Order Michigan Supreme Court

Lansing, Michigan 

December 20, 2007 Clifford W. Taylor,

 Chief Justice 

128560 Michael F. Cavanagh 

Elizabeth A. Weaver 

Marilyn Kelly H.A. SMITH LUMBER & HARDWARE CO., Maura D. Corrigan 

Plaintiff/Counter- Robert P. Young, Jr. 

Stephen J. Markman, Defendant/Appellee, Justices 

v SC: 128560 

 COA: 238521

 Oakland CC: 1999-015436-CZ 

JOHN DECINA, 

 Defendant/Cross- 

 Defendant/Appellant, 

and 

JOHN DECINA DEVELOPMENT CO., 

 Third Party Defendant/CrossDefendant/Counter-Plaintiff/ 

Appellant, 

and 

LINAS P. GOBIS and LYDIA K. GOBIS, 

 Defendants/Cross-Plaintiffs/ 

 Cross-Defendants/Counter- 

 Defendants/Appellees, 

and 

WILLIAM GARDELLA d/b/a WILLIAMS 

GLASS CO., 

Defendant/Counter-Plaintiff/ 

 Cross/Plaintiff/ Third Party 

Plaintiff/Appellee. 

_________________________________________/ 

On November 8, 2007, the Court heard oral argument on the application for leave 

to appeal the March 3, 2005, judgment of the Court of Appeals. On order of the Court, 

the application is again considered. MCR 7.302(G)(1). In lieu of granting leave to 

appeal, we REVERSE the judgment of the Court of Appeals. To be awarded attorney 

fees as a “prevailing party” under MCL 570.1118(2), the party must prevail on the lien 
 

 

2 

foreclosure action. In this case, the unpaid subcontractors filed a lien foreclosure action 

against the property owners and a breach of contract action against the general contractor. 

The subcontractors lost on their lien claim but prevailed on the breach of contract claim. 

While the statute allows a lien claimant to bring an underlying contract action at the same 

time as the lien foreclosure action, it does not preclude the option of bringing the two 

actions separately. MCL 570.1117(5). If the subcontractors had chosen to bring their 

breach of contract claims against the general contractor as a separate action, they would 

not have been allowed to recover attorney fees. The language of MCL 570.1118(2) does 

not permit recovery of attorney fees on the contract action merely because it was brought 

together with the lien foreclosure action. Accordingly, we VACATE the portion of the 

Oakland Circuit Court order granting attorney fees to plaintiff H.A. Smith Lumber & 

Hardware Company and defendant William Gardella d/b/a Williams Glass Company. 

CAVANAGH, J., dissents and states as follows: 

The majority’s order vacating the award of attorney fees is flawed because it fails 

to address the actual language of the Construction Lien Act (CLA), MCL 570.1101 et 

seq., and it fails to honor the CLA’s provision that it “shall be liberally construed to 

secure the beneficial results, intents, and purposes of this act.” MCL 570.1302(1). A 

purpose of the CLA is to prevent subcontractors from bearing the costs of litigation every 

time their work goes uncompensated. I presume that subcontractors will often be in the 

position where they must pursue their claims against a general contractor who has been 

paid, as here. To do so, subcontractors must plead the underlying contract. 

The statute appears to include such claims in its attorneys-fee provision. It does 

not expressly preclude them. It states that “[i]n each action in which enforcement of a 

construction lien through foreclosure is sought, the court shall examine each claim and 

defense that is presented, and determine the amount, if any, due to each lien claimant 

. . . .” MCL 570.1118(2). “Each claim” must include more than just the lien claim. The 

statute further provides that “[t]he court may allow reasonable attorneys’ fees to a lien 

claimant who is the prevailing party.” Id. The subcontractors here were “lien claimants.” 

The trial court found that their liens were valid, but simply did not attach because the 

owners had paid the general contractor. The subcontractors were prevailing parties: they 

prevailed on the underlying contract claims against the general contractor. Because the 

general contractor had been paid, the contract claims were the subcontractors’ only 

recourse for the payment that the lien was meant to secure. 

Guided by the statute’s aim to relieve unpaid contractors of the financial burden of 

litigation, I would deny leave to appeal. 

KELLY, J., joins the statement of CAVANAGH, J. 
 _________________________________________ 

 

3

 WEAVER, J., dissents and states as follows: 

I dissent from the majority’s order reversing the judgment of the Court of Appeals. 

Instead, I would affirm the Court of Appeals affirmance of the trial court’s grant of 

attorney fees to H. A. Smith Lumber and Hardware Company and William Gardella, for 

the reasons stated in the Court of Appeals opinion. 

t1213 

I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the 

foregoing is a true and complete copy of the order entered at the direction of the Court. 

December 20, 2007 

 Clerk