Symons Corp. v. Tartan-Lavers Delray BeachSymons Corp. v. Tartan-Lavers Delray Beach
Jeffrey Allan Hirsch and Ronald F. Shapiro of Holland & Knight, Fort Lauderdale, for appellee/cross appellant.
SMITH, CHARLES E., Associate Judge.
The outcome of this appeal for an award of attorney‘s fees and appellee‘s cross appeal of the appellant‘s successful suit on a mechanic‘s lien hinges on the answer to one question; namely, was there proper service of the statutorily required Notice to Owner? We hold that there was. This is not to say that the corporate veil was pierced. The corporate veil may not be pierced unless it is shown not only that one business entity dominated or was the alter ego of the other, but that the relationship was created or used in order to mislead or defraud creditors. See, e.g., Dania Jai-Alai Palace, Inc. v. Sykes, 450 So.2d 1114 (Fla. 1984). In the instant case, piercing the corporate veil is beside the point, and does not determine the question whether appellant adequately noticed the owner of the construction project. Boux v. East Hillsborough Apartments, Inc., 218 So.2d 202 (Fla. 2d DCA 1969).
In its final judgment, the trial court found that by virtue of various subsidiaries, fictitious names, and interlocking management, the defendant is the owner/developer and generаl contractor of the Lavers Racquet Club project. The trial court also found that “[p]laintiff properly served its Notice to Owner pursuant to Florida Statute Section 713.06, upon the defendant on May 29, 1981.” While the testimony and evidence contained in the record on appeal is deplorably scanty, we find the trial court was not “clearly erroneous” nor “totally without any substantial evidence” to support its findings of fact.
Symons sent a Notice to Owner by certified mail to “Lavers Delray Racquet Club” at 755 Dotterel Road, Delray Beach, Florida and also to “Tartan Dev.” at 2350 Jaеger Drive, Delray Beach, Florida. The second Notice to Owner was sent to “Tartan Dev.” in an attempt to satisfy the requirement set out in
James Venable, an officer of the owner corporation, testified that all of the companies involved in the Lavers Racquet Club project do occasionally receive mail at 755 Dotterel Road. James Venable testified that the project presently called Laver‘s International Tennis Resort was also known as Lavers Racquet Club. He further stated that a number of names similar to Lavers Racquet Club and Laver‘s International Tennis Resort are reserved in Tallahassee. James Venable admitted being an officer in a number of Tartan companies registered in Florida, and that all these companies are tied together “in one way or another.” He testified that Amy C. Stern was an employee of Clubhouse Restaurant, Inc., which is a subsidiary of Tartan-Laver Delray, Inc., owner-developer of the Lavers Racquet Club project. He conceded that Tartan-Laver Delray, Inc., was owner-developer of the “Lavers project.”
After admitting all of the above facts, Mr. Venable stated from his own personal knowledge that Tartan-Laver Delray, Inc., did not receive a Notice to Owner from
Notice is of two kinds, actual and constructive. Sapp v. Warner, 105 Fla. 245, 141 So. 124, aff‘d, 143 So. 648 (1932). Actual notice is itself comprised of two types: (1) express, based on direct information; and (2) implied, which includes notice inferred from the fact that a person had the means of knowledge, which it was his duty to use. Id. Implied actual notice is an inference of fact. Id.; see also, Reinhart v. Phelps, 150 Fla. 382, 7 So.2d 783 (1942). Implied actual notice, being an inference of fact, may be drawn by the court as a matter of law when warranted by the circumstances of the particular case calling for its application in order to grant equitable relief. Sapp v. Warner, supra. United Contractors, Inc. v. United Constr. Corp., 187 So.2d 695 (Fla. 2d DCA 1966).
A review of the evidence shows that both the Notice to Owner and the Claim of Lien were addressed to “Lavers Delray Racquet Club” at 755 Dotterel Road, Delray Beach, Florida. Apparently Tartan-Laver Delray, Inc., received the Claim of Lien even though it was also addressed to “Lavers Delray Racquet Club” at 755 Dotterel Road (just as the Notice to Owner had been). The Claim of Lien was apparently received because ten days after receiving the Claim of Lien by certified mail the attorneys for “Lavers Racquet Club” bonded off the lien against the property described as “Lavers Racquet Club.” A copy of the Clerk‘s Certificate of Bonding was sent to Symons Corporation at its address on Bryan Road, as set out in the Claim of Lien. We do not see how the attorneys for “Lavers Racquet Club” could have bonded off a lien claimed by lienor Symons Corporation unless the owner, Tartan-Laver Delray, Inc., had received the Claim of Lien sent to “Lavers Delray Racquet Club” at 755 Dotterel Road. Additionally, the Claim of Lien referred to the Notiсe to Owner previously mailed to the Lavers Delray Racquet Club, thus putting Tartan-Laver
It is not necessary that one be an employee of a corporation to be its agent. Babson Bros. Co. v. Allison, 337 So.2d 848 (Fla. 1st DCA 1976) (citing Economic Research Analysts, Inc. v. Brennan, 232 So.2d 219 (Fla. 4th DCA 1970)). When, in the usual course of business of a corporation, an officer or other agent is held out by the corporation or has been permitted to act for it or manage its affairs in such a way as to justify third persons who deal with him in inferring or assuming that he is doing an act within the scope of his authority, the corporation is bound thereby. Edward J. Gerrits, Inc. v. McKinney, 410 So.2d 542 (Fla. 1st DCA 1982). See also, S & S Air Conditioning Co. v. Cantor, 343 So.2d 923 (Fla. 3d DCA 1977). See also cases on apparent authority: American Ladder and Scaffold Co. v. Miami Ventilated Awning Mfg. Co., 161 So.2d 699 (Fla. 3d DCA 1964) (An agent‘s authority need not be conferred in express terms, but may be apparеnt or implied under justifying circumstances); Aetna Ins. Co. v. Holmes, 59 Fla. 116, 52 So. 801 (1910); Parsley Bros. Constr. Co. v. Humphrey, 136 So.2d 257 (Fla. 2d DCA 1962); One Hour Valet, Inc. v. Keck, 157 So.2d 83 (Fla. 2d DCA 1963) (stating that whether acts are within scope of an agent‘s apparent authority or whether acts were ratified by the principal are questions of fact, and will not be set aside unless clearly erroneous). The trial court could have inferred from the testimony and evidence that Amy Stern had apparent authority to receive and sign for certified mail addressed to Lavers Delray Racquet Club at 755 Dotterel Road, and that, having received the signed certificates, Symons relied on this evidence of delivery that Notice to Owner had properly been served.
For serving its Notice to Owner, Symons utilized one of the methods prescribed in Section 713.18, as follows:
By mailing the same, postage prepaid, by registered or certified mail to the person to be served at his last known address and evidence of delivery.
Analogous to this method of service of Notice to Owner is Substituted Service of Process:
The statute which provides a method of substituted service on a non-resident and which requires that notice of service be sent by registered or certified mail by the plaintiff or his attorney to the defendant does not require, in the case of corporate defendant, that the notice and process be sent to some officer of the corporation; presumably, the statutory requirement that the documents be mailed “to the defendant” can be satisfied by a mailing to any place in the world where the postal service can provide a return receipt which, in the case of a corporation, can be signed by any clerical employee or agent authorized to do so. George Fischer Ltd., v. Plastiline, Inc., 379 So.2d 697 (Fla. 2d DCA 1980).
In S & S Air Conditioning Co. v. Cantor, 343 So.2d 923 (Fla. 3d DCA 1977), the plaintiff-subcontractor received a receipt for registered mail by which the notice to ownеr had been sent and made a substantial change of position in reliance on the effectiveness thereof. Under those circumstances the Court found that whether the attorney acting for the owners had forwarded the notice to owner after receiving and receipting the registered mail was not a matter of concern for the plaintiff-subcontractor. On the facts disclosed, the defendant-owners were estopped to deny the effectiveness of the plaintiff‘s preliminary notice. Id. A similar situation exists here with Symons Corporation.
The omission of any foregoing details or errors in such claim of lien shall not, within the discretion of the trial court, prevent the enforcement of such lien as against one who has not been adversely affected by such omission or error.
Though
We do not find the trial court‘s findings of fact that the Notice to Owner was properly served so clearly erroneous or totally without support as to warrant a reversal of its findings. Symons’ proof was sufficient to show a good faith substantial compliance of the mailing of the Notice to Owner. The burden of proof then shifted to the owner to show prejudice, which it failed to do. We affirm.
The trial court struck Symons Corporаtion‘s demand for attorney‘s fees and failed to award attorney‘s fees to Symons Corporation as the prevailing party. Tartan Lavers Delray, Inc., as the owner of the property, posted a cash deposit and transferred Symons’ lien from its real property to a cash deposit, pursuant to
The owner relies on the case of Gesco, Inc. v. Nezelek, to support its position that it is not liable for attorney‘s fees. Gesco held only that the liability for costs of the surety on the bond and the principal, a lending institution, including attorney‘s fees, was limited to $100.00, as provided in
Symons Corporation, as the prevailing party against the owner, Tartan Lavers Delray, Inc., under
This case is remanded to the trial court for determination of reasonable attorney‘s fees for trial and this appeal.
GLICKSTEIN, J., concurs.
HURLEY, J., dissents with opinion.
HURLEY, Judge, dissenting.
I respectfully disagree with the majority‘s approach for two reasons: (1) it ignores the rationale employed by the trial court, and (2) it substitutes a finding of agency which is not supported by the record.
Admittedly, the trial court did not use the phrase “piercing the corporate veil.” It did, however, hold one corporation responsible for information received by another corporation on the theory that both were part of the same corporate family. The trial court expressly found that Tartan-Laver Delray, Inc., “by virtue of various subsidiaries and fictitious names, interlocking management, is the owner-developer and general contraсtor of the Laver Racquet Club... .” Based on this finding, the court held that Tartan-Laver Delray, Inc. had constructive knowledge of information given to an employee of a sister corporation. The majority, however, discounts this finding and states, “[t]his is not to say that the corporate veil was pierced.” Ante, at 1256. Indeed, in the next breath, the majority opines, “In the instant case, piercing the corporate veil is beside the point... .” Ante, at 1256.
Next, the majority posits a finding of agency. It suggests that either Amy
In my view, the dispositive question on appeal is whether the statutorily required “notice to owner” was served properly.3 I would answer in the negative and reverse.
Symons Corp. rents modular forms and related equipment to contractors for poured-in-place concrete construction. In the context of this case, Symons’ status is that of a sub-sub-contractor/materialman. It signed a rental agreement with Lemi Enterprises, a subcontractor engaged in building Laver‘s International Tennis Resort, also known as Lаver‘s Racquet Club, in Delray Beach. Thereafter, Symons sent a “notice to owner” by certified mail to “Laver‘s Delray Racquet Club, 755 Dotterel Road, Delray Beach, Fla.,” and to “Tartan Dev., 2350 Jaeger Drive, Delray Beach, Fla.” (The Dotterel Road address is a condominium residence building at the tennis resort.) The return receipt shows that both notices were signed and received by one Amy C. Stern. When Symons failed to receive full payment, it filed a claim of lien against the property. Pursuant to
Tartan-Laver responded with a motion to dismiss in which it questioned the adequacy of the allegations regarding the notice to owner. The trial court denied the motion and Tartan-Laver filed an answer containing a denial plus an affirmative defense aimed at the adequacy of the notice to owner. Symons replied with a denial of all of the allegations in the affirmative defense.
Testimony at trial confirmed that Laver‘s International Tennis Resort is owned by Tartan-Laver Delray, Inc. This company is a member of a large corporate family. The parent is Tartan Development Corp., a Canadian corporation not licensed to do business in Florida. The chief U.S. subsidiary is Tartan Management U.S., Inc. Tartan-Laver Delray, Inc., the owner of the tennis resort, is a subsidiary of Tartan Management U.S., Inc. The general contractor for the tennis resort is Tartan Construction Co., Inc., also a subsidiary of Tartan Management U.S., Inc. Finally, there is Clubhouse Restaurant, Inc., which apparently operates a restaurant at the tennis resort and is a subsidiary of Tartan-Laver Delray, Inc.
Trial testimony also established that the five corporations, viz., the Canadian parent, the chief U.S. subsidiary, the owner, the general contractor, and the restaurant operator, share a common corporate officer. Two of the corporations, the owner and the general contractor, maintain corporate offices at 801 S.E. Sixth Avenue in Delray Beach. James Venable, testifying on behalf of the owner and general contractor, denied that either had received a copy of Symons’ notice to owner. He stated that Amy C. Stern, the person who signed the return rеceipts, is an employee of Clubhouse Restaurant, Inc., and that she does not have any connection with either the owner or general contractor.
Based on the foregoing evidence, the trial court pierced Clubhouse Restaurant‘s
The concept of piercing a corporate veil has been the subject of much recent discussion by this court. See, e.g., Church of Scientology of California v. Blackman, 446 So.2d 190 (Fla. 4th DCA 1984); Sisk v. General Builders Corp., 438 So.2d 65 (Fla. 4th DCA 1983); Dania Jai-Alai Palace, Inc. v. Sykes, 425 So.2d 594, 598 (Fla. 4th DCA 1982), rev‘d, 450 So.2d 1114 (Fla. 1984); Vantage View, Inc. v. Bali East Development Corp., 421 So.2d 728 (Fla. 4th DCA 1982). These cases, however, are passe in light of the Supreme Court‘s reversal of Dania Jai-Alai, supra. There, the court reaffirmed the rule “that the corporate veil will not be pierced, either at law or in equity, unless it be shown that the corporation was organized or used to mislead creditors or to perpetuate a fraud upon them.” Dania Jai-Alai Palace, Inc. v. Sykes, supra, at 1119-1120 (quoting Riley v. Fatt, 42 So.2d 769, 773 (Fla. 1950)). Thus, to pierce a corporate veil on the theory that one corporation is an “alter ego” or “mere instrumentality” of another, it is necessary to prove domination plus improper conduct.
Normally, the question of whether a corporation is an instrumentality or an alter ego of another corporation is an issue to be determined by the trier of fact. Barnes v. Liebig, 146 Fla. 219, 1 So.2d 247 (1941). However, “it is elemental that at the trial the burden of proof rests on the plaintiff to establish by competent evidence each material fact essential to recovery and that upon failure to do so it is the duty of the trial court upon appropriatе motion to take the case from the jury and direct a verdict for the defendant.” Smith‘s Bakery, Inc. v. Jernigan, 134 So.2d 519, 521 (Fla. 1st DCA 1961). In order to prevail on an “alter ego” or “mere instrumentality” theory, Symons had the burden of demonstrating that Tartan-Laver dominated Clubhouse Restaurant for an improper purpose. Symons, however, failed to shoulder this burden. Counsel for Tartan-Laver established that all of the corporations share a common corporate officer. But Symons’ counsel chose not to probe beyond this fact. Obviously, the existence of a common corporate officer may serve as a lеgitimate starting point for an inquiry, but it does not, by itself, prove that one corporation dominated another to the extent that the subservient corporation could be termed the “mere instrumentality” of the dominant corporation. The record is silent on the policies, day-to-day operations, and interaction among the various corporations. Even more glaring is the complete absence of proof of improper purpose or conduct. Thus, Symons totally failed in its effort to pierce Clubhouse Restaurant, Inc.‘s corporate veil.
Symons’ fallback рosition is that the requirements of the mechanics’ lien statute can be satisfied by showing that Tartan-Laver had constructive knowledge of the notice to owner. Symons relies upon two cases for this position: Boux v. East Hillsborough Apartments, Inc., 218 So.2d 202 (Fla. 2d DCA 1969) and Broward Atlantic Plumbing Co. v. R.L.P., Inc., 402 So.2d 464 (Fla. 4th DCA 1981). Both cases, however, are inapposite. They involve subcontractors who were deemed to be in privity with the owners and, therefore, not subject to the notice to owner requirement. See
The requirements for the notice to owner are found in
All lienors under this section, except laborers, as a prerequisite to perfecting a
lien under this chapter and recording a claim of lien, shall be required to serve a notice on the owner setting forth the lienor‘s name and address, a description sufficient for identification of the real property, and the nature of the services or materials furnished or to be furnished. A sub-subcontractor or a materialman to a subcontractor shall serve a copy of the notice on the contractor as a prerequisite to perfecting a lien under this chapter and recording а claim of lien.
“The purpose of the notice is to protect an owner from the possibility of paying over to his contractor sums which ought to go to a subcontractor who remains unpaid.” Boux v. East Hillsborough Apartments, Inc., supra. Since mechanics’ liens are purely creatures of statute, the law must be strictly construed and complied with in every detail. Sheffield-Briggs Steel Products, Inc. v. Ace Concrete Service Co., supra. This principle is exemplified by the host of cases which have held that untimely service of the notice to owner is a fatal defect. See, e.g., Falovitch v. Gunn & Gunn Construction Co., 348 So.2d 560 (Fla. 3d DCA 1977); Babe‘s Plumbing, Inc. v. Maier, 194 So.2d 666 (Fla. 2d DCA 1966); Stancil v. Gardner, 192 So.2d 340 (Fla. 2d DCA 1966). Thus, I would hold that constructive knowledge is not an acceptаble substitute for full statutory compliance.4
Of course, a trial court‘s finding comes to this court clothed with a presumption of correctness. Beck v. Beck, 383 So.2d 268 (Fla. 3d DCA 1980). Yet, it is also true that to be sustained on appeal, a final judgment must be grounded in competent, substantial evidence. Walker v. Harris, 398 So.2d 955 (Fla. 4th DCA 1981). Here, the record is devoid of competent, substantial evidence to support the trial court‘s finding of adequate service. Since proper service of the notice to owner is an indispensable prerequisite to perfecting a mechanic‘s lien,5 I would reverse and remand with instructions to enter a judgment in favоr of Tartan-Laver Delray, Inc.