J.M. Beeson Co. v. Sartori

• Decision Date: 30 August 1989
• Docket Number: 87-2415 and 87-2693,Nos. 87-1953,s. 87-1953
• Citation: 14 Fla. L. Weekly 2023,553 So.2d 180
• Parties: 14 Fla. L. Weekly 2023, 14 Fla. L. Weekly 2863 J.M. BEESON COMPANY, Appellant, v. Ernesto SARTORI, Appellee.
• Court: Florida District Court of Appeals

Page 180

553 So.2d 180

14 Fla. L. Weekly 2023, 14 Fla. L. Weekly 2863

J.M. BEESON COMPANY, Appellant, v. Ernesto SARTORI, Appellee.

Nos. 87-1953, 87-2415 and 87-2693.

District Court of Appeal of Florida Fourth District.

Aug. 30, 1989.

On Motion for Clarification Dec. 13, 1989.

Kevin J. O'Grady of Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A., Fort Lauderdale, for appellant.

Linda R. Spaulding and Harris K. Solomon of Brinkley, McNerney, Morgan and Solomon, Fort Lauderdale, for appellee.

WARNER, Judge.

This appeal by a general contractor questions an amended final judgment in favor of the owner of a shopping center, awarding liquidated damages for delay and compensatory damages to complete construction.

This opinion was ready to be issued when a suggestion of bankruptcy of appellant was filed. We ordered appellant to notify the court when the automatic stay of bankruptcy was lifted. However, appellee points out to us the case of W.W. Gay Mechanical Contractor, Inc. v. Wharfside Two, Ltd., 545 So.2d 1348 (Fla.1989), in which the supreme court held that where a supersedeas bond has been posted by the bankrupt, the bond is not the property of the bankrupt estate. Therefore, a court may proceed to determine a suit between the bankrupt and a third party despite the automatic stay in bankruptcy. If the third party is successful on the merits, then it may satisfy its claim to the extent of the supersedeas bond. In this case, a supersedeas bond has been posted. Therefore, on the authority of W.W. Gay and mindful of the limitations on the recovery available to appellee thereunder, we proceed with our opinion on the merits of this case.

The appellant and appellee entered into a construction contract in 1983. It provided for the construction of a shopping center including several anchor tenants and outparcels. The contract provided for liquidated damages of $1,000.00 per day if appellant failed to substantially complete the project within 300 days of commencement. It further provided for a bonus of $1,000.00 per day for each day the project was finished prior to the completion date. Appellant commenced construction and within six months put two anchor tenants into their spaces. The remainder of the retail spaces received their certificates of occupancy within the 300-day period, but an anchor tenant in an outparcel was not given its certificate of occupancy until over a year after commencement. Shortly thereafter, the appellant-contractor left the job because of nonpayment and filed suit. Appellee counterclaimed for breach of contract and for the liquidated damages provided in the contract. After trial, the court awarded judgment in favor of appellee. This appeal ensued.

Appellant first contends that the trial court erred in awarding the liquidated delay damages to appellee, because they amounted to a penalty and had no reasonable relation to the actual damages suffered by appellee. However, this point is controlled by Murray v. Chillemi, 396 So.2d 1222 (Fla. 4th DCA 1981). In that case, as in this case, the appellant failed to raise the issue in the trial court and therefore was precluded from raising it on appeal. Furthermore, we would note that where liquidated damages are attacked, it is the burden of the defendant to raise the excessiveness of the damages as an affirmative defense. See C.T. McCormick, Handbook on the Law of Damages at 622-623 (1977). Having failed to raise this issue below, we therefore find no error on this point.

Secondly, appellant contends that the trial court erred in finding that he did not substantially complete the work. In this case the contract provided that "substantial" completion occurred when "construction is sufficiently complete in accordance with the Contract Documents, so the owner can occupy or utilize the work or designated portion thereof for the use for which it is intended." The "work" under the contract "comprises the completed construction required by the contract documents." Under the contract in this case the work consisted of "construction and completion of a Shopping Center", including all of its component parts such as landscaping and paving.

The contract also provides that the date of substantial completion is to be certified by the supervising architect. On this project, however, there was no supervising architect who approved certificates for payment or certified substantial completion. In fact, the appellee's contract with his architect specifically deleted any responsibilities on behalf of the architect to supervise payments and to certify the date of substantial completion. Thus, we must determine whether or not the trial court applied the correct definition of substantial completion to the facts of this case.

We agree with appellant's contention that the contractual definition of substantial completion in this case is similar to the well established doctrine of substantial performance, and the terms are interchangeable. See Ramada Development Co. v. Rauch, 644 F.2d 1097 (5th Cir.1981). The doctrine of "substantial performance" as held by this court in Ocean Ridge Development Corp. v. Quality Plastering, Inc., 247 So.2d 72, 75 (Fla. 4th DCA 1971) states:

Substantial performance is that performance of a contract which, while not full performance, is so nearly equivalent to what was bargained for that it would be unreasonable to deny the promisee the full contract price subject to the promisor's right to recover whatever damages have been occasioned him by the promisee's failure to render full performance. See 3A Corbin on Contracts, Section 702 et sequi.

To say that substantial performance is performance which is nearly equivalent to what was bargained for, as the case law defines the term, in essence means that the owner can use the property for the use for which it is intended. Furthermore, in defining substantial performance, one of the tests as enunciated by Corbin is the "degree of frustration of purpose":

Extremely important factors in solving the present problem [of what is substantial performance] are the character of the performance that the plaintiff promised to render, the purposes and end that it was expected to serve in behalf of the defendant, and the extent to which the nonperformance by the plaintiff has defeated those purposes and ends, or would defeat them if the errors and omissions are corrected.

Corbin on Contracts, 3-A, Section 706. Thus, substantial completion as defined in the contract is the equivalent of substantial performance under the case law and authorities hereinbefore cited.

In the instant case as of March, 1984, all phases of the shopping center had been completed sufficiently so as to obtain the certificates of occupancy from the city. Thus, the owner was capable of having tenants occupy the spaces and collecting rents thereon, and he was already collecting substantial rents on many of the tenant spaces prior to that date.

Despite the appellee's ability to rent out the shopping center spaces, the trial court found that appellant had not substantially completed the work by relying on an architect who testified that there still may not be substantial performance even though tenants were capable of occupying the premises, if the certificate of substantial completion called for in the contract had not been issued by the supervising architect. But this witness also testified that where there is no...