Spartan Asphalt Paving Co. v. Grand Ledge Mobile Home Park

• Decision Date: 08 September 1976
• Docket Number: Docket No. 25510
• Citation: 247 N.W.2d 589,71 Mich.App. 177
• Parties: SPARTAN ASPHALT PAVING COMPANY, a Michigan Corporation, Plaintiff-Appellant, v. GRAND LEDGE MOBILE HOME PARK, a Michigan Limited Partnership, Defendant- Appellee, and Grand Ledge Ravines, Inc., a Michigan Corporation, et al., Defendants.
• Court: Court of Appeal of Michigan — District of US

Page 589

247 N.W.2d 589

71 Mich.App. 177

SPARTAN ASPHALT PAVING COMPANY, a Michigan Corporation Plaintiff-Appellant, v. GRAND LEDGE MOBILE HOME PARK, a Michigan Limited Partnership, Defendant- Appellee and Grand Ledge Ravines, Inc., a Michigan Corporation, et al., Defendants.

Docket No. 25510.

Court of Appeals of Michigan.

Sept. 8, 1976.

Released for Publication Dec. 14, 1976.

Brown & Winckler by James L. Winckler, Lansing, for plaintiff-appellant.

Vittorio E. Porco, Lansing, for defendant-appellee.

Radner, Radner, Shefman, Bayer & Berlow by Stephen E. Shefman, Southfield, for Mich. Nat'l.

Before ALLEN, P.J., and D. E. HOLBROOK, Jr. and PAPP, ^* JJ.

ALLEN, Presiding Judge.

Defendant Grand Ledge Mobile Home Park, a limited partnership, owns and operates a mobile home development in Eaton County. Plaintiff Spartan Asphalt Paving Company supplied paving materials and labor worth in excess of $15,000 to the defendant's general contractor in 1973. When the general contractor failed to pay, Spartan Asphalt filed a suit against the defendant, ¹ the general contractor and others. The complaint against defendant sought foreclosure of a mechanic's lien, judgment on a Quantum meruit theory, and/or creation and foreclosure of an equitable lien. This appeal follows the trial judge's grant of the defendant's motion for summary judgment on all three counts.

The motion for summary judgment was made under GCR 1963, 117.2(1), I.e., on the ground that the plaintiff had failed to state a claim upon which relief could be granted. In a written opinion, the trial judge indicated that he would grant the motion and enter summary judgment. The correctness of that ruling as to each of the complaint counts is discussed below.

Several months later, but still before final judgment had been entered, the plaintiff filed a motion for reconsideration and a motion to amend Counts II and III of its complaint. The motion for reconsideration argued that the judge had erred in his interpretation of the mechanic's lien statutes. The motion to amend sought to add allegations of possibly fraudulent dealings by the defendant and its corporate general contractor. These allegations included the nature of the interlocking ownership mentioned in footnote 1, Supra, and an allegation that the defendant had never paid the general contractor for the materials and services provided by the plaintiff. ² Although Following a hearing, the trial judge entered a written opinion denying the plaintiff's motion for reconsideration. The opinion mentioned only the mechanic's lien theory. It made no mention of the motion to amend the complaint. However, the judgment entered pursuant to the opinion denied both the motion for rehearing and the motion to amend. The proceedings on the motion for reconsideration and amendment will be discussed later. We first address the initial ruling granting summary judgment for the defendant on each of the three complaint counts.

it was not mentioned in [71 Mich.App. 181] the motion to amend the complaint, we note with interest the fact that the defendant's law firm initially appeared on behalf of both the defendant and the general contractor. The appearance on behalf of the contractor was later withdrawn on the ground that it had been a 'mistake'.

COUNT I--MECHANIC'S LIEN

The mechanic's lien statute, M.C.L.A. § 570.1 Et seq.; M.S.A. § 26.281 Et seq., seems designed to create confusion and frustrate anyone who attempts to meet all of its requirements. Nevertheless, the plaintiff almost succeeded. It served notice of intent to claim a mechanic's lien on the defendant by certified mail within 90 days after beginning work. M.C.L.A. § 570.1; M.S.A. § 26.281. It also recorded a statement of account with the Eaton County Register of Deeds within 90 days after the work was completed. M.C.L.A. § 570.5; M.S.A. § 26.285.

The next step in the perfection of a mechanic's lien is service of a copy of the recorded statement on the property owner. M.C.L.A. § 570.6; M.S.A. § 26.286. The plaintiff's difficulties began at that point.

M.C.L.A. § 570.6 provides in part:

'Every person recording such statement * * * shall within 10 days after the recording thereof, serve on the owner, * * * if he can be found within the county * * * a copy of such statement or claim; but if (the owner cannot) * * * be found within the county where such premises are situated, then such copy shall be served by posting in some conspicuous place on said premises Within 5 days after the same might have been served personally * * *.' (Emphasis supplied.)

The underscored language was the basis of the defendant's motion for summary judgment on Count I. After learning that the partners could not be served personally within Eaton County, the plaintiff served a copy of the recorded statement by posting it on the premises of the mobile home park and sending a copy to the defendant by certified mail. The service by posting was accomplished seven days after the statement was recorded. The defendant argued that the service was not effective because the quoted statute requires that the lienor attempt personal service within the county for 10 days before resorting to service by posting if all attempts at personal service are unsuccessful. Under this view of the statute, service by posting may only be used between the 11th and 15th days. Since service in the present case occurred on the seventh day, the defendant argued that the lien had never been perfected. The plaintiff countered that service by posting was appropriate at any time within the first 15 days once it was determined that personal service within the county would be impossible.

The trial judge adopted the defendant's interpretation of the statute. We agree. The statute shows a clear preference for personal service when it is possible. Requiring attempts at personal service for at least 10 days before substituted service may be used enforces that preference for personal service. We believe that was the We find that the plaintiff was not in strict compliance with the statutory mandate; but we believe that the plaintiff did substantially comply. As mentioned, several of the other preliminary lien requirements had already been satisfied. There is no suggestion in this record that the defendant could have been served personally in Eaton County within the 10-day limitation. Nor is there any suggestion that the defendant did not receive actual notice by certified mail that the lien documents had been recorded with the Register of Deeds. The plaintiff made an extensive effort to fully comply. We see no possibility that the defendant was prejudiced by the fact that service occurred on the seventh rather than the eleventh day. We conclude that the plaintiff substantially complied with the statutory requirements.

legislative intent. Spartan Asphalt Paving Co. v. Tri-Cities Construction, Inc., 68 Mich.App. 305, 242 N.W.2d 565 (1976).

But is substantial compliance sufficient? The trial judge ruled that it was not, citing Zilz v. Wilcox, 190 Mich. 486, 157 N.W. 77 (1916). See also Spartan Asphalt Paving Co. v. Tri-Cities Construction, Inc., supra. Zilz is typical of the cases which hold that the mechanic's lien statute, being in derogation of common law, must be strictly interpreted. The earliest case to that effect cited in Zilz was Hannah & Lay Mercantile Co. v. Mosser, 105 Mich. 18, 62 N.W. 1120 (1895). That decision relied upon cases from other jurisdictions and a 19th Century mechanic's lien treatise.

Vorrath v. Garrelts, 35 Mich.App. 463, 192 N.W.2d 547 (1971), typifies another line of cases holding that the mechanic's lien statute must be strictly interpreted 'until the lien attaches' and may be liberally interpreted after that point. See also Burman v. Ewald, 192 Mich. 293, 158 N.W. 853 (1916), citing Lacy v. Piatt Power & Heat Co., 157 Mich. 544, 122 N.W. 112 (1909), citing Smalley v. Northwestern Terra-Cotta Co., 113 Mich. 141, 71 N.W. 466 (1897).

But both lines of cases ignore the clear mandate of M.C.L.A. § 570.27; M.S.A. § 26.307:

'This act is hereby declared to be a remedial statute and To be construed liberally to secure the beneficial results, intents and purposes thereof; And a substantial compliance with its several provisions shall be sufficient for the validity of the lien or liens hereinbefore provided for * * *.' (Emphasis supplied.)

The original version of our present mechanic's lien act was passed as 1891 P.A. 179. The quoted language was added to § 27 of the Act by 1897 P.A. 143. Despite the clear statutory language, most of the cases decided since 1897 have insisted on strict compliance. ³ But the majority cases appear to have misinterpreted earlier precedent. We can see no sound legal justification for ignoring the clear legislative mandate.

The cases typified by Zilz v. Wilcox, supra, i.e., those holding that the mechanic's lien act must be strictly construed because it is in derogation of common law, rely upon cases which pre-date the enactment of 1897 P.A. 143. The post--1897 cases in this group simply ignore the statute.

Cases like Vorrath v. Garrelts, supra, are more likely to mention the statute but circumvent it with the rule that the statutory requirements must be strictly interpreted until the lien attaches. The basis for this rule appears to be Smalley v. Northwestern Terra-Cotta Co., supra. ⁴ Smalley does not support Vorrath and the intermediate cases. Lacy v. Piatt Power & Heat Co., supra, states that Smalley considered the quoted statutory language and still insisted on strict compliance. That is not true. Smalley did opt for a strict interpretation of the For the reasons stated, we conclude that substantial compliance with the various requirements of the mechanic's lien act was sufficient in the present case. ⁵ If that were the only issue before us, we would immediately reverse the trial court. However, on appeal, the defendant has raised another objection to the...