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CAROLINA BUILDERS CORP. v. CENIT EQUITY CO. (59805)


CAROLINA BUILDERS CORP.

v.

CENIT EQUITY CO.


February 26, 1999
Record No. 980519

CAROLINA BUILDERS CORPORATION

v.

CENIT EQUITY COMPANY

FROM THE CIRCUIT COURT OF YORK COUNTY
Thomas B. Hoover, Judge
Present: All the Justices
OPINION BY JUSTICE CYNTHIA D. KINSER


In this appeal, we decide two issues: (1) the
date from which the 150-day limitation period in Code
Sect. 43-4 is calculated for purposes of determining what
sums can be included in a memorandum of mechanic’s lien; and
(2) whether including only sums due for labor performed or
materials furnished during the 150-day limitation period is a
prerequisite for perfecting a mechanic’s lien, thereby
invalidating a lien that includes sums due for labor performed or
materials furnished prior to the 150-day period. Because we
conclude that the 150-day limitation period is computed from the
last day that labor is performed or material is furnished to a
job preceding the filing of a memorandum of mechanic’s lien
and that including only labor and materials furnished during the
150-day limitation period is a prerequisite for perfecting the
lien, we will affirm the judgment of the circuit court
invalidating a mechanic’s lien.

I.

Carolina Builders Corporation (Carolina
Builders) filed a memorandum of mechanic’s lien on July 29,
1996, against a certain tract of real estate located in York
County for sums owed to Carolina Builders for materials that it
had furnished for construction of a residential dwelling on the
property. Subsequently, on January 27, 1997, Carolina Builders
filed a bill to enforce the mechanic’s lien and named Cenit
Equity Company (Cenit) as one of the defendants.

After conducting discovery, Cenit filed a
petition to declare the mechanic’s lien invalid pursuant to
Code Sect. 43-17.1
[1] and a motion for summary judgment.
Cenit asserted that the mechanic’s lien sought to be
enforced by Carolina Builders was invalid under Code
Sect. 43-4 because it included sums due for materials
furnished more than 150 days prior to the last date on which
labor was performed or material was furnished to the job
preceding the filing of the memorandum.

At a hearing on November 6, 1997, the parties
stipulated the following facts:

1. Carolina Builders filed the
memorandum of mechanic’s lien on July 29, 1996.

2. The memorandum of mechanic’s
lien included sums due for materials furnished by
Carolina Builders from December 6, 1995, through April
16, 1996.

3. May 23, 1996, was the last day that
Carolina

Builders furnished materials to the job prior
to

filing the memorandum of
mechanic’s lien.

4. Counting back from May 23, 1996, the
150-day period ended on December 25, 1995.

5. The memorandum of mechanic’s
lien included amounts owed for materials furnished prior
to December 25, 1995, specifically from December 6
through 15, 1995.

After considering memoranda and argument by the
parties, the circuit court determined that the 150-day period
must be calculated back from May 23, 1996, the last day that
Carolina Builders furnished materials to the job immediately
preceding the date that it filed the memorandum. Thus, the court
concluded that the mechanic’s lien violated Code
Sect. 43-4 because it included amounts owed to Carolina
Builders for materials provided to the job prior to the 150-day
period. In a final decree dated December 18, 1997, the court held
that the mechanic’s lien was invalid and unenforceable, and
granted summary judgment in favor of Cenit. Carolina Builders
appeals.

II.

Code Sect. 43-4 contains two distinct time
limitations. The first one requires that a memorandum of
mechanic’s lien be filed "not later than ninety days
from the last day of the month in which [the lien claimant] last
performs labor or furnishes material, and in no event later than
ninety days from the time such building, structure, or railroad
is completed, or the work thereon otherwise terminated."
Code Sect. 43-4. No one disputes that Carolina Builders
complied with this 90-day rule. It is the second limitation that
is at issue in this appeal. That provision specifies that
"[t]he lien claimant may file any number of memoranda but no
memorandum . . . shall include sums due for labor or
materials furnished more than 150 days prior to the last day on
which labor was performed or material furnished to the job
preceding the filing of such memorandum." Code
Sect. 43-4.

Carolina Builders’ memorandum of
mechanic’s lien included sums due for materials furnished
from December 6, 1995, through April 16, 1996. Therefore, it
argues that the 150 days should be counted back from April 16
rather than from May 23, 1996, even though the latter date was
when Carolina Builders last delivered materials before filing the
memorandum. In other words, Carolina Builders asserts that the
last date actually included in the mechanic’s lien for
materials furnished to the job should be the operative date from
which to calculate the 150-day limitation period set out in Code
Sect. 43-4. We do not agree.

We have previously stated that Code
Sect. 43-4 is "clear and unambiguous." Dominion
Trust Co. v. Kenbridge Constr. Co., Inc.
, 248 Va. 393, 396,
448 S.E.2d 659, 660 (1994). If the statute as written is clear on
its face, this Court will look no further than the plain meaning
of the statute’s words. City of Winchester v. American
Woodmark Corp.
, 250 Va. 451, 457, 464 S.E.2d 148, 152 (1995).
In applying the plain meaning rule, this Court constantly strives
to determine and give effect to the intention of the legislature.
Barr v. Town & Country Properties, Inc., 240 Va. 292,
295, 396 S.E.2d 672, 674 (1990).

The statute plainly states that the memorandum
of mechanic’s lien shall not include sums for materials
furnished more than 150 days prior to the last day that material
was furnished to the job preceding the filing of the
memorandum. In the present case, Carolina Builders filed its
memorandum of mechanic’s lien on July 29, 1996. The last day
that Carolina Builders delivered materials to the job immediately
before it filed its memorandum was May 23, 1996. Thus, under the
clear terms of the statute, the 150 days must be counted back
from May 23, 1996. To adopt Carolina Builder’s
interpretation of the statute would, in effect, rewrite the
statute.

A correct application of the statutory 150-day
limitation period does not render meaningless the 90-day filing
limitation, as hypothesized by Carolina Builders, but instead
comports with the General Assembly’s desire to prevent
undisclosed or inchoate liens. Recognizing that the 150-day
limitation period might necessitate that a claimant file multiple
liens during the course of a construction project, the General
Assembly specifically authorized the filing of "any number
of memoranda." Code Sect. 43-4. The statute also allows
a lien claimant to include amounts that are "or will be due
and payable." Code Sect. 43-4.

The remaining issue is whether Carolina
Builder’s violation of the 150-day limitation rule renders
its entire mechanic’s lien unenforceable. The circuit court
so held, but Carolina Builders argues that the 150-day
requirement limits only the sums that can be recovered and is not
a prerequisite for perfecting the mechanic’s lien. Relying
on this Court’s decisions in West Alexandria Properties,
Inc. v. First Va. Mortgage & Real Estate Inv. Trust
, 221
Va. 134, 267 S.E.2d 149 (1980); and First Nat’l Bank of
Martinsville v. Roy N. Ford Co., Inc.
, 219 Va. 942, 252
S.E.2d 354 (1979), Carolina Builders contends that, rather than
invalidating a lien, a trial court can reduce the amount of a
mechanic’s lien when the memorandum contains excess sums.

Conversely, Cenit argues that all the
requirements in Code Sect. 43-4, including the 150-day
limitation period, are prerequisites for perfecting a
mechanic’s lien and must, therefore, be strictly construed.
According to Cenit, Carolina Builders had an affirmative duty not
to include sums owed for materials furnished prior to the 150-day
"look back" period in its memorandum of mechanic’s
lien. Cenit also asserts that the decisions in West Alexandria
Properties
and Bank of Martinsville are inapposite. We
agree with Cenit.

This Court has repeatedly stated that a
mechanic’s lien is in derogation of the common law and that
the statutes dealing with the existence and perfection of a
mechanic’s lien must, therefore, be strictly construed. American
Standard Homes Corp. v. Reinecke
, 245 Va. 113, 119, 425
S.E.2d 515, 518 (1993); Rosser v. Cole, 237 Va. 572, 576,
379 S.E.2d 323, 325 (1989). "[U]nless [a mechanic’s
lien] is perfected within the proper time and in the proper
manner, as outlined by the statute, it is lost." Wallace
v. Brumback
, 177 Va. 36, 40, 12 S.E.2d 801, 802 (1941). In American
Standard Homes
, this Court distinguished between perfection
of a mechanic’s lien under Code Sect. 43-4 and
enforcement of the lien pursuant to Code Sect. 43-17. In
doing so, we stated that the "provisions of the enforcement
statutes are to be construed liberally while the requirements of
the perfection statute are to be construed strictly." 245
Va. at 119, 425 S.E.2d at 518.

Code Sect. 43-4 contains specific
conditions that a lien claimant must fulfill "in order to
perfect the lien given by Sect. 43-3." For example, the
claimant must file the memorandum within a specified time (the
90-day rule) in the clerk’s office where the property is
located and must include certain information in the memorandum.
The 150-day limitation is included in these conditions. In
contrast to the 90-day rule, the 150-day requirement is not a
filing deadline. Instead, it is a limitation on how far back in
time a lien claimant can reach in any given memorandum for sums
owed. Therefore, we conclude that the 150-day limitation period
is one of the prerequisites required by Code Sect. 43-4 in
order to perfect a mechanic’s lien.
[2] Thus, the
circuit court did not err when it held that Carolina
Builders’ mechanic’s lien was invalid and
unenforceable.

In reaching this result, we are mindful that we
allowed excess sums to be excluded without invalidating the
mechanic’s liens in West Alexandria Properties and Bank
of Martinsville
. In each of those cases, the memorandum of
mechanic’s lien included amounts attributable to labor
performed and materials furnished not only for improvements on
the liened land but also for improvements on additional property.
However, the excess sums claimed in the memoranda did not violate
any specific statutory provision in effect at that time with
regard to perfecting a lien.
[3]

In contrast, we invalidated the mechanic’s
liens in Woodington Elec., Inc. v. Lincoln Sav. & Loan
Ass’n
, 238 Va. 623, 385 S.E.2d 872 (1989), and in Rosser,
237 Va. 572, 379 S.E.2d 323. In those cases, the lien claimants
had described property in the memoranda for which no labor or
materials had been furnished. There was excess property rather
than excess sums included in the memoranda. Noting that Code
Sect. 43-4 requires the lien claimant to include in the
memorandum a brief description of the property on which the lien
is claimed, we stated in Woodington that "[i]t is the
mechanic’s duty to place his lien upon the property on which
he worked and no more." 238 Va. at 634, 385 S.E.2d at 878.
In other words, the lien claimant had violated one of the
specific provisions contained in Code Sect. 43-4.

Carolina Builders did not merely claim a larger
sum than its proof would perhaps support. That kind of
over-inclusiveness is a traditional problem faced by a landowner
and one that a trial court resolves when determining how much of
a claimed lien should be allowed. Id. at 633-34, 385
S.E.2d at 877-78. Instead, Carolina Builders violated the
explicit statutory requirement that its memorandum shall not
include sums for materials furnished more than 150 days prior to
the last day on which material was furnished to the job preceding
the filing of the memorandum. Code Sect. 43-4.

For these reasons, we will affirm the judgment
of the circuit court.

Affirmed.

 

 

FOOTNOTES:

[1] Code Sect. 43-17.1 provides, in
pertinent part:

Any party, having an interest in real
property against which a lien has been filed, may . . .
petition the court of equity having jurisdiction . . . to
hold a hearing to determine the validity of any perfected
lien on the property. . . . If the court finds that the lien
is invalid, it shall forthwith order that the memorandum or
notice of lien be removed from record.

[2] Code Sect. 43-15, which pertains
to inaccuracies in the memorandum or in the description of the
property to be covered by the lien, is not applicable to the
present situation.

[3] When this Court decided Kenbridge Constr., the
150-day requirement was in effect, but it was not at issue in
that case. Although we acknowledged "that a trial court, in
certain limited circumstances, may reduce the amount of a
mechanic’s lien rather than invalidate the lien," we
did not afford Kenbridge that relief. 248 Va. at 399, 448 S.E.2d
at 662. Kenbridge had not requested that the trial court reduce
the lien so as to include only the value of labor and materials
furnished to the liened property, and we doubted that it would
have been able to make that allocation. Id.

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