Lead Opinion
Defendant Michigan Department of Commerce appeals as of right the trial court’s denial of defendant’s motion for summary disposition and entry of judgment of $21,280 in favor of plaintiff Central Ceiling & Partition, Inc. (Central), $4,054 in favor of defendant Kitchen Suppliers, Inc. (ksi), and $6,915 in favor of intervening plaintiff Cappy Heating and Air Conditioning, Inc. (Cappy) with respect to their claims against the Homeowner Construction Lien Recovery Fund. We affirm.
i
The facts in this case were stiрulated before the trial court. Defendant general contractor Primeau Homes, Inc., failed to pay its subcontractors,
Defendant sought summary disposition of the subcontractors’ lien fund claims under MCR 2.116(C)(10) on the ground that the liens were not recorded within the ninety-day period as required by the Construction Liеn Act, MCL 570.1111(1). The trial court denied defendant’s motion and instead granted judgment in favor of the subcontractors, concluding that there was substantial compliance with the act’s requirements and the subcontractors were entitled to recovery from the lien fund. The court reasoned that the subcontractors presented their liens for recording within the required ninety-day period and obtained date stamps on the filings, any delay by Wayne County staff in entering the filings in the rеcord books was beyond the subcontractors’ control, and, thus, there was compliance with the ninety-day requirement.
n
This Court reviews de novo as a question of law a trial court’s grant of a motion for summary disposition. Ardt v Titan Ins Co,
To recover under the Construction Lien Act, a claimant must record the lien within ninety days of the last date of furnishing material or labor:
Notwithstanding section 109 [MCL 570.1109], the right of a contractor, subcontractor, laborer, or supplier to a construction lien created by this act shall cease to exist unless, within 90 days after the lien claimant’s last furnishing of labor or material for the improvement, pursuant to the lien claimant’s contract, a claim of lien is recorded in the office of the register of deeds for each county where the real property to which the improvement was made is located. A claim of lien shall be valid only as to the real property described in the claim of lien and located within the county where the claim of lien has been recorded. [MCL 570.1111(1).]
Defendant contends that the lien claims filed by Central, KSI, and Cappy were not timely because even though they were filed by the subcontractors and accepted by the Wayne County Register of Deeds office within the ninety-day period, the register of deeds office did not formally record the liens until after the ninety-day period had passed. We disagree.
The Construction Lien Act contains a substantial compliance provision, MCL 570.1302(1):
This act is declared to be a remedial statute, and shall be liberally construed to secure the beneficial results, intents, and purposes of this act. Substantial compliance with the provisions of this act shall be sufficient for the validity of the construction liens provided for in this act, and to give jurisdiction to the court to enforce them.
The substantial compliance provision does not necessarily apply to all requirements of the act. Northern
the overall purpose of the statute; potential for prejudice or unfairness when the apparent clarity of a statutory provision is replaced by the uncertainly of a “substantial compliance” clause; the interests of future litigants and the public; the extent to which a court can reasonably determine what constitutes “substantial complianсe” within a particular context; and, of course, the specific language of the “substantial compliance” and other provisions of the statute. [Id. at 321-322.]
In applying these factors, the Court in Northern Concrete Pipe observed that provisions outlining the requirements for filing certain information with public officials or those providing for notice are the types of provisions to which a substantial compliance provision may suitably be applied. Id. at 323. We agree, and so conclude, on the facts before us.
Pursuant to the Construction Lien Act’s substantial compliancе provision, MCL 570.1302(1), the subcontractors’ actions of properly filing the lien claims with the register of deeds, and acceptance by the register of deeds office, constitutes substantial compliance with the act’s requirement that a claim of lien be recorded within ninety days. Accordingly, the subcontractors’ rights were not subject to the automatic extinguishment provision of § 111 and did not cease to exist.
Of the six hens at issue, ah were timely filed and accepted. Central’s hens were subject to a last date of furnishing of October 3, 1997, and were filed with the
Unfortunately, the claims of lien were not formally recorded within the register of deeds office for more than thirty days after they were filed and accepted. Central’s claims of lien were filed and accepted on December 17, 1997, but not formally recorded until February 2, 1998. Ksi’s claim of lien was filed and accepted on August 27, 1997, but not formally recorded until September 30, 1997. Cappy’s claims of hen were filed and accepted on December 5, 1997, but not formally recorded until January 23, 1998. Attributing the delays within the register of deeds office to the subcontractors, as suggested by defendant, would lead to absurd and unfair results. No lien claimant would ever know the number of days that would be “deducted” from the statutorily prescribed ninety-day period because the lag time between the filing and acceptance and the formal recording would vary case by case. One lien claimant might be subject to a thirty-day period, while another might be subject to a sixty-day period, and yet another to an eighty-ninety-day period, merely because of variances in formal recording times within the registers of deeds offices. We cannot sanction this result, which wholly negates the Legislature’s concept of a ninety-day period expressed in the statute and has great potential for prejudice or unfairness. Northern Concrete Pipe, supra at 321-322.
We hold that filing within the ninety-day statutory period, and acceptance of a lien claim by the register of deeds, substantially complies with the act’s requirement of recording the lien claim. Our holding leaves no uncertainty that the filing and acceptance must occur within the ninety-day period; it can reasonably be determined whether the requirement has been met in a particular context. Id. at 322, see also id. at 318 (a lien may be imprоperly filed and thus not accepted, in which case the requirement may not be met).
The dissent’s analysis would be well taken if the standard under the Construction Lien Act was one of strict compliance, but it is not. The Legislature expressly adopted a standard of substantial compliance to secure the beneficial results of the act: “[substantial compliance . . . shall be sufficient for the validity of the construction liens . . . .” MCL 570.1302(1).
Application of the substantial compliance provision in this circumstance comports with the Construction Lien Act’s purpose of “protecting the rights of hen claimants to payment for wages and materials.”
Affirmed.
Notes
For ease of reference, we refer to Central, ksi, and Cappy as “subcontractors,” disregarding аny technical distinction between material suppliers and service contractors.
Further, application of the substantial compliance provision does not work against the purpose of protecting homeowners from paying twice for services, Old. Kent Bank of Kalamazoo v Whitaker Constr Co,
Dissenting Opinion
(dissenting). I respectfully dissent. In Northern Concrete Pipe, Inc v Sinacola Cos—Midwest, Inc,
I
To recover under the Construction Lien Act, a claimant must record the lien within ninety days of the last date of furnishing material or labor:
Notwithstanding section 109 [MCL 570.1109], the right of a contractor, subcontractor, laborer, or supplier to a construction lien created by this act shall cease to exist unless, within 90 days after the lien claimant’s last furnishing of labor or material for the improvement, pursuant to the lien claimant’s contract, a claim of lien is recorded in the office of the register of deeds for each county where the real property to which the improvement was made is located. A claim of lien shall be valid only as to the real property described in the claim of lien and located within the county where the claim of lien has been recorded. [MCL 570.1111(1) (emphasis added).]
To resolve the dispute in this case, we must determine what constitutes “recording” a claim of lien in the office of the register of deeds. This determination is a matter of statutory interpretation, a question of law that we review de novo. Etefia v Credit Technologies, Inc,
In considering a question of statutory construction, this Court begins by examining the language of the statute. We*449 read the statutory language in context to determine whether ambiguity exists. If the language is unambiguous, judicial construction is precluded. We enforce an unambiguous statute as written. Where ambiguity exists, however, this Court seeks to effectuate the Legislature’s intent through a reasonable construction, considering the purpose of the statute and the object sought to be accomplished. [Citations omitted.]
Unless defined in the statute, every word or phrase of a statute should be accorded its plain and ordinary meaning, taking into account the context in which the words are used, Phillips v Jordan,
The majority concludes that the filing of a lien within ninety days and the acceptance of the lien filing by the register of deeds substantially complies with the act’s requirement to record the lien claim. Because this conclusion is contrary to the plain mеaning of the term “recorded” as used in the act, I disagree.
First, while the term “recorded” is not defined in the Construction Lien Act, there is ample evidence in the act as well as other statutes with regard to its intended meaning. MCL 565.25, relating to entry books, the effect of entry by the register of deeds,
(1) ... In the entry book of levies the register shall enter all. . . liens [and] other instruments of encumbrances, and documentation required under subsection (2), noting in the books, the day, hour, and minute of receipt, and other particulars, in the appropriate columns in the order in which the instruments are respectively received.
(4) The instrument shall be considered as recorded at the time so noted and shall be notice to all persons except the recorded landowner subject to subsection (2) of the liens, rights and interests acquired by or involved in the proceedings. [Emphasis added.]
MCL 600.2567 provides in relevant part:
(1) A register of deeds is entitled to the following fees ...
(a) For entering and recording a deed ... or other instrument, $5.00 for the first page and $2.00 for each additional and succeeding page. . .. The fee shall be paid when the .. . instrument is left for record. . . .
(2) In addition to any other fees proscribed in subsection (1) or (5) , a register of deeds shall collect a fee of $2.00 for entering and recording a deed ... or othеr instrument. The fee shall be paid when the instrument is left for record. [Emphasis added.]
In MCL 570.1109, which describes notices of furnishing under the act, a sample form is provided:
(4) The notice of furnishing, if not given on the form attached to the notice of commencement, shall be in substantially the following form:
*451 NOTICE OF FURNISHING
To:
(name of designee (or owner or lessee) from notice of commencement)
(address from notice of commencement)
Please take notice that the undersigned is furnishing to
(name and address of other contracting party) certain labor or material for
(describe type of work)
in connection with the improvement tо the real property described in the notice of comméncement recorded in liber_, on page_,_records,____
(name of county)
[Emphasis added.]
It is apparent from these statutes that the recording of a lien does not take place until an entry has been made in the book of levies, with the assignment of a liber and page number noting the date, hour, and minute the lien is entered. As both MCL 565.25 and MCL 600.2567 make clear, the leaving of the instrument for record, i.e., filing, does not constitute the recording of the document. See People v Madigan,
Precedent from our Supreme Court also recognizes that entry in liber must occur to record a document. In Balen v Mercier,
Further support for the conclusion that filing does not constitute recording is found in the precedent of several states. In State v Noren,
In Markham v Markham,
The majority rejects application of the plain meaning of the term “recorded,” under the circumstances of this case, as inconsistent with both the intent of the Legislature and the holding of Northern Concrete Pipe, supra. I disagree with this conclusion because the Supreme Court’s holding in Northern Concrete Pipe, supra, adopts the strict compliance rule.
It is a cardinal rule of statutory construction that a clear and unambiguous statute warrants no further interpretation and requires full compliance with its provisions, as written. Within the Construction Lien Act, however, the Legislature provided an exception to that rule, in the form of the “substantial compliance” provision. As an. exception, this provision should not be interpreted to nullify altogether the general rule that statutes should be interpreted consistent with their plain and unambiguous meaning. [Id. at 320-321 (citations omitted).]
[t]he case before us is a clear instance in which the Legislature could not have imposed a more precise requirement. MCL 570.1111(1); MSA 26.316(111)(1) states without qualification that a subcontractor’s right to a lien ceases to exist if not recorded in the county office of the register of deeds within ninety days after the last furnishing of labor or material. [Id. at 323-324 (emphasis added).]
hi my view, interpreting the term “recorded” to mean entry in the book of levies not only is consistent with the plain meaning of the statute but is consistent with the Legislature’s intent to require strict compliance with this particular notice provision of the act. On the other hand, property owners and subsequent purchasers who check the book of levies after ninety days and find no recordation of a claim of lien will lack notice of a claim merely “filed,” and thus will lack certainty of title under the result reached by the mаjority. As pointed out by the Supreme Court, “certainty of title could only be achieved [under these circumstances] by researching the complete history of improvements with respect to a particular parcel of property and painstakingly obtaining waivers of lien from each contractor, subcontractor, materials supplier, and laborer.” Id. at 322.
The majority also concludes that attributing delays in recording by the register of dеeds to hen claimants would lead to absurd and unfair results not contem
Where a lien claimant files the claim before the ninety-day recording deadline (as Central, ksi, and Cappy did in this case), the hen claimant is not without remedies to ensure timely recording. The claimant, which unlike all others knows the claim has been filеd, can examine the book of levies before the ninety-day deadline expires to determine whether recording has occurred. Where the deadline is near expiration and the hen has yet to be recorded, the lien claimant can request immediate action from the register or seek extraordinary remedies in the circuit court. In any case, the difficulties attendant in determining whether the register is timely performing the duties of the office are not justification for this Court to redefine the commonplace and unambiguous statutory term “recorded.” Mclntire, supra at 156, n 3. The policy choice with regard to whether notice under these circumstances should be provided by recording or filing is best left to the Legislature.