Title: Glasser & Glasser, PLC v. Jack Bays, Inc.
Citation: N/A
Docket Number: 120287
State: Virginia
Issuer: Virginia Supreme Court
Date: February 28, 2013

PRESENT:  All the Justices 
 
GLASSER & GLASSER, PLC, TRUSTEE FOR 
FIRST MORTGAGE BONDHOLDER, 2006 SERIES 
 
v. 
Record No. 120287   
 
 
 
OPINION BY 
 JUSTICE DONALD W. LEMONS 
 
 
 
 
 
 
 
      February 28, 2013 
JACK BAYS, INC., ET AL. 
 
CITIZENS BUSINESS BANK 
 
v. 
Record No. 120288 
 
JACK BAYS, INC., ET AL. 
 
CELTIC BANK 
 
v. 
Record No. 120289   
 
JACK BAYS, INC., ET AL. 
 
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY 
Mary Grace O'Brien, Judge 
 
 
In this appeal, we consider the validity of various 
mechanics' liens filed under Code § 43-4. 
I. 
Facts and Proceedings  
 
A. 
New Life's Construction Project, Contractors, 
 and Financing 
 
 
Jack Bays, Inc. ("Jack Bays") is a commercial general 
contracting firm with expertise in new church construction.  
In 2004, the company's President, Lynn Bays Fuechsel 
("Fuechsel"), met the Senior Pastor and Founder of New Life 
Anointed Ministries International ("New Life"), Bishop Eugene 
Reeves ("Bishop Reeves").  At the time, New Life was beginning 
the process of building a church in Woodbridge, Virginia.  
 
2 
Jack Bays ultimately became the general contractor on the 
project. 
 
On August 22, 2005, Jack Bays submitted a proposal for 
the site work portion of the project.  Site work included 
excavation and grading, utility installation, concrete and 
asphalt paving, landscaping, and fencing.  New Life accepted 
the proposal either contemporaneously or shortly thereafter by 
signing an owner/contractor agreement form ("August '05 
Agreement").  The agreement form stated that New Life would 
pay Jack Bays a stipulated sum of $4,209,532 for initial work 
at the project site. 
 
On September 29, 2005, Jack Bays began site work.  On 
April 26, 2006, a new Agreement ("April '06 Agreement") 
provided that New Life would pay Jack Bays a stipulated sum of 
$12,016,000.  The April '06 Agreement incorporated the sum and 
scope of work from the August '05 Agreement. 
 
On December 5, 2006, the parties increased the value of 
the contract for the final time.  Change Order 13 required 
construction on a preschool, sanctuary, lobby and corridors.  
The cost of this project was $5,858,732, which brought the 
total cost of the project to $17,874,732.  The contract 
provided for payment of requisitions from Jack Bays based upon 
percentage completion of the project. 
 
3 
 
To perform work at the site, Jack Bays contracted with 
several subcontractors, the following eleven of which are 
parties to this action: Structural Steel, LLC ("Structural 
Steel"), United Sprinkler Company, Inc. ("United Sprinkler"), 
Virginia Paving Company ("Virginia Paving"), Sparkle Painting 
Company, Inc. ("Sparkle Painting"), Scaffold Resource, LLC 
("Scaffold Resource"), Miller Construction, Inc. ("Miller 
Construction"), Adrian L. Merton, Inc. ("Adrian Merton"), 
Century Contracting Corporation ("Century Contracting"), 
Clover Contracting, Inc. ("Clover Contracting"), General Glass 
Corporation ("General Glass"), and Becker Electric Company.∗ 
 
After briefly working with Branch Banking and Trust, New 
Life sought additional funds for the project.  To obtain these 
funds, New Life worked with Strongtower, a bonding company for 
church financing.  This collaboration led New Life to obtain 
additional financing, specifically in the amount of $13.6 
million.  San Joaquin Bank (the predecessor to and hereinafter 
"Citizens Business Bank"), 1st Centennial Bank (the 
predecessor to and hereinafter "Celtic Bank"), and Glasser & 
Glasser, PLC ("Glasser & Glasser") (collectively, "Lenders") 
were listed as "Lenders" on the Deed of Trust for the new 
financing, while Stewart Title Guaranty Company ("Stewart 
                     
∗ When referring to the general contractor and the 
subcontractors we will use the term "Contractors." 
 
4 
Title") was designated "Trustee."  Glasser & Glasser was also 
designated Trustee for "First Mortgage Bondholders, 2006 
Series" ("Bondholders").  Citizens Business Bank obtained a 
note evidencing the debt in the principal amount of 
$8,962,000.  Celtic Bank obtained a note in the principal 
amount of $4,491,000.  Additionally, the Deed of Trust 
incorporated a $13,453,000 Trust Indenture "for the benefit of 
certain Bondholders," with Glasser & Glasser as Trustee, and 
Reliance Trust Company as the trust company and disbursement 
agent.  The Lenders recorded their Deed of Trust on June 27, 
2006. 
 
On September 29, 2005, Jack Bays issued its first 
requisition for payment to New Life.  New Life paid in full, 
and continued to pay its requisitions in full each month 
through March 2007.  New Life paid part of Jack Bays' April 
2007 requisition, falling $141,498.70 short of total payment.  
Thereafter, New Life made no payments to Jack Bays from May 
through October 2007, because funding for the project was 
exhausted. 
 
Throughout the May-October 2007 period, New Life 
attempted to obtain additional financing.  Jack Bays 
understood from Bishop Reeves that new funding would be 
obtained to cover the cost of the project.  On July 27, 2007, 
Monika Taylor, an underwriter for Quest Capital Funding, wrote 
 
5 
to Fuechsel to "inform [Fuechsel] that we are going through 
final approval for a $20,000,000.00 (Twenty Million Dollar) 
loan for New Life Anointed Church."  From her conversations 
with Bishop Reeves, Fuechsel expected to be paid for Jack 
Bays' prior, ongoing, and future work on or around August 3, 
2007.  After the anticipated loan from Quest Capital Funding 
did not close, Fuechsel was told that financing would instead 
be in place by the end of August.  However, no further 
financing was obtained.  Jack Bays continued construction work 
at the site from May through September 28, 2007. 
B. 
Contract Work and Demobilization,  
Mechanics' Liens, and Termination 
 
 
On September 28, 2007, Jack Bays sent a memorandum to its 
subcontractors.  The memorandum detailed New Life's efforts to 
obtain financing, and informed the subcontractors that delays 
in the approval process caused Jack Bays to immediately 
"stop[] active work on the site until all payments are 
current."  The letter asked the subcontractors to consider 
waiting until November 2007 to file a mechanics' lien so that 
title could remain clear and enable New Life to "have the best 
opportunity to obtain financing."   
 
After September 28, 2007, Jack Bays began to shut down 
active work on the project by collecting equipment and 
rectifying unsafe conditions on the premises.  Jack Bays 
 
6 
maintained a log of site work during this time and issued a 
requisition for October 2007 work it classified as 
"demobilization."   
 
According to Jack Bays, subcontractors continued work at 
the site through October 11, 2007.  However, United Sprinkler 
performed "normal course of business" work through at least 
October 18, 2007.  Sparkle Painting had an employee working on 
site through at least October 1, 2007, and possibly through 
October 9, although information supporting the latter date was 
inconclusive.  Scaffold Resource entered the premises on 
October 1 to remove scaffolding provided, completing this work 
– which was provided for in its contract with Jack Bays – on 
October 16.  Becker Electric continued contract completion 
work on the project by performing wiring work related to pulls 
and terminations at electrical panel locations and rooftop 
units through October 16, although this was primarily in an 
effort to address safety concerns associated with exposed live 
electrical wires. 
 
Jack Bays alleged that its activity at the project site 
between October 1 and November 16, 2007, was a necessary part 
of its demobilization efforts, and that any contract work 
performed by subcontractors during that time was at the 
subcontractors' own risk.  However, Jack Bays increased the 
percentage by which it evaluated the completeness of the 
 
7 
project's work between its September and October 2007 
requisitions by 2%, from 92% to 94%.  Whether Jack Bays' 
actions and the actions of the subcontractors in October and 
November 2007 constitute continuing contract work or 
demobilization is disputed by the parties to this action.     
 
On December 28, 2007, Jack Bays recorded its Memorandum 
of Mechanic[s'] Lien against New Life in the amount of 
$5,942,487.48 in the Circuit Court of Prince William County.  
The following table summarizes the dates on which 
subcontractors recorded their memoranda of mechanics' liens, 
and the value of those liens: 
Subcontractor 
Date 
Value 
Clover 
Contracting 
12/20/07 
$60,814.37 
Adrian L. 
Merton 
12/20/07 
$323,165.20 
General Glass 
12/20/07 
$50,544.00 
Century 
Contracting 
12/20/07 
$134,303.00 
Capital 
Contracting 
12/21/2007 
$217,575.00 
Virginia 
Paving 
12/27/07 
$423,583.27 
Sparkle 
Painting 
12/27/07 
$13,950.00 
Structural 
Steel 
12/27/07 
$139,922.00 
Miller 
Construction 
12/28/07 
$99,654.00 
Scaffold 
Resource 
1/11/08 
$75,867.80 
Becker 
Electric 
1/22/08 
$549,545.00 
United 
Sprinkler 
1/29/08 
$97,664.40 
 
 
8 
 
On May 8, 2008, Jack Bays sent a letter to New Life 
terminating the April 26, 2006 construction contract.  Between 
June 19 and July 14, 2008, all Contractors timely filed 
complaints in the Circuit Court of Prince William County 
("circuit court") against the Lenders and Stewart Title. 
C. 
Proceedings before the Commissioner of Accounts and the 
Circuit Court 
 
 
By Decree of Reference and Order of Consolidation and 
Reference entered by the circuit court in late 2008 and early 
2009, Prince William County Commissioner in Chancery Robert J. 
Zelnick ("Commissioner Zelnick") held a proceeding from 
January 11-15, 2010, to address "only issues concerning 
enforceability" of the mechanics' liens.  The issues of 
valuation and priority were "deferred to a subsequent hearing, 
if needed."  
 
On May 31, 2011, Commissioner Zelnick filed his report.  
He found that: 
• All necessary parties were made defendants in the 
Contractors' suits to enforce their mechanics' liens; 
• Jack Bays did not violate the 90-day rule embodied in 
Code § 43-4; 
• Jack Bays complied with the 150-day rule embodied in Code 
§ 43-4; 
• The other Contractors complied with the 150-day rule 
embodied in Code § 43-4; 
• Jack Bays did not include charges for labor and materials 
prior to May 1, 2007; 
• Jack Bays acted reasonably in waiting until September 28, 
2007 to recommend ceasing current work on the New Life 
project, and therefore did not fail to mitigate damages; 
 
9 
• The mechanics' liens of Century Contracting, Adrian L. 
Merton, Scaffold Resource, Becker Electric, United 
Sprinkler, General Glass, Miller Construction, Structural 
Steel, Sparkle Painting, Virginia Paving, and Clover 
Contracting were valid and enforceable; 
• Capital Contracting's mechanics' lien was extinguished; 
• The liens of Samaha Associates, Loudoun Sheet Metal 
Company, and Phillip C. Clarke, Incorporated, were not 
enforceable; 
• A priority of liens existed, with the subcontractors 
holding top priority, Jack Bays second priority, the 
Lenders third priority, and a September 2008 Jack Bays 
Deed of Trust and Trustee for General Mortgage 
Bondholders holding fourth priority; and 
• The property should be sold to satisfy the outstanding 
liens. 
 
 
 
On June 10, 2011, Citizens Business Bank, Celtic Bank, 
and Glasser & Glasser filed exceptions to the report.  The 
Lenders filed a Joint Brief in Support of Exceptions to the 
report.  Their exceptions primarily focus on the 
Commissioner's interpretation of Code § 43-4 concerning filing 
procedures and lien value.  Additionally, the Lenders asserted 
that the Contractors failed to mitigate damages during their 
October 2007 work and that they also did not include necessary 
parties to their action to enforce the liens.  Finally, the 
Lenders disputed the validity of some of the subcontractors' 
liens.   
 
The circuit court issued a final order on November 18, 
2011, rejecting the Lenders' arguments in their entirety.  The 
circuit court incorporated its October 14, 2011 letter opinion 
 
10 
into its final order.  The circuit court further ordered that 
the property be sold at public auction to the highest bidder, 
with proceeds of the sale to be applied in satisfaction of the 
mechanics' liens in the order of priority established by 
Commissioner Zelnick.  Lenders timely filed notices of and 
petitions for appeal, raising fourteen assignments of error.  
We awarded an appeal. 
II.  Analysis 
 
A. 
Standard of Review 
 
 
In their first assignment of error, the Lenders assert 
that "[t]he trial court lacked subject matter jurisdiction as 
necessary parties were not joined in any of the lawsuits which 
are the subject matter of this appeal."  This assignment 
involves a question of law and is reviewed de novo.  Conyers 
v. Martial Arts World of Richmond, Inc., 273 Va. 96, 104, 639 
S.E.2d 174, 178 (2007). 
 
For the remaining assignments of error, the Lenders 
challenge the circuit court's conclusion that Commissioner 
Zelnick properly determined issues related to the Contractors' 
liens.  "When a circuit court approves a report by a 
commissioner in chancery who heard evidence ore tenus, we will 
affirm the court's decree unless it is plainly wrong or 
without evidence to support it."  Amstutz v. Everett Jones 
Lumber Corp., 268 Va. 551, 558, 604 S.E.2d 437, 441 (2004) 
 
11 
(citing Shepherd v. Davis, 265 Va. 108, 117, 574 S.E.2d 514, 
519 (2003); Snyder Plaza Props., Inc. v. Adams Outdoor Adver., 
Inc., 259 Va. 635, 641, 528 S.E.2d 452, 456 (2000)).  "[W]e 
look at the commissioner's conclusions, as approved by the 
circuit court, and determine whether the conclusions are 
supported by credible evidence."  Id. (citing Chaney v. 
Haynes, 250 Va. 155, 158, 458 S.E.2d 451, 453 (1995)); see 
also Code § 8.01-610.  However, this standard "is not 
applicable to pure conclusions of law contained in the 
report," which are reviewed de novo.  Hill v. Hill, 227 Va. 
569, 577, 318 S.E.2d 292, 296 (1984) (citations omitted).   
B. 
Necessary Parties 
 
 
Suits to enforce mechanics' liens 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.  Mendenhall v. Douglas L. Cooper, Inc., 239 Va. 71, 
72, 75, 387 S.E.2d 468, 469-70 (1990). 
 
Citing James T. Bush Constr. Co. v. Patel, 243 Va. 84, 
87-88, 412 S.E.2d 703, 704-05 (1992), the Lenders contend that 
"[i]n the context of mechanic[s'] lien litigation, necessary 
parties include the owner of the property, and both the 
trustee and beneficiaries of a deed of trust secured by the 
property."  The beneficiaries here, the Lenders assert, are 
the Bondholders under the Trust Indenture.  Because the 
 
12 
Contractors did not name the Bondholders, their suits must be 
dismissed, according to the Lenders.  
 
The Contractors rejoin that this Court stated otherwise 
in Michael E. Siska Rev. Trust v. Milestone Development, LLC, 
282 Va. 169, 181, 715 S.E.2d 21, 27 (2011), where we held that 
"the necessary party doctrine does not implicate subject 
matter jurisdiction."  They also allege that "[p]arties filing 
mechanic[s'] liens are entitled to rely on the land records," 
citing Blue Ridge Constr. v. Stafford Dev. Grp., Ltd., 244 Va. 
361, 365, 421 S.E.2d 199, 201 (1992) in support.  The 
Contractors finally assert that Glasser & Glasser, as Trustee 
for the Bondholders, is in position to protect the 
Bondholders' interests. 
 
In their Reply, the Lenders argue that Siska "does not 
address statutorily created causes of action such as 
mechanics' liens, or modify the clear line of authority of 
Bush v. Patel."  The Lenders also claim that the rule 
concerning whether parties may rely on land records is not the 
law in Virginia, citing a 1956 case, Chavis v. Gibbs, 198 Va. 
379, 94 S.E.2d 195, in support.  Finally, the Lenders state in 
a footnote that "[the Contractors'] reliance upon the powers 
of the Trustee under the Trust Indenture to take action to 
prevent any impairment of the Trust Estate is misplaced as 
 
13 
they are no different in kind than the power any trustee has 
to take action to protect the Trust property." 
 
In Siska, we stated that "the necessary party doctrine 
does not implicate subject matter jurisdiction. If the 
doctrine involved subject matter jurisdiction, the absence of 
a necessary party would, by definition, deprive the court of 
the power to render a decree. There could not logically be 
exceptions."  282 Va. at 177, 715 S.E.2d at 25.  We observed 
that questions of personal jurisdiction and the ability to 
"render complete relief" guide the decision whether to 
exercise subject matter jurisdiction.  Id.   
 
However, Siska's rule is not applicable in the present, 
limited context.  As "purely a creature of statute," Wallace 
v. Brumback, 177 Va. 39, 40, 12 S.E.2d 801, 802 (1941), a 
mechanics' lien must be "perfected within the proper time and 
in the proper manner, as outlined by the statute, [or] it is 
lost."  American Standard Homes Corp. v. Reinecke, 245 Va. 
113, 119, 425 S.E.2d 515, 518 (1993) (internal quotation marks 
omitted).   
 
The Lenders are correct that both trustees and trust 
beneficiaries to a deed of trust are necessary parties to a 
mechanics' lien suit.  See Bush, 243 Va. at 87, 412 S.E.2d at 
704; Walt Robbins, 232 Va. at 47, 348 S.E.2d at 226.  Although 
Bush did not concern the question whether a beneficiary of a 
 
14 
trust indenture was a necessary party, its principles remain 
clear: a party must name a beneficiary to the deed of trust 
because that beneficiary has "a substantial interest in being 
given the opportunity to challenge the validity of the 
mechanic[s'] lien, or otherwise to litigate the elements of 
the lien."  243 Va. at 88, 412 S.E.2d at 705.  Because this 
purpose is fulfilled by the deed of trust beneficiaries, it 
follows that the beneficiaries of a trust indenture are not 
necessary parties.  As a named beneficiary of the Deed of 
Trust and as a Trustee for the Bondholders, naming Glasser & 
Glasser is sufficient to comply with the requirements of Bush. 
 
Also, we note that there is little evidence supporting 
the Lenders' contention that the Contractors were aware of the 
Bondholders' identity or that the Contractors could have 
inquired to determine it.  The Trust Indenture states that 
Reliance Trust Company would maintain in Georgia a bond 
register containing names, addresses, bond numbers, and 
amounts of purchase of all issued bonds.  However, Reliance 
had no obligation to keep the list accurate.  ("[Reliance] 
shall be under no responsibility with regard to the accuracy 
of [the bond registration] list.").  Nor could the Contractors 
have obtained the information on the list without the express 
written consent of another entity, California Plan of Church 
Finance, Inc.  Even without regard to the Bush precedent, the 
 
15 
Contractors could not be expected to accurately ascertain the 
identity of bondholders under these circumstances.  A rule to 
the contrary would render compliance with the statute 
effectively impossible.  
C. 
Code § 43-4 
 
 
1. 
The Ninety-Day Rule 
 
 
In relevant part, Code § 43-4 provides:  
 
A general contractor, or any other lien 
claimant under §§ 43-7 and 43-9, in order to 
perfect the lien given by § 43-3, provided such 
lien has not been barred by § 43-4.01 C, shall 
file a memorandum of lien at any time after the 
work is commenced or material furnished, but not 
later than 90 days from the last day of the 
month in which he last performs labor or 
furnishes material, and in no event later than 
90 days from the time such building, structure, 
or railroad is completed, or the work thereon 
otherwise terminated. 
 
Therefore, each contractor had ninety days from the end of the 
last month in which it last performed labor or furnished 
material to file a lien, unless work on the church was 
complete or "otherwise terminated." 
 
It is not disputed that as of the date of Jack Bays' 
September 28, 2007 letter, the church was incomplete.  Nor is 
it disputed that Jack Bays recorded its lien on December 28, 
2007.  The Lenders allege that although work was not complete, 
Jack Bays' September 28 letter "otherwise terminated" work on 
the church, beginning the ninety-day filing limitation.  If 
 
16 
this is true, then we must dismiss Jack Bays' suit: The 
difference between September 28 and December 28 is ninety-one 
days.  If it is not, then Jack Bays earns the benefit of 
starting the ninety-day clock on the last day of September, 
two days later.  Importantly, the difference between the last 
day in September and December 28 is eighty-eight days.  
Accordingly, in order for Jack Bays to have timely filed its 
lien, its letter of September 28, 2007, cannot have operated 
to "otherwise terminate[]" work on the church, as the Lenders 
insist. 
 
The Lenders cite to Mills v. Moore's Super Stores, Inc., 
217 Va. 276, 279, 227 S.E.2d 719, 722 (1976) and Northern 
Virginia Savings and Loan Ass'n v. J.B. Kendall Co., 205 Va. 
136, 135 S.E.2d 178 (1964), in support of their argument.  In 
the latter case, they allege, this Court found that a 
contractor's work had "otherwise terminated" when work on the 
project came to a "standstill" due to the property owner's 
lack of financing and the contractor's failure to provide 
labor or material to the job.  See J.B. Kendall Co., 205 Va. 
at 147-48, 135 S.E.2d at 186.  The Lenders conclude that J.B. 
Kendall Co. should apply here because work came to a 
standstill after September 28, 2007. 
 
Jack Bays argues that September 30, 2007, is the proper 
date to use for the 90-day deadline imposed by Code § 43-4, 
 
17 
because the statute gives a claimant "90 days from the last 
day of the month in which he last performs labor or furnishes 
material."  Jack Bays claims that Virginia law on the matter 
is contrary to the Lenders' assertion; "the law provides that 
all activity must have come to an end in order for the work to 
be deemed terminated as of September 28, 2007[,] which plainly 
did not occur here."  See Mills, 217 Va. at 276, 227 S.E.2d at 
719; J.B. Kendall Co., 205 Va. at 148, 135 S.E.2d at 187. 
 
The Commissioner concluded that 
[t]he Supreme Court has recognized that the 90-
day time period "begins to run from the time 
the entire building is completed or work 
thereon is otherwise terminated, and not 
necessarily from the time the general 
contractor has completed his specific contract 
to furnish labor or materials, or both."  [J.B. 
Kendall Co., 205 Va. at 144, 135 S.E.2d at 
184].  In light of the uncontroverted fact that 
the building was never completed, and that 
several subcontractors, such as Becker Electric 
and Scaffold Resources, Inc. continued to work 
on the Project in October, 2008, your 
Commissioner finds that Jack Bays' lien does 
not violate the 90-day rule. 
 
The circuit court "agree[d] with the Commissioner that the 
evidence established that Jack Bays properly used the last day 
of September, 2007, to begin calculating the ninety-day filing 
deadline."   
 
We held in Mills that "otherwise terminated" under Code 
§ 43-4 meant when work under the contract ceased.  217 Va. at 
279, 227 S.E.2d at 722.  There, the contract ceased upon the 
 
18 
combination of several factors: financial difficulties 
encountered by the general contractor, uncontroverted evidence 
that neither the general contractor nor any subcontractors 
worked at the site after the termination date, and the owner's 
firing of the general contractor.  Id.  Here, unlike in Mills, 
work did not stop at the construction site; several 
subcontractors remained and performed contract work through 
October.  Jack Bays also terminated its involvement in May 
2008.  Therefore, it cannot be said that "work [on the 
structure was] otherwise terminated" under Code § 43-4, and 
the circuit court was not plainly wrong in upholding the 
Commissioner's ruling that Jack Bays complied with the ninety-
day rule. 
2. 
The 150-day Rule 
 
In relevant part, Code § 43-4 provides: 
The lien claimant may file any number of 
memoranda but no memorandum filed pursuant to 
this chapter 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. 
 
Accordingly, whether Jack Bays offered sufficient proof to 
conform to the 150-day rule prescribed by Code § 43-4 is a 
factual inquiry.  If a claimant violates this rule, their 
mechanics' lien is unenforceable.  Carolina Builders Corp. v. 
Cenit Equity Co., 257 Va. 405, 411, 512 S.E.2d 550, 553 (1999). 
 
19 
i. Does the Rule Provide for a Unitary Date  
Range for all Contractors?  
 
 
The Lenders first claim that the 150-day rule has a 
unitary date range for all contractors. 
 
As we stated in Carolina Builders, 257 Va. at 409, 512 
S.E.2d at 551, the 150-day rule  
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." 
 
Id. (quoting Code § 43-4) (emphasis added);  see also Smith 
Mt. Bldg. Supply, LLC v. Windstar Props., LLC, 277 Va. 387, 
390-91, 672 S.E.2d 845, 846 (2009).  The Lenders' argument 
that the 150-day rule does not apply separately for each 
claimant ignores the language of the statute, which plainly 
states that the period is calculated according to the actions 
of the lien claimant.  Code § 43-4.  Because time is 
calculated in this fashion, it cannot be "unitary" for all 
lien claimants. 
ii. Propriety of the September 28, 2007 End Date 
 
The Lenders allege that, even if the 150-day rule is not 
unitary, Jack Bays failed to comply with the rule because it 
used the wrong end date, September 28, 2007, from which it 
looked back.  Because the circuit court agreed with 
 
20 
Commissioner Zelnick's conclusion that Jack Bays complied with 
the 150-day rule prescribed by Code § 43-4, the Lenders must 
show that the decision was plainly wrong or without evidence 
to support it.  Amstutz, 268 Va. at 558, 604 S.E.2d at 441. 
 
Jack Bays' Site Superintendent for the New Life project, 
Steven Wise ("Wise"), supervised the work site during the 
September-November 2007 period.  The same day that Jack Bays 
informed its subcontractors to cease work via mail and fax, 
September 28, 2007, Wise began making phone calls to all 
subcontractors to inform them that, per instructions from 
Fuechsel, Jack Bays was "shut[ting active work on the project] 
down."  The afternoon of September 28, 2007, Wise made no 
fewer than nine phone calls to various subcontractors, 
explaining to them that Jack Bays was "demobilizing" and that 
the subcontractors should not return to the work site the 
following week and that if they did so, it would be at their 
own risk. 
 
Wise also vividly recounted his interaction with 
subcontractors and efforts related to Jack Bays' work at the 
site from October 1 through November 16, 2007, none of which 
work involved labor performed "to the job" – that is, 
construction of the church.  Fuechsel's testimony supported 
Wise's account.  The Lenders offered no controverting 
evidence, instead asserting that "value" was added to the 
 
21 
project through Jack Bays' labor after September 28, 2007, and 
that this added value precluded Jack Bays from using September 
28 as the end point for purposes of the 150-day rule. 
 
The Lenders' arguments to both Commissioner Zelnick and 
the circuit court on this issue were rejected.  Although 
several subcontractors added value to the project after 
September 28, 2007, the Commissioner concluded that the same 
was not true for Jack Bays.   
 
This Court "look[s] at the commissioner's conclusions, as 
approved by the circuit court, and determine[s] whether the 
conclusions are supported by credible evidence."  Amstutz, 268 
Va. at 558, 604 S.E.2d at 441.  Whether Jack Bays showed it 
complied with the 150-day rule was a factual inquiry for 
Commissioner Zelnick to decide.  Based on the testimony of 
Wise and Fuechsel, Jack Bays sufficiently demonstrated to the 
Commissioner and the circuit court that the last day it 
performed labor or furnished material to the job was September 
28, 2007. 
iii. Propriety of Fees Included in Jack Bays' Lien 
 
Jack Bays must also show that it did not include in its 
lien "sums due for labor or materials furnished" before May 2, 
2007, the date 150 days prior to September 28, 2007.  Code 
§ 43-4. 
 
22 
 
The Lenders argue that Jack Bays' lien is invalid because 
it includes sums for work performed prior to May 2, 2007, the 
beginning of the 150-day period. 
 
First, the Lenders claim that 
 
[p]rior to May 1, 2007, Jack Bays had 
clearly not billed New Life for all of the work 
Miller Construction had performed to date.  In 
the following months, Jack Bays' requisitions 
to New Life accounted for these previous 
shortcomings, and thus included sums 
attributable to work performed prior to May 1, 
2007.  Therefore, because the liens were based 
on these later billings, they too included sums 
for work done prior to May 1, 2007. 
 
 
The Lenders offered the testimony of Thomas Chappell as 
an expert witness in construction accounting to support their 
argument before the Commissioner.  Chappell testified that 
between December 2006 and April 2007 Miller Construction 
billed $424,624 to Jack Bays, and Jack Bays billed only 
$327,362 to New Life for work that Chappell believed was 
attributable to Miller Construction.  Jack Bays subsequently 
charged New Life amounts varying from the monthly value 
invoiced to it by Miller Construction through July 2007.  
According to Chappell, Jack Bays' May 2007 billing  
appears to be a catch-up for the under-billing 
in the prior months which would mean that costs 
incurred, labor and materials incurred in the 
prior period are now being drawn into the May 
requisition by Jack Bays, which is also 
included as part of the basis for the 
mechanic[s'] lien. 
 
 
23 
 
It is true that Jack Bays invoiced New Life different 
values for masonry work – Miller Construction's job – than 
Miller Construction invoiced Jack Bays a month prior.  Jack 
Bays argues that the discrepancy exists because it billed New 
Life under a stipulated sum agreement, rather than a cost-plus 
contract.  Semon Samaha ("Samaha"), the project architect, 
described before the Commissioner the difference between the 
two billings: 
Well, the cost-plus is somewhat open-ended, I 
mean the contractor is providing a fee 
basically to do the work and then whatever 
costs are incurred plus that fee is what the 
owner pays, so part of the problem is trying to 
determine which cue [sic] the costs go in.  And 
I know that one of the projects that we did a 
while back, there was a dispute, for example, 
about whether a saw that the contractor 
purchased should be part of the cost or part of 
the contractor's fee and whether it should have 
just been a rental charge, and so it becomes 
much more cumbersome, where a stipulated sum, 
the amount is agreed upon ahead of time and 
from then on, it's just based on how much of 
the work gets done as a percentage of that 
amount. 
 
Chappell also acknowledged that differences exist between 
stipulated sum agreements and cost-plus agreements. 
 
Fuechsel, who qualified before the Commissioner as an 
expert witness in commercial general contracting with a sub-
specialty in new church construction, testified that 
requisitions were prepared around the 25th of each month and 
projected through the end of that month.  Jack Bays 
 
24 
"reasonably assume[d]" progress made in various construction 
areas as compared to the prior billing period, with the 
percentage increase serving as the basis for the requisition.  
This process is consistent with the April '06 Agreement and 
the AIA A201-1997 General Conditions ("General Conditions") 
incorporated therein.  Fuechsel testified that subcontractor 
billings were used to "confirm our percent complete at the 
time of each monthly invoice."  Additionally, all requisitions 
were submitted to and approved by Samaha.  Samaha could only 
approve requisitions for payment based on the value of work 
completed beyond the prior month's performance, not by a 
subcontractor's individual billing.   
 
Commissioner Zelnick was persuaded by Jack Bays' 
argument, finding that its monthly requisitions "were not 
formulated based on costs incurred from the subcontractors and 
suppliers, but rather were the product of Jack Bays' 
reasonable estimation of the value added to the project with 
that billing period."  He also found that Chappell's testimony 
was unpersuasive due to the differences between his testimony 
and the nature of a stipulated sum agreement.  The circuit 
court reviewed and accepted these findings without 
qualification.   
 
Whether Jack Bays proved that it did not include in its 
lien Miller Construction's sums due prior to May 1 was a 
 
25 
factual inquiry.  Although the Lenders offered expert 
testimony and cross examined Jack Bays' witnesses regarding 
the relationship between subcontractor billings and Jack Bays' 
requisitions, the Commissioner found that Jack Bays did not 
include charges for Miller Construction's work in its lien.  
The circuit court accepted these findings.  Based upon the 
record, we cannot say that these findings were plainly wrong 
or without evidence to support them.   
 
The Lenders also argue that the trial court erred in its 
conclusion that no charges for labor or material provided 
before May 2, 2007, were included in Jack Bays' lien.  
Fuechsel testified regarding how Jack Bays calculated the 
proper value for the 150-day period between May 2, 2007, and 
September 28, 2007.  This process involved using the 
requisitions from May to September to ascertain the value of 
the lien.  However, because May 1, 2007, was included in the 
May requisition but was not validly part of the lien, Fuechsel 
stated that Jack Bays omitted this day from its calculation.  
The company did so by taking the total number of work days in 
May and dividing by the total amount invoiced to come up with 
a per-day value of labor performed or materials furnished, and 
then subtracted a per-day value in an effort to comply with 
Code § 43-4. 
 
Referring to May 1, Fuechsel testified: 
 
26 
Looking at the daily reports, there wasn't, you 
know, it was kind of business as usual, it 
wasn't a big delivery day, no major activities 
or unusual activities happened, so we took the 
number of work days in May, which was twenty-
one, divided it into the total May invoice, and 
deleted what essentially mathematically came out 
to one day. . . . 
 
Commissioner Zelnick found that testimony on this point was 
offered without contradiction.  The circuit court concurred 
with his assessment.  This factual determination was not 
plainly wrong or without evidence to support it. 
 
Jack Bays sufficiently proved to both the Commissioner 
and the circuit court that it did not include sums due for 
labor provided or material furnished before May 2, 2007, nor 
did it perform labor or furnish material after September 28, 
2007.  Accordingly, we hold that Jack Bays properly perfected 
its lien under Code § 43-4. 
 
It may appear inconsistent to use September 30, 2007, as 
the relevant date from which to analyze Jack Bays' compliance 
with Code § 43-4 for purposes of the 90-day calculation, and 
September 28, 2007, as the relevant date from which to analyze 
Jack Bays' compliance with Code § 43-4 for purposes of the 
150-day calculation.  These distinct dates are used because 
Code § 43-4 provides that in the circumstances presented by 
this case, the proper date to use when evaluating compliance 
with the 90-day rule is the end of the relevant month where a 
 
27 
contractor last works on a structure, when that structure is 
not fully completed.  The 150-day rule, on the other hand, 
requires that courts calculate time based on when the 
contractor last performs labor or furnishes material – not 
necessarily at the end of a month. 
3. Duty to Mitigate 
 
The Lenders contend that Jack Bays was obligated to 
mitigate its damages from May 25, 2007 onward, when New Life 
made its last payment to the contractor.  The Lenders also 
argue that Jack Bays never requested assurances from New Life 
that payments would be forthcoming, and instead accrued 
millions in charges when it knew it would not receive payment. 
 
Jack Bays notes that "[t]he failure to mitigate defense 
asserted by [the Lenders] apparently has never been applied in 
the mechanic[s'] lien context – the Lenders have been 
challenged to produce such authority, but it has never been 
forthcoming."  It asserts that the defense is contractual in 
nature, and that the Lenders have no grounds to assert the 
mitigation defense because they were not parties to the 
contract.  During oral argument, counsel for Jack Bays also 
argued that Code § 43-4 already contains a "mitigation-like" 
provision, the 150-day rule, which limits the fees a lien 
claimant may request.  Finally, in the event the Lenders can 
 
28 
raise a mitigation defense, Jack Bays asserts that its actions 
were reasonable under the circumstances.   
 
Assuming without deciding that the Lenders may raise the 
defense of failure to mitigate, Jack Bays took reasonable 
measures under the circumstances.  Specifically, Jack Bays 
introduced during the Commissioner's hearing evidence stating 
that in July 2007 New Life was in "final approval for a 
$20,000,000.00 (Twenty Million Dollar) loan."  It was also 
uncontroverted that Bishop Reeves told Fuechsel that New Life 
would pay for Jack Bays' prior, current, and future work in 
early August 2007, and if not then, shortly thereafter.  When 
it became apparent that additional funding would not be 
obtained, Jack Bays acted promptly and decisively.  The 
Commissioner and the trial court did not err in holding that 
Jack Bays properly mitigated its damages.    
 
Accordingly, the circuit court was not plainly wrong in 
failing to rule that Jack Bays was required to mitigate its 
damages. 
4. Subcontractor Liens 
 
The Lenders argue that if this Court determines that work 
on the structure "otherwise terminated" on September 28, 2007, 
then Scaffold Resource, Becker Electric, and United Sprinkler 
were untimely in filing their liens on January 11, 22, and 29, 
2008 respectively. 
 
29 
 
Because we find that the circuit court was not plainly 
wrong in concluding that work on the church did not terminate 
on September 28, 2007, and because we have held that the 
ninety-day deadline applies to each individual contractor, 
rather than the group collectively, United Masonry Inc. of Va. 
v. Riggs Nat'l Bank of D.C., 233 Va. 476, 479, 357 S.E.2d 509, 
511 (1987) ("the [ninety-day] filing deadline [is] dependent 
upon each contractor's own activity"), the validation of the 
mechanics' liens of Scaffold Resource, Becker Electric, and 
United Sprinkler was not plainly wrong or without evidence to 
support it.  
D. 
The Stipulation, Lien Priority, and Sale of Land 
1. The Stipulation 
 
The Lenders argue that at the January 2010 hearing before 
Commissioner Zelnick, "all parties stipulated, and the 
Commissioner ruled, that the hearing was confined to the issue 
of the enforceability of the liens, and all other issues of 
valuation and priority would be deferred to a subsequent 
hearing."  Relying on Bauer v. Harn, 223 Va. 31, 36, 286 
S.E.2d 192, 194 (1982), they contend that "[s]tipulations are 
definitive of the issues" and are binding.  Unfortunately, the 
Lenders omit from their argument that the Commissioner's 
stipulation was contingent on future hearings being necessary. 
 
30 
 
The parties agreed that Commissioner Zelnick could 
address issues of priority and valuation at the January 2010 
hearing, and that those issues would be "deferred to a 
subsequent hearing, if needed."  The Commissioner reiterated 
the conditional nature of future hearings on priority and 
valuation by stating that a hearing on those matters would 
occur only if necessary.  For this reason, the stipulation did 
not require that further hearings be held. 
2. Lien Priority 
 
The Lenders argue that no evidence concerning lien 
priority was submitted to Commissioner Zelnick during the 
five-day hearing.  Consequently, they claim, the Commissioner 
and circuit court were plainly wrong in determining that the 
Contractors' liens had priority over the Lenders' Deed of 
Trust.  
 
Jack Bays argues that evidence of lien priority was 
introduced.  Various subcontractors claim that because Jack 
Bays commenced its contract work on the church before the Deed 
of Trust was recorded, "any mechanic[s'] liens arising out of 
that contract take priority over the Lenders' Deed of Trust." 
 
Commissioner Zelnick reviewed the validity of the liens 
filed by each of the dozen-plus claimants and concluded that 
"the Claimants' liens, with the exception of the lien filed by 
Capital Contracting, are valid and enforceable, [and] have 
 
31 
priority over the . . . Deed of Trust."  The Commissioner 
reasoned that "[p]ursuant to Virginia Code § 43-23, there is 
no priority among mechanic[s'] liens, 'except that the lien of 
a subcontractor shall be preferred to that of his general 
contractor. . . .' "  Accordingly, the Commissioner gave 
priority to subcontractor liens over Jack Bays' lien, and gave 
priority to Jack Bays' lien over the Lenders' lien.  See Code 
§ 43-23. 
 
In relevant part, Code § 43-21 states that  
[n]o lien or encumbrance upon the land created 
before the work was commenced or materials 
furnished shall operate upon the building or 
structure erected thereon, or materials 
furnished for and used in the same, until the 
lien in favor of the person doing the work or 
furnishing the materials shall have been 
satisfied; nor shall any lien or encumbrance 
upon the land created after the work was 
commenced or materials furnished operate on the 
land, or such building or structure, until the 
lien in favor of the person doing the work or 
furnishing the materials shall have been 
satisfied. 
 
Of course, a "lien" or "encumbrance" upon land may include a 
deed of trust.  See Bayview Loan Servicing, LLC v. Simmons, 
275 Va. 114, 119, 654 S.E.2d 898, 900 (2008); see also 
Woodington Electric, Inc. v. Lincoln Sav. & Loan Ass'n, 238 
Va. 623, 630, 385 S.E.2d 872, 875 (1989) ("the mechanic[s'] 
lien 'leaps to the head of the class,' coming before virtually 
every other lien.").  With the possible exception of priority 
 
32 
concerning the land (discussed infra), the Commissioner was 
not plainly wrong or without evidence to support his 
determination concerning priority.  
3. Sale of the Land 
 
The Lenders also assert that, under Code § 43-3, a 
mechanics' lien applies only to " 'so much land therewith as 
shall be necessary for the convenient use and enjoyment 
thereof.' "  See Code § 43-3.  They maintain that there was 
"no basis for suggesting th[at] all of the land is necessary 
for the use and enjoyment of the improvements."  They argue 
that "[i]n the case of the property at issue, the uncompleted 
church sits on approximately 22 acres of land.  The 
uncompleted structure accounts for only 125,000 square feet 
(or 2.8 acres)." 
 
Jack Bays suggests that objections to the sale of the 
entire parcel of land were not preserved.  At the hearing on 
exceptions to the Commissioner's report, counsel for Citizens 
Business Bank stated to the circuit court, "I don't see how 
the property can be sold at this point because it is clear 
from the record that the way the hearing proceeded, those 
issues were not determined, and by agreement they were not 
determined.  They were deferred."  The question of objection 
to the sale of the entire parcel was adequately preserved. 
 
33 
 
Because of the significant total sum of the mechanics' 
liens, Commissioner Zelnick determined that a sale of the land 
was necessary to satisfy the liens.  See Code § 43-3.  The 
Commissioner stated that proceeds remaining after the sale and 
satisfaction of the liens would be payable to New Life. 
 
Code § 43-3(A) states as relevant here that  
[a]ll persons performing labor or furnishing 
materials of the value of $150 or more, 
including the reasonable rental or use value of 
equipment, for the construction, removal, repair 
or improvement of any building or structure 
. . . shall have a lien . . . upon such building 
or structure, and so much land therewith as 
shall be necessary for the convenient use and 
enjoyment thereof. 
 
(emphasis added). 
 
Commissioner Zelnick recommended the sale of the twenty-
two acre property because there were liens totaling 
approximately $32,360,000, and sale of the entire parcel was 
necessary to pay all of the liens.  However, not all of these 
liens were mechanics' liens.  Additionally, sale of the 
property to satisfy a mechanics' lien may only extend to "so 
much [of the] land therewith as shall be necessary for the 
convenient use and enjoyment thereof."  Code § 43-3.  The 
record does not reflect evidence presented on this question.  
Sale of the entire property may or may not be proper.  
Determination of this question may affect priority 
determination as it applies to the land. 
 
34 
III. Conclusion 
 
For the reasons stated, we hold that on this record, 
Commissioner Zelnick and the circuit court erred in approving 
the sale of the entire parcel of land to satisfy the 
Contractors' liens, where no evidence was introduced to 
support this decision.  Accordingly, we will affirm in part 
and reverse in part the judgment of the circuit court and 
remand for further proceedings consistent with this opinion.  
Affirmed in part, 
reversed in part, 
and remanded.