Automated Bldg. Components, Inc. v. New Horizon Homes, Inc., C7-93-2036
| Decision Date | 12 April 1994 |
| Docket Number | No. C7-93-2036,C7-93-2036 |
| Citation | 514 N.W.2d 826 |
| Parties | AUTOMATED BUILDING COMPONENTS, INC., et al., Plaintiffs, v. NEW HORIZON HOMES, INC., et al., Defendants, Michael F. Donnelly, et al., Appellants, DayCo Concrete Company, Inc., Respondent. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
The requirement of "adjoining lots" under Minn.Stat. § 514.09 (1992) does not preclude a mechanic from filing a combined lien statement against multiple lots separated by related intervening objects. Unrecorded vendee interests in registered land do not bind the land or prevent a vendor from subjecting the property to a mechanics' lien.
James T. Swenson, Mackall, Crounse & Moore, Minneapolis, for plaintiffs.
Anthony J. Gleekel, William Christopher Penwell, Siegel, Brill, Gruepner & Duffy, P.A., Minneapolis, for defendants.
Considered and decided by SHORT, P.J., and KLAPHAKE and DAVIES, JJ.
This foreclosure action involves a combined mechanics' lien statement on multiple lots. New Horizon Homes, Inc. (developer) hired DayCo Concrete Company, Inc. (mechanic) to perform concrete, masonry, and foundation construction for a multifamily townhouse development in Woodbury. The mechanic was not paid for its labor and materials. When the mechanic attempted to foreclose its liens, several owners and mortgagees moved for summary judgment claiming the combined lien statement failed as a matter of law. The trial court denied that motion. The parties stipulated to the facts, and the trial court entered findings of fact, conclusions of law, and order for judgment in favor of the mechanic. Appellants argue the trial court erred by concluding that (1) the lots were "adjoining" on the day concrete construction began, and (2) the mechanic supplied labor and materials pursuant to a contract with the owner. In addition, appellants argue the trial court abused its discretion in the award of attorney fees. We affirm.
In 1990, the developer purchased parcels of unplatted land to create a multifamily townhouse development called Carver Lake Meadows. By written agreement with the developer, the City of Woodbury approved Carver Lake Meadows as a planned unit development and plotted the property as Lots 1 through 20 of Block 1, Lots 1 through 29 of Block 2, and outlots A through G. The plan was to include 49 townhouse units in buildings containing three to six units apiece, mutual easements, covenants and private streets, and a single homeowners association to govern the entire subdivision and to own certain designated common areas. In January of 1990, the developer conveyed outlots A through E to the homeowners association pursuant to warranty deed.
In January of 1991, the developer hired the mechanic to perform concrete, masonry, and foundation construction for Carver Lake Meadows. All work was performed by the mechanic under this oral agreement and was confirmed by several written work proposals. From April 18 through October 18, 1991, the mechanic furnished concrete and masonry work to Lots 1 through 14 of Block 1 and Lots 26 through 29 of Block 2. The mechanic finished construction of foundations and masonry work on five buildings, comprising 23 of the 49 units. The mechanic ceased further work after receiving payment for work done on eight units.
On March 4 and April 3, 1991, three of the appellants, by executory purchase agreements, acquired equitable interests in Lots 2, 4, and 7 of Block 1. These vendee interests were unrecorded. Between August 23 and September 30, 1991, six appellants, including the three holding unrecorded interests, recorded ownership rights to Lots 1, 2, 4, 6, 7, and 8 of Block 1. None of the appellants sought a lien waiver from the mechanic.
On February 6, 1992, the mechanic filed a combined lien statement in the amount of $100,480.81 that included Lots 1 through 14 of Block 1 and Lots 26 through 29 of Block 2. The statement was filed within 120 days of the mechanic's last day of work. On October 9, 1992, the mechanic filed a restated lien statement for $89,211.43 that included Lots 1 through 9, and Lots 11 through 13 of Block 1, and Lots 26 through 29 of Block 2. The restated lien statement reflected additional work and services supplied, but omitted property where the lien was satisfied. The mechanic also requested attorney fees as part of its foreclosure costs. The mechanic allocated the reasonable value of labor, skill, materials, supplies and equipment, and attorney fees to the individually platted lots. Each lot was the subject of a separate foreclosure action, but those cases were consolidated into this action.
I. Can closely connected lots which are physically separated by related intervening objects constitute "adjoining lots" under Minn.Stat. § 514.09?
II. Does a vendor have the status of "owner" within the meaning of Minn.Stat. § 514.09?
III. Did the trial court abuse its discretion in its award of attorney fees?
The parties agree on the relevant facts. The sole issue before us is one of statutory interpretation. The construction of a statute is a question of law subject to de novo review on appeal. Doe v. Minnesota State Bd. of Medical Examiners, 435 N.W.2d 45, 48 (Minn.1989).
Mechanics' liens are purely creatures of statute and exist only within the terms of the statute. Kirkwold Constr. v. M.G.A. Constr., 513 N.W.2d 241 (Minn.1994); Dunham Assocs. v. Group Invs., Inc., 301 Minn. 108, 118, 223 N.W.2d 376, 383 (1974). The relevant part of the mechanics' lien statute provides:
A lienholder who has contributed to the erection, alteration, removal, or repair of two or more buildings or other improvements situated upon or removed to one lot, or upon or to adjoining lots, under or pursuant to the purposes of one general contract with the owner, may file one statement for the entire claim, embracing the whole area so improved.
Minn.Stat. § 514.09 (1992). The parties agree that the statute applies to planned unit developments as well as to single family dwellings. We are asked to decide whether the statutory prerequisites for permitting a combined lien statement were present when the mechanic began work at Carver Lake Meadows.
Minn.Stat. § 514.09 gives a mechanic the option of filing a lien statement against each lot or a combined lien statement against multiple lots. A claimant who provides labor or materials to one tract of land is entitled to a mechanics' lien not only on the tract improved, but on all adjoining lots in common ownership. LaValle v. Bayless, 257 N.W.2d 283, 285 (Minn.1977); Carr-Cullen Co. v. Cooper, 144 Minn. 380, 392. 175 N.W. 696, 697 (Minn.1920). Improvement on two noncontiguous tracts cannot be protected by one lien statement. See S.H. Bowman Lumber Co. v. Piersol, 147 Minn. 300, 180 N.W. 106 (1920) (). The critical time for determining contiguity is when the claimant began construction. LaValle, 257 N.W.2d at 285.
Appellants argue the combined lien statement is invalid as a matter of law because the encompassed property is separated by intervening lots and a roadway. The legislature did not define the term "adjoining lots" in the statute. Appellants ask us to construe the statutory language to require all encompassed property to share a common boundary; the mechanic suggests that the parties' intent to treat the property as one tract should control how the land is platted.
Words of a statute are to be given their ordinary meaning in the absence of persuasive reasons to the contrary. Minn.Stat. § 645.08(1) (1992); Federal Deposit Ins. Corp. v. Meyer, --- U.S. ----, ----, 114 S.Ct. 996, 1001, 127 L.Ed.2d 308 (1994). Webster's Dictionary defines "adjoining" as "touching or bounding at some point or on some line; near in space." Webster's 3rd New International Dictionary 27 (1986) (unabridged). The American Heritage Dictionary defines "adjoining" as "neighboring; contiguous." The American Heritage Dictionary 22 (3rd ed. 1992). Black's Law Dictionary defines "adjoining" as "touching or contiguous." Black's Law Dictionary 41 (6th ed. 1990). Those definitions suggest that the spatial relationship of the tracts of land, not the parties' intended use of the property, is determinative.
The object of all statutory interpretation is to ascertain and effectuate the intention of the legislature. Minn.Stat. § 645.16 (1992); Tuma v. Commissioner of Economic Security, 386 N.W.2d 702, 706 (Minn.1986). We presume the legislature intends to adopt the same construction of the term "adjoining lots" as used by the Minnesota Supreme Court. Minn.Stat. § 645.17(4) (1992). Caselaw repeatedly uses "contiguous" interchangeably with the word "adjoining" in resolving issues involving combined lien statements. LaValle, 257 N.W.2d at 285; Johnson v. Salter, 70 Minn. 146, 72 N.W. 974 (1897). The lots subject to a combined lien thus need to have a close spatial relationship. The intent of the parties alone cannot subject noncontiguous parcels to a combined lien statement. See, e.g., S.H. Bowman, 147 Minn. 300, 180 N.W. 106, 107 (); Buckley v. Commercial Nat'l Bank, 171 Ill. 284, 49 N.E. 617, 619 (1898) ().
On the date the mechanic began its foundation and concrete construction, Carver Lake Meadows was one development with a circumference of approximately 3,400 feet. While one city street and three commonly owned outlots were interspersed in blocks one and two, the land was platted to accommodate one planned unit development; there were no...
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