Court Opinion

ID: 9715584
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:09:27.398716+00
Date Added: 2024-06-11T18:23:36.095563
License: Public Domain

KENNEY, Judge,
dissenting.
This case involves the collision of competing policies within the mechanics’ lien law that was adopted to protect those who furnish labor and materials in construction. Riley v. Abrams, 287 Md. 348, 357, 412 A.2d 996 (1980). In 1982, the legislature adopted Md.Code (1974, 1981 Repl.Vol., 1982 Supp.), § 9-104(f)(3) of the Real Property Article (“R.P.”), which provided:
Notwithstanding any other provision of this section to the contrary, the lien of the subcontractor against a single family dwelling being erected on the land of the oumer for his own residence shall not exceed the amount by which the owner is indebted under the contract at the time the notice is given. [Emphasis added.]
In Reisterstown Lumber Co. v. Tsao, 319 Md. 623, 628, 574 A.2d 307 (1990), the Court of Appeals recognized that the clear purpose of § 9-104(f)(3) is “to protect from double payment the owner of ‘a single family dwelling being erected on the owner’s land for his own residence.’ ” Real Property § 9-104(f)(3) has been liberally and, in my mind, appropriately construed by our courts to carry out the perceived legislative intent. This Court acknowledged, however, in Ridge Sheet Metal Co. v. Morrell, 69 Md.App. 364, 369, 517 A.2d 1133 (1986) that, although a significant change in the law occurred in 1982, the mechanics’ lien statute is “still to be construed in favor of mechanics and suppliers.”
In Reisterstown, the Court was confronted with owners who decided, after construction, not to occupy the dwelling because of its proximity and view of a cemetery. They decided ultimately to occupy the dwelling. The question before the Court *262was whether the dwelling being erected was still being erected as their residence after they decided not to live in the house. Acknowledging that the problem presented was of limited scope, the Court in Reisterstown focused on the language “for his own residence” found in § 9-104 and held that whether the building is intended to be the owner’s residence is determined as of the time when the subcontractor commences an otherwise substantially uninterrupted performance of work for, or sells materials to, the contractor. Reisterstown, 319 Md. at 630-31, 574 A.2d 307. Reisterstown involved new construction.
The majority finds Grubb Contractors v. Abbott, 84 Md.App. 384, 579 A.2d 1185 (1990), to be “instructive,” majority opinion at 12, because it, too, involved an addition to an existing home, but that was not the issue decided in Grubb. The Grubb decision focused on what constitutes a “single family dwelling.” The question presented was whether the inclusion of Mrs. Abbot’s mother as a permanent resident of the dwelling with her own kitchen resulted in two families occupying the dwelling, rendering it no longer a single family dwelling. We concluded that the Abbott household remained “a single family, with a single dwelling.” Grubb, 84 Md.App. at 393, 579 A.2d 1185.
Grubb looked to Ridge Sheet Metal, a case involving the issue of indebtedness, for guidance as to legislative intent. More recently, in Best Drywall v. Berry, 108 Md.App. 381, 395, 672 A.2d 116 (1996), we construed the term “residence” also to include a vacation home. Both Ridge Sheet Metal and Best Drywall involved new construction.
It appears that no case has decided directly the issue now before us: Is there a distinction to be made between new construction and remodeling or improving an existing dwelling in the application of § 9-104(f)(3)? As always, our goal is to determine the general purpose, aim, or policy of the statute, and, although we are not to be enslaved by the plain meaning rule, our starting point is always the language of the statute. Tracey v. Tracey, 328 Md. 380, 614 A.2d 590 (1992). In our analysis, it is important to examine the statute as a whole to *263divine the legislative intent. Hyle v. Motor Vehicle Admin., 348 Md. 143, 149, 702 A.2d 760, 763 (1997) (“In interpreting statute, Court of Appeals construes statute as a whole, interpreting each provision of statute in context of the entire statutory scheme.”)
In reviewing the statute, I find the following provisions, as emphasized, instructive:
[Maryland Code Ann. (1974, 1996 Repl.Vol.)] § 9-102 Property subject to lien.
(a) Buildings.—Every building erected and every building repaired, rebuilt, or improved to the extent of 25 percent of its value is subject to establishment of a lien in accordance with this subtitle for the payment of all debts, without regard to the amount, contracted for work done for or about the building and for materials furnished for or about the building, including the drilling and installation of wells to supply water, the construction or installation of any swimming pool or fencing, the sodding, seeding or planting in or about the premises of any shrubs, trees, plants, flowers or nursery products, the grading, filling, landscaping, and paving of the premises, and the leasing of equipment, with or without an operator, for use for or about the building or premises.
(c) Machines, wharves, and bridges.—Any machine, wharf, or bridge erected, constructed, or repaired within the State may be subjected to a lien in the same manner as a building is subjected to a lien in accordance with this subtitle.
(d) Exemptions.—However, a building or the land on which the building is erected may not be subjected to a lien under this subtitle if, prior to the establishment of a lien in accordance with this subtitle, legal title has been granted to a bona fide purchaser for value.
§ 9-104. Notice requirement for lien; form
(a) Notice required to entitle subcontractor to lien.—(1) A subcontractor doing work or furnishing materials or both *264for or about a building other than a single family dwelling being erected on the owner’s land for his own residence is not entitled to a lien under this subtitle unless, within 120 days after doing the work or furnishing the materials, the subcontractor gives written notice of an intention to claim a lien substantially in the form specified in subsection (b) of this section.
(2) A subcontractor doing work or furnishing materials or both for or about a single family dwelling being erected on the owner’s land for his own residence is not entitled to a lien under this subtitle unless, within 120 days after doing work or furnishing materials for or about that single family dwelling, the subcontractor gives written notice of an intention to claim a lien in accordance with subsection (a)(1) of this section and the owner has not made full payment to the contractor prior to receiving the notice.
❖ * *
(f)(3) Notwithstanding any other provision of this section to the contrary, the lien of the subcontractor against a single family dwelling being erected on the land of the owner for his own residence shall not exceed the amount by which the owner is indebted under the contract at the time the notice is given.
§ 9-113. Prohibited provisions in executory contracts.
(a) In general.—An executory contract between a contrac- ' tor and any subcontractor that is related to construction, alteration, or repair of a building, structure, or improvement may not waive or require the subcontractor to waive the right to:
(1) Claim a mechanics’ lien; or
(2) Sue on a contractor’s bond.
(b) Provisions conditioning payment to subcontractor on payment of contractor.—A provision in an executory contract between a contractor and a subcontractor that is related to construction, alteration, or repair of a building, structure, or improvement and that conditions payment to the subcontractor on receipt by the contractor of payment *265from the owner or any other third party may not abrogate or waive the right of the subcontractor to:
(1) Claim a mechanics’ lien; or
(2) Sue on a contractor’s bond.
(c) Void provisions.—Any provision of a contract made in violation of this section is void as against the public policy of this State.
In describing property that can be subjected to a lien, § 9-102(a) refers to “every building erected” and to “every building repaired, rebuilt or improved.... ” The value of the labor or materials is not an issue in the case of a “building erected.” It is material to whether a lien will attach in the case of a repair, rebuilding or an improvement. Section 9-102(c), on the other hand, makes no distinction in the case of machines, wharves and bridges. Moreover, the exemption created by § 9-102(d) to protect bona fide purchasers for value also makes no distinction between new construction and existing buildings so long as the building is subject to a lien pursuant to § 9-102(a).
The language of § 9-104, the section in which the limitation under review is found, repeatedly carves out an exception between buildings generally and “a single family dwelling being erected on the owner’s land for his own residence.” (Emphasis added.) This language closely tracks the language of § 9-102(a) and implies, to me, that it applies to new construction. If the intent was not to limit § 9-104(f)(3) to new construction, there was no purpose to the words “being erected.” Those words could be excised from the provision to protect generally the owners of single family residences similarly to the broad protection given to bona fide purchasers for value by the exemption in § 9-102(d). We are not to interpret a statute in a manner that would render a clause, sentence, or phrase “surplusage, superfluous, meaningless, or nugatory.” State v. Pagano, 341 Md. 129, 134, 669 A.2d 1339 (1996) (quoting Montgomery County v. Buckman, 333 Md. 516, 524, 636 A.2d 448 (1994)).
*266Were we writing on a clean slate, I might agree that the policy interpretation reached by the majority is an appropriate policy. I find it difficult, however, to ignore the repeated language in this statute that reinforces a policy distinction between new construction and home improvements. Because we are being asked to interpret a limitation to a statute designed to protect lien claimants, which is to be interpreted in the most liberal and comprehensive manner in favor of mechanics, we should carefully heed our own admonition in Ridge:
Since the law was designed to protect subcontractors and materialmen, the Court of Appeals repeatedly ruled that it was to be interpreted in the most liberal and comprehensive manner in favor of mechanics. Courts, however, had “no power to extend the law to cases, beyond the obvious designs and plain requirements of the statute.” Although a significant change occurred in the law in 1982, as Chief Judge Gilbert recently repeated, it is still to be interpreted in favor of mechanics and suppliers.
Ridge, 69 Md.App. at 369-370, 517 A.2d 1133 (internal citations omitted).
In preceding cases, the statute could be construed without reference to language that distinguishes between buildings erected or “being erected” and an existing building being repaired, rebuilt, or improved. The language of § 9-104, both in the notice provisions, (a)(1) and (2) and in the limitation language of (f)(3), consistently refers to “a single family dwelling being erected on the owner’s land for his own residence.”
Obviously, the legislature understands how to eliminate any linguistic distinctions between new and existing construction, as demonstrated in § 9-102(c) (“any marine, wharf, or bridge erected, constructed or repaired”) and § 9-113. Section 9-113 concerns contracts between contractors and subcontractors and refers to executory contracts “related to construction, alteration, or repair of a building, structure, or improvement.” R.P. § 9-113(a) & (b). That language clearly encompasses *267both new construction and home improvements. It is noted, also, that the prohibition created by § 9-113 against contracts waiving or requiring subcontractors to waive their right to a mechanics’ lien or even to make the obligation of the contractor to the subcontractor conditioned upon payment by the owner to the contractor, reinforces a policy to protect subcontractors such as appellant in this case.
Are there possible reasons for such a distinction? One explanation is actually suggested by the Court in Ridge. In explaining why a person in the trades may be in a better position than an owner to know whether the general contractor is in a financially unstable position, the Court reflected that
[increasing the risk of double payment for the single family dwelling owner may well dampen the enthusiasm of the prospective house builder. This in turn would further decrease housing starts, particularly in a slow market.
Ridge, 69 Md.App. at 375, 517 A.2d 1133 (emphasis supplied). The Court went on to note that ‘Tfjor those unfamiliar with the housing industry, the number of housing starts is used as a predictor for market conditions for the coming year.” Ridge, 69 Md.App. at 375, fn. 5, 517 A.2d 1133 (emphasis added). Rather than creating a protection for owners of existing homes, the legislation may have been designed to jump start or encourage new home construction in support of the housing industry. Perhaps, as a practical matter, the legislature believed that owners of existing homes, who are more likely to be on site during construction and who may have greater personal knowledge of the contractor being utilized, do not require the same protection as the new home buyer. In the end, of course, it may be simply a matter of legislative oversight or imprecise drafting. Obviously, we cannot know for sure, but I do not believe it to be necessary that we do.
I would interpret the limitation narrowly and, based on the language of the statute, find for the appellant. Therefore, I respectfully dissent.