Court Opinion

ID: 9705831
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:22:49.807264+00
Date Added: 2024-06-11T18:22:16.453150
License: Public Domain

White, PJ.
(concurring in part and dissenting in part). I agree that the lien claimants who did not provide timely notices of furnishing are nevertheless entitled to hens for work performed before providing notice except to the extent that payments were made to the contractor pursuant to either a contractor’s sworn statement or a waiver of hen. MCL 570.1109(6); MSA 26.316(109)(6).1
*684I also agree that there are no genuine issues of material fact concerning the validity of the contractor’s statements. The statements were not dated, signed, or notarized in accordance with the statute. MCL 570.1110(4); MSA 26.316(110)(4). While homeowners are entitled by statute to rely on the sworn statements of others, MCL 570.1110(7); MSA 26.316(110)(7); Renshaw v Samuels, 117 Mich App 649, 657; 324 NW2d 117 (1982), the statements at issue here were not sworn statements, and thus do not operate to reduce the amount of the liens under subsection 109(6).
Regarding the lien waivers, I agree with the conclusion that forged waivers of lien cannot defeat the valid lien rights of innocent lien claimants.2 I would, *685however, remand with respect to Darling Builders Supply Co. and Hunnicutt Plumbing & Heating as well as RBK Corporation and Clark Foundation Company. It is unclear from the record and the briefs whether Darling Builders Supply and Hunnicutt Plumbing & Heating assert that the waivers of lien pertaining to them were fraudulent. While it is correct that only RBK and Clark Foundation provided affidavits asserting that the waivers were forged, the hen fund’s brief in the circuit court conceded that the lien waivers may have been forged without differentiating between the parties. On appeal, the appellees’ joint brief refers to the RBK and Clark Foundation affidavits, but asserts generally that the lien waivers were fraudulent, apparently referring to all of them. Thus, I would remand for further inquiry into the validity of the waivers pertaining to all four subcontractors.
I join in the reversal with regard to Stahl & Sons, Inc., on the basis that it was not a member of the lien fund when it contracted to work on the job.3
I agree that there is a genuine issue of material fact concerning RBK’s entitlement to recover from the fund under MCL 570.1203(3)(h); MSA 26.316(203)(h). RBK did not establish that Holt Building Company (Holt)4 was licensed, and there is a genuine issue concerning whether RBK contracted with Daniel Hughes or Holt.5 I note that RBK does not argue on appeal *686that Holt was not required to be licensed under MCL 339.2401(b); MSA 18.425(2401)(b), and I therefore do not consider the applicability of that section.6
I join in the majority’s discussion of the time/price differential element of plaintiffs claim.
Regarding the lien fund’s claim of entitlement to the $31,663.30 held by the circuit court, I do not agree that the lien fund forfeited any subrogation rights it might have by failing to pay the lien claimants before asserting those rights. I do not read § 203 as evincing a legislative intent to preclude the lien fund from disputing its liability to a lien claimant and at the same time alternatively asserting a subrogation right should the court hold it hable to the hen claimant.
Additionally, the hen fund pleaded a cause of action against Hughes asserting a right to recover all sums owed to the hen claimants. In its brief in the circuit court, the hen fund asserted that all hen claimants are entitled to equal priority under subsection 119(1) of the statute, MCL 570.1119(1); MSA 26.316(119)(1), and that the $31,663.30 should not be distributed solely to those claimants who were not members of the fund. On appeal, the hen fund asserts an entitlement to the entire sum as the subrogee of the fund-member claimants. The hen fund asserts that the sum is owed by the owner to Hughes, and by Hughes to the claimants.
I would hold that the circuit court erred in ordering that the $31,663.30 be distributed to the nonmember *687claimants only. The statute provides that all liens are entitled to the same priority and that the lien fund is subrogated to the rights of the fund members who are paid by the fund. The lien fund was therefore subrogated to the fund members’ claims against the remaining $31,663.30 owed on the contract,7 and the sum should have been distributed pro rata between all the lien claimants, fund members and nonfund members. The nonmember claimants have provided no support for their position that the $31,663.30 should be shared by them alone, other than the argument that the statute is remedial and intended to provide relief to unpaid providers of materials and labor. However, the statute expressly states that all liens have equal priority, and there is no reason to conclude that the Legislature intended that the hens of nonmember lien claimants increase in value because other hen claimants are fund members.
While I conclude that the circuit erred in ordering that the nonmembers share exclusively in the $31,663.30 and that the hen fund satisfy the fund *688member claims in their entirety, I reject the lien fund’s claim to the entire $31,663.30 contract balance held by the court. The lien fund has presented no argument to support its implied claim that its rights attained through subrogation are superior, rather than equal, to the rights of the nonmember claimants.

 In its brief on appeal, the lien fund argues that the untimely filing of the notices of lien bars the lien claimants from enforcing the liens, but *684does not directly address the operation of subsection 109(6). During argument, the lien fund asserted that subsection 109(6) is inapplicable and that it was not raised below. However, a review of the lien fund’s brief in the circuit court reveals that the lien fund took the position that the late filing of the notices invalidated the liens “to the extent that the homeowners paid pursuant to lien waivers.”

 I observe at this juncture that the statutory provision regarding the effect of the owner’s payment to the contractor on the subcontractor’s lien where the subcontractor has not provided a timely notice of furnishing, subsection 109(6), is not completely parallel to the provision regarding the effect of the homeowner’s payments to a contractor on the enforceability of a construction lien on residential premises, MCL 570.1203(1); MSA 26.316(203)(1). Subsection 109(6) applies to all real property and reduces the amount of the lien to the extent payment is made pursuant to sworn statements or lien waivers. Subsection 203(1) applies only to residential structures and declares that the lien will not attach if the homeowner files an affidavit with the court stating that the homeowner has paid the contractor and the amount paid, has not colluded with anyone to obtain payment from the lien fund, and has cooperated and will continue to cooperate in the defense of the lien fund. Thus, in the instant case, unsworn statements and fraudulent lien waivers do not diminish the amount of the lien, but the homeowner nevertheless is entitled to the protection of subsection 203(1), and those lien claimants who are members of the lien fund can proceed against the fund to recover the lien amounts that are valid under subsection 109(6), but do not attach under subsection 203(1).

 I reject Stahl & Sons’ argument that the lien fund waived review of this issue by failing to properly identify Stahl & Sons in the fund’s docketing statement, and note that Stahl & Sons has not responded to this issue on the merits.

 Hughes contracted with the Verhelles and the remaining parties using the name Cor-Al Construction.

 I recognize that RBK may not rely on the fact that Hughes was licensed to establish compliance with the statute, Annex Constr, Inc v *686Fenech, 191 Mich App 219; 477 NW2d 103 (1991), if, indeed, the contract was with Holt, rather than Hughes.

 RBK did assert in the circuit court that Holt was not required to be licensed under a different section of the statute, MCL 339.2403(e); MSA 18.425(2403)(e), but has not repeated this argument on appeal.

 If one were to conclude that the failure to pay the fund members was fatal to the subrogation claim, the result would be the same. The fund members themselves would be entitled to a pro-rata share of the $31,663.30, and their claims against the lien fund would be reduced by the sums collected. Similarly, it does not matter if the lien claimants’ claims are viewed as claims against the contractor or the homeowner. The homeowner owed the contractor $31,663.30 under the contract, and that sum was subject to the subcontractors’ claims for payment from the contractor. The court permitted the homeowner to pay the sum to the court, rather than the contractor as provided in subsection 203(1), but the money was constructively the contractor’s (subject to subcontractor claims) pursuant to the contract. If the claim is viewed as one against the homeowner for the remaining $31,663.30, then the facts must be viewed from the standpoint of the money not having been paid to the court or the contractor. The homeowner, then, would not be entitled to the protection of subsection 203(1) with respect to that amount, and the lien fund members would have no claim against the lien fund for those amounts.