Northern Site Contractors v. Sber Royal Mills, LLC
| Decision Date | 05 June 2009 |
| Docket Number | K.M. 2008-1482,K.M. 2008-1248,K.M. 2008-1574,K.M. 2008-1696,K.M. 2008-1718,K.M. 2008-1445,K.M. 2008-1190,K.M. 2008-1572 (FORMERLY P.M. 2008-4544),K.M. 2008-1396,K.M. 2008-1695,K.M. 2008-1247,K.M. 2008-1504,K.M. 2008-1473,K.M. 2008-1471,K.M. 2008-1524 |
| Court | Rhode Island Superior Court |
| Parties | NORTHERN SITE CONTRACTORS v. SBER ROYAL MILLS, LLC and SBER ROYAL MILLS COTTON SHED, LLC SHERIDAN ELECTRIC, INC. v. SBER ROYAL MILLS, LLC SHERIDAN ELECTRIC, INC. v. SBER ROYAL MILLS COTTON SHED, LLC, et al RUSTIC FIRE PREVENTION, INC. v. SBER ROYAL MILLS COTTON SHED, LLC, et al ROOFING CONCEPTS, INC. v. SBER ROYAL MILLS COTTON SHED, LLC, et al WESTBAY WELDING & FABRICATION, INC. v. SBER ROYAL MILLS, LLC. & ROYAL MILLS FEDERAL, LLC KITCHENS INTERNATIONAL, INC. v. SBER ROYAL MILLS, LLC & ROYAL MILLS FEDERAL, LLC. GRAYBAR ELECTRIC COMPANY, INC. v. SBER ROYAL MILLS, LLC & ROYAL MILLS FEDERAL, LLC EAGLE CARPET, INC. v. SBER ROYAL MILLS, LLC. GEM PLUMBING & HEATING COMPANY, INC. v. SBER ROYAL MILLS, LLC. JOSEPH TAVONE PAINTING CO., INC v. SBER ROYAL MILLS, LLC. NORTHEAST STEEL CORPORATION INC. v. SBER ROYAL MILLS, LLC, et al JESMAC, INC. v. SBER ROYAL MILLS, LLC, JESMAC, INC. v. SBER ROYAL MILLS, LLC, ET AL, J. D. CEMENT WORKS, INC. v. SBER ROYAL MILLS COTTON SHED, LLC, ET AL |
DECISION
This matter first came on for hearing before Mr. Justice Lanphear on April 17, 2009 on Rockland Trust Community Development Corporation II's and Rockland Trust Company's motion for relief from subordination, for determination of priority and for permission to foreclose its mortgages, pursuant to the Rhode Island Mechanics' Lien Law. The Court bifurcated these issues and in its May 1, 2009 decision denied Rockland relief from subordination under Rule 60(b). The parties preserved their right to argue constitutional issues, which were heard by the Court on May 4, 2009 and are addressed herein. The Court's jurisdiction is pursuant to G.L. 1956 § 34-28-16.
This is a mechanics' lien case (consolidated with fourteen other such lien cases) involving and a large mill renovation project along the Pawtuxet River in West Warwick, Rhode Island. The project comprises two parcels, which are both involved in this overall litigation. The first of these properties is known as the Cotton Shed, which is a proposed retail use project located at 186 Providence Street, Lot 10 of Assessor's Plat No. 26. The second property is a 250-unit residential use project, known as Royal Mills at Riverpoint, located on Lot 11 of Assessor's Plat No. 26.
After an action was instituted by Northern Site Contractors, Inc. to enforce a mechanics' lien, the Superior Court Clerk issued citations to various persons or entities which may have interests in the property. Similar petitions against the two parcels were subsequently filed, and additional citations issued. Rockland Trust Community Development Corporation II and Rockland Trust Company (hereinafter "Rockland"), the first and third mortgage holders on the Cotton Shed property, failed to timely respond to particular citations issued to it.1[]
Rockland filed a motion seeking relief from subordination pursuant to G.L. 1956 § 34-28-16 of the Mechanics' Lien Law and Rule 60(b); a determination of its priority as the first two lien holders; and permission to foreclose under § 34-28-16.1.2[] On May 1, 2009, this Court issued a decision denying relief from subordination in the actions brought by Northern Site Contractors, Inc. ("Northern Site," K.M. 2008-1190), Sheridan Electric, Inc. ("Sheridan," K.M. 2008-1248) Roofing Concepts, Inc. ("Roofing Concepts," K.M 2008-1445), and Rustic Fire Prevention, Inc. ("Rustic," K.M. 2008-1396), to which Rockland did not timely answer. Rockland's constitutional claims were preserved and bifurcated for later hearing.
Manufacturers and Traders Trust Company ("M&T"), a mortgagee on the Royal Mills property, similarly responded out of time to particular citations issued to it and moved for relief from subordination and for a determination of its priority as the first lien holder on the Royal Mills property. Although M&T's motion is still pending, M&T joined with Rockland to present constitutional arguments to the Court on May 4, 2009.3[] Specifically, Rockland and M&T argue that the Superior Court's form Mechanics' Lien Citation violates procedural due process, and that the subordination clause in § 34-28-16 violates substantive due process and equal protection of the laws, as guaranteed by the United States Constitution and the Rhode Island Constitution.
It is well-settled that "[i]n reviewing the constitutionality of statutes, '[t]he Legislature is presumed to have acted within its constitutional power.' " Gem Plumbing & Heating Co., Inc. v. Rossi, 867 A.2d 796, 808 (R.I. 2005) (quoting Burrillville Racing Association v. State, 118 R.I. 154, 157, 372 A.2d 979, 982 (1977)). Furthermore, "[t]his [C]ourt will attach every reasonable intendment in favor of . . . constitutionality in order to preserve the statute." Id. (quoting Lynch v. King, 120 R.I. 868, 875, 391 A.2d 117, 121 (1978)) (internal quotations omitted). Importantly, the party challenging the statute bears the high burden of proving "beyond a reasonable doubt that the statute is unconstitutional." Id.
Importantly, subsection (b) mandates that "[t]he citation noted in the aforesaid section shall be in a form established by the superior court." Sec. 34-28-15(b).
As clearly stated by the Legislature in the following section, § 34-28-16, the failure to promptly contest the claim results in the loss of a mortgage's priority status. See Sec. 34-28-16(a).4[] Petitioners may only avoid subordination of their interests only if they did not receive actual notice of the filing of the mechanics' lien or were granted relief under Rule 60(b) to file out of time. See id.
Rockland and M&T first take issue with the Superior Court's mechanics' lien citation form. In particular, Rockland and M&T argue that the citation did not provide adequate notice and thus comport with procedural due process because it did not describe all consequences of not responding before the expressed deadline. Rockland and M&T also take issue with § 34-28-16, arguing it takes property in an arbitrary, discriminatory, or irrelevant manner in violation of substantive due process; and that the Legislature's use of a Rule 60(b) standard versus a Rule 55(c) standard violates equal protection of the laws. This Court will deal with each argument in turn.
The Fourteenth Amendment to the United States Constitution prevents states5[] from depriving "any person of life, liberty, or property, without due process of law." U.S. Const. amend. XIV, § 1. Our State Constitution provides similar protections: "No person shall be deprived of life, liberty or property without due process of law." R.I. Const. art. I, § 2. Unlike other legal rules, due process " 'is not a technical conception with a fixed content unrelated to time place and circumstances.' " Gem Plumbing & Heating Co., Inc., 867 A.2d at 803 (quoting Cafeteria & Restaurant Workers Union, Local 473, AFL-CIO v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743 (1961)). As our Supreme Court has explained, "[t]he very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation." Id.
The Due Process Clause provides both procedural and substantive protections. To establish a claim of either type, "a deprivation of a protected property interest" must first be established. Perez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 30 (1st Cir. 2008); see also Rhode Island Economic Development Corp. v. The Parking Co., L.P., 892 A.2d 87, 98 (R.I. 2006). It is well-settled that a "mortgage's legal title to property pursuant to its mortgage is a property interest protected by the Federal and State Constitutions." In re D'Ellena, 640 A.2d 530, 534 (R.I. 1994).
Rockland and M&T argue that the notice given in the mechanics' lien citation was inadequate and thus violative of procedural due process. "It is fundamental that the Fourteenth Amendment requires notice and an opportunity to be heard before one is deprived of his property or liberty." Vicario v. Vicario, 901 A.2d 603, 612 (R.I. 2006) (quoting Fricke v. Fricke, 491 A.2d 990, 997 (R.I. 1985)) (internal quotations omitted). Thus, "[w]hen a procedural due process claim is advanced, the proper focus must be on the manner in which the state has acted: 'how and when' the alleged deprivation was effected." Amsden v. Moran, 904 F.2d 748, 753 (1st Cir. 1989).
"At a...
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