*1 180 FISCHER-FLACK, v CHURCHFIELD INC 20, 1988, Lansing. De- at 108806. Submitted December Docket No. 16, 1989. cided October Churchfield, doing Fischer-Flack, Inc., D. with Robert contracted Wiring, supply for Currently electrical materials business as Lansing had with East Churchfield an electrical subcontract Inc., Development, Realty in turn had a contract which and Larsen, by complex apartment owned Max which was build being by City Bank and mortgage held on the same give purportedly Company, the statu- Trust N.A. Fischer-Flack owner, furnishing supplies tory the owner’s notice of 25, September designee general 1985. and the contractor on prop- supplies were furnished Fischer-Flack The first 3, 1986, supplies January erty last were furnished on and the 3, 1986, 25, September Fischer-Flack 1986. On December $35,144.11 for in a of lien the amount recorded claim for it had to Churchfield but it had furnished 1987, 1, paid. Fischer-Flack filed On December not been lien, naming complaint Ingham a to foreclose Circuit Court Churchfield, The owner and the bank as defendants. the owner designee and the owner’s claimed that the bank Sep- receiving general could not remember contractor 23, 1985, furnishing first notice that their tember September plaintiff a lien occurred on claim 19, 1986, general contractor of informed the when $14,514.92 owing same, which time there was a balance at and the bank moved The owner from the owner Churchfield. 1985, claiming September summary disposition, that the for Act because ineffective under notice was of the first materials was filed $14,514.92 only was still they were thus liable general re- owing on the date the to Churchfield court, G. Michael lien. The trial actual notice ceived plain- Harrison, J., judgment agreed favor and entered References 2d, Am Liens 8. §§ Jur Encumbrances; Liens and Annotations under See the Index to Liens. Mechanics’ against tiff and the owner and the bank the amount of $14,514.92. appealed. Plaintiff Appeals The Court of held: by plaintiff prior The notice of sent to the furnish- ing of the first materials was in substantial *2 with provisions of the Construction Lien Act in accordance legislative with the intent of that act. Since the notice satisfied requirement Act, plaintiff the notice of the Construction Lien unpaid was entitled to a lien in the amount of the balance owed to it. Reversed and remanded. Kelly, P.J., sup- Michael J. dissented. He would hold that plying furnishing prior of notice to the actual of supplies satisfy requirement the first does not the notice of the Construction Lien Act. He would affirm. — — — Furnishing Liens Construction Lien Act Notice Sub- Compliance. stantial furnishing given by A supplier notice a subcontractor or designee general prior of the owner and the furnishing of the first labor or materials is in substantial provisions of the Construction Lien Act legislative act; and in accord with the intent of that such perfection is sufficient to allow of a lien under the Construction (MCL570.1109[1]; 26.316[109][1]). Lien Act MSA Cook, Jurrens), Nash & Deibel M. Randall (by plaintiff. Stanley, Gray, Davidoff & P.C. L. Gray), W. (by for Max Larsen.
Before: Kelly, P.J., J. Michael and Gribbs and L.V. Washington,* JJ.
L.V. J. on Washington, appeal The issue whether a substantially construction claimant complies Act, 109 of the Lien § 26.316(101) MCL 570.1101 et et seq.; seq., where the claimant issues a notice to the date it on the first furnishes construction site.
* judge, sitting Appeals by assignment. Circuit on Court App 606 are uncontroverted. largely of this case
The facts (hereinafter Larsen In defendant Max early owner) on which purchased property certain real called major apartment complex of a Defendant developed. to be "On Pond” was mortgage held the City Company Bank & Trust Develop- Lansing Realty East property. contractor. Defendant ment, Inc., general was the Churchfield, Currently as doing D. business Robert plain- subcontractor Wiring, was electrical tiff, Fischer-Flack, Inc., of electri- supplier was cal materials Churchfield. plain Churchfield contacted
Sometime On supplies. tiff a source of electrical to secure 23, 1985, provided purportedly September mail furnishing” certified a "notice contractor, general designee, and the his Act, of the Construction pursuant § *3 26.316(109)(1). fur Plaintiff January on supplies property nished its first 3, 1986, Septem on supplies furnished its last on 25, recorded a claim lien ber 1986. Plaintiff sup 3, 1986, that it had alleged December but $101,109.50 property on the plied supplies leaving $65,965.39 in payments, had only received 1, $35,144.11. On December an unpaid balance the 1987, to complaint filed a foreclose plaintiff owner, the against the subcon $35,144.11. the the amount tractor bank (hereinafter defen- bank The owner and the dants) designee, his neither the claim that receiving recalled nor the contractor general plaintiff Septem- on furnishing by notice of mailed general 23, claim ber 1985. Defendants to plaintiff first learned that contractor conver- telephone in a a on the property claim lien time, 19, 1986. At September sation owing balance to the subcontractor from the owner $14,514.92. was
Defendants moved for summary disposition pur- 2.116(0(10), to suant MCR claiming plaintiff’s 1985, September, furnishing notice of did not com- ply Act, since the notice was issued to the date that were first by plaintiff furnished on the property. Defendants plaintiff’s asserted that claim of lien against $14,514.92, them was limited amount owed to the subcontractor gen- when the eral received actual claimed lien. The trial agreed and entered April an order on limiting defendant’s $14,514.92. liability It is from that that, order plaintiff appeals. preserve
To rights, its claim supplier who contracts with a contractor or a subcontractor provide material improvement used of real property provide must a "notice of furnishing.” 26.316(109)(1). MCL 570.1109(1); MSA Section 109 of the Construction Lien Act sets forth proce- states, dures to be followed and in pertinent part: supplier subcontractor or who contracts [A] provide improvement property to real shall provide a furnishing designee notice of contractor, general if any, as named notice of at commencement the address shown in commencement, the notice of either personally or mail, by days certified within 20 after the first labor or material .... If service of the mail, is made certified *4 complete upon mailing. Emphasis is service [Id. added.]
On appeal, plaintiff defendants assert did that with comply procedures not the above because before it provided the plaintiff App 606 180 Mich property, on the first materials furnished materials. it furnished the than after rather of the notice its issuance Plaintiff contends appropri- September, of compliance with substantial ate constitutes parties therefore Lien Act and is the Construction in the amount payment to receive entitled $14,514.92 as limited $35,144.11, rather than agree. court.1 the trial We 302(1) Act, Section 26.316(302)0), expressly provides: statute, to and be remedial This act is declared liberally secure beneficial construed
shall be
results, intents,
purposes
this act. Substan-
compliance
provisions of this act
tial
validity of the construc-
for the
be sufficient
shall
tion liens
act,
give
for in this
provided
enforce them.
jurisdiction
we note that
construing
provision,
this
In
concisely
were
statutory
rules
Co, 171
v Clinton
Twp
Charter
in Bath
stated
(1988):
395, 397-398; NW2d
Mich
construction is
statutory
rule of
primary
The
legislative intent.
give effect to the
discover and
Paving
Ledge Mobile
v Grand
Spartan Asphalt
Home
Co
184, 187;
Park,
Mich
NW2d
(1977). Legislative
(1977),
intent
It long recognized has been laws, lien also known as laws, mechanic’s lien a dual purpose: protect serve the lien claimants’ right wages for or payment materials and to protect owners from paying twice for such services. purpose This dual was embodied by Legisla- ture in object clause the Construction Lien Act: establish, An protect act to and enforce rights persons performing the material or providing labor or equipment improvement for the of real
property; provide for certain defenses thereto .... legislative The intent is further revealed in the legislative analysis which prepared was adoption the act: App op Opinion the Court identify all be owners must able Lenders and funds disbursed before are
potential lien claimants protect from lien they themselves can so matter, practical ... As a [construc- claims. to ensure that subcontrac- system exists tion lien] tors, paid their labor suppliers and laborers are *6 Analysis, HB Legislative or materials. 4053, [Senate 9, December pp 1980.] Superior Bernadino Co Brown Co v San In 891, 897; Court, Dep’t, Cal 3d Appellate (1983), appellate a California Rptr 258 196 Cal in to the one similar a statute interpreted It present case. stated: the question preliminary notice "shall that prescribing In days the claimant given later than after be has first not labor, service, equipment, or furnished (c) . .” job-site, . subdivision materials section serving specify an initial date 3097 does not specify does it a preliminary notice nor may given; it not be which notice date before time after provides or cut-off merely a deadline may not be served notice preliminary a which performed theretofore or respect to services with labor, service, theretofore equipment or materials that a Legislature Had the furnished. had been contracted given after materials notice for would not they had been delivered before but prescribed effective, undoubtedly have it would be validly could not be notice time before which a requiring notice to the purpose of given. The possible need for the owner to is to alert owner herself; and the earlier or protecting himself likely statutory is the it given the more notice is will be effectuated. purpose Michigan cases have found addition, several In effective of lien are still or claims that statements See due. money to the time if filed Wilkinson, 661; 266 Mich Co v Saginaw Lumber Gibbons, v (1934); Knowlton 210 Mich 254 NW 547; v Ashland Brown- (1920); Smalley NW Co, Stone 104; Thus, NW 29 clear premature notice a claim of lien in construction has not fatal in the past, cases been premature notices have enforced by been Michigan Court. Supreme
As is the case the California statute re- above, ferred
26.316(109)(1) does not before specify date given. not may accept be We believe defendants’ position should not be protections afforded the of the Construction Lien Act plaintiff gave because too much notice would contravene the intent of the Legislature is an unduly restrictive statute. The case, although this seem- nature, ingly premature is in accord with the statutory purpose notifying gen- eral potential and the lender *7 Moreover, plaintiff’s claimants. providing of notice before the supplied actual materials were is consis- tent with the statutory purpose facilitating of right to claim work or for materials furnished. See Co, Brown supra.
We hold that substantially complied 109(1) with of the Lien Act and was § therefore entitled to a in the amount of $35,144.11 against the subject property.2 We re- verse the grant summary trial court’s disposi- tion Max favor of Larsen and Bank City & Trust and remand this matter Company trial court of an entry appropriate order consis- tent with this holding. Court’s proceedings
Reversed and remanded for further opinion. consistent this do not with We retain jurisdiction. 1, supra. See n App Mich J. P.J. Kelly, Dissent Michael
Gribbs, J., concurred. (dissenting). I see don’t J. P.J. Kelly,
Michael ambiguous provision about anything 26.326(109)(1) quoted which was pro opinion in the emphasis majority with given "... shall be within vides or furnishing first labor after days given .” a notice majority says material . . . The before furnishing days one hundred is statute. That substantial construction,” complete depar it is a not "liberal ture from the statute. in which disburse-
We do not know the context
in this endeavor.
financing
ments from
were made
title
escrow accounts are established
Often
banks,
insurance
mortgage companies,
companies,
heavily
companies
rely
or other
fiduciaries which
re-
If
examiner
recording
mechanisms.
of en-
to assume freedom
corded documents were
dates
statutory
to his reliance on
cumbrance due
title,
would
majority’s
for insurance of
decision
no
This
and needs
problems.
statute
clear
pose
Ruberg,
Smith
v
interpretation.
judicial
Auto,
(1988).
Inc v
Action
13;