C D Barnes Associates Inc. v. Star Heaven, LLC
300 Mich. App. 389
| Mich. Ct. App. | 2013Background
- Barnes furnished labor and materials to Star Heaven’s Grand Haven Club project under a time-and-materials contract; Star Heaven’s master deed converted the project to a condominium after Barnes began work; Barnes filed nine liens totaling $360,909.11 on May 8, 2008; Flagstar’s mortgage on the property was recorded May 23, 2006; a May 2, 2006 sworn statement asserted the property was free of construction liens; the trial court granted Barnes partial summary disposition that Barnes’s lien had priority over Flagstar’s mortgage; the matter includes separate proceedings (Findling action) and a sale of the property under Judge Post’s supervision; the court ultimately held Barnes’s lien valid and with priority over Flagstar, but remanded for separate attorney fees judgment and apportionment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Barnes’s lien is valid and timely under the Construction Lien Act | Barnes; timely within 90 days and substantial compliance | Flagstar; lien invalid for improper description and timing | Lien valid and timely; substantial compliance supported |
| Whether Barnes’s lien priority over Flagstar’s mortgage stands given condominium conversion | Barnes’s lien attached to the entire project per notice of commencement | Condominium Act requires unit-specific liens post-conversion | Barnes’s lien priority over Flagstar affirmed |
| Effect of May 2, 2006 sworn statement on lien validity and priority | Sworn statement substantially complied; not a waiver | May 2 statement improper or insufficient to affect priority | Sworn statement substantially complied; priority preserved |
| Whether attorney fees should be included in the lien amount and apportioned against Flagstar | Fees may be awarded to prevailing lien claimant | Fees must be awarded separately from the lien amount and only against the responsible party | Attorney fees must be severed from the lien amount; awarded against Flagstar on remand |
Key Cases Cited
- Stock Bldg Supply, LLC v Parsley Homes of Mazuchet Harbor, LLC, 291 Mich App 403 (2011) (construction lien act remedial; substantial compliance; liens arise from first improvement)
- Big L Corp v Courtland Constr Co, 482 Mich 1090 (2008) (remedial statute; substantial compliance; lien validity)
- Northern Concrete Pipe, Inc v Sinacola Companies-Midwest, Inc., 461 Mich 316 (1999) (90-day deadline is mandatory; strict timing governs liens)
- Jeddo Drywall, Inc v Cambridge Investment Group, Inc., 293 Mich App 446; 810 NW2d 633 (2011) (relates back to first actual improvement; priority rules)
- Solution Source, Inc v LPR Assoc Ltd Partnership, 252 Mich App 368 (2002) (remedial purposes; protective of lien claimants)