John Marini Management Co. v. Butler

• Decision Date: 17 September 2007
• Docket Number: No. 05-P-735.,05-P-735.
• Citation: 873 N.E.2d 1150,70 Mass. App. Ct. 142
• Parties: JOHN MARINI MANAGEMENT COMPANY v. Joseph G. BUTLER, trustee in bankruptcy.<SMALL><SUP>1</SUP></SMALL>
• Court: Appeals Court of Massachusetts

873 N.E.2d 1150

70 Mass. App. Ct. 142

JOHN MARINI MANAGEMENT COMPANY v. Joseph G. BUTLER, trustee in bankruptcy.¹

No. 05-P-735.

Appeals Court of Massachusetts, Norfolk.

Argued April 10, 2007.

Decided September 17, 2007.

Paul S. Samson, Boston, for the defendant.

Edmund A. Allcock, Braintree, for the plaintiff.

Present: McHUGH, DREBEN, & KAFKER, JJ.

DREBEN, J.

When John Marini Management Company (Marini), the general contractor for a condominium project, became aware that suppliers and subcontractors of C.R. Stone Concrete Contractors, Inc. (Stone), the subcontractor for construction of a concrete parking garage, had not been paid, Marini terminated Stone's contract effective January 11, 2005. Ten days later, Stone filed the documents necessary to obtain a mechanic's lien—a "notice of contract" and "statement of amount due." See G.L. c. 254, §§ 4, 8. On February 11, 2005, Marini filed an action for dissolution of the lien in Superior Court, and before us is Stone's appeal from the summary dissolution of its lien. We reverse the judgment except insofar as it dissolves portions of the lien relating to the claim for conversion and damage to Stone's property.

Although Stone filed a bankruptcy petition on February 18, 2005, which had the effect of staying the action in Superior Court, see 11 U.S.C. § 362 (2000), the Federal bankruptcy court, on March 23, 2005, "lifted" the automatic stay provisions "for the limited purpose of allowing Marini to continue the proceeding to dissolve the mechanic's lien pursuant to [G.L. c.] 254, § 15A, now pending" in the Superior Court. At oral argument in the bankruptcy court, the judge specifically stated with respect to the issue of the mechanic's lien, "I am not talking about the dispute between the parties on who owes what to whom." While the bankruptcy judge's written order, prepared by Marini's counsel, does not spell out the limits of the lifting of the stay, the intent of the bankruptcy judge, in our view, was to have the State court determine in a summary proceeding whether apparent defects existed to affect the validity of the lien under State law, but not to determine such questions as what was an agreed change order or what was properly paid by Marini.² Those questions would involve "who owes what to whom."

One of the main issues to be decided by the Superior Court was whether the mechanic's lien covered concrete forms and other materials belonging to Stone and retained by Marini. Marini contended, and still contends, that this matter represents a claim for conversion and not a claim which is protectable by a mechanic's lien. The bankruptcy judge ordered Marini to return the materials, noting, "And it's possible, as [Marini's counsel] says, this narrow issue of Massachusetts law [the mechanic's lien issue] will go away once the equipment is returned which I have directed to be returned. . . ."

A hearing on Marini's motion to dissolve the lien was held in Superior Court on April 5, 2005. Affidavits and other materials were filed, including an affidavit of Christopher R. Stone, Stone's president. That affidavit asserted, inter alia, that while some of Stone's property was returned, not all was, and that many of the items brought back were badly damaged.³ The judge, without taking testimony and without making findings, entered an order allowing Marini's motion on the day of the hearing. On April 8, 2005, counsel for Marini hand-delivered to the Superior Court a proposed judgment and order dissolving the mechanic's lien. The judge entered judgment, in the form proposed, on April 11, 2005, without a hearing. The main portion of the judgment dissolving the lien stated:

"[T]his Court . . . hereby enters Judgment in favor of [Marini] on Counts I and II⁴ and Prayers 1 and 2 of the Complaint. . . ."

Those prayers were that the court:

"(1) issue an Order declaring that no valid lien exists as [Stone] has willfully and knowingly claimed more than is due from [Marini], included claims unrelated to the written contract between the parties and ignored its own material breach of the Subcontract; [and]

"(2) issue an Order pursuant to [G.L. c.] 254, § 15A dissolving the lien."

1. Marini's argument that Stone's appeal is moot for failure to file a compulsory counterclaim. Unless an enforcement action is brought in the Superior Court within ninety days after the filing of the statement of amount required by G.L. c. 254, § 8, the lien is dissolved. G.L. c. 254, § 11. Marini claims that Stone's appeal has been rendered moot by its failure to file such an enforcement action as a compulsory counterclaim in Marini's action to dissolve the lien. Relying on dictum in Golden v. General Builders Supply LLC, 441 Mass. 652, 807 N.E.2d 822 (2004),⁵ Marini urges us to dismiss the appeal. We decline to decide whether the counterclaim is a compulsory one as, in any event, dismissal is not appropriate in this case.

As indicated earlier, § 11 provides: "The lien shall be dissolved unless a civil action to enforce it is commenced within ninety days after the filing of the statement required by section eight." G.L. c. 254, § 11, as amended through St.1996, c. 364, § 11. After entry of the judgment dissolving the lien, but within the ninety-day period, Stone filed an enforcement action in the Superior Court in an effort to protect its rights in the event that the judgment were reversed on appeal. (General Laws c. 254, § 5, requires that the action be brought in the Superior Court in the county in which the land lies.) Stone then removed the enforcement action to the bankruptcy court.

Marini filed an emergency motion in the bankruptcy court to remand Stone's enforcement action to the Superior Court, arguing, inter alia, that the case involves questions of State law and that "the issue of whether the Enforcement Action was barred because of [Stone's] failure to assert a counterclaim to the complaint to dissolve will be a significant issue in the Enforcement Action." The bankruptcy judge denied the motion, saying that although the litigation on appeal (the validity of the mechanic's lien)

"has an impact upon the broader fight between the parties . . . the question is, who's going to have to mediate or decide that broader fight between the parties? I think it so affects my case that I have to hang onto it. If I find I've got state court problems, I'll cope with them when I go forward."

The issue urged by Marini has thus been retained by the bankruptcy court, and we do not consider it necessary or appropriate for us to decide it.

2. The dissolution of the lien. Under G.L. c. 254, § 15A, a contractor, among other "person[s] in interest," who claims that there is no valid lien because, inter alia,

"(b) it appears from the notice of contract or a statement of account that the claimant has no valid lien by reason of the character of, or the contract for, the labor or materials or rental equipment, appliances or tools furnished and for which a lien is claimed, ... or (d) that for any other reason a claimed lien is invalid by reason of failure to comply with any provision of this chapter, or (e) that any party's rights are foreclosed by a judgment or release . . ."

is permitted to "apply to the superior court for the county where such land lies . . . for an order (i) ruling on the matter involved or (ii) summarily discharging of record the alleged lien...." Ibid., inserted by St.1996, c. 364, § 15.

Section 11 of G.L. c. 254 provides in pertinent part:

"The validity of the lien shall not be affected . . . by an inaccuracy in stating the amount due for labor or material unless it is shown that the person filing the statement has wilfully and knowingly claimed more than is due him."

Marini claims that Stone wilfully and knowingly claimed more than what was due, and urges affirmance of the judgment dissolving the lien because § 11 is encompassed by § 15A(d). While in some cases it may be possible to determine invalidity summarily under § 11, in this case the affidavits and supporting documents submitted to the Superior Court judge do not permit a summary determination or one consistent with the bankruptcy court's remand. In Golden v. General Builders Supply LLC, 441 Mass. at 656-657, 807 N.E.2d 822, the court explained the scope of the summary procedure under § 15A:

"The types of defects that can result in an order `summarily discharging' the lien under G.L. c. 254, § 15A, are normally amenable to immediate determination on undisputed documents and matters of public record. A lien can be `summarily' discharged under that section if `it appears from the notice of contract or a statement of account that the claimant has no valid lien by reason of the character of, or the contract for, the labor or materials or rental equipment, appliances or tools furnished and for which a lien is claimed,' if the requisite notices and statements have not been timely filed and recorded, if there has been any other failure to comply with the statute that would invalidate the lien, or if the lien rights `are foreclosed by judgment or release.' Id. In other words, summary discharge of the lien can only be obtained for defects that will customarily appear of record or be readily ascertainable by reference to undisputed documents—defects in the notice of contract or statement of account, failure to timely record the notice or statement, or a judgment or release that would preclude the lien" (emphasis supplied).

The affidavits filed on behalf of both Marini and Stone indicate that the validity of the lien as to items other than the concrete forms (originally based on a claim for conversion and now also a claim for damages to the returned property) relate to whether Stone is entitled to any additional payment and whether it, in the words of § 11, "wilfully and knowingly claimed more than is due." Those issues involve both questions of credibility and questions of "who owes what to whom," a matter retained by the...