O'Grady v. Bird
| Decision Date | 18 September 1981 |
| Citation | 411 So.2d 97 |
| Parties | Linda L. O'GRADY, Johnny O'Grady, First Federal Savings and Loan Association of Bessemer, a corp., George F. Seier and Page Seier v. S. M. BIRD, Jr., Ind. and d/b/a Bird Building Material Co. and The RoomakersCorp., a corp. and S. M. BIRD, Jr., Ind. and d/b/a Bird Building Material Company v. Linda L. O'GRADY, et al. 79-379, 79-397, 79-399, 79-400 and 79-401. |
| Court | Alabama Supreme Court |
G. W. Nicholson and J. Dan Taylor of Smyer, White, Taylor, Evans & Sanders and W. H. Collier, Jr., Birmingham, for appellants and cross-appellees.
Wade H. Morton, Jr., Columbiana, for appellees and cross-appellants.
This case concerns the Alabama mechanics' and materialmen's lien law. From a judgment below largely in favor of plaintiff-lienholder Bird, defendants appeal and Bird cross-appeals. We affirm as to most of appellants' contentions and reverse and remand as to Bird's cross-appeal.
In December 1977, Johnny O'Grady (Johnny) and his wife Linda O'Grady (Linda) S. M. Bird (Bird) does business as a building supplier; Johnny had a credit account with Bird, and Johnny obtained materials for his house on credit. Johnny also renovated a block house which stood on the 3.458 acres and built a barn on the property, but outside the reserved acreage. Bird supplied materials for all three buildings, but the invoices did not distinguish which materials were for which building.
contracted to buy 26.660 acres of land in Shelby County from George and Page Seier (Seiers). When the sale closed on January 10, 1978, the deed passed title to Linda only; a 3.458 acre parcel was exempted from the purchase money mortgage executed that day by Johnny and Linda. A down payment of $20,000.00 served as consideration for this exemption; the mortgage amount was $50,000.00. Prior to the closing, Johnny, who was in the construction business, had begun building a house for himself and his family on the portion of the land which was exempted from the mortgage to the Seiers in order to facilitate financing for their house.
Prior to contracting to buy the Seiers' land, Johnny and Linda had contracted to sell their home, with expectation of realizing $30,000.00 as their equity. When this contract was not carried out, Johnny was unable to pay Bird for the materials purchased for his new home, an account which ultimately amounted to $29,819.91. On April 20, 1978, Bird filed a verified statement of lien, which substantially followed the form of Code 1975, § 35-11-213, for this amount plus interest and attorney's fees against the three buildings above and "one acre of land surrounding (each building) and contiguous thereto." Johnny's credit agreement with Bird provided for 18% interest and attorney's fees in the event of default.
On August 17, 1978, Bird filed a complaint in circuit court against Johnny and Linda, the Seiers, First Federal Savings and Loan Association of Bessemer (First Federal) and the Roomakers Corporation (Roomakers). First Federal held a mortgage which Johnny and Linda had executed on the 3.458 acres to secure construction financing, and Roomakers had filed a verified statement of lien on August 8, 1978, in the amount of $1,877.36 plus interest against the newly constructed house and one acre surrounding it. Roomakers' lien was for carpeting supplied by it to Johnny and Linda.
Bird's complaint sought a judgment that his lien be established for the $29,819.91 claimed therein, that his lien had priority over all other interests in the land, and that it be foreclosed to satisfy the indebtedness. The Seiers filed a motion to dismiss which alleged various grounds including, among others, allegations that Bird claimed three liens in one statement of lien and that the land was insufficiently described in his statement. Roomakers filed a general denial and a counterclaim and cross-claim on its lien. First Federal had a default judgment against it, but this was set aside, and it filed an answer which challenged the validity of the lien. Johnny and Linda filed a motion to dismiss which paralleled that of the Seiers.
When the trial court denied these motions, Johnny and Linda filed an "Answer" alleging that the complaint failed to state a claim. The Seiers filed an answer alleging that their mortgage had priority, that Bird's lien did not extend to the land covered by the Seiers' mortgage, and that Bird had not properly filed his lien or his suit. Bird amended his complaint three times, the first two for clarification and the third to respond to all the allegations of insufficiency of the liens. This third amendment alleged that up to that time Bird had no way of knowing either the allocation of the materials to the particular buildings or the exact description of one acre surrounding each building (his complaint included a correct description of both the larger tract and the exempted 3.458 acres).
The trial court ordered a survey of the property, including one acre surrounding each building. Defendants contest this There was much dispute over whether the lien could be enforced against Johnny's contract obligations because title to the land was taken in Linda's name. The court found, however, that the conveyance to Linda was a fraudulent attempt to defeat Johnny's creditors, that a constructive trust was created for Johnny's benefit, and that the trust should be terminated, vesting full title in Johnny.
order as beyond the scope of the court's authority, but cite no cases to that effect and we find no merit in this contention; such an order is within the equitable power of the court. The case was heard without a jury during three days in May, 1979. Bird presented as a witness Curtis Michael Benson, who had served as Johnny's foreman on the job; Benson itemized the materials in Bird's invoices to each building.
The court further held valid Bird's and Roomakers' liens in that they contained a legal description of the smallest tract of land which Bird and Roomakers could reasonably have provided. The court further found that the additional one acre per building was described as specifically as practicable and that the court could fix the exact location of each one acre from the evidence. It held that the liens were good against each of the buildings and the land on which they were situated, but not against the additional one acre surrounding the buildings. The court felt constrained to hold that the additional one acre could not be subjected to lien because of our decisions in Bice v. R. L. Bains Builders, Inc., 269 Ala. 662, 115 So.2d 468 (1959), and Fowler v. Mackentepe, 233 Ala. 458, 172 So. 266 (1937).
The court held that the Seiers' mortgage had priority over Bird's lien on the land on which the barn stood, but not "exceeding the portion of the unpaid balance of the purchase money mortgage attributable to this .062 acres of land, being the sum of $133.60, and (that) they have no interest whatever in the barn ...." Further, the Court held that Bird's and Roomakers' liens had priority over First Federal's mortgage. The court ordered that if the debts allocated to each building, plus interest and attorney's fees as provided by Johnny's credit agreement with Bird were not satisfied, the lien should be foreclosed.
Linda, the Seiers, and First Federal appeal the awards of the liens against them, and Bird cross-appeals the denial of a lien on the additional acre surrounding the buildings.
We will discuss the issues raised by the parties in the following order:
A. Lien Statement Challenges.
1. Sufficiency of affidavit in verified statement of lien.
2. Propriety of filing one statement of lien for the three buildings without allocating the materials.
3. Adequacy of description of the one additional acre granted by statute.
B. Pre-trial Matters.
4. Power of the trial court to order a survey.
5. Statute of limitations argument against Roomakers.
C. Judgment.
6. Correctness of trial court's order that title be vested in Johnny based on fraudulent conveyance and constructive trust.
7. Priorities.
8. Award of contract-rate interest and attorney's fees.
1. Sufficiency of Affidavit.
Linda 1 argues on appeal that Bird's notarized affidavit on his lien statement does not meet the personal knowledge requirements of Code 1975, § 35-11-213, in that it includes the phrase "the same are true to the best of his knowledge and belief."
She relies upon Globe Iron Roofing & Corrugating Co. v. Thatcher, 87 Ala. 458, 6 So. 366 (1889). This case is clearly inapposite both because Bird followed the form provided in § 35-11-213 () and because a fuller quotation of Bird's oath would include, "That he is the claimant herein and has personal knowledge of the facts set forth ...." The affidavit in Globe did not contain such language. We find no error here. Cf. Harper v. J. & C. Trucking & Excavating Co., Inc., 374 So.2d 886 (Ala.Civ.App.1978), cert. quashed, 374 So.2d 893 (Ala.1979).
2. Propriety of filing one statement without allocating the materials to each building.
Linda and First Federal claim on appeal, as they did at trial, that Alabama law requires Bird to have segregated the materials he supplied according to the buildings improved thereby before he filed his lien statement. Appellants rely chiefly on College Court Realty Co. v. J. C. Letcher Lumber Co., 201 Ala. 362, 78 So. 218 (1917), and on Richardson Lumber Co. v. Howell, 219 Ala. 328, 122 So. 343 (1929). In each of these cases the defendant property owner's challenge to the materialman's lien was that the contract had not specified which items supplied were placed in each building. This court held in both cases that the lien was not defeated by this lack of specificity in the contract. "It is sufficient if (the amount that is to go into each house or lot) is ascertained before the...
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