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Fernandez v. Manning Building Supplies, Inc.

Florida Court of Appeals, First District

September 25, 2019

Courtney M. Fernandez and Ellis T. Fernandez, Appellants,
v.
Manning Building Supplies, Inc., Appellee.

         Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

          On appeal from the Circuit Court for Duval County. Waddell A. Wallace, Judge.

          E.T. Fernandez, III, of Fernandez Trial Lawyers, P.A., Jacksonville, for Appellants.

          Charles B. Jimerson and James O. Birr, III, of Jimerson & Cobb, P.A., Jacksonville, for Appellee.

          Bilbrey, J.

         Courtney M. and Ellis T. Fernandez challenge a judgment foreclosing on a construction lien and awarding attorney's fees and costs. We find no error in the award of attorney's fees and costs and affirm that award without further comment. However, we find merit in the argument that the trial court erred in its determination of the interest recoverable on the principal amount of the lien, and therefore, we reverse that part of the judgment.

         A construction lien was filed by Manning Building Supplies, Inc., on the residential property owned by the Fernandezes. Manning entered into a contract with the general contractor hired by the Fernandezes to supply materials to be used in a renovation of the residence. Manning was not paid so it filed a lien against the property and filed suit against the contractor as well as the Fernandezes. The trial court granted a partial summary judgment on the lien foreclosure count of Manning's complaint. The trial court thereafter determined that Manning was entitled to collect $24, 157.64 in principal from the Fernandezes plus interest at the rate of 18% per year. The trial court determined a rate of 18% was required because the contract between Manning and the contractor provided that a monthly fee of 1.5% of the contract balance would be owed if payment was not timely made on a monthly basis.

         The contract provides in pertinent part:

1. Payment of all sums due hereunder are due and payable in DUVAL County, Florida. CUSTOMER agrees that all invoices are due upon receipt with the following terms: Net 10th of the month following month of purchase I/We submit to Manning Building Supplies, Inc. I/We agree to make payment to MBS on or before the tenth (10th) day of the month following date of purchase. I/We understand that a delinquent account will cause credit to be suspended and a 1-1/2% monthly delinquent charge to be added, plus any attorney's fees, and/or court costs necessary to collect this account, all of which I/We agree to pay. Proper venue shall be in DUVAL County, Florida. Accounts are considered delinquent on the fifteenth (15th) day of the month following purchase and finance charges will be added on the last day of the month following purchase. . . . CUSTOMER agrees to pay SELLER interest, including post judgment interest, at the highest rate allowable by law on all sums not timely paid and hereby submits to the jurisdiction of the courts of the State of Florida, whose laws govern this Agreement.

(Emphasis added). The monthly 1.5% charge was annualized by the trial court to be 18%.

         Section 713.06(1), Florida Statutes (2018), specifically authorizes a lien on real property for a materialman or laborer "not in privity" with the owner of real property for unpaid services or materials and "for any unpaid finance charges due under the lienor's contract."[*] Chapter 713 does not define the term "finance charge."

         However, other areas of Florida Statutes distinguish between delinquency and finance charges. For example, Chapter 687, Florida Statutes (2018), pertaining to usury, interest, and lending practices provides:

(c) Notwithstanding any other provision of this section, any lessor or merchant, or any person who lends money or extends any other form of credit, who is regularly engaged in the business of selling or leasing merchandise, goods, or services which are for other than personal, family, or household purposes, or any assignee of such lessor, merchant, or person who lends money or extends any other form of credit, who is the holder of a commercial installment contract, each of which persons or entities is subject to the laws of any jurisdiction of the United States, any state, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or insular possession of the United States, may, if the contract so provides, charge a delinquency charge on each installment which is in default for a period of not less than 10 days in an amount not in excess of 5 percent of such installment. However, only one such delinquency charge may be collected on any installment, regardless of the period during which it remains in default. A delinquency charge imposed pursuant to this paragraph shall not be deemed interest or a finance charge ...

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