Aetna Cas. and Sur. Co. v. Buck

594 So. 2d 280, 1992 WL 18569
CourtSupreme Court of Florida
DecidedFebruary 6, 1992
Docket76925
StatusPublished
Cited by36 cases

This text of 594 So. 2d 280 (Aetna Cas. and Sur. Co. v. Buck) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aetna Cas. and Sur. Co. v. Buck, 594 So. 2d 280, 1992 WL 18569 (Fla. 1992).

Opinion

594 So.2d 280 (1992)

AETNA CASUALTY AND SURETY COMPANY, Etc., et al., Petitioners,
v.
Gordon F. BUCK, P.E., etc., Respondent.

No. 76925.

Supreme Court of Florida.

February 6, 1992.
Rehearing Denied March 27, 1992.

John M. Jorgensen of Scott, Royce, Harris, Bryan & Hyland, P.A., Palm Beach Gardens, for petitioners.

Isidro M. Garcia of Joseph A. Vassallo, P.A., Lake Worth, for respondent.

HARDING, Justice.

We have for review Pappalardo Construction Co. v. Buck, 568 So.2d 507 (Fla. 4th DCA 1990), in which the district court acknowledged conflict with Floridaire Mechanical Systems, Inc. v. Alfred S. Austin-Daper Tampa, Inc., 470 So.2d 717 (Fla. 2d DCA), review denied, 480 So.2d 1293 *281 (Fla. 1985), on the issue of whether privity should be found where an owner and contractor share a common identity so as to excuse the notice-to-owner requirement for perfecting a mechanics' lien. We have jurisdiction pursuant to article V, section 3(b)(4), Florida Constitution.

Vincent J. Pappalardo (Pappalardo) is the president and sole shareholder of Pappalardo Construction Company (Pappalardo Construction) and the president and sole shareholder of Bay Colony Land Company (Bay Colony Land). Pappalardo Construction is the general contractor on the construction site known as Bay Colony. Bay Colony Land is one of the two partners in the joint venture which owns the property under construction. Gordon F. Buck (Buck) orally contracted with Pappalardo Construction to furnish metal construction materials to the construction site. The parties disputed the reasonableness of the delivery time and Pappalardo Construction subsequently withheld payment for the materials. Buck filed a claim of lien against Pappalardo. Pappalardo transferred the lien to a surety bond issued by Aetna Casualty and Surety Company (Aetna). Buck never served a notice of lien on the joint venture as owner of the property.

The trial court held that because the owner and general contractor shared a common identity, the owner's knowledge of the subcontractor's presence on the job, obtained through his actions as the general contractor, established privity of contract between the owner and subcontractor. The trial court granted attorney's fees against Aetna and ordered an increase in the bond amount to cover these fees. On appeal, the district court agreed with the trial court's definition of privity and affirmed the trial court's final judgment and order.

I.

Mechanics' liens are "purely creatures of the statute." Sheffield-Briggs Steel Prods., Inc. v. Ace Concrete Serv. Co., 63 So.2d 924, 925 (Fla. 1953). As a statutory creature, the mechanics' lien law must be strictly construed. Home Elec. of Dade County, Inc. v. Gonas, 547 So.2d 109, 111 (Fla. 1989). As a prerequisite to perfecting a mechanics' lien, all lienors who are not in privity with the owner, except for laborers, must serve a notice on the owner. § 713.06(2), Fla. Stat. (1987). The purpose of serving notice to an owner is "`to protect an owner from the possibility of paying over to his contractor sums which ought to go to a subcontractor who remains unpaid.'" Broward Atlantic Plumbing Co. v. R.L.P., Inc., 402 So.2d 464, 466 (Fla. 4th DCA 1981) (quoting Boux v. East Hillsborough Apartments, Inc., 218 So.2d 202, 202 (Fla. 2d DCA 1969)). In other words, as the trial court recognized, the notice requirement is just that, a notice to the owner that those not in privity with the owner are in fact providing improvements to the property. Because the purpose of serving notice is to alert the owner to guard against double payment, such notice will be excused only when privity exists between the owner and the subcontractor. See § 713.05, Fla. Stat. (1987).[1] Privity, however, is not defined in the statute. Tompkins Land Co. v. Edge, 341 So.2d 206, 207 (Fla. 4th DCA 1976).

In Harper Lumber & Manufacturing Co. v. Teate, 98 Fla. 1055, 125 So. 21 (1929), this Court held that privity requires both knowledge by an owner that a particular subcontractor is supplying services or materials to the job site and an express or implied assumption by the owner of the contractual obligation to pay for those services or materials. Id.; see also First Nat'l Bank of Tampa v. Southern Lumber & Supply Co., 106 Fla. 821, 145 So. 594 (1932). The Second District Court applied this definition of privity in Floridaire, and *282 the petitioners contend that it should be applied in the instant case.

Although we agree with the Harper Lumber and Floridaire definitions of privity, we also hold that privity is established where, for all practical purposes, a common identity exists between the owner and the contractor. Cf. Broward Atlantic Plumbing Co. v. R.L.P., Inc., 402 So.2d 464, 466 (Fla. 4th DCA 1981) (the three owners of a real estate project were also the principals in the contracting corporation). In such a case, service of notice on the owner is not necessary in order to perfect a mechanics' lien. Thus, we find that privity exists either when the owner knows a subcontractor is working on the job and that owner has assumed the contractual obligation for the work or when the owner and contractor share a common identity. In either situation, notice is not required.

In the instant case, the trial court made a factual determination that the owner and the contractor share a common identity. The record more than adequately supports the trial court's finding of this common identity. Here, the warranty deed and the Notice of Commencement both list the address of the owner as "c/o Vincent J. Pappalardo, 4440 PGA Blvd., Palm Beach Gardens, Florida." The construction contract between the joint venture and Pappalardo Construction lists the address of the owner and of the contractor as "4440 PGA Blvd., Palm Beach Gardens, Florida." Furthermore, the construction contract itself lists Bay Colony Land, of which Pappalardo is 100% owner, as the managing partner of the joint venture. Pappalardo signed the construction contract both in his capacity as president of Bay Colony Land, which is listed as the owner, and in his capacity as president of Pappalardo Construction. Pappalardo personally approved the subcontract between Pappalardo Construction and Buck. Pappalardo also acknowledged that he was on the job site once or twice a day in his capacity as general contractor and as the agent for the owner. In addition, the project manager for Pappalardo Construction, Palermo, believed that Pappalardo was the owner and, upon inquiry by Buck, informed Buck of such. Thus, even if Buck had actually given notice to the owner, he would have given it to Pappalardo.[2]

Accordingly, we disapprove the Second District Court of Appeal's decision in Floridaire to the extent it can be read as requiring notice to be served on an owner who shares a common identity with the contractor.

II.

The second issue on appeal is whether the 1987 revisions to section 713.24 of the Florida Statutes[3] make a surety liable for *283 all reasonable attorney's fees incurred by a lien claimant in an action on a surety bond. Prior to 1987, Florida's mechanics' lien statute provided that any lien transferred to a surety bond must include an amount of $100 to cover costs. § 713.24, Fla. Stat. (1985). The statute also provided that costs were not to exceed $100. Id. Furthermore, under the statute, attorney's fees were to be taxed as costs. § 713.29, Fla. Stat. (1985).

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594 So. 2d 280, 1992 WL 18569, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aetna-cas-and-sur-co-v-buck-fla-1992.