Erb Lumber Co. v. Homeowner Const. Lien Recovery Fund
| Decision Date | 19 September 1994 |
| Docket Number | 159195,Docket Nos. 150628 |
| Court | Court of Appeal of Michigan — District of US |
| Parties | ERB LUMBER COMPANY, a Michigan corporation, Plaintiff-Appellee, v. HOMEOWNER CONSTRUCTION LIEN RECOVERY FUND, Defendant-Appellant, and D.A. Derusha, Inc., David A. Derusha, Rebecca L. Derusha, George P. Johnson, III, Mary Alice Johnson, National Bank of Detroit Mortgage Co., Kitchen Suppliers, Inc., J.R. & Son Plumbing, Inc., Defendant. ERB LUMBER COMPANY, a Michigan corporation, Plaintiff-Appellee, v. HOMEOWNER CONSTRUCTION LIEN RECOVERY FUND, Defendant-Appellant, and Vittorio A. Basilisco, Jr., Connie Sitto, J.C. Cornillie Co., Gaspare Cracchiolo, d/b/a Cracchiolo Painting of Sterling Heights, Farmington Ridge Homeowners Association and Lite Electric, Defendants. |
May, Simpson & Strote by Ronald P. Strote and John A. Forrest, Bloomfield Hills, for Erb Lumber Co.
Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., Michael A. Lockman and Jack Blumenkopf, Asst. Attys. Gen., for Homeowner Const. Lien Recovery Fund.
Before MURPHY, P.J., and MARILYN J. KELLY and BUHL, * JJ.
In these consolidated cases, the defendant, Homeowner Construction Lien Recovery Fund, appeals as of right from orders in two separate construction lien actions granting Erb Lumber's motion for summary disposition. MCR 2.116(C)(10). We affirm.
In the first case, Docket No. 150628, Erb Lumber provided building materials and supplies to D.A. Derusha, Inc. for a residence that the contractor was building for George P. and Mary Alice Johnson. The supply contract provided that payment for materials must be made within 150 days of delivery. If not, a time-price differential charge of two percent per month would be added until the total was fully paid.
Erb sought to recover pursuant to the Construction Lien Act. M.C.L. § 570.1101 et seq.; M.S.A. § 26.316(101) et seq. Because the structure was a residence, Erb was required to name the State of Michigan, Department of Licensing and Regulation, Homeowner Construction Lien Recovery Fund as a party. M.C.L. § 570.1201 et seq.; M.S.A. § 26.316(201) et seq.
Erb obtained a consent judgment in which the Fund agreed to pay Erb Lumber's entire lien claim except for the time-price differential which the Fund refused to pay. Erb moved for summary disposition on the question of whether the time-price differential charge was properly included in Erb's lien claim and whether the Fund was liable for the amount. The circuit court judge found in favor of Erb Lumber, concluding that the time-price differential was properly included in the construction lien claim. The Fund appeals only from inclusion of the time-price differential in the construction lien claim.
In Docket No. 159195, while the contractor and the homeowners involved were different, the facts are similar. The homeowners and the Fund entered into a partial consent judgment with Erb Lumber but again disputed the Fund's duty to pay the time-price differential. The judge in that case also granted Erb's motion for summary disposition on the question. The Fund appeals from the trial court's decision. The Court of Appeals consolidated the two cases on March 31, 1993.
The Fund contends that the two percent time-price differential is not an improvement as the term is defined in the Construction Lien Act. M.C.L. § 570.1104; M.S.A. § 26.316(104). It also argues that both the language of the statute and case law demonstrate that interest payments are notproperly included in determining the amount of a lien. M.C.L. § 570.1107; M.S.A. § 26.316(107).
Two sections of the Construction Lien Act are relevant to resolution of the dispute. M.C.L. § 570.1107; M.S.A. § 26.316(107) provides in part:
(1) Each contractor, subcontractor, supplier, or laborer who provides an improvement to real property shall have a construction lien upon the interest of the owner or lessee who contracted for the improvement to the real property.... A construction lien acquired pursuant to this act shall not exceed the amount of the lien claimant's contract less payments made on the contract. [M.C.L. § 570.1107; M.S.A. § 26.316(107).]
The term "improvement" is defined in M.C.L. § 570.1104; M.S.A. § 26.316(104):
(7) "Improvement" means the result of labor or material provided by a contractor, subcontractor, supplier, or laborer, including, but not limited to, surveying, engineering and architectural planning, construction, management, clearing, demolishing, excavating, filling, building, erecting, constructing, altering, repairing, ornamenting, landscaping, paving, leasing equipment, or installing or affixing a fixture or material, pursuant to a contract. [M.C.L. § 570.1104; M.S.A. § 26.316(104).]
A fundamental rule of statutory construction is to ascertain and give effect to the intent of the Legislature. Farrington v. Total Petroleum, Inc., 442 Mich. 201, 212, 501 N.W.2d 76 (1993). The first criterion to consider in determining intent is the specific language of the statute. House Speaker v. State Administrative Bd., 441 Mich. 547, 567, 495 N.W.2d 539 (1993).
The Legislature is presumed to have intended the meaning it plainly expressed, and the statute must be enforced as written. Frasier v. Model Coverall Service, Inc., 182 Mich.App. 741, 744, 453 N.W.2d 301 (1990). Unless defined in the statute, words and phrases should be accorded their plain and ordinary meanings. M.C.L. § 8.3a; M.S.A. § 2.212(1); People v. Tracy, 186 Mich.App. 171, 176, 463 N.W.2d 457 (1990).
When the term "improvement", defined in M.C.L. § 570.1104; M.S.A. § 26.316(104), is used in M.C.L. § 570.1107; M.S.A. § 26.316(107), it does not fix or define the extent of the lien as the Fund contends. Rather, it identifies the parties who are eligible to seek a lien. Thus, despite the Fund's claims to the contrary, use of the term "improvement" in M.C.L. § 570.1107; M.S.A. § 26.316(107) is not helpful in determining which sums can properly be included in a construction lien. However, the same section of the statute provides that the amount of the lien is calculated by taking the lien claimant's contract price, less the amount already paid on it.
Thus, it becomes necessary to decide if the two percent time-price differential was part of the contract price of the materials. The Fund argues that the time-price differential amounts to a finance charge and should not be considered part of the contract price. However, the cases cited in support of its position are unpersuasive.
III
The Fund relies on Brede v. Rose, 236 Mich. 651, 211 N.W. 58 (1926). In that case, our Supreme Court limited recovery under a lien to the work performed and the materials used. The plaintiff and the defendant had entered into an agreement whereby the plaintiff would decorate and paint the defendant's home. A dispute arose in connection with the plaintiff's workmanship, and the defendant refused to allow the plaintiff to complete the work. The trial court rendered a judgment for the plaintiff in quantum meruit, and the defendant appealed. Our Supreme Court agreed that the plaintiff was entitled to recover but excluded profit and overhead from the judgment amount. In reaching its decision, the Court implicitly accepted that profit and overhead are included in a contract price. The Court also suggested that, had plaintiff proceeded on a contract theory, he...
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