Ferguson Fire & Fabrication, Inc. v. Preferred Fire Prot., L.L.C.

• Decision Date: 13 August 2014
• Docket Number: No. 27410.,27410.
• Citation: 762 S.E.2d 561,409 S.C. 331
• Court: South Carolina Supreme Court
• Parties: FERGUSON FIRE AND FABRICATION, INC., Plaintiff, v. PREFERRED FIRE PROTECTION, L.L.C.; Fair Forest of Greenville, L.L.C.; Thomas F. Wong; and Immedion, L.L.C., Defendants, Of Whom Ferguson Fire and Fabrication, Inc., is Petitioner, and Immedion, L.L.C., is Respondent. Immedion, L.L.C., Third–Party Plaintiff, v. Rescom Construction, L.L.C., Third–Party Defendant. Appellate Case No. 2012–212191.

409 S.C. 331

762 S.E.2d 561

FERGUSON FIRE AND FABRICATION, INC., Plaintiff,

v.PREFERRED FIRE PROTECTION, L.L.C.; Fair Forest of Greenville, L.L.C.; Thomas F. Wong; and Immedion, L.L.C., Defendants,Of Whom Ferguson Fire and Fabrication, Inc., is Petitioner,andImmedion, L.L.C., is Respondent.

Immedion, L.L.C., Third–Party Plaintiff,

v.Rescom Construction, L.L.C., Third–Party Defendant.

Appellate Case No. 2012–212191.

No. 27410.

Supreme Court of South Carolina.

Heard June 12, 2014.

Refiled Aug. 13, 2014.

Robert E. Culver, of Charleston, for Petitioner.

Ronald G. Tate, Jr., and Zachary Lee Weaver, both of Gallivan, White & Boyd, P.A., of Greenville, for Respondent.

ORDER

The Petition for Rehearing in the above matter is denied. However, the opinion is refiled to eliminate a sentence from the factual recitation that does not affect the result.

/s/COSTA M. PLEICONES A.C.J.

/s/DONALD W. BEATTY, J.

/s/JOHN W. KITTREDGE, J.

/s/FOR THE COURT.

Acting Justice D. CRAIG BROWN and Acting Justice DOROTHY MOBLEY JONES, not participating.

Justice BEATTY.

This Court granted a petition for a writ of certiorari to review the decision in Ferguson Fire & Fabrication, Inc. v. Preferred Fire Protection, L.L.C., 397 S.C. 379, 725 S.E.2d 495 (Ct.App.2012), in which a supplier of materials (“Ferguson Fire”) brought an action for foreclosure of a mechanic's lien against the owner of a data center (“Immedion”) and its contractor (“Preferred Fire”). Ferguson Fire contends, and we agree, that the Court of Appeals erred in adding requirements to S.C Code Ann. § 29–5–40 (2007), governing a notice of furnishing, that are not in the statute itself and in concluding Ferguson Fire did not establish an effective lien upon which a foreclosure action could be premised. We reverse and remand.

I. FACTS

This case arises out of Ferguson Fire's efforts to obtain payment for materials it supplied to Preferred Fire for Immedion's data center. An outline of the events leading to Ferguson Fire's mechanic's lien action and the lower courts' rulings follow.

Contracts for Improvements to Immedion's Data Center

In 2007, Immedion, a telecommunications company, hired Rescom, L.L.C. to be the general contractor for improvements planned for its data center on property Immedion leased in Greenville. This contract excluded the performance of part of the fire protection work that was needed. Rescom, in turn, hired Preferred Fire, a fire sprinkler company, as a subcontractor.

In addition, Immedion directly hired Preferred Fire under a separate contract for $30,973.00 to install a special “pre-action” fire suppression system ¹ in its data center. To complete this work, Preferred Fire purchased materials from Ferguson Fire. Ferguson Fire began delivering materials to Preferred Fire on August 24, 2007, and the deliveries continued through October 16, 2007.

Notice of Furnishing Labor and/or Materials

On September 21, 2007, while its deliveries were in progress, Ferguson Fire sent a “Notice of Furnishing Labor and Materials” (“Notice of Furnishing”) to Immedion advising it in relevant part that it had been employed by Preferred Fire to deliver labor, services, or materials with an estimated value of $15,000.00 to Immedion's premises. The Notice of Furnishing advised that it was being given as “a routine procedure to comply with certain state requirements that may exist,” and that it was not a lien, nor any reflection on Preferred Fire's credit standing.

Immedion paid Preferred Fire $15,486.50 of the $30,973.00 contract price for installation of the system before receiving Ferguson Fire's Notice of Furnishing on September 21, 2007. After receiving the Notice of Furnishing, Immedion issued two additional checks to Preferred Fire totaling $15,486.50 for the unpaid balance of the contract price.

It is undisputed that Immedion paid everything it owed to Rescom, and it also paid its contractor Preferred Fire in full under the separate contract for the fire suppression system. However, Preferred Fire never paid Ferguson Fire for the materials it furnished.

Notice or Certificate of Lien

On January 8, 2008, Ferguson Fire served upon Immedion, Preferred Fire, and others (and later filed) a “Statement and Notice of Mechanic's Lien,” which gave notice of the existence of a lien and included a Statement of Account. Ferguson Fire indicated it had supplied $15,548.93 in materials to Preferred Fire for Immedion's premises from August 24, 2007 through October 16, 2007 pursuant to an agreement with Preferred Fire that was entered into “with the knowledge and consent and permission and authorization of Immedion.” Ferguson Fire stated $15,548.93 was still owing and due, and it asserted a mechanic's lien upon the described premises.

Complaint for Foreclosure of Lien & Summary Judgment Motions

On April 11, 2008, Ferguson Fire filed a complaint and a lis pendens against Preferred Fire, Fair Forest of Greenville, L.L.C., Thomas F. Wong, and Immedion seeking foreclosure of a mechanic's lien as to all defendants, as well as attorney's fees, costs, and interest.²

Immedion answered ³ and thereafter moved for summary judgment, maintaining (1) there was no evidence Ferguson Fire had furnished any materials for the benefit of property owned by Immedion, as it was a mere leaseholder; (2) there was no contractual relationship giving rise to liability between Ferguson Fire and Immedion; and (3) Immedion paid in full for all work performed by its contractors, so it had no further liability pursuant to S.C.Code Ann. § 29–5–20(B).

Ferguson Fire filed a cross-motion for summary judgment, arguing (1) under S.C.Code Ann. § 29–5–30 a leasehold interest in property is subject to a materialman's lien; (2) a materialman supplying materials to a contractor has a lien for the value of the materials on the leaseholder's interest under S.C.Code Ann. § 29–5–20, and the value of the lien is limited to the amount due to the contractor by the owner/leaseholder as of the date of notice under sections 29–5–20 and 29–5–40; and (3) Immedion should have been aware of its potential claim because Ferguson Fire gave Immedion the Notice of Furnishing prior to Immedion's full payment to Preferred Fire.

Ferguson Fire asserted since it gave Immedion notice on September 21, 2007 that it was furnishing materials for its premises, under South Carolina's mechanic's lien statutes, it was entitled to a lien up to the amount Immedion paid to its contractor, Preferred Fire, after that date, plus attorney's fees and interest.⁴ Ferguson Fire noted that the value of the materials it supplied to Preferred Fire was actually greater than the amount of its lien, but acknowledged that under the statutory provisions its lien was limited to the unpaid balance of the contract between Immedion and Preferred Fire as of the date of its Notice of Furnishing.

Decisions of Circuit Court & Court of Appeals

The circuit court granted summary judgment to Immedion and extinguished the mechanic's lien filed by Ferguson Fire. The court stated, “The issue is whether the Notice of Furnishing was sufficient to notify the owner [Immedion] of the lien given by § 29–5–20. Because the Notice explicitly stated that it was not a mechanic's lien and contained no demand for payment, the Notice is ineffective under § 29–5–40 as a Notice of Lien.”

The Court of Appeals affirmed, finding the Notice of Furnishing was ineffective under section 29–5–40 because it “was sent prior to furnishing all the material, failed to identify the final amounts of the goods delivered, and never made a demand for payment.” Ferguson Fire & Fabrication, Inc. v. Preferred Fire Protection, L.L.C., 397 S.C. 379, 386, 725 S.E.2d 495, 499 (Ct.App.2012). The court concluded “the circuit court did not err in finding the Notice [of Furnishing] was insufficient to notify Immedion of a lien.” Id. at 387, 725 S.E.2d at 499. This Court granted Ferguson Fire's petition for a writ of certiorari.

II. STANDARD OF REVIEW

Rule 56(c) of the South Carolina Rules of Civil Procedure provides a motion for summary judgment shall be granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”

“An appellate court reviews the granting of summary judgment under the same standard applied by the trial court pursuant to Rule 56, SCRCP.” Progressive Max Ins. Co. v. Floating Caps, Inc., 405 S.C. 35, 42, 747 S.E.2d 178, 182 (2013) (citation omitted). Determining the proper interpretation of a statute is a question of law, which this Court reviews de novo. Town of Summerville v. City of N. Charleston, 378 S.C. 107, 662 S.E.2d 40 (2008).

III. LAW/ANALYSIS

On certiorari, Ferguson Fire contends the Court of Appeals erred in adding requirements for the timing and form of a Notice of Furnishing under S.C.Code Ann. § 29–5–40; specifically, it erred in determining a Notice of Furnishing could not be delivered to an owner until after a materialman delivers all materials to the worksite and that a demand for payment of a specific amount must be included in the notice. We agree. The Court of Appeals has added requirements that are not present in the statute itself and, as a result, erred in concluding Ferguson Fire's lien was ineffective as a matter of law.

A. Overview of Mechanics' Liens Statutes

In South Carolina, mechanics' liens are purely statutory and may be acquired and enforced only in accordance with the terms and conditions set forth in the statutes creating them. Multiplex Bldg. Corp. v. Lyles, 268 S.C. 577, 235 S.E.2d 133 (1977); accord Skiba v. Gessner, 374 S.C. 208, 212, 648 S.E.2d 605, 606 (2007) (stating “one's right to a mechanic's lien is wholly dependent upon the language of the statute creating it”); Butler Contracting, Inc. v. Court St., L.L.C., 369 S.C. 121, 130, 631 S.E.2d 252, 257 (2006) (observing mechanics' lien stat...