West Alexandria Properties, Inc. v. First Virginia Mortg. and Real Estate Inv. Trust, 781224

• Decision Date: 06 June 1980
• Docket Number: No. 781224,781224
• Citation: 267 S.E.2d 149,221 Va. 134
• Parties: WEST ALEXANDRIA PROPERTIES, INC. v. FIRST VIRGINIA MORTGAGE AND REAL ESTATE INVESTMENT TRUST. Record
• Court: Virginia Supreme Court

Page 149

267 S.E.2d 149

221 Va. 134

WEST ALEXANDRIA PROPERTIES, INC. v. FIRST VIRGINIA MORTGAGE AND REAL ESTATE INVESTMENT TRUST.

Record No. 781224.

Supreme Court of Virginia.

June 6, 1980.

Richard F. Williamson, Alexandria (W. Curtis Sewell, Thomas & Sewell, P. C., Alexandria, on briefs), for appellant.

David C. Canfield, Arlington (John H. Ariail, Jr., Tolbert, Smith, Fitzgerald & Ramsey, Arlington, on brief), for appellee.

Before CARRICO, HARRISON, COCHRAN, POFF, COMPTON and THOMPSON, JJ.

POFF, Justice.

West Alexandria Properties, Inc. (WAPI), appeals from a decree entered June 1, 1978 sustaining a demurrer to an amended bill of complaint to enforce a mechanic's lien against land owned by First Virginia Mortgage and Real Estate Investment Trust (FVM). The major issues presented are (1) whether WAPI is a "person" entitled to claim a mechanic's lien and (2) whether, when land has been severed by dedication to the public after commencement of construction improving both the dedicated and non-dedicated land, a lien encompassing the value of work done on the public property may be enforced against the remaining private property after it has been conveyed to a new owner.

Reviewing a decree sustaining a demurrer, we consider true all facts alleged in, or reasonably inferable from, WAPI's bill of complaint. Old Dominion Iron v. VEPCO, 215 Va. 658, 660, 212 S.E.2d 715, 718 (1975).

On July 9, 1973, WAPI and Landmark Palace Associates (LPA) entered into an agreement in order "to maximize the uses permitted on (their adjoining properties), to comply with certain requirements of the City of Alexandria and . . . to undertake . . . mutually advantageous cost-sharing and other cooperative arrangements". The agreement called for the parties to relocate their common boundary and then "jointly cause to be constructed" along the relocated boundary an 80-foot street, "an enclosed storm sewer trunk line", and a relocated sanitary sewer. Construction of the street and these facilities and dedication to the city were conditions precedent to the city's approval of site plans for development of multi-family dwellings.

The parties agreed to share equally all costs of construction. They were to be "jointly responsible" for "letting" engineering and construction contracts, and all plans and contracts had to be approved by both WAPI and LPA. "For the purpose of administering and implementing contracts", WAPI was named "Project Manager." The agreement provided for all invoices from "subcontractors" to be submitted to and to be paid by WAPI. WAPI, in turn, was to deliver copies of invoices, with evidence of payment, to LPA which would pay WAPI half the amounts expended.

Construction began in July 1973 and continued through August 1975. Allegedly acting as "general contractor", WAPI "furnished all materials, labor and supervision" for grading land, constructing the storm sewer trunk and branches, relocating and constructing the sanitary sewer line, constructing a water line, and temporarily relocating an electrical distribution line. Laterals and "stubs" from the mains extended onto the property LPA retained after the parties dedicated land for the street. Dedication occurred while construction was in progress.

In March 1975, LPA conveyed the remainder of its land, comprised of two parcels abutting the street, to FVM, the secured lender under existing deeds of trust on the parcels. WAPI, with FVM's knowledge, "continued to furnish materials, perform labor, and pay subcontractors to improve" FVM's land.

Between April 14 and October 9, 1975, WAPI filed several memoranda of liens against the land owned by FVM (the liened land) to secure an aggregate debt of $125,154.47 LPA owed WAPI. Of this amount, $36,123.70 was attributable to labor and materials that improved the liened land; the remainder was attributable to improvements to the dedicated land.

In October 1975, WAPI filed its original bill of complaint to enforce the liens. That bill did not distinguish the cost of improvements to FVM's land from the cost of improvements to the dedicated land. The court sustained FVM's demurrer to this bill on the grounds that, assuming all the improvements were "structures" within the contemplation of Code § 43-3, the structures were not "annexed to" the liened land and that this land was not "necessary for the convenient use and enjoyment" of the structures within the meaning of that statute.

WAPI subsequently filed the amended bill, the sufficiency of which is in issue here. Two bases of FVM's demurrer were sustained. First, the court held that WAPI was not a person entitled to a lien. Ruling that WAPI and LPA had been joint venturers, the court stated that a joint venturer does not meet the definition of "general contractor" contained in Code § 54-113(2). For this reason, the court concluded that WAPI could not be a "general contractor" for purposes of the mechanic's lien provisions of Title 43. Second, the court reaffirmed its earlier ruling that FVM's land was not "necessary for the convenient use and enjoyment" of improvements to the dedicated land. However, the court rejected, inter alia, FVM's allegation that "(a)ny labor performed or materials furnished . . . were not for a . . . 'structure permanently annexed to the freehold' ". Having sustained the demurrer the court declared the lien invalid in its entirety and dismissed the amended bill.

On appeal, WAPI initially contends the court erred in concluding from the face of the amended bill that WAPI and LPA had been joint venturers. WAPI advances two arguments. Asserting that the agreement did not contemplate a "profit", WAPI argues that a joint venture cannot exist absent a profit motive. But see Jackson Company v. City of Norfolk, 197 Va. 62, 67, 87 S.E.2d 781, 784 (1955). And, argues WAPI, the anticipated gain in a joint venture must accrue jointly, rather than severally as WAPI claims the benefits accrued in this case.

These arguments are not properly before us. Rule 5:21 provides that "(e)rror will not be sustained to any ruling below unless the objection was stated with reasonable certainty". On appeal, though taking the same general position as in the trial court, an appellant may not rely on reasons which could have been but were not raised for the benefit of the lower court. See Miller v. Commonwealth, 185 Va. 17, 21, 37 S.E.2d 864, 866 (1946); Virginia Public Service Co. v. Carter, 168 Va. 171, 179-80, 190 S.E. 155, 158 (1937). Although WAPI took the position at trial, both orally and on brief, that it and LPA had not been joint venturers, WAPI did not raise the points now offered to support that position. Accordingly, we do not consider these arguments, and for purposes of this opinion, we accept the trial court's conclusion that WAPI and LPA were joint venturers.

WAPI contends that, even so, the "court erred in attributing their joint venture status to (WAPI) and (FVM)." Noting that joint ventures are created by contract, not by operation of law, Legum Furniture v. Levine, 217 Va. 782, 786, 232 S.E.2d 782, 785 (1977), WAPI argues that the court, without examining the relationship between it and FVM, improperly attributed joint venture status to them. This argument suffers from two fatal flaws. Again, WAPI presents a question not raised below; and the argument creates and attacks a straw man. The trial court did not attribute joint venture status to WAPI and FVM. The reason underlying its ruling was that WAPI was not a general contractor and, therefore, had no standing to assert a lien. Under that rationale, the identity of the landowner was inconsequential.

Assuming that WAPI and LPA were joint venturers, we turn to WAPI's contention that this status alone does not preclude it from claiming and enforcing a lien. Code § 43-3 states in part that:

"All persons performing labor or furnishing materials of the value of fifty dollars or more, for the construction, removal, repair or improvement of any building or structure permanently annexed to the freehold . . . shall have a lien, if perfected as hereinafter provided, upon such building or structure, and so much land therewith as shall be necessary for the convenient use and enjoyment thereof . . . ."

Emphasizing the term "all persons", WAPI argues that the statute does not exclude joint venturers from its protection. If any person, says WAPI, performs labor or furnishes materials under the conditions prescribed in § 43-3, that person is entitled to a lien. FVM, however, maintains that the reference to "all persons" in § 43-3 is modified by §§ 43-4, -7, and -9. Those statutes prescribe how "general contractors", "subcontractors", and persons "performing labor or furnishing materials for a subcontractor" can perfect the lien authorized by § 43-3. FVM argues that not "all persons", but only general contractors, subcontractors, and "subsubcontractors", are entitled to claim a lien and that WAPI falls into none of these privileged classes.

The definitions ascribed to "general contractor" and "subcontractor" for purposes of the mechanic's lien laws do not restrict the meaning of "all persons" as FVM maintains they do. Cf. Cain v. Rea, 159 Va. 446, 166 S.E. 478 (1932) (architect is an eligible lienor). The applicable definition of "general contractor" is that provided by Code § 43-1. ¹ That statute defines the term to "include contractors, laborers, mechanics, and persons furnishing materials, who contract directly with the owner". A person making improvements to land is deemed a general contractor if that person is in contractual privity with the owner. Quoting § 43-1, we have held that there can be several general contractors for one construction project. Loan Association v. Kendall Company, 205 Va. 136, 143, 135 S.E.2d 178, 183-84 (1964). For purposes of the mechanic's lien provisions of Title 43, the term "general contractor" is definitionally broader than its colloquial counterpart. Merch'ts & Mech. Sav....