Trace Construction, Inc. v. Dana Barros Sports Complex, LLC

945 N.E.2d 833, 459 Mass. 346, 2011 Mass. LEXIS 165
CourtMassachusetts Supreme Judicial Court
DecidedApril 13, 2011
DocketSJC-10765
StatusPublished
Cited by23 cases

This text of 945 N.E.2d 833 (Trace Construction, Inc. v. Dana Barros Sports Complex, LLC) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trace Construction, Inc. v. Dana Barros Sports Complex, LLC, 945 N.E.2d 833, 459 Mass. 346, 2011 Mass. LEXIS 165 (Mass. 2011).

Opinion

Cowin, J.

These cases, which were consolidated for trial, involve contractors and subcontractors who claim liens, pursuant to the mechanic’s lien statute, G. L. c. 254, on real property owned in fee by Richard J. Madigan. 4 The contractors are Trace Construction, Inc. (Trace), and CB Seating, Inc. (CB Seating); the subcontractors, both of whom performed work for Trace, are L.C. Anderson, Inc. (Anderson), and Quinn Brothers of Essex, Inc. (Quinn). The contractors were engaged by Dana Barros Sports Complex LLC (Complex), a company owned by Dana Barros, to perform renovations on premises that Dana Barros Basketball Camp, LLC (Camp) had leased from Madigan. 5 The Complex failed to make payments to the contractors for work performed, and the contractors and subcontractors filed notices of liens on the property pursuant to G. L. c. 254, § 2 (governing contractors’ liens), and G. L. c. 254, § 4 (governing subcontractors’ liens). The Camp also fell behind on lease payments to Madigan, and ultimately surrendered possession of the premises to him. The contractors and subcontractors brought *348 these actions to enforce the liens against both the Camp’s leasehold interest and Madigan’s fee interest. 6 Following a jury-waived trial, a Superior Court judge determined that the contractors and subcontractors had established valid liens against the leasehold interest, but denied all claims asserting liens against Madigan’s fee interest. 7 The contractors, subcontractors, and Madigan appealed to the Appeals Court, and we transferred the case here on our own motion. 8

We conclude that the contractors have a valid lien on Madigan’s fee interest. We conclude also that any lien that may have been validly created on the leasehold interest was terminated when the Camp’s leasehold was surrendered. We thus reverse the decision of the trial judge that each of the contractors and subcontractors had established liens on the leasehold interest. We affirm the judge’s conclusion that the subcontractors did not establish a lien on Madigan’s fee interest.

1. Background. The real property at issue in this case consists of two adjoining parcels of land, one situated in Foxborough and the other in Mansfield, and a 70,000 square foot building located on the parcels. Madigan has owned the property since 1983, and he operated an indoor tennis club in the building until 1989. Madigan thereafter moved his wholesale paper business into the building, operating 7,000 square feet of the building as offices and 50,000 square feet as warehouse space, which was heated, lighted, and outfitted with storage racks. In 1996, he sold his business to Georgia Pacific and leased the premises to that company until 2000. The building then remained vacant until 2004.

Dana Barros, a former professional basketball player, operated a basketball camp prior to his dealings with Madigan, and *349 had established the Camp in 2002 for that purpose. In 2004, Barros and Madigan held a series of discussions in which Barros told Madigan that he was interested in opening a sports complex on the premises and that he intended to make improvements for that purpose, but did not provide substantial detail prior to signing the lease.

Madigan and the Camp entered into a five-year lease agreement that began on September 1, 2004, and that provided the Camp with an option to renew the lease for two five-year periods. The lease provided that all of the Camp’s “alterations, improvements, additions and/or renovations,” with the exception of personal property, equipment, and trade fixtures that were removable “without material damage” to the premises, were for Madigan’s benefit and were not the property of the Camp. The Camp was required to obtain Madigan’s written consent for any such alteration.

After securing the lease, Barros formed the Complex. The Complex entered into a contract with Trace in November, 2004, to perform extensive alterations and improvements to the premises, including plumbing, lighting, HVAC, and electrical work. Trace entered into subcontracts with Anderson and Quinn soon thereafter. The Complex also entered into a contract with CB Seating in January, 2005, for the installation of basketball equipment, gymnasium dividers, and other miscellaneous items.

Trace began performance and sent periodic applications for payment to the Complex. By the time of Trace’s fifth application, the Complex was late in making payment. Trace informed the Complex in a notice dated March 23, 2005, that it would cease work within seven days if the balance remained unpaid. Shortly thereafter, in a letter dated March 30, 2005, Trace informed the Complex that it had ceased work. CB Seating performed in full, completing its work in May, 2005. The contractors and subcontractors each claim unpaid balances for work performed.

The work on the premises was sufficiently complete for the Camp and the Complex to occupy the premises in the spring of 2005. The Camp had persistent difficulties in making lease payments to Madigan, however, and in April, 2006, Barros executed a “Surrender of Possession” document on behalf of the Camp and Complex and presented it to Madigan. Madigan accepted it *350 without objection, and the Camp and the Complex vacated the premises.

Madigan continued to operate the facility as a means of generating income from the property and retained some of the employees who had worked for the Complex for that purpose. Within several months after the surrender, Madigan leased the property to a company known as BOAH, LLC (BOAH). That entity operated a fitness center at the premises for approximately eighteen months, after which time BOAH vacated and Madigan again took back operation of the facility. Madigan continued to operate it at the time of trial while seeking potential buyers.

Each of the contractors and subcontractors filed a notice of contract and statement of account in the Bristol County or Norfolk County registry of deeds as required by the mechanic’s lien statute. See G. L. c. 254, § 2 (notice of contract requirement for contractors); G. L. c. 254, § 4 (notice of contract requirement for subcontractors); G. L. c. 254, § 8 (statement of account for all mechanic’s liens). Each also filed and recorded a complaint as required by the statute. See G. L. c. 254, § 11. There is no dispute that the contractors and subcontractors have made the appropriate filings for creating a mechanic’s lien.

After the contractors and subcontractors filed these complaints, Madigan brought a separate action pursuant to G. L. c. 254, § 15A, 9 for summary discharge of the liens, arguing that, as he was not a party to the contracts with the contractors or subcontractors, the lien could not attach to his fee interest in the property. See Madigan v. Trace Constr., Inc., 71 Mass. App. Ct. 1, 2 (2007).

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Bluebook (online)
945 N.E.2d 833, 459 Mass. 346, 2011 Mass. LEXIS 165, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trace-construction-inc-v-dana-barros-sports-complex-llc-mass-2011.