PALMER FIRST NATIONAL BANK, APPELLANT,
v.
RINKER MATERIALS CORP. ET AL., APPELLEES
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A mortgagee bank's vice president assured subcontractors that funds existed to complete a construction project and urged them to continue furnishing materials and labor without filing mechanic's liens. The trial court found the bank waived its mortgage priority over subsequently filed liens based on the subcontractors' reliance on these assurances. The appellate court reversed, holding that absent fraud or active misrepresentation, a mortgagee cannot waive its lien priority through mere assurances and inducements.
A mortgagee cannot waive the priority of its mortgage over mechanic's liens through mere assurances and inducements to continue work, even if the lien claimants rely on those assurances and refrain from filing liens, absent fraud or active misrepresentation by the mortgagee.
[1] A mortgagee does not waive the priority of its mortgage over mechanic's liens by assuring lien claimants that funds are sufficient to complete a project and that they nee…
[2] Reliance by subcontractors on a bank's assurances that funds are available and that liens are unnecessary does not estop the bank from asserting its mortgage priority whe…
Previewing 2 of 3 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the sole question which merits discussion herein is whether a mortgagee can waive the priority of its mortgage over mechanic's liens where the mortgagee induced the lien claimants to continue to furnish construction materials and labor while simultaneously refraining from filing lien claims absent fraud or active misrepresentation on the part of the mortgagee. We answer this question in the negative given the facts before us.”
States the precise legal issue and the court's holding in the negative, establishing the core rule.
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Join FLexlaw to unlock all legal intelligenceAppellees were subcontractors who furnished labor and materials for the Gallery Condominium construction project. Palmer First National Bank held the …
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NATHAN, Judge.
Although several points are raised by appellant bank in this action, the sole question which merits discussion herein is whether a mortgagee can waive the priority of its mortgage over mechanic’s liens where the mortgagee induced the lien claimants to continue to furnish construction materials and labor while simultaneously refraining from filing lien claims absent fraud or active misrepresentation on the part of the mortgagee. We answer this question in the negative given the facts before us.
Appellees are subcontractors who furnished labor and materials for the construction of the Gallery Condominium. Appellant was the mortgagee on the construction loan for the project. At one time or another, the appellees were all assured by Clyde Brantley, the appellant bank’s vice president in charge of construction loans, that there were sufficient funds in the construction loan account to complete the project; that they should continue to furnish labor and materials; that there was no need to file mechanic’s liens; and, finally, that Brantley would do everything in his power to see to it that the subcontractors were paid, including the issuance of joint checks, if necessary.
The trial judge found that appellees had relied upon Brantley’s statements, which induced them to continue furnishing labor and materials without filing liens. It was therefore ruled that appellant had waived the priority of its mortgage over the mechanic’s liens which were ultimately filed by the appellees.
We do not agree with this conclusion. The trial court specifically found that Brantley’s statements were neither fraudulent nor untrue; nor had any misrepresentations been directed toward the appellees. In light of this finding, which is supported by the record, we hold that the trial court erred as a matter of law in ruling that appellant waived the priority of its mortgage over appellees’ liens. Cf. Merritt v. Unkefer, 223 So. 2d 723 (Fla.1969), quashing Unkefer v. Merritt, 207 So. 2d 726 (Fla. 4th DCA 1968); see also Kimbrell v. Fink, 78 So. 2d 96 (Fla.1955); J. G. Plumbing Service, Inc. v. Coastal Mortgage Co., 329 So. 2d 393 (Fla.2d DCA 1976). See this writer’s opinion in Gancedo Lumber Co., Inc. v. Flagship First National Bank of Miami Beach, 340 So. 2d 486 (Fla.3d DCA 1976).
As we have held that appellant has not waived the priority of its mortgage over the appellees’ claims, there is no need to consider the remaining points on appeal.
Reversed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Condor Merritt et ux. v. Unkefer, 223 So. 2d 723 (Fla. 1969)
- J. G. Plumbing Serv., Inc. v. Coastal Mortg. Co., 329 So. 2d 393 (Fla. 2d DCA 1976)
- Kimbrell v. Fink, 78 So. 2d 96 (Fla. 1955)
- Gancedo Lumber Co., Inc. v. Flagship First Nat'l Bank of Miami Beach, 340 So. 2d 486 (Fla. 3d DCA 1976)
- Unkefer v. Condor Merritt et ux., 207 So. 2d 726 (Fla. 4th DCA 1968)