[CLC-Discussion] Payment of "Undisputed Sums" which the court Ultimately finds to be disputed--Remedy & Prevailing Party Fees

[Justin Zinzow]

Good afternoon:  We have run across an interesting issue.  I will start by framing the issue and would appreciate any insights those on this distribution list can provide.  This might also be an area ripe for legislative clarification.

The Issue:  When a 713.346, Florida Statutes action is brought by a subcontractor against a general and the court fails to hold the summary hearing but finds at trial that the general had a bona fide dispute (but then also found the general breached the contract), is the general who withheld payment because of the bona fide dispute entitled to prevailing party fees under 713.346?

We have been engaged as counsel following a trial loss by our client's former trial counsel.  The complaint which commenced the lawsuit was brought by a subcontractor against the general.  It contained a count under 713.346, Florida Statutes over allegedly undisputed sums, and a count for breach of contract.

The Judge never held the summary hearing required by 713.346.  Instead, the Judge let everything go to trial.  The court found that the sums were disputed by the general and that it was a close call, but ultimately ruled in favor of the subcontractor on both counts.  It appears the Judge erred in ruling for the subcontractor on 713.346 because the sums were disputed.

Who should be entitled to fees, if anyone, under 713.346?

In Astaldi Const. Corp. the Fifth District Court of Appeal, interpreting section 255.071, Florida Statutes (materially similar to 713.346), held that 713.346 does not provide a mechanism for relief as to disputed sums and indicated that disputed sums must go to trial.  The issue of prevailing party attorney's fees was not mentioned in the decision, but the court was clearly differentiating between disputed and undisputed claims.

Logic and fairness would suggest that 713.346 provides prevailing party fees to a subcontractor only if withheld sums are undisputed.  By doing so it would act as a penalty to a wrongdoer and as a deterrent to future would-be wrongdoers.  But is the reverse also true?  If a subcontractor brings a claim under 713.346 knowing the sums are disputed, is the general entitled to prevailing party fees when the court determines the amount was, in fact, disputed?

The statute is unclear as to the fee issue.  It provides that "The prevailing party in any proceeding under this section is entitled to recover costs, including a reasonable attorney's fee, at trial and on appeal."  Why is trial mentioned?  As per Astaldi, there is a distinction between an undisputed sums claim that does not go to trial, and a disputed claim which does.  Does the statute mention trial and appeal to indicate the court levels, as opposed to an actual trial?




Justin R. Zinzow
Board Certified in Construction Law
Zinzow Law, LLC
35111 U.S. Highway 19 North
Suite 302
Palm Harbor, FL 34684
Phone: (727) 787-3121
Fax: (727) 787-3231
www.zinzowlaw.com<http://www.zinzowlaw.com/>
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