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Taylor Industrial Construction, Inc. v. Westfield Insurance Co.

United States District Court, M.D. Florida, Tampa Division

July 12, 2019

TAYLOR INDUSTRIAL CONSTRUCTION, INC., a Florida corporation, Plaintiff,
WESTFIELD INSURANCE COMPANY, an Ohio corporation, Defendant. SLONE ASSOCIATES, INC. a Georgia corporation, Counter-Plaintiff,
TAYLOR INDUSTRIAL CONSTRUCTION, INC., a Florida corporation, Counter-Defendant.



         This is an action by a sub-subcontractor, Plaintiff Taylor Industrial Construction, Inc. (“Taylor”), to recover on a construction lien, which was bonded off, and, in which, the general contractor, Counter-Plaintiff Slone Associates, Inc. (“Slone”), filed a counterclaim for fraudulent claim of lien. The parties have filed cross-motions for summary judgment, which are now ripe for review.

         I. BACKGROUND

         This construction-litigation dispute over payment for welding steel reinforcement joints to the ceiling area of a WalMart distribution center (the “Project”) in Brooksville, Florida, involves a general contractor, a subcontractor, sub-subcontractors, and a surety. On or about May 9, 2016, Slone was hired to provide construction-related services and materials for the Project under a prime contract (the “Prime Contract”) with Wal-Mart. Doc. 28 at ¶ 11. In conjunction with the Prime Contract, Slone entered into a subcontract (the “Subcontract”) with Daniels Welding Services, Inc. (“Daniels”) to perform certain roof joist reinforcement work at the Project in exchange for Slone's payment of the total contract price of $555, 769.00 to Daniels. Id. at ¶ 12. Taylor was hired by Daniels to replace a prior sub-subcontractor, Suwanee Iron Works (“Suwanee”), that Daniels terminated for poor performance. On or around June 25, 2016, Taylor began performing welding work as a sub-subcontractor. Doc. 1 at ¶ 15. On July 8, 2016, Taylor and Daniels reduced the sub-subcontract to writing. The Daniels/Taylor sub-subcontract was originally a fixed price contract in the amount of $194, 400.00 (the “Agreement”). Doc. 1-4. Daniels and Taylor then entered into a change order (the “Change Order”) for compensation to be calculated instead on a time and materials basis.[1] Id. Under the Change Order, Daniels agreed to pay Taylor $60.00 per hour for its work, which included “all overhead and profit.” Id.

         In late July 2016, Daniels notified Slone of its intent to discontinue working on the Project. Shortly thereafter, Taylor received a similar notice from Daniels. Taylor responded in writing that unless termination was properly made under the express terms of the Contract, Taylor intended to continue to perform. Taylor then contacted Slone and asked to be kept on the Project, but Slone informed Taylor that it had already hired another welding company, Champco, Inc. (“Champco”), to complete the work. As a result, Taylor left the Project on July 26, 2016.

         Taylor, having not been paid by Daniels for its work, filed a construction lien (the “Claim of Lien” or “Lien”) on August 22, 2016. On September 29, 2016, Slone bonded off Taylor's Lien with a lien transfer bond (the “Bond”) with Slone as principal and Defendant Westfield Insurance Company (“Westfield”) as surety, removing Taylor's Claim of Lien from the property and transferring the Lien to the Bond pursuant to Florida Statute § 713.24.

         On October 19, 2016, Taylor filed a one-count complaint against Westfield seeking to collect $175, 453.36 (plus reasonable attorneys' fees, costs and interest) on the Bond. Four months later, Slone moved to intervene, seeking to file an intervenor complaint against Taylor and third-party Daniels. Slone's complaint alleged a fraudulent lien claim against Taylor and five claims against Daniels. See Doc. 28. Daniels' motion to dismiss Slone's claims against it based on their subcontract's forum selection clause was granted by the Court, and Daniels is no longer a party in this case. See Doc. 72.

         Taylor's Motion for Summary Judgment against Slone (Doc. 109) seeks a finding that Taylor's Lien is not fraudulent, and its Motion for Summary Judgment against Westfield (Doc. 110) seeks the same relief in addition to summary judgment on its bond claim against Westfield. Westfield's Motion for Summary Judgment (Doc. 86) seeks a declaration that the Lien is fraudulent and a discharge of the Bond issued by Westfield. Slone joined in Westfield's motion (Doc. 99) seeking the same relief. The main issue to be decided amongst the parties' numerous motions, responses and replies is whether Taylor's Lien is enforceable. Taylor has established that there are no genuine issues of material fact as to the enforceability of the Lien, which subsumes the issue of whether the Lien is fraudulent. A corollary issue relates to the Declaration of Taylor's President, Greg Taylor (“Mr. Taylor”) (Doc. 93-2), which Taylor filed along with its opposition (Doc. 93) to Westfield's Motion for Summary Judgment (Doc. 86). Westfield moves to strike Mr. Taylor's Declaration on multiple bases: Mr. Taylor's assertions are inadmissible testimony that cannot be considered by the Court; portions of the Declaration lack relevance to the motion for summary judgment; the Declaration is inconsistent with Mr. Taylor's prior sworn testimony[2]; the Declaration was filed in bad faith in violation of Rule 56(h). Doc. 94. Upon review, none of the bases, however, warrant striking the Declaration.


         A. Motion to Strike Greg Taylor's Declaration

         A motion to strike will “usually be denied unless the allegations have no possible relation to the controversy and may cause prejudice to one of the parties.” Seibel v. Society Lease, Inc., 969 F.Supp. 713, 715 (M.D. Fla. 1997) (citations omitted). Because this is a difficult standard to satisfy, “[m]otions to strike … are not favored, often being considered time wasters.” Somerset Pharm., Inc., v. Kimball, 168 F.R.D. 69, 71 (M.D. Fla. 1996) (internal quotations omitted). Federal Rule of Civil Procedure 56(c)(4) governs the submission of affidavits and declarations supporting summary judgment motions and states that an affidavit “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters.” Fed.R.Civ.P. 56(c)(4).

         When a party has given clear answers to unambiguous deposition questions which negate existence of any genuine issue of material fact, that party cannot thereafter create such issue and thereby defeat summary judgment with an affidavit that merely contradicts, without explanation, previously given testimony; such an affidavit would be a sham. McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1240 n.7 (11th Cir. 2003) (citations omitted). However, that is not the case here. There is no direct contradiction between Mr. Taylor's deposition testimony and the testimony in his Declaration, and there is no basis for Westfield's assertion that it was made in bad faith. In addition, the Eleventh Circuit has stated that, in some circumstances, otherwise admissible evidence may be submitted in inadmissible form at the summary judgment stage, though at trial it must be submitted in admissible form. Henry v. Colonial Baking Co., 952 F.Supp. 744, 749-50 (M.D. Ala. 1996) (citing McMillian v. Johnson, 88 F.3d 1573, 1584 (11th Cir. 1996)). For the reasons stated in Taylor's response to Westfield's motion to strike, the Court finds the statements in the Declaration admissible as summary judgment evidence. Finally, Westfield fails to cite any authority in support of its argument that portions of the Declaration lack relevance to the motion for summary judgment and therefore should be stricken. Furthermore, the Court is equipped to disregard any such irrelevant inclusion. As such, the Court denies Westfield's Motion to Strike Mr. Taylor's Declaration.

         Westfield's motion is also denied on the alternative basis that it fails to comply with Local Rule 3.01(g). Local Rule 3.01(g) requires a party to confer with opposing counsel in a good faith effort to resolve an issue before filing a motion. Section I.A.2 of the Middle District Discovery Handbook explains “confer” means “a substantive discussion.” It adds: “Many potential ... disputes are resolved (or the differences narrowed or clarified) when counsel confer in good faith. Rule 3.01(g) is strictly enforced. A motion that does not comply with the rule may be summarily denied.” Discovery Handbook § I.A.2; see also Miller v. Summers, No. 2:14-cv-347-FtM-38DNF, 2015 WL 12859329, at *1-2 (M.D. Fla. Sept. 25, 2015) (finding that a party's motions to strike were procedurally barred for failure to comply with Local Rule 3.01(g) and denying the motions on that basis).

         B. Motions for Summary Judgment on Validity of the Lien

         Summary judgment is appropriate if all the pleadings, discovery, affidavits, and disclosure materials on file show that there is no genuine disputed issue of material fact, and the movant is entitled to judgment as matter of law. See Fed. R. Civ. P. 56(a) and (c). The existence of some factual disputes between the litigants will not defeat an otherwise properly supported summary judgment motion; “the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). A fact is material if it is a legal element of the claim that may affect the outcome of the suit under the substantive governing law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997). A dispute about a material fact is “genuine” if the evidence is such that a reasonable jury could find for the non-moving party. Anderson, 477 U.S. at 248. In determining whether a genuine dispute of material fact exists, the court must view the evidence and all factual inferences drawn therefrom in the light most favorable to the non-moving party and must resolve any reasonable doubts in the non-movant's favor. Skop v. City of Atlanta, 485 F.3d 1130, 1136 (11th Cir. 2007).

         The non-moving party, however, “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, the non-movant must go beyond the pleadings and “identify affirmative evidence” that creates a genuine dispute of material fact. Crawford-El v. Britton, 523 U.S. 574, 600 (1998). “[M]ere conclusions and unsupported factual allegations are legally insufficient to defeat a summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (citing Bald Mtn. Park, Ltd. v. Oliver, 836 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere ‘scintilla' of evidence supporting the opposing party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252).

         When a contractor is owed money for either labor, services, materials, or other items used to improve real property in accordance with a contract, Florida Statute § 713.05 allows a contractor to assert a claim of lien on the real property that he has improved. “[T]he fundamental purpose of the Construction Lien Law is to protect those who have provided labor and materials for the improvement of real property. It is to be construed favorably so as to give laborers and suppliers the greatest protection compatible with justice and equity.” WMS Constr., Inc. v. Palm Springs Mile Assocs., Ltd., 762 So.2d 973, 974-75 (Fla. 3d DCA 2000) (citations omitted). “The mechanics lien law was enacted to protect the interests of subcontractors and materialmen who remain unpaid while the owner pays the contractor directly.” Hardrives Co. v. Tri-County Concrete Prods., Inc., 489 So.2d 1211, 1212 (Fla. 4th DCA 1986) (citation omitted).

         Generally, in order to succeed on a claim of lien transferred to a bond pursuant Florida Statute § 713.24, a lienor who is not in privity with the owner must show it: (i) timely and properly served a statutorily-compliant notice to owner, (ii) timely recorded a claim of lien within 90 days of last performing work on the project, (iii) filed suit to foreclose within one year of recording the claim of lien, and (iv) that such lien is for labor, services and/or materials actually incorporated into the project in accordance with the lienor's contract and the contract between the owner and the contractor. See, generally, Fla. Stat. §§ 713.06, 713.08. There is no dispute that the first three elements have been met by Taylor. It is the fourth element that is at issue here.

         On the other hand, Florida Statute § 713.31 protects the owner of the property by providing a remedy for fraud or collusion on the part of the contractor. In pertinent part, § 713.31 reads as follows:

(2)(a) Any lien asserted ... in which the lienor has willfully exaggerated the amount for which such lien is claimed or in which the lienor has willfully included a claim for work not performed upon or materials not furnished for the property upon which he or she ...

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