DEC Elec., Inc. v. Raphael Const. Corp., 87-3164

• Decision Date: 22 February 1989
• Docket Number: No. 87-3164,87-3164
• Citation: 14 Fla. L. Weekly 521,538 So.2d 963
• Parties: 14 Fla. L. Weekly 521 DEC ELECTRIC, INC., Appellant, v. RAPHAEL CONSTRUCTION CORP., Appellee.
• Court: Florida District Court of Appeals

Page 963

538 So.2d 963

14 Fla. L. Weekly 521

DEC ELECTRIC, INC., Appellant, v. RAPHAEL CONSTRUCTION CORP., Appellee.

No. 87-3164.

District Court of Appeal of Florida,

Fourth District.

Feb. 22, 1989.

Alexander J. Williams, Jr., of Chappell and Brandt, P.A., Fort Lauderdale, for appellant.

Stuart H. Sobel and Martin A. Feigenbum of Sobel and Sobel, P.A. Miami, for appellee.

ANSTEAD, Judge.

This is an appeal from a final judgment in a breach of contract case holding that a subcontractor was not entitled to payment from a contractor because the contractor had not been paid by the owner. We affirm.

DEC Electric, Inc., a subcontractor, entered into a contract with Raphael Construction Corporation, a contractor, to perform various jobs on a construction project. The construction project was subsequently shut down by the owner of the development. The contractor acknowledged at trial that the subcontractor was owed a debt in the amount of $25,612.00 plus interest. However, it argued that it should not have to pay the debt because the owner of the project had not paid the contractor on its general contract. Paragraph 6 of the subcontract at issue reads:

Upon final payment a sworn statement with supporting waiver of lien from your material suppliers and/or subcontractors must be furnished with your final waiver of lien. A sworn statement must be furnished to us listing major material suppliers and subcontractors and the amounts of their contracts at the time of first payout. Interim payments require partial waivers with supporting material supplier's waivers in exchange for payment. Your payments are made in accordance with our interim draws as we show you on our sworn statement with your percentage of completion as we estimate it at the time of our billing to the Owner. This may not conform to your billing to us. No funds will be owed to the subcontractor unless the General Contractor is paid by the owner in accordance to the sworn statement. The subcontractor fully understands that in the event of non-payment by the owner to the General Contractor, the subcontractor has legal recourse against the owner through the Mechanics Lien Laws or other legal procedures for their correct monies due.

The contractor relys here as it did in the trial court, on the language of paragraph 6, "No funds will be owed to the subcontractor unless the General Contractor is paid by the owner in accordance to the sworn statement."

In Peacock Const. Co. v. Modern Air Conditioning, Inc., 353 So.2d 840 (Fla.1977), the Florida Supreme Court ruled that provisions of construction subcontracts similar to the provisions at issue herein should usually be judicially construed as a matter of law without receiving evidence of the intention of the parties. The court adopted the general rule that such provisions should usually be construed not to condition payments to the subcontractors on the receipt of payments to the contractors by the owners. Id. at 842. In so ruling, the court rejected a line of cases holding that the meaning of ambiguous provisions should be determined as an issue of fact. The court reasoned that most subcontractors are small businesses that are not willing to assume the risk of nonpayment because they cannot afford to remain in business without prompt payment for their work. Id. In Peacock, the court found that the contract language providing for payment, "within 30 days after completion ... and full payment therefor by the owner," was merely a designation of the time of payment and did not constitute a condition precedent to...