Second District Quashes Order Discharging Claim of Lien and Lis Pendens

Premier Finishes, Inc. v. Maggirias, 2D13-1340 (Fla. 2d DCA 2013):

In April 2011, Premier, under the fictitious name PFI Construction, entered into a contract with a family trust to build a house. In August 2012, Premier filed a complaint against Maggirias, the trustee. Premier alleged they had substantially completed performance pursuant to the contract when Maggirias wrongfully terminated them and failed to pay the outstanding balance due. Premier recorded a notice of lis pendens and a claim of lien, which they sought to foreclose.

Maggirias filed a motion to dismiss the complaint and to discharge the claim of lien and lis pendens. He asserted the complaint and recorded instruments were filed by Premier whereas the contract was entered into by PFI Construction. Thus, Maggirias contended Premier is not a party to the contract, is not the contractor, and is not the proper lienor under Florida’s Construction Lien Law. Premier responded that PFI Construction was simply a name used by Premier, basically an acronym. Further, Premier completed all of the work pursuant to the contract. Finally, Maggirias failed to show any prejudice as a result of the potential errors, omissions, or deficiencies in the claim of lien to prevent its enforcement.

The court granted Maggirias’ motion to dismiss count I because “[t]here was no alleged – no proven contract” to which Premier was a party. Also, the court discharged the lien and lis pendens because Premier did not have a basis under the strict reading of chapter 713. Premier filed an amended complaint alleging that they occasionally do business as PFI Construction, making the two entities one and the same. Premier stressed that they are the actual party to the contract.

The Second District reasoned that a contract entered into under a fictitious name is valid and enforceable. The real entity that uses the fictitious name when entering into a contract is the actual party to the contract. Therefore, Premier would be entitled to proceed with a claim of lien, but the time period for Premier to record an amended claim of lien had expired. However, the circuit court departed from the essential requirements of the law by depriving Premier their statutory remedy without holding an evidentiary hearing to determine whether Maggirias was adversely affected by the discrepancy between Premier Finishes, Inc. and PFI. The petition for writ of certiorari was granted.