FIDELITY AND DEPOSIT COMPANY OF MARYLAND, A FOREIGN INSURANCE COMPANY, AND SANCHEZ CORPORATION, A FLORIDA CORPORATION, APPELLANTS,
v.
ACCEL, INC., APPELLEE

Fla. 4th DCA | 1978-01-24
No. 76-1660
ANSTEAD, J. and BERANEK, JOHN R., Associate Judge, concur.
354 So. 2d 424 Florida District Court of Appeal, Fourth District (1978) Positive Treatment
Cited by 9 cases

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Synopsis

This case involves a subcontractor's claim against a general contractor and its surety. The appellate court reversed a judgment for the subcontractor, holding that the subcontractor failed to prove it met the statutory notice requirements for a mechanic's lien, which was a prerequisite for recovery against the surety. The court also remanded the breach of contract claim for a new trial on damages.


Holding

1. No, the subcontractor must prove all prerequisites for enforcing a lien, including statutory notice, to recover against the surety on the bond. 2. No, the measure of damages awarded for breach of contract was improper and requires a new trial.


Headnotes

[1] A lien claimant must prove all prerequisites for enforcing a lien, even after the lien has been transferred from real property to a bond.

[2] A surety on a bond posted to relieve property from a mechanic's lien is not liable if the lien claimant failed to comply with statutory notice requirements.

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Key Quotes

“The mere fact that some interested party transfers a lien from property to a bond pursuant to Section 713.24, Florida Statutes (1975) does not obviate the necessity of the lien claimant proving all of the prerequisites necessary for him to enforce his lien.”

Establishes that transferring a lien to a bond does not waive the requirement to prove lien prerequisites.

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Facts & Procedural History

Accel, Inc., a subcontractor, sued Sanchez Corporation (general contractor) and its surety, Fidelity and Deposit Company, after leaving a construction…

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Opinion of the Court
DOWNEY, Judge.

DOWNEY, Judge.

Appellant Sanchez Corporation as general contractor contracted with the owner of real property to construct a building thereon. Sanchez also contracted with Accel, Inc. as a subcontractor to install elevators in the planned improvements. During the course of construction Accel, Inc. left the job and filed a claim of lien for the amount it claimed it was due from Sanchez. Shortly thereafter Sanchez had the lien removed from the realty and transferred to a bond pursuant to Section 713.24, Florida Statutes (1975). Appellant Fidelity and Deposit Company of Maryland is the surety on said bond.

Accel, Inc. filed this suit against Sanchez Corporation and Fidelity and Deposit Company. In its complaint Accel, Inc. claimed damages from Sanchez for breach of contract and claimed a lien against the realty for which it was entitled to judgment against Fidelity on the surety bond. The trial court entered judgment for Accel, Inc. and against Sanchez and Fidelity for $10,-637.20.

Both Fidelity and Sanchez have appealed from said judgment. Fidelity contends the judgment is erroneous because it found Ac-cel was entitled to a mechanic’s lien which in turn entitled Accel to recover on Fidelity’s bond. Sanchez perceives error in finding it guilty of breach of contract and awarding damages of $10,637.20.

The thrust of Fidelity’s assignment of error is that Accel, Inc. neither alleged nor proved that it had furnished the owner with the notice required by Section 713.06(2)(a), Florida Statutes (1975) and thus Fidelity was entitled to a dismissal of the complaint at the conclusion of the plaintiff’s case. Accel contends, on the other hand, that the bond which was furnished to relieve the property from the lien was furnished by Sanchez, not by the owner, and therefore, Accel was absolved from proving it had furnished the required notice to owner.

We reject Accel’s argument as lacking merit. The mere fact that some interested party transfers a lien from property to a bond pursuant to Section 713.24, Florida Statutes (1975) does not obviate the necessity of the lien claimant proving all of the prerequisites necessary for him to enforce his lien. On the contrary, even though the real property is no longer encumbered by the lien the claimant must prove all of the conditions precedent to the perfection and enforcement of that lien. McGuire v. Consolidated Electrical Supply, Inc., 329 So. 2d 411 (Fla. 4th DCA 1976).

Thus, if the lien claimant could not recover against the owner because of his failure to comply with the lien law he cannot recover against the surety on the bond. See Regal Wood Products, Inc. v.

First Wisconsin National Bank of Milwaukee, 347 So. 2d 643 (Fla. 4th DCA 1977); Resnick Developers South, Inc. v. Clerici, Inc., 340 So. 2d 1194 (Fla. 4th DCA 1976).

In view of the foregoing the judgment against Fidelity on Accel’s lien claim was error. In an effort to prove its claim against Sanchez for damages for breach of contract against Sanchez, Accel relied upon a showing that the contract provided for Sanchez to make installment payments at certain stages of the work. Accel attempted to prove the stage of completion and to claim the installments due under the contract for that stage of completion. This is not the proper measure of damages in an action for breach of contract. The rule has been frequently stated in this jurisdiction that the measure of damages in a suit by a contractor against an owner for breach of contract when the contract has not been fully completed is either quantum meruit or the contractor’s lost profit together with the reasonable cost of labor and materials incurred in good faith in the partial performance of the contract. Poinsettia Dairy Products, Inc. v. Wessel Co., 123 Fla. 120, 166 So. 306 (1936); First Atlantic Building Corporation v. Neubauer Construction Company, 352 So. 2d 103 (Fla.

Fourth District Court of Appeal opinion filed November 1, 1977); Marchese v. Taylor, 252 So. 2d 820 (Fla. 4th DCA 1971); Ballard v. Krause, 248 So. 2d 233 (Fla. 4th DCA 1971). This is also the proper measure of damages that a subcontractor must prove when suing a contractor. Since the wrong measure of damages was used in the trial court, Accel’s claim for damages against Sanchez for breach of contract must be retried.

Accordingly, the judgment appealed from is reversed and the cause is remanded with directions to grant a new trial on damages only on the claim of Accel, Inc. against Sanchez Corporation and to enter judgment for Fidelity and Deposit Company of Maryland on Accel, Inc.’s claim, based upon a mechanic’s lien.

REVERSED AND REMANDED.

ANSTEAD, J. and BERANEK, JOHN R., Associate Judge, concur.


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Citator

Cited By

  • Morganti S., Inc. v. Hardy Contractors, Inc., 397 So. 2d 378 (Fla. 4th DCA 1981)
    …encumbered by the lien. On the contrary, the lien claimant must prove all of the conditions precedent to perfection and enforcement of the lien before recovery against the bond can be achieved. Fidelity & Deposit Company of Maryland v. Accel, Inc., 354 So. 2d 424 (Fla. 4th DCA 1978) and McGuire v. Consolidated Electrical Supply, Inc., 329 So. 2d 411 (Fla. 4th DCA 1976). We find it unnecessary to directly answer the question of whether the cause of action is in rem in nature in view of the provisions of Sect…
  • Diversified Commercial Developers, Inc. v. Formrite, Inc., 450 So. 2d 533 (Fla. 4th DCA 1984)
    …. Wessel Co., 123 Fla. 120, 166 So. 306, 104 A.L.R. 216 (1936); Ballard v. Krause, 248 So. 2d 233, (Fla. 4th D.C.A.1971); 94 Fla.Jur., Damages, § 83.” This rule was again noted by this Court in Fidelity & Deposit Company of Maryland v. Accel, Inc., 354 So. 2d 424 (Fla. 4th D.C.A.1978). The proof at trial in the latter case was virtually identical to the proof presented to the trial judge below, and in reversing the damage award, this Court noted: “The rule has been frequently stated in this jurisdiction tha…
  • Irwin Stanley Brooks v. Dick Holsombach, 525 So. 2d 910 (Fla. 4th DCA 1988)
    …of labor and materials incurred in good faith in the course of partial performance of the contract. Diversified Commercial Developers, Inc. v. Formrite, Inc., 450 So. 2d 533 (Fla. 4th DCA 1984), and Fidelity & Deposit Co. of Maryland v. Accel, Inc., 354 So. 2d 424 (Fla. 4th DCA 1978). The builder argues that the figures presented at trial do in fact represent the formula stated in the above cited cases, but we can find no basis in the record to support this argument. To the contrary, the jury verdict was to…

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