Taylor Industrial Construction
v. Westfield Insurance Company involved a general contractor,
subcontractor, sub-subcontractors, and a surety disputed over payment after
termination of the contract. 2019 WL 3068395 (M.D. Fla. 2019). In May 2016,
general contractor Slone Associates, Inc. (“Slone”) was hired to provide
construction-related services and materials for the ceiling area of a WalMart
Distribution Center (“the Project”). Slone entered into a subcontract with
Daniels Welding Services, Inc. (“Daniels”) to perform certain roof joist
reinforcement work. Taylor Industrial Construction, Inc. (“Taylor”) was hired
by Daniels as a sub-subcontractor to perform welding work, which Taylor began on
June 25, 2016.
The Daniels/Taylor
sub-subcontract was originally a fixed price contract in the amount of
$194.400.00. Daniels and Taylor then entered into a change order for
compensation to be calculated instead on a time and materials basis at $60.00 per
hour. However, in late July, Daniels notified Slone and Taylor of its intent to
discontinue working on the Project. Taylor then contacted Slone requesting it
be kept on the Project, but Slone informed Taylor that it had already hired
another welding company to complete the work. Taylor left the project on July
26, 2016.
Taylor had not been paid by
Daniels for its work, so it filed a construction lien on August 22, 2016. Slone
bonded off Taylor’s lien with a lien transfer bond (“the bond”) with Slone as principal
and Westfield Insurance Company (“Westfield”) as surety. Ultimately, Taylor
filed a complaint against Westfield seeking to collect $175,453.36 on the bond.
Slone moved to intervene, alleging a fraudulent lien claim against Taylor.
Taylor filed a Motion for Summary Judgment against Slone and Westfield seeking
a finding that Taylor’s lien is not fraudulent.
Florida law holds that when a
contractor is owed money for labor, services, materials, or other items used to
improve real property in accordance with a contract, that contractor may assert
a claim of lien on the real property he has improved. The fundamental purpose
of this law is to protect those who have provided labor and materials for the
improvement of real property. Florida law does, however, protect an owner from
fraud or collusion on the part of the contractor.
Westfield alleged that Taylor’s
lien was fraudulent because it included time billed for defective work, time
and costs not authorized under the contract, and was compiled in a grossly
negligent manner. The Court acknowledged that an inspector found only minor
defects with Taylor’s work and that, if the work was defective, Taylor was
entitled the opportunity to cure, which it was not provided. The Court held Westfield failed to provide
any authority for its contention that costs such as water, rest, or food breaks
and lodging were not collectible under Taylor’s contract. Lastly, the Court
found that the errors in Taylor’s lien were only typographical in nature and
did not adversely affect Westfield.
As a result, the Court found in
favor of Taylor and granted its Motions for Summary Judgment. Generally, courts
are in favor of subcontractors getting paid for the work they perform and this Florida
Court had a high standard of proof for Slone and Westfield’s claims that
Taylor’s lien was fraudulent.
