H.A. Smith Lumber & Hardware Co. v. Decina, Docket No. 128560.

• Decision Date: 20 December 2007
• Docket Number: COA No. 238521.,Docket No. 128560.
• Citation: 480 Mich. 987,742 N.W.2d 120
• Parties: H.A. SMITH LUMBER & HARDWARE CO., Plaintiff/Counter-Defendant/Appellee, v. John DECINA, Defendant/Cross-Defendant/Appellant, and John Decina Development Co., Third Party Defendant/Cross-Defendant/Counter-Plaintiff/Appellant, and Linas P. Gobis and Lydia K. Gobis, Defendants/Cross-Plaintiffs/ Cross-Defendants/Counter-Defendants/Appellees, and William Gardella d/b/a Williams Glass Co., Defendant/Counter-Plaintiff/ Cross/ Plaintiff/ Third Party Plaintiff/Appellee.
• Court: Michigan Supreme Court

742 N.W.2d 120

480 Mich. 987

H.A. SMITH LUMBER & HARDWARE CO., Plaintiff/Counter-Defendant/Appellee, v. John DECINA, Defendant/Cross-Defendant/Appellant, and John Decina Development Co., Third Party Defendant/Cross-Defendant/Counter-Plaintiff/Appellant, and Linas P. Gobis and Lydia K. Gobis, Defendants/Cross-Plaintiffs/ Cross-Defendants/Counter-Defendants/Appellees, and William Gardella d/b/a Williams Glass Co., Defendant/Counter-Plaintiff/ Cross/ Plaintiff/ Third Party Plaintiff/Appellee.

Docket No. 128560.

COA No. 238521.

Supreme Court of Michigan.

December 20, 2007.

On November 8, 2007, the Court heard oral argument on the application for leave to appeal the April 27, 2005, judgment of the Court of Appeals. On order of the Court, the application is again considered. MCR 7.302(G)(1). In lieu of granting leave to appeal, we REVERSE the judgment of the Court of Appeals. To be awarded attorney fees as a "prevailing party" under MCL 570.1118(2), the party must prevail on the lien foreclosure action. In this case, the unpaid subcontractors filed a lien foreclosure action against the property owners and a breach of contract action against the general contractor. The subcontractors lost on their lien claim but prevailed on the breach of contract claim. While the statute allows a lien claimant to bring an underlying contract action at the same time as the lien foreclosure action, it does not preclude the option of bringing the two actions separately. MCL 570.1117(5). If the subcontractors had chosen to bring their breach of contract claims against the general contractor as a separate action, they would not have been allowed to recover attorney fees. The language of MCL 570.1118(2) does not permit recovery of attorney fees on the contract action merely because it was brought together with the lien foreclosure action. Accordingly, we VACATE the portion of the Oakland Circuit Court order granting attorney fees to plaintiff H.A. Smith Lumber & Hardware Company and defendant William Gardella d/b/a Williams Glass Company.

MICHAEL F. CAVANAGH, J., dissents and states as follows:

The majority's order vacating the award of attorney fees is flawed because it fails to address the actual language of the Construction Lien Act (CLA), MCL 570.1101 et seq., and it fails to honor the CLA's provision that it "shall be liberally construed to secure the beneficial results, intents, and purposes of this act." MCL 570.1302(1). A purpose of the CLA is to prevent subcontractors from bearing the costs of litigation every time their work goes uncompensated. I presume that subcontractors will often be in the position where they must pursue their claims against a general contractor who has been paid, as here. To do so, subcontractors must plead the underlying...