Arbitration & Mediation

Contractor Lien Law (F.S. 713.21) Does Not Allow M-Compel Arbitration As Response to Discharge of Lien

By Christopher B. Hopkins, Esq.

In a statutory-driven area of construction law, the Fourth District (Klein, Farmer, and Taylor) once again bristle at a party's attempt to seek arbitration. Ironically, in their haste to torpedo the enforcement of arbitration in 2 pages or less, it appears they missed citing to pretty decent precedent from the Third DCA.

In Connie and Charles J. Brookshire v. GP Construction of Palm Beach, Inc., the court held that strict construction of a lien law took precedent over Florida court's (draconian) precedent on avoiding waiver of the right to arbitrate.

Contractor put a lien on a house. Owners filed suit seeking to discharge the lien, which was served on the contractor along with a clerk-issued rule to show cause order per Florida Statute 713.21(4). That statute calls upon the recipient to show cause why the lien should not be enforced or why the lienor did not commence such action.

Here, the contractor filed, within the 20 day period, a motion to compel arbitration per the contract. Owner argued, at both trial and appellate levels, that the failure to show cause for failing to comply leaves the court with no discretion.

The 4th DCA reasoned that the "lien and the dispute are not one and the same" and that the disposition of the lien would not resolve the contractor's claim for payment. Strictly speaking, that's true. But liens are the teeth behind contractor claims. Liens exist as a part of the claim. One goes with the other. We won't argue the in's and out's of contract law because... well, because the Fourth District didn't bother to either.

Incidentally, the court did not provide the arbitration language, so we do not know what was within the scope of arbitration.

The contractor "could have complied with the 20-day statutory period by filing a counterclaim within the owner's action... any concern about whether the contractor was waiving arbitration could have been satisfied by filing a motion to arbitrate those issues which were subject to arbitration." Notably, none of the three cases cited were within the last several years thus we don't know if they are still viable after the Florida Supreme Court's decision in Raymond James Financial v. Saldukas, a 2005 case which defines waiver of arbitration under Florida state law.

Take a moment to read this 7-paragraph Brookshire opinion and then look at the three cited cases in the second-to-last paragraph (from 1978, 1986 and 2001). Acceptable precedent for part of their point but how do we know this is solid arbitration-waiver law post-Saldukas? What about a citation to Waterhouse Construction Group v. 5891 SW 64th Street LLC?

Full post as published by Florida Arbitration Law on November 20, 2008 (boomark / email).