B. T. Electrical Enterprises, Inc. v. ADC Fairways Corp.

4 Va. Cir. 48, 1981 Va. Cir. LEXIS 50
CourtFairfax County Circuit Court
DecidedDecember 1, 1981
DocketCase Nos. (Chancery) 70851, 70852
StatusPublished
Cited by2 cases

This text of 4 Va. Cir. 48 (B. T. Electrical Enterprises, Inc. v. ADC Fairways Corp.) is published on Counsel Stack Legal Research, covering Fairfax County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
B. T. Electrical Enterprises, Inc. v. ADC Fairways Corp., 4 Va. Cir. 48, 1981 Va. Cir. LEXIS 50 (Va. Super. Ct. 1981).

Opinion

By JUDGE THOMAS J. MIDDLETON

Plaintiff B. T. Electrical Enterprises, Inc., is a sub-contractor which delivered materials and performed electrical work on forty-two units in a condominium known as 4355 Ivymont Court Condo. Plaintiff Gary A. Sturgill is a subcontractor who delivered materials and performed plumbing, heating and air conditioning work on forty-two units in the same condominium. In each case, the work was done pursuant to an oral contract with a general contractor, Johnmark Construction, Inc.

Each Plaintiff filed a blanket mechanic’s lien encumbering the units upon which work was performed. The liens stated the full amounts claimed to be due under the respective contracts of each subcontractor. In filing their mechanic’s liens, each Plaintiff failed to list in the memorandum the names of the owners of record of fifteen of the units. These units had been sold by Defendant ADC Fairways Corporation prior to the filing of the liens. Plaintiffs failed to perfect their liens in accordance [49]*49with the provisions of Virginia Code Section 43-4 with respect to these fifteen units.

The parties agree that the liens are ineffective as to the fifteen units. The Defendants assert that the ineffectiveness of each lien as to the fifteen units invalidates each mechanic’s lien entirely. The Plaintiffs, on the other hand, seek to enforce the liens on the remaining units.

The Virginia Supreme Court first recognized the validity of a "joint" or "blanket" mechanic’s lien in Sergeant v. Denby, 87 Va. 206, 2 S.E. 402 (1890). In Sergeant, there was one contract between the parties for the construction of two houses. The general contractors filed a single mechanic’s lien to encumber both houses without specifying the amount due on each house. The owner contended that there must be a separate lien on each building because a joint lien was not provided for by statute. The Supreme Court held that "as between the general contractors and the owner" a joint lien was valid because the contract was for an entire work. A separate contract for each house had not been negotiated, and the contract did not require separate accounts to be maintained for each house.

In the case of In Re Thomas A. Cary, Inc., 412 F. Supp. 667 (E.D. Va. 1976), aff’d. 562 F.2d 48 (4th Cir. 1977), the Federal District Court discussed the use of blanket liens when innocent third parties are involved. In Cary, the mechanic’s lien was filed against a 50-lot subdivision for materials supplied that had not been allocated to specific lots. The parties contesting the lien, a lender and a title insurer, argued that the endorsement of blanket liens in Sergeant was limited to cases involving contractors and owners. They relied on Weaver v. Harland, 176 Va. 224, 10 S.E.2d 547 (1940), for the proposition that the use of such liens is not allowed in cases including third parties. The District Court disagreed and held that blanket liens were appropriate in that case because the nature of subdivision development "provides impediments to the use of a single lien." 411 F. Supp. at 674. In addition, the Court stated that the holding of Weaver was limited to the effect of releases on mechanic’s liens. 412 F. Supp. at 673. This specific issue is discussed below.

The question of the validity of a blanket mechanic’s lien was addressed again in United Masonry v. Jeffer[50]*50son Mews, 218 Va. 360, 237 S.E.2d 171 (1977), this time in the context of a condominium project. In United Masonry, the Plaintiff filed a single mechanic’s lien for work done under two separate contracts, one contract for construction of a bathhouse which would benefit the entire 264 unit project and the other contract for work done on the initial 132 units.

The Court did not question the validity of a blanket mechanic’s lien on a condominium project. Rather, it narrowed the issue to whether the blanket mechanic’s lien was invalid "for failure to apportion the value of the work performed between the individual condominium units and the common element facilities." 218 Va. at 371.

The lien in question failed to allocate the amounts due under each contract, thereby seeking to encumber the entire 264 unit project for work done only on 132

units. In response, the Supreme Court stated that the object of the mechanic’s lien law:

is to give those who, by their labor and material, have enhanced the value of the building the security of a lien thereon to the extent they have added to its value, but not to give a lien therefor upon property not benefited by such labor and materials, (citation omitted) Such policy of the law becomes particularly important when, as here, the interests of third party. . . may be impinged upon by a joint lien. 218 Va. at 378 (emphasis added).

The memorandum of mechanic's lien in United Masonry attempted to lien property which had not been benefited by the work. As a result, the Court found that the memorandum failed to substantially comply with Va. Code Section 43-3, and the lien therefore was invalid. Id.

The cases discussed above, Sergeant, Cary, and United Masonry, recognized blanket mechanic’s liens in Virginia. These cases indicate that when work is performed under a single contract, a single mechanic’s lien may be perfected to encumber all the units or lots which are benefited by such work. Moreover, the mechanic’s lien will not be invalid for failure of the memorandum to apportion the lien among the individual units. However, when there is a contest for priority of encumbrances and the interests of third parties are involved, the question of apportion[51]*51ment becomes crucial to the issue of release in the blanket lien situation.

In Weaver v. Harland Corporation, the Virginia Supreme Court addressed the issue of releases and the effect which they have upon mechanic’s liens. The Court held that "the weight of authority and the force of reason sustain the view that the release of a portion of the properties, under the circumstances of this case, embraced by the lien, precludes its successful assertion against the remainder. This is only true where the interests of other lien creditors are affected." 176 Va. at 227 (emphasis added).

Weaver involved several lienors who contracted to furnish materials and labor for the construction of twenty houses. Prior to filing a lien, each lienor released some of the houses for payments made under the contract. There was nothing to indicate the value of materials which went into each house, and in most cases it was impossible to determine those values. In each case, the mechanic’s liens filed against the unreleased houses were filed for the balance due to the particular lienor. 176 Va. at 227.

The Court held that under those circumstances the liens were invalid because "the mechanics lien lienors could so shift their liens as to unduly burden some of the lien subjects and relieve others, to the extent of imperiling the interests of other lien creditors which would not be consonant with the intent and spirit of the statute and would be offensive to good conscience and equity." 176 Va. at 227-228. The Court went on to demonstrate the "undue burden" created by the releases in the case of one lienor.

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