Sacha Boegem is an experienced litigator in the West Palm Beach Fox Rothschild office.  He focuses his practice on a wide range of commercial litigation matters, including business disputes and torts, banking/financial services industry litigation, trust and estate litigation, and supplier-distributor litigation and advising.  Below is Sacha’s first post on the South Florida Trial Practice blog.  We welcome Sacha to the blog and look forward to future posts. For anyone with questions or comments regarding this post, you can reach you can contact Sacha at 561-804-4437 or sboegem@foxrothschild.com.

In an opinion released April 22, 2015 Florida’s First District Court of Appeals upheld a trial court’s ruling that Section 713.3471(2) of Florida’s Construction Lien Law precluded common law remedies.  See Jax Utilities Mgmt., Inc. v. Hancock Bank, No. 1D14-664, 2015 WL 1809322, at *5 (Fla. 1st DCA Apr. 22, 2015).  This section sets forth certain notice requirements that construction loan lenders must comply with if they make “a final determination, prior to the distribution of all funds available under a construction loan, that the lender will cease further advances pursuant to the loan.”  Fla. Stat. § 713.3471(2)(a).  The statute also provides that a lender has no liability if it complies with the statute, and provides a mechanism for determining damages if a lender fails to comply.  Fla. Stat. § 713.3471(2)(a) and (b).

As the First District Court of Appeal explained on this issue of first impression for a Florida appellate court, “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.”  In Jax Utilities, even though the record did not indicate that the lender had served proper notice under the statute, plaintiff Jax elected not to bring a statutory claim and instead sued the lender for equitable lien and unjust enrichment.  The trial court found that the statute precluded Jax’s common law claims and entered summary judgment for the lender, which the Court of Appeals upheld.

This opinion has not yet been released for publication in the permanent law reports and thus is still subject to revision or withdrawal.  Assuming it stands, however, the opinion potentially provides construction loan lenders with a way to avoid or have dismissed common law claims against them for their alleged failure to provide the statutorily-mandated notice, and limits their liability to the measure of damages provided for in the statute in instances where they are found to have violated the statute.