Spartan Asphalt Paving Co. v. Grand Ledge Mobile Home Park
247 N.W.2d 589
Mich. Ct. App.
1976
Check Treatment

*1 1976] Hm Pk v GRAND LEDGE PAVING COMPANY SPARTAN ASPHALT PARK HOME MOBILE op the Court Service— 1. Mechanics’ Liens —Service on Owner —Substituted by Posting Register of Deeds —Statutes. Service — attempt personal person claiming A lien must a mechanics’ days copy of a statement of account of the service for ten of a him, he has recorded the statement of ac- amount due after deeds, register he of before resort count with the by posting copy of the statement substituted service (MCLA 570.6; premises of the owner MSA account on 26.286). by Posting— 2. Mechanics’ Liens —Service on Owner —Service Compliance. Substantial person copy of a statement of account of the A who served property by posting him owner the state- amount due on premises day the seventh on the owner’s ment of account register with the recorded the statement of account after he substantially complied with the mechanic’s lien statute deeds requirements preliminary had been met. other lien where Compliance. 3. Mechanics’ Liens —Substantial compliance provisions the mechanic’s lien with the Substantial prejudice validity lien where no is sufficient for the of a statute (MCLA compliance by the deviation from strict is caused 26.307). 570.27;MSA [1, [3] [4] [5] [6] Am [7-9] [10, Rights 2] 53 Am Jur 53 Am Jur Mechanics’ Liens § 53 Am 61 Am Jur 53 Am Jur 61 Am part and remedies under Jur § Jur Mechanics’ Liens of which is of a 2d, Mechanics’ Liens 168. 2d, 2d, 2d, Jur References 2d, Pleading 2d, Equity 2d, Pleading Mechanics’ Liens 170. §§ for Points §§ lienable character. 149 ALR 37. § 308-313. § statute of 236. 6. § in Headnotes one performing work 682. Jr., Holbrook, D. J. E. Concurrence Roadways—Parking 4. Mechanics’ Liens — Grounds. protection lien act does not the mechanic’s extend to *2 persons furnishing labor in materials and connection with the roadways parking grounds; coverage of or construction of furnishing persons the act is limited to labor materials for projects expressly act. mentioned in the Seg- 5. Mechanics’ Items —Non-lienable Liens —Lienable Items — regation. provided A contractor who both lienable and non-lienable materi- als and services in connection with the construction of road- ways parking grounds or is not entitled to a mechanics’ lien for segregated. lienable and items which non-lienable cannot be Unjust Equity 6. Quantum Meruit — Enrichment. — allegation unjust quantum An of is enrichment the basis of a recovery. meruit Pleading Complaint—Amendment—Leave op 7. — Court —Court Rules. freely given party

Leave of court shall be to a to amend his (GCR 118.1). complaint justice requires 1963, when so Pleading Amending Complaint op 8. — —Leave Court. granted party Leave complaint should be to allow a to amend his prejudice opposing result; party unless unfair would possibility opposing party might that the lose if the amendment is prejudice allowed is not the sort of will which bar amend- ments. Pleading Amending Complaint Delay Prejudice. 9. — —Undue — party complaint Leave of the court to allow a to amend his delay delay unfairly be denied because of undue where the prejudiced opposing party. Pleading Amending Complaint Judges. — — judge may deny complaint A upon motion to amend based his opinion complaint legally merits if the amended on insufficient its face. Pleading—Amending Complaint 11. Motions — —Discretion— Statement Reasons. judicial rulings The exercise discretion in on motions to amend Spartan Asphalt Hm v Mobile Pk Opinion op the Court complaints supported by must be a statement of for reasons ruling. Appeal Eaton, Robinson, from Richard J. Sub- (Docket 3, 1976, Lansing. mitted June at No. 25510.) September Decided 1976. Leave to ap- applied for. peal

Complaint by Spartan Asphalt Paving Company Park, against Ledge Grand Mobile Home Grand Ravines, Ledge Inc., R. Jack Courshan and others lien, quan- for foreclosure of a recovery meruit, tum or creation and foreclosure an equitable lien. Summary defendants all appeals. part, counts. Plaintiff Affirmed in reversed in part remanded. *3 Winckler,

Brown & plaintiff. for Farhat, Story, Burns & P. (by C. Vittorio E. Porco), for Grand Ledge Mobile Home Park and R. Jack Courshan. Allen, J.,

Before: P. and D. Holbrook, Jr., E. Papp,* and E. H. JJ.

Allen, P. J. Defendant Ledge Grand Park, Home a limited partnership, oper- owns and a ates development mobile home in Eaton County. Plaintiff Asphalt Paving sup- Company plied paving materials and worth labor in excess $15,000 to the general defendant’s contractor in general 1973. When the pay, contractor failed to Spartan Asphalt filed a suit against the defend- * judge, sitting Appeals assign- by Former circuit on the Court of pursuant 1963, 6, ment to Const art 23§ as amended in 1968. 71 the Court The com- and others. ant,1 general the contractor sought foreclosure a plaint against defendant meruit quantum lien, on a judgment equi- foreclosure of an and theory, and/or creation judge’s trial follows the This appeal lien. table summary judg- motion grant of the defendant’s on all three counts. ment was made summary The motion for i.e., 117.2(1), ground 1963, the GCR under which upon state claim had the failed opinion, In a written granted. relief could be grant he would trial indicated judge The correct- judgment. summary and enter motion complaint to each of ruling of that as ness is discussed below. counts later, judg- final still before months but Several entered, filed a motion ment had been motion to amend Counts for reconsideration and The motion for recon- complaint. III of its II and in his had erred argued that sideration lien statutes. of the mechanic’s interpretation allegations to add sought to amend motion and defendant dealings by fraudulent possibly allegations These general contractor. corporate its ownership interlocking the nature of included infra, allegation and an mentioned footnote paid general defendant had never provided for the materials services contractor it was not mentioned Although the plaintiff.2 opinion to the limited in this refer References "defendant” Inc., Ravines, contractor, general Ledge partnership. Grand who least at one incorporated individuals were—at owned ownership partnership. interlocking inter- time —members *4 possible which figure remedies in some of the discussion will ests against already judgment the a default won follows. contractor; judgment have been on that but all efforts to collect parties in interest The other named defendants are unsuccessful. property. mortgage they the hold liens on defendant’s because time, were, general incorporators one at contractor general partners in the The defendant’s and defendant. limited both Spartan Asphalt Hm Pk op the Coukt complaint,

the motion to the we amend note with interest initially appeared the fact the defendant’s law firm

on behalf both the defendant general appearance the and contractor. behalf the contractor was later withdrawn on ground the a that it had been "mistake”.

Following hearing, judge a the trial entered a opinion denying written motion for opinion reconsideration. The mentioned theory. mechanic’s lien motion to It made no mention of the complaint. However, amend the opinion pursuant entered denied rehearing both motion for and the motion to proceedings amend. The on the motion for recon- sideration and will amendment be discussed later. ruling granting We first address the initial sum- mary judgment for the defendant on each complaint three counts.

Count I—Mechanic’s Lien seq.; statute, The mechanic’s lien MCLA 570.1 et seq., designed MSA 26.281 et seems to create anyone attempts confusion and frustrate who to requirements. meet Nevertheless, all of its plaintiff almost succeeded. It served notice of in- tent claim a to on the defendant days beginning certified mail within 90 after 570.1; work. MCLA MSA 26.281. It also recorded appeal brief on interest states that those individuals have terminated their However, partnership. timing in the limited motiva- ownership change explained. Similarly, tion for the have not been appeal allegation brief defendant’s denies the the defendant paid general paving never services. the Flint Journal sentenced HUD third contractor for the materials however, Again, no details are mentioned. Recent articles report recently incorporators the two were prison by participation a Federal in a their housing They presently suing scandal the Flint area. are Journal, 19, involved in that associate venture. Flint November 9, 3, 1976; July March March *5 App 177 op Opinion the Court County Regis- the Eaton with statement of account the work after was days ter Deeds within 570.5; 26.285. MSA completed. MCLA aof mechanic’s perfection The next in the step recorded statement of the copy lien is service of a 570.6; MSA 26.286. MCLA property on the owner. that began point. at difficulties provides part: MCLA 570.6 * * * recording statement shall "Every person such thereof, recording serve on days within owner, after * * * * * * county within the if he be found can claim; but if owner copy a of such or statement [the ** * county such found within where be cannot] situated, copy by such shall be served premises are posting in some then conspicuous place premises on said might days the same have been served within 5 after ** * supplied.) personally (Emphasis .” language was basis underscored summary defendant’s motion for could not learning partners I. that Count After County, Eaton personally served within of the recorded statement copy served home premises it on the of the mobile by posting sending by to the defendant park copy posting mail. The service was accom- certified was re- plished days seven after the statement the service was argued corded. The defendant quoted requires statute not effective because attempt personal the lienor service within resorting before to service county days service are posting attempts personal if all at statute, ser- Under this view of the unsuccessful. the 11th be used between by posting vice in the case days. present and 15th Since service argued day, the seventh the defendant occurred on plain- perfected. lien had never been Mobile Hm Pk the Court by posting appropri- tiff countered that service any days at ate time the first 15 within once it was personal determined that county service within the impossible. would be judge adopted interpre The trial the defendant’s agree. tation of the The statute statute. We shows *6 preference personal a clear possible. for service when it is attempts

Requiring personal at service days may for at 10 least before substituted service preference personal used be enforces that ser legislative vice. We believe that was the intent. Spartan Asphalt Paving Co v Tri-Cities Construc (1976). App tion, Inc, 305; 68 242 Mich 565 NW2d plaintiff We find that in was not strict compliance statutory mandate; with the but we substantially comply. believe that the did preliminary mentioned, As several other requirements already lien had been satisfied. suggestion There no in is this record that personally defendant could have served been County 10-day Eaton within the limitation. Nor is suggestion any there that did defendant not receive actual notice certified mail that the lien Register documents had been recorded with the Deeds. The an made extensive effort to fully comply. possibility We see no that the defend- prejudiced by ant was the fact that service occur- day. red on the seventh rather than the eleventh plaintiff substantially We conclude that com- plied requirements. statutory with the compliance

But is substantial sufficient? citing not, trial ruled it was Zilz v (1916). Wilcox, 486; 190 Mich 157 NW 77 See also Spartan Asphalt Paving Co v Tri-Cities Construc- typical tion, Inc, Zilz is of the cases which being statute, hold that derogation mechanic’s lien strictly law, of common must be inter- App 177 Mich 184 71 Opinion of the Court in Zilz that effect cited case to earliest preted. Mosser, Co v Lay Mercantile Hannah & (1895). That decision 18; Mich 1120 105 62 NW jurisdictions and a from other upon cases relied treatise. 19th mechanic’s Century 463; Garrelts, 192 NW2d v 35 Mich Vorrath (1971), holding line of cases another typifies strictly must be lien statute and interpreted the lien attaches” "until point. See also after liberally interpreted Ewald, 293; 158 v NW 853 Burman 192 Mich Co, & Heat v Piatt Power (1916), citing Lacy (1909), citing Smalley 122 NW Terra-Cotta Northwestern (1897). NW the clear mandate ignore cases

But both lines of 570.27; MSA 26.307: MCLA to be a remedial statute hereby act declared "This liberally to secure the beneficial to be and results, construed thereof; purposes substantial intents *7 provisions shall be sufficient compliance its several with pro- the lien liens hereinbefore validity the of or for vided * * * (Emphasis supplied.) for .” lien of our mechanic’s original present version quoted 179. The lan- passed as 1891 PA act was 27 the act 1897 PA was to of guage added § language, most of the clear Despite statutory 1897 strict have insisted on decided since cases to have appear cases majority But compliance.3 no precedent. We can see misinterpreted earlier clear ignoring the legal justification sound mandate. legislative 3 61; Moody, exceptions. v 116 Mich have See Fairbairn There been (1922), Trautz, 51; (1898), 187 v 218 Mich NW 370 386 Martin

74 NW and, (1932), Meyer, more 882 much 259 Mich NW Hurd v Co, Georgia-Pacific Corp recently, v Park North Central (1975). 228 NW2d Hm Pk v Mobile of Court Wilcox, supra, i.e., Zilz v cases typified by those mechanic’s lien act holding that must be strictly it derogation construed because is in law, pre-date common cases which rely upon enactment of 1897 PA 143. The post-1897 cases in group this ignore the simply statute. Garrelts, supra,

Cases like Vorrath v are more likely mention the statute but circumvent it with the rule that statutory requirements must be until strictly interpreted the lien attaches. The basis appears for this rule to be Smalley v Co, Northwestern supra.4 Terra-Cotta Smalley does Vorrath and the intermediate support not cases. Lacy Piatt Power Heat supra, & states that Smalley considered the quoted statutory language and still on compliance. insisted strict That is not true. Smalley opt did for a strict interpretation act. But the Smalley Court dealing was with the act MCLA § 27 [now 570.27], as it existed before the substantial compli ance language added 1897 PA 143. There fore, the subsequent cases have been mistaken in Smalley upon their reliance as authority for disre garding the statutory language. stated,

For reasons we conclude that sub- compliance stantial with the requirements various of the mechanic’s lien act was sufficient in the present us, case.5 If that were the issue before we would immediately reverse the trial court. However, appeal, the defendant raised objection another purported me- Ewald, holding Vorrath cites Burman v in Burman upon interpretation Smalley Lacy relied v Piatt Power & Co,supra. Heat already prejudiced by We have found that the defendant was not *8 compliance. the deviation from strict We for reserve future cases the question actually prejudices which will arise when a minor deviation property owner. App 177 71 Mich Opinion op the Court conclude that reluctantly this chanic’s lien. We taken. objection is well second Co, 259 Mich Development Bezold v Beach (1932), protection that 244 NW 204 held to not extend materials lien act does with the con- in connection and labor furnished grounds”. Be- parking or "roadways struction precedent. Court zold Supreme point directly cannot Thus we must conclude present in the case. claim a mechanic’s lien reluctantly. The cover- We reach that conclusion act is described age of the mechanic’s 570.1; MCLA 26.281. That section’s list of MSA which are covered extends materials and services an extensive effort pages. four Such nearly legislative attempt as a to might have been read property improve- form of virtually every include However, fit Supreme Court seen to ment. to the items coverage limit the statute’s mentioned therein. expressly which are past two cases which liens There are at least were discussed without paving for similar services Knapp Transit mention of the Bezold See problem. Greens, Inc, Highland Mix Co v Spartan Asphalt Paving Co (1974), NW2d Construction, Inc, But Tri-Cities both were decisions which did not mention Appeals Court of Bezold. Bezold. Neither authorizes us disregard possibility have considered the Finally, we ground on the might preserved the lien furnished both lienable and non-lienable Gorelick, and services. Chesnow v materials (1929), 571; 225 NW 4 held that an architect lienable and non-lienable ser- provided who both total entitled to a mechanic’s lien for the vices was Beach Bezold v However, his services. value of supra, to this Development speaks directly contradicts Chesnow. point and *9 Hm Pk Opinion of the Court " 'Where a includes both lienable and claim nonliena- items, stating them, the method of by ble and reason of segregated the nonlienable items cannot be from the ” general aggregate, lien must fail.’ 259 the entire Mich at 695. The two an present cases irreconcilable appear conflict limited to its facts. unless each is Since Bezold, case, paving like involved present ma- services, terials that it we conclude controls present case. present Court wish to Supreme recon- Bezold; its holding. sider but we are bound This in Hodgkiss & in detail matter was discussed some Douma, Co, Development Inc v Woodward (1976). Hodgkiss panel 245 NW2d App that Bezoldnmst concluded, do, followed. as we stated, For the we hold that reasons is not lien unless entitled to a Supreme distinguishes Court or its deci- overrules Development Bezold v Beach sion Quantum Count Meruit II — judge We conclude that correctly trial granted summary judgment on Count II. In his opinion, he stated: alleges only "Count II owner-defendant re- performed

ceived the value and benefit of the labor plaintiff.” materials furnished This is an accurate II summary of Count in its original allegations form. The were not then suffi- cient to support since there was no recovery allegation unjust original enrichment. II Count did not exclude the possibility paid general defendant had its contractor for the plaintiff. services and materials furnished by the An allegation unjust enrichment is the basis of Opinion op the Court Dobbs, quantum recovery.6 Remedies, meruit 4.2, Thus, p grant the initial summary § judgment was correct. The motion to amend its later complaint discussed this opinion. Equitable

Count Lien III — reasons, For similar we conclude the trial granted correctly summary *10 Count original III in allegations its form. The were not sufficient that permit finding to the defend- ant had unjustly plaintiffs been enriched at expense. possibility As as the long remains that the defendant its already paid had contractor the value of services, materials no equitable permit known theory would the court shift the burden of the contractor’s default from plaintiff onto the defendant. See generally (1884). Kelly v Kelly, NW Of course, that statement assumes the partner- (defendant) (contractor) ship corporate entities not deliberately were employed as devices to de- fraud the plaintiff. plaintiff’s The motion to amend its complaint alleged precisely type of im- proper dealing.

The Motion for Reconsideration The focus of the motion for reconsideration was Count I. We have already concluded that adoption 1963, Michigan Since the General Court Rules of recognizes only one form of action which is known as a "civil action”. holding supported GCR 12. In that Count II not have would quantum recovery, saying actually meruit we are the factual allegations recognized theory in Count not II did describe a of recov ery. instance, against allegations In this we measured the the form of quantum adoption action known as rules. meruit before the of the court Hm Pk the Court

plaintiff ory. a mechanic’s lien the- cannot recover on judge correctly necessarily

It the trial follows the motion for reconsideration. denied Complaint to Amend

The Motion required to leave of seek The court court amendment. rules trial to file its given freely provide that shall be when leave rulings justice requires. 1963, 118.1. While so GCR the discretion on such motions are entrusted to appellate courts, courts of this the trial state consistently leave should have granted held that prejudice opposing

unless unfair oppos- party possibility that the would result. ing party might if the amendment is allowed lose "prejudice” is not the sort of which will bar Fyke amendments. Ben P & Sons v Gunter (1973). 649; 213 NW2d 134 Qur problem appeal is that we do not know why the motion. trial denied His written opinion did not mention the motion to even subsequent curtly amend. The motion without order denied the

explanation. judge may have denied the motion to amend filing delayed because the the motion for *11 judge several months after the announced that he grant summary judgment. delay may Undue would denying a valid reason for a motion if the be such delay unfairly prejudiced opposing party. the Fyke Co, P & v Gunter Alterna- Ben Sons tively, judge may have that the the been convinced if defendant would win at trial even complaint. Fyke P were allowed to amend its Ben judges they deny & Sons warns to be careful if Only motions to amend on that amended face” if the basis. complaint "legally its insufficient on opinion merits use his on the Opinion op the Court as a reason for denying motion to amend. 390 Mich at

In Ben P & Fyke Sons Gunter supra, Supreme Court reaffirmed its earlier holding in LaBar v Cooper, 137 NW2d 136 (1965), that the exercise of judicial discretion in rulings on motions to amend must supported be a statement of reasons for the ruling. safeguard "To implement policy favoring amendment, this upon Court has directed that denial of

a motion to amend 'such exercise of discretion should supported by specific findings as to reasons for the same’.” (Emphasis original.) 390 Mich at 656-657. Since no reasons were stated in present case, we must reverse the judgment and remand for further proceedings on the plaintiffs motion to amend.

Proceedings After Remand It appears the plaintiffs chances for ulti- mate success depend will upon substantiation of its amended allegation that the defendant has never paid anyone for the value of the plaintiffs materi- als and services. Unjust enrichment lies at heart of both sought remedies as well as the other possibilities noted below.

If the defendant has paid never its contractor paving services, materials and we fail to why see the plaintiff cannot simply initiate garnishment proceedings to execute on its default against the contractor. Depending upon proofs, detailed the plaintiffs quantum meruit and equitable lien theories may be viable. But *12 PkHm 191 v the Court of into the case garnishment as easily fit as neither e.7 this stat precedent

law good faith full made If the defendant no contractor, possibil- can see we payment unless the Su- by of a recovery ity Develop- v Beach Bezold Court overrules preme against the same no law There is ment separate in business being involved individuals other. each which deal with entities defendant has is The final possibility interlocking but, because its contractor paid the payment purpose real ownership, While we have recovery. plaintiff’s to block was prove to ability plaintiff’s doubts about serious of the merits those doubts theory,8 case on that its a motion for be tested the case should 117.2(3), not GCR under summary Ben P Fyke amend. a motion to the context of Co, supra. & Sons v Gunter recovery quantum is the major to a meruit obstacle 7 Another dealing and defendant. any direct between absence of two; and we obviously "in fact” between no contract There implied any a contract in have find cases which unable to have been by "piercing problem might type be overcome this of situation. easy entity; corporate will not be an separate but that the veil” of the task. NW2d Kaufman, 85; App Compare Drywall, 69 Mich 244 Inc v Burton High (1976), Equipment v State Brothers Co with Brown (1974). Commission, App way 215 NW2d 591 51 Mich handicapped by theory similarly equitable the absence lien Ryno, dealing. 373 Mich Elevator & Lumber Co Tustin of direct (1964). require a written cases also Most of the 129 NW2d equitable Fredricks an interest in real estate. lien is since an contract (1934). Evans, 486; 254 NW 176 266 Mich Co v Lumber 4, supra, Michigan the old has abolished in footnote As we noted recognizes only Thus the “civil actions”. now of action and forms equitable quantum meruit and plaintiff theories if the to its is not limited support allegations to amend would in its motion Hawkins, Honigman recognized theory. 1 & recovery on some other (2d Comments, ed), Rule Michigan Author’s Rules Annotated Court framed, recovery allegations might support 12, p Properly "pierce might permit theory. the court The facts also a fraud recovery any See footnote support theories. corporate veil” 7, supra. Holbrook, Jr., J. Concurrence D. E. *13 procedures of these alternative complexity the need for a emphasize serves to clarifica- tion of the issues discussed mechanic’s lien in the first precedent section While opinion. of this re- quired our holding that no mechanic’s lien was created, we an appeal by plain- would welcome tiff on that issue.

Affirmed in part, part reversed and remanded for proceedings opinion. consistent with this

D. E. (concurring). Jr., Holbrook, J. Being of the Co, that Bezold Development v Beach opinion (1932), and Hodgkiss & 244 NW 204 Douma, Inc Development v Woodward (1976), 245 NW2d 725 control as to the me- chanic’s lien issue I feel it was unnecessary for the majority to address phases issue, itself to other of that their reasoning and resolution as to which I cannot fully subscribe. As to the balance of the opinion I con- cur in full.