National Lumber Company v. LeFrancois Construction Corporation

• Decision Date: 05 October 1999
• Citation: 430 Mass. 663,723 NE 2d 10
• Parties: NATIONAL LUMBER COMPANY v. LEFRANCOIS CONSTRUCTION CORPORATION & others.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

430 Mass. 663

723 NE 2d 10

NATIONAL LUMBER COMPANY v. LEFRANCOIS CONSTRUCTION CORPORATION & others.¹

Supreme Judicial Court of Massachusetts, Worcester.

October 5, 1999.

January 28, 2000.

Present: MARSHALL, C.J., ABRAMS, LYNCH, GREANEY, & IRELAND, JJ.

Thomas I. Elkind (Michael R. Pontrelli & Andrew Keith Goldstein with him) for Dean E. Schwartz & another.

Louis J. Caccavaro, Jr. (Mark E. Barnett with him) for the plaintiff.

The following submitted briefs for amici curiae:

Robert V. Lizza, Paul M. James, & Edward R. Hickey for Associated General Contractors of Massachusetts.

Michael E. Malamut for New England Legal Foundation.

Alvin S. Nathanson, pro se.

J. Patrick Walsh for Chicago Title Insurance Company.

Richard Urban & Ward P. Graham for Stewart Title Guaranty Company. Gordon H. Piper & Diane C. Tillotson for Massachusetts Conveyancers Association, Inc., & another.

Marshall F. Newman for Northeastern Retail Lumber Association & another.

MARSHALL, C.J.

The defendants, Dean and Stephanie Schwartz (Schwartzes), appeal from a ruling of the Appellate Division of the District Court affirming an order of a judge in the District Court denying their motion for judgment on the pleadings. The Appellate Division held that National Lumber Company (National Lumber) had perfected and could enforce its mechanic's lien on the Schwartzes' property in accordance with G. L. c. 254, the mechanic's lien statute. We granted the Schwartzes' application for direct appellate review. We affirm.

I

The material facts are not in dispute. In January, 1995, LeFrancois Construction Company (LeFrancois) purchased a lot in Northborough (property) with the intention of developing it for resale as a residential property. On September 21, 1995, National Lumber and LeFrancois entered into a contract for National Lumber to supply lumber and materials to LeFrancois for the construction of a house on the property. On October 25, 1995, National Lumber recorded a notice of the contract in the registry of deeds for Worcester County (registry), identifying LeFrancois as the owner of the property.² See G. L. c. 254, § 4. The recorded notice specified that the contract was to be completed on or before December 1, 1995. Pursuant to G. L. c. 254, § 8, National Lumber had thirty days (until December 31, 1995) within which to file any statement of account without which its lien would dissolve.³ On December 18, 1995, it met the statutory deadline by recording in the registry a sworn statement of claim that $26,103.98 had not been paid for labor and materials supplied by it to LeFrancois under the contract. It once again identified LeFrancois as the owner of the property. Four days earlier, on December 14, 1995, LeFrancois had conveyed the property to the Schwartzes.

On February 5, 1996, National Lumber commenced this action "in accordance with G. L. c. 254, § 5," to enforce its lien.⁴ It named LeFrancois, as corporation and as trustee, as the defendant. It did not name the Schwartzes. On February 12, 1996, National Lumber recorded an attested copy of the complaint in the registry. See G. L. c. 254, § 5.⁵ On August 5, 1996, six months after the complaint had been filed, service was made on LeFrancois. On August 28, 1996, before any responsive pleading had been filed, National Lumber filed an amended complaint, pursuant to Mass. R. Civ. P. 15 (a), 365 Mass. 761 (1974), adding the Schwartzes as defendants, seeking to enforce its mechanic's lien against both LeFrancois and the Schwartzes.⁶ The Schwartzes were served on September 9, 1996.

On December 3, 1996, after answering the amended complaint, the Schwartzes filed a motion for judgment on the pleadings asserting that, by operation of law, National Lumber's mechanic's lien had dissolved before they were added as parties. On March 2, 1997, a judge in the District Court denied their motion. On August 4, 1997, National Lumber and the Schwartzes filed an agreement for judgment in the District Court. The Schwartzes did so "solely" to permit the legal issues raised in their motion for judgment on the pleadings to be reviewed by an appellate court. Judgment entered on August 15, 1997. The Schwartzes then took an appeal in the Appellate Division, which affirmed the motion judge's ruling. This appeal followed.

II

At issue in this case is the reliability of the recording system for providing notice of a mechanic's lien secured under G. L. c. 254 with respect to a particular piece of land. Specifically, we must decide whether the statute requires that an owner who acquires title after the recording of the notice of contract be named as a defendant in an action to enforce a mechanic's lien within the statutory period required by G. L. c. 254, § 11.⁷ We hold that G. L. c. 254, the mechanic's lien statute, has no such requirement.

A mechanic's lien must be perfected and can be enforced only as provided by statute. See East Coast Steel Erectors, Inc. v. Ciolfi, 417 Mass. 602, 605 (1994) (lien is "solely a statutory creation" enforceable only "by strict compliance with the statutory specifications"). See also Blount Bros. v. Lafayette Place Assocs., 399 Mass. 632 (1987) (invalidating mechanic's lien in which completion date in filed notice of contract was different from completion date in contract); Baltimore Contrs., Inc. v. Dupree, 352 Mass. 83, 86 (1967) (notice of contract stating "contract not yet completed due to Owner changes" insufficient to establish statutory lien).

The statutory section at issue, G. L. c. 254, § 11, requires that "a civil action to enforce [a mechanic's lien be] commenced within sixty days of the filing of the statement [of account]."⁸ The Schwartzes contend that the mechanic's lien statute contemplates that an enforcement action must be commenced against the then-current owner of the property subject to the lien, and that unless "commenced within sixty days" against that owner the lien dissolves. G. L. c. 254, § 11. In effect they argue that the burden is on the lienholder to ascertain the identity of the record owner of the property at the time it commences an enforcement action under § 11. Because National Lumber failed to name the Schwartzes as defendants within sixty days after National Lumber filed its statement of account on December 18, 1995, they contend, the lien against their property dissolved.⁹ National Lumber responds that, because it commenced an action within the sixty-day period against LeFrancois, the party named in the notice of contract and in the statement of account, and later amended its complaint to add the Schwartzes in a timely manner under the Massachusetts Rules of Civil Procedure, it complied fully with the statutory requirements.

General Laws c. 254 does not specify whether, in order to preserve a lien, a lienholder must name the owner of record as a defendant when it files a complaint to enforce its lien. Section 23 of the statute describes the circumstances in which a subsequent owner of the property may be sued. At the relevant time, § 23 provided in part: "If the person for whom the labor has been performed or furnished or the material has been furnished ... conveys away his estate or interest before the commencement of a civil action to enforce a lien, it may be commenced and prosecuted against ... the persons holding the estate or interest which he had in the land at the time when the labor or material was performed or furnished" (emphasis added). By its express terms, therefore, § 23 permits, but does not require, a lienholder to enforce a lien against any new owner of the property, if the property was conveyed prior to the commencement of an action pursuant to G. L. c. 254, § 11.

National Lumber argues that it would be inconsistent with the wording of the statute to require that a lienholder "must" name the record owner as a defendant at the time the § 11 action is commenced. The Schwartzes respond that the language is framed in permissive terms because the precursor to § 23, first enacted in 1836 (§ 27 of R.S. [1836], c. 117), was designed to address an uncertainty in the mechanic's lien statute adopted in 1819, namely whether a lienholder could bring an enforcement action against the original owner's successor in interest in any circumstances. The 1836 amendment to the original 1819 statute corrected that uncertainty, making clear that a change in title was no bar to enforcement of the lien against the new owner's interest in the property. Because the statute is not explicit as to any time limitation on when a successor in title must be joined — the statute is simply silent on the question — we consider that section in the context of the over-all objective the Legislature sought to accomplish. See International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 851 (1983). A primary purpose of G. L. c. 254 is "to provide security to contractors, subcontractors, laborers, and suppliers for the value of their services and goods provided for improving the owner's real estate." Hammill-McCormick Assocs. v. New England Tel. & Tel. Co., 399 Mass. 541, 542-543 (1987). Because a perfected lien is an encumbrance on the property, the statute is also designed to ensure that a person searching the land records in a registry of deeds can determine with certainty whether or not title to a particular parcel of land is encumbered by a mechanic's lien. See Pratt & Forrest Co. v. Strand Realty Co., 233 Mass. 314, 317-318 (1919) ("One plain object of the present statute was to require the placing upon record in the registry of deeds of certain information, for the benefit of prospective purchasers of land and other interested persons, touching the incumbrances [sic] created or likely to be created by liens .... Accuracy in this respect may be thought to be essential for the protection of laborers and subcontractors as well as others who may have occasion to depend upon the record").

General Laws c. 254 sets out in careful detail the steps required to...