Ferguson Fire & Fabrication, Inc. v. Preferred Fire Protection, L.L.C.Ferguson Fire & Fabrication, Inc. v. Preferred Fire Protection, L.L.C.
count(s) of respondent, shall serve as an injunction to prevent respondent from making withdrawals from the account(s) and shall further serve as notice to the bank or other financial institution that the Receiver, Peyre Thomas Lumpkin, Esquire, has been duly appointed by this Court.
Finally, this Order, when served on any office of the United States Postal Service, shall serve as notice that the Receiver, Peyre Thomas Lumpkin, Esquire, has been duly appointed by this Court and has the authority to receive respondent‘s mail and the authority to direct that respondent‘s mail be delivered to Mr. Lumpkin‘s office. Mr. Lumpkin‘s appointment shall be for a period of no longer than nine months unless an extension of the period of appointment is requested.
/s/Jean H. Toal, C.J.
FOR THE COURT
Ronald G. Tate, Jr., and Zachary Lee Weaver, both of Gallivan, White & Boyd, P.A., of Greenville, for Respondent.
ORDER
The Petition for Rehearing in the above matter is denied. However, the opinion is refiled to eliminate a sentence from the factual recitation that does not affect the result.
/s/COSTA M. PLEICONES A.C.J.
/s/DONALD W. BEATTY, J.
/s/JOHN W. KITTREDGE, J.
FOR THE COURT.
Acting Justice D. CRAIG BROWN and Acting Justice DOROTHY MOBLEY JONES, not participating.
Justice BEATTY.
This Court granted a petition for a writ of certiorari to review the decision in Ferguson Fire & Fabrication, Inc. v. Preferred Fire Protection, L.L.C., 397 S.C. 379, 725 S.E.2d 495 (Ct.App.2012), in which a supplier of materials (“Ferguson Fire“) brought an action for foreclosure of a mechanic‘s lien against the owner of a data center (“Immedion“) and its contractor (“Preferred Fire“). Ferguson Fire contends, and we agree, that the Court of Appeals erred in adding requirements to
I. FACTS
This case arises out of Ferguson Fire‘s efforts to obtain payment for materials it supplied to Preferred Fire for Immedion‘s data center. An outline of the events leading to Ferguson
Contracts for Improvements to Immedion‘s Data Center
In 2007, Immedion, a telecommunications company, hired Rescom, L.L.C. to be the general contractor for improvements planned for its data center on property Immedion leased in Greenville. This contract excluded the performance of part of the fire protection work that was needed. Rescom, in turn, hired Preferred Fire, a fire sprinkler company, as a subcontractor.
In addition, Immedion directly hired Preferred Fire under a separate contract for $30,973.00 to install a special “pre-action” fire suppression system1 in its data center. To complete this work, Preferred Fire purchased materials from Ferguson Fire. Ferguson Fire began delivering materials to Preferred Fire on August 24, 2007, and the deliveries continued through October 16, 2007.
Notice of Furnishing Labor and/or Materials
On September 21, 2007, while its deliveries were in progress, Ferguson Fire sent a “Notice of Furnishing Labor and Materials” (“Notice of Furnishing“) to Immedion advising it in relevant part that it had been employed by Preferred Fire to deliver labor, services, or materials with an estimated value of $15,000.00 to Immedion‘s premises. The Notice of Furnishing advised that it was being given as “a routine procedure to comply with certain state requirements that may exist,” and that it was not a lien, nor any reflection on Preferred Fire‘s credit standing.
Immedion paid Preferred Fire $15,486.50 of the $30,973.00 contract price for installation of the system before receiving Ferguson Fire‘s Notice of Furnishing on September 21, 2007. After receiving the Notice of Furnishing, Immedion issued two additional checks to Preferred Fire totaling $15,486.50 for the unpaid balance of the contract price.
Notice or Certificate of Lien
On January 8, 2008, Ferguson Fire served upon Immedion, Preferred Fire, and others (and later filed) a “Statement and Notice of Mechanic‘s Lien,” which gave notice of the existence of a lien and included a Statement of Account. Ferguson Fire indicated it had supplied $15,548.93 in materials to Preferred Fire for Immedion‘s premises from August 24, 2007 through October 16, 2007 pursuant to an agreement with Preferred Fire that was entered into “with the knowledge and consent and permission and authorization of Immedion.” Ferguson Fire stated $15,548.93 was still owing and due, and it asserted a mechanic‘s lien upon the described premises.
Complaint for Foreclosure of Lien & Summary Judgment Motions
On April 11, 2008, Ferguson Fire filed a complaint and a lis pendens against Preferred Fire, Fair Forest of Greenville, L.L.C., Thomas F. Wong, and Immedion seeking foreclosure of a mechanic‘s lien as to all defendants, as well as attorney‘s fees, costs, and interest.2
Immedion answered3 and thereafter moved for summary judgment, maintaining (1) there was no evidence Ferguson Fire had furnished any materials for the benefit of property owned by Immedion, as it was a mere leaseholder; (2) there was no contractual relationship giving rise to liability between
Ferguson Fire filed a cross-motion for summary judgment, arguing (1) under
Ferguson Fire asserted since it gave Immedion notice on September 21, 2007 that it was furnishing materials for its premises, under South Carolina‘s mechanic‘s lien statutes, it was entitled to a lien up to the amount Immedion paid to its contractor, Preferred Fire, after that date, plus attorney‘s fees and interest.4 Ferguson Fire noted that the value of the materials it supplied to Preferred Fire was actually greater than the amount of its lien, but acknowledged that under the statutory provisions its lien was limited to the unpaid balance of the contract between Immedion and Preferred Fire as of the date of its Notice of Furnishing.
Decisions of Circuit Court & Court of Appeals
The circuit court granted summary judgment to Immedion and extinguished the mechanic‘s lien filed by Ferguson Fire. The court stated, “The issue is whether the Notice of Furnishing was sufficient to notify the owner [Immedion] of the lien given by
II. STANDARD OF REVIEW
“An appellate court reviews the granting of summary judgment under the same standard applied by the trial court pursuant to
III. LAW/ANALYSIS
On certiorari, Ferguson Fire contends the Court of Appeals erred in adding requirements for the timing and form of a Notice of Furnishing under
In South Carolina, mechanics’ liens are purely statutory and may be acquired and enforced only in accordance with the terms and conditions set forth in the statutes creating them. Multiplex Bldg. Corp. v. Lyles, 268 S.C. 577, 235 S.E.2d 133 (1977); accord Skiba v. Gessner, 374 S.C. 208, 212, 648 S.E.2d 605, 606 (2007) (stating “one‘s right to a mechanic‘s lien is wholly dependent upon the language of the statute creating it“); Butler Contracting, Inc. v. Court St., L.L.C., 369 S.C. 121, 130, 631 S.E.2d 252, 257 (2006) (observing mechanics’ lien statutes “must be strictly followed“). The statutory process encompasses several steps, including the (1) creation, (2) perfection, and (3) enforcement of the lien. See generally
(1) Creation of Lien
As a general rule, mechanics’ liens arise when a contractor, subcontractor, or other person improves real property by furnishing labor and/or materials for a building or structure. 22 S.C. Jur. Mechanics’ Liens § 2 (1994). “Because the improvements usually attach to and become an inseparable part of the structure, the lien statutes give the persons responsible for the improvements a security interest, or a lien on the improvement to the value of the amount due them.” Id. § 3 (footnote omitted).
The primary lien statutes are found in sections
In this case, Ferguson Fire did not contract directly with the leaseholder of the premises, Immedion; rather, it was a supplier of materials to Immedion‘s contractor, Preferred Fire. This implicates section
“The lien arises, inchoate, when the labor is performed or the materials are furnished.” Shelley Constr. Co. v. Sea Garden Homes, Inc., 287 S.C. 24, 26, 336 S.E.2d 488, 489 (Ct.App.1985). In other words, “when the labor is performed or material is furnished, the right exists but the lien has not been perfected.” Butler Contracting, 369 S.C. at 128, 631 S.E.2d at 256 (emphasis added).
Moreover, if the person furnishing the labor or materials was employed by someone other than the owner (such as a contractor), for the lien to attach the person must meet the additional requirement of giving written notice to the owner of the furnishing of the labor or material. Id. (citing
Section
Whenever work is done or material is furnished for the improvement of real estate upon the employment of a contractor or some other person than the owner and such laborer, mechanic, contractor or materialman shall in writing notify the owner of the furnishing of such labor or material and the amount or value thereof, the lien given by
§ 29-5-20 shall attach upon the real estate improved as against the true owner for the amount of the work done or material furnished. But in no event shall the aggregate amount of liens set up hereby exceed the amount due by the owner on the contract price of the improvement made.
For an inchoate lien to become valid, the lien must be perfected and enforced in compliance with South Carolina‘s mechanic‘s lien statutes. Preferred Sav. & Loan Ass‘n v. Royal Garden Resort, Inc., 301 S.C. 1, 389 S.E.2d 853 (1990). To perfect and enforce a lien, one must timely complete the following three steps found in sections
(a) Notice or Certificate of Lien. Section
(b) Commencement of Lawsuit to Enforce the Lien. Pursuant to section
(c) Notice of Lis Pendens. Section
“If these steps are taken, the person claiming the lien may foreclose against the property to satisfy the debt.” Butler Contracting, 369 S.C. at 129, 631 S.E.2d at 256. “On
The importance of strictly adhering to the statutory requirements is that, once a party claiming a lien gives the proper notice, he is entitled to be paid in preference to the contractor who procured the labor or materials, and the owner‘s payment to the contractor after receiving the proper notice shall not diminish the amount recoverable by the party asserting a lien.
B. Application of Statutory Scheme to Ferguson Fire
The current dispute centers on the Court of Appeals‘s determination that Ferguson Fire never acquired a lien because it gave a Notice of Furnishing to Immedion prior to delivering all of the materials to the worksite and without including a demand for payment of a specific amount. The court‘s holding turns on its interpretation of section
If a statute is ambiguous, the courts must construe its terms. Sparks v. Palmetto Hardwood, Inc., 406 S.C. 124, 750 S.E.2d 61 (2013). “A statute as a whole must receive practical, reasonable, and fair interpretation consonant with the purpose, design, and policy of lawmakers.” Id. at 128, 750 S.E.2d at 63 (citation omitted). However, “[w]here the statute‘s language is plain and unambiguous, and conveys a clear and definite meaning, the rules of statutory interpretation are not needed and the court has no right to impose another meaning.” Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000).
“What a legislature says in the text of a statute is considered the best evidence of the legislative intent or will. Therefore, the courts are bound to give effect to the expressed intent of the legislature.” Id. (quoting Norman J. Singer, Sutherland Statutory Construction § 46.03, at 94 (5th ed.1992)). “We are not at liberty, under the guise of construction, to alter the plain language of [a] statute by adding words which the Legislature saw fit not to include.” Shelley Constr. Co., 287 S.C. at 28, 336 S.E.2d at 491. “Our duty is to apply the statute according to its own terms.” Id. at 29, 336 S.E.2d at 491.
Upon reviewing the plain terms of section
Application of the mechanic‘s lien statutes outlined above indicates Ferguson Fire followed the proper timing and sequence of events for (1) creation, (2) perfection, and (3) enforcement of a mechanic‘s lien. An inchoate lien normally arises upon the furnishing of the labor and materials under section
In this case, Ferguson Fire gave Immedion written notice on September 21, 2007 that it was supplying materials to Preferred Fire for its premises with an estimated value of $15,000.00. This is all of the information specifically required by the General Assembly in section
Once all of the materials had been furnished and Preferred Fire failed to pay the amount due, Ferguson Fire then proceeded
The Court of Appeals acknowledged that section
In Lowndes Hill Realty Co. v. Greenville Concrete Co., 229 S.C. 619, 629, 93 S.E.2d 855, 860 (1956), this Court expressly stated that the Notice of Furnishing statute specifies no time when the notice should be given to the owner, and it could be “given at any time“:
Section 45-254 [now
29-5-40 ] specifies no time at which or within which notice of the furnishing of material is to be given to the owner. Such notice may be given at any time. Cf. Hughes v. Peel, 221 S.C. 307, 70 S.E.2d 353 [(1952)]; but of course it will be ineffectual if the other requisites to the perfection and enforcement of the lien, Sections 45-259 and 45-262 [now sections29-5-90 and29-5-120 ], are not met. Delay in giving the notice cannot operate to the detriment of the owner, because his liability under the lien is limited to the balance due by him to the prime contractor at the time he receives the notice.
(Emphasis added.) In Wood v. Hardy, 235 S.C. 131, 137-38, 110 S.E.2d 157, 160 (1959), this Court quoted Lowndes extensively and reiterated that the General Assembly has set forth
The Court of Appeals also recognized the impact of the timing of a Notice of Furnishing upon the potential lien amount in Stovall Building Supplies:
S.C.Code Ann. § 29-5-40 (1976) provides, in pertinent part, that a mechanic‘s lien will not attach to the owner‘s property unless the owner is given notice of the claim of a materialman who contracted with a person other than the owner prior to the payment in full of the amount owed the contractor. In addition, the materialman‘s lien is limited to the amount the owner owes the contractor at the time the materialman gives notice.
Stovall Bldg. Supplies, Inc. v. Mottet, 305 S.C. 28, 32, 406 S.E.2d 176, 178 (Ct.App.1990) (footnote omitted). More recently, in Butler Contracting, this Court again explicitly noted, “Section
Ferguson Fire obviously gave its Notice of Furnishing to Immedion. Once it received the proper notice, Immedion made any additional payments at its own peril. See generally Lowndes Hill Realty Co., 229 S.C. at 629, 93 S.E.2d at 860 (citing the prior codifications of sections
The Court of Appeals has created additional requirements not provided by the General Assembly in section
IV. CONCLUSION
We conclude Ferguson Fire followed the statutory procedures to establish a mechanic‘s lien upon which a foreclosure action could be maintained, so summary judgment was improperly awarded to Immedion. We reverse and remand for further proceedings.5
REVERSED AND REMANDED.
KITTREDGE, J. and Acting Justices D. CRAIG BROWN and DOROTHY M. JONES, concur.
PLEICONES, Acting Chief Justice, concurring in result only.