Opinion ID: 2351879
Heading Depth: 1
Heading Rank: 3

Heading: Superior Court Complaint Properly Dismissed

Text: The record reflects that a certified copy of a mortgage encumbering the Venzon property was attached as an exhibit to the affidavit in support of the defendants' motion to dismiss. Typed on the face of the mortgage was the following legend: FOR AGREEMENT SEE DEED BK. 1841, PG. 280. That cross-reference was a direction to an AGREEMENT TO EXTEND THE CONSTRUCTION PERIOD AND MODIFICATION OF THE DEED OF TRUST recorded on November 21, 1994. The complaint or statement of claim filed by Builders' Choice was silent regarding the existence of any mortgage that might come within the purview of Section 2712(b)(11). In the affidavit of defense, Venzon alleged that this omission was fatal to the Builders' Choice claim for a mechanic's lien. The Superior Court agreed: The statute does not enlighten one on how a plaintiff, such as Builders' Choice, Inc. in this action, is supposed to know the details of the first mortgage agreement between the owner and the lender. But I think there is a way to artfully plead on behalf of such a plaintiff in a mechanic's lien action consistent with the true and correct requirement. In any event, in this case, there was no attempt to comply with the requirement of 25 Del.C. § 2712(b)(11) and the complaint/statement of claim is thus legally deficient. The Superior Court properly concluded that, despite whatever difficulty may be inherent in determining whether a statutorily defined construction mortgage existed on the Venzon real property, some attempt to comply with Section 2712(b)(11) through artful pleading was mandated by the 1992 amendments to the mechanic's lien statute. As a matter of procedure, Section 2712(b)(11) of the mechanic's lien statute requires the existence of a first mortgage and the time of its recording to be set forth in the complaint or statement of claim. As a matter of substance, Section 2718(a) gives priority to those first construction mortgages that comport with the statutory definition. If the claimant cannot conclusively determine whether the first mortgage is a statutorily defined construction mortgage, that encumbrance can be referred to within equivocal terms, e.g., which may be, in the statement of claim or complaint. For example, the following averment regarding the Venzon mortgage could have been made in the statement of claim: The first mortgage lien on the structure executed by defendants Venzon on February 15, 1994, in favor of Loyola Federal Savings Bank in face amount of $118,000.00, which may be a mortgage of the kind described in 25 Del.C. § 2712(b)(11), was recorded at 5:03 p.m. on February 25, 1994, in the Office of the Recorder of Deeds in and for New Castle County, Delaware, in Mortgage Book 3308, Page 165. Such an artful pleading would have comported with the procedural requirements of Section 2712(b)(11). The substantive operation of a first mortgage, for the purpose of Section 2718(a), may only be ascertainable through discovery or after trial. The validity of a mechanic's lien depends upon an affirmative demonstration that each statutory prerequisite for the creation of such an encumbrance has been followed. Ceritano Brickwork, Inc. v. Kirkwood Industries, Inc., 276 A.2d at 268. It follows that a statement of claim which fails to meet the requirements of the statute is totally insufficient to warrant the entry of a mechanic's lien. Id. The mechanic's lien statute mandates that if a first mortgage encumbers the property, it must be identified in the statement of claim or complaint.