Summary
In Vorrath, a contractor, who had submitted a sworn statement which omitted 8 of 18 subcontractors, sought to enforce a mechanics' lien against the owner.
Summary of this case from Renshaw v. SamuelsOpinion
Docket No. 10122.
Decided August 23, 1971.
Appeal from Berrien, Julian E. Hughes, J. Submitted Division 2 June 9, 1971, at Grand Rapids. (Docket No. 10122.) Decided August 23, 1971.
Complaint by Ronald Vorrath against Elmer Garrelts and The Federal Land Bank of Saint Paul for foreclosure of mechanic's lien. Judgment for plaintiff. Reversed.
Donald J. Dick, for plaintiff.
White, Klute White (by Murray C. Campbell), for defendants.
Before: R.B. BURNS, P.J., and FITZGERALD and J.H. GILLIS, JJ.
OPINION OF THE COURT
Plaintiff contractor agreed to construct a house according to plans submitted by defendant owner for the sum of $28,948.70. Numerous changes in the plans, all of which were suggested by the defendant, increased the total price by an additional $6,000. After requesting, but not receiving, the additional $6,000 for these plan changes the plaintiff ceased working on the defendant's partially-completed house.
At trial level the plaintiff's mechanic's lien was upheld and foreclosed in the amount of $6,663.
Seeking to invalidate plaintiff's lien the defendant argues that plaintiff's statutorily-required contractor's statement was defective. Plaintiff contends that the errors were harmless and that his "substantial compliance" with the statute in question was sufficient.
When seeking a mechanic's lien the original contractor must file a contractor's statement. MCLA § 570.4 (Stat Ann 1970 Rev § 26.284).
The pertinent statutory provision (MCLA § 570.4 [Stat Ann 1970 Rev § 26.284]) states:
"The original contractor shall, whenever any payment of money shall become due from the owner * * * or whenever he desires to draw any money from the owner * * * make out and give to the owner * * * a statement under oath of the number and names of every subcontractor or laborer in his employ, and of every person furnishing materials, giving the amount, if anything, which is due or to become due to them, or any of them * * * Until the statement provided for in this section is made, in manner and form as herein provided, the contractor shall have no right of action or lien against the owner." (Emphasis supplied.)
Plaintiff conceded he failed to include several subcontractors and laborers in his contractor's statement.
"Strict" not "substantial" compliance is the rule of construction concerning the question of whether or not a lien attaches.
In Burman v. Ewald (1916), 192 Mich. 293, 295, the Court said:
"The statute providing for a mechanic's lien, being in derogation of the common law, must be strictly construed to the point when the lien attaches; that thereafter, because of its remedial character, a liberal construction may be indulged." (Emphasis supplied.)
See, also, Wallich Lumber Co. v. Golds (1965), 375 Mich. 323; Lowrie Webb Lumber Co. v. Ferguson (1945), 312 Mich. 331; Grand River Lumber Coal Co. v. Glenn (1926), 234 Mich. 310.
Plaintiff argues that he is not required to list those subcontractors and laborers that he paid prior to filing his statement.
This argument was upheld by the Court in Halpin v. Garman (1916), 192 Mich. 71. In Spicer v. Dugrey (1922), 221 Mich. 264 the Court upheld a lien when the plaintiff inadvertently omitted one bill due to an electrical contractor. However, in the present case the contractor omitted eight of 18 subcontractors to whom money was owed. The omission cannot be interpreted even as substantial compliance.
Providing the owner with a list of unpaid subcontractors, laborers, and materialmen and the amounts due them as required by statute is a condition precedent to the attachment of a mechanic's lien. Wood v. Bolinger (1930), 252 Mich. 489; Wildey v. Gillett (1912), 171 Mich. 153.
Reversed. Costs to defendants.
FITZGERALD, J., concurred.
I dissent. I am convinced from a review of the record, that the errors made in plaintiff's statement of account and lien were inadvertent and not made in bad faith. I am also convinced that since there is evidence to support the trial judge's finding on this issue, that determination should not be disturbed on appeal unless shown to be clearly erroneous. Morman v. Ryskamp (1926), 235 Mich. 140.
It has long been held that unintentional errors which result in overstatement of the amount due from the recalcitrant debtor will not defeat a mechanic's lien. McMonegal v. Wilson (1894), 103 Mich. 264; Fairbairn v. Moody (1898), 116 Mich. 61; Union Trust Co. v. Casserly (1901), 127 Mich. 183; Vaughan v. Ford (1910), 162 Mich. 37; Grace Harbor Lumber Co. v. Ortman (1916), 190 Mich. 429; Knowlton v. Gibbons (1920), 210 Mich. 547; Ypsilanti Lumber Coal Co. v. Leslie (1922), 218 Mich. 664; Hart v. Reid (1928), 243 Mich. 175.
It is not the law in this state that understatement of the statement of account and lien by a contractor through inadvertent omission of a subcontractor's bill results in loss of the lien. That very situation arose in Spicer v. Dugrey (1922), 221 Mich. 264, 267 where it was held:
"This Court has occasionally criticized some statements of liens which overstated the amount due because it was evidently the intent of the legislature to keep such accounts from being overstated to the detriment of the owner or other persons claiming liens. When the account is understated it results in no loss to anyone except to the lienor, who loses the lien against the premises for that part of his claim which has been omitted."
While it is true that failure to make out and give any statement of account and lien is fatal, Wood v. Bolinger (1930), 252 Mich. 489; Wildey v. Gillett (1912), 171 Mich. 153, I am not persuaded that any error committed in a good-faith attempt to assert a valid lien pursuant to the essential statutory requirements should always result in failure of the lien. While overstatement of the account may often result in prejudice to the debtor, I fail to see how this defendant can seriously contend he was harmed because the resulting lien was for an amount less than that which he owed. In my opinion, plaintiff's substantial compliance with the statute in listing more than 90% of the outstanding indebtedness established a valid lien. See MCLA § 520.27 (Stat Ann 1970 Rev § 26.307).
I would affirm the decision of the trial court.