New England Savings Bank v. Meadow Lakes Realty Co.

706 A.2d 465, 243 Conn. 601, 1998 Conn. LEXIS 11
CourtSupreme Court of Connecticut
DecidedFebruary 3, 1998
DocketSC 15651
StatusPublished
Cited by18 cases

This text of 706 A.2d 465 (New England Savings Bank v. Meadow Lakes Realty Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New England Savings Bank v. Meadow Lakes Realty Co., 706 A.2d 465, 243 Conn. 601, 1998 Conn. LEXIS 11 (Colo. 1998).

Opinion

Opinion

KATZ, J.

This certified appeal concerns the validity of a blanket mechanic’s hen filed on two separately acquired parcels of land for engineering and surveying work performed on those parcels and on an adjacent parcel that was owned by a third party and that was not liened. Angus McDonald-Gary Sharpe and Associates, Inc. (McDonald-Sharpe), brought an action to foreclose a mechanic’s lien filed pursuant to General Statutes § 49-33,1 against Meadow Lakes Realty Company, also known as Glen Lakes Realty Company [603]*603(Meadow Lakes). Although the lien was for work performed on three parcels of land located in East Lyme, it covered only two of the parcels. New England Savings Bank brought an action against Meadow Lakes to foreclose its construction mortgage, which covered only one of the two liened parcels. That mortgage was later assigned by the Federal Deposit Insurance Corporation to ALI, Inc., which was then substituted as the plaintiff in the first case, and as a defendant in the second case. National Loan Investors, Inc. (National), was thereafter substituted as appellee in place of ALI, Inc.

These foreclosure actions were consolidated for trial. The trial court concluded that the mechanic’s lien was invalid and discharged it. The court further concluded that National’s mortgage was a valid first mortgage, subject only to taxes owed to the town of East Lyme, and rendered judgment accordingly. McDonald-Sharpe appealed to the Appellate Court, which affirmed the trial court’s judgment. New England Savings Bank v. Meadow Lakes Realty Co., 44 Conn. App. 240, 249, 688 A.2d 345 (1997). Thereafter, this court granted McDonald-Sharpe’s petition for certification limited to the following issue: “Did the Appellate Court properly conclude that the plaintiffs mechanic’s lien was invalid?” New England Savings Bank v. Meadow Lakes Realty Co., 240 Conn. 918, 692 A.2d 814 (1997).

[604]*604The Appellate Court decision sets forth the facts pertinent to this appeal. “In 1986, a general partnership known as Meadow Lakes Realty Company was formed for the purpose of owning and developing property in the town of East Lyme. [Angus] McDonald is a partner in the partnership known as Meadow Lakes. He is also the president and principal stockholder of McDonald-Sharpe, a firm that does site planning and designs commercial projects. Gary Sharpe is the vice president and a stockholder of McDonald-Sharpe.

“Meadow Lakes initially requested that McDonald-Sharpe do a feasibility study concerning the residential development of a certain tract of land situated in East Lyme. No written contract existed between McDonald-Sharpe and Meadow Lakes concerning the feasibility study.2 At the time of the initial request for the feasibility study, the subject property was owned by Locarno and Romagna, Inc. (Locarno); Meadow Lakes did not hold title to any of the subject premises. McDonald-Sharpe commenced the feasibility study in June, 1986, prior to Meadow Lakes’ taking title to the property. McDonald-Sharpe continued to work on the feasibility study until late in 1986, at which time it concluded that the project was, in fact, feasible.

“On December 15, 1986, Meadow Lakes acquired the ninety-seven acre front portion of the property from Locarno. At the same time, Meadow Lakes acquired an option to purchase from Locarno the rear portion consisting of an additional 127.24 acres. The primary reason that Meadow Lakes purchased only the front parcel was that the rear parcel shared a border with a parcel owned by Valentine and Irene Kowalski, and Meadow Lakes did not want to take title to the rear parcel until the boundaries with the Kowalskis and [605]*605other issues regarding the Kowalski parcel were resolved.3 At all relevant times, the Kowalski parcel has been owned by the Kowalskis, and Meadow Lakes has had no interest in it.

“McDonald-Sharpe performed work on the front and rear parcels throughout 1987. The front and rear parcels taken together contained several ponds that created planning and zoning considerations. All of the bills and statements rendered by McDonald-Sharpe during the first two years of their being involved in the site development were paid in full.

“On March 31, 1988, [National] provided Meadow Lakes with a construction mortgage in the amount of $400,000, which covered the front parcel only. At the time of the mortgage, McDonald-Sharpe had been paid in full for all of its work. The mortgage deed and note contained language to the effect that the signatories would keep the premises free and clear of liens and encumbrances. McDonald, as a partner in Meadow Lakes, was one of the signatories to the mortgage and note. Some of the proceeds of the [National] loan were paid to McDonald-Sharpe for services rendered.

“In May, 1988, after the mortgage was recorded, Meadow Lakes instructed McDonald-Sharpe to commence work on the Kowalski property. This became one of the principal activities of McDonald-Sharpe for the next year.

“On January 31, 1990, Meadow Lakes purchased the rear parcel from Locarno. The purchase of the rear parcel was financed by a purchase money mortgage in favor of Locarno. Thereafter, McDonald-Sharpe continued to perform work on both the front and rear parcels until late in 1990.

[606]*606“In October, 1990, McDonald-Sharpe filed and served its mechanic’s lien on the East Lyme land records, claiming a balance due of $125,554.36. The lien, purporting to be for materials furnished and services rendered ‘in the subdivision, site development and improvement of a certain parcel of land,’ covered the front and rear parcels, and included metes and bounds descriptions of each. The amount of the lien represented the aggregate amount for work performed on the front parcel, the rear parcel and the Kowalski parcel and was in addition to approximately $137,000 that McDonald-Sharpe had already been paid for its work. Despite the fact that much of the work claimed under the lien was performed on the Kowalski property, no lien was placed on the Kowalski property. No attempt was made to allocate the work among the different parcels.4

“In 1991, Locarno brought an action against Meadow Lakes to foreclose its purchase money mortgage on the rear parcel. McDonald-Sharpe was listed as a defendant in that action. McDonald-Sharpe issued a release of its mechanic’s lien with respect to the rear parcel only.5

“On October 8, 1991, [National] brought an action to foreclose its $400,000 mortgage on the front parcel and on October 9, 1991, McDonald-Sharpe commenced an action to foreclose its mechanic’s lien. The actions were consolidated and tried to the court. The trial court found, inter alia, that the mechanic’s lien was invalid because it was claimed against only one of three parcels of land on which work was performed. Even if the [607]*607mechanic’s lien was valid, the trial court further found that it was not entitled to priority over [National’s] mortgage because much of the work represented by the mechanic’s lien was for a separate and distinct contract formed after the date of [National’s] mortgage. On that basis, the trial court ordered the mechanic’s lien discharged. The trial court further held that [National’s] $400,000 construction mortgage was a valid first mortgage subject only to taxes owed to the town. McDonald-Sharpe appealed from that decision.”

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Bluebook (online)
706 A.2d 465, 243 Conn. 601, 1998 Conn. LEXIS 11, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-england-savings-bank-v-meadow-lakes-realty-co-conn-1998.