The Florida Bar

Florida Bar Journal

Subcontractors/Suppliers Beware: Form Over Substance

Solo and Small Firm

The recent trend of at least some Florida courts to prefer form over substance should send bells of alarm through the construction industry. The problem is focusing on the requirements of F.S. §713.06, mandating that subcontractors and suppliers who are not in direct privity with the owner must send a timely and adequate “notice to owner” to preserve their statutory construction lien rights.

F.S. §713.06 serves a noble purpose because it makes the owner aware of who is supplying labor and materials to the site, in an effort to keep the owner from paying twice for the same work. The statute requires that the notice to owner “substantially” follow the statutory form. The statute does not require the precise statutory form to be used. Further, the statute states that “[i]f a lienor has substantially complied with the provisions of paragraphs (a), (b), and (c), errors or omissions do not prevent the enforcement of a claim against a person who has not been adversely affected by such omission or error.”1

The claim of lien statute2 also does not require that the precise statutory form be used. F.S. §713.08(3) requires only that the form be “substantially” similar to the statutorily prescribed form. F.S. §713.08(4)(a) also allows for some insubstantial discrepancies by stating: “The omission of any of the foregoing details or errors in such claim of lien shall not, within the discretion of the trial court, prevent the enforcement of such lien as against one who has not been adversely affected by such omission or error.”3

Since both the notice to owner statute and the claim of lien statute allow some mistakes in detail without jeopardizing enforcement of the lien, the earlier court decisions gave meaning to this latitude by refusing to disallow the validity of the construction lien if there were no adverse consequences to the owner. Thus, in Symons Corp. v. Tartan-Lavers Delray Beach, Inc., 456 So. 2d 1254 (Fla. 4th DCA 1984), a discrepancy in the name of the owner listed in the notice to owner did not prevent enforcement of the lien. In a common sense approach, the Symons court reviewed the mistake in the owner’s name, designating “Lavers Delray Racquet Club,” instead of “Lavers Racquet Club.” The court refused to vacate the lien, stating:

In cases upholding the sufficiency of the designation of an owner in the Notice of Owner under a Mechanics’ Lien statute, the courts note that if the owner or others were not misled, prejudiced or injured by the claimed defect in the Notice, especially in the case of an honest mistake, the lien is not vitiated by such defect.4

Similarly, in Blinn v. Dumas, 408 So. 2d 683 (Fla. 1st DCA 1982), the claim of lien was enforceable, even though it lacked the details about the labor, services, or materials furnished; while in Centex-Winston Corp. v. Crown Paint, Inc., 294 So. 2d 694 (Fla. 3d DCA 1974), the failure of the materials supplier to indicate the contractor to whom it was providing supplies did not invalidate the lien. Enforcing the purpose of the statute was also evident in Fidelity and Deposit Company of Maryland v. Delta Painting Corp., etc., et al., 529 So. 2d 781 (Fla. 4th DCA 1988). In this case, a joint venture ownership including George Heaton decided to develop some property in Broward County. City National Bank of Miami was the trustee. City National posted a notice of commencement, providing that notices as required were to be served on the owner by either mailing same to City National Bank of Miami in Miami or to George Heaton at the office address of Heaton Development Corp. (a/k/a HDC, which George Heaton owned). After contracting for the work, Delta Plumbing Corp. mailed its notice to owner to the offices of HDC, but not specifically to George Heaton. Heaton testified that even if his name had appeared as addressee in the notice to owner, he probably would not have received it anyway. The court held, however, that “[t]he statute does not require a more personal service. This shows substantial compliance with the Notice to Owner requirement and the absence of George Heaton’s name was inconsequential to the establishment of the lien.”5

The problem for subcontractors and suppliers centers on three decisions: In Mirror and Shower Door Products, Inc. v. Seabridge, Inc., 621 So. 2d 486 (Fla. 4th DCA 1993), the court refused to enforce a claim of lien because the “notice to owner” form delivered did not contain some warnings required by the Florida statute. Instead, the warnings were orally transmitted, as opposed to being shown on the form itself. The Seabridge decision was reaffirmed by the First District on July 15, 1999, in Gulfside Properties Corp. v. Chapman Corp., 24 Fla. L. Weekly D1676 (Fla. 1st DCA 1999), holding that:

[T]he plain language of section 713.06 indicates the legislature’s intent that service of a written notice which includes the warnings contained in section 713.06(2)(c) is a prerequisite to perfecting a lien under Chapter 713. Mirror and Shower Door Products, Inc. v. Seabridge, Inc.,621 So. 2d 486, 487 (Fla. 4th DCA 1993) (acknowledging that only immaterial errors and omissions in the form of the notice to owner have been excused by courts). Chapman did not serve a written notice which included statutory warnings, and the lack of those warnings was fatal to establishing its lien against the subject property.

Even more interesting is the relatively recent decision in Allstar Building Materials, Ltd. v. Donald F. Kronauer, 724 So. 2d 616 (Fla. 5th DCA 1998). In this case, the court refused to enforce the lien because 1) it was sent to the contractor, as well as the owner; 2) some of the type was reduced in size; and 3) the words, “Important Information for Your Protection” were omitted.6 Perhaps most important is that this court seemed to suggest that virtually any form, except the statutory form, would be insufficient because, as the court put it, “We believe, however, that the form itself is important and that the form utilized by the legislature better conveys the warnings required in order to justify a lien on the property of one not in privity.”7

The Seabridge, Kronauer, and Chapman courts never even discussed whether the owner was adversely affected. The genesis of the concern created by these three decisions can be found in two amendments to F.S. §713.06, effective January 1, 1991. Prior to January 1, 1991, F.S. §713.06(2)(c) (1984) provided that the notice to owner “may” be in substantially the form suggested by the statute. However, effective January 1, 1991, the “may” was removed and in its place, the statute used the word “must.” In addition, effective January 1, 1991, the legislature added a sentence to F.S. §713.06(2)(f) reading, “However, a lienor must strictly comply with the time requirements of paragraph (a).” Significantly, however, the legislature did not remove the “adverse consequence” test of the statute, nor did it drop the word “substantially,” or choose to use the word “precisely” in its place.

The Supreme Court of Florida picked up on the nuances of the amendments in Stresscon v. Madiedo, 581 So. 2d 158 (Fla. 1991). In Stresscon, Justice Harding, writing for the majority, confronted the failure to notarize an otherwise timely and accurate statement of account under subsection 713.16(2) of the Florida Statutes (1987). More precisely, the court had to decide whether the failure to notarize could be cured by an after-the-fact affidavit, executed by the person who signed the statement of account, asserting the truthfulness and accuracy of the statement of account. The court answered in the negative. Critically, however, the court noted:

The fact that no prejudice has been shown nor can be shown is not the determining factor in this case; nor is it significant that Stresscon substantially complied with the mechanics’ lien law. The courts have permitted substantial compliance or adverse effect to be considered in determining the validity of a lien when there are specific statutory exceptions which permit their consideration. (emphasis supplied)8

The court went on to note that, in the claim of lien statute,9 the omission of details or errors in the claim of lien should not prevent its enforcement against one who has not been adversely affected by the omission or error. In substance, the Stresscon court noted that, when the statute required (without exception) a precise technical compliance, any variation from the statute would prevent an enforcement of the lien. However, Stresscon carefully pointed out that when there were “specific statutory exceptions,” the fact that there was “substantial compliance” or no “adverse effect,” was to be considered.10

the Seabridge, Kronauer, and Chapman courts ignoring any discussion of the “adverse consequence test,” it would seem that the time for conflict certiorari is at hand. For the time being, however, contractors and suppliers in the First, Fourth, and Fifth districts should precisely follow the statutory form and it is recommended that they do so in the other two districts as well.

1 Fla. Stat. §713.06(2)(f).
2 Fla. Stat. §§713.001 et seq.
3 Fla. Stat. §713.08(3).
4 Symons, 456 So. 2d at 1259.
5 Fidelity, 529 So. 2d at 783.
6 Kronauer, 724 So. 2d at 616.
7 Id.
8 Stresscon, 581 So. 2d at 160.
9 Fla. Stat. §713.08(4)(a).
10 Stresscon, 581 So. 2d at 160.

Howard J. Hollander obtained a B.A. from the University of Florida in 1961 and a J.D. from the University of Miami in 1964. His practice is confined to commercial litigation primarily in the area of construction law, representing developers, contractors, and sureties. Mr. Hollander is the founding partner of Hollander & Bartelstone, P.A., and a frequent contributor to periodicals of interest in the construction industry.

This column is submitted on behalf of the General Practice, Solo and Small Firm Section, Clinton N. Gregory, chair, and David A. Donet, editor.

Solo and Small Firm