Case No. 99-SP14-0147
Appeal No.  BB-66

J. KOKOLAKIS CONTRACTING, INC.,

Appellant,

v.

MITCO WATER LABORATORIES, INC.,

Appellee.

OPINION OF THE COURT

This is an appeal from the county court of Polk County, Judge Timothy Coon presiding. Appellant seeks review of the ruling below which awarded Appellee payment on a public construction bond established under Chapter 255, Florida Statutes, despite lack of notice. This court has jurisdiction. Fla. R. App. P. 9.030(3). The ruling of the county court is remanded with instructions.

I.

On September 5, 1995, the School Board of Hillsborough County contracted with Appellant, J. Kokolakis Construction, Inc., as general contractor to build a middle school in Hillsborough County. J. Kokolakis secured a $13 million dollar bond with Hartford Casualty Insurance Company for the project as required by section 255.05(1). J. Kokolakis hired Reliance Associates as subcontractors to provide heating, ventilation and air conditioning on the project. Reliance hired Appellee, Mitco Water Services, Inc., as sub-subcontractors to provide a water treatment system and services for one year.

Reliance filed bankruptcy on August 12, 1997, and Mitco filed a claim for payment in U.S. Bankruptcy Court for the Middle District of Florida for $7,092.91. Under the terms of the Reliance/Mitco agreement, Mitco was to file monthly water test reports with Reliance. After Reliance filed bankruptcy, Mitco began sending the monthly reports to the School Board.

On December 18, 1997, Mitco requested payment directly from J. Kokolakis, and filed suit in county court seeking payment of $7,092.91. On July 23, 1997, Mitco filed a Notice to Owner with the School Board for $7,092.91 in accordance with Chapter 713, Florida Statutes. However, Mitco never filed a claim on the bond as required by 255.05(2). The county court awarded $5,000.00 plus prejudgment interest and costs to Mitco after finding that Mitco had the option to forego its claim under the bond and recover on a quasi-contract theory. The trial judge reasoned that J. Kokolakis would be unjustly enriched if they were permitted to escape payment. This appeal followed.

II.

The issue on appeal, whether § 255.05 provides the exclusive remedy for breach of a public construction contract, raises a question of law. The trial court’s ruling is subject to de novo review. Phillip J. Padavono, Florida Appellate Practice, § 9.4, (2d ed.1997).

III.

A.

Chapter 255 provides the only remedy for claimants who are not in privity with the general contractor on public construction payment bonds. Sharpe Inc. v. Neil Spear, Inc., 611 So. 2d 66 (Fla. 1^st DCA 1992); D.I.C. Commercial Construction Corp. v. Knight Erection and Fabrication, Inc., 547 So. 2d 977, 979 (Fla. 4^th DCA 1989). Claimants must give notice of their intent to make a claim against the payment bond. Section 255.05(2)2 states in pertinent part:

2. A claimant, except a laborer, who is not in privity with the contractor shall, before commencing or not later than 45 days after commencing to furnish labor, materials, or supplies for the prosecution of the work, furnish the contractor with a notice that he or she intends to look to the bond for protection. A claimant who is not in privity with the contractor and who has not received payment for his or her labor, materials, or supplies shall deliver to the contractor and to the surety written notice of the performance of the labor or delivery of the materials or supplies and of the nonpayment. The notice of nonpayment may be served at any time during the progress of the work or thereafter but not before 45 days after the first furnishing of labor, services, or materials, and not later than 90 days after the final furnishing of the labor, services, or materials by the claimant or, with respect to rental equipment, not later than 90 days after the date that the rental equipment was last on the job site available for use. No action for the labor, materials, or supplies may be instituted against the contractor or the surety unless both notices have been given.

Failure to provide notice as required by 255.05(2) precludes recovery. D.I.C. Construction, 547 So. 2d at 979 (citing W.G. Mills, Inc. v. M&M.A. Corp., 465 So. 2d 138 (Fla. 2d DCA 1985)).  

B.

Mitco rejects the premise that section 255.05 provides the exclusive remedy for claimants on public construction bonds. Instead, Mitco argues that Chapter 255 was never intended to allow a general contractor to escape the duty to pay for services rendered. Strict enforcement of the notice requirement, they argue, would permit unjust enrichment. They conclude that the decision below should be affirmed because it prevents unjust enrichment and is consistent with the Miller Act and the mechanic’s lien provision in Chapter 713. They cite Rite-Way Painting and Plastering, Inc. v. Tetor, in support of their conclusion. 582 So. 2d 15, 17 (Fla. 2d DCA 1991).

The trial court found that J. Kokolakis received a benefit from Mitco on the middle school construction project the absence of a contract or privity between J. Kokolakis and Mitco. The court determined that it was unfair to allow J. Kokolakis to retain the benefit without payment. As a matter of general law, a court may create a legal obligation on a quasi-contract theory although the litigants are not parties to an actual contract. Tipper v. Great Lake Chemical Co., 281 So. 2d 10 (Fla. 1973). Thus, the trial court concluded that J. Kokolakis should pay Mitco.

C.

The Second District Court of Appeal has concluded that Chapter 255, governing construction of public buildings, provides a basis for recovery on public construction contracts in lieu of the recovery provisions contained in Chapter 713. Gulsby, Inc. v. Miller Construction Co., Inc., 351 So. 2d 396 (Fla 2d DCA 1977) (acknowledging the lack of parity between Chapter 713 and Chapter 255); Blosam Contractors, Inc. v. Joyce, 451 So. 2d 545, 547 (Fla. 2d DCA 1984) (requiring prompt notice of claim protects contractors and claimants). While Chapter 713 allows claimants to pursue remedies in addition to those contained in Chapter 713, Rite-Way, 582 So. 2d at 17, Chapter 255, governing public building contracts, does not. Gulsby v. Miller, 351 So. 2d 396; Blosam v. Joyce, 451 So. 2d at 547. The plain language of the statue states, "[n]o action for the labor, materials, or supplies may be instituted against the contractor or the surety unless both notices have been given." For the foregoing reasons, this court concludes that Chapter 255 contains the exclusive remedy for claimants on public construction bonds when the claimant is not in privity with the general contractor.

Failure to give notice under section 255.05(2)2 precludes recovery on a public construction bond. In Buffalo Tank Corp. v. Environmental Control Equipment, Inc., the claimant sought an equitable lien against the funds held by a city. 544 So. 2d 1037 (Fla. 2d DCA 1989), reh. den.. The city held the funds on a contract to build a water treatment facility in lieu of a surety. The trial court granted the city’s motion to dismiss the action because the claimant had not filed proper notice under section 255.05(2)2. The Second District Court stated that the purpose of notice requirement is to give notice to the general contractor that he may have to pay someone whom he might not otherwise know exists. Id. at 1039. When the parties are in privity, no notice is required. Id. In D.I.C. Commercial Construction Corp., v. Knight Erection and Fabriciation, Inc., the general contractor appealed from a ruling which awarded a payment on the construction bond on a public school improvement contract. 547 So. 2d 977 (Fla. 4^th DCA 1989). The district court concluded that notice is a condition precedent to recovery. Id. at 979 (citing W. G. Mills, Inc. v. M. & M. A. Corp., 465 So. 2d 1388 (Fla. 2d DCA 1985)). Finally, in Sharp, Inc. v. Neil Shear, Inc., the court addressed one issue; whether a sub-subcontractor who is not in privity with the general contractor on a public construction project may recover against a payment bond if the sub-subcontractor failed to comply with the notice requirement of section 255.05(2). 611 S0. 2d 66 (Fla. 1^st DCA 1992). On very similar facts, the district court held that in a circumstance in which there is no privity between the parties and the claimant has failed to give proper notice, there can be no recovery.

IV.

In the present matter, J. Kokolakis, the general contractor, secured a payment bond as required by section 255.05(1). J. Kokolakis hired Reliance as subcontractor, and Reliance hired Mitco. Mitco filed a "Notice to Owner" under Chapter 713 rather than Chapter 255. As the name implies, the notice went to the School Board as the property owner. Mitco did not file notice with Hartford or J. Kokolakis as is specified in the statute. Reliance ordered materials on June 17, 1996, and Mitco began treatment services on May 20, 1997. During the term of the Reliance/Mitco contract, Reliance filed bankruptcy. Mitco continued to perform, but at no time, either before or after the breach by Reliance, did Mitco deal directly with J. Kokolakis. On December 18, 2000, Mitco sought payment directly from J. Kokolakis for the first time.

As a sub-subcontractor who was not in privity with the general contractor, Mitco was required to give notice of their intent to make a claim against the bond. The statute requires notice to the general contractor or the surety either before commencing work or within 45 days of commencing work. Further, the statute states that as a claimant, Mitco cannot bring suit against the contractor or surety unless they have filed both a notice of intent and a notice of nonpayment. The facts are not in dispute. Thus, the trial court may not award a claim against the bond on a quasi-contract theory in contravention to the clear language of the statute. Mitco’s failure to provide notice bars recovery.

Accordingly, it is ORDERED that the ruling below is VACATED and this cause is REMANDED with a direction to dismiss the complaint.

ORDERED 27 June 2000.

Charles B. Curry
Chief Judge