Butler v. O'Connor

Decision Date05 July 2017
Docket NumberFSTCV126014644S
CourtConnecticut Superior Court
PartiesShane Butler et al. v. Charles O'Connor et al

UNPUBLISHED OPINION

SUPPLEMENTAL MEMORANDUM OF DECISION

A William Mottolese, Judge Trial Referee.

A.

On January 18, 2017 this court filed its decision after trial post-trial briefing and subsequent oral argument. In that decision the court awarded judgment to the defendant-counterclaim plaintiff (" O'Connor") on his first counterclaim which sought foreclosure of his mechanic's lien and although concluding that O'Connor had fully performed his contract did not award judgment on the second count which claimed breach of contract. The court then ordered a hearing to establish the updated debt, appraised value and form of judgment. At that hearing held April 6, 2017 O'Connor's counsel revealed to the court that a recent title examination disclosed that a notice of lis pendens had never been filed as required by G.S. § 49-39 thereby creating the issue of whether the lien foreclosure judgment could stand. The court ordered additional briefing and heard oral argument on May 31, 2017. For the reasons that follow the court concludes that the foreclosure judgment cannot stand and that the judgment must therefore and is hereby revised so as to dismiss the foreclosure count and award judgment on the second count of the counterclaim which claims breach of contract.

G.S. § 49-39 in pertinent part provides at follows:

A mechanic's lien shall not continue in force for a longer period than one year after the lien has been perfected, unless the party claiming the lien commences an action to foreclose it, by complaint, cross complaint or counterclaim, and records a notice of lis pendens in evidence thereof on the land records of the town in which the lien is recorded within one year from the date the lien was recorded . (Emphasis added.)

As the parties have pointed out in their briefs, there is a split of authority within the Superior Court over the proper interpretation of the decisions of our Appellate Court in H.G. Bass Associates, Inc. v. Ethan Allen, Inc., 26 Conn.App. 426, 601 A.2d 1040 (1992) and First Constitution Bank v. Harbor Village Ltd. Partnership, 37 Conn.App. 698, 657 A.2d 1110 (1995). Preliminarily, it is observed that decisions of coordinate members of the Superior Court are not binding on this court save in the exceptional case where the doctrine of law of the case applies which is not present in this case. Mayer v. Historic District Commission, 325 Conn. 765, 779, 160 A.3d 333 (2017) (Superior Court decision not binding statewide). While the issue requires this court's own independent analysis, the reasoning of these cases is nevertheless helpful to the process.

In H.G. Bass Associates the plaintiff was a subcontractor who sought to foreclose on a mechanic's lien against the property owner but failed to record its notice of lis pendens within one year of the recordation date of the mechanic's lien. Relying on well-established precedent in the cases of Diamond National Corporation v. Dwelle, 164 Conn. 540, 325 A.2d 259 (1979) and Persky v. Puglisi, 101 Conn. 658, 127 A. 351 (1925) the court concluded that although these cases dealt with the time requirement that a mechanic's lien foreclosure action be commenced within one year after recording the lien, the court expanded that analysis to include the one-year recording requirement. The court simply treated each of the requirements in pari passu concluding that " [t]he plain intent of this statute is to clear the title to the premises unless an action of foreclosure is brought within the time limited for the continuance of the lien. The phrase 'no mechanic's lien shall continue in force' is conclusive." Id. at 429. Equally clear is that the court held that " the trial court was without jurisdiction to render judgment for the plaintiff." Id. at 432 (emphasis added).

In First Constitution Bank the plaintiff sought foreclosure of its mortgage on property on which F had filed a mechanic's lien. In asserting priority the plaintiff claimed that F's mechanic's lien was not valid because the notice of lis pendens which was recorded within one year of the filing of the mechanic's lien was deficient because it failed to set forth the names of the parties as required by G.S. § 52-325 which provides in relevant part as follows:

NOTICE OF LIS PENDENS. (a) In any action in a court of this state or in a court of the United States (1) the plaintiff or his attorney, at the time the action is commenced or afterwards, or (2) a defendant, when he sets up an affirmative cause of action in his answer and demands substantive relief at the time the answer is filed, if the action is intended to affect real property, may cause to be recorded in the office of the town clerk of each town in which the property is situated a notice of lis pendens, containing the names of the parties, the nature and object of the action, the court to which it is returnable and the term, session or return day thereof, the date of the process and the description of the property . . . This section shall be construed to apply to mechanic's lien . . . (Emphasis added.)

The notice of lis pendens was recorded within one year of the filing of F's mechanic's lien. In rejecting the plaintiff's position the court reviewed the nature and purpose of a lis pendens.

The purpose of the lis pendens in the context of a mechanic's lien is the same as it is in any other situation in which real property is the subject of litigation; namely, it is intended to give constructive notice to persons seeking to purchase or encumber property after the recording of a lien or the commencement of a foreclosure suit . . . Thus, if a person has actual notice of the lien and a suit commenced thereon, that actual notice may take the place of constructive notice imparted by the filing of a lis pendens . . . To hold otherwise would exalt constructive notice over actual notice. (Citations omitted; internal quotation marks omitted.) Meyer, Kasindorf & Mancino v. Lafayette Bank & Trust Co., 34 Conn.Supp. 84, 86-87, 377 A.2d 861 (1977). (Alternate citation omitted.) Id. at 703.

O'Connor relies on the following underscored statement of the court to support his claim that as long as the Butlers had actual knowledge of the mechanic's lien, which from the evidence they clearly did, such knowledge is a substitute for constructive notice which is created by the recording of the lis pendens.

Since the filing of notice of lis pendens is not a condition precedent to a right of action; Meyer, Kasindorf & Mancino v. Lafayette Bank & Trust Co., supra, 34 Conn.Supp. 87; and since the plaintiff, or its predecessor, had actual notice of the action for foreclosure of the mechanic's lien, Fairfield's lien is not invalid to this plaintiff. The plaintiff suffered no prejudice. Id. at 704. (Emphasis added.)

It is crucial to note at this point that the rationale of Meyer, Kasindorf & Mancino was based entirely on the mechanic's lien jurisprudence of the State of California. The Appellate Court in H.G. Bass determined that that reliance was misplaced because the California mechanic's lien statute sets no time limit within which the party seeking to foreclose the lien must record the notice of lis pendens. Therefore, there are several reasons why the First Constitution Bank case is inapposite and therefore not determinative of the present case. 1) Unlike in H.G. Bass, the controversy was not between lienor and lienee but rather between a lienor and a third party who sought priority over the lien in that foreclosure action but was not a party to the lien; 2) First Constitution was decided on the basis on G.S. § 52-325 and not § 49-29; 3) the sole issue in First Constitution was whether the omission by the mechanic's lienor of the names of subsequent encumbrances as required by § 52-325 invalidated the lien. G.S. § 49-29 was not even mentioned in the court's opinion; 4) the same court in H.G. Bass rejected the reasoning of the Meyer case as applied to § 49-29 for the reason set forth above; 5) while the actual notice rule may apply to a third party under § 52-325 it does not apply to a mechanic's lienee under § 49-29. See also Cadlerock Properties Joint Venture, L.P. v. Ashford, 98 Conn.App. 556, 562, n.3, 909 A.2d 964 (2006); 6) since the court's assertion that the filing of a notice of lis pendens is not a condition precedant to a right of action it was not necessary to the holding of the case so it is deemed to be obiter dictum. Therefore, stare decisis does not attach to this commentary. Balentine's Law Dictionary, 3rd Ed. at 346; Gladys v. Planning and Zoning Commission, 57 Conn.App. 797, 805, 750 A.2d 507 (2000).

To summarize, the court now holds that because of the failure to record the notice of lis pendens the court had no jurisdiction to adjudicate the first count of the counterclaim and hereby dismisses that count. In all other respects the court reaffirms the judgment of January 19, 2017 and hereby enters judgment for the defendant-counterclaim plaintiff on the breach of contract count.

The plaintiff argues that the breach of contract count should also be dismissed because both it and the foreclosure count rely on the existence of the mechanic's lien. Specifically, they posit that because the breach of contract count " incorporates and realleges" paragraphs 1-4 of the foreclosure count, the lien was an essential part of both counts. The court concludes that this argument is based on a faulty reading of the counterclaim. Paragraphs 1-4 do nothing more than allege a contractual relationship with the plaintiffs and do not even mention the mechanic's lien. For this reason this claim is rejected.

B.

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