Gesco, Inc. v. Edward L. Nezelek, Inc., s. 80-1178

• Decision Date: 14 April 1982
• Docket Number: 80-2008,Nos. 80-1178,s. 80-1178
• Citation: 414 So.2d 535
• Parties: GESCO, INC., the Chase Manhattan Bank, N.A., a national banking association and Seaboard Surety Company, a New York corporation authorized to do business in the State of Florida, Appellants, v. EDWARD L. NEZELEK, INC., and the Travelers Indemnity Company, Appellees. EDWARD L. NEZELEK, INC. and the Travelers Indemnity Company, Appellants, v. GESCO, INC., the Chase Manhattan Bank, N.A., a national banking association, and Seaboard Surety Company, a New York corporation authorized to do business in the State of Florida, Appellees.
• Court: Florida District Court of Appeals

Page 535

414 So.2d 535

GESCO, INC., the Chase Manhattan Bank, N.A., a national banking association and Seaboard Surety Company, a New York corporation authorized to do business in the State of Florida, Appellants, v. EDWARD L. NEZELEK, INC., and the Travelers Indemnity Company, Appellees.

EDWARD L. NEZELEK, INC. and the Travelers Indemnity Company, Appellants, v. GESCO, INC., the Chase Manhattan Bank, N.A., a national banking association, and Seaboard Surety Company, a New York corporation authorized to do business in the State of Florida, Appellees.

Nos. 80-1178, 80-2008.

District Court of Appeal of Florida Fourth District.

April 14, 1982.

Rehearings Denied June 16, 1982.

Karl W. Adler of Adler, Tolar & Adler, Fort Lauderdale, for Gesco, inc.

Robert H. Haggerty, New York City, for Chase Manhattan Bank and Seaboard Sur. Co.

Wayne A. Cypen of Cypen & Cypen, Miami Beach, for Nezelek and Travelers.

PER CURIAM.

This is a consolidated appeal from both a final judgment and a post judgment order in an action on a construction contract and a mechanic's lien. Gesco, Inc. is the owner-developer of a condominium around which this controversy centers. Chase Manhattan Bank is the construction lender and the principal on a transfer bond and Seaboard Surety Company is the surety on the transfer bond. These parties appeal from a final judgment rendered in favor of Edward L. Nezelek, Inc., the project's contractor. Nezelek appeals from a stay order prohibiting execution upon post judgment orders granting it attorneys fees and costs.

Gesco filed suit against Nezelek alleging breach of a condominium construction contract and sought damages for alleged substitution of inferior materials, defective construction and delay in completion. Nezelek denied these charges and asserted several affirmative defenses, among which was a claim that Gesco was solely responsible for the construction delays. Nezelek also counterclaimed to foreclose on its $1,117,614.92 mechanics lien which represented the alleged balance due under the contract. Nezelek joined Chase Manhattan Bank and Seaboard Surety Company in this action because they had posted the bond which transferred the lien. A non-jury trial followed.

The construction contract guaranteed that $6,500,000 would be advanced in monthly installments equal to 90% of the value of the work completed at the end of each requisition period, less previous payments, with the 10% retainage due thirty days after substantial completion of all work and compliance with various other requirements of the agreement. Under the terms of the contract "time was of the essence." All work was to be substantially completed within fourteen months of the project's commencement. It was further provided that this period would be extended only for delays attributable to Gesco, its architect or unavoidable casualties. However, in order that these delays inure to the contractor's benefit, the contract required Nezelek to request an extension, in writing, within fifteen days of the delay. Otherwise, the claim was deemed waived and the completion date remained unaltered.

The condominium was not completed on schedule. A ninety day temporary certificate of occupancy, for the first ten floors of the building, was issued six months late. The final certificate of occupancy was issued three months after that. All told, the condominium was completed nine months after the date called for by the contract. (Construction began on or about June 20, 1973. The final certificate of occupancy was issued May 12, 1975.)

Gesco ceased making payments on the contract after January, 1975. On May 8, 1975, Nezelek filed a lien for the entire amount it claimed was due. The lawsuit upon which this appeal is based followed shortly thereafter.

The trial, even without a jury, lasted twelve days. On January 7, 1980, the court entered final judgment in favor of Nezelek. The court found that Nezelek's lien was valid; that Gesco suffered no damage as a result of the delay in the building's completion; that there was no basis in evidence to apportion the delay between the parties; that Gesco had authorized the use of the materials utilized by Nezelek; and that Nezelek was responsible for only minor construction defects. The court also found that Nezelek was entitled to costs and attorneys fees but reserved jurisdiction to determine the amount of such award at a later date.

Following the denial of their motion for rehearing, appellants timely filed their notice of appeal. Subsequently, the lower court awarded Nezelek attorneys fees of $180,000.00. The court also assessed costs of $4,038.94 against Gesco and Chase Manhattan Bank. Seaboard Surety Company was assessed costs of $100.00. Upon motion of appellants, the court granted a stay of execution upon these awards pending final resolution of all appeals. Nezelek appeals, contesting the propriety of the stay.

Gesco now contends that Nezelek's lien was premature and therefore should be considered fraudulent and invalid pursuant to Section 713.31, Florida Statutes. However, as this argument was not pursued below, it may not now be raised on appeal. See, Ronal Builders, Inc. v. Powell Brothers, Inc., 328 So.2d 869 (Fla. 4th DCA 1976), cert. denied, 339 So.2d 1171 (Fla.1976). Likewise, Gesco's argument that Nezelek did not comply with the affidavit requirements of Section 713.06(3)(d)(1), Florida Statutes, was not raised below and is therefore deemed waived for purposes of appeal.

Gesco further contends that the court erred by not finding Nezelek responsible for any delays in the completion of the condominium project. It relies upon the contract provisions which required the contractor to request, in writing, extensions for delays caused by Gesco's actions. The record clearly establishes that no such requests were tendered. However, once again, this argument was not raised below. Nezelek affirmatively pled that all delays in construction were attributable to Gesco. If Gesco's position was that Nezelek waived the right to hold it responsible for delay, by virtue of Nezelek's failure to request extensions, then Gesco was obligated to so inform the trial court. Having failed to do so, by either pleading or argument, Gesco is precluded from raising this issue on appeal.

Although the record demonstrates, and the trial court found, that Nezelek was responsible for some of the delay, the court was nevertheless correct in concluding that Gesco's evidence did not establish a reasonable basis for apportioning responsibility for the total delay. See, United States, ex rel. Gray-Bar Electric Co. v. J. H. Copeland & Sons Construction, Inc., 568 F.2d 1159 (5th Cir. 1978), cert. denied, 436 U.S. 957, 98 S.Ct. 3072, 57 L.Ed.2d 1123 (1978). See generally, 17A C.J.S. Contracts, § 502(4). The record clearly substantiates the trial court's finding that Gesco was responsible for considerable delay by such conduct as improperly locating a sewer easement, failing to timely supply lighting fixtures, and by allowing unit owners to effectuate changes in their apartments.

Gesco also challenges the lower court's refusal to allow its real estate appraiser to testify as to damages suffered by Gesco as a result of the delay in the condominium's completion. We have reviewed the proffered testimony, as well as the testimony of Gesco's accountant, and concur in the lower court's determination. The testimony of each witness was premised on several assumptions, which are not adequately supported by the record. Therefore, such testimony is not competent evidence on the issue of damages. We are first asked to accept the premise that were it not for the delay many additional condominium units would have been sold. However, neither expert could identify any party who definitely would have purchased but for the delay. We are also asked to consider the relative market conditions at the time the contract called for completion and the time completion actually occurred. The appraiser's testimony was premised on the fact that the real estate market was suffering when the project was completed. This may well be true. However, there was no testimony offered which demonstrated that the particular condominium in question would be subject to general market conditions. The market conditions testified to concerned Broward County as a whole, whereas this building was located on the intracoastal waterway in the City of Fort Lauderdale. We do not view testimony concerning condominium sales in such municipalities as Margate, Coral Springs, Davie, Hollywood, etc. as necessarily relevant to condominium sales occurring in a particular location of Fort Lauderdale.

Perhaps, if testimony was offered concerning sales of comparable condominium units, in comparable condominium projects, in comparable locations during the time in question, the relevance of Gesco's experts' testimony would be more apparent. However, as presented, the appraiser's testimony was not relevant and therefore properly excluded. Additionally, we find the appraiser's assumption that every sale of a condominium unit, following the six month delay, would have occurred six months earlier were it not for the delay untenable. There is no basis for assuming that a sale which occurred two years after the condominium was completed would have occurred six months earlier had the project been completed on schedule. Only those sales which would have taken place during the delay period, but were cancelled or precluded due to the delay, would be proper components of Gesco's damages. It should also be noted that even had the lower court erred by not accepting the appraiser's testimony, such error would be harmless. We...