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In Taylor Morrison Services, Inc., f/k/a Morrison Homes, Inc. v. Carol Ecos and Susan Bessing, 40 Fla. L. Weekly D1283b (1st DCA, May 28, 2015) the First District Court of Appeal reversed a final judgment holding that Morrison Homes was an unlicensed contractor pursuant to Section 489.128(1), Florida Statutes. Section 489.128(1)(c), states, in relevant part, “a contractor shall be considered unlicensed only if the contractor was unlicensed on the effective date of the original contract for the work, if stated therein, or, if not stated, the date the last party to the contract executed it, if stated therein.”

In this case, Morrison Homes had four contractors listed as “qualifying agents” with the Florida Department of Business and Professional Regulation (“DBPR”) on the effective date of the contract.  Two and half months after the parties entered in the contract, someone from Morrison Homes applied for the building permit for the Project. The application was apparently signed by one of the “qualifying agents” listed with DBPR for Morrison Homes. However, the qualifying agent testified that she had no involvement with the Project and disputed the signature’s authenticity. The trial court ruled that Morrison Homes was unlicensed focusing the on the apparent fraud in the permit application and lack of construction supervision.

On appeal, the First DCA noted that the plain language of Section 489.128 requires the determination of whether a contractor is licensed to be made as of the contract’s effective date. The First DCA added that this analysis precludes consideration of events that occur after the effective date of the contract as the trial court had done in this case. The First DCA reversed the trial court’s ruling and held that Morrison Homes was not an licensed contractor under Section 489.128(1) because they had a qualify agent on the effective date of the contract.

I am excited to be the featured speaker at the Noon Leads Group meeting on May 19, 2015 at the Greater Hollywood Chamber of Commerce.  My presentation will focus on an owner’s options in responding to a claim of lien.

The Hollywood Chamber of Commerce has three Leads Groups that are dedicated to developing strong business relationships among chamber members; the groups are comprised of only one representative from a specific business category, thereby ensuring that no competition exists for business leads within the groups.

The Noon Leads Group meets every Tuesday at noon and most meetings feature a guest speaker whom provides lunch for the group.

            The importance of having an experienced construction attorney handle your claims of lien is at the forefront of a lawsuit currently pending in the Miami-Dade County styled Pistorino & Alam Consulting Engineers v. Mirasol Ocean Towers Condominium Association (2014-01857-CA-32). In this case, Pistorino & Alam was hired by the Association to perform design work on various portions of the condominium property under nine separate contracts. In May 2014, Pistorino & Alam recorded a single claim of lien in the amount of $107,090 for services provided under the nine separate contracts.

                Pistorino & Alam filed suit to enforce its claim of lien and in response the Association filed a motion for summary judgment alleging the claim of lien was invalid because it improperly combined work under separate contracts into a single claim of lien. On March 12, 2015, Circuit Judge Lisa Walsh entered an order granting summary judgment in favor of the Association holding the claim of lien failed to comply with Section 713.29, Florida Statutes.  Section 713.09 states that “[a] lienor is required to record only one claim of lien covering his or her entire demand against the real property when the amount demanded is for labor or services or material furnished for more than one improvement under the same direct contract.”

                In this case, there were nine separate “direct contracts” between the Association and Pistorino & Alam. Accordingly, Pistorino & Alam was required to record nine separate liens covering the work performed under each of the contracts. Judge Walsh’s ruling was based on established case law and an experienced construction attorney would have been able to advise Pistorino & Alam about the requirement for multiple liens in this case.

We are excited to invite everyone to our new office at 1909 Harrison Street in the heart of vibrant Downtown Hollywood. In addition to the new office, the firm is in the process of finalizing new branding package for the firm courtesy of CityStreetz Graphics in Hollywood. Please click the link for an exclusive view of the new business cards.

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I have previously written about how arbitration provisions have to be carefully written in order for them to be enforceable. The recent case of Andre Franklin, Inc. v. Wax, 39 Fla. L. Weekly D 2107 (October 8, 2014 Fla. 2d DCA) demonstrates the importance of properly preserving your right to arbitration in the event the other party to the agreement files a lawsuit.

In this case Herb and Jill Wax contracted with Andre Franklin, Inc. (“Franklin”) for the restoration of a historic home they purchased. The contract required that all disputes be resolved through arbitration. Five years after the project started Franklin recorded a claim of lien on the Waxes property after disputes arose about payments.

The Waxes filed a lawsuit against Franklin which included a show cause action pursuant to Section 713.21, Florida Statutes requiring Franklin to show cause why the claim of lien should not be vacated. In response, Franklin filed a motion to enforce arbitration, a motion to dismiss for failing to comply with the pre-suit requirements of Chapter 558, Florida Statutes, an answer and affirmative defenses, and a counterclaim to foreclose on its claim of lien and for breach of contract. The trial court held a hearing on these motions and partially granted Franklin’s motion to dismiss and granted the Waxes leave to amend to comply with the pre-suit requirement of Chapter 558, Florida Statutes.

The Waxes filed an Amended Complaint and Franklin responded by filing a renewed motion to enforce arbitration. At the hearing on the motion to enforce arbitration, the Waxes argued that Franklin had waived its right to arbitrate by initially filing a counterclaim and arguing its motion to dismiss during the first hearing. The trial court agreed with the Waxes and ruled that Franklin waived its right to arbitration by seeking affirmative relief from the court by filing its counterclaim and seeking to enforce the contract.

On appeal, the Waxes relied primarily on the case of Coral 97 Associates, Ltd. v. Chino Electric, Inc., 501 So. 2d 69 (Fla. 3d DCA 1987) to support its argument that Franklin had acted inconsistently with its right to arbitrate by filing a counterclaim. The Second District Court of Appeal relied on Design Structures, Inc. v. P.L. Dodge Foundation, Inc., 532 So. 2d 1334 (Fla. 3d DCA 1988) which clarified “it was the act of implementing discovery” following the filing of a counterclaim that acted a waiver of arbitration rights in in Coral 97 Associates. Based on these prior decisions, the Second District Court of Appeal reversed the trial court’s ruling and held that Franklin did not waive its contractual right to arbitrate by filing a counterclaim simultaneously with its motion to compel arbitration because Franklin did not implement discovery.

The Franklin case demonstrates the legal minefield that a litigant faces when they are faced with a lawsuit and want to preserve their contractual right to arbitrate. Typically, I would not recommend filing a counterclaim along with a motion to compel arbitration. However, one important issue that the was not addressed in the appellate opinion is that because the Waxes filed a show cause action under Section 713.21, Florida Statutes, Franklin had to timely file a counterclaim to enforce its claim of lien or it would have it lost its lien rights. In retrospect, Franklin’s counterclaim should not have included the breach of contract claim to avoid the argument that they were seeking to enforce the contract.