United Masonry Inc. of Virginia v. Riggs Nat. Bank of Washington, D.C.

Decision Date12 June 1987
Docket Number850187,Nos. 840090,s. 840090
Citation233 Va. 476,357 S.E.2d 509
PartiesUNITED MASONRY INCORPORATED OF VIRGINIA v. RIGGS NATIONAL BANK OF WASHINGTON, D.C. UNITED MASONRY INCORPORATED OF VIRGINIA v. RIGGS NATIONAL BANK OF WASHINGTON, D.C., et al.
CourtVirginia Supreme Court

Robert K. Richardson (Odin, Feldman & Pittleman, P.C., Fairfax, on brief), for appellant.

David G. Lane (Stephen J. Johnson, Lewis, Mitchell & Moore, Vienna, on brief), Frank E. Brown, Jr. (Tolbert, Smith, Fitzgerald & Stackhouse, Arlington, on briefs), for appellees.

Present: CARRICO, C.J., POFF, COMPTON, STEPHENSON, RUSSELL and THOMAS, JJ., and COCHRAN, Retired Justice.

STEPHENSON, Justice.

United Masonry Incorporated of Virginia (United Masonry) was a general contractor on a townhouse project in the Council Square II Subdivision in the town of Vienna. Wedgefield Corporation (Wedgefield) owned the project. Riggs National Bank of Washington, D.C. (Riggs), was the construction lender for the project; its construction loan was secured by a deed of trust on the entire project. Pursuant to the building loan agreement between Wedgefield and Riggs, Wedgefield engaged a title insurance company, Chicago Title Insurance Company (Chicago Title), to provide insurance to Riggs. When Wedgefield defaulted, Riggs became the owner of the project through foreclosure. In these appeals, United Masonry contends that the trial court erred in ruling that United Masonry (1) failed to timely file certain mechanics' liens (Record No. 840090); and (2) waived its right to claim certain other mechanics' liens (Record No. 850187).

I

Whether Certain Mechanics' Liens Were Timely Filed. (Record No. 840090).

United Masonry and Wedgefield entered into three written contracts. The first contract, dated March 18, 1980 (the March contract), provided for masonry and concrete work and materials on Lots 1 through 19 of the subdivision. The second contract, dated September 8, 1980 (the September contract), provided for the construction of a brick boundary wall for the development. The third contract, dated October 6, 1980 (the October contract), was for labor and materials on Lots 20 through 23 and 39 through 49.

United Masonry commenced construction pursuant to the March contract in March or April 1980 and completed this work no later than October 1980. Work under the September contract was begun in September or October 1981 and terminated in November 1981. Construction pursuant to the October contract commenced on Lots 46 through 49 in February 1981 and was completed in July 1981; construction began on Lots 20 through 23 in April and May 1981 and ended in September 1981.

On June 22, 1982, United Masonry filed memoranda of mechanics' liens, claiming separate liens on Lots 1 through 12, 14, 17, and 18 in the total amount of $60,673.45; a blanket lien on Lots 20 through 23 in the amount of $51,745.35; a blanket lien against Lots 46 through 49 in the amount of $40,920.65; and a lien on the brick wall for $2,979.21.

On September 3, 1982, United Masonry sued to enforce its liens. This appeal challenges the trial court's grant of a partial summary judgment in favor of Riggs whereby the court ruled that the mechanics' liens claimed by United Masonry on Lots 20 through 23, 46 through 49, and the brick wall were not timely filed.

Prior to its amendment in 1980, Code § 43-4 provided that "[a] general contractor, in order to perfect [his] lien ..., shall file [a memorandum] at any time after the work is done and the material furnished by him and before the expiration of ninety days from the time such building, structure, or railroad is completed, or the work thereon otherwise terminated...." Effective July 1, 1980, Code § 43-4 provides that "[a] general contractor, ... in order to perfect [his] lien ..., shall file [a memorandum] at any time after the work is commenced or material furnished, but not later than ninety days from the last day of the month in which he last performs labor or furnishes material...." (Emphasis added.) Thus, the 1980 amendment makes the filing deadline dependent upon each contractor's own activity and no longer permits a contractor to rely upon work performed by others to extend the filing time.

Amended Code § 43-4 further provides, however, that:

The time limitations set forth herein shall apply to all labor performed or materials furnished on construction commenced on or after July 1, 1980. As to any labor performed or materials furnished or construction commenced prior to July 1, 1980 the lien claimant shall file at any time after the work is done and the material furnished by him and before the expiration of ninety days from the time such building, structure or railroad is completed or the work thereon otherwise terminated.

(Emphasis added.)

Resolution of the issue in this appeal turns upon the meaning given to the term "construction commenced." United Masonry contends that the term should be construed to mean construction commenced by anyone on the overall townhouse project irrespective of when United Masonry commenced construction. Riggs, on the other hand, contends that the term means construction commenced by the lien claimant, United Masonry, under the contract that entitles the claimant to a lien.

The trial court found that United Masonry and Wedgefield were operating under "three separate contracts, entered into on separate dates with separate consideration;" none of the contracts was "tie[d] ... to the other," and there was "no reason why the work could not have been done by three separate contractors." 1 Based upon its finding that there were three separate contracts, the court concluded that because construction commenced under the September and October contracts after July 1, 1980, the new filing requirements under present Code § 43-4 controlled; thus, the liens claimed on the brick wall and on Lots 20 through 23 and 46 through 49 were time-barred. We agree.

At the outset, we note that the General Assembly is presumed to have acted with full knowledge of the law of mechanics' liens when it amended Code § 43-4. See Cape Henry v. Natl. Gypsum, 229 Va. 596, 600-01, 331 S.E.2d 476, 479 (1985). A mechanic's lien, although a statutory creation, necessarily has its foundation in a contract, see Sergeant v. Denby, 87 Va. 206, 208, 12 S.E. 402, 402 (1890), and it is a contractor's performance under the contract that gives rise to the inchoate lien, see Hadrup v. Sale, 201 Va. 421, 425, 111 S.E.2d 405, 407 (1959); Weaver v. Harland Corporation, 176 Va. 224, 230, 10 S.E.2d 547, 549 (1940).

In determining which contractors were subject to the new filing requirements of Code § 43-4, the General Assembly expressly provided that "[t]he time limitations ... shall apply to all labor performed or materials furnished on construction commenced on or after July 1, 1980." We conclude that the General Assembly intended to apply the new filing requirements to a contractor who, on or after July 1, 1980, commenced construction under a contract that entitled him to a lien.

Here, Wedgefield did not engage United Masonry in a single contract to furnish all masonry and concrete labor and materials for all units in the Council Square II development. Had Wedgefield and United Masonry entered into one contract covering the entire development and construction had commenced under such contract prior to July 1, 1980, the result may have been different. Instead, Wedgefield contracted for labor and material in phases, i.e., piecemeal. Each of the three contracts represented an independent undertaking for separate and distinct compensation. See Richmond College v. Scott-Nuckols, 124 Va. 333, 336, 98 S.E. 1, 2 (1919) (contracts for a single sewer and water system let to same contractor at three separate times, for separate consideration, and without reference to the other contracts in any one contract, were independent, not interdependent agreements).

Construction under the September and October contracts was not commenced until after July 1, 1980; indeed, the parties did not even enter into these contracts until after that date. Because United Masonry did not begin construction under the September and October contracts until after July 1, 1980, the filing requirements of present Code § 43-4 apply, and the liens claimed for labor and materials furnished under those contracts were not timely filed.

II

Partial Lien Waivers. (Record No. 850187).

United Masonry claims mechanics' liens securing the payment of a balance due by Wedgefield in the amount of $55,447.15 for labor and material it furnished to Lots 1 through 11 prior to September 26, 1980. Riggs filed a second motion for partial summary judgment, asserting that United Masonry had waived these liens. The trial court granted the motion and entered summary judgment for Riggs. The dispositive issue in this appeal is whether there was consideration for the partial lien waivers that United Masonry executed. 2

Pursuant to its construction loan commitment to Wedgefield, Riggs agreed to provide advances on its loan so Wedgefield could pay its contractors at various stages of construction. Riggs, however, required title insurance providing affirmative coverage against mechanics' liens. Chicago Title, in turn, conditioned its extension of coverage for each loan advancement upon receipt of adequate lien waivers. Upon receipt of these...

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