Rentals v. Drilling

• Decision Date: 15 July 2013
• Citation: 992 N.E.2d 291,465 Mass. 856
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: NES RENTALS v. MAINE DRILLING & BLASTING, INC., & another.

465 Mass. 856

992 N.E.2d 291

NES RENTALS

v.MAINE DRILLING & BLASTING, INC., & another.¹

Supreme Judicial Court of Massachusetts,

Berkshire.

Argued March 7, 2013.

Decided July 15, 2013.

John J. Ferriter, Holyoke, for Maine Drilling & Blasting, Inc.

Peter F. Davis, Holliston, for the plaintiff.

Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, DUFFLY, & LENK, JJ.

DUFFLY, J.

We address in this appeal whether a subcontractor's amendment of its original complaint to enforce a mechanic's lien constituted timely commencement of its action to enforce a bond pursuant to G.L. c. 254, § 14, as amended through St. 2002, c. 400, § 2 (§ 14), which sets forth procedures for execution and enforcement of bonds to dissolve mechanic's liens. The plaintiff, NES Rentals, Inc. (NES Rentals), filed an action in the Superior Court to enforce a mechanic's lien recorded pursuant to G.L. c. 254, § 4, as amended through St. 1996, c. 364, § 5 (§ 4), on land owned by Berkshire Wind and Power Cooperative Corporation (Berkshire Wind). More than a year later, Maine Drilling and Blasting, Inc. (Maine Drilling), acting as principal debtor, and the surety, Berkley Regional Insurance Company (Berkley), executed and recorded a surety bond to dissolve the lien pursuant to § 14. The bond named NES Rentals as an obligee. Within ninety days of receiving notice of the bond, NES Rentals served on Maine Drilling and Berkley a motion to amend its original complaint, seeking to include them as defendants in its underlying complaint and to add a claim to enforce the bond against them.²

After NES Rentals filed the amended complaint with leave of court, a judge in the Superior Court denied Maine Drilling's motion to dismiss the amended complaint, explaining that although NES Rentals had not filed the amended complaint within ninety days of receipt of notice of the bond, service of the motion on the defendants within that ninety-day period provided the defendants with actual notice of the action to enforce the bond, and satisfied the § 14 requirement that a claimant have “commenced” a civil action within that period in order to enforce the bond. The defendants sought leave to appeal, which was allowed, and we transferred the case to this court on our own motion.

We affirm the order denying the defendant's motion to dismiss, but for reasons different from those relied on by the judge. We conclude that the term “commenced” as used in § 14 contemplates the filing of an action in court in accordance with Mass. R. Civ. P. 3, as amended, 385 Mass. 1215 (1982), and that the commencement requirement in § 14 is satisfied on the facts of this case because the amendment to the complaint relates back to the date on which NES Rentals filed its original action against Berkshire Wind under Mass. R. Civ. P. 15(c), 365 Mass. 761 (1974) (rule 15[c] ).

1. Background and prior proceedings. NES Rentals alleges that McManus Excavating, Inc., contracted with it to rent equipment for construction use on property owned by Berkshire Wind. On April 26, 2010, NES Rentals perfected a mechanic's lien on the Berkshire Wind property by recording a notice of its contract with McManus, as required by § 4,³ and a sworn statement of account that claimed $89,101 as the amount due for the rental equipment, as required by G.L. c. 254, § 8, as amended by St. 1996, c. 364, § 9 ( § 8).⁴ On May 25, 2010, NES Rentals filed and recorded its complaint against Berkshire Wind in the Superior Court, seeking to enforce the lien. See G.L. c. 254, § 5, as amended by St. 1996, c. 364, § 9 ( § 5) (setting forth procedures for enforcement of mechanic's lien by civil action).

On April 29, 2011, Maine Drilling ⁵ and Berkley recorded a bond in the penal sum of $89,101, thereby dissolving the lien pursuant to § 14. ⁶ NES Rentals received notice of recording of the bond on June 13, 2011, and on August 23, 2011, NES Rentals served on Maine Drilling and Berkley a motion for leave to amend its complaint against Berkshire Wind by adding them as defendants, and asserting against Maine Drilling and Berkley a new claim to enforce the bond. On October 3, 2011, NES Rentals filed its motion to amend with the Superior Court, and Berkshire Wind filed a cross motion to dismiss the lien enforcement action.

On November 2, 2011, a judge of the Superior Court allowed both the motion of NES Rentals to amend the complaint and Berkshire Wind's cross motion to dismiss the underlying complaint against it; NES Rentals then filed its amended complaint with the court. Thereafter, Maine Drilling filed a motion to dismiss the amended complaint on the ground that it was not timely filed in accordance with the terms of § 14, because the amended complaint, which constituted the action to enforce the bond, was not filed within ninety days after NES Rentals received notice of recording of the bond, that is, by September 11, 2011.

The judge denied Maine Drilling's motion to dismiss the amended complaint. He explained that “even though the amended complaint was actually not ‘filed’ within the 90 day period, the defendants had actual notice of it well within that period,” where NES Rentals had served the motion to amend on Maine Drilling and Berkley within that time, and that, therefore, “the purpose of the statute, i.e., notice to the issuer of the bond within 90 days, was satisfied.” ⁷ Maine Drilling filed an application for leave to prosecute an interlocutory appeal with a single justice of the Appeals Court. That motion was allowed, and we subsequently transferred the case to this court on our own motion.

[465 Mass. 860]2. Discussion. In reviewing the denial of a motion to dismiss, we consider the matter de novo, Curtis v. Herb Chambers I–95, Inc., 458 Mass. 674, 676, 940 N.E.2d 413 (2011), accepting as true “the factual allegations in the plaintiff['s] complaint, as well as any favorable inferences reasonably drawn from them.” Ginther v. Commissioner of Ins., 427 Mass. 319, 322, 693 N.E.2d 153 (1998), citing Nader v. Citron, 372 Mass. 96, 98, 360 N.E.2d 870 (1977), abrogated on other grounds, Iannacchino v. Ford Motor Co., 451 Mass. 623, 635, 888 N.E.2d 879 (2008).

In this case we consider whether amendment of a complaint, originally brought as an action to enforce a lien, by adding a claim to enforce a lien dissolution bond constitutes timely commencement of an action to enforce the bond within the meaning of § 14. We begin our discussion of the applicable provisions of G.L. c. 254 (mechanic's lien statute) with the observation that it is the primary purpose of the mechanic's lien statute “to provide security to contractors, subcontractors, laborers, and suppliers for the value of their servicesand goods provided for improving the owner's real estate” through perfection of a mechanic's lien on the owner's real estate. Hammill–McCormick Assocs., Inc. v. New England Tel. & Tel. Co., 399 Mass. 541, 542–543, 505 N.E.2d 883 (1987), citing Mitchell v. Packard, 168 Mass. 467, 469, 47 N.E. 113 (1897).

“At the same time, the statute contains filing and notice requirements to protect the owner and others with an interest in the property.” Id. at 543, 505 N.E.2d 883, and cases cited. The mechanic's lien statute is “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.” National Lumber Co. v. LeFrancois Constr. Corp., 430 Mass. 663, 668, 723 N.E.2d 10 (2000)( National Lumber I ), citing Pratt & Forrest Co. v. Strand Realty Co., 233 Mass. 314, 317–318, 123 N.E. 771 (1919). Additionally, because a perfected lien is an encumbrance on the owner's property, the statute provides for prevention of future liens and dissolution of existing liens by the giving of a bond, see G.L. c. 254, § 12, as amended through St. 2002, c. 400, § 1 (§ 12), and § 14, which benefits “an owner of land (or anyone possessing an interest in that land) by furnishing means to keep his title free from liens” and preventing the sale of the land to satisfy a lien.⁸Warren Bros. Co. v.Peerless Ins. Co., 8 Mass.App.Ct. 719, 722, 397 N.E.2d 329 (1979), citing Rockwell v. Kelly, 190 Mass. 439, 440, 77 N.E. 490 (1906). Thus, the mechanic's lien statute both “governs the creation, perfection, and dissolution of a mechanic's lien,” National Lumber Co. v. United Cas. & Sur. Ins. Co., 440 Mass. 723, 726, 802 N.E.2d 82 (2004)( National Lumber II ), citing Ng Bros. Constr. v. Cranney, 436 Mass. 638, 644, 766 N.E.2d 864 (2002), and sets forth the procedures for execution and enforcement of a lien dissolution bond. National Lumber II, supra at 726, 802 N.E.2d 82.

We look to the specific provisions governing creation and perfection of a mechanic's lien, and the procedures for enforcement of a lien dissolution bond, to decide whether NES Rentals has fulfilled the requirements for enforcement of the bond by timely commencing a civil action. Under § 4 of the mechanic's lien statute, a subcontractor furnishing rental equipment for use on land may record a lien on that property, but under G.L. c. 254, § 11, as amended through St. 1996, c. 364, § 11 (§ 11), “[t]he 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,” and thereafter “filed in the registry of deeds and recorded.” G.L. c. 254, § 5 (delineating procedures for lien enforcement action). There is no question that NES Rentals recorded its lien and timely commenced and recorded a civil action to enforce it in the Superior Court, after recording a § 8 statement setting forth the amount due for the rental equipment it had furnished.

Section 14 dictates how such a perfected lien may be dissolved by the posting of a bond, and what a subcontractor must do to maintain his security. “Any person in interest may dissolve a lien ... by recording ... a bond ... in a penal sum equal to the amount of...