[CLC-Discussion] Lien rights for non-conforming goods?
Randall Gilbert
rgilbert at theconstructionlawyers.com
Tue Aug 9 15:27:05 PDT 2016
To All, Thank you all for your over 40+ responses and citations to various laws which were very helpful especially §713.06(1) Fla. Stat. which I find particularly on-point.
As to Michael Gibbons’ “Side question here for Randall: This should have been caught in the Shop Drawing and submittal process. How did the windows get fabricated without approved shop drawings (presumably signed off by Architect)?”
· The answer is the MANUFACTURER says their request to see the plans were denied by the GC, that they “thought it weird,” but manufactured exactly what was ordered by the GC as set forth in their PO with the GC. The OWNER played no part in the order being incorrectly placed by the GC and there is no estoppel/waiver/consent/unclean hands defense to be argued regarding the Owner. This is simply an issue caused entirely by the GC between two innocent parties. My supposition is that the GC figured no one would catch the error in the energy factor being 300% less than what was specified and approved in the publicly filed and permitted set of plans, and the GC just ordered much cheaper windows. In other words, non-conforming goods.
Perry, if your motion (made at the end of your trial) was written on the issue would you share it?
Belinda, a big thank you for the Hawaiian Inn case, which other cases have cited, and for the benefit of all I am quoting below…
· “When an owner avails himself of the services of an architect for the purpose of preparing plans and specifications and thereafter enters into a contract for construction in accordance with those plans and specifications the owner is entitled, in the absence of an agreed change, acquiescence or estoppel, neither of which are sustained by the evidence sub judice, to expect and require construction in accordance with the plans and specifications. It being clear from the record that the paint (and other materials, specifically caulking) used by the painting subcontractor was not as specified we find insufficient basis for the assertion and foreclosure of mechanic's liens: The portions of the final judgments so providing, in favor of appellee Robert Myers Painting, Inc. and against appellant Hawaiian Inn of Daytona Beach, Inc. are reversed.” Hawaiian Inn of Daytona Beach, Inc. v. Robert Myers Painting, Inc., 363 So. 2d 125, 126 (Fla. 1st DCA 1978)
· “ Florida law is clear that “[b]efore the lienor may recover, the owner's contract must call for the furnishing of the particular item. Where the contract is written, the plans and specifications must reflect the *1231 furnishing of the particular materials.” 1 S. Rakusin, Florida Mechanics' Lien Manual 3.02 A.1. (Supp.1988). Where the written contract is at variance with the claim of lien, mechanics' lien jurisdiction will not lie. See Hawaiian Inn of Daytona Beach, Inc. v. Robert Myers Painting, Inc., 363 So.2d 125 (Fla. 1st DCA 1978) (where paint and other materials used by subcontractor were not in accordance with plans and specifications, there was no basis for assertion and foreclosure of mechanics' lien), cert. denied, 370 So. 2d 461 (Fla. 1979); Morris & Esher, Inc. v. Olympia Enters., Inc., 200 So.2d 579 (Fla. 3d DCA 1967) (to determine whether amounts reflected in claim of lien covered lienable items, court must consider terms of direct contract between owner and contractor.” Lofter v. Rashide, 523 So. 2d 1230, 1230–31 (Fla. 3d DCA 1988)
· “ In this case the homeowner's direct contract with Strickland called for a Katolight generator, but the generator actually delivered was an Onan. The homeowner argues that this nonconformity defeats Newman's claim of lien. “Where the written contract is at variance with the claim of lien, Mechanic's Lien jurisdiction will not lie.” Lofter v. Rashide, 523 So.2d 1230, 1231 (Fla. 3d DCA 1988) (citing Hawaiian Inn of Daytona Beach, Inc. v. Robert Myers Painting, Inc., 363 So.2d 125 (Fla. 1st DCA 1978); Morris & Esher, Inc. v. Olympia Enters., Inc., 200 So.2d 579 (Fla. 3d DCA 1967)). We think the owner is estopped from invoking the nonconformity under the circumstances of this case. Upon delivery of the generator the homeowner immediately determined that it was nonconforming but made a conscious decision to accept the generator in exchange for a credit on the price. There is no indication of any such circumstances in the above cited cases. Keller v. Newman Sons, Inc., 756 So. 2d 120, 122 (Fla. 3d DCA 2000).
· “An example of a situation in which there are no lien rights would be that of a contractor ordering the electrical subcontractor to put lights in a room where the plans and specifications do not call for lights. The owner has not ordered this change, and is not aware of it. The contractor has ordered the change because it makes the room easier for the contractor to work in. The electrical subcontractor will not have lien rights for those extra lights, but may recover the reasonable value of the lights from the contractor.” 8 Fla. Prac., Constr. Law Manual §8:76 (2015-2016 ed.)
APPLICABLE STATUTES
· “For the purpose of perfecting her or his lien under this part, every lienor, including laborers and persons in privity, shall record a claim of lien which shall state … The labor, services, or materials furnished and the contract price or value thereof. Materials specially fabricated at a place other than the site of the improvement for incorporation in the improvement but not so incorporated and the contract price or value thereof shall be separately stated in the claim of lien.” §713.08(1)(c) Fla. Stat.
· “Persons who are not in privity with an owner and who perform labor or services or furnish materials constituting a part of an improvement under the direct contract of another person shall have rights to a lien on real property as provided in s. 713.06.” §713.02(4) Fla. Stat.
o “Furnish materials” means supply materials which are incorporated in the improvement including normal wastage in construction operations; or specially fabricated materials for incorporation in the improvement, not including any design work, submittals, or the like preliminary to actual fabrication of the materials; or supply materials used for the construction and not remaining in the improvement, subject to diminution by the salvage value of such materials; and includes supplying rental equipment, but does not include supplying handtools. The delivery of materials to the site of the improvement is prima facie evidence of incorporation of such materials in the improvement. ….. §713.01(13) Fla. Stat.
o “Direct contract” means a contract between the owner and any other person. §713.01(9) Fla. Stat.
o “Improvement” means any building, structure, construction, demolition, excavation, solid-waste removal, landscaping, or any part thereof existing, built, erected, placed, made, or done on land or other real property for its permanent benefit. §713.01(15) Fla. Stat.
· “A materialman or laborer, either of whom is not in privity with the owner, or a subcontractor or sub-subcontractor who complies with the provisions of this part and is subject to the limitations thereof, has a lien on the real property improved for any money that is owed to him or her for labor, services, or materials furnished in accordance with his or her contract and with the direct contract and for any unpaid finance charges due under the lienor's contract. … The total amount of all liens allowed under this part for furnishing labor, services, or material covered by any certain direct contract must not exceed the amount of the contract price fixed by the direct contract except as provided in subsection (3).” §713.06(1) Fla. Stat.
· “Direct contract” means a contract between the owner and any other person. §713.01(9) Fla. Stat.
Sincerely yours,
Address: 1720 Harrison Street, Penthouse B
Hollywood, FL 33020
Office: (954) 620-5000
Fax: (954) 620-5105
Web#1: www.TheConstructionLawyers.com<http://www.theconstructionlawyers.com/>
Randall Gilbert, Esq.
Web#2: www.TheTitleLawyers.com<http://www.thetitlelawyers.com/>
Board Certified Construction Lawyer
Web#3: www.TheCorporateLawyers.com<http://www.thecorporatelawyers.com/>
[Randall Gilbert][cid:image003.gif at 01CD3F4A.EF94F960]
From: Gibbons, Michael [mailto:Michael.Gibbons at lowndes-law.com]
Sent: Tuesday, August 09, 2016 2:09 PM
To: 'Reese J. Henderson, Jr.' <Reese.Henderson at gray-robinson.com>; Randall Gilbert <rgilbert at theconstructionlawyers.com>; clc-discussion at lists.flabarrpptl.org
Subject: RE: Lien rights for non-conforming goods?
Reese,
I believe your interpretation of “in accordance with” is overly narrow and restrictive. And Randall’s facts illustrate why. Why should a lienor have lien rights here when the product fabricated is cut to the wrong dimensions and cannot be used to actually improve Owner’s property. The issue can be (and typically is) avoided by the fabricator working off permitted drawings and specs that are included in the direct contract.
Side question here for Randall: This should have been caught in the Shop Drawing and submittal process. How did the windows get fabricated without approved shop drawings (presumably signed off by Architect)?
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/>
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From: Reese J. Henderson, Jr. [mailto:Reese.Henderson at gray-robinson.com]
Sent: Tuesday, August 09, 2016 1:58 PM
To: Gibbons, Michael; 'Randall Gilbert'; clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: RE: Lien rights for non-conforming goods?
Mike,
The statute you cited says “in accordance with his or her contract and with the direct contract”, not “in compliance with the requirements of . . . .” Otherwise, it would be very easy to defeat liens for specially fabricated materials if the owner could find one feature technically out of compliance. Under the stated hypothetical, the fabricator shipped what was ordered. Absent a case saying to the contrary, my understanding is “in accordance with” simply means the supplier’s contract is in the chain of contracts leading to the owner and, in the hypothetical, it clearly is in the chain of contracts.
Reese J. Henderson, Jr. | Shareholder
Florida Bar Board Certified in Construction Law
Florida Supreme Court Certified Circuit Civil Mediator
G R A Y | R O B I N S O N
50 North Laura Street, Suite 1100 | Jacksonville, Florida 32202
T: 904-598-9929 | F: 904-598-9109 | D: 904-632-8459
E-mail<mailto:Reese.Henderson at gray-robinson.com> | Website<http://www.gray-robinson.com> | Bio<http://www.gray-robinson.com/attorneys/detail/1022/ReeseJ-HendersonJr> | vCard<http://www.gray-robinson.com/docs/Reese%20Henderson.vcf>
Facebook<https://www.facebook.com/GrayRobinsonLaw> | LinkedIn<https://www.linkedin.com/company/grayrobinson-p-a-> | Twitter<https://twitter.com/grayrobinsonlaw>
From: Gibbons, Michael [mailto:Michael.Gibbons at lowndes-law.com]
Sent: Tuesday, August 09, 2016 1:53 PM
To: Reese J. Henderson, Jr.; 'Randall Gilbert'; clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: RE: Lien rights for non-conforming goods?
Don’t think so, Reese. The issue is not whether the specially fabricated materials were incorporated or not. The issue is whether a supplier or sub (i.e, non-privity lienor) has lien rights when the materials (specially fabricated or otherwise) do NOT conform to the requirements of the direct contract between Owner and GC. In Randall’s facts, he made it clear that the materials (while complying with the terms of the subcontract) do not comply with the terms of the direct or owner contract.
It would appear the underlying rationale for the statutory limitation on the lien rights is that the lienor should not be permitted to encumber the Owner’s real property with a Claim of Lien when the performance by the Lienor (here specially fabricated materials) does not conform to the Owner’s contractual requirements and hence doesn’t benefit Owner.
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:image004.jpg at 01D1F25B.E68051D0]
From: Reese J. Henderson, Jr. [mailto:Reese.Henderson at gray-robinson.com]
Sent: Tuesday, August 09, 2016 1:36 PM
To: Gibbons, Michael; 'Randall Gilbert'; clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: RE: Lien rights for non-conforming goods?
My friend Michael is incorrect. See § 713.01(13); see also Aquatic Plant Management, Inc. v. Paramount Engineering, Inc., 977 So.2d 600 (Fla. 4th DCA 2007). Assuming, of course, the windows really were specially fabricated for this project.
Reese J. Henderson, Jr. | Shareholder
Florida Bar Board Certified in Construction Law
Florida Supreme Court Certified Circuit Civil Mediator
G R A Y | R O B I N S O N
50 North Laura Street, Suite 1100 | Jacksonville, Florida 32202
T: 904-598-9929 | F: 904-598-9109 | D: 904-632-8459
E-mail<mailto:Reese.Henderson at gray-robinson.com> | Website<http://www.gray-robinson.com> | Bio<http://www.gray-robinson.com/attorneys/detail/1022/ReeseJ-HendersonJr> | vCard<http://www.gray-robinson.com/docs/Reese%20Henderson.vcf>
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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 Gibbons, Michael
Sent: Tuesday, August 09, 2016 1:19 PM
To: 'Randall Gilbert'; clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Lien rights for non-conforming goods?
Per 713.06(1), the answer appears to be “no”.
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:image005.jpg at 01D1F25B.E68051D0]
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 Randall Gilbert
Sent: Tuesday, August 09, 2016 12:11 PM
To: clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: [CLC-Discussion] Lien rights for non-conforming goods?
1. OWNER contracts with GC for installation of Windows.
2. GC orders windows from MANUFACTURER/MATERIALMAN.
3. MANUFACTURER specially fabricates Windows and delivers same to OWNER’S house.
4. Assume the windows are manufactured exactly how the GC ordered them, but that the GC provided incorrect specifications to the MANUFACTURER.
5. Upon delivery, OWNER fires GC.
6. OWNER further advises MANUFACTURER that the windows are all the wrong dimensions and wrong energy ratings (in other words non-conforming goods that do not conform with the plans).
7. The Windows have not been installed.
8. Based on the above facts, does the MANUFACTURER/MATERIALMAN have lien rights against the OWNER for non-conforming goods?
Sincerely yours,
Address: 1720 Harrison Street, Penthouse B
Hollywood, FL 33020
Office: (954) 620-5000
Fax: (954) 620-5105
Web#1: www.TheConstructionLawyers.com<http://www.theconstructionlawyers.com/>
Randall Gilbert, Esq.
Web#2: www.TheTitleLawyers.com<http://www.thetitlelawyers.com/>
Board Certified Construction Lawyer
Web#3: www.TheCorporateLawyers.com<http://www.thecorporatelawyers.com/>
[Randall Gilbert][cid:image003.gif at 01CD3F4A.EF94F960]
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