PREFERRED SAVINGS & LOAN ASSOCIATION, INC. v. Royal Garden Resort, Inc.

389 S.E.2d 853, 301 S.C. 1, 1990 S.C. LEXIS 54

• Court: Supreme Court of South Carolina
• Decided: February 20, 1990
• Docket: 23114
• Status: Published

Opinions

Chandler, Justice:

In this action between a construction lender (Preferred Savings) and a general contractor (Cianbro), the Court of Appeals held that Cianbro’s mechanic’s lien was invalid for failure to timely commence suit to foreclose. Preferred Sav. & Loan Ass’n v. Royal Garden Resort, Inc., 295 S. C. 268, 368 S. E. (2d) 78 (Ct. App. 1988). We granted certiorari and now affirm.

FACTS

Cianbro entered into a single fixed-price contract with the owner (Royal Garden) to construct a condominium project, for which Preferred Savings was the lender.

The project was substantially completed by June, 1984, at which time Cianbro was entitled to the remaining balance due under its contact. Cianbro served and filed a Notice of Mechanic’s Lien on August 13,1984. On September 18,1984, it filed an Amended and Restated Notice of Mechanic’s Lien, reflecting payments received in the interim. It continued to work until November, 1984, when the project was finally completed. Suit to foreclose the lien was not commenced until April 2, 1985, over seven months after the August 13, filing, and more than six months after the September 18 filing.

ISSUE

Did the Court of Appeals err in holding that Cianbro failed to timely commence suit to foreclose its mechanic’s lien?

DISCUSSION

A mechanic’s lien arises, inchoate, when labor is performed or material furnished. Williamson v. Hotel Melrose, 110 S. C. 1, 96 S. E. 407 (1917). However, to be valid, the lien must be perfected and enforced in compliance with the Mechanic’s Lien Statutes, S. C. Code Ann. §§ 29-5-10 to -430 (1976). See Lowndes Hill Realty Co. v. Greenville Concrete Co., 229 S. C. 619, 93 S. E. (2d) 855 (1956).

Section 29-5-90, mandating service and filing of a certificate of lien, provides in pertinent part:

Such a lien shall be dissolved unless the person desiring to avail himself thereof, within ninety days after he ceases to labor on or furnish labor or materials for such building or structure, serves upon the owner ... a statement of a just and true account of the amount due him, with all just credits given ... which certificate ... shall be recorded in a book kept for the purpose by the register of clerk____[Emphases supplied].

The Court of Appeals concluded that “[w]hen a party files a notice of lien under [this statute] he is asserting that at a time within ninety days before the notice he has performed work for which he is entitled to assert a lien.” 295 S. C. at 272, 368 S. E. (2d) at 81. We agree. The statute requires that the certificate include a statement “of the amount due him,” and that it be filed “within ninety days after he ceases to labor.” The clear meaning of this language is that the labor contemplated in the filed statement has already been performed within 90 days prior to the filing.

Section 29-5-120 contains the limitations period for commencing suit to foreclose a mechanic’s lien. This statute reads:

Unless a suit for enforcing the lien is commenced, and notice of pendency of the action is filed, within six months after the person desiring to avail himself thereof ceases to labor on or furnish labor or material for such building or structures, the lien shall be dissolved.

We agree with the Court of Appeals that § 29-5-120 and § 29-5-90 “look to the same point in time.” Both time limits run from the same event: the certificate of lien must be filed within 90 days, and the foreclosure suit must be commenced within six months, after the contractor “ceases to furnish labor or materials.”

The effect of these provisions is that the six month limitations period for enforcing the lien necessarily commences no later than the date the certificate of lien isk filed.¹ If suit is not commenced within six months after the date of filing, title examiners may assume that the mechanic’s lien is dissolved.

We reject Cianbro’s contention that the limitations period does not commence until all labor ceases, without regard to the date and time the requisite certificate of lien is filed. It eschews a reading of the statutes together and, if upheld, would create uncertainty and confusion in the examination and certification of titles to real property. Examiners would be required to move beyond the records on file at the county courthouse to determine whether labor was performed or materials furnished subsequent to the date of the lien filing.

CONCLUSION

Cianbro did not timely commence suit to foreclose its mechanic’s lien. Accordingly, the Court of Appeals’ judgment dissolving the lien is affirmed.

Affirmed.

Gregory, C. J., Finney, J., and Acting Associate Justice Bruce Littlejohn, concur. Toal, J., dissenting in separate opinion.

1 If the certificate of lien is filed on the date that labor ceases, suit must be brought within six months thereafter. For each additional day between the date of cessation of labor and the date of filing, the time between filing and commencement of suit is reduced by one day. Thus, if the certificate were filed on the 90th day after cessation of labor, suit must be commenced three months after the filing.