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

[Justin Zinzow]

Michael, thank you for your response.  I am copying the list on my reply so that those who wish to respond have the additional fact you seek.

The court did not decline to hold the summary hearing.  The plaintiff did not schedule it, I suspect for the reason you mention.



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/>

From: Gibbons, Michael [mailto:Michael.Gibbons at lowndes-law.com]
Sent: Monday, June 15, 2015 6:35 PM
To: Justin Zinzow; clc-discussion at lists.flabarrpptl.org
Subject: RE: Payment of "Undisputed Sums" which the court Ultimately finds to be disputed--Remedy & Prevailing Party Fees


    Good issue. Couple comments:


1.        Did the Court decline to hold the evidentiary hearing despite a clear statutory requirement to hold one or did the plaintiff fail to schedule the hearing with the Court?   I suspect the latter especially if there was a breach of contract claim where the parties may have been focusing their attention.  I don’t see a circuit court judge unilaterally scheduling an evidentiary hearing on such a complaint in the absence of a party bringing it to court’s attention and scheduling it.[JRZ]


2.        With respect to the evidentiary hearing vs. reference to “trial” later in the statute, I don’t believe that the evidentiary hearing functions as the sole adjudicatory procedure in an action filed under Fla. Stat. s. 713.346.  The early evidentiary hearing  is expressly offered as a  means by which the plaintiff might qualify for some extraordinary prejudgment remedies such as a “temporary injunction” or “prejudgment attachment”.  The evidentiary hearing doesn’t mean that there is no later trial of an action filed under this statute; it just provides an evidentiary and procedural basis for the issuance of the extraordinary “prejudgment” relief spelled out at subsection (4).



3.        In order to prevail in this statutory action, I believe it is incumbent on the plaintiff to both plead and prove the existence of an “undisputed obligation” due from defendant to plaintiff.  That’s a high bar and for this reason this statutory action seems to be rarely invoked.  Subsection (4) appears to expressly require proof  of “each allegation of the complaint” which would include the allegation of an undisputed debt.  If plaintiff fails to prove the existence of the undisputed debt, then Plaintiff would not prevail in the action and defendant would appear to be entitled to recover prevailing party attorney’s fees.



4.        The combination of the high bar of pleading and  proving undisputed debt with the risk of plaintiff being obligated to pay defense atty’s fees is enough to keep most practitioners from invoking this statute.

Michael R. Gibbons  (Bio<http://lowndes-law.com/our-people/michael-r-gibbons>)
Shareholder
Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
215 N. Eola Drive
Orlando, FL 32801
Phone: 407-418-6378
Fax: 407-843-4444
email: michael.gibbons at lowndes-law.com<mailto:michael.gibbons at lowndes-law.com>
website: http://www.lowndes-law.com<http://www.lowndes-law.com/>

        [cid:image001.jpg at 01D0A79B.551D2FD0]

From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Justin Zinzow
Sent: Monday, June 15, 2015 4:47 PM
To: clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: [CLC-Discussion] Payment of "Undisputed Sums" which the court Ultimately finds to be disputed--Remedy & Prevailing Party Fees

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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