Mace v. Bryant Const. Corp.

• Decision Date: 19 August 1980
• Docket Number: V-Z,No. 7930SC248,7930SC248
• Citation: 269 S.E.2d 191,48 N.C.App. 297
• Court: North Carolina Court of Appeals
• Parties: Joe K. MACE, d/b/a Joe K. Mace Plumbing Company, Plaintiff, v. BRYANT CONSTRUCTION CORPORATION;Top, Ltd. and its general partner, David H. Head; Jack E. Bryant, Inc., Defendants, Great American Mortgage Investors; Great American Management & Investment; Great American Properties Georgia, Inc.; Mor Prop, Incorporated; Intermont, Inc.; James P. Furniss, Trustee; Alexander R. Mehran, Trustee; Richard T. Rodgers, Trustee, Additional Defendants, and GREAT AMERICAN MORTGAGE INVESTORS; Great American Management & Investment; and Great American Properties Georgia, Inc., Third Party Plaintiffs, v. LAWYERS TITLE INSURANCE CORPORATION and Southern Title Insurance Company, Third Party Defendants.

Page 191

269 S.E.2d 191

48 N.C.App. 297

Joe K. MACE, d/b/a Joe K. Mace Plumbing Company, Plaintiff, v. BRYANT CONSTRUCTION CORPORATION; V-Z Top, Ltd. and its

general partner, David H. Head; Jack E. Bryant,

Inc., Defendants,

Great American Mortgage Investors; Great American Management

& Investment; Great American Properties Georgia, Inc.; Mor

Prop, Incorporated; Intermont, Inc.; James P. Furniss,

Trustee; Alexander R. Mehran, Trustee; Richard T. Rodgers,

Trustee, Additional Defendants,

and

GREAT AMERICAN MORTGAGE INVESTORS; Great American Management

& Investment; and Great American Properties

Georgia, Inc., Third Party Plaintiffs, v. LAWYERS TITLE INSURANCE CORPORATION and Southern Title

Insurance Company, Third Party Defendants.

No. 7930SC248.

Court of Appeals of North Carolina.

Aug. 19, 1980.

Jones, Jones & Key, P. A. by Richard Melvin, Franklin, for plaintiff-appellant.

Siler & Philo, P. A. by Steven E. Philo, Franklin, Bennett, Kelly & Cagle, P. A. by E. Glenn Kelly, Asheville, for defendants-appellees Great American Mortgage Investors, Great American Management and Investment, Great American Properties-Georgia, Inc. and Southern Title Insurance Company.

Rodgers, Cabler & Henson by J. Edwin Henson, Highlands, for defendants-appellees Intermont, Inc. and Lawyers Title Insurance Corporation.

PARKER, Judge.

We note at the outset that although the summary judgment adjudicated fewer than all of the claims involved in this suit, the trial court found that "there (was) no just reason for delaying entry of final judgment" on the lien claim or the fraudulent conveyance claim. The judgment was final as to those claims and immediate right of appeal lies therefrom. G.S. 1A-1, Rule 54(b); see Oestreicher v. Stores, 290 N.C. 118, 225 S.E.2d 797 (1976).

It is well established that, upon a motion for summary judgment, the movant "has the burden of showing that there is no triable issue of fact and that movant is entitled to judgment as a matter of law." Pitts v. Pizza, Inc., 296 N.C. 81, 86, 249 S.E.2d 375, 378 (1978). The nonmovant does not bear the burden of coming forward with evidentiary material in support of his claim until the movant has offered evidence which negates that claim. Butler v. Berkeley, 25 N.C.App. 325, 213 S.E.2d 571 (1975). Applying these principles to the present case, we hold that the trial court did not err in concluding as a matter of law that plaintiff was not entitled to a lien on the improved real property.

Article 2 of Chapter 44A of the General Statutes grants to mechanics, laborers, and materialmen certain liens upon their compliance with the procedures defined in the Article. Within the statutory scheme of Article 2, defendant Bryant Construction, having entered into a contract for the improvement of real property with the property owners (then V-Z Top, Ltd. and Jack E. Bryant, Inc.), is a "contractor," G.S. 44A-17(1), and plaintiff Mace, having entered into a contract with the "contractor" for the improvement of the same realty, is a "first tier subcontractor." G.S. 44A-17(2). Because we hold that summary judgment was properly entered on the grounds that plaintiff Mace had no substantive right to a lien upon the real property, we do not consider the questions raised by the parties on this appeal as to whether the procedural requirements of Chapter 44A were met. Under Article 2 of Chapter 44A, a lien upon real property may arise either directly or by subrogation in favor of a first tier subcontractor who furnishes labor or materials at a job site. G.S. 44A-23 provides in pertinent part as follows:

A first, second or third tier subcontractor, who gives notice as provided in this Article, may, to the extent of his claim, enforce the lien of the contractor created by Part 1 of Article 2 of this Chapter. . . . Upon the filing of the notice and claim of lien and the commencement of the action, no action of the contractor shall be effective to prejudice the rights of the subcontractor without his written consent.

This statute grants to a first tier subcontractor a lien upon improved real property based upon a right of subrogation to the direct lien of the general contractor on the improved real property as provided for in G.S. 44A-8. Because the subcontractor is entitled to a lien under G.S. 44A-23 only by way of subrogation, his lien rights are dependent upon the lien rights of the general contractor. See Urban & Miles, "Mechanics' Liens for the Improvement of Real Property: Recent Developments in Perfection, Enforcement and Priority." 12 Wake For.L.Rev. 283, 374-376 (1976). Thus, if the general contractor has no right to a lien, the first tier subcontractor likewise has no such right. As the language of G.S. 44A-23 indicates, no action of the contractor will be effective to prejudice the rights of the subcontractor without his written consent "(u)pon the filing of the notice and claim of lien and the commencement of the action." Prior to that time, however, the general contractor is free to waive its lien rights and to bar effectively the subcontractor's rights by way of subrogation.

Applying these principles in the present case, we hold that there is no genuine issue of material fact as to plaintiff's claim to a lien on the land pursuant to G.S. 44A-23. In support of their motion for summary judgment, the moving defendants submitted a document entitled "Owner's and Contractor's Affidavit." That affidavit was executed on 17 April 1973, long before plaintiff filed any claim of lien, for the purpose of inducing defendant GAMI to loan funds to finance the development of the real property at issue. In that affidavit Jack E. Bryant, as president of Bryant Construction, expressly waived Bryant Construction's right, as general contractor, to file a materialman's lien against the property. Plaintiff Mace, as subrogee, has no greater rights than the party to whom he is subrogated. Montsinger v. White, 240 N.C. 441, 82 S.E.2d 362 (1954); Dowdy v. R.R., 237 N.C. 519, 75 S.E.2d 639 (1953). Thus, by virtue of the general contractor's waiver, plaintiff has no right to a lien on the realty pursuant to G.S. 44A-23.

Apart from the lien rights afforded by G.S. 44A-23, a lien upon realty may arise directly in favor of a first tier subcontractor under G.S. 44A-18(1) and G.S. 44A-20. The right to such a lien, unlike the right to a lien under G.S. 44A-23, may arise without regard to whether the general contractor has waived its own lien rights. G.S. 44A-18(1) provides that a first tier subcontractor who furnishes labor or materials at a job site is entitled to a "lien upon funds which are owed (by the owner of the improved real property) to the contractor with whom the first tier subcontractor dealt." Once the first tier subcontractor gives notice of his claim of lien upon funds to the owner, the owner is thereafter "under a duty to retain any funds subject to the lien or liens under (Article 2 of Chapter 44A) up to the total amount of such liens as to which notice has been received." G.S. 44A-20(a). Under G.S. 44A-20(b) and (d), the first tier subcontractor lien claimant may thereafter acquire a lien upon the improved real property by virtue of the property owner's wrongful payment after receiving notice. Those provisions read in part as follows:

(b) If, after the receipt of the notice to the obligor, the obligor shall make further payments to a contractor or subcontractor against whose interest the lien or liens are claimed, the lien shall continue upon the funds in the hands of the contractor or subcontractor who received the payment, and in addition the obligor shall be personally liable to the person or persons entitled to liens up to the amount of such wrongful payments, not exceeding the total claims with respect to which the notice was received prior to payment.

(d) If the obligor is an owner of the property being improved, the lien claimant shall be entitled to a lien upon the interest of the obligor in the real property to the extent of the owner's personal liability under subsection (b) . . . .

The initial questions raised with respect to G.S. 44A-18 and G.S. 44A-20 in the present case, therefore, are whether plaintiff Mace was entitled to a lien upon funds owed by the owners of the improved property to Bryant Construction, the general contractor and,...