CMI Contracting, Inc. v. Little River Lodging ( 2004 )

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

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CMI Contracting, Inc., Respondent,

v.

Little River Lodging, LLC and Construction Design Associates, Inc., Defendants,

of whom Little River Lodging, LLC, is, Appellant.

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Appeal From Horry County
J. Stanton Cross, Jr., Master-In-Equity

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Unpublished Opinion No. 2004-UP-421
Submitted June 8, 2004 – Filed June 30, 2004

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AFFIRMED

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W. W. DesChamps, Jr., of Myrtle Beach, for Appellant.

Reese R. Boyd III, of Myrtle Beach, for Respondent.

PER CURIAM:  Little River Lodging, LLC, appeals the trial court’s order granting judgment in favor of CMI Contracting, Inc., on a mechanic’s lien in the amount of $73,620.75. The order also awarded CMI $18,055.95 in prejudgment interest and $8,533.70 in attorney’s fees.  As an alternative but superceded ground for recovery, the trial court found Little River liable to CMI for the amount of the alleged mechanic’s lien on the basis of CMI’s unjust enrichment claim.  We affirm. [1]

FACTS

Little River is the owner of a parcel of real estate situated in Horry County, South Carolina upon which it sought to construct a commercial hotel development.  Through its owner and operator, Bhupendra Patel, Little River contacted co-defendant Construction Design Associates, Inc., (“CDA”), a general contractor, in February 2000 and asked CDA to begin working on the project.  CDA and Little River understood the first phase of this project to include clearing the parcel and filling some wetlands on the property.  Due to a longstanding professional relationship between CDA and Little River, CDA did not initially require a written agreement with Little River. 

Subsequent to these discussions concerning the property, CDA entered a subcontract agreement with CMI for the clearing and wetland work to be performed on the property. The subcontract agreement included a cost estimate from CMI of approximately $118,000.  CMI began performing the agreed upon work in early March and completed the work on April 11, 2000.  CDA and Patel visited the work site during the months CMI performed the work specified in the subcontract agreement. 

Following the work’s completion, CMI submitted invoices to CDA for payment totaling $123,621. CDA then submitted $50,000 in payment to CMI after receiving a check for the same amount and purpose from Patel of Little River.  This was the only payment CMI received for the work.  Although an internal CDA document recognized a $61,259 balance due CMI on the subcontracting work, Patel later claimed he understood the $50,000 payment to be the complete amount due CMI for the project.

Little River and CDA did not memorialize their general contracting agreement for developing the property until October 2000.  The contract states work shall not commence until all of the following are accomplished: 1) financing is in place and designated for the project; 2) a building permit is obtained; and 3) written notice to proceed is received by CDA.  Because construction financing could not be obtained, CDA never commenced contract performance.  No hotel or other structure exists on the property today.

In the meantime, CMI served a summons, complaint, and notice and certificate of a mechanic’s lien on the property on Little River on July 18, 2000 and to CDA on August 11, 2000.  In addition to the mechanic’s lien, CMI asserted a claim against Little River for unjust enrichment.  The trial court awarded CMI a judgment of $100,210.40, the lien plus interest and attorney’s fees, against Little River.  The court order also stated CMI was entitled to $73,620.75 on its claim for unjust enrichment, but explained this award was “superceded by CMI’s judgment on its mechanic’s lien.”  This appeal followed.

STANDARD OF REVIEW

A proceeding to enforce a mechanic’s lien is an action at law.  Seckinger v. Vessel Excalibur, 326 S.C. 382, 386, 483 S.E.2d 775, 777 (Ct. App. 1997).  In an action at law, on appeal of a case tried without a jury, the findings of fact of the judge will not be disturbed upon appeal unless found to be without evidence which reasonably supports the judge’s findings.  Townes Assocs. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976).

LAW / ANALYSIS

I. Subject Matter Jurisdiction

Little River argues the mechanic’s lien foreclosure should be reversed because the trial court lacked subject matter jurisdiction over the matter due to untimely service.  We disagree.

South Carolina Code section 29-5-90 provides, in pertinent part:

[A] lien shall be dissolved unless the person desiring to avail himself thereof, within ninety days after he ceases to labor on or furnish labor or material for such building or structure, serves upon the owner . . . a statement of a just true account of the amount due him . . . together with a description of the property intended to be covered by the lien . . . with the name of the owner of the property, if known.

S.C. Code Ann. § 29-5-90 (Supp. 2003). [b1]    It is undisputed that CMI served this required notice and certificate of a mechanic’s lien on Little River after the statutorily mandated ninety-day period.  However, when questioned at trial regarding the sufficiency of the lien’s service, the following exchange occurred between the trial court and counsel for Little River:

THE COURT:  Is there an issue about the technical aspects of the mechanic’s lien such as the notice, the certificate was given, the timing of the foreclosure of the mechanic’s lien? All the technical aspects, is that an issue?

LITTLE RIVER:  I think the mechanic’s lien was served and everything.

THE COURT:  I don’t have the roll up here.

LITTLE RIVER:  I’ve got some other points to argue, but it’s not regarding service or whether the mechanic’s lien was properly prepared.

The sufficiency of the lien’s service was never again discussed or raised before the trial court.

While Little River certainly could have argued the timeliness of the mechanic’s lien’s service as valid grounds to dismiss the initial foreclosure action, it failed to do so.  Generally, an issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial judge to be preserved for appellate review. Wilder v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998).  However, Little River argues the issue of timeliness of service is one of subject matter jurisdiction and, as such, may be raised at any time, including for the first time on appeal.  See Johnson v. State, 319 S.C. 62, 64, 459 S.E.2d 840, 841 (1995) (stating issues related to subject matter jurisdiction can be raised at any time).

Subject matter jurisdiction has been defined as “the power to hear and determine cases of the general class to which the proceedings in question belong.”  McLendon v. S.C. Dep’t of Highways and Pub. Transp., 313 S.C. 525, 525-26, 443 S.E.2d 539, 540 (1994).  In McLendon, the supreme court determined that a statute of limitations defense does not raise a question of subject matter jurisdiction.  Id. at 525-26, 443 S.E.2d at 540. The supreme court extended this holding to the time limits set by statutes of creation. [2] Simpson v. Sanders, 314 S.C. 413, 415 n.1, 445 S.E.2d 93, 94 n.1 (1994).  As such, issues of timeliness of service, even when they arise from the mandatory terms of statutes of creation, do not give rise to concerns of subject matter jurisdiction. 

Thus, as Little River failed to raise to the trial court the issue of whether the mechanic’s lien in this case was timely served, this issue is not properly preserved for our review.

II. Absence of a Structure on the Building Site

Little River contends the trial court erred in enforcing the mechanic’s lien because the absence of a building or structure on the tract of land in question precludes attachment of the lien to the land.  We disagree.

The South Carolina mechanic’s lien statute provides:

A person to whom a debt is due for labor performed . . .  in the erection, alteration, or repair of a building or structure upon real estate . . . by virtue of an agreement with, or by consent of, the owner of the building or structure, or a person having authority from, or rightfully acting for, the owner in procuring or furnishing the labor or materials shall have a lien upon the building or structure and upon the interest of the owner of the building or structure in the lot of land upon which it is situated to secure the payment of the debt due to him. 

. . .

[L]abor performed . . . includes . . . the work making the real estate suitable as a site for the building or structure.  The work is considered to include, but not be limited to, the grading, bulldozing, leveling, excavating, and filling of land . . .

S.C. Code Ann. § 29-5-10 (Supp. 2003). 

Little River relies on Clo-Car Trucking Co., Inc. v. Clifflure Estates of South Carolina, 282 S.C. 573, 320 S.E.2d 51 (Ct. App. 1984), for the proposition that if no structure is erected on a tract of land, a mechanic’s lien, by the plain language of the statute, cannot attach to the land.  In Clo-Car Trucking, the contractor, pursuant to its contract with the previous owner, cleared and graded land for the construction of streets and roads.  Neither the contractor nor anyone else did anything more to the land.  This court held that, under section 29-5-10, “a mechanic’s lien cannot attach to land or to an owner’s interest in land where the work done is unconnected with and forms no integral part of the erection, alteration, or repair of either a building or a structure of some description.”  Clo-Car Trucking Co., Inc., 282 S.C. at 578, 320 S.E.2d at 54.

We find A.V.A. Construction Corporation v. Santee Wando Construction, 303 S.C. 333, 400 S.E.2d 498 (Ct. App. 1990), more instructive on this issue.  In A.V.A. Construction, the contractor had contracted to construct the tennis court, provide drainage facilities, build roads with curbs, and clear and grade land in anticipation of development of a subdivision. At the time the action was commenced, no houses had been constructed on any of the lots.  Noting the General Assembly’s recent liberalization of the mechanic’s lien statute, this court found the mechanic’s lien attached to the land because the work was “provided in order to make [the land] usable for building structures,” notwithstanding the fact that the buildings were “yet to come.” [3]   Id.  at 335, 400 S.E.2d at 500.  In reaching this decision, this court expressly distinguished Clo-Car Trucking on the factual basis that, in the earlier case, no allegation was made that the clearing and grading were done in connection with the construction or erection of any building or structure.  Id.

We find the facts before this court more analogous to those in A.V.A. Construction.  While no structure currently exists on Little River’s property, the work performed by CMI was clearly performed in anticipation of the construction of a hotel and was provided to Little River in order to make the plot suitable for such.  We find the statute sufficiently broad to encompass labor essential to the owner’s development of his property, regardless of the subsequent progress of that development. 

III. Owner Consent

Little River argues the trial court erred in enforcing the mechanic’s lien because there was no agreement with or consent from the owner of the land, Little River, for CMI to perform the labor on the land.  We disagree.

Little River bases its argument on the language of the mechanic’s lien statute which provides:

A person to whom a debt is due for labor performed . . . in the erection, alteration, or repair of a building or structure upon real estate . . . by virtue of an agreement with, or by consent of, the owner of the building or structure, or a person having authority from, or rightfully acting for, the owner in procuring or furnishing the labor or materials shall have a lien upon the building or structure and upon the interest of the owner of the building or structure in the lot of land upon which it is situated to secure the payment of the debt due to him. 

S.C. Code Ann. § 29-5-10 (Supp. 2003) (emphasis added). Little River contends, because no contract existed directly between it and CMI, no consent was given to CMI to perform the labor on the land. 

The consent required by section 29-5-10 is “something more than a mere acquiescence in a state of things already in existence. It implies an agreement to that which, but for the consent, could not exist, and which the party has a right to forbid.”  F & D Elec. Contractors, Inc. v. Powder Coaters, Inc., 350 S.C. 454, 459-60, 567 S.E.2d 842, 844 (2002).  This consent does not require an express contract, but must indicate “an agreement that the owner of . . . the land shall be, or may be, liable for the materials or labor.”  F & D Elec. Contractors, 350 S.C. at 460, 567 S.E.2d at 845 (quoting St. Catherine’s Church Corp. of Riverside v. Technical Planning Assocs., 9 Conn.App. 682, 520 A.2d 1298 (Conn. Ct. App. 1987)).

F & D Elec. Contractors involved the issue of owner consent regarding a mechanic’s lien in a landlord-tenant context. In such a context, the landlord/owner or his agent must directly give the tenant or materialman express or implied consent acknowledging his liability for the work.  The reasoning behind this requirement is manifest in the landlord-tenant relationship.  A landlord/owner should not be liable for repairs or improvements undertaken at the sheer caprice of a tenant, even if the landlord is aware of the improvements or grants the tenant general permission to undertake them. We find the situation before us now, however, quite different from that arising within the landlord-tenant context.

The labor performed by CMI was commenced and completed at the sole behest of Little River, through its general contractor CDA.  But for the consent and impetus of Little River, the labor on the plot of land would not exist.  The labor was performed for the sole benefit of Little River.  Its owner and operator, Patel, visited the sight and expressed his satisfaction with the work.  These visits constitute more than mere acquiescence of a particular state of the land.  Rather they are evidence that the work commenced under the direction of Little River.  The evidence in the record demonstrates the understanding between Little River and CDA, who shared a longstanding professional relationship, that the work being performed on the site by CMI was within the agreed upon scope of the essential first stage of the property’s development.  For these reasons, we conclude the work performed by CMI on the hotel sight was commenced by consent of Little River.  Thus, the enforcement of the lien was proper.

IV. Monies due CDA from Little River

Little River argues that because no monies were due CDA at the time CMI served its notice and certificate of mechanic’s lien, Little River owes CMI nothing on the lien.  As this issue was not conclusively raised at trial or ruled upon by the trial court in its final order, it is not preserved for our review.  See Wilder Corp. v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998) (“It is axiomatic that an issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial judge to be preserved for appellate review.”).

V.  Award of in personam judgment

Little River argues the trial court erred in awarding CMI a monetary in personam judgment against Little River without ordering the sale of the property to pay the mechanic’s lien indebtedness.  It asserts this issue is one of subject matter jurisdiction. We disagree with this assertion.  As stated above, subject matter jurisdiction concerns “the power to hear and determine cases of the general class to which the proceedings in question belong.”  McLendon v. South Carolina Department of Highways and Public Transportation, 313 S.C. 525, 525-26, 443 S.E.2d 539, 540 (1994).

There is a wide difference between a want of jurisdiction in which case the court has no power to adjudicate at all, and a mistake in the exercise of undoubted jurisdiction in which case the action of the trial court is not void although it may be subject to direct attack on appeal. A judgment will not be vacated for a mere irregularity which does not affect the justice of the case, and of which the party could have availed himself, but did not do so until judgment was rendered against him.

Thomas & Howard Co. v. T.W. Graham and Co., 318 S.C. 286, 291, 457 S.E.2d 340, 343 (1995) (citations omitted).

“When a court acts with proper subject matter jurisdiction but takes some action outside of its authority, the party against whom the act is done must object and directly appeal.”  Coon v. Coon, 356 S.C. 342, 348, 588 S.E.2d 624, 627 (Ct. App. 2003). 

Here, the trial court certainly had the power to hear and determine mechanic’s lien cases.  Its failure to order the sale of the property involved is, at the most, a mistake in the exercise of its undoubted jurisdiction. As Little River failed to raise this omission to the trial court in a post-trial motion, the issue is not properly before this court.  See Padgett v. Mercado, 341 S.C. 229, 233, 533 S.E.2d 339, 341 (Ct. App. 2000) (stating a post-trial motion must be made where there are errors or inconsistencies in the trial court’s order).

VI. Amount of attorney’s fees

Little River argues the trial court erred in its award of attorney’s fees to CMI as the court failed to make specific findings of fact on the record for each of the six factors necessary for consideration in determining such an award.  Little River, however, failed to raise to the trial court its concern over a lack of consideration of these factors in the form of a motion to alter or amend the judgment pursuant to Rule 59, SCRCP. Accordingly, this issue is not properly before this court.  See Wilder Corp. v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998) (“It is axiomatic that an issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial judge to be preserved for appellate review.”); Baker v. Wolfe, 333 S.C. 605, 614, 510 S.E.2d 726, 731 (Ct. App. 1998) (noting where record did not indicate appellant objected to the reasonableness of the hours or fees, either at the hearing or by way of a motion to reconsider, the issue was not properly before the court).  Furthermore, because the mechanic’s lien was proper, we find the trial court properly granted CMI attorney’s fees. 

VII.  Unjust Enrichment

Because we conclude the mechanic’s lien was properly enforced against Little River, we need not address Little River’s exceptions to the trial court’s ruling on CMI’s unjust enrichment claim. See Hodge v. First Fed. Sav. & Loan Ass’n, 267 S.C. 270, 275, 227 S.E.2d 310, 312 (1976) (stating that because the appellant had failed to establish error in the enforcement of the mechanic’s lien, the personal judgment premised upon the contingency of the invalidity of the lien was academic).

CONCLUSION

For the foregoing reasons, the order of the trial court is

AFFIRMED.

ANDERSON, HUFF, and KITTREDGE, JJ., concur.

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[1] We decide this case without oral argument pursuant to Rule 215, SCACR.

[2] Although similar in operation, a statute that creates a new liability and affixes the time within which an action may be commenced is not a statute of limitation but a statute of creation.  Simpson v. Sanders, 314 S.C. 413, 415, 445 S.E.2d 93, 94 (1994); Knight Pub. Co. v. University of South Carolina, 295 S.C. 31, 33, 367 S.E.2d 20, 21 (1988) (overruled on other grounds in Simpson v. Sanders, 314 S.C. 413, 445 S.E.2d 93 (1994)).

[3] Little River contends, in A.V.A Constr. Corp. v. Santee Wando Constr., 303 S.C. 333, 400 S.E.2d 498 (Ct. App. 1990), the this court determined the constructed tennis courts and roads to be “structures” under the act.  We find nothing in that opinion that would reflect this interpretation by the court of the mechanic’s lien statute or the facts of that case.