Grant v. Florida Power Corp. (In re American Fabricators, Inc.)

197 B.R. 987, 10 Fla. L. Weekly Fed. B 11, 1996 Bankr. LEXIS 773
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedJune 4, 1996
DocketBankruptcy No. 94-62-BKC-3P7; Adv. No. 95-86
StatusPublished

This text of 197 B.R. 987 (Grant v. Florida Power Corp. (In re American Fabricators, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grant v. Florida Power Corp. (In re American Fabricators, Inc.), 197 B.R. 987, 10 Fla. L. Weekly Fed. B 11, 1996 Bankr. LEXIS 773 (Fla. 1996).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

GEORGE L. PROCTOR, Bankruptcy Judge.

This proceeding came before the Court upon complaint to recover property of the estate pursuant to 11 U.S.C. § 542(b); to determine extent, validity ■ and priority of. lien; and objections to claims 13, 14 and 46. A trial was held on March 6,1996. Upon the evidence presented, the Court enters the following findings of fact and conclusions of law:

[990]*990 FINDINGS OF FACT

1. On October 20, 1992, American Fabricators, Incorporated d/b/a Buffalo Tank Corporation (“Debtor”) entered into a contract with Florida Power Corporation (“FPC”) to construct a storage tank on FPC’s leasehold property. (FPC Ex. 1).

2. Debtor subcontracted the welding and painting portion of the work to A & A Welding & Fabrication, Incorporated (“A & A”). (Trustee’s Brief at 1). On July 19,1993, A & A subcontracted the painting and sandblasting portion of the work to Whitlock Industrial Painting, Company (“Whitlock”). (Id.). Debtor also subcontracted portions of the work to Tri-State Contractors of Florida, Incorporated (“Tri-State”). The controversy in this proceeding stems from the amount of money that is owed to sub-subcontractor Whitlock pursuant to the “A & A — Whitlock” contract.

3. On January 6, 1994, an involuntary petition was filed against Debtor under Chapter 7 of the Bankruptcy Code and relief was ordered. (Main Case Rec. at 1). Plaintiff Charles W. Grant (“Trustee”) was appointed trustee on August 19,1994.

4. FPC owed Debtor $95,985.20 for work Debtor completed pursuant the Debtor-FPC contract (“the general contract”). (Adv.Rec. 1). FPC retains possession of the $95,985.02 (“the funds”). FPC paid A & A $7,320.00 and Tri-State $6,556.00 from the funds. (FPC Ex. 3). Pursuant to this Court’s Order of January 19, 1996, Whitlock was paid $14,-756.15 in principal and interest. (Id.). The funds FPC currently has on hand total $67,-343.05. (FPC’s Brief at 1).

5. On March 15, 1995, Trustee filed this adversary proceeding naming FPC, Whit-lock, A & A and Tri-state as defendants. (Adv.Rec. 1). Count I of the complaint seeks a turnover of the funds as property of the estate pursuant to 11 U.S.C. § 542(b). (Adv. Rec. 1). Count II of the complaint seeks a determination of the amount and validity of Whitlock’s lien or other interest in the funds. (Id.).

6. Counts III and IV of the complaint are moot for purposes of resolving this proceeding because stipulations of dismissals were filed dismissing defendants A & A and TriState. (Adv.Rec. 55-56).

7. In Counts V and VI of the complaint, the Trustee objects to Whitlock’s claim 13, a general unsecured claim in the amount of $21,450.00 and Whitlock’s claim 14 for $15,-905.54, a claim secured under Florida’s Mechanics’ Lien law.

8. Throughout the proceeding, the parties have not addressed claim 13. Claim 14 in the amount of $15,905.54 consists of $12,-106.00, the principal amount owed to Whit-lock by Debtor, and $3,799.54 for extras. (Claim file 14). This sum of $15,905.54 arose from the Claim of Lien Whitlock filed against FPC on September 15, 1993, in Alachua County, Florida. (Whitlock Ex. 16). Whit-lock has received payment for the $12,106.00 principal, together with $2,650.15 in interest. The remaining dispute in this proceeding concerns the $3,799.54 portion of Whitlock’s Claim of Lien, and entitlement to attorneys’ fees, costs and interest.

9. Count VII of the complaint objects to claim 46 filed by FPC for $59,355.93 for estimated breach of contract damages, representing the potential liability FPC could face because Debtor failed to pay subcontractors. (Claim file 46). The amount of FPC’s claim has since been reduced, and FPC is now claiming $28,427.72 in attorneys’ fees for breach of contract and set-off damages. (Adv.Rec. 78, 87).

10. Whitlock answered the complaint asserting affirmative defenses, a counterclaim and a erossclaim. Whitlock contends that it holds a priority interest in the funds. (Adv. Rec. 5). In its counterclaim and crossclaim Whitlock alleges that Debtor breached its contract with FPC by failing to pay all subcontractors timely. (Id.). Whitlock argues that it has a perfected construction lien claim against FPC’s property, and therefore, has superior rights to funds FPC owes Debtor in the amount of its Claim of Lien. (Id.).

11. On November 15, 1995, Whitlock amended its counterclaim and erossclaim asserting that the $3,799.54 portion of its Claim of Lien is a valid lien pursuant to Florida’s mechanics’ lien law. (Adv.Rec. 27). Trustee moved for dismissal of Whitlock’s counter[991]*991claim pursuant to FRCP 12(b)(6) and Fed. R.Bankr. 7012. (Adv.Rec. 8). This Court however found that the Trustee did not meet his burden in proving insufficiency of Whit-lock’s counterclaim, and denied Trustee’s Motion to Dismiss Whitlock’s Counterclaim. (Adv.Rec. 18).

12. FPC' answered the Trustee’s complaint, asserting that Debtor failed to provide FPC with Contractor’s Final Affidavit as required under Fla.Stat. § 713.06(3)(d), and which is a condition precedent to distribution of final payment pursuant to the contract. (Adv.Rec. 6). Also, in answering Whitlock’s crossclaim, FPC asserts as an affirmative defense that it is not required to pay attorneys’ fees, costs and interest associated with Whitlock’s enforcement of its lien rights. (Adv.Rec. 24).

13. On December 1, 1995, Whitlock moved for summary judgment on its cross-claim against FPC and partial summary judgment on Counts I and II of Trustee’s complaint. (Adv.Rec. 32). FPC also moved for summary judgment seeking set-off, attorneys’ fees, and sought to deposit the funds it holds into the Court’s registry. (Rec. 34). Trustee moved for partial summary judgment on the issue of whether Whitlock can obtain a construction lien on the $3,799.54 portion of its Claim of Lien. (Adv.Rec. 38). On January 19, 1996, this Court issued an Order denying both Trustee’s motion for summary judgment and defendant FPC’s motion for partial summary judgment. (Adv. Rec. 51). The Order also denied in part and granted in part defendant Whitlock’s motion for summary judgment, directing FPC to pay Whitlock $14,756.15 out of the funds. (Id,.). The $14,756.15 amount paid to Whitlock consists of the $12,106.00 portion of its Claim of Lien and $2,650.15 in interest for the periods up to August 10, 1995. (Trustee Ex. 9).

14. On January 19,1996, Whitlock served FPC and Trustee with Request for Admissions, which was filed with the Court on January 21,1996. (Adv.Rec. 53). FPC timely responded to Whitlock’s request for admissions on February 2, 1996. (Adv.Rec. 54). However, this Court entered an Order Striking Trustee’s Response to Whitlock’s Request for Admissions. (Adv.Rec. 71).

15. The trial was held on March 6, 19.96. The parties subsequently submitted briefs outlining their arguments.

16. The Trustee argues that the $3,799.54 portion of Whitlock’s Claim of Lien is not lienable under Florida’s mechanics’ lien law. (Adv.Rec. 72).

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197 B.R. 987, 10 Fla. L. Weekly Fed. B 11, 1996 Bankr. LEXIS 773, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grant-v-florida-power-corp-in-re-american-fabricators-inc-flmb-1996.