Barry Properties, Inc. v. Fick Bros. Roofing Co.

• Decision Date: 10 February 1976
• Docket Number: No. 62,62
• Citation: 353 A.2d 222,277 Md. 15
• Parties: BARRY PROPERTIES, INC. v. The FICK BROS. ROOFING COMPANY.
• Court: Maryland Court of Appeals

Page 15

277 Md. 15

353 A.2d 222

BARRY PROPERTIES, INC. v. The FICK BROS. ROOFING COMPANY.

No. 62.

Court of Appeals of Maryland.

Feb. 10, 1976.

Mark D. Dopkin and Charles B. Heyman, Baltimore (Gary E. Klausner and Kaplan, Heyman, Engelman & Belgrad, Baltimore, on the brief), for appellant.

The Mechanical Contractors' Ass'n of Maryland, Inc. and Associated Organizations, Howard H. Conaway, George W. Liebmann and Frank, Bernstein, amici curiae, Conaway & Goldman, Baltimore, on brief.

Joseph I. Huesman, Baltimore (Lerch & Huesman, Baltimore, on the brief), for appellee.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and O'DONNELL, JJ.

DIGGES, Judge.

This nation's first mechanics' lien law was enacted by the Maryland General Assembly 185 years ago. Laws of Maryland 1791, ch. 45, § 10. The statute, which may well have been drafted by Maryland's venerable Thomas Johnson, ¹ applied only to that section of the State which was being ceded to the United States to constitute the District of Columbia, and was passed by the Legislature, at the urging of Thomas Jefferson and James Madison, to facilitate the speedy construction of the new capital city of Washington. Although other states quickly followed this lead by enacting similar laws, it was not until 47 years later that such a statute, Laws of Maryland 1838, ch. 205, was adopted for any other portion of Maryland, and even that act applied only in Baltimore City. See Frederick Contr. v. Bel Pre Med., 274 Md. 307, 313, 334 A.2d 526 (1975); Freeform Pools v. Strawbridge, 228 Md. 297, 302 n. 1, 179 A.2d 683 (1962); Welch v. Humphrey, 200 Md. 410, 415, 90 A.2d 686 (1952); H. Farnam, Chapters in the History of Social Legislation in the United States to 1860, 153-56 (1935); W. Tindall, Standard History of the City of Washington 47-49 (1914). See generally Cutler & Shapiro, The Maryland Mechnics' Lien Law-Its Scope and Effect, 28 Md.L.Rev. 225 (1968). ² Our current mechanics' lien law, Maryland Code (1974, 1975 Cum.Supp.), Real Property Article, §§ 9-101 to -111, which is applicable throughout the State, is a lineal descendant of the 1838 statute. The question with which we are confronted in this case is whether Maryland's present mechanics' lien law is compatible with the due process clauses of Article 23 of the Maryland Declaration of Rights and the Fourteenth Amendment of the United States Constitution. Although we conclude that parts of the statute do not comport with contemporary concepts of due process, we find it unnecessary to strike down the entire act since its provisions are severable.

Generally speaking, mechanics' lien statutes, in an endeavor to provide for the public welfare, are designed to encourage construction by ensuring that those who contribute to a project are compensated for their efforts. Maryland's law, in furtherance of this purpose, grants to those who have supplied labor or materials to the creation, erection, improvement or repair of specified property (principally buildings) a lien, enforceable by foreclosure, on the structure and the immediately adjacent land. See §§ 9-101, -102, -105, -106, -111; Maryland Rules BG70, 71, 73, 74, 76.

Although this Court has considered a multitude of mechanics' lien cases since the law's original enactment in 1838, we have never before been faced with a procedural due process challenge to the validity of the entire statute. The basis of the present attack-that the imposition of a lien without notice and an opportunity for a prior hearing, as the Maryland statute authorizes, deprives the owner of his property without procedural due process-emanates from a quartet of recent Supreme Court decisions which address the question of whether certain statutory prejudgment creditor remedies are consonant with the due process clause of the Fourteenth Amendment. In the order they were decided, those cases are: Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969) (garnishment of wages); Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) (replevin of personalty); Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974) (sequestration of personalty pursuant to vendor's lien); and North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975) (garnishment of bank account). ³ Before discussing whether Maryland's mechanics' lien law satisfies the requirements of due process as interpreted in those four decisions, we will more fully describe the statute and set forth the facts of this case.

Under the terms of the Maryland statute, a lien is created and attaches to the property as soon as work is performed or materials are supplied, § 9-101(a), and lasts until 'the expiration of 180 days after the work has been finished or the materials furnished, although no claim has been filed for them (with the clerk of the court).' § 9-105; see Treusch v. Shryock, 51 Md. 162, 169-70, 173 (1879); Sodini v. Winter, 32 Md. 130, 133 (1870); Franklin Ins. Co. v. Coates, 14 Md. 285, 296-97 (1859). However, if a laborer or materialman is a subcontractor, meaning he did not directly contract with the property owner, he 'is not entitled to a lien unless, within 90 days after furnishing the work or material, he or his agent gives notice in writing, . . . to the owner . . . of his intention to claim a lien.' § 9-103(a); see Palmer Park Ltd. v. Marvelite, Inc., 255 Md. 121, 125-30, 257 A.2d 169 (1969); Himelfarb v. B & M Weld. & Iron Wks.,254 Md. 37, 41-42, 253 A.2d 842 (1969); § 9-103(b)-(d). The purpose of this § 9-103(a) notice is to inform the property owner that a lien may be claimed so that he, as authorized by § 9-104, 'may retain from the cost of the building the amount which he ascertains to be due to the party giving notice.' The statute further provides that if either a subcontractor (who gives the § 9-103(a) notice) or a general contractor has not been fully paid and desires to retain his mechanics' lien, he must within the 180 days prescribed by § 9-105(e), file a claim containing specified information concerning the claim, § 9-105(c), with the clerk of the circuit court of the county where the property is located, at which time the lien will be recorded on a special 'Mechanics' Lien Docket.' § 9-105. Once filed with the clerk the lien subsists for one year from the date of its filing unless within that period the claimant commences a proceeding to enforce it, in which case the lien is 'stayed until the conclusion of the proceeding.' § 9-106. During that one-year period, however, 'the owner of the property subject to the lien, or any other person interested in it, may bring proceedings in equity to compel the claimant to prove the validity of the lien or have it declared void,' id.; see Continental Steel Corp. v. Sugarman, 266 Md. 541, 548, 295 A.2d 493 (1972); Rule BG75 a; or, with court approval, the owner may release his property from the lien by substituting a bond. ⁴ Rule BG75 b. An action to enforce a mechanics' lien that has been recorded is an in rem equity proceeding of which all interested parties are entitled to notice as in other equity actions. See Grinnell Co. v. City of Crisfield, 264 Md. 552, 561, 287 A.2d 486 (1972); Rule BG71 a. If in such a proceeding the claimant establishes that he is entitled to the lien, the court will order a sale of the property to pay the claimant unless the amount found to be due is paid on or before a specified date. Rule BG73. Having summarized Maryland's mechanics' lien statute, we now, relying substantially on the parties' stipulations, sketch the facts of this case.

On June 6, 1973, Associated Engineers, Inc., and the appellant, Barry Properties, Inc., signed a contract providing that Associated, as a general contractor, was to erect a building on a tract of land located in the Owings Mills Industrial Park in Baltimore County, owned by Barry. At some point thereafter, the appellee, Fick Bros. Roofing Co., subcontracted with Associated, agreeing to construct, using materials it was to supply, the building's roof. The appellee fully and satisfactorily performed its contractual obligations and was owed $11,610 by Associated. The parties agree that Fick's notice of intent to claim a mechanics' lien, filing of the mechanics' lien claim and bill of complaint to enforce that lien complied in all respects with the applicable Maryland statutes and rules of procedure. To the extent pertinent here, Barry responded by moving for summary judgment on the ground that the lien statute unconstitutionally deprived it of its property without procedural due process of law. For the purposes of the motion for summary judgment, the parties further stipulated that Fick's lien kep Barry from being paid the balance of its construction mortgage (the construction lender withheld payment pending resolution of this and other mechanics' lien claims) and prevented Barry from either closing a permanent mortgage or obtaining a second mortgage on the property's equity. After a hearing, the Circuit Court for Baltimore County (Haile, J.) concluded that there was no denial of due process; the court then determined that the lien claim was valid to the extent of $11,610, and appointed a trustee to sell the property if the lien was not paid within 30 days. Barry appealed, ⁵ and we granted certiorari while the cases pending in the Court of Special Appeals. Code (1974, 1975 Cum.Supp.), Courts and Judicial Proceedings Article, § 12-201.

While agreeing with all we have thus far related in this opinion, the appellant nevertheless urges that Maryland's mechanics' lien law, as it currently exists, deprives owners of their property without procedural due process in contravention of Article 23 of the Maryland Declaration of Rights and of the Fourteenth Amendment of the United States Constitution. With respect to this issue, we initially observe that it has long been settled by the...