Appellate Ruling Reversing Discharge of Contractor’s Liens Protects Lienors

Siegfried Rivera
December 15, 2010


A recent construction lien claim and appeal that we handled on behalf of Miami-based CDC Builders, Inc. against developer Riviera Almeria, LLC led to a reversal of the lower court’s decision that would have discharged CDC’s construction liens over two stalled Coral Gables custom home projects. The appellate court’s ruling in the case overruled the trial court’s interpretation and application of Chapter 713 of the Florida Statutes wherein the trial court incorrectly discharged and invalidated CDC’s construction liens against the developers due to the trial court’s finding that the contractor’s interim payment requests were inaccurate.

The appellate ruling, which has significant implications for many other contractor lawsuits and construction liens, was the subject of a report in the Thursday, December 9, edition of the Daily Business Review. The article quoted 3rd District Court of Appeal Chief Judge Juan Ramirez who wrote that the Miami-Dade Circuit Court’s ruling in this case would have “a deleterious impact . . . on the construction industry as a whole. If we agree with the trial court, the purpose of liens would be undercut. Liens could be subject to attack for inaccuracies or simple mathematical errors. That was not what the Florida Legislature intended when it enacted the construction lien law.”

The article further explains:

“Miami-Dade Circuit Judge Gill Freeman granted the developer’s motion for partial summary judgment and discharged the lien, ruling that CDC had wrongly filed false interim payment applications because it had withheld subcontractor money.

The 3rd DCA panel ruled that Freeman should not have discharged the lien because CDC was adhering to its contract with Riviera.

‘Not only was CDC Builders allowed to withhold a retainage, it was contractually required to do so,’ Ramirez wrote.

The opinion also pointed to state law, which ‘does not prevent any person from withholding any payment, or any part of a payment . . . if there is a bona fide dispute regarding the amount due.’

The court added that ‘to agree with the trial court’s application of the statute would mean that otherwise valid liens would violate the lien law.'”

We were very pleased to have helped our client prevail in this appeal, and we believe the reversal of the trial court’s decision in this case is going to have a positive impact for many of the contractors which have filed construction lien claims in the state. The South Florida construction law attorneys at our firm will continue to write about important cases and rulings in the state’s courts, and we encourage those who are interested in our analysis and insights to add their e-mail address to the subscription box at the top of the column on the right in order to automatically receive all of our future blog posts.