Sheridan Ready Mix, Inc. v. First Congregational Church ( 1985 )

No. 34-278
IN THE SUPREME COURT OF THE STATE OF PIONTAXA
1984
SHERIDAN READY MIX, INC. ,
a Montana corp.,
Plaintiff and Appellant,
FIRST CONGREGATIONAL CHURCH OF
PLENTYWOOD, MONTANA,
Defendant and Respondent.
APPEAL FROM: District Court of the Fifteenth Judicial District,
In and for the County of Sheridan,
The Honorable M. James Sorte, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Hendrickson & Everson; Jim Ragain, Billings, l4ontana
For Respondent :
Marks and Irving; Dave Irving, Glasgow, Montana
Submitted on Briefs: Nov. 20, 1984
Decided: January 28, 1985
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This is an appea.1 from a summary judgment order of a
mecha.niclslien, filed in the District Court of the Fifteenth
Judicial District of the State of Montana, for the County of
Sheridan.
Appellant Sheridan Ready-Mix (Sheridan) filed a com-
plaint for foreclosure on a mechanic's lien against the First
Congregational Church of Plentywood Montana (Church). The
Church filed an answer and motion for summary judgment,
alleging the mechanic's lien was defective because: (1) the
statutory period of notice was not met; (2) the "owners" of
the property were not properly served; and (3) the property
description was inadequate. Defendant Church's motion was
granted and Sheridan Ready-Mix appeals.
The Church hired Norris Masonry and Concrete Construc-
tion to construct and make certain improvements to the
church, including: steps, approaches, ramps, landings and
sidewalks. On September 1, 1982, Sheridan Ready-Mix was
hired as a subcontractor by Norris Masonry to provide con-
crete for the construction and improvements on the church.
Sheridan provided concrete until September 17, 1982. At the
completion of the work, Norris Masonry was paid in toto by
the Church and for some reason Sheridan was never paid the
$2,726.93 owed it.
On December 15, 1982, Mr. David Cybulski, attorney for
Sheridan filed a "Notice of Lien" against Church with the
County Clerk of Sheridan County. Prior to filing that lien,
Cybulski mailed a copy of it to the First Congregational
Church, 313 North Jackson, Plentywood, Montana, 59254, by
certified mai,, return receipt requested. The Reverend Doris
Underdahl, the minister of the church, received notice on
December 17, 1982, one day after the statutory period for
filing the lien had expired.
The notice of lien consisted of six pages. Page one
contained the information required by statute to he on a lien
notice, a legal description of the real property sought to be
charged with the lien and a certificate of service over the
signature of Mr. Cybulski. The legal description stated:
"That the real property which is subject
to this lien is situated in the County of
Sheridan, State of Montana, and is par-
ticularly described as follows: to-wit:
"Lots One (1) and Two (2) of Block
Three (3) Original Townsite,
Plentywood, Montana."
The Certification of Service stated:
"I hereby certify that a true and correct
copy of the Notice of Lien has been
served upon the owner of record, the
First Congregational Church, 313 North
Jackson, Plentywood, Montana 59254, by
certified mail-, return receipt requested,
postage prepaid to the owner's last known
address. "
Pages 2 through 6 of the notice of lien consisted of an
account summary and copies of specific invoices. Each of
those pages made specific reference to "Congregational
Church" or "Cong. Church."
The District Court found the lien was invalid because
of an inadequate property description. The District Court
also questioned the timeliness of the filing of the notice
and whether or not the real owner was notified.
Four issues are present.ed for consideration:
1. Whether the property description in the notice of
lien was adequate as a matter of law.
2. Whether proper notificati-on had been given to the
owner of record of the property named in the lien, as provid-
ed by section 71-3-513(2) MCA.
3. Whether a mechanic's lien was perfected if a copy
was not received by the owner of the property until after the
ninety day statutory period has expired.
4. Whether the "owner" of the property had been prop-
erly served when a copy of the lien had heen addressed to the
name of the unincorporated association rather than the gov-
erning body or the agent of said association.
The first issue concerns whether the property descrip-
tion in the notice of lien was adequate as a matter of law.
The respondent argues the trial court correctly ruled the
property description and notice of lien was inadequate as a
matter of law in that it contained a "very descript legal
description" and is therefore inadequate under the mechanic's
lien. Varco-Pruden v. Nelson (1979), 181 Mont. 252, 593 P.2d
48; Caird Engineering Works v. Seven-up Gold Mining Co.
{1941), 111 Mont. 471, 111 P.2d 267; Federal Land Bank of
Spokane v. Green (1939), 108 Mont. 56, 90 P.2d 489; Midland
Coal & -
Lumber v. Ferguson (1921), 61 Mont. 402, 202 P.28 389;
and Stritzel-Spaberg Lumber Co. v. Edwards et al. (1914), 50
-
Mont. 49, 144 P . a 772.
Interestingly enough, both parties seem to rely upon
the same cases and appear to be in agreement with the above
authorities. The accounts and statements attached to and
filed with the lien statement form a part of the lien state-
ment and can be used for further aid in identifying the
property sought to be charged with a lien. Here the only
evidence submitted to the trial court was that the concrete
was supplied and incorporated into the First Congregational
CORRECTION. In preparing this opinion for pub-
Hon. John C. Harrison lication, we noted in our verification of titles and
Justice, Supreme Court citations the matters listed below. Corrections have
Room 414 Justice Building been made on our copy of the opinion.
215 North Sanders
Helena, Montana 59620
MAR 1 8 1985
March 12, 1985 FTm'T: '"
.. !II?.R;I:SOP~
Clerk < I Slapreme Court
Sheridan Ready Mix, Inc. v. First Congregational Churckt&~t on tan:
Plentywood, No. 84-278, Jan. 28, 1985
Page 4, line 21
Page 4, line
- - - 202 P.2d 389 should read 202 - 389.
P.
23 - - - 144 P.2d 772 should read 144 - 772. d
P.
,
Page 9, last line - - - (Tex. 1972) should read (Tex.Civ.App. 19721.v
WE$T PUBLISHING COMPANY
Box 43526
St. Paul, MN 55164
Church, and that a person generally familiar with the locali-
ty could identify the property from the description contained.
in the lien statement. It should be noted that the respon-
dent Church had an opportunity to submit evidence to the
contrary, but chose not to do so, apparently deciding to
contest this lien on the basis that only a question of law
existed as to whether the lien statement contained an ad.e-
quate legal description.
Mechanic's lien proceedings are governed by section
71-3-501, et. seq., MCA. Subsection (1) of section 71-3-511,
MCA entitled "How to Perfect Lien" states as follows:
"Every person wishing to avail himself of
the benefits of this part must file, with
the county clerk of the county in which
the property or premises mentioned in
71-3-501 is situated and within 90 days
after the material or machinery aforesaid
has been furnished or the work or labor
performed, a just and true account of the
amount due him, after allowing all cred-
its, containing a correct description of
- property t o be charged - -
the
lien, verified-2-affidavit,
with such
but any
error or mistake - - account - -
in the or de-
scription -- affect - validity of
does not the
- - - - the property - - identi-
the lien if can be
fied 2 - description.
the - paper
The
containing the account, description, - and
affidavit is deemed --
the lien. When there
is an openaccount between the parties
for labor, material or machinery, such
lien may be filed within 90 days after
the date of the last item in such account
and include all items and charges con-
tained therein for material or machinery
furnished for, or work performed on, the
property on which the lien is claimed."
(Emphasis added.)
In support of its contention that Sheridan's property
description is inadequate in that it is a "bare legal de-
scription," the respondent Church relied upon Midland v.
Ferguson, supra, a.n early Montana case for the proposition
that the property to be described in a mechanic's lien is the
building, structure, or other improvements upon which the
lien is to attach, rather than the land upon which the prop-
erty is located. Church also cited Midland - -
Coal & Lumber,
supra, as holding that if a person familiar with the locality
can identify the property from the descriptj-on in a lien,
said description meets the statutory requirement. In so
arguing, Church cites Varco-Pruden v. Nelson, supra, as
authority for its argument that a bare legal desciption of a
tract of land, with no attempt to describe the building or
improvement upon which the lien is claimed, does not give
rise to an enforceable lien.
While we do not disagree with this argument, it should
be noted the court below in its findings as a matter of law,
found the property description contained in Sheridan's lien
is a "bare legal description." The District Court had before
it two copies of the lien statement filed by Sheridan, one of
which was attached to Sheridan's complaint, the other being a
certified copy attached to an affidavit of the attorney David
Cybulski. Mr. Cybulski was the attorney who prepared the
lien which stated he had been a resident of Plentywood,
Montana, for twenty-nine years; that he was familiar with the
locality and the property owned by the Church; that there
were two buildings on the above described property, those
being a church building and a parsonage; that a person gener-
ally familiar with the locality, such as Mr. Cybulski, given
the legal description of the lots and the further description
of "Conqregational Churchtn could identify the property
described as the church building as opposed to the other
structures on the lots.
Two recent decisions of this Court, General Electric
Supply Co. v. Bennett (Mont. 1981), 626 P.2d 844, 38 St-Rep.
553, and Morrison-Maierle, Inc. v. Selsco (1980), 1.86 Mont.
180, 606 P.2d 1085, require a finding that the property
description in Sheridan's lien statement is sufficient to
enable one familiar with the locality to identify the proper-
ty sought to be charged, thus meeting the requirements of
section 71-3-511, MCA.
In General Electric Supply Co., supra, this Court,
citing Federal Land Bank of Spokane v. Green 11939), 108
Mont. 56, 90 P.2d 489, held the requirements of the mechan-
ic's lien statutes as to procedure will be strictly enforced,
but once the procedural requirements have been fulfilled, the
statutes will he liberally construed so as to give effect to
their remedial character. In General Electric Supply -
Co.,
the defendant property owners argued the lien statement was
defective in that it referred only to an "office building,"
there being more than one building on the property. This
Court held, however, that pursuant to our statute, the ac-
counts and statements filed with the notice of lien formed
part of the lien itself and can he used for further aid in.
identifying the property. In General Electric Supply -
Co.,
the accounts and statements filed with the notice of lien
identified the building as the "Bennett Office Building." We
held tha.t using the account statements, which formed part of
the lien, it was clear that a person familiar with the local-
ity could identify the property. Here, as in General Elec-
tric Supply - the description contained in the notice of
Co.,
lien is sufficient to safisfy the statutory requirements.
The second issue is whether the proof of service con-
tained in Sheridan's lien statement meets the requirement of
the mechanic's lien statute. The District Court in holding
that it did not, cited the recent case General Electric
Supply Co. v. Bennett, supra, in support of the ruling that
the lien did not meet the statutory requirement. The court
cited that proper notice was not made because of an inade-
quate return receipt. A review of statutory authority,
including the legislative history and cases referred to by
the District Court, do not reveal any support for the conclu-
sion reached by the District Court on this issue.
Section 71-3-513, MCA entitled "Filing with the county
clerk--notification of owner" states in subsection (2)
thereof:
"The clerk shall not file the lien unless
there is attached thereto a certification
by the lien claimant or his agent that a
copy of the lien has been served upon
each owner of record of the property
named in the lien. Service shall be made
by personal service on ea.ch owner or by
mailing a copy of the lien by certified
or registered mail with return receipt
requested to each owner's last known
address. The certification shall state
whether service was made by delivery of
certified or registered mail-."
Nothing in this section speaks of any requirement to
produce to the clerk a "return receipt" or other proof of
actual receipt by the property owner. Here, the lien state-
ment of the appellant reads as follows:
"CERTIFICATE - SERVICE
OF
1 hereby certify that a true and correct
copy of the Notice of Lien has been
served upon the owner of record, the
First Congregational Church, 313 North
Jackson, Plentywood, Montana, 59254, by
certified mail, return receipt requested
postage prepaid to the owner's last known
address. "
This language was followed by the signature of attorney David
Cybulski, Sheridan's attorney. This method of proof of
service follows the language of the statute and is suffi-
cient. The District Court erred in holding the method of
proving service was inadequate.
The next issue concerns whether appellant Sheridan's
lien statement was properly perfected, notwithstanding the
fact that First Congregational Church did not receive a copy
of the lien until one day after the filing period had ex-
pired. It is the respondent's position the District Court
properly ruled service was improper in that the notice was
not received until the 91st day, one day after the filing
period had expired. The evidence introduced showed appellant
Sheridan provided materials and labor which were incorporated
into the Church for a period of time ending September 17,
1982. Thus, Sheridan had until December 16, 1982 to perfect
its lien by filing it with the county clerk. Sheridan se-
cured the services of attorney Cybulski to prepare and file
its lien statement. Mr. Cybulski filed the lien statement on
December 15, 1982, after first mailing a copy of the lien
statement, by certified mail, return receipt requested, to
First Congregational Church. The copy of the lien statement
was not delivered to First Congregational until December 17,
1982, one day after the 90-day period for filing had expired.
Statutes concerning the perfection of a mechanic's lien
are governed by sections 71-3-511, and 71-3-513, MCA. Church
bases its contention that the appellant's lien is invalid on
the "has been served" language contained in section
71-3-513 (2), MCA. It is the position of the respondent that
a copy of the lien had not been served until it was actually
served on the owner of the property.
Both the appellant and respondent have found no Montana
decisions which resolve this issue and therefore have had to
resort to precedents from other jurisdictions. The appellant
relies on Johnson Service Co. v. Climate Control Contractors,
478 S.W.2d 643, where subcontractor Johnson
having not been paid by Climate Control mailed a notice on
the 89th day to Climate Control which did not receive the
notice until the 91st day. The Texas statute concerning the
unpaid bills provided as follows:
"'Such claimant shall have given within
ninety (90) days ... written notices of
the claim by certified or registered
mail, addressed to the prime contractor
at his last known business address, or at
his residence, and to the surety or
sureties. ' " Johnson Service - 478
Co.,
S.W.2d at 644.
In tha.t case, the Texas Court of Appeals adopted the rule
that when a statute authorizes service of notice by regis-
tered or certified mail, service is effective when the notice
is properly addressed, registered and mailed. We believe
that such is a proper ruling and adopt the above language in
this decision.
The final issue is whether or not the appellant served
a copy of its lien on the proper party. The respondent,
Church, argues Sheridan's lien is invalid beca.use the notice
to the Church was received by the minister of the Church,
rather than someone on the board of trustees. Section
71-3-513(2), MCA, permits that in lieu of personal service, a
copy of the lien may be mailed by certified or registered
mail to the owner of the property named in the lien. When
the requirements for service by mail, as permitted by section
71-3-513(2), MCA are followed, service is complete. It is
irrelevant to such service who receives the notice which has
been properly mailed. The lien statute does not impose a
duty on the lien claimant to follow the postman to the door
of the addressee to determine if the right person received
the letter. Service was complete when the mailing as re-
quired by statute occurred. See section 28-10-201, MCA.
We hold the District Court erred in finding that the
legal description was inadequate, that the filing of the
notice was improper without filing a return receipt, and that
there were questions as to the receipt of said notice by a
proper party.
The judgment of the District Court is reversed and it
is remanded with instructions to enter a judgment for appel-
lant Sheridan, said judgment is to include reasonable attor-
ney's fees incurred by the appel-l.ant,at trial and appellate
level.
We concur: