D.T. McCall & Sons v. Seagraves

• Decision Date: 23 May 1990
• Docket Number: No. 89-316-II,89-316-II
• Citation: 796 S.W.2d 457
• Parties: D.T. McCALL & SONS, Plaintiff/Appellant, v. Glenn L. SEAGRAVES, Barbara Seagraves, and Thomas F. Baker, IV, Trustee, Defendants/Appellees.
• Court: Tennessee Court of Appeals

Page 457

796 S.W.2d 457

D.T. McCALL & SONS, Plaintiff/Appellant, v. Glenn L. SEAGRAVES, Barbara Seagraves, and Thomas F. Baker IV, Trustee, Defendants/Appellees.

No. 89-316-II.

Court of Appeals of Tennessee Middle Section, at Nashville.

May 23, 1990.

Permission to Appeal Denied by

Supreme Court Sept. 24, 1990.

James L. Bass, Bass & Bass, Carthage, for plaintiff/appellant.

Vicky V. Klein, Goodlettsville, for defendants/appellees.

OPINION

KOCH, Judge.

This appeal involves the enforcement of a materialman's lien on a newly constructed house. A material supplier who had sold the contractor a heat pump for the house sued the homeowners in the Chancery Court for Wilson County after the contractor did not pay. The trial court dismissed the complaint because of the materialman's failure to comply with the statutory requirements for enforcing a lien. We affirm.

I.

David Holland is a contractor from Lafayette. Sometime in 1988, he bought a heat pump from D.T. McCall & Sons for a house he was building in the East Meadows Subdivision in Mt. Juliet. On June 25, 1988, he contracted to sell the house to Glenn and Barbara Seagraves while it was still under construction. During the August 25, 1988 closing, Mr. and Mrs. Seagraves paid Mr. Holland in full, and Mr. Holland provided the Seagraves with a warranty deed for the house and lot. Mr. and Mrs. Seagraves took possession of the house at that time.

Mr. Holland recorded a notice of completion of the house in the Wilson County register's office on September 21, 1988. Apparently he did not pay D.T. McCall & Sons for the heat pump, and on October 24, 1988, D.T. McCall & Sons recorded a notice of lien on the Seagraves' property "to secure the payment of the sum of $3,800.00 for labor, materials and supplies."

On January 5, 1989, D.T. McCall & Sons filed a complaint to enforce its lien. Mr. and Mrs. Seagraves moved to dismiss the complaint as well as the amended complaint because of defects in the notice of lien and in the complaint and amended complaint. The trial court initially denied the motion. However, after reconsidering the matter on its own initiative, the trial court filed a memorandum opinion on May 25, 1989 finding the motion to be well taken. Accordingly, the trial court entered an order on June 23, 1989 dismissing D.T. McCall's complaint.

II.

The Seagraves' motion to dismiss and D.T. McCall & Sons' response relied upon matters outside the complaint. The trial court's memorandum and order state that its decision was based on a consideration of the entire record. Thus, we find that the trial court considered the parties' affidavits and that they played a role in the trial court's decision.

The Seagraves' motion to dismiss became a motion for summary judgment when the trial court considered and did not exclude the additional evidentiary material. ¹ Hixson v. Stickley, 493 S.W.2d 471, 473 (Tenn.1973); Jacox v. Memphis City Bd. of Educ., 604 S.W.2d 872, 873-74 (Tenn.Ct.App.1980). Accordingly, we must review the trial court's decision using the standard applicable to summary judgments instead of the one applicable to motions to dismiss for failure to state a claim upon which relief can be granted.

Our role on appeal is to determine whether Tenn.R.Civ.P. 56's requirements have been met. Hill v. City of Chattanooga, 533 S.W.2d 311, 312 (Tenn.Ct.App.1975). Summary judgments are inappropriate when genuine disputes concerning material facts exist. Poore v. Magnavox Co., 666 S.W.2d 48, 49 (Tenn.1984); Executone of Memphis, Inc. v. Garner, 650 S.W.2d 734, 736 (Tenn.1983). In determining whether a factual dispute exists, this court considers the pleadings and evidentiary materials in the appellate record in a light most favorable to the opponent of the motion. Blocker v. Regional Medical Center, 722 S.W.2d 660, 660 (Tenn.1987).

III.

Materialman's liens are creatures of statute. Williams Lumber & Supply Co. v. Poarch, 221 Tenn. 540, 544, 428 S.W.2d 308, 310 (1968); Brown v. Brown & Co., 25 Tenn.App. 509, 512, 160 S.W.2d 431, 433 (1941). Persons seeking to take advantage of the lien statutes must comply with all the applicable statutory requirements, including those relating to notice, recordation, and proper initiation of suit. Hamilton Nat'l Bank v. Long, 189 Tenn. 562, 567-68, 226 S.W.2d 293, 296 (1949); American City Bank v. Western Auto Supply Co., 631 S.W.2d 410, 423 (Tenn.Ct.App.1981).

Tennessee's courts have generally required strict compliance with the lien statutes, Eatherly Constr. Co. v. DeBoer Constr. Co., 543 S.W.2d 333, 334-35 (Tenn.1976); Smith v. Chris-More, Inc., 535 S.W.2d 863, 863 (Tenn.1976); Sequatchie Concrete Serv. v. Cutter Laboratories, 616 S.W.2d 162, 165 (Tenn.Ct.App.1980), because, as noted by the Supreme Court:

A materialman's lien is altogether statutory, and, when a lawmaking body prescribes the terms upon which it may be asserted, it is beyond the power of this court to waive its provisions or substitute others.

McDonnell v. Amo, 162 Tenn. 36, 41, 34 S.W.2d 212, 213 (1931). However, any construction adopted by the courts should not be so strict that it defeats the statutes' purpose. Southern Blow Pipe & Roofing Co. v. Grubb, 36 Tenn.App. 641, 653, 260 S.W.2d 191, 196 (1953).

IV. The Adequacy of the Notice of Lien

The Seagraves' motion contains a two-pronged attack on the validity of D.T. McCall's notice of lien. First, it asserts that the notice does not comply with Tenn.Code Ann. § 66-11-112 (1982) because it is not supported by a sworn statement. Second, it asserts that it was not timely because it was not filed within ten days after the filing of the notice of completion as required by Tenn.Code Ann. § 66-11-143(d)(2) (Supp.1989).

The issue concerning the notice's compliance with Tenn.Code Ann. § 66-11-143(d)(2) cannot be disposed of by motion because of the factual dispute concerning when the house was completed. Mr. Seagraves' affidavit states that the house was completed prior to the August 25, 1988 closing, and the certificate of completion asserts that it was completed on August 18, 1988. However, Dave M. McCall's affidavit states that the installation of the heat pump was not completed until sometime in October, 1988. This conflict in testimony precludes the summary disposition of the Tenn.Code Ann. § 66-11-143(d)(2) claim.

The Seagraves' claim that the notice of lien does not comply with Tenn.Code Ann. § 66-11-112 is ripe for adjudication because it is based upon the contents of a document about which there is no dispute. D.T. McCall & Sons responds by arguing first that it was not required to satisfy Tenn.Code Ann. § 66-11-112's formalities because its claim was against the property owners. Second, it asserts that its notice of lien satisfies Tenn.Code Ann. § 66-11-112 if the statute does apply. We have determined that the statute does apply in this case and that D.T. McCall & Sons' notice of completion meets its requirements.

The purpose of the notice requirements in the lien statutes is to protect against secret liens. There can be no lien without proper notice. Conger Lumber & Supply Co. v. White, 17 Tenn.App. 206, 212-13, 66 S.W.2d 999, 1002 (1934). However, the requirements for effective notice vary depending on for whom the notice is intended.

If the notice is directed toward the property's record owner at the "visible commencement of operations" or when the materials are provided, then simple notice without registration or filing will suffice. Streuli v. Brooks, 203 Tenn. 373, 379, 313 S.W.2d 262, 265 (1958); Sequatchie Concrete Serv. v. Cutter Laboratories, 616 S.W.2d at 164; Walker Supply Co. v. Corinth Community Development, Inc., 509 S.W.2d 514, 516-17 (Tenn.Ct.App.1974). If, however, the notice is intended to be effective insofar as subsequent purchasers and encumbrancers are concerned, registration is necessary and the formal requirements of either Tenn.Code Ann. § 66-11-111 (1982) or Tenn.Code Ann. §§ 66-11-112 and 66-11-117 must be met. Tindell Home Center, Inc. v. Union Peoples Bank, 543 S.W.2d 843, 844-45 (Tenn.1976); American City Bank v. Western Auto Supply Co., 631 S.W.2d 410, 423 (Tenn.Ct.App.1981).

D.T. McCall & Sons asserts that it did not need to comply with the formal registration requirements because its claim was against the owners of the property. While it is true that Mr. and Mrs. Seagraves owned the property at the time the dispute arose, there is no proof that they owned the property when work on the house began, or when the builder purchased the heat pump, or when the heat pump was delivered.

D.T. McCall's contract was not with Mr. and Mrs. Seagraves but rather with the builder who owned the property himself when he bought the heat pump. Mr. and Mrs. Seagraves were subsequent purchasers for value without notice of D.T. McCall's lien claim. Thus, D.T. McCall's notice must meet the requirement of either Tenn.Code Ann. § 66-11-111 (1982) or Tenn.Code Ann. §§ 66-11-112 and 66-11-117 (1982) in order to be effective.

Material suppliers may protect their liens against subsequent purchasers or encumbrancers in two ways. First, pursuant to Tenn.Code Ann. § 66-11-111, they can register a properly authenticated copy of their written contract in the register's office. Second, pursuant to Tenn.Code Ann. § 66-11-112(a), they can register a "sworn statement similar to that set forth in § 66-11-117." The statement required by Tenn.Code Ann. § 66-11-117 is a "sworn statement of the amount due and/or approximately that to accrue for such work, labor or materials, and a reasonably certain description of the premises."

D.T. McCall & Sons chose to follow Tenn.Code Ann. § 66-11-112 to protect its lien in this case. Therefore, in order to be effective against subsequent purchasers, its notice must embody a sworn statement and must be acknowledged and registered. Pulaski Lumber Co. v. Harpeth South, Inc., 501 S.W.2d 275, 279 (Tenn.1973); Chattanooga Lumber & Coal Corp. v. Phillips, 202 Tenn. 266,...