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Tardy Claim of Lien

Author: FAUSONE, TAYLOR & BOHN, LLP (LegalEase Solutions)

BRIEF IN SUPPORT OF DEFENDANT’S

MOTION FOR PARTIAL SUMMARY DISPOSITION

Defendants DKB ASSOCIATES, LLC, SHANE CALLAGHAN (known as JOHN P. CALLAGHAN IV), SALEEM A. KHASHAN, SOC GROUP, INC., submits this brief through their attorney, Lucy M. Snyder of Fausone, Taylor & Bohn, LLP, in support of their Motion for Partial Summary Disposition on Count 1 of Plaintiff’s Complaint pursuant to MCR 2.116 (C)( 8) and (10), and Motion to Remove This Matter to District Court for lack of Subject-Matter Jurisdiction pursuant to MCR 2.227.

STATEMENT OF FACTS

On or about May 20, 2004, The Plaintiff, McIntosh Poris, Inc. entered into a written contract with the Defendant, SOC Group, Inc. to perform certain architectural services for the construction of a restaurant in Milford, Michigan.  A copy of the contract is attached as Exhibit A. The Plaintiff agreed to perform such architectural services for $20,000 to $25,000.  Subsequently, Plaintiff failed to complete the work under the contract and failed to perform its services in a workmanlike manner, failing to comply with industry standards, and failing to perform at all certain contractual obligations.  As a result of these breaches, Defendants were forced to hire another architect to perform the services that Plaintiff had been hired for.

On or about December 14, 2005 Plaintiff/Counter-Defendant filed a tardy Claim of Lien. As the last work furnished at the project was completed prior to September 3, 2004, the Claim of Lien recorded December 14, 2004 was tardy.  Plaintiff’s own letter dated September 3, 2004 stated that “[i]n regards to our recent phone conversation, we understand that you do not wish to continue with our services, per our contract, for the remainder of your project. . . .”  (A copy of the letter is attached as Exhibit B).   This letter was signed by not only one of Plaintiff’s Principals, but by the Project Manager as well.  Furthermore, attached as Exhibit C, is the affidavit of John P. Callaghan, one of the Defendants, where he testifies that “the last services provided by McIntosh Poris were provided prior to September 3, 2004.”  Callaghan’s affidavit went on to state that “All invoices for services provided reflect that the work performed by Plaintiff was performed prior to September 3, 2004.”

STANDARD OF REVIEW

A motion for summary disposition brought pursuant to MCR 2.116(C)(8) tests the legal sufficiency of the complaint.  All well pled factual allegations are accepted as true and construed in a light most favorable to the non-movant.  Maiden v. Rozwood, 461 Mich 109 (1999).  A motion under MRC 2.116(C)(8) may be granted only where the claims alleged are “so clearly unenforceable as a matter of law that no factual development could possibly justify recovery.”  Id., (quoting Wade v. Department of Corrections, 439 Mich 158(1992)).  When deciding a motion brought pursuant to this section, a court considers only the pleadings.  MCR 2.116(G)(5).

A motion for summary disposition brought under MRC 2.116(C)(10) tests the factual support for a claim.  Lytle v. Malady, 456 Mich 1 (1997); Mitchell v. Dahlbert, 215 Mich App 718 (1996).  In reviewing such a motion, the trial court is to consider affidavits, pleadings, depositions, admissions and documentary evidence filed in the action or submitted by the parties in the light most favorable to the party opposing the motion.  If those things show that there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law, then the motion may be granted.  Quinto v. Cross and Peters Co., 451 Mich 358 (1996).

Mere existence of issues of fact is no bar to entry of summary disposition if, upon resolving all such issues in favor of the non moving party, the moving party would still be entitled to judgment as matter of law.  Kuhn v Department of Treasury, 384 Mich 378 (1971); Hull v Green Oak, 24 Mich App 309 (1970).

 

ARGUMENT

  1. THE PLAINTIFF’S CLAIM OF LIEN IS INVALID AND IS BARRED BY MCL 570.1111.

Plaintiff breached its contract with Defendant by failing to complete the work under the contract and to perform its services in a workmanlike manner, and to comply with industry standards.  As a result of these breaches, Defendants were forced to hire another architect to perform the services that Plaintiff been hired to perform. The Plaintiff filed a claim of lien on or about December 14, 2005, more than 90 days after the last work was furnished by Plaintiff.  The last work furnished at the project was completed prior to September 3, 2004.  Thus the claim of lien did not comply with the statutory language of § 570.1111 of Michigan Compiled Laws which mandates a ninety day period with in which a lien claim should be filed.

MCL § 570.1111 reads in relevant part:

Sec. 111. (1) Notwithstanding section 109, the right of a contractor, subcontractor, laborer, or supplier to a construction lien created by this act shall cease to exist unless, within 90 days after the lien claimant’s last furnishing of labor or material for the improvement, pursuant to the lien claimant’s contract, a claim of lien is recorded in the office of the register of deeds for each county where the real property to which the improvement was made is located. A claim of lien shall be valid only as to the real property described in the claim of lien and located within the county where the claim of lien has been recorded.

A lien must be filed within ninety days after the last date when materials or services are supplied. Northern Concrete Pipe, Inc.,v Sinacola Cos., 461 Mich. 316 (1999).  In  Northern Concrete Pipe, the Court went on to explain the rationale for the 90-day rule:

With respect to the purpose of the provision in question, a ninety-day period of limitation advances policies of preventing stale claims and protecting defendants from the fear of protracted litigation. Chase v Sabin, 445 Mich. 190, 199; 516 N.W.2d 60 (1994), quoting Bigelow v Walraven, 392 Mich. 566, 576; 221 N.W.2d 328 (1974). This is especially important in light of the public’s substantial interest in the certainty of land titles. Absent strict compliance with the ninety-day filing requirement of MCL 570.1111(1); MSA 26.316(111)(1), every construction project could create a potential cloud on the title to property, creating uncertainty in land titles. Moreover, where property owners and subsequent purchasers rely on the clear and unambiguous requirements of MCL 570.1111(1); MSA 26.316(111)(1), and find no notice of lien filed with the county office of the register of deeds, it would be inequitable to later subject those parties to the risk of foreclosure.

Id at 322.  The Court also commented on the obvious meaning of the statute and that it could not have been stated any clearer:

The case before us is a clear instance in which the Legislature could not have imposed a more precise requirement.  MCL 570.1111(1)  ; MSA 26.316(111)(1) states without qualification that a subcontractor’s right to a lien ceases to exist if not recorded in the  county office of the register of deeds within ninety days after the last furnishing of labor or material.

 Id at 324.  Moreover, when the language of a statute is clear and unambiguous no interpretation need or can be made. Jones v Grand Ledge Public Schools, 349 Mich 1 (1957).  See also MacQueen v City Comm of Port Huron, 194 Mich 328, 342 (1916) (“It is a cardinal rule that the legislature must be held to intend the meaning which it has plainly expressed, and in such cases there is no room for construction or attempted interpretation to vary such meaning.”)

In the present case, the claim of lien was filed on December 14, 2004. The labor and materials were last furnished before September 3, 2004 and the work was completed prior to this date. Plaintiff’s, in fact, have admitted this fact, as is evident from the letter dated September 3, 2004 from the Plaintiff/ Counter Defendant to the Defendants/ Counter Plaintiffs verifying the discontinuation of services, which states, “in regards to our recent phone conversation, we understand that you do not wish to continue with our services, per our contract, for the remainder of your project….” (Exhibit B)  This letter was signed by not only one of Plaintiff’s principals, but by the project manager as well.  Moreover, John P. Callaghan testified in his Affidavit that “the last services provided by McIntosh Poris were provided prior to September 3, 2004” and that “All invoices for services provided reflect that the work performed by Plaintiff was performed prior to September 3, 2004.” (Exhibit C).  Thus it is evident that the labor and materials were last furnished before September 3, 2004 and all the work was completed prior to this date. Under such circumstances, it is readily apparent that the claim of lien filed on December 14, 2004 is well beyond the statutory period of 90 days.

The delay on part of the Plaintiff to timely file his claim within 90 days and his failure to strictly comply with the claim of lien provision, MCL 570.1111, invalidates his claim of lien. Therefore, no genuine issue of material fact remains, and Plaintiff has failed to state a claim upon which relief can be granted, and Defendants entitled to partial summary disposition on Count I of Plaintiff’s Complaint.

  1. WITH THE FAILURE OF PLAINTIFF’S COUNT 1, THE AMOUNT IN CONTROVERSY IS BELOW THE $25,000 JURISDICTIONAL LIMIT FOR CIRCUIT COURT

 MCL 600.8301 states that “The district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000.00.”  If this Court finds for Defendants and grants their Motion for Partial Summary Disposition over Count 1 of Plaintiff’s Complaint, the amount in controversy will be below the $25,000 jurisdictional limit for the circuit court, and this Court must either dismiss Plaintiff’s action or may remove it to District Court pursuant to MCR 2.227.

RELIEF REQUESTED

THEREFORE, Defendants request this Court grant their Motion for Partial Summary Disposition in their favor, and remove this case to District Court for lack of subject-matter jurisdiction and award all costs, including attorney fees, incurred in this matter.