430 Mass. 663 | Mass. | 2000
The defendants, Dean and Stephanie Schwartz (Schwartzes), appeal from a ruling of the Appellate Division of the District Court affirming an order of a judge in the District Court denying their motion for judgment on the pleadings. The Appellate Division held that National Lumber Company (National Lumber) had perfected and could enforce its mechanic’s lien on the Schwartzes’ property in accordance with G. L. c. 254, the mechanic’s lien statute. We granted the Schwartzes’ application for direct appellate review. We affirm.
I
The material facts are not in dispute. In January, 1995, Le-Francois Construction Company (LeFrancois) purchased a lot in Northborough (property) with the intention of developing it for resale as a residential property. On September 21, 1995, National Lumber and LeFrancois entered into a contract for National Lumber to supply lumber and materials to LeFrancois for the construction of a house on the property. On October 25, 1995, National Lumber recorded a notice of the contract in the registry of deeds for Worcester County (registry), identifying LeFrancois as the owner of the property.
On February 5, 1996, National Lumber commenced this action “in accordance with G. L. c. 254, § 5,” to enforce its hen.
On December 3, 1996, after answering the amended complaint, the Schwartzes filed a motion for judgment on the pleadings asserting that, by operation of law, National Lumber’s mechanic’s hen had dissolved before they were added as parties. On March 2, 1997, a judge in the District Court denied their motion. On August 4, 1997, National Lumber and the Schwartzes filed an agreement for judgment in the District Court. The Schwartzes did so “solely” to permit the legal issues raised in their motion for judgment on the pleadings to be reviewed by an appellate court. Judgment entered on August 15, 1997. The Schwartzes then took an appeal in the Appellate Division, which affirmed the motion judge’s ruling. This appeal followed.
n
At issue in this case is the reliability of the recording system
A mechanic’s lien must be perfected and can be enforced only as provided by statute. See East Coast Steel Erectors, Inc. v. Ciolfi, 417 Mass. 602, 605 (1994) (lien is “solely a statutory creation” enforceable only “by strict compliance with the statutory specifications”). See also Blount Bros. v. Lafayette Place Assocs., 399 Mass. 632 (1987) (invalidating mechanic’s lien in which completion date in filed notice of contract was different from completion date in contract); Baltimore Contrs., Inc. v. Dupree, 352 Mass. 83, 86 (1967) (notice of contract stating “contract not yet completed due to Owner changes” insufficient to establish statutory lien).
The statutory section at issue, G. L. c. 254, § 11, requires that “a civil action to enforce [a mechanic’s lien be] commenced within sixty days of the filing of the statement [of account].”
General Laws c. 254 does not specify whether, in order to preserve a hen, a lienholder must name the owner of record as a defendant when it files a complaint to enforce its lien. Section 23 of the statute describes the circumstances in which a subsequent owner of the property may be sued. At the relevant time, § 23 provided in part: “If the person for whom the labor has been performed or furnished or the material has been furnished . . . conveys away his estate or interest before the commencement of a civil action to enforce a lien, it may be commenced and prosecuted against. . . the persons holding the estate or interest which he had in the land at the time when the labor or material was performed or furnished” (emphasis added). By its express terms, therefore, § 23 permits, but does not require, a lienholder to enforce a lien against any new owner of the property, if the property was conveyed prior to the commencement of an action pursuant to G. L. c. 254, § 11.
National Lumber argues that it would be inconsistent with the wording of the statute to require that a lienholder “must” name the record owner as a defendant at the time the § 11 action is commenced. The Schwartzes respond that the language is framed in permissive terms because the precursor to § 23, first enacted in 1836 (§ 27 of R.S. [1836], c. 117), was designed to address an uncertainty in the mechanic’s lien statute adopted in 1819, namely whether a lienholder could bring an enforcement action against the original owner’s successor in interest in any circumstances. The 1836 amendment to the original 1819 statute corrected that uncertainty, making clear that a change in title was no bar to enforcement of the lien against the new owner’s interest in the property. Because the statute is not explicit as to any time limitation on when a successor in title must be joined — the statute is simply silent on the question — we consider that section in the context of the over-all objective the Legislature sought to accomplish. See International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 851 (1983).
General Laws c. 254 sets out in careful detail the steps required to create, maintain, and enforce a mechanic’s lien on real estate, from the recording of a notice of contract in the registry of deeds, G. L. c. 254, § 2 (“general contractor”); G. L. c. 254, § 4 (“sub-contractor”), to the commencement of a civil action to enforce the lien, G. L. c. 254, § 11,
A new owner of the property, whose deed is recorded after the recording of the notice of contract, takes the property subject to the mechanic’s lien. Cf. Mister Donut of Am., Inc. v. Kemp, 368 Mass. 220, 224 (1975). The encumbrance survives a change in ownership of the property even if all of the statutory steps required to perfect a lien have not been completed because the time for doing so has not expired.
National Lumber recorded its notice of contract with LeFran-cois, specifying a completion date of December 1, 1995. Pursuant to G. L. c. 254, § 8, National Lumber had until December 31, 1995, to file its statement of account. On December 14, 1995, the Schwartzes took title to the property. They therefore had constructive notice of the lien on their property.
We have already noted that one important purpose of the mechanic’s lien statute was to provide an accurate system for recording and identifying encumbrances secured under the mechanic’s lien statute. Naming the then-current owner of record at the time an enforcement action is commenced is not necessary to achieve this purpose. The statute provides an efficient mechanism of ensuring that an enforcement action may readily be identified through routine title searching procedures. The hen statute mandates that an attested copy of any complaint
The statutory scheme also suggests that the record owner at the time the notice of contract is recorded may be a proper party in a subsequent enforcement action. The statute requires that the name of the property owner in the statement of account be the same as the name of the owner in the notice of contract, even if the property has been conveyed in the interim. G. L. c. 254, § 8. The reason is clear: “The statute . . . regard[s] it as important that the name of the [original] owner should be given in the [statement of account] . . . because, otherwise, subsequent purchasers who buy upon the faith of the registry title are hable to be misled.” William S. Howe Co. v. Theyson, 263 Mass. 27, 29 (1928), quoting McPhee v. Litchfield, 145 Mass. 565, 566 (1888). If the name of the owner as it appears on the notice of contract (LeFrancois) is included in the enforcement action, whether or not a subsequent owner is included, subsequent purchasers, such as the Schwartzes, who rely on the registry title will not be misled.
We recognize that an action to enforce a mechanic’s lien challenges the title of the record owner of the property. Although we are not required to resolve the issue here, the record owner at the time the hen is enforced, such as the Schwartzes, may qualify as a “necessary party” under Mass. R. Civ. R 19 (a), 365 Mass. 765 (1974). The timing of the naming of the record owner as a party appropriately would be governed by the rule of civil procedure; it is not mandated in G. L. c. 254.
We deal briefly with National Lumber’s argument that its
The Schwartzes point to jurisprudence in several other States to support their position that, even if not a statute of repose, National Lumber’s complaint adding them as parties must be dismissed. See, e.g., Mendenhall v. Douglas L. Cooper, Inc., 239 Va. 71, 75 (1990) (suit, time barred as to necessary party, must be dismissed because necessary party is not subject to trial court’s jurisdiction). Massachusetts practice is more liberal than other jurisdictions in allowing amendments adding or substituting defendants after expiration of a period of limitations. See Reporters’ Notes to Mass. R. Civ. P. 15, Mass. Ann. Laws, Rules of Civil Procedure at 426 (Lexis 1999), citing Wadsworth v. Boston Gas Co., 352 Mass. 86, 88 (1967) (“In general, the law in this Commonwealth with respect to amendments is more liberal than elsewhere, and cases from other jurisdictions are not in point”). In Massachusetts, “where an action has been commenced before the statute of limitations has run, a plaintiff may be allowed to substitute one defendant for another after the
Judgment affirmed.
LeFrancois owned the property as trustee for Mark Peter Realty Trust. Le-Francois, acting in its own capacity and not as trustee, contracted with National Lumber for the labor and materials. The notice of contract was filed by National Lumber under G. L. c. 254, § 4 (contracts between subcontractor and contractor).
Because the thirty-day statutory limit, December 31, 1995, fell on Sunday of a holiday weekend, National Lumber in fact had until January 2, 1996, to file its statement of account.
In 1996, the Legislature revised G. L. c. 254. See St. 1996, c. 364. The present case arose under and is governed by the provisions of c. 254 in effect before 1996.
Prior to 1996, G. L. c. 254, § 5, provided no specific time limit within which to record the complaint. The statute now requires that a copy of the complaint be filed within thirty days of commencement of the action. St. 1996, c. 364, § 7.
The amended complaint also alleged claims against LeFrancois for breach of contract and on account annexed. Those two counts are not at issue: Le-Francois never appeared in this action and on May 19, 1997, National Lumber voluntarily dismissed it. See Mass. R. Civ. P. 41 (a) (1) (i), 365 Mass. 803 (1974).
At the time, G. L. c. 254, § 11, required that an action he commenced within sixty days of the recording of the statement of account. Amended in 1996, the statute now requires that the action to enforce a mechanic’s lien be commenced within ninety days after the statement of account is recorded. St. 1996, c. 364, § 11.
See note 7, supra.
The Schwartzes also claim that National Lumber failed to serve LeFrancois within the time provided by Mass. R. Civ. R 19, 365 Mass. 765 (1974),
See note 7, supra.
See note 5, supra.
If perfected, the priority of a mechanic’s lien is determined as of the date of the recording of the notice of contract. See G. L. c. 254, § 7 (mortgagees are second priority to mechanic’s lienholders if the lender has not registered and recorded its mortgage and actually committed funds before the notice of contract is recorded); G. L. c. 254, § 13 (“rights of an attaching creditor shall not prevail as against a lien . . . where notice or notices of contract have been
The Schwartzes concede that “a reasonably diligent title examiner” would have identified the notice of contract and would have informed them of the encumbrance on the property. They complain that they did not learn of the enforcement action until more than six months after it was filed. But the issue, surely, is whether prospective purchasers, such as the Schwartzes, have notice of a valid encumbrance prior to purchase, for enforcement of a mechanic’s lien such as National Lumber’s divests the title of the fee owner.
As a matter of logic, this would also apply to the filing of a statement of account under § 8. Although § 8, unlike § 11, explicitly requires that the name of the owner on the notice of contract be the same as the name of the owner on the statement of account, were we to accept the Schwartzes’ argument, the new owner should also be included on the statement of account.
It is “solidly established” for a title examiner to run the grantor (LeFrancois) index forward for at least three years. See J.A. Stein, Mechanics of Title Examination in Massachusetts, Appendix A, Crocker’s Notes on Common Forms, § A7, at 850-851 (8th ed. 1995 & Supp. 1997).
From 1915 to 1973, an action to enforce a mechanic’s lien was commenced by filing a bill of equity in Superior Court. A principle of equity