[CLC-Discussion] Punitive damages for fraudulent lien in the absence of actual damages?

Tue May 2 18:47:40 PDT 2023

I'ts not whether or not  the phrase "who suffers damages" modifies the owner.  The "right of action for damages occasioned thereby" applies to all, owner and contractor, sub, sub-sub, who suffers damages.   The owner will naturally have a cause of action since the lien is against its property.  A contractor, subcontractor or sub-subcontractor, who does not own the property which is subject to the fraudulent lien, will have to have more, such as a contractual obligation to indemnify the owner, to have damages.  But even an owner, and the lower tiers who suffer damages, only have a cause of action "for damages occasioned thereby".  Damages are an element of any cause of action.  No damages, no cause of action.  No harm, no foul.  But the owner's damages are pretty easy, attorney's fees to file the action to have the lien discharged as fraudulent, are damages.  If the Owner looses a sale, or re-fi, and the fraudulent lien is satisfied without owner incurring fees, owner can still be damaged.  But you have to have damages, before you can get the statutory punitive damages added on.

Jim McCrae
P.O.Box 1969
Orlando, Fl 32802
407 376 9331
Board Certified in Construction Law
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From: clc-discussion-bounces at lists.flabarrpptl.org <clc-discussion-bounces at lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Friday, April 28, 2023 3:56 PM
To: clc-discussion at lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Punitive damages for fraudulent lien in the absence of actual damages?

I'm not sure I agree with Bruce. Actually, I'm not sure I disagree with him either. The difficulty arises in the first sentence of the subsection, which reads "An owner against whose interest in real property a fraudulent lien is filed, or any contractor, subcontractor, or sub-subcontractor who suffers damages as a result of the filing of the fraudulent lien, shall have a right of action for damages occasioned thereby." If we read it that the contractor, sub, and sub-sub have a right of action if and only if they suffer damages, but the phrase"... who suffers damages..." does not modify the owner, then the owner would have a right of action damages or not. If, on the other hand, we read the sentence that the phrase who suffers damages also modifies the owner, then there would be no right of action and hence no basis for getting to the punitive damages sentence. The other concern is the statute talks in terms of the suit to attack the lien, for discharge, etc. If the contractor discovers the overstatement and releases the lien before any action is commenced, then I say no suit and no punitive damages. If the contractor files the suit, discovers its "oopsie" and dismisses the suit and cancels the lien before the owner has to spend a dime, I still think the better answer is no punitive damages.

Regards,
Langfred W. White, Esquire
Board Certified in Construction Law

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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> <clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org>> On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, April 26, 2023 4:06 PM
To: clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Punitive damages for fraudulent lien in the absence of actual damages?

Thank you, Bruce.  I knew I'd get a thoughtful and detailed answer from you.  I should have just gone to Rotary yesterday and asked you this question after the meeting.  (Please don't comment on my atrocious Rotary attendance as of late...)

Really appreciate it, Bruce.

John Trawick

From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> <clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org>> On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, April 26, 2023 2:45 PM
To: 'clc-discussion at lists.flabarrpptl.org' <clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>>
Subject: Re: [CLC-Discussion] Punitive damages for fraudulent lien in the absence of actual damages?

Did the owner hire an attorney to defend the case and incur any fees before the lien was released?

But more broadly, I don't read the statute to require actual damages as a condition to punitive damages. If you break it apart grammatically I think that becomes clear.

If the lienor who files a fraudulent lien is not the prevailing party, the lienor shall be liable to the owner or the defrauded party who prevails in an action under this subsection in damages, which shall include

     *   court costs,
     *   clerk's fees,
     *   a reasonable attorney's fee and costs for services in securing the discharge of the lien,
     *   the amount of any premium for a bond given to obtain the discharge of the lien,
     *   interest on any money deposited for the purpose of discharging the lien, and
     *   punitive damages in an amount not exceeding the difference between the amount claimed by the lienor to be due or to become due and the amount actually due or to become due.

I don't read any of that as conditional on any other part of it. If it's conditional on what goes before, the failure to recover a bond premium would also prevent recovery of punitives, so to recover punitives you would be required to bond off the lien. I read them as a cumulative description of the types of damages recoverable. The only limitation on punitive damages is the cap that is expressed.

Also, an action on a fraudulent lien "may be instituted independently of any other action."

Bruce Partington | Shareholder
Board Certified Specialist in Construction Law
bpartington at clarkpartington.com<mailto:bpartington at clarkpartington.com> | (850) 432-1399<callto:(850)%20432-1399>

CLARK PARTINGTON
Office: (850) 434-9200 | Fax: (850) 432-7340
125 East Intendencia Street, 4th Floor
Pensacola, Florida 32502
clarkpartington.com<https://link.edgepilot.com/s/eca1e86f/RKxmMyAfz0_1OVlUAZSYwg?u=https://clarkpartington.com/>

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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> <clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org>> On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, April 26, 2023 2:21 PM
To: clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Punitive damages for fraudulent lien in the absence of actual damages?

Doubtful

Sincerely,

Barry Kalmanson
500 N. Maitland Avenue
Suite 305
Maitland, Fl. 32751
407-645-4500 x 215

https://link.edgepilot.com/s/53196555/XYCliRnwlUyv6uVfFVAN-Q?u=http://www.barrykalmanson.com/

From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> <clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org>> On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, April 26, 2023 1:47 PM
To: clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Punitive damages for fraudulent lien in the absence of actual damages?

To clarify further: what happens if lienor records lien which might otherwise be deemed as fraudulent and then, months later, and shortly after suit to foreclose is filed, the lienor cancels the lien.  Owner doesn't suffer any actual damages in the form off loss of sale, loss of financing ability, etc., and in fact owner doesn't suffer any out of pocket losses at all.  Is owner still entitled to punitive damages against lienor?

John Trawick

From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> <clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org>> On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, April 26, 2023 12:38 PM
To: clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Punitive damages for fraudulent lien in the absence of actual damages?

See Martin v. Jack Yanks 650 So2d 120 (3rd DCA 1995)... in the dicta at 122, Court says owner's costs, clerk fees and reasonable attorney fees to remove fraudulent lien was its damages and entitled to punitive damages as a matter of law.

Michael J. Yates, Esq.
Board Certified in Construction Law
5975 Sunset Drive, Suite 602
Miami FL 33143
Office 305.666.8100
Fax      305.666.8106

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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> <clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org>> On Behalf Of RPPTL CLC-Discussion
Sent: Wednesday, April 26, 2023 1:05 PM
To: clc-discussion at lists.flabarrpptl.org<mailto:clc-discussion at lists.flabarrpptl.org>
Subject: [CLC-Discussion] Punitive damages for fraudulent lien in the absence of actual damages?

Is anyone aware of any case law wherein a court awarded punitive damages for the recording of a fraudulent lien in the absence of actual damages?  The language of the statute, 713.31(2)(c), appears to suggest that an owner would be entitled to punitive damages only if the owner can also demonstrate actual damages resulting from the fraudulent lien.  Any insight in this regard would be greatly appreciated!

John Trawick
Board Certified Construction Attorney

John B. Trawick, PLLC
3298 Summit Blvd., Suite 5 | Pensacola, Florida 32503
Office: (850) 476-0495 | Direct: (850) 982-0165

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