Red Rooster Const. Co. v. River Associates, Inc.

• Decision Date: 09 February 1993
• Docket Number: No. 14403,14403
• Citation: 620 A.2d 118,224 Conn. 563
• Court: Connecticut Supreme Court
• Parties: RED ROOSTER CONSTRUCTION COMPANY v. RIVER ASSOCIATES, INC., et al.

Page 118

620 A.2d 118

224 Conn. 563

RED ROOSTER CONSTRUCTION COMPANY v. RIVER ASSOCIATES, INC., et al.

No. 14403.

Supreme Court of Connecticut.

Argued Nov. 4, 1992.

Decided Feb. 9, 1993.

William J. Egan, with whom, on the brief, was Carol A. Fantozzi, Hartford, for appellant (plaintiff).

Geoffrey A. Hecht, with whom, on the brief, were Bernard J. Virshup, Milton I. Caplan and John R. Scanlon, New Haven for appellees (defendant Connecticut Sav. Bank et al.).

Before PETERS, C.J., and CALLAHAN, BORDEN, KATZ and F.X. HENNESSY, JJ.

BORDEN, Associate Justice.

This appeal arises from an action brought by the plaintiff, Red Rooster Construction Company (Red Rooster), to foreclose a mechanic's lien on the property of the defendant River Associates, Inc. The plaintiff appeals ¹ from the judgment of the trial court rendered in favor of the defendants River Associates, Inc. (River Associates), Connecticut Savings Bank (bank), and Connecticut Attorney's Title Insurance Company (title company). The trial court concluded that the plaintiff's mechanic's lien was invalid.

Red Rooster claims that the trial court improperly concluded that: (1) the bank, as a mortgagee of the property, was an owner of the property pursuant to General Statutes § 49-34 ² and was thereby entitled to notice of the filing of the lien; (2) there was no evidence that Red Rooster had recorded a notice of lis pendens within the one year requirement of General Statutes § 49-39; ³ and (3) the mechanic's lien certificate had not been sworn to within the meaning of § 49-34. We agree with Red Rooster regarding its first and second claims but disagree with its third claim. Consequently, we affirm the judgment of the trial court.

The relevant facts are as follows. River Associates was the record owner of real property located in New Haven. River Associates entered into a contract with Red Rooster in which Red Rooster agreed, for the contract price of $3,376,985.14, to construct condominium units and commercial space on that property. Construction commenced on September 30, 1987.

On August 23, 1989, River Associates ordered Red Rooster to stop working because River Associates did not have sufficient capital to pay for the completion of the project. As of that date, River Associates owed Red Rooster $258,402.36 for work already completed. On September 25, 1989, Red Rooster filed a certificate of mechanic's lien on the land records to secure its claim. Red Rooster served a copy of the certificate on River Associates but did not serve a copy on the bank, an encumbrancer of the property by virtue of a mortgage given to the bank by River Associates and recorded on the land records on February 4, 1988.

On October 16, 1989, Red Rooster filed this complaint seeking to foreclose its mechanic's lien. The complaint named River Associates and the bank as defendants. ⁴ On the same date, Red Rooster recorded a notice of lis pendens on the land records and served River Associates and the bank with a copy of the complaint, the certificate of mechanic's lien, and the notice of lis pendens. Pursuant to General Statutes § 49-37(a), ⁵ the lien was released upon substitution of a bond with the bank as principal and the title company as surety. The complaint was then amended to reflect the substitution of the bond and the addition of the title company as a defendant to the action. ⁶ The liability of the bank and the title company, however, continued to depend on the validity of the mechanic's lien. See Six Carpenters, Inc. v. Beach Carpenters Corporation, 172 Conn. 1, 7, 372 A.2d 123 (1976).

After a court trial, the trial court requested the parties to file posttrial memoranda. Thereafter, having agreed with the claims asserted by the defendants in their posttrial briefs, the trial court concluded that Red Rooster's mechanic's lien was invalid because: (1) the bank, as a mortgagee of the property, was an "owner" of the property within the meaning of § 49-34, and was thereby entitled to notice of the filing of the lien; (2) there was no evidence that Red Rooster had recorded a notice of lis pendens within the one year requirement of § 49-39; and (3) the mechanic's lien was not sworn to by Red Rooster within the meaning of § 49-34. This appeal followed.

I

Red Rooster first claims that the trial court improperly concluded that the bank, as a mortgagee of the property, was an owner of the property within the meaning of § 49-34 and was thereby entitled to notice of the filing of the lien. We agree.

Section 49-34 provides that a mechanic's lien is not valid unless the person performing the services or furnishing the materials serves a true and attested copy of the certificate of lien on the owner of the property within thirty days after filing the lien. See footnote 2. The issue in this case, therefore, is whether a mortgagee is an owner for the purposes of the statute and is thereby entitled to notice of the filing of the lien.

Connecticut adheres to the title theory of mortgages. "It is undisputed that a mortgagee in Connecticut, both by common-law rule and by statute, is deemed to have taken legal title upon the execution of a mortgage on real property. General Statutes § 47-36h; State v. Stonybrook, Inc., 149 Conn. 492, 496, 181 A.2d 601, appeal dismissed, cert. denied, 371 U.S. 185, 83 S.Ct. 265, 9 L.Ed.2d 227 (1962); Leonard v. Bailwitz, 148 Conn. 8, 12, 166 A.2d 451 (1960); City Lumber Co. of Bridgeport, Inc. v. Murphy, 120 Conn. 16, 19, 179 A. 339 (1935); Hartford Realization Co. v. Travelers Ins. Co., 117 Conn. 218, 224, 167 A. 728 (1933); Desiderio v. Iadonisi, 115 Conn. 652, 654, 163 A. 254 (1932); McKelvey v. Creevey, 72 Conn. 464, 467, 45 A. 4 (1900); Chamberlain v. Thompson, 10 Conn. 243, 251 (1834)." Conference Center Ltd. v. TRC, 189 Conn. 212, 218, 455 A.2d 857 (1983). At the same time, however, we have recognized that the law of mortgages is built primarily on a series of legal fictions "as a convenient means of defining the various estates to which conveyances may give rise." Ensign v. Batterson, 68 Conn. 298, 309, 36 A. 51 (1896).

Despite our title theory of mortgages, "[i]n substance and effect ... and except for a very limited purpose, the mortgage is regarded as mere security ... and the mortgagor is for most purposes regarded as the sole owner of the land...." McKelvey v. Creevey, supra, 72 Conn. at 466-67, 45 A. 4. The mortgagee "has title and ownership enough to make his security available, but for substantially all other purposes he is not regarded as owner, but the mortgagor is so regarded, always subject of course to the mortgage." Id., at 468, 45 A. 4.

In light of our long use of the term owner to mean the mortgagor; see, e.g., State v. Stonybrook, Inc., supra; Leonard v. Bailwitz, supra; Waterbury Savings Bank v. Lawler, 46 Conn. 243, 245 (1878) ("[T]he law is well settled that, except as between the immediate parties, the mortgagor before foreclosure is the owner of the property ... while the interest of the mortgagee is mere personal estate."); Mills v. Shepard, 30 Conn. 98, 101 (1861); Savage v. Dooley, 28 Conn. 411, 413 (1859); Porter v. Seeley, 13 Conn. 564, 571 (1840); we are not persuaded that the legislature intended the term "owner" in § 49-34 to mean the mortgagee. ⁷ A long-standing rule of statutory construction is that if a statute "makes use of words [that] have an accepted meaning at the common law they ought, in the absence of other controlling reasons, to be expounded and received with that meaning." Faulkner v. Solazzi, 79 Conn. 541, 546, 65 A. 947 (1907); see also, e.g., Seaman v. Climate Control Corporation, 181 Conn. 592, 603, 436 A.2d 271 (1980).

Moreover, to deviate from a construction of the statute that accords the term "owner" its commonly approved usage would create an unnecessary conflict within the statutory scheme. A court should interpret a statutory scheme as a whole with a view toward reconciling its separate parts in order to render a reasonable overall interpretation. See, e.g., Ganim v. Roberts, 204 Conn. 760, 763, 529 A.2d 194 (1987). General Statutes § 49-33(a) provides that a person is entitled to a mechanic's lien on a property only if the claim to payment arises by virtue of an agreement with, or consent by, the owner of the land. A mortgagee, however, ordinarily does not have the power to subject the property to claims that may give rise to a mechanic's lien, at least before the mortgagee takes possession of the property upon a default of the underlying obligation. The use of the term "owner" in § 49-33(a) indicates, therefore, that a mortgagee is not an owner of the property. As a result, we decline to read the legislature's use of "owner" in § 49-34 differently from its meaning in related sections. See, e.g., Mashantucket Pequot Tribe v. Connecticut, 737 F.Supp. 169, 173 (D.Conn.), aff'd, 913 F.2d 1024 (2d Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 1620, 113 L.Ed.2d 717 (1991).

The defendants rely on the canon of statutory construction that a court should avoid a statutory interpretation that places a statute in constitutional jeopardy. See, e.g., In re Valerie D., 223 Conn. 492, 514, 613 A.2d 748 (1992). Specifically, the defendants argue that, because the mortgagee has an interest in the property, the mortgagee is constitutionally entitled to notice of the filing of the lien particularly if, as in this case, the mechanic's lien would take priority over the mortgagee's interest. ⁸ Consequently, the defendants argue, this canon compels the conclusion that the legislature intended the term "owner" to include the mortgagee. We are not persuaded.

The defendants have not cited a single appellate decision from any state, nor do we know of any, that has held a mechanic's lien statute unconstitutional for failing to provide a mortgagee with notice of the filing of the lien. ⁹ Although we generally seek to avoid a construction of a statute that places it in constitutional...