CopyCited 1 times | Published | Florida 1st District Court of Appeal | 2010 Fla. App. LEXIS 13718, 2010 WL 3583981
THOMAS, J. Appellant Victor Whitehead, doing business as Whitehead Construction, appeals a final summary judgment entered in favor of Appellee Tyndall Federal Credit Union, in which the trial court found Appellee did not violate the provisions of section 713.3471(2)(a), Florida Statutes (2005)....
...in the aggregate amount of $49,320 which, together with the $165,680 paid to Appellant, amounted to $215,000, the full amount of the loan. In Count III of its Third Amended Complaint, Appellant alleged that Appellee violated the notice provisions in section 713.3471(2)(a), Florida Statutes (2005)....
...cease further loan advances prior to final distribution of all funds available under the loan. In fact, the entire amount of the loan was disbursed, albeit to two separate contractors. The court found that under the plain and unambiguous language of section 713.3471(2)(a), as a matter of law, Appellant could not prevail “because [Ap-pellee] disbursed the full amount of the Loan, $215,000.00, this amount was paid to [Appellant] and the subsequent contractor and [Appellee] followed the instructi...
...Analysis Because this case is one of statutory interpretation, the standard of review is de novo. See Morgenthau v. Estate of Andzel,
26 So.3d 628, 630 (Fla. 1st DCA 2009) (holding that appellate review is de novo to the extent the issue turns on statutory interpretation). Section
713.3471(2)(a), Florida Statutes (2005), provides: Within 5 business days after a lender makes a final determination, prior to the distribution of all funds available under a construction loan, that the lender will cease further advances purs...
...of such decision in accordance with this subsection and the decision is otherwise permitted under the loan documents. In his complaint, Appellant alleged Ap-pellee failed to comply with this statutory notice requirement. The trial court interpreted section 713.3471(2)(a) to mean that Appellee did not owe Appellant notice under the statute because Appellee never made the decision to cease further loan advances prior to final distribution of all funds. The trial court’s interpretation of section 713.3471(2)(a) is based on a literal reading of the statute’s plain language that notice is only required when the lender decides to cease further advances “prior to the distribution of all funds” available under the loan....
CopyPublished | Florida 1st District Court of Appeal
...(“Jax”), challenges the trial
court’s entry of a final summary judgment in favor of Appellee, Hancock Bank,
arguing that the trial court erred by holding that (1) the statute of limitations set
forth in section
95.11(5)(b), Florida Statutes (2011), barred Jax’s equitable lien
claim, and (2) section
713.3471, Florida Statutes (2011), precluded Jax’s common
law claims of equitable lien and unjust enrichment....
...and unjust enrichment claims against Hancock Bank (Counts II and III,
respectively). Hancock Bank moved for summary judgment based upon its
affirmative defenses that section
95.11(5)(b), Florida Statutes, barred Jax’s
equitable lien claim and section
713.3471, Florida Statutes, precluded both of Jax’s
common law claims.
The parties’ summary judgment evidence established in part the following:
In December 2005, Plummer Creek, as owner, and Jax, as contractor, entered into
a S...
...In
doing so, the trial court rejected Jax’s argument that the statute of limitations did
not begin to run until the equitable lien claim accrued upon the initiation of the
foreclosure proceeding. The trial court further concluded that Jax’s equitable lien
and unjust enrichment claims were precluded by section 713.3471, Florida
Statutes, and reasoned that the Legislature clearly intended to alter the common
law and that the statute is so repugnant to Jax’s common law claims that they
cannot coexist....
...bring suit within the one-year period provided by section
95.11(5)(b). As such,
like the trial court, we reject Jax’s argument that the statute of limitations period
ran from when Hancock Bank initiated foreclosure proceedings.
Construction of Section
713.3471
Turning now to Jax’s second argument, Jax contends that the trial court
misapplied section
713.3471, Florida Statutes, to preclude common law relief
under the facts of this case. Hancock Bank, on the other hand, argues that the trial
court correctly applied section
713.3471 to preclude Jax’s common law claims of
equitable lien and unjust enrichment because the statute expressly precludes such
claims and is so repugnant to the existence of common law remedies that the two
cannot coexist. However, both parties agree that this is an issue of first impression
for a Florida appellate court. For the reasons that follow, we agree with Hancock
Bank.
Section
713.3471, Florida Statutes (2011), was enacted in 1992, is part of
the Construction Lien Law, and is titled “Lender responsibilities with construction
loans.” Section
713.3471(2) defines a lender’s responsibilities to a contractor for
construction work where the lender decides to stop making advances prior to the
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distribution of all the construction loan funds....
...ractor based upon the decision
of the lender to cease further advances if the lender gives the
contractor notice of such decision in accordance with this subsection
and the decision is otherwise permitted under the loan documents.
§ 713.3471(2)(a), Fla....
... foreclosure action filed by the lender, may not be the basis of any
claim for an equitable lien or for equitable subordination of the
mortgage lien, and may not be asserted as an offset or a defense in the
foreclosure case.
§ 713.3471(2)(b)-(c), Fla....
...Stat.
To discern legislative intent, courts first look to the plain language of a
statute, whereby “[t]he plain and ordinary meaning of the words of a statute must
control.” Marrero v. State,
71 So. 3d 881, 886-87 (Fla. 2011). Section
713.3471(2) governs construction loan lenders who, prior to the distribution of all
funds available under a loan, make a final determination that they will cease
further advances....
...Such lenders must give timely notice to the contractor and any
other lienor who has given the lender notice. If the lender complies with this
notification duty (and its decision is permitted under the loan documents), it has no
liability to the contractor or lienor. § 713.3471(2)(a), Fla....
...Stat.
If the lender fails to comply with this notification duty, it is liable to the
contractor through a statutory cause of action, but the damages are calculated as
prescribed by the statute, unless the noncompliance was intended to defraud the
contractor. § 713.3471(2)(b)-(c), Fla....
...Furthermore, where the lender fails to
comply with the notice requirement, the statutory claim may not interfere with any
foreclosure action and “may not be the basis of any claim for an equitable lien or
for equitable subordination of the mortgage lien . . . .” § 713.3471(2)(c), Fla. Stat.
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In effect, section 713.3471(2) provides benefits and burdens to lenders and
contractors....
...to
notify contractors of a decision to cease making advances. See Giffen Indus. of
Jacksonville, Inc. v. Se. Assocs., Inc.,
357 So. 2d 217 (Fla. 1st DCA 1978); J. G.
Plumbing Serv., Inc. v. Coastal Mortg. Co.,
329 So. 2d 393 (Fla. 2d DCA 1976).
Section
713.3471(2) changed the common law by imposing on lenders an
affirmative duty to notify, thereby protecting contractors from continuing work on
projects without notice that further funds will not be advanced. See Whitehead v.
Tyndall Federal Credit Union,
46 So. 3d 1033, 1035-36 (Fla. 1st DCA 2010) (“The
obvious purpose of [section
713.3471(2)] is to prevent exactly what occurred here:
the unjust termination of payments to a contractor who continues work, without
any notice from the lender that payments will be terminated.”). Section
713.3471(2) constitutes comprehensive regulation in this narrow area.
While courts generally presume that the common law remains in effect when
a statute is enacted in derogation of the common law, this presumption is
inapplicable where the statute expressly says otherwise or “is so repugnant to the
common law that the two cannot coexist.” Major League Baseball v. Morsani,
790
So. 2d 1071, 1077-78 (Fla. 2001). Section
713.3471 does both. Section
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713.3471(2) expressly immunizes lenders who provide notice, prescribes the
damages where notice is not provided, and states that the cause of action cannot
become the basis for an equitable lien claim. Moreover, a common law claim
would conflict with the statute. If a lender complies with the statute, it has no
liability. If the lender fails to comply, a contractor may seek damages as
prescribed by the statute.
Notably, section
713.3471 lacks a provision expressly preserving common
law remedies. The Legislature routinely includes such provisions where it does not
intend to displace the common law, and the omission of such a provision reinforces
the conclusion that section
713.3471 displaces the common law remedies....
...common law or under any statute.”).
Here, Peoples First was a construction loan lender that decided to cease
further advances before all the loan funds had been distributed. Though the record
does not indicate that Peoples First ever served notice on Jax pursuant to section
713.3471(2), Jax elected not to bring a statutory claim and instead sued Hancock
Bank (as successor-in-interest to Peoples First) for equitable lien and unjust
enrichment. However, we find that section
713.3471(2) precluded Jax’s common
law claims and the trial court properly entered summary judgment in Hancock
Bank’s favor on this issue because the plain language of section
713.3471(2)
evinces a legislative intent to displace the common law remedies and the statute is
so repugnant to common law remedies that the two cannot coexist.
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CONCLUSION
Accordingly, the trial court correctly held that the statute of limitations set
forth in section
95.11(5)(b), Florida Statutes, barred Jax’s equitable lien claim and
section
713.3471, Florida Statutes, precluded Jax’s common law claims of
equitable lien and unjust enrichment.
Therefore, we AFFIRM the trial court’s Final Summary Judgment.
MARSTILLER and OSTERHAUS, JJ., CONCUR....
