Hobbs Const. and Development, Inc. v. Presbyterian Homes of Synod of Florida, AS-222

• Decision Date: 18 November 1983
• Docket Number: No. AS-222,AS-222
• Citation: 440 So.2d 673
• Parties: HOBBS CONSTRUCTION AND DEVELOPMENT, INC., Appellant, v. PRESBYTERIAN HOMES OF the SYNOD OF FLORIDA and Leon County Health Facilities Authority, Appellees.
• Court: Florida District Court of Appeals

Page 673

440 So.2d 673

HOBBS CONSTRUCTION AND DEVELOPMENT, INC., Appellant, v. PRESBYTERIAN HOMES OF the SYNOD OF FLORIDA and Leon County

Health Facilities Authority, Appellees.

No. AS-222.

District Court of Appeal of Florida,

First District.

Nov. 18, 1983.

Bill R. Hutto, Panama City, for appellant.

David A. Monaco of Cobb & Cole, P.A., Daytona Beach, for appellees.

JOANOS, Judge.

In this interlocutory appeal, Hobbs Construction and Development, Inc. (Hobbs) contends the trial court erred in granting partial summary judgment to Presbyterian Homes of the Synod of Florida (Presbyterian Homes) and Leon County Health Facilities Authority (Leon County) on their counterclaim alleging Hobbs' claim of lien to be fraudulent. We affirm.

Hobbs entered into a construction contract with Presbyterian Homes and Leon County to build a continuing care health facility, Westminster Oaks. The parties had a cost-plus contract with a guaranteed maximum price of $7,250,000.00 and provisions for changes in work with prior written approval by change orders. For purposes of this appeal, the parties adopt $7,268,206.00 as the guaranteed maximum rate. Hobbs filed a claim of lien, with sworn support that the total value of work performed was $8,043,142.09, with an outstanding balance of $677,023.15. Presbyterian Homes and Leon County counterclaimed that the lien was fraudulent under § 713.31, Fla.Stat. (1981).

The deposition of Hobbs' chief engineer, Wenick, showed how Hobbs compiled the lien. Included were $150,524 for delays; $134,009 for additional field overhead expenses; $237,093 for overtime labor; $21,441.63 for markup on overtime labor; and $1,139.24 as interest on a withheld payment at a 16.5% rate of interest.

Wenick revealed that the above amounts were not authorized by the contract and that they were not the subject of any change order or change order application.

The trial court found that Hobbs should not have included in the claim of lien the amounts not authorized by the contract or change orders; such inclusion amounting to a willful exaggeration, and therefore a fraudulent lien within the meaning of Section 713.31(2), Florida Statutes.

Section 713.31(2)(a), Florida Statutes (1981), provides that any mechanic's lien in which the lienor has willfully exaggerated the amount or has compiled the claim with such willful and gross negligence as to amount to a willful exaggeration shall be deemed a fraudulent lien. The determination that a lien is fraudulent is a complete defense to enforcement of the lien. Section 713.31(2)(b), Fla.Stat. (1981).

A contractor, such as Hobbs, who complies with the provisions of the Florida Mechanics' Liens Law, Chapter 713, Fla.Stat., has a lien on the improved real property for any money that is owed to him for labor, services, materials, or other items required by, or furnished in accordance with, the direct contract. Section 713.05, Fla.Stat. (1981). The "direct contract" is the agreement between owner and any other person for improving real property. Section 713.01, Fla.Stat. (1981). Under subsection 713.01(3) "contract price" is

the amount agreed upon by the contracting parties for performing all labor and services and furnishing all materials covered by their contract and shall be increased or diminished by the price of extras or change orders as herein defined, or by any amounts attributable to changes in the scope of the work or defects in workmanship or materials or any other breaches of the contract ...

As noted, the contract between Hobbs and Presbyterian Homes had a guaranteed maximum...