Crafton, Tull, Sparks & Associates, Inc. v. Ruskin Heights, LLC
2015 Ark. 1
| Ark. | 2015Background
- Ruskin Heights obtained an $8.6M construction loan from Metropolitan and executed a mortgage on September 17, 2007; construction began October 1, 2007 (morning) and Metropolitan recorded its mortgage that afternoon.
- Nabholz began construction; CTSA later provided engineering/architectural services to Ruskin Heights.
- CTSA recorded an engineer’s lien on September 25, 2009, claiming $37,239.45; Ruskin Heights received notice on September 28, 2009.
- Metropolitan filed a foreclosure on August 3, 2009; CTSA sued November 2, 2009 asserting an engineer’s lien and sought priority over Metropolitan’s mortgage.
- The circuit court ruled CTSA’s engineer’s lien attached only upon recordation (Sept. 25, 2009) and did not relate back to project commencement; thus Metropolitan’s earlier-recorded mortgage (Oct. 1, 2007) had priority.
- CTSA appealed; after procedural iterations, the Arkansas Supreme Court affirmed, holding the engineer’s lien is governed by Ark. Code §18-44-105 and does not receive the relate-back priority afforded to mechanics’/materialmen’s liens under §18-44-110.
Issues
| Issue | Plaintiff's Argument (CTSA) | Defendant's Argument (Metropolitan) | Held |
|---|---|---|---|
| Whether CTSA’s engineer’s lien relates back to construction commencement so as to have priority over Metropolitan’s mortgage recorded later the same day construction began | CTSA: §18-44-110’s relate-back/priority language applies to engineer’s liens, so CTSA’s lien should date to construction commencement (Oct. 1, 2007) | Metropolitan: §18-44-105 requires engineer’s liens to attach only upon filing; §18-44-110’s relate-back applies to labor/materialmen only, not engineers | Held for Metropolitan: engineer’s liens attach only when duly filed; §18-44-110’s relate-back does not apply to §18-44-105 engineer’s liens, so Metropolitan’s mortgage (filed Oct. 1, 2007) has priority over CTSA’s lien (filed Sept. 25, 2009) |
Key Cases Cited
- Mahaffey & Assocs. v. Brophy, 249 Ark. 884, 462 S.W.2d 226 (1971) (distinguishes engineer’s services from materialmen’s liens; engineer not covered by materialman statute)
- BB & B Constr. Co., Inc. v. F.D.I.C., 316 Ark. 663, 875 S.W.2d 48 (1994) (lien statutes are in derogation of common law and must be strictly construed)
- Lambert v. Newman, 245 Ark. 125, 431 S.W.2d 480 (1968) (supports strict construction principle for lien statutes)
- Dix v. Olds, 242 Ark. 850, 415 S.W.2d 567 (1967) (same)
- Ark. Dep’t of Econ. Dev. v. William J. Clinton Presidential Found., 364 Ark. 40, 216 S.W.3d 119 (2005) (when statute is clear, court will give plain meaning and not seek extrinsic legislative intent)
- Weiss v. Geisbauer, 363 Ark. 508, 215 S.W.3d 628 (2005) (same principle)
- Cave City Nursing Home, Inc. v. Ark. Dep’t of Human Servs., 351 Ark. 13, 89 S.W.3d 884 (2002) (same principle)