Summary
In Probuild the defendant homeowner, in defense of an action to foreclose a mechanic's lien, argued that the lien was invalid because it stated an incorrect date for commencement of services.
Summary of this case from Absolute Plumbing v. EdelmanOpinion
No. CV 09-6004714
June 25, 2010
MEMORANDUM OF DECISION
This is an action to foreclose on a mechanic's lien. In this case the defendant entered into a contract with D.J. Flanagan Builders to remodel his house. The contract was for an agreed price of $94,000.00, but as work progressed there were various add-ons. The agreement between the parties was signed September 23, 2008. The plaintiff delivered various construction materials to D.J. Flanagan from January 2009 through February 2009 according to the invoices submitted to D.J. Flanagan.
Mr. Flanagan testified that the defendant had paid him more than the agreed contract price of $94,900.00 presumably because of the add-ons during the contract period, and he also testified that the defendant still owed him $10,800.00 for work he had performed. No indication was given as to when the last payment was made by the defendant to Flanagan, although he did testify that he left the job in February 2009. The plaintiff filed its mechanics lien on May 4, 2009 with a copy served on the defendant on the same date.
The credit manager for the plaintiff Probuild East testified at trial and stated that there is owed to Probuild the sum of $15,245.47 for materials supplied to Flanagan for work done on the defendant's home.
The mechanics lien filed as an exhibit lists the amount owed as $15,275.47 which the court will accept as the correct figure since the invoices submitted into evidence add up to the $15,275.47 figure.
The court will first discuss evidentiary and factual issues that arose during the course of the trial before it deals with the legal issues presented by the case.
(a)
To establish its claim for compensation for materials ordered by Flanagan for work on the defendant's home, the plaintiff submitted a statement with a balance due of $15,275.47. To support the statement of the amount owing a series of invoices were attached listing specific items. There are 24 invoices each of which listed materials "sold to" D.J. Flanagan Builders. Each of the invoices is so headed. Opposite this entry the words "ship to" appear on some of the invoices state the items were shipped to Green Street, Milford, some say they were shipped to 50 Green Street, Milford, others say they were shipped to Andersen, 50 Green Street, Milford.
The summons indicates the defendant resides at 50 Green Street, Milford. The sheriff's return indicates abode service was made on the defendant at this address; the mechanics lien lists the same address for the defendant. The defendant's answer admits to paragraph one of the complaints which through an exhibit to the complaint admits the defendant lives at 50 Green Street in Milford. This was also admitted in response to a request to admit.
At trial the invoices were sought to be introduced through the testimony of Mr. Peligan, the plaintiff's credit manager. Voir dire was conducted. Defense counsel after voir dire had no objection to the admission of these items into evidence and characterized the records as being offered under the business records exception to the hearsay rule.
Mr. Peligan said he had no personal knowledge of whether the materials listed on each invoice was incorporated into the defendant's home for the remodeling project and acknowledged Flanagan Builders had an open credit line during the time period of the invoices. Upon questioning he said "he did not know if Flanagan was buying materials for other property."
However, upon questioning by the court as to how the invoices were prepared Mr. Peligan said "the builder calls it in; we have one of our sales people write the order out, price it out; that's how the invoice is made out." As indicated the invoice, though sent to Mr. Flanagan, notes the Green Street, Milford address.
The fact that Peligan did not personally prepare the order is not relevant to admissibility under the business records exception. He generally testified as to how invoices are prepared by Probuild. To qualify under the exception "the business record must be one based upon the entrant's own observations or upon information transmitted to him by an observer whose business duty it was to transmit it to him," Sheary v. Hallock's of Middletown, Inc., 149 Conn. 188, 195 (1962). As stated in Tait and Prescott, Connecticut Evidence," The person supplying the information to the record keeper must (1) be within the business and (2) have personal knowledge of the information . . ." § 8.28.7, page 550.
Mr. Flanagan testified that he obtained "All sorts of building products" from Probuild to work on the defendant's home. Since construction was "scarce" at the time he was working on the home he highly doubted he was working on other projects at the time and he did not remember working on other projects. Upon further questioning by plaintiff's counsel as to whether the materials mentioned in the invoices were "either delivered or picked up to the Poffenbergers' home," Mr. Flanagan said "every one of those were either delivered or picked up to the Poffenbergers' home."
The defendant did not conduct a line by line cross examination of Mr. Flanagan that might have suggested some of the materials represented as sent to the defendants' residence were not used in the project. The Poffenbergers were not called to testify that this was the case and certainly not called to testify any of the supplies were left scattered about their yard and thus not used in the project. The thorough brief submitted by the defendant post-trial did not allude to any claim that the materials referred to in the invoice were in fact not used in the project or that the plaintiff had not met its burden of proof that the materials were shipped to the Green Street address.
The foregoing establishes to the court's satisfaction that the materials mentioned in the invoices were ordered by Flanagan Builders for the work at the defendants' house and used in that project.
The defendant raises several arguments which he argues should preclude the plaintiff from securing the requested relief. The court will try to discuss each of the claims.
MECHANICS LIEN IS INVALID
Section 49-34 CGSA sets forth the requirements for a mechanics' lien. It states that within 90 days of providing materials a certificate must be filed with to town clerk where the subject property is located. Among the several descriptions required in the mechanics lien is one "(A) describing the premises, the amount claimed as a lien thereon, the name or names of the person against whom the lien is being filed and the date of the commencement of the performance of services or furnishing of materials."
The defendant argues that the lien here is invalid because it states an incorrect date for commencement of services. The lien states the commencement date of January 28, 2009. The defendant points out that the contract is dated September 28, 2008. Mr. Flanagan testified he began to work on the project in October of 2008, that he obtained the materials used in the project from the plaintiff and began using them in the same month. The invoices run from January to the end of February 2009.
HS Torrington Associates v. Lutz Engineering Co., 185 Conn. 549, 553 (1981), says that: "The purpose of the mechanics lien is to give one who furnishes materials or services the security of the building and land for the payment of his (sic) claim by making such a claim a lien thereon . . . Because the mechanic's lien is a creature of statute a lienor must comply with statutory requirements in order to perfect his (sic) claim." One of the cases cited for this proposition is City Lumbar Company v. Borsuk, 131 Conn. 640 (1945). At page 645 that court said: "The mechanic's lien legislation is remedial in character and should be construed so as to carry out its fundamental purpose . . . Courts have been liberal in considering errors in matters of detail but have insisted upon reasonable compliance with specific provisions of the statute. So it has been held that a lien will not be held invalid because of a mistake in stating the date of ceasing to render services."
Even more to the point on the specific issue before the court is the language in Purcell, Inc. Libbey, 111 Conn. 132, 136 (1930), where it is said, quoting from an earlier case:
The mechanic's lien law is a creature of statute, and this statute is to be construed so as to reasonably and fairly carry out its remedial intent. Parsons v. Keeney, 98 Conn. 745, 748, 120 Atl. 505. We may not ascertain the construction of a single provision of this law nor the legislative intent by its words alone; we must take all of its provisions and read them as a whole, that each provision may be in harmony with every other and the remedial purposes of the law preserved. That purpose was to give to whoever furnishes material or services in excess of $10 in the construction, raising, removal or repairs of any building, either by virtue of an agreement with or by consent of the owner of the land in which the building stands, or of some person having authority from or acting for such owner in procuring such labor or materials, the security of the building and land for the payment of his claim by making such claim a lien thereon, which should have precedence of any incumbrance originated after the commencement of such services or the furnishing of such material, provided the claimant shall conform to the requirements of the statutory procedure. General Statutes, § 5217. (Emphasis by this court.)
It would seem that the purpose of including a commencement date is primarily intended for the protection of laborers or suppliers who have done work on a project by establishing priorities among possible claimants.
Rosengren discuss the effect of failure to comply with mechanic's lien requirements in Volume 13 of the Connecticut Practice Series "Connecticut Construction Law," Chapter 6 which discusses such liens. In § 6:5 he notes that "if minor deviations from the statutory requirements (§ 49-33 CGSA) exist on the face of the lien that were made in good faith and do not prejudice the property owner, courts will not invalidate the lien."
Regarding failure to include a commencement date or providing an incorrect commencement date trial courts have gone both ways. Systematics, Inc. v. Forge Square Associates LP, 13 Conn. L. Rptr. 497 (1995) states "Because the certificate of lien contained the wrong commencement date, it failed to conform to the express requirements enunciated by the legislature and is an invalid mechanics lien by definition," also see Brochu v. Northwest Lumber Hardware, Inc. 11 Conn. L. Rptr. 160 (1994). But see case in plaintiff's brief, Northeast Clearing, Inc. v. Applegate Estates LLC, 48 Conn. L. Rptr. 401 (2009).
The test enunciated in the appellate case law regarding failure to comply with the exact requirements of § 49-33 is based on whether or not the property owner or subsequent owners would be injured or prejudiced. Thus see Burque v. Naugatuck Lumber Co., 113 Conn. 350, 353 (1931) which held that an incorrect property description will not invalidate a mechanic's lien; also see Morici v. Jarvis 137 Conn. 97, 102 (1950) which stated "A misstatement in a certificate of lien of the amount due does not render the lien invalid if no fraud is intended thereby and no one is injured," id.
It is difficult to see how the property owner or anyone else could be said to be injured by inclusion of an incorrect commencement date for providing the material and supplies here. Query whether the commencement date is even aimed at protecting the property owner. And perhaps more to the point this is not a case where the property owner for example, is an out of state owner that contracted for a construction project in our state. The evidence indicates the Poffenbergers lived at the home in question and were at least aware of the work being done or which they wanted done, — they would have been aware of when the work commenced. No evidence was presented contradicting these suppositions or indicating how the defendants were prejudiced, certainly there was no evidence or reason offered to show that in placing a wrong commencement date in the lien there was a fraudulent intent. How would Probuild have benefited from that, it just exposes it to a "gotcha" analysis asking for invalidation of the mechanic's lien because the statute's terms were not literally complied with to no one's harm where the defendant homeowner had received the benefit of materials and supplies delivered to their home.
NO LIEN FORECLOSURE CAN BE HAD BECAUSE NO LIENABLE FUNDS EXIST
The defendant makes two arguments under this heading:
(i)
It is first argued that no lienable funds exist because the general contractor, Flanagan was paid in full under the contract which set a price of $94,000.
What does "lienable funds" mean? To examine this concept it is necessary to examine § 49-33(f) of the general statutes which purports to define the ambit of a subcontractor's rights as regards a mechanic's lien. As noted by Rosengren in § 6:2 there are two classes of claimants for mechanic's liens. The first category would be the general contractor, the second category "include(s) subcontractors and persons who furnish materials or services by virtue of a contract with the original contractor or with any subcontractor . . ." Seaman v. Climate Control Corp., 181 Conn. 592, 595-96 (1980).
Section 49-33(f) effectuates the rights of these second category claimants and as interpreted in Seaman . . ." a subcontractor's right to a mechanic's lien is said to flow from his equitable entitlement to the lien which would otherwise attach in favor of the general contractor . . . Subrogation is consistent with and, and an integral part of our statutory provisions (referring to § 49-33f) limiting the totality of mechanic's lien to the unpaid contract debt owed by the owner to the general contractor," 181 Conn. at 601-02. Also see W.G. Glennly Co. v. Bianco, 27 Conn.App. 199, 201 (1992) where the court said: "Under Connecticut law a subcontractor's right to enforce a mechanic's lien is based on the doctrine of subrogation. The theory of subrogation allows the plaintiff to recover only to the extent the general contractor could recover from the owner."
All of this translates into what a "lienable fund" means — such a lien is limited to the unpaid contract debt owed by the owner to the general contractor, Paquelli Construction v. United Natural Foods, CV 97 056980, Hale J.T.R. (1998).
In other words if we examine the claim of a materialman, its claim must be based on establishing that the materials and supplies were used in the project. But the owner contracted for the project with the general contractor whose contract price must have included the cost of materials which the general incurred to complete the project. Therefore the property of the owner subject to a mechanic's lien by a materialman cannot exceed the total contract price since vis-a-vis the owner, the materialman or supplier only has a subrogation claim as to any unpaid balance on the contract price negotiated with the general contractor. What is the contract price, then, broadly defined?
Here the original contract price was $94,000 and Flanagan testified that was paid in full. But he also testified, as in almost every construction job there are add ons which increased the contractual debt owed to him by the Poffenbergers beyond the original contract price. He stated he was still owed $10,800 for his work on the job that, however, is the amount of the lienable fund and the mechanic's lien here is only valid to that amount.
To say, however, that no lienable fund exists because the original contract price of $94,000 was paid despite the fact that work beyond that contract was performed and the general contractor claims he is still owed $10,800 is inequitable. As noted in 73 Am.Jur.2d in the article on "Subrogation at § 11 page 553: "Subrogation has its roots in natural justice and equity and at common law, equitable principles controlled its application and the mere fact that subrogation presents itself in a statute does not necessarily change the common law application of the principle because subrogation is an equitable remedy no matter what form it takes."
(ii)
The second argument is that the underlying contract between DJ Flanagan and the defendant homeowner violates the Home Improvement Act (HIA) therefore there is no lienable fund in any event allowing for the mechanic's lien. Thus the contract with Flanagan being void under subrogation theory there can be no right to place such a lien. As Rosenger says § 6:2, page 125 . . ." a subcontractor's right to file a mechanic's lien is based on the doctrine of subrogation, thereby limiting the amount of a subcontractor's recovery to the amount of the unpaid contract debt owed by the owner to the general contractor," But if that contract is void under the act there is nothing owed by the owner.
The claim is made that section 20-429 of the act has been violated which, is entitled: "No home improvement contract shall be valid or enforceable against an owner unless" — seven requirement are then listed. The defendant claims several of those requirements have not been met in that the contract between Flanagan and the defendant does not contain the name and address or the registration number of the Home Improvement Contractor (subsection 5) and there is no notice of the right to cancel.
Given the subrogation basis of the subcontractor's or supplier's rights as regards a mechanic's lien, the argument could be made that barring such an entities rights does not contradict Meadows v. Higgins, 249 Conn. 155, 165 (1999) which held the act does not apply to subcontractors. In other words in Meadows the plaintiff was a subcontractor solicited by an agent of the owners acting as project manager and pursuant to discussion with him and the owners proceeded to do his work. The court held because he was a subcontractor his agreement to do the work did not have to comply with the Home Improvement Act, (see 249 Conn. 169 for factual basis of these observations). In other words the plaintiff in Meadows was not proceeding on the basis of a subrogation theory. So the fact that the HIA was held not to apply to subcontractor contracts is irrelevant to whether subrogation rights could have been asserted.
But to the court at least, to distinguish between a plaintiff, who as in Meadows, had his or her own agreement to perform work for the owner's benefit and allow such a litigant to be compensated and a supplier like the plaintiff who may have dealt only with the general contractor but delivered materials for the benefit of a project the defendant agreed to, and allow the supplier no claim merely because the general's contract violated the Home Improvement Act is unfair and inequitable. The plaintiff here had nothing to do with the creation of the Flanagan — homeowner contract.
Still it might be said what of the subrogation theory on which a so-called second tier subcontractor bases its claim pursuant to § 49-33(f). No matter the inequities that is what the statute refers to — subrogation rights. And in that regard our court has held that when the Home Improvement Act has been violated the contractor cannot rely on a quasi-contract theory such as unjust enrichment, see Barrett Builders v. Miller, 215 Conn. 316 (1990), Habetz v. Condon, 224 Conn. 231 (1992); Wadia Enterprises, Inc. v. Herschfield, 224 Conn 240 (1992). But why should a subcontractor be barred from such a right when it had nothing to do with the contract between owner and contractor and the subrogation verbiage in § 49-33(f) was created solely for the purpose of protecting owners from double liability. Depriving the subcontractor of a remedy will not advance the purposes of the Home Improvement Act and only serves to give owners a windfall.
Furthermore use of subrogation language in these construction cases has a stilted air to it. Thus the court said in Westchester Fire Ins. Co. v. Allstate Ins. Co., 236 Conn. 362, 371 (1996) "equitable subrogation is broad enough to include every instance in which one person, not acting as a mere volunteer or intruder, pays a debt for which another is primarily liable and which in equity and good conscience should have been discharged by the latter." The legislature used the language of subrogation but how does it apply to a subcontractor's action against the property owner. The subcontractor supplier delivered material to the general — does the general contractor thereby incur a debt? But it is incurred to the subcontractor in any event.
The court would refer to Section 7 of the previously cited 73 Am.Jur.2d article where it says "subrogation, as a doctrine, is not fixed and inflexible, nor is it static but rather it is sufficiently elastic to meet the ends of justice. Furthermore, the doctrine is not constrained by form over substance nor is it in the form of a rigid rule of law;" pp. 549-50. If common-law courts can exercise such flexibility in interpreting a word, "subrogation," developed in court's of chancery why cannot a court interpret the ambit of such a word in a statute such as § 49-33(f) which merely borrowed the word from common-law case law.
On this basis the subrogation language of § 49-33(f), in this court's opinion, should be interpreted to protect owners from double liability situations or overpayments above and beyond an agreed contract price but it should not be so interpreted to also bar claims of subcontractors and materialman who had nothing to do with the invalidity of the contract between the general contractor and the owner which brought them to the job to satisfy, after all, the aims of the owner as well as the general contractor in entering into the project agreement in the first place.
In any event the court concludes the mechanic's lien should be enforced in the reduced amount referred to previously of $10,800.