The court reversed a trial court order granting a motion to increase the amount of the bond entered after the final judgment, finding that the plain language of 713.24, Florida Statutes, only applied to pending actions.
Edmondson v. Tri-County Electrical Services, Inc., arises from an electrical contractor’s payment dispute with a homeowner. After performing work for the homeowner, the electrical contractor was unpaid, and recorded a construction lien in the amount of $6,780.00 against the homeowner’s property. After the contractor filed a lawsuit to foreclose the lien, the homeowner transferred the lien to a cash security bond in the amount of $9,339.45. The contractor moved to increase the amount of the bond, and the court deferred ruling on that motion.
The case proceeded to trial, and the electrical contractor won on all counts. The court reserved jurisdiction to determine the amount of attorneys’ fees and costs to which the contractor was entitled. When the electrical contractor moved filed its motion for attorneys’ fees and costs, it requested within the motion that the court increase the amount of the cash bond. The electrical contractor also filed a renewed motion to increase the cash security. The trial court ultimately entered an agreed final judgment, awarding pre-judgment interest, attorneys’ fees, expert fees, and costs, but failing to address the motion to increase the amount of the bond. The judgment also did not reserve jurisdiction to address the bond issue later.
More than 30 days after the judgment, the trial court held a hearing on the electrical contractor’s motion to increase the amount of the bond and granted it. The homeowner’s appealed that ruling, arguing that because the trial court entered final judgment before ruling on the motion, it lacked jurisdiction to enter an order on the motion to increase the amount of the bond.
The appellate court agreed, first recognizing that once the time for rehearing had passed, the court lacked jurisdiction address the electrical contractor’s motion. The appellate court then noted that while Florida Rule of Civil Procedure 1.540 would allow relief from judgment under certain circumstances, the electrical contractor did not invoke that rule in its motion to increase the cash bond, and the trial court only relied on section 713.24, Florida Statutes, in granting the electrical contractor’s motion.
The appellate court found this problematic, because section 713.24, Florida Statutes, permits parties to “file a motion in a pending action to enforce a lien, for an order to require additional security.” The court concluded that because the final judgment had been entered, the action was not “pending” as required by the statute. Thus, the appellate court reversed the trial court’s ruling granting the electrical contractor’s motion to increase the bond.
While this ruling may not seem like a big deal—after all, the contractor still won, and still has a judgment in its favor—the lack of a sufficient bond guts some of the power of a lien. A contractor’s lien, and the resulting judgment, is one of the few types of liens/judgments that can be enforced against a homeowner’s property, even if it is homesteaded. Once the lien is transferred to a bond, the lien no longer encumbers the property, and the contractor’s only security for payment is the bond. If the bond amount is less than the lien, interest, attorneys’ fees and costs, then the contractor, after obtaining the cash from bond, is left with an unsecured judgment for the balance.
The key takeaway from this case for contractors is that once a lien is transferred to a security bond, they need to ensure that the bond amount is adjusted regularly to reflect the potential award in their favor, including in any final judgment.