Spielman-Fond, Inc. v. Hanson's, Inc.

379 F. Supp. 997
CourtDistrict Court, D. Arizona
DecidedDecember 17, 1973
DocketCiv. 72-417 Phx WEC
StatusPublished
Cited by67 cases

This text of 379 F. Supp. 997 (Spielman-Fond, Inc. v. Hanson's, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spielman-Fond, Inc. v. Hanson's, Inc., 379 F. Supp. 997 (D. Ariz. 1973).

Opinion

OPINION AND JUDGMENT

PER CURIAM.

The sole issue presented in this action is whether the Arizona statutes relating to mechanics’ and materialmen’s liens, A.R.S. § 33-981 et seq., are in violation of the due process clause of the Fourteenth Amendment to the Constitution of the United States.

Defendants Yanke and Hanson’s companies furnished labor and materials to plaintiffs in connection with the development of plaintiffs’ mobile home park. Claiming that they had been unpaid for labor performed and for materials supplied, these defendants caused liens affecting plaintiffs’ property to be recorded with the Maricopa County Recorder pursuant to the Arizona mechanics’ and materialmen’s lien statutes. Plaintiffs remain in the continuous and uninterrupted physical possession of the property against which the liens have been filed.

Plaintiffs bring this action pursuant to 42 U.S.C. § 1983. Jurisdiction is invoked under 28 U.S.C. § 1343, as well as under 28 U.S.C. § 1332, because of diversity of citizenship of the parties. Plaintiffs seek a declaration that A.R.S. § 33-981 et seq., are unconstitutional, and that defendants be enjoined from enforcement of those statutes. A Three-Judge Court was convened pursuant to 28 U.S.C. §§ 2281 and 2284.

Plaintiffs argue that property is, in effect, a bundle of rights. Among these *998 is the right to alienate property freely. A lien may be filed and recorded by a claimant without the need of prior notice or hearing to the property owner. The effect of the lien, plaintiffs assert, is to cut off the right to alienate freely. As a result, it is argued, a significant property interest has been taken from the owner, and since this is done without the benefit of prior notice or hearing, the perfection of a lien under the statutes violates due process of law as enunciated by the United States Supreme Court in Sniadach v. Family Finance Corp. of Bay View, 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970); Boddie v. Connecticut, 401 U.S. 371, 91 S.Ct. 780, 28 L.Ed.2d 113 (1971) and Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972).

Sniadach, supra, held that a Wisconsin prejudgment wage garnishment statute which did not provide for prior notice and hearing to the garnishee was unconstitutional. Goldberg, supra, declared that welfare benefits may not be a right, but they are still an entitlement which cannot be taken from the recipient without prior notice and hearing. Boddie, supra, held that, given the nature of the state’s monopoly on the dissolution of a marriage, state procedures requiring the payment of court fees and costs in divorce actions effectively barred indigents from access to the courts, and thus violated due process. The proposition upon which plaintiffs rely in Boddie is the statement by the Court, 401 U.S. at 378-379, 91 S.Ct. at 786:

“That the hearing required by due process is subject to waiver, and is not fixed in form does not affect its root requirement that an individual be given an opportunity for a hearing before he is deprived of any significant property interest, except for extraordinary situations where some valid governmental interest is at stake that justifies postponing the hearing until after the event.” (Emphasis in original; footnotes omitted.)

Fuentes, supra, held that Florida and Pennsylvania prejudgment replevin statutes were invalid under the Fourteenth Amendment since they work a deprivation of property without due process by denying the right to a prior opportunity to be heard before chattels are taken from the possessor. The issue decided in Fuentes was whether procedural due process required an opportunity for a hearing before the state authorizes its agents to seize property in the possession of a person upon the application of another. 407 U.S. at 80, 92 S.Ct. 1983.

Both Fuentes and Sniadach involved a private dispute between private parties in which the state, through some mechanism such as a garnishment or replevin statute, stepped in to aid one side to the dispute. The Fuentes court found this objectionable because the party invoking the state’s power could be misguided and incorrect in its claim. Thus, without some sort of prior hearing, the other party might be wrongfully deprived of a right or an entitlement.

There are several similarities between the Fuentes and Snidach cases, and the instant case. Here, as there, we have a private dispute between private parties. We have the presence of some sort of mechanism added by the state, viz. a lien, to aid one party to the dispute. The mechanism here can be effected upon the application of one side to the dispute without giving the other party prior notice or hearing. The party invoking the state mechanism may be acting in good faith, but may be incorrect as to the validity of its claim.

The similarities end there. In Sniadach there was an actual taking of wages from the party. The effect of the Wisconsin garnishment statute was to freeze the wages in the employer. Thus, funds to which the employee was entitled were kept from him. He was deprived of the actual possession and use of his wages. In Goldberg the ter *999 mination of welfare benefits denied possession and use of the funds to the recipient. In Fuentes the chattels seized were physically taken from the parties. The instant case, by contrast, presents no actual taking of possession of any kind from plaintiffs. Indeed, the stipulated facts demonstrate that plaintiffs remain in continued possession of their land and continue to rent mobile home spaces to the tenants who are unaware of the lien claims. Thus, plaintiffs here have not been deprived of possession or use of their property as were the cases in Snidach, Goldberg and Fuentes.

Plaintiffs rely on McClellan v. Commercial Credit Corp., 350 F.Supp. 1013 (D.R.I.1972), aff’d 409 U.S. 1120, 93 S.Ct. 935, 35 L.Ed.2d 253 (1973). There a Three-Judge Court held the Rhode Island attachment statutes unconstitutional, relying on Snidach, Goldberg and

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Bluebook (online)
379 F. Supp. 997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spielman-fond-inc-v-hansons-inc-azd-1973.