ABE MURAVCHICK AND PAULINE MURAVCHICK, APPELLANTS,
v.
UNITED BONDING INSURANCE COMPANY, AN INDIANA CORPORATION, APPELLEE
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A third party cannot sue on a contract intended solely for the benefit of the contracting parties, even if they derive incidental benefit.
Appellants brought a cross-claim against a bonding company for failing to promptly pay lienors, which allegedly led to a mortgage foreclosure and loss…
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The appellants brought a cross-claim against co-defendant, United Bonding Insurance Company. The bonding company had entered into a contractor’s payment bond for construction by a lessee upon appellants’ property. Appellants’ claim alleged that as a result of the failure of the bonding company to promptly pay the claims of certain lienors, the construction mortgage was foreclosed and appellants lost their equity in the property. The trial court dismissed the cross-claim and this appeal followed.
Appellants agree that they have no claim under the bond, but they urge that because they were obligees under the bond, the bonding company owed them a duty to act promptly and in good faith to pay lienors on the property. It is further alleged that the bonding company breached this duty to the damage of the appellants.
The only damage alleged because of the breach of the duty claimed is in paragraph six of the cross-claim which reads as follows:
******
“(6) In reliance upon the above described Bonds being executed and delivered by the Cross-Defendant to the Cross-Claimants, Cross-Claimants joined in the execution of the temporary construction mortgage encumbering the Property, and, as a result of the breaches and defaults under the said Bonds by the Cross-Defendant, the said temporary construction mortgage was not satisfied at its maturity and the equity of the Cross-Claimants in the Property has been foreclosed.”
We concur in the holding of the trial court that the cross-claim failed to state a cause of action. When a contract is designed solely for the benefit of the parties thereto, third persons cannot maintain an action thereon, even though such third persons might derive some incidental or consequential benefit from its enforcement. American Surety Co. of New York v. Smith, 100 Fla. 1012, 130 So. 440 (1930).
Affirmed.
BARKDULL, J., dissents.
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McKINNEY-Green, Inc. v. Davis, 606 So. 2d 393 (Fla. 1st DCA 1992)…. of New York v. Smith, 100 Fla. 1012, 130 So. 440 (1930); Genet Co. v. Anheuser-Busch, Inc., 498 So. 2d 683, 685 (Fla. 3d DCA 1986); Security Mut. Cas. Co. v. Pacura, 402 So. 2d 1266, 1267 (Fla. 3d DCA 1981); Murar chick v. United Bonding Ins. Co., 242 So. 2d 179, 180 (Fla. 3d DCA 1970). If this were deemed an action to redress injuries to Oaks of Kanapaha, Inc., resulting from appellant’s breach of the agreement to make a construction loan to the corporation, Davis would be subject to the general rule that…
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Canal Ins. Co. v. Hartford Ins. Co., 415 So. 2d 1295 (Fla. 1st DCA 1982)…rom its terms had the intended policy been obtained by Saint, there was no clearly expressed intent that the purpose of the lease agreement was to confer a direct and substantial benefit upon Hartford. Muravchick v. United Bonding Insurance Company, 242 So. 2d 179 (Fla.3d DCA 1970); American Empire Ins. Co. of South Dakota v. Fidelity and Deposit Company of Maryland, 408 F. 2d 72 (5th Cir. 1969); State ex rel. Westinghouse Electric Supply Co. v. Wesley Construction Company, 316 F.Supp. 490 (S.D.Fla.1970), aff…
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Alvah G. Hales v. Ashland OIL, Inc., 342 So. 2d 984 (Fla. 3d DCA 1977)…l profit of Pickard and the Ashland Oil group. The incidental or consequential benefit flowing to customers of the Pickard companies is not sufficient to allow them to sue as third party beneficiaries. See Muravchick v. United Bonding Insurance Co., 242 So. 2d 179 (Fla. 3d DCA 1970); see also Brooks v. Owens, 97 So. 2d 693 (Fla.1957). For the above reasons, we hold that the trial court properly dismissed plaintiffs’ complaint for failure to state a cause of action. Affirmed.…
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- Am. Sur. Co. of N.Y. v. R. Nelson Smith in Bankr. for Jacksonville Marble & Tile Co., 100 Fla. 1012 (Fla. 1930)