Newport Sand & Gravel Co. v. Miller Concrete Construction, Inc.

614 A.2d 395, 159 Vt. 66, 1992 Vt. LEXIS 100
CourtSupreme Court of Vermont
DecidedAugust 14, 1992
Docket90-540
StatusPublished
Cited by21 cases

This text of 614 A.2d 395 (Newport Sand & Gravel Co. v. Miller Concrete Construction, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Vermont primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Newport Sand & Gravel Co. v. Miller Concrete Construction, Inc., 614 A.2d 395, 159 Vt. 66, 1992 Vt. LEXIS 100 (Vt. 1992).

Opinions

Johnson, J.

The issue in this appeal is whether and to what extent the contractors’ lien statute, 9 V.S.A. §§ 1921-1928, protects suppliers of construction materials when they supply materials to subcontractors of general contractors. On motions for summary judgment, the superior court held that suppliers of subcontractors are entitled to a lien against the owner of property benefited by the provision of the materials and that the extent of protection is judged by the amount owed by the owner to the general contractor at the time the notice of lien is re[68]*68ceived. The court also awarded statutory interest running from the date the complaint was filed. We affirm.

The facts are unremarkable. Defendant Royalton Town School District contracted with defendant Simpson Construction, Inc. to build an addition to one of its schools. Simpson acted as general contractor for the project. It subcontracted with defendant Miller Concrete Construction, Inc. to do the concrete work. Miller Concrete arranged to have plaintiff Newport Sand & Gravel, Inc. supply the materials. Newport fulfilled its obligations under the contract, but Miller failed to pay it in the amount of $24,500.

Newport filed a notice of lien against the District on December 11, 1987, under 9 V.S.A. § 1921. At that time, the District owed Simpson, the general contractor, over $900,000. On February 26,1988, Newport brought suit against the District and Miller to enforce the lien. It also obtained a writ of attachment against the District, but Simpson intervened and posted a surety bond, obviating the need to serve and record the attachment. In fact, Simpson defended the action, with little or no participation from the District, because the District released the remaining contract funds to Simpson after it posted the surety bond. Miller filed bankruptcy, but obtained relief from the automatic stay to participate in discovery.

Although there is no dispute that Miller owed Newport $24,500, there is a substantial dispute between Simpson and its subcontractor, Miller, about monies due from Simpson to Miller. Simpson claims it owes Miller only $11,875, and contends that if Newport is entitled to a lien at all, it is limited by the amount remaining on Simpson’s contract with Miller and not by the $900,000 owing from the District to Simpson at the time the lien was filed.

The first issue, then, is whether Newport, as a supplier of construction materials to subcontractor Miller, may claim the protection of the lien statute. The contractors’ lien for labor or material provides:

(b) A person who by virtue of a contract or agreement, either in writing or parol, with an agent, contractor or subcontractor of the owner thereof, performs labor or furnishes materials for erecting, repairing, moving or altering [69]*69such improvements shall have a lien, to secure the payment of the same upon such improvements and the lot of land upon which the same stand, by giving notice in writing to such owner or his or her agent having charge of such property that he or she shall claim a lien for labor or material. Such lien shall extend to the portions of the contract price remaining unpaid at the time such notice is received.

9 V.S.A. § 1921(b). Although the present statute was amended as recently as 1986, Goodro v. Tarkey, 112 Vt. 212, 214, 22 A.2d 509, 510 (1941), there has been some form of mechanics’ or materialmens’ lien statute in Vermont since 1849.1849, No. 21, § 3. The lien is purely a creature of statute, and, therefore, cases from other jurisdictions, and even Vermont cases decided prior to the present statute, have limited application. T.A. Haigh Lumber Co. v. Drinkwine, 130 Vt. 120, 126, 287 A.2d 560, 563 (1972). Notwithstanding the diversity of mechanics’ lien statutes, their general intent is to provide limited protection for suppliers to construction projects by giving them a tool to secure payment for their products, which is, presumably, part of the contract price received by the general contractor from the owner. See Seaman v. Climate Control Corp., 181 Conn. 592, 597, 436 A.2d 271, 275 (1980). By giving suppliers and others who benefit the project an in rem right against the owner, the statute overcomes the lack of privity between the suppliers and the owner, since the suppliers typically deal with the general contractor or the subcontractors. Stratton v. Inspiration Consol. Copper, 140 Ariz. 528, 531, 683 P.2d 327, 330 (Ct. App. 1984); Seaman, 181 Conn, at 596, 436 A.2d at 274.

Simpson’s argument focuses on the statutory language. It states that because Newport supplied Miller, which it describes as a subcontractor of the “general,” and not “of the owner,” as required by the statute, Newport is not entitled to a lien. Simpson contends that although Miller would be allowed a lien, as a subcontractor, Miller’s suppliers would not. Simpson’s interpretation is internally inconsistent, mischaracterizes the relationship of Miller to the owner, and defeats the purpose of the statute.

If Miller is only a subcontractor of the general contractor, then, under Simpson’s theory, Miller should not be entitled to a lien because it is not also a subcontractor of the owner. Under [70]*70Simpson’s theory, Miller should be allowed to recover only if it contracts, as a subcontractor, directly with the owner. If it did so, however, it would be a contractor and not a subcontractor, and would not be covered by the statute.

More importantly, Miller is a subcontractor “of the owner.” A subcontractor is “[o]ne who takes portion of a contract from [a] principal contractor.” Black’s Law Dictionary 1277 (5th ed. 1979). One can be a subcontractor of the owner only if there is an owner’s general contract in the first place. The obvious purpose of the use of the word “subcontractor” in the statute is to cover precisely the factual situation before the Court. The general contractor secures the job and subcontracts major portions of it. Suppliers provide materials to the subcontractors so that the “subs” can perform their part of the work to be done under the general contract. Here, Simpson asked Miller to do the concrete work, and Miller obtained supplies for that portion of the job from Newport.

Simpson’s interpretation also defeats the purpose of the statute by cutting off protection for suppliers who are more than one step removed from the owner. But the Legislature intended, by the express terms of the statute, to extend the protection of a lien to “persons” who “furnish materials” pursuant to “contract or agreement” with an agent, contractor, or subcontractor of the owner. Suppliers of subcontractors are, necessarily, more than one step removed from the owner. The plain wording of the statute includes them. See Addison County Community Action v. City of Vergennes, 152 Vt. 161, 165, 565 A.2d 233, 235 (1989).

Simpson’s second argument is that, even if Newport is entitled to a lien under the statute, the lien should be measured by Simpson’s contract with Miller, as the party with whom Newport contracted.

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Cite This Page — Counsel Stack

Bluebook (online)
614 A.2d 395, 159 Vt. 66, 1992 Vt. LEXIS 100, Counsel Stack Legal Research, https://law.counselstack.com/opinion/newport-sand-gravel-co-v-miller-concrete-construction-inc-vt-1992.