INTERNATIONAL COMMUNITY CORPORATION, A DELAWARE CORPORATION, AND THE INSURANCE COMPANY OF FLORIDA, APPELLANTS/CROSS-APPELLEES,
v.
OVERSTREET PAVING COMPANY, A FLORIDA CORPORATION, APPELLEE/CROSS-APPELLANT
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A Florida appellate court affirmed a mechanic's lien foreclosure judgment but reversed course on prejudgment interest, holding that a subcontractor is entitled to prejudgment interest against a landowner and surety despite lack of privity, in light of the Florida Supreme Court's recent decision establishing that prejudgment interest on liquidated damages is a matter of law.
A subcontractor is entitled to prejudgment interest on a mechanic's lien judgment against a landowner and surety, regardless of the lack of privity. Once the lien is determined to be valid and damages are liquidated, prejudgment interest is as much a part of the subcontractor's damages as the balance owed for its services.
[1] A subcontractor in a mechanic's lien action is entitled to prejudgment interest on its out-of-pocket pecuniary losses once the damages are liquidated by the trier of fact…
[2] The absence of privity between a subcontractor and a landowner does not preclude the subcontractor from recovering prejudgment interest in a mechanic's lien action.
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Join FLexlaw to unlock all legal intelligence“once the trier of fact liquidates damages on a plaintiff's out-of-pocket pecuniary losses, the plaintiff is, as a matter of law, entitled to prejudgment interest from the date of the loss”
Establishes the Supreme Court's rule that prejudgment interest is mandatory once damages are liquidated, regardless of privity
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Join FLexlaw to unlock all legal intelligenceInternational Community Corporation and the Insurance Company of Florida obtained a $48,650 judgment in a mechanic's lien foreclosure action against O…
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GRIMES, Acting Chief Judge.
This is an appeal from a $48,650 judgment entered in a mechanic’s lien foreclosure action in favor of a subcontractor against a landowner and its surety which had issued a lien transfer bond. We have examined the record and find that it contains sufficient evidence to support the judgment.
On cross-appeal, the subcontractor contends that it should have been awarded prejudgment interest. In denying the claim, the court below relied on this court’s decision in Largo Hospital Owners, Ltd. v. International Glass & Manufacturing Co., 410 So. 2d 518 (Fla. 2d DCA 1981), which held that a subcontractor in a mechanic’s lien action could not recover prejudgment interest against the landowner because of the lack of privity. However, while this appeal was pending, the supreme court reasserted the rule that in all cases (excepting personal injury actions), once the trier of fact liquidates damages on a plaintiff’s out-of-pocket pecuniary losses, the plaintiff is, as a matter of law, entitled to prejudgment interest from the date of the loss. Argonaut Insurance Co. v. May Plumbing Co., 474 So. 2d 212 (Fla.1985).
Our sister court in Zacco Contractors, Inc. v. Irving Trust Co., 488 So. 2d 616 (Fla. 3d DCA 1986), has now had occasion to consider the effect of the Argonaut decision on facts analogous to those in the instant case. The court held that in view of Argonaut, a subcontractor which had been awarded an equitable lien on undis-bursed loan proceeds held by a lender was entitled to prejudgment interest despite the lack of privity between the subcontractor and the lender. The court relied upon the reasoning of Argonaut that an award of prejudgment interest is a means to reimburse the plaintiff for its loss rather than an imposition of a penalty upon the defendant. In a footnote the court observed that the adoption of the loss theory negated the “litigable” defense rationale of certain earlier cases.
We find the rationale of Zacco Contractors, Inc. to be persuasive. Implicit in the Largo Hospital Owners case is the proposition that a landowner required to respond to a claim of lien by one not in privity should not also have to pay prejudgment interest. In light of Argonaut ⅛ rejection of the penalty theory, the landowner’s lack of culpability is irrelevant and prejudgment interest is as much a part of the subcontractor’s damages as is the balance owed for its services. Therefore, in the instant case, once the lien was determined to be valid, the landowner and its surety were obligated for the total amount of subcontractor’s loss regardless of the absence of privity.
We affirm the decision below but remand the case with directions that the judgment be amended so as to provide for the payment of prejudgment interest.
SCHOONOVER and SANDERLIN, JJ., concur.
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Underhill Fancy Veal, Inc. v. Padot, 677 So. 2d 1378 (Fla. 1st DCA 1996)…); Barnes Surgical Specialties, Inc. v. Bradshaw, 549 So. 2d 1189 (Fla. 2d DCA 1989) (finding that a salesman has a right to prejudgment interest on commissions which were improperly withheld); International Community Corp. v. Overstreet Paving Co., 493 So. 2d 25 (Fla. 2d DCA 1986) (ruling that a subcontractor has a right to prejudgment interest on a valid mechanic’s lien)). In cases involving the destruction of a vested property interest, it is not necessary to demonstrate that the party has actually made…
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Alvarado v. Rice, 614 So. 2d 498 (Fla. 1993)…); Barnes Surgical Specialties, Inc. v. Bradshaw, 549 So. 2d 1189 (Fla. 2d DCA 1989) (finding that a salesman has a right to prejudgment interest on commissions which were improperly withheld); International Community Corp. v. Overstreet Paving Co., 493 So. 2d 25 (Fla.2d DCA 1986) (ruling that a subcontractor has a right to prejudgment interest on a valid mechanic’s lien). Alvarado contends that she is entitled to prejudgment interest for the damages awarded to her for past medical expenses as these are act…
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Miller v. Transflorida Bank, 656 So. 2d 1364 (Fla. 4th DCA 1995)…); Barnes Surgical Specialties, Inc. v. Bradshaw, 549 So. 2d 1189 (Fla. 2d DCA 1989) (finding that a salesman has a right to prejudgment interest on commissions which were improperly withheld); International Community Corp. v. Overstreet Paving Co., 493 So. 2d 25 (Fla. 2d DCA 1986) (ruling that a subcontractor has a right to prejudgment interest on a valid mechanic’s hen). Appellant cites Inacio v. State Farm Fire & Casualty Co., 550 So. 2d 92 (Fla. 1st DCA 1989), and Bremshey v. Morrison, 621 So. 2d 717 (F…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Argonaut Ins. Co. v. MAY Plumbing Co., 474 So. 2d 212 (Fla. 1985)
- Largo Hosp. Owners, Ltd. v. Int'l Glass & Mfg. Co., Inc., 410 So. 2d 518 (Fla. 2d DCA 1981)
- Zacco Contractors, Inc. v. Irving Tr. Co., 488 So. 2d 616 (Fla. 3d DCA 1986)