PAVEX CORPORATION, APPELLANT,
v.
BROWARD COUNTY BOARD OF COUNTY COMMISSIONERS, APPELLEE

Fla. 4th DCA | 1986-11-26
No. 4-86-0500
GLICKSTEIN and DELL, JJ., concur.
498 So. 2d 1317 Florida District Court of Appeal, Fourth District (1986) Caution
Cited by 6 cases

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Holding

A subcontractor cannot assert an equitable lien against public funds owed to a contractor when the surety is insolvent, as this is an impermissible garnishment of public funds without statutory authority.


Headnotes

[1] A subcontractor cannot assert an equitable lien on funds held by a county owed to a prime contractor when a statutory remedy against a surety exists, as such a claim is c…

[2] The insolvency of a surety does not create a right for a subcontractor to pursue an equitable lien against a public entity for funds owed to a contractor.

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Facts & Procedural History

A materialman-subcontractor sued a County for payment after the prime contractor's surety became insolvent. The subcontractor sought an equitable lien…

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Opinion of the Court
STONE, Judge.

STONE, Judge.

The appellant was a materialman-subcon-tractor on various Broward County street projects. The prime contractor filed bankruptcy proceedings. Normally, appellant would simply recover the sums due from the contractor by claiming against the surety under section 255.05, Florida Statutes (1985). However, the surety in this case is in liquidation and is possibly insolvent. Appellant sued the County seeking recovery out of funds owed by the County to the contractor or its trustee in bankruptcy. Appellant alleged an equitable lien and asserted various other equitable theories in support of its claim. The trial court dis missed the complaint with prejudice on the undisputed facts.

Section 255.05(l)(a), Florida Statutes (1985), provides, in part:

255.05 Bond of contractor constructing public buildings; form; action by materialmen.—

(l)(a) Any person entering into a formal contract with the state or any county, city, or political subdivision thereof, or other public authority, for the construction of a public building, for the prosecution and completion of a public work, or for repairs upon a public building or public work shall be required, before commencing the work, to execute a payment and performance bond with a surety insurer authorized to do business in this state as surety. Such bond shall be conditioned that the contractor perform the contract in the time and manner prescribed in the contract and promptly make payments to all persons defined in s. 713.01 whose claims derive directly or indirectly from the prosecution of the work-provided for in the contract. Any claimant may apply to the governmental entity having charge of the work for copies of the contract and bond and shall thereupon be furnished with a certified copy of the contract and bond. The claimant shall have a right of action against the contractor and surety for the amount due him. Such action shall not involve the public authority in any expense.

Appellee asserts that a claim by a sub - contractor for an equitable lien on funds held by a county pursuant to a contract between the county and a contractor is, in essence, an impermissible garnishment of public funds. This position is supported by Board of County Commissioners of Okaloosa County v. Gulf Pipeline Co., 168 So. 2d 757 (Fla. 1st DCA 1964). In that case a subcontractor asserted an equitable lien on funds owed by the County to a prime contractor. The appellate court reversed the circuit court’s denial of a motion to dismiss, reasoning that such a claim was “in essence an indirect or equitable garnishment-, to which the County is not subject in the absence of statutory authori-ty_” Id. at 759. The court went on to recognize that the subcontractor had an adequate remedy at law by enforcing a claim against the surety under the statute. Board of County Commissioners of Okaloosa County, at 760. See also Wesley Construction Co. v. Biscayne Construction, Inc., 341 So. 2d 786 (Fla. 3d DCA 1977). Appellant contends that no such remedy exists here since the surety is insolvent.

Appellant argues that its cause of action was recognized in City of St. Augustine v. Brooks, 55 So. 2d 96 (Fla.1951). In . that case the supreme court reversed the imposition of a mechanic’s lien on property being held by the City in trust for use as a public museum. The court first determined that the mechanic’s lien law did not apply to public land, even where title is held in trust. In reversing, however, the court went on to recognize that if the contractor could prove a direct contract with the City, he would be entitled to an equitable lien on museum funds.

Appellant further notes that liability has been imposed on a public body where it failed to require that the bonding contemplated by section 255.05 be obtained. Warren v. Glens Falls Indemnity Co., 66 So. 2d 54 (Fla.1953). The court there held that although the statute is worded as an obligation of the contractor, the public agency has a corresponding duty to see to it that such a bond is in fact posted for the protection of subcontractors before construction commences. This is clearly in furtherance of the legislative intent.

We conclude that the trial court did not err. There is no basis to conclude that the statute affords any additional equitable relief to a subcontractor because of the later insolvency of a surety. The principles enunciated in the Okaloosa County case are applicable, and this decision is not inconsistent with Brooks.

We also note that in this case the appellant does have additional remedies at law. Certainly the funds held by Broward County, if due the contractor, may be listed as an asset of the bankrupt estate against which creditors’ claims, including appellant’s, will be made. Moreover, appellant’s claims against the surety may be pursued by filing a claim in the liquidation proceedings against the receiver. Appellant has no right to an equitable lien, nor other equitable relief, against any obligation or funds reserved to pay any debt owed to the contractor or its trustee in bankruptcy.

Affirmed.

GLICKSTEIN and DELL, JJ., concur.


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Citator

Cited By

  • Palm Beach Cnty. v. Trinity Indus., Inc., 661 So. 2d 942 (Fla. 4th DCA 1995)
    …tion 255.05 places a corresponding duty on the public agency, as well as the contractor, to see that a bond is in fact posted for the protection of the subcontractors before construction commences. Pavex Corp. v. Broward County Bd. of County Com’rs, 498 So. 2d 1317, 1318 (4th DCA), rev. dismissed, 509 So. 2d 1118 (Fla.1987). Where the determination of the issues of a lawsuit depends upon the construction of a written instrument and the legal effect to be drawn therefrom, the question at issue is essentially o…
  • The Sch. Bd. OF Broward Cnty. v. The Trane Co., 840 So. 2d 1095 (Fla. 4th DCA 2003)
    …ne v. Fine, 221 So. 2d 145 (Fla.1969); U.S. Fid. & Guar. Co. v. Ernest Constr. Co., 854 F.Supp. 1545 (M.D.Fla.1994); Kennedy Elec. Co. v. U.S. Postal Serv., 508 F. 2d 954 (10th Cir.1974). The School Board’s reliance on Pavex Corp. v. Broward County, 498 So. 2d 1317 (Fla. 4th DCA 1986), and Board of County Commissioners of Okaloosa County v. Gulf Pipeline Co., 168 So. 2d 757 (Fla. 1st DCA 1964), is misplaced. In each of these cases, payment bonds had been posted which afforded the [*1097] unpaid subcontractors…
  • Buffalo Tank Corp. v. Env't Control Equip., Inc., 544 So. 2d 1037 (Fla. 2d DCA 1989)
    …American Ventures, Inc., 350 So. 2d 581, 584 (Fla. 2d DCA 1977). There is no equitable reason to embroil the City in litigation if the claimant has an adequate remedy against the contractor. Cf. Pavex Corp. v. Broward County Board of County Comm’rs, 498 So. 2d 1317 (Fla. 4th DCA 1986), review dismissed, 509 So. 2d 1118 (Fla.1987) (subcontractor denied an equitable lien against undisbursed funds owed by a county to a contractor, despite the insolvency of the surety and bankruptcy of the contractor, because reme…

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