Westburne Supply, Inc. v. Community Villas Partners, Ltd., BO-390
| Decision Date | 19 May 1987 |
| Docket Number | No. BO-390,BO-390 |
| Citation | 12 Fla. L. Weekly 1277,508 So.2d 431 |
| Parties | 12 Fla. L. Weekly 1277 WESTBURNE SUPPLY, INC., Appellant, v. COMMUNITY VILLAS PARTNERS, LTD., and Community Income Properties, Inc., Appellees. |
| Court | Florida District Court of Appeals |
Jack M. Ross, of Birr, Bryant, Saier & Ross, Gainesville, for appellant.
Neil P. Linden and Eric C. Christu, of Rollnick, Rosen & Linden, Coral Gables, for appellees.
Westburne Supply, Inc. (Westburne), appeals a final order dismissing with prejudice its second amended complaint against appellees, Community Villas Partners, Ltd. (Community Villas), and Community Income Properties, Inc. (Community Properties). The complaint sought to enforce an equitable lien against certain real property now owned by Community Villas. Finding error in the trial court's ruling that the statute of limitations bars appellant's cause of action in respect to these defendants, we reverse.
The allegations of the complaint reveal that in August 1983 Stanley and Phyllis Baumann, as owners, and Baumann, Inc., as contractor, commenced construction of an apartment complex in Alachua County. Westburne supplied the plumbing subcontractor with plumbing materials used in construction of the apartment complex. The last of the materials were supplied on August 30, 1984. Westburne filed suit against the Baumanns and others on February 27, 1985, alleging that the Baumanns had conceived and executed a plan to defraud subcontractors by wrongfully refusing to pay for labor and materials used in the construction of the apartment complex, thereby causing Westburne damages in the amount of $122,340.68. Among the several causes of action alleged, the complaint contained a count to foreclose an equitable lien against the apartment complex property. In February 1985, Westburne filed a notice of lis pendens against the property pursuant to section 48.23, Florida Statutes (1985). Defendants moved to dismiss the complaint and discharge the lis pendens. The motion to dismiss was denied. The trial court ordered the lis pendens discharged unless Westburne immediately filed a $500,000 bond. The bond was not filed. 1
According to the complaint, on March 15, 1985, Community Villas and Community Properties (as general partner of Community Villas) closed the purchase of the apartment complex from the Baumanns, and Community Villas took title under deed. On February 14, 1986, Westburne filed its second amended complaint. Count VII thereof added Community Villas and Community Properties as additional defendants and alleged that Community Villas took title with full knowledge of Westburne's "claim of an equitable lien as set forth in Count IV" and, therefore, "took title to The Villas Apartments subject to Plaintiff's claim of an equitable lien on The Villas Apartments." No cause of action other than enforcement of the equitable lien was stated against Community Villas and Community Properties.
Appellees moved to dismiss count VII on the ground, among others, that Westburne's claim for equitable lien was barred by the one-year statute of limitations in section 95.11(5)(b), Florida Statutes (1985). 2 The trial court granted the motion, reasoning that the statute of limitations commenced running against these defendants on August 30, 1984, the date that Westburne last supplied materials to the property, not from March 1986, the date Community Villas purchased the complex, and that the action had thus not been brought against Community Villas and Community Properties within the prescribed one-year period. The trial court's ruling is in error because it fails to recognize the distinction between quasi in rem claims and in personam claims.
This action to foreclose an equitable lien arising out of the furnishing of materials incorporated into real property is a quasi in rem action. In Hullum v. Bre-Lew Corporation, 93 So.2d 727 (Fla.1957), the court described the nature of an equitable lien as follows:
An equitable lien is a right, not recognized at law, to have a fund or specific property, or its proceeds, applied in whole or in part to the payment of a particular debt or class of debts. It is not an estate or property in the thing itself, nor is it a right to recover the thing, that is, it is not a right which may be the basis of a possessory action, but it is merely a charge upon it. Such a lien may be created by an express contract which shows an intention to charge some particular property with a debt or obligation, or it may arise by implication from the relations and dealings of the parties whose interests are involved.... In fact, if a transaction resolves itself into a security, whatever may be its form and whatever name the parties may choose to give it, it is in equity a lien. Possession by the lienor of the thing sought to be charged is not essential to the existence of an equitable lien, which differs in this respect from a common-law lien.
93 So.2d at 730-31, quoting 33 Am.Jur. Liens § 18 (1941). Because the lien is not an estate or property in the land itself, the court further stated:
It is a charge or encumbrance upon the land "so that the very thing itself may be proceeded against in an equitable action, and either sold or sequestered under a judicial decree, and its proceeds in the one case, or its rents and profits in the other, applied upon the demand of the creditor in whose favor the lien exists.
93 So.2d at 730, quoting Jones v. Carpenter, 90 Fla. 407, 106 So. 127, 129 (1925). An action to foreclose an equitable lien is essentially an action against the property and not necessarily an in personam claim against the person or entity having title to or possession of the property; therefore, the statute of limitations is tolled when the action to enforce the lien is filed against the property.
A party does not cause the statute of limitations to commence running anew by subsequently acquiring an interest in the property, whether or not that party is joined in the pending litigation. Westburne's initial suit to enforce an equitable lien was obviously filed within the time allowed by the statute of limitations and apparently named as defendants all persons having an interest in the property at that time. Because the filing of this action against the Baumanns satisfied the statute of limitations, the addition of Community Villas as a party having a subsequently acquired interest in the property does not violate the statute of limitations. 3
Appellees argue that, until the equitable lien has been adjudicated and established by court decree, Westburne possesses only a claim--not a perfected lien giving the claimant any rights or interest in the property. Building on this theme, they argue that a notice of lis pendens had to be properly filed and maintained of record under section 48.23 in order to preserve the superiority of Westburne's claim of lien against a subsequent purchaser of the property, whether or not that purchaser had actual knowledge of the pending court proceedings involving the claimed lien. Accordingly, appellees say, because Westburne's lis pendens was discharged for failure to post the bond, and because Westburne failed to sue Community Villas within one year of the date Westburne supplied the last materials (August 30, 1984), its claim of lien became barred by the one-year statute of limitations. Appellees candidly admit that under this argument Westburne's equitable lien could have been cut off if the Baumanns had alienated the property more than one year after the last materials were supplied by Westburne.
This argument fails because it is predicated on an erroneous conception of the purpose and...
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