Stocker v. Tri-Mount/Bay Harbor Building Co.

706 N.W.2d 878, 268 Mich. App. 194
CourtMichigan Court of Appeals
DecidedDecember 8, 2005
DocketDocket 261575
StatusPublished
Cited by6 cases

This text of 706 N.W.2d 878 (Stocker v. Tri-Mount/Bay Harbor Building Co.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stocker v. Tri-Mount/Bay Harbor Building Co., 706 N.W.2d 878, 268 Mich. App. 194 (Mich. Ct. App. 2005).

Opinion

DAVIS, J.

Defendant/cross-plaintiff/cross-defendant Flotation Docking Systems, Inc. (FDS), appeals as of right an order entering a partial consent judgment. That order was later determined to have fully determined the rights and liabilities of all parties. The issue before us arose out of an earlier order in which the trial court held that a mortgage lien held by defendant/cross-plaintiff/cross-defendant/third-party plaintiff Carpenters Pension Trust Fund-Detroit and Vicinity (Carpenters) was superior to all other liens later recorded on a piece of real property, including a construction lien held by FDS. We affirm.

Carpenters loaned $9 million to Tri-Mount/Bay Harbor Building Company, Inc. (Tri-Mount). The loan was secured by a mortgage interest in a parcel of real property located in Emmet County. The mortgage financed the purchase of the property and secured future advances, not to exceed the face value of the note, to the mortgagor for the construction of certain improvements. These improvements included a 37-lot subdivision and a 45-unit boat dock condominium project. Carpenters properly recorded the mortgage on February 11, 1998, the day after the loan was made. A notice of commencement of improvements was recorded on May 17, 1999. It is undisputed that the mortgage was recorded before the first actual physical improvement *196 to the property occurred. FDS contracted with TriMount to construct certain detachable docks for the development. FDS began construction on July 8, 2000, and recorded a lien for $222,635.40 on the property on January 2, 2001. Tri-Mount eventually defaulted on the mortgage.

This suit was commenced when Dave Stocker, doing business as Dave’s Drywall Company (Stocker), filed suit to foreclose his construction lien against Carpenters, FDS, and other companies and individuals with interests in the property. FDS cross-complained to foreclose its construction lien. Carpenters then filed a counter-cross- and third-party complaint for foreclosure of the mortgage. Carpenters and Tri-Mount entered two consent judgments of foreclosure on the property. These consent judgments allowed Carpenters to foreclose on portions of the property as long as it resolved the priority of its mortgage lien before holding a foreclosure sale. Carpenters moved for partial summary disposition, seeking a declaration that its mortgage had priority over any other liens on the property. FDS was the only party to oppose the motion. On November 17, 2003, the trial court heard and granted Carpenters’ motion for summary disposition pursuant to MCR 2.116(0(10).

On appeal, FDS argues that a construction lien takes priority over a purchase money mortgage where the lien is on an improvement that can easily be removed without damaging the land. A grant or denial of summary disposition under MCR 2.116(0(10), which tests the factual sufficiency of the complaint, is reviewed de novo on the basis of the entire record in the light most favorable to the nonmoving party to determine if the moving party is entitled to judgment as a matter of law. Maiden v Rozwood, 461 Mich 109, 118, 120; 597 NW2d 817 (1999).

*197 This matter requires us to interpret the Construction Lien Act (CLA), MCL 570.1101 et seq. Statutory interpretation is a question of law that is also reviewed de novo. Eggleston v Bio-Medical Applications of Detroit, Inc, 468 Mich 29, 32; 658 NW2d 139 (2003). The goal of statutory interpretation is to determine and give effect to the intent of the Legislature, with the presumption that unambiguous language should be enforced as written. Gladych v New Family Homes, Inc, 468 Mich 594, 597; 664 NW2d 705 (2003). “However, if a statute is susceptible to more than one interpretation, judicial construction is proper to determine legislative intent. Statutory language should be construed reasonably, keeping in mind the purpose of the act.” People v Spann, 250 Mich App 527, 530; 655 NW2d 251 (2002) (citations omitted), aff d on other grounds 469 Mich 904 (2003). Our Supreme Court has explained that the purpose of the CLA is “to protect the interests of contractors, workers, and suppliers through construction liens, while protecting owners from excessive costs.” Vugterveen Sys, Inc v Olde Millpond Corp, 454 Mich 119, 121; 560 NW2d 43 (1997). The CLA should be “liberally construed to effectuate these purposes.” Id.

MCL 570.1119(4) provides that a mortgage “recorded before the first actual physical improvement to real property shall have priority over a construction lien arising under this act.” Ostensibly, our analysis ends there inasmuch as this case involves a purchase-money mortgage that was recorded the day after it was made, before any improvements were made, and well before FDS became involved. However, specific statutory provisions control general ones. Antrim Co Treasurer v Dep’t of Treasury, 263 Mich App 474, 484; 688 NW2d 840 (2004). On that basis, FDS urges us to consider the effect of MCL 570.1107, which provides in relevant parts as follows:

*198 (1) Each contractor, subcontractor, supplier, or laborer who provides an improvement to real property shall have a construction lien upon the interest of the owner or lessee who contracted for the improvement to the real property, as described in the notice of commencement provided for by section 108 or 108a, the interest of an owner who has subordinated his or her interest to the mortgage for the improvement of the real property, and the interest of an owner who has required the improvement. A construction lien acquired pursuant to this act shall not exceed the amount of the lien claimant’s contract less payments made on the contract.
(3) Each contractor, subcontractor, supplier, or laborer who provides an improvement to real property to which the person contracting for the improvement had no legal title shall have a construction lien upon the improvement for which the contractor, subcontractor, supplier, or laborer provided labor, material, or equipment. The forfeiture, surrender, or termination of any title or interest held by any owner or lessee who contracted for an improvement to the property or by any owner who subordinated his or her interest to the mortgage for the improvement, or by any owner who has required the improvement shall not defeat the lien of the contractor, subcontractor, supplier, or laborer upon the improvement.

The first sentences of these two subsections describe how construction liens arise under two contrasting situations: in subsection 1, where the entity with whom the lienholder contracted had title to the improved property and in subsection 3, where the same entity did not have title to the improved property. The first sentences of these two subsections are therefore only background to this appeal, because Carpenters apparently concedes that FDS had a lien under the CLA. We are therefore not concerned with the minutia of how that lien arose. It is sufficient to note that it existed.

*199 FDS argues that the important consideration is the second sentence of subsection 3. Specifically, FDS argues that this provision precludes subjugation of its lien to Carpenters’ mortgage. We disagree.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Ruben S Ramos v. Bibi Inc
Michigan Court of Appeals, 2020
In re Detroit Edison Co.
823 N.W.2d 433 (Michigan Court of Appeals, 2012)
In re Michigan Consolidated Gas Co.'s Compliance
818 N.W.2d 354 (Michigan Court of Appeals, 2011)
In re Review of Consumers Energy Co. Renewable Energy Plan
820 N.W.2d 170 (Michigan Court of Appeals, 2011)
Attorney General v. Powerpick Player's Club of Michigan, LLC
783 N.W.2d 515 (Michigan Court of Appeals, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
706 N.W.2d 878, 268 Mich. App. 194, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stocker-v-tri-mountbay-harbor-building-co-michctapp-2005.