         FIRST DISTRICT COURT OF APPEAL
                STATE OF FLORIDA
                  _____________________________

                          No. 1D18-4819
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COURTNEY M. FERNANDEZ and
ELLIS T. FERNANDEZ,

    Appellants,

    v.

MANNING BUILDING SUPPLIES,
INC.,

    Appellee.
                  _____________________________


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

                       September 25, 2019


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
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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 made incident to or as
    a condition to the grant of the loan or other
    extension of credit and shall not be included in
    determining the limit on charges, as provided by


    *  Manning does not contend that the Fernandezes were in
privity. Thus, any recovery by Manning can only be as allowed by
statute and not based on Manning’s contract with the general
contractor.

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    this section, which may be made in connection
    with the loan or other extension of credit as
    provided by law of this state.

§ 687.03(2)(c), Fla. Stat. (Emphasis added).

     Distinguishing between a delinquency charge and a finance
charge is also consistent with Chapter 520, Florida Statutes, which
regulates retail installment sales and financing of retail
installment sales. This chapter defines a finance charge as “the
cost of consumer credit as a dollar amount.” § 520.02(6), Fla. Stat.
(2018). The statute further provides that the “term ‘finance
charge’ includes any charge payable directly or indirectly by the
buyer and imposed directly or indirectly by the seller as an
incident to or a condition of the extension of credit.” Id.; see also
15 U.S.C. § 1605(a) (defining finance charge for consumer credit as
the sum of all charges “imposed directly or indirectly by the
creditor as an incident to the extension of credit”). Here, had
timely payment been made no additional cost would have been
imposed by the Manning contract.

     While Manning’s contract with the general contractor called
the 1.5% delinquency charge a “finance charge,” a late payment fee
is not a “finance charge” as that term is generally understood. In
addition to the Florida Statutes discussed above, the difference
between a finance charge and delinquency fee is recognized by
Black’s Law Dictionary (10th ed. 2014) which defines a “finance
charge” as “[a]n additional payment, usu. in the form of interest,
paid by a retail buyer for the privilege of purchasing goods or
services in installments.” As such, a finance charge is the cost of
credit — not the cost of paying late. The 1.5% fee required by the
Manning contract is to be paid only upon default; it is not a cost of
credit per se. Thus, as it is not a finance charge as that term is
understood generally, the trial court erred in assessing interest at
a rate of 18% against the Fernandezes.

     Accordingly, that part of the judgment awarding interest at a
rate of 18% is reversed, and the cause is remanded for an award of
interest at the statutory rate. In all other respects, the judgment
and award of attorney’s fees and costs are affirmed.

    AFFIRMED in part, REVERSED in part, and REMANDED.
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WOLF, J., concurs; RAY, C.J., dissents with opinion.

                  _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
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RAY, C.J., dissenting.

     I respectfully dissent from the majority’s conclusion that the
delinquency charge authorized by contract is not a finance charge
recoverable under the materialman lien statute. I would affirm the
final order in full.

     Under the lien statute, the amount of the lien of a
materialman not in privity with the property owner includes “any
unpaid finance charges due under the lienor’s contract.” §
713.06(1), Fla. Stat. Here, the credit agreement between the
materialman (Manning Building Supplies, Inc.) and the general
contractor called for a 1.5% monthly delinquency charge if the
account was not paid on time. It further provided that the finance
charge would be assessed on the delinquent account on the last day
of the month following purchase.

     I am not persuaded that the 1.5% delinquency charge is
anything but a finance charge as that term is used in both the
contract and statute. As explained by the trial court, the context of
this business transaction assumes a preexisting failure to make
timely payments for the building materials supplied on credit. The
contract states that the materialman is entitled to X if paid on
time, and X + 1.5% per month if not paid on time. While labeled
interchangeably as a delinquency charge and a finance charge, the
1.5% assessment refers to the additional charge incurred—as a
condition of the extension of credit—for amounts past due. Nothing
in Florida’s construction lien laws distinguishes this type of charge
from the statutorily undefined “finance charge.”



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     Because the construction lien laws are designed in part “to
protect suppliers who furnish labor or materials to the property by
assuring them of full payment,” Stunkel v. Gazebo Landscaping
Design, Inc., 660 So. 2d 623, 626 (Fla. 1995), I would affirm the
trial court’s decision to include interest on the outstanding
principal balance at the annual rate of 18% per year as provided
in the credit agreement.

                 _____________________________

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.




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