Contract – Mechanic’s Lien – Preparation Costs

A Hanover County Circuit Court invalidates a mechanic’s lien filed by a contractor that incurred costs in anticipation of construction of a steel building, but did not provide labor or materials actually employed in construction of the building, which was built by a different contractor.

The construction company entered into an agreement with defendant Super Structures in late 2007 for the construction of a steel building. Super Structures performed certain labor and incurred costs in anticipation of commencing the building project.

Prior to commencement of the project, however, plaintiff cancelled its agreement with Super Structures and pursued the building project with another contractor. All labor or materials attributed to Super Structures were provided in a preparation phase of the project. Nothing provided by or derived from Super Structures’ efforts was employed in the construction of the building on the real property against which the mechanics’ lien is asserted.

Plaintiff argues the mechanic’s lien is not valid because Super Structures neither performed labor nor furnished materials to the property subject to the lien.

Super Structures correctly notes that the statute, Va. Code § 43-3(A), could be parsed to encompass the factual circumstances of this case. Super Structures did perform labor or furnish materials for the construction of a building projected to be permanently annexed to the freehold. The labor and materials produced by Super Structures did correspond with the stipulated contract asserted as the basis for the mechanic’s lien. The prior decisions of the Virginia Supreme Court, however, uniformly stand against imposition of mechanic’s liens in cases where labor or materials never actually reached the burdened property.

The parties agree that no materials furnished by Super Structures were incorporated into the burdened property, or were ever even present at the building site. Thus the “furnishing materials” clause of Code § 43-3 cannot be a basis for the mechanic’s lien.

Super Structures claims two types of labor performed which allegedly meet the requirements of Code § 43-3. The first is the fabrication of steel components for use in the planned building project. The building against which the lien is asserted, however, does not contain a single piece of steel produced by Super Structures. No means, methods or products of Super Structures’ steel fabrication reached the building site. This labor does not allow a mechanic’s lien under the “performing labor” clause of Code § 43-3.

The second type of labor claimed is in the nature of building planning or architectural work. It is undisputed that Super Structures performed this type of work in preparation for erection of a building. While architectural labor is contemplated by the statute, the efforts must have specifically enhanced the value of the burdened property. Where an architect – or any other laborer – performed work to enhance a building, but cannot show that their work enhanced the building against which the lien is asserted, such work cannot be the foundation of a mechanics’ lien. The architectural and planning work performed by Super Structures, having never enhanced the burdened property, does not fall under the “performing labor” clause of Code § 43-3.

The court finds the mechanic’s lien in question to logically be in the nature of an extraterritorial lien. Assuming Super Structures’ efforts corresponded with the contract on which its claim relies, it supplied no labor or materials to the burdened property. The contract alone fails to provide the necessary nexus between the efforts of Super Structures and the property. Based upon the court’s findings, the petition to invalidate the mechanic’s lien is granted.

Dallan Construction Co. v. Super Structures General Contractors Inc. (Harris, J.) No. CL08000473-00, Jan. 30, 2009; Hanover County Cir.Ct.; Edward E. Nicholas, L.B. Cann III for the parties. VLW 009-8-026, 3 pp.