Present: Kinser, C.J., Lemons, Goodwyn, Millette, Mims, and 

Powell, JJ., and Koontz, S.J. 

SYNCHRONIZED CONSTRUCTION 

SERVICES, INC. OPINION BY 

 JUSTICE LEROY F. MILLETTE, JR. 

v. Record No. 131569 October 31, 2014 

PRAV LODGING, LLC, ET AL. 

FROM THE CIRCUIT COURT OF ORANGE COUNTY 

Daniel R. Bouton, Judge 

In this appeal we consider whether a general contractor, 

who has no pecuniary interest in the bond posted to release the 

real estate subject to a subcontractor's mechanic's lien, is a 

necessary party to a subcontractor's mechanic's lien 

enforcement action. 

I. Facts and Proceedings 

In 2008, Prav Lodging, L.L.C. ("Prav") acquired a parcel 

of real estate in Orange County, Virginia to build a hotel 

facility. Secured by a credit line deed of trust, Virginia 

Community Bank ("VCB") financed the construction of the hotel 

facility. Prav entered into a contract with Paris Development 

Group, LLC ("Paris") to act as construction manager for the 

project. As construction manager, Paris had the authority to 

enter into subcontracts with subcontractors to facilitate the 

project. Paris entered into several such subcontracts, 

including a subcontract with Synchronized Construction 

Services, Inc. ("Synchronized"). 
2

The owner-construction manager contract between Prav and 

Paris was a cost-plus agreement, whereby Prav would pay Paris 

the cost of the work plus a $192,000 fixed fee. Prav's 

payments were scheduled to be made on a monthly basis upon 

Paris' submission of an invoice to Prav. 

The construction manager-subcontractor subcontract between 

Paris and Synchronized was a fee agreement, whereby Paris would 

pay Synchronized a $398,000 fee subject to additions and 

deductions as the project progressed. Paris' payments were 

scheduled to be made on a monthly basis upon Synchronized's 

submission of a pay application to Paris. 

By February 3, 2010, the construction project was 

"substantially complete," with the remaining work to be 

"obtainable in a matter of a few days." On March 11, 2010, 

Synchronized recorded a mechanic's lien for unpaid work on the 

construction project in the amount of $208,250.80 with the 

Orange County Clerk's Office. On September 9, 2010, 

Synchronized filed a complaint to enforce its mechanic's lien 

in the Circuit Court of Orange County, naming Prav, Paris, VCB, 

and numerous other subcontractors as defendants. In its 

complaint, Synchronized asserted a claim to enforce its 

mechanic's lien as well as a claim that Paris breached its 

contract with Synchronized by failing to make all payments due 

to Synchronized under their subcontract. 
3

Paris did not enter an appearance in the case. Indeed, it 

could not do so because it no longer existed. According to the 

public records of its state of incorporation, Paris was 

dissolved on March 12, 2010 – the day after Synchronized had 

recorded its mechanic's lien. 

Prav and VCB filed an application to post a bond in the 

amount of $237,906.80 in accordance with Code § 43-70. The 

circuit court granted that application, thereby releasing the 

real estate which had been subject to Synchronized's mechanic's 

lien. 

Prav filed a motion to dismiss the entire complaint on the 

basis that Synchronized failed to timely serve numerous 

defendants. In response, the circuit court held that 

Synchronized "failed to exercise due diligence" to serve Paris 

within one year of the date of the filing of the complaint, and 

therefore dismissed Synchronized's breach of contract claim 

against Paris. However, the court declined to dismiss 

Synchronized's mechanic's lien claim. 

Later, VCB filed a motion to dismiss the mechanic's lien 

claim on the basis that Synchronized failed to timely serve 

Paris, who, as the construction manager, was a necessary party 

to the mechanic's lien enforcement action. In response, the 

circuit court held that Paris was in fact a necessary party, 

and that Synchronized's failure to timely serve Paris required 
4

dismissing Synchronized's mechanic's lien claim with prejudice. 

The court entered an order to that effect and denied 

Synchronized's motion for reconsideration. 

Synchronized timely filed a petition for appeal with this 

Court. We granted the following assignments of error: 

1. The [c]ircuit [c]ourt erred in dismissing 

Synchronized's mechanic's lien enforcement action 

where Paris, the construction manager, did not have a 

recognized possessory or expectancy interest in the 

lien enforcement action which could be defeated or 

diminished as the result [of that] suit and therefore 

was not a necessary party to the action. While Paris 

may have had a contractual claim against the owner of 

the [p]roject arising out of its [c]ontract, the facts 

below reveal that Paris never satisfied the express 

conditions precedent[] found in its [c]ontract in 

order to preserve and maintain such claims. Hence, 

even if Paris had contractual claims, those claims 

would not be sufficient to mandate a finding that 

Paris was a necessary party to the lien enforcement 

action brought by Synchronized. 

2. The [c]ircuit [c]ourt applied an incorrect standard 

in analyzing whether Paris was a necessary party to 

the lien enforcement action and thus erred in 

dismissing Synchronized['s] mechanic's lien 

enforcement action where the presence of . . . Paris[, 

the general contractor,] was not required under 

Virginia law. 

3. The [c]ircuit [c]ourt erred in that Virginia Code 

§ 43-22 does not explicitly require a [general 

contractor] to be included as a party to a mechanic's 

lien enforcement action or at all times be [a] viable 

party in a mechanic's lien enforcement action where 

the facts below showed that Synchronized had the 

ability to present proof at trial of the balance due 

under the Prav Lodging-Paris [c]ontract at all 

relevant times included at the time Synchronized's 

mechanic's lien was recorded. 
5

II. Discussion 

A. Standard of Review 

Whether a party is a necessary party to a particular claim 

is a question of law that we review de novo. Glasser & 

Glasser, PLC v. Jack Bays, Inc., 285 Va. 358, 369, 741 S.E.2d 

599, 604 (2013). 

B. Necessary Parties in Mechanic's Lien Enforcement Actions 

This appeal requires us to address the meeting of two 

different areas of law: mechanic's lien enforcement actions, 

and necessary party jurisprudence. However, as this is not an 

issue of first impression, precedent controls our decision. 

A mechanic's lien was "[un]known to the common law or to 

courts of equity," and therefore is purely "a creature of the 

statute" allowing for its creation. Shenandoah Valley R.R. Co. 

v. Miller, 80 Va. 821, 826 (1885); Sergeant v. Denby, 87 Va. 

206, 208, 12 S.E. 402, 402 (1890). Being in derogation of the 

common law, "there must be a substantial compliance with the 

requirement of that portion of the statute which relates to the 

creation of the [mechanic's] lien; but . . . the provisions 

with respect to its enforcement should be liberally construed." 

American Standard Homes Corp. v. Reinecke, 245 Va. 113, 119, 

425 S.E.2d 515, 518 (1993). That is to say, a party must 

strictly comply with the "specific time frame and in the manner 

set forth in the statutes" to perfect its mechanic's lien, "or 
6

the lien will be lost." Britt Constr., Inc. v. Magazzine 

Clean, LLC, 271 Va. 58, 63, 623 S.E.2d 886, 888 (2006) 

(collecting cases). Once a mechanic's lien is created by 

operation of law and is perfected in accordance with the 

relevant statutory requirements, the party holding the 

mechanic's lien is able to bring suit to enforce that lien. 

Code § 43-22. 

A mechanic's lien enforcement action "must name all 

necessary parties within the time set forth by Code § 43-17, 

and a failure to name a necessary party as defendant requires 

dismissal." Glasser, 285 Va. at 369, 741 S.E.2d at 605. The 

Code does not provide an answer as to which parties are 

necessary parties to a mechanic's lien enforcement action. See

Walt Robbins, Inc. v. Damon Corp., 232 Va. 43, 46-47, 348 

S.E.2d 223, 226 (1986) (rejecting the argument that Code § 43-

22 establishes who is a necessary party in mechanic's lien 

enforcement actions). We have therefore relied upon our common 

law authority to supply the answer. 

We have consistently defined "necessary party" broadly. 

See, e.g., Asch v. Friends of Mt. Vernon Yacht Club, 251 Va. 

89, 90-91, 465 S.E.2d 817, 818 (1996). Generally, we have 

described necessary parties as follows: 
7

Where an individual is in the actual enjoyment of the 

subject matter, or has an interest in it, either in 

possession or expectancy, which is likely either to 

be defeated or diminished by the plaintiff's claim, 

in such case he has an immediate interest in 

resisting the demand, and all persons who have such 

immediate interests are necessary parties to the 

suit. 

Id. (internal quotation marks omitted). What constitutes the 

"subject matter" or res of a mechanic's lien enforcement action 

narrows the necessary party analysis to a specific set of 

interests in this type of litigation. 

1. Enforcement of a Mechanic's Lien Against Real Estate 

A mechanic's lien enforcement action seeks to enforce the 

mechanic's lien "against the property bound thereby." Code 

§ 43-22. As a mechanic's lien enforcement action implicates 

real property rights, we have turned to due process principles 

to determine who is a necessary party in such litigation. See

Walt Robbins, 232 Va. at 46-47, 348 S.E.2d at 226. 

Such due process principles qualify a necessary party as 

any party who has a real property interest in the real estate 

subject to the mechanic's lien. See, e.g., James T. Bush 

Constr. Co. v. Patel, 243 Va. 84, 87-88, 412 S.E.2d 703, 705 

(1992) (beneficiary of a deed of trust, recorded after the real 

estate subject to the mechanic's lien was improved, is a 

necessary party); Mendenhall v. Douglas L. Cooper, Inc., 239 

Va. 71, 75-76, 387 S.E.2d 468, 740-71 (1990) (owner of real 
8

estate subject to the mechanic's lien is a necessary party); 

Walt Robbins, 232 Va. at 47, 348 S.E.2d at 226 (beneficiary of 

a deed of trust, recorded before the real estate subject to the 

mechanic's lien was improved, is a necessary party); id. at 48, 

348 S.E.2d at 227 (trustee of a deed of trust, recorded before 

the real estate subject to the mechanic's lien was improved, is 

a necessary party). In sum, the "subject matter" or res of a 

mechanic's lien enforcement action is the real estate subject 

to the mechanic's lien, and a necessary party is one who has a 

real property interest in such real estate because it is that 

real property interest "which is likely either to be defeated 

or diminished by the plaintiff's claim." Asch, 251 Va. at 90, 

465 S.E.2d at 818. 

Importantly, the focus is on which parties actually have a 

relevant interest in the real property. Just because a party 

may be generally "interested" in the mechanic's lien 

enforcement action, such as having a pecuniary interest in the 

outcome of the litigation, does not mean that the party is 

necessary to the proceedings. See, e.g., Air Power, Inc. v. 

Thompson, 244 Va. 534, 537-38, 422 S.E.2d 768, 770 (1992) (land 

trust beneficiaries are not necessary parties to a mechanic's 

lien enforcement action against the trust's real estate because 

they only have a personal property interest in the profits from 
9

the trust's real estate, and have "no interest, [either] legal 

or equitable, in the [real estate] itself"). 

2. Release of the Real Estate by a Posted Bond 

Certain "parties in interest" may, in accordance with the 

rules set forth by the General Assembly, post a bond after a 

mechanic's lien enforcement action has been filed. Code § 43-

70. A properly posted bond releases the real estate from the 

mechanic's lien enforcement action. Id. We have previously 

recognized that this bonding-off process only "substitutes the 

bond for the real estate" that had been subject to the 

mechanic's lien. York Fed. Sav. & Loan Ass'n v. William A. 

Hazel, Inc., 256 Va. 598, 602, 506 S.E.2d 315, 317 (1998). 

Because the real estate is no longer subject to the mechanic's 

lien enforcement action once a bond is properly posted, the 

"subject matter" or res of the suit is no longer the real 

estate, but is instead the posted bond itself. 

This has a logical impact on the necessary party analysis. 

If no bond has been posted the inquiry turns upon which parties 

have a real property interest in the real estate subject to the 

mechanic's lien, but when a bond is posted the inquiry focuses 

upon which parties have a pecuniary interest in the bond itself

which is "likely either to be defeated or diminished" by the 

plaintiff's "claim against the bond." George W. Kane, Inc. v. 
10

NuScope, Inc., 243 Va. 503, 509, 416 S.E.2d 701, 705 (1992) 

(internal quotation marks omitted). 

 To this end, we have previously considered which parties 

constitute "necessary parties-defendant to [a] bond enforcement 

suit." Id. at 509, 416 S.E.2d at 704. The principal on the 

bond and the surety on the bond are necessary parties. Id. 

However, the owner of real estate, the trustee under the deed 

of trust, and the beneficiary of the deed of trust are no 

longer necessary parties when their only relation to the 

litigation is their respective real property interests in the 

real estate that had been subject to the mechanic's lien, but 

that was no longer encumbered once the bond had been posted in 

accordance with Code § 43-70. Id. at 510, 416 S.E.2d at 705. 

3. Concerns Not Addressed by the Necessary Party Doctrine 

The circuit court incorporated into its necessary party 

analysis concerns that go beyond the scope of this precedent, 

and the parties dispute these concerns on appeal. We address 

these points to underscore that they are not part of the 

necessary party analysis. 

First, the court expressed concerns about issues of proof. 

The amount that the owner is indebted to the general 

contractor, and the amount that the general contractor is 

indebted to the subcontractor, are factual issues that the 

parties may dispute when a subcontractor seeks to enforce its 
11

mechanic's lien. See Code § 43-7(A). And such disputes remain 

present even "with respect to a bond enforcement suit, 

[because] the party-plaintiff has the burden of proving the 

same elements of his claim that he would have had to prove in a 

suit to enforce the lien released by that bond." George W. 

Kane, 243 Va. at 509, 416 S.E.2d at 704. 

However, concerns regarding which parties might be vital 

to proving the plaintiff's case are not relevant to the 

necessary party analysis. See id. at 509-10, 416 S.E.2d at 

704-05. This conclusion is compelled by the fact that we have 

previously held that the owner of the real estate subject to a 

mechanic's lien is no longer a necessary party once a bond is 

posted to release and replace that real estate as the res

subject to the lien. Id. at 510, 416 S.E.2d at 705. If an 

owner is not a necessary party even though the mechanic's lien 

enforcement action may implicate issues relating to a contract 

entered into by that owner, see Code § 43-7(A), then a general 

contractor is not a necessary party simply because the 

mechanic's lien enforcement action may implicate issues 

relating to a contract entered into by that general contractor. 

Simply put, the controlling considerations of the 

necessary party doctrine are not issues of proof and issues as 

to which party may be best situated to provide proof. Instead, 

the necessary party doctrine is calculated to ensure that all 
12

parties central to a dispute can have their interests resolved, 

so that absent parties' interests are not adversely affected 

and participating parties may be awarded complete relief. See

Michael E. Siska Revocable Trust v. Milestone Dev., LLC, 282 

Va. 169, 173-77, 715 S.E.2d 21, 23-25 (2011). As established, 

this requires defining a necessary party to a mechanic's lien 

enforcement action as a party who has a recognized interest in 

the "subject matter" or res of the litigation. 

Second, the circuit court believed that the "subject 

matter" or res of a mechanic's lien enforcement action was more 

than simply the real estate or the posted bond. The court 

expanded those terms to include the contractual issues that may 

arise through the course of a plaintiff's prima facie case or 

by way of an affirmative defense. 

This position incorrectly conflates a mechanic's lien 

enforcement claim with a breach of contract claim. A necessary 

party to a mechanic's lien enforcement action must have a 

specifically defined interest in the "subject matter" or res of 

that litigation, which we have repeatedly defined as being 

either the real estate or posted bond. See George W. Kane, 243 

Va. at 509-10, 416 S.E.2d at 705; Air Power, 244 Va. at 537-38, 

422 S.E.2d at 770; James T. Bush Constr. Co., 243 Va. at 87-88, 

412 S.E.2d at 705; Mendenhall, 239 Va. at 75-76, 387 S.E.2d at 

470-71; Walt Robbins, 232 Va. at 47-48, 348 S.E.2d at 226-27. 
13

A party whose only relation to a mechanic's lien enforcement 

action is his status as a party to a contract, the terms of 

which may be contested during the course of litigation, is akin 

to a party who has only a general pecuniary interest in the 

outcome of a mechanic's lien enforcement action. We have 

previously recognized that such a general, tangential interest 

is insufficient to elevate a party to necessary party status. 

See Air Power, 244 Va. at 537-38, 422 S.E.2d at 770. 

Moreover, as with many mechanic's lien situations, in this 

case any litigation in the mechanic's lien enforcement action 

will not foreclose the ability for Paris, as the general 

contractor, to bring or defend a claim in the future relating 

to its contracts with the owner, Prav, or the subcontractor, 

Synchronized. Neither collateral estoppel nor res judicata 

would encumber such future litigation because Paris would not 

have been a party to the mechanic's lien enforcement action, 

and no party in that mechanic's lien enforcement action 

identifies with Paris' interest to such a degree that it could 

be said to have represented Paris' legal rights. See Rule 1:6 

(governing res judicata); Raley v. Haider, 286 Va. 164, 170, 

747 S.E.2d 812, 815 (2013) (setting forth the requirements for 

res judicata to bar suit, including identity of the parties or 

their privies); Ellison v. Commonwealth, 273 Va. 254, 258, 639 

S.E.2d 209, 212 (2007) (noting the mutuality of parties 
14

requirement among the standards for application of collateral 

estoppel to bar litigation of an issue of fact). 

C. Whether Paris Is a Necessary Party 

In this case, Prav and VCB posted a bond that released the 

real estate subject to Synchronized's mechanic's lien. Code 

§ 43-70. As a bond has been posted, the necessary party 

inquiry is whether Paris has a pecuniary interest in that 

posted bond, being the "subject matter" or res of 

Synchronized's mechanic's lien enforcement action, which is 

"likely either to be defeated or diminished" by Synchronized's 

"claim against the bond." George W. Kane, 243 Va. at 509, 416 

S.E.2d at 705 (internal quotation marks omitted). The answer 

is no. 

Paris is neither the principal nor the surety on the bond. 

Moreover, Paris has no ability to be awarded a judgment to be 

paid out from the bond. A posted bond is "subject to the final 

judgment of the court upon the hearing of the [mechanic's lien 

enforcement action] upon its merits," and is "for the payment 

of such judgment." Code § 43-70. That is, a posted bond can 

only be paid out to those claimants who have a valid mechanic's 

lien on the real estate released by the bond. 

Paris does not have such a mechanic's lien. It is true 

that Paris was the construction manager and, by providing such 

services for the construction of the hotel facility, acquired a 
15

mechanic's lien on that real estate. Code § 43-3. But the 

continued existence of a mechanic's lien requires the party 

acquiring the lien to perfect it in accordance with the Code. 

Id.; see Britt Constr., 271 Va. at 63, 623 S.E.2d at 888 

(collecting cases). 

The requirements for perfection differ depending upon 

whether the party asserting the lien is a general contractor, a 

subcontractor, or a party who contracts with a subcontractor. 

See Code §§ 43-4; 43-7; 43-9. Being the party who 

"contract[ed] directly with the owner," Paris was a "general 

contractor" for purposes of the mechanic's lien statutory 

scheme. Code § 43-1. Code § 43-4, governing the perfection of 

a general contractor's mechanic's lien, required Paris to file 

a "memorandum of lien" and "a certification of mailing of a 

copy of the memorandum of lien [to] the owner of the property" 

in the Orange County clerk's office. The record reflects that 

Paris did not undertake these actions. As such, Paris failed 

to perfect its mechanic's lien on the real estate, and that 

mechanic's lien was lost. Britt Constr., 271 Va. at 63, 623 

S.E.2d at 888. Because Paris lost its mechanic's lien, the 

posted bond is incapable of being subject to a monetary 

judgment in favor of Paris through the course of Synchronized's 

mechanic's lien enforcement action. 
16

We therefore hold that the circuit court can render 

"complete relief" in Synchronized's mechanic's lien enforcement 

action, even in Paris' absence, because Paris' lack of a 

pecuniary interest in the posted bond means that there is no 

monetary claim upon which the circuit court could award 

judgment in favor of Paris, and no interest held by Paris which 

might need to be shielded from an adverse judgment. See Lamar 

Co. v. City of Richmond, 287 Va. 322, 324-25, 757 S.E.2d 15, 16 

(2014) (proper decree could be entered without participation of 

the absent and putatively necessary party). 

III. Conclusion 

Under the facts of this case, Paris, as the general 

contractor, is a proper party but not a necessary party to a 

subcontractor's mechanic's lien enforcement action. We will 

therefore reverse the circuit court's judgment to the contrary, 

vacate the order dismissing Synchronized's mechanic's lien 

enforcement claim with prejudice, and remand for further 

proceedings consistent with this opinion. 

Reversed and remanded. 

SENIOR JUSTICE KOONTZ, with whom JUSTICE MIMS and JUSTICE 

POWELL join, dissenting. 

 I respectfully dissent. This case presents the issue 

whether the general contractor in a project involving the 

construction of a hotel was a "necessary party" in a 
17

subcontractor's action to enforce its mechanic's lien when that 

perfected lien had been discharged, pursuant to Code § 43-70, 

upon the filing of an appropriate bond by the owner of the real 

estate upon which the hotel was constructed. 

 Today the majority of this Court holds that because the 

general contractor failed to perfect its statutorily granted 

mechanic's lien under Code § 43-3 it had no "pecuniary 

interest" in the bond and, therefore, was not a necessary party 

to the subcontractor's action to enforce its perfected 

mechanic's lien. Neither the majority in its opinion, nor the 

subcontractor in its appellee's brief, cites to any prior 

decision by this Court in which we have held that a general 

contractor is not a necessary party to a subcontractor's action 

to enforce its mechanic's lien. In my view, the statutory 

scheme involving the enforcement of a mechanic's lien by a 

subcontractor and the significant role of the general 

contractor in all construction projects provide persuasive 

reasons that such is the case. 

 Initially, I am reminded of the old adage that bad facts 

can lead to bad law. In this case no evidentiary hearing was 

conducted in the trial court and, thus, the material facts are 

drawn necessarily from the parties' pleadings, memoranda, and 

supporting exhibits filed in that court. While the majority 

makes reference to the fact that the general contractor did not 
18

enter an appearance in the case because it was apparently 

dissolved the day after the subcontractor recorded its 

mechanic's lien, there are no facts in the record reflecting 

the status of the general contractor at the time the 

subcontractor subsequently filed its action to enforce its 

mechanic's lien nor at the time the bond was posted by the 

owner of the real estate. 

 What is undisputed, however, is the fact that the general 

contractor was not given notice of the subcontractor's action 

because the subcontractor "failed to exercise due diligence" to 

serve the general contractor. That finding by the trial court 

was not challenged by the subcontractor even though it suggests 

that the general contractor could have been served. Under 

these circumstances, the proper analysis of the issue in this 

appeal necessarily must be premised upon the fact that the 

subcontractor simply failed to give the general contractor 

notice of the proceeding and thereby deprived the general 

contractor of the opportunity to appear and provide evidence in 

the case if it desired to do so. This is not a case in which 

the general contractor with notice declined to participate. 

Moreover, under these circumstances there is no factual basis 

upon which a determination can be made as to what pecuniary 

interest, if any, the general contractor had in the proceeding 

initiated by the subcontractor. 
19

 Nevertheless, the majority opinion seems to suggest that 

the posting of the bond made these "bad facts" irrelevant to 

its determination that the general contractor was not a 

necessary party in this case. In that context, it is not clear 

what the reasoning would be had, for example, the general 

contractor been given notice, appeared, and asserted that the 

owner was indebted to it and that it was not indebted to the 

subcontractor. For the reasons that follow, in my view, the 

statutory scheme for enforcing a mechanic's lien contemplates 

the central role of the general contractor in construction 

cases so that all claims may be resolved and future litigation 

avoided. 

 The analysis in this appeal is guided by settled law 

regarding the enforcement of a mechanic's lien. Mechanic's 

liens arise by statute and are in derogation of the common law. 

Britt Constr., Inc. v. Magazzine Clean, LLC, 271 Va. 58, 63, 

623 S.E.2d 886, 888 (2006); Carolina Builders Corp. v. Cenit 

Equity Co., 257 Va. 405, 410, 512 S.E.2d 550, 552 (1999). 

 The statutory authority for a mechanic's lien for those 

whose labor or materials is incorporated in construction 

projects is found in Code §§ 43-1 to 43-23.2. As pertinent to 

this appeal, Code § 43-3(A) provides that a mechanic's lien is 

created automatically by "performing labor or furnishing 

materials of the value of $150 or more . . . for the 
20

construction, removal, repair or improvement of any building or 

structure." Both the general contractor and subcontractor are 

granted a mechanic's lien in this manner. See Code § 43-4 

(general contractors); Code § 43-7 (subcontractors). 

 A mechanic's lien cannot be enforced, however, unless it 

is first perfected in accord with Code § 43-7. Britt Constr., 

271 Va. at 63, 623 S.E.2d at 888 (collecting cases). Pertinent 

to the present case, Code § 43-7(A) provides that "the amount 

for which a subcontractor may perfect a lien . . . shall not 

exceed the amount in which the owner is indebted to the general 

contractor." This statute further provides that it shall be an 

affirmative defense that the owner is not indebted to the 

general contractor, or that the amount owed to the general 

contractor is less than the amount of the subcontractor's 

asserted mechanic's lien. These provisions reflect the central 

role of the general contractor in all construction projects. 

Thus, we have long held that the burden of proof in a suit to 

enforce a mechanic's lien requires the subcontractor to prove 

both that he is entitled to payment for labor and materials 

furnished under his contract with the general contractor and

that the owner was indebted to the general contractor under 

their contract at the time notice of the subcontractor's lien 

was given or became so indebted thereafter. John T. Wilson Co. 

v. McManus, 162 Va. 130, 135, 173 S.E. 361, 362 (1934). 
21

 Once a mechanic's lien has been perfected, Code § 43-22 

provides, in pertinent part, that the lien "may be enforced in 

a court of equity" by a complaint filed in the county or city 

wherein the property upon which the building was constructed is 

located. The statutory scheme for enforcing a perfected 

mechanic's lien is a unique equity proceeding. Once the 

subcontractor's suit invokes the equity jurisdiction of the 

trial court, "it may go on to a complete adjudication, even to 

the extent of establishing legal rights and granting legal 

remedies which would otherwise be beyond the scope of its 

authority." Such is the case even though the complainant may 

have failed to establish its right to a mechanic's lien. 

Johnston & Grommett Bros. v. Bunn, 108 Va. 490, 493, 62 S.E. 

341, 342 (1908); see also Erlich v. Hendrick Constr. Co., 217 

Va. 108, 115, 225 S.E.2d 665 (1976). 

 In a suit by a subcontractor to enforce a mechanic's lien 

the focus of the equity court's determination is upon the 

status of the general contractor's accounts with the owner and 

the subcontractor. In this context, we have observed that 

there is a distinction between a "proper party" and a 

"necessary party" in that the failure to include the former is 

not a ground for dismissing the suit whereas the failure to 

include the latter renders the court powerless to proceed with 

the suit. Mendenhall v. Douglas L. Cooper, Inc., 239 Va. 71, 
22

74, 387 S.E.2d 468, 470 (1990). There we explained that a 

necessary party's "interests in the subject matter of the suit, 

and in the relief sought, are so bound up with that of the 

other parties, that their legal presence as parties to the 

proceeding is an absolute necessity, without which the court 

cannot proceed. In such cases the court refuses to entertain 

the suit, when those parties cannot be subjected to its 

jurisdiction." Id. 

In Raney v. Four Thirty Seven Land Co., we stated that 

"[w]here an individual is in the actual enjoyment of 

the subject matter, or has an interest in it, either 

in possession or expectancy, which is likely either 

to be defeated or diminished by the plaintiff's 

claim, in such case he has an immediate interest in 

resisting the demand and all such parties who have 

such an interest are necessary parties to the suit." 

233 Va. 513, 519-20, 357 S.E.2d 733, 736 (1987) (quoting 

Gaddess v. Norris, 102 Va. 625, 630, 46 S.E. 905, 907 

(1904)) 

Code § 43-70 provides that when a suit has been filed 

under Code § 43-22 to enforce a mechanic's lien, "parties in 

interest" may petition the court "for permission to pay into 

court an amount of money sufficient to discharge such lien." 

If the court permits the posting of the bond, "the property 

affected thereby shall stand released from such lien" and 

enforcement of the lien "shall be subject to the final judgment 

of the court upon the hearing of the case on its merits." The 
23

posting of the bond does not constitute a confession of 

judgment or otherwise resolve the underlying controversy of 

whether the alleged debt secured by the lien is owed. See York 

Fed. Sav. & Loan Ass'n v. William A. Hazel, Inc., 256 Va. 598, 

602, 506 S.E.2d 315, 317 (1998). Thus, we held in George W. 

Kane, Inc. v. NuScope, Inc., 243 Va. 503, 509, 416 S.E.2d 701, 

704 (1992), that "with respect to a bond enforcement suit, the 

[subcontractor] has the burden of proving the same elements of 

his claim that he would have had to prove in a suit to enforce 

the lien released by that bond." 

In the present case, the subcontractor filed a complaint 

in the Circuit Court of Orange County to enforce its perfected 

mechanic's lien on September 9, 2010. Subsequently, in August 

2011 the owner filed an appropriate bond in accordance with 

Code § 43-70 and the subcontractor's lien was discharged. 

Although the complaint named the general contractor as a 

defendant, the subcontractor failed to give the general 

contractor notice of the proceeding and the general contractor 

did not enter an appearance. 

It is readily apparent that when a bond is filed under 

Code § 43-70 the subject matter of the subcontractor's lien 

enforcement suit remains the determination of what 

indebtedness, if any, existed between the owner and the general 

contractor at the time the lien was perfected or thereafter, 
24

and what indebtedness, if any, exists between the general 

contractor and the subcontractor. The bond is not the subject 

matter of the suit. Rather, the bond provides the monetary 

pool from which the equity court makes a "complete 

adjudication" of the financial issues between all the parties 

involved in the construction project that have been provided 

proper notice of the proceeding, while releasing the property 

of the owner in question from claims of parties involved in 

that construction project. Significantly, in this way the bond 

provides the mechanism by which the equity court is able to 

resolve any financial claims that may exist between all the 

parties to the construction project and thus protect them from 

future litigation involving the construction project. 

In the present case, the general contractor was not 

provided the opportunity to assert any claims it may have had 

against the owner or to refute any assertions of the 

subcontractor against it in its capacity as the general 

contractor in the construction project. Moreover, the equity 

court was called upon to render a complete adjudication of the 

financial issues in the case "on its merits" without the 

benefit of the general contractor's evidence of what, if any, 

indebtedness existed between it and the owner and what, if any, 

indebtedness existed between it and the subcontractor. In that 

circumstance, in my view the general contractor was a necessary 
25

party to the subcontractor's suit to enforce its mechanic's 

lien, and the trial court did not abuse its discretion in 

refusing to entertain that suit and dismissing it with 

prejudice. 

The majority relies, in part, upon our decision in Kane to 

conclude that a general contractor is not a necessary party to 

a bond enforcement suit by a subcontractor. There, we held 

that the owner of the real estate subject to a mechanic's lien 

is no longer a necessary party once a bond is posted to release 

the real estate. 243 Va. at 510, 416 S.E.2d at 705. The 

majority reasons that if an owner is not a necessary party in 

those circumstances then it follows that the general contractor 

is also not a necessary party. In Kane, however, the general 

contractor, rather than the owner, posted the bond. Id. at 

505, 416 S.E.2d at 702. The distinction is significant. When 

the owner posts the bond it does so to release a mechanic's 

lien claim so that the owner's property is no longer 

encumbered. When the general contractor posts the bond it 

becomes a party to the subcontractor's enforcement suit and 

thereby protects itself from future litigation with the 

subcontractor. 

The majority also relies upon our decision in Air Power, 

Inc. v. Thompson, 244 Va. 534, 422 S.E.2d 768 (1992), to 

support its reasoning in this case. There, we held that land 
26

trust beneficiaries are not necessary parties to a mechanic's 

lien enforcement action against the trust's real estate. This 

was so because the beneficiaries only had a personal property 

interest in the profits of the trust's real estate. Id. at 

537-38, 422 S.E.2d at 770. Obviously, Air Power did not 

involve the status of a general contractor and the unique role 

the general contractor plays in a construction project and the 

resulting role it maintains in the resolution of a 

subcontractor's mechanic's lien enforcement suit. 

For these reasons, I would hold that the general 

contractor, where available for service by a subcontractor in 

its mechanic's lien enforcement suit in which a bond has been 

posted by the owner in accordance with Code § 43-70, is a 

necessary party. Accordingly, I would further hold that the 

trial court did not abuse its discretion in refusing to 

entertain the subcontractor's action in this case and 

dismissing it with prejudice.