City Electric Supply Co. v. Arch Insurance Co.

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SJC-12561
CITY ELECTRIC SUPPLY COMPANY1 vs. ARCH INSURANCE COMPANY.
Norfolk. November 8, 2018. - March 29, 2019.
Present: Gants, C.J., Gaziano, Lowy, Budd, Cypher, & Kafker,
JJ.
Mechanic's Lien. Bond. Practice, Civil, Enforcement of
liability on bond. Statute, Construction.
Civil action commenced in the Superior Court Department on
August 17, 2016.
The case was heard by Beverly J. Cannone, J., on a motion
for summary judgment.
The Supreme Judicial Court granted an application for
direct appellate review.
Thomas E. Day for the plaintiff.
John W. DiNicola, II, for the defendant.
GAZIANO, J. In this case, we consider whether a claimant
seeking to enforce a target lien bond by commencing a civil
action pursuant to the mechanic's lien statute, G. L. c. 254,
1 Doing business as Concord Electric Supply, Ltd.
2
§ 14, must record an attested copy of the complaint in the
registry of deeds. We conclude that the lien statute contains
no such requirement. A party seeking to enforce a target lien
bond, a bond which has the effect of dissolving a mechanic's
lien that has been placed on a property, need not record a copy
of a complaint in the registry of deeds as a condition precedent
to enforcing the bond.
1. Background. The essential facts are undisputed. City
Electric Supply Company, doing business as Concord Electric
Supply, Ltd. (CES), supplied electrical materials for a
construction project in Brookline to subcontractor Michael
Franciosi, doing business as Electrical Professionals
(Franciosi). In June 2016, CES perfected a mechanic's lien on
the Brookline property by recording a notice of contract in the
Norfolk County registry of deeds pursuant to G. L. c. 254, § 4;
the notice indicated that Franciosi owed CES $283,056.54.
Months later, Franciosi filed a suggestion of bankruptcy in the
Superior Court.
On July 14, 2016, general contractor Tocci Building
Corporation (Tocci) issued and recorded a "target lien bond,"2
2 Both parties refer to a bond issued pursuant to G. L.
c. 254, § 14, as a "target lien bond." The term "target lien
bond" is not used in the language of G. L. c. 254, § 14.
Nonetheless, as CES explains, a lien dissolution bond filed
pursuant to G. L. c. 254, § 14, is "commonly referred to as a
'target bond.'" We also previously have referred to a bond
3
pursuant to G. L. c. 254, § 14, in the amount of $283,056.54,
the amount of the mechanic's lien that CES had created. The
target lien bond listed the defendant, Arch Insurance Company
(Arch), as surety, and was recorded in the Norfolk County
registry of deeds.
In August, 2016, CES sought to enforce the target lien bond
by filing a timely action against Franciosi and Arch in the
Superior Court, pursuant to G. L. c. 254, § 14. CES properly
served Franciosi and Arch. CES did not record a copy of its
complaint in the registry of deeds within thirty days of
commencement of the action.3
In March, 2017, Arch moved for summary judgment pursuant to
Mass. R. Civ. P. 56, 365 Mass. 824 (1974); it argued that CES
had failed to comply with G. L. c. 254. Specifically, Arch
alleged that CES had not recorded in the registry of deeds an
attested copy of its complaint to enforce the target lien bond
within thirty days of filing the complaint, as would have been
required in a lien enforcement action under G. L. c. 254, § 5.
CES opposed the motion "on the grounds that suit on a lien bond
issued pursuant to G. L. c. 254, § 14, as a "lien dissolution
bond." See NES Rentals v. Maine Drilling & Blasting, Inc., 465
Mass. 856, 860 (2013).
3 In January, 2017, CES ultimately recorded a copy of the
complaint in the Norfolk County registry of deeds, after counsel
for Arch contacted CES.
4
under [G. L. c. 254, § 14,] does not require an attested copy of
the complaint to be recorded and Arch's interpretation of the
lien bond requirement is erroneous."
Following a hearing, a Superior Court judge allowed Arch's
motion for summary judgment. The judge reasoned that G. L.
c. 254, § 14, must be read in conjunction with "the detailed and
precise requirements of [§] 5, which dictate the procedures for
a lien enforcement action." As G. L. c. 254, § 5, requires that
an attested copy of a complaint be recorded, the judge
"reject[ed] [CES's] claim that because G. L. c. 254, § 14, is
silent with respect to filing an attested copy of the complaint,
it was excused from doing so within the thirty days of the
commencement of the action as required by G. L. c. 254, § 5."
CES filed a timely appeal. We allowed CES's petition for direct
appellate review.
2. Statutory scheme. General Laws c. 254 "governs the
creation, perfection, and dissolution of a mechanic's lien."
National Lumber Co. v. United Cas. & Sur. Ins. Co., 440 Mass.
723, 726 (2004) (National Lumber II). Because a perfected lien
encumbers the property upon which it is placed, one purpose of
G. L. c. 254 is "to ensure that a person searching the land
records in a registry of deeds can determine with certainty
whether or not title to a particular parcel of land is
encumbered by a mechanic's lien." National Lumber Co. v.
5
LeFrancois Constr. Corp., 430 Mass. 663, 668 (2000) (National
Lumber I). Another important "purpose of G. L. c. 254 is 'to
provide security to contractors, subcontractors, laborers, and
suppliers for the value of their services and goods provided for
improving the owner's real estate.'" Id., quoting Hammill-
McCormick Assocs., Inc. v. New England Tel. & Tel. Co., 399
Mass. 541, 542-543 (1987). "Because a mechanic's lien is purely
a creation of statute, we have consistently required exact
compliance with the statute in order to create, perfect, and
enforce such a lien." Golden v. General Bldrs. Supply LLC, 441
Mass. 652, 654 (2004). At the same time, we have recognized
that the mechanic's lien "statute is . . . intended to protect
those who lawfully enhance the value of land by the expenditure
upon it of material or labor." Shaughnessy v. Isenberg, 213
Mass. 159, 161 (1912).
General Laws. c. 254 also "provides for prevention of
future liens and dissolution of existing liens by the giving of
a [lien] bond, which benefits . . . anyone possessing an
interest in that land . . . by furnishing means to keep his
title free from liens and preventing the sale of the land to
satisfy a lien" (quotation omitted). NES Rentals v. Maine
Drilling & Blasting, Inc., 465 Mass. 856, 860 (2013), citing
G. L. c. 254, §§ 12, 14. To do so, the statute establishes two
distinct types of lien bonds: "blanket" lien bonds that are
6
issued pursuant to G. L. c. 254, § 12, and "target" lien bonds
that are issued under G. L. c. 254, § 14. The filing of a
blanket lien bond prevents a lien from attaching to a property.
See G. L. c. 254, § 12. See also J.W. DiNicola II & E.L. Hall,
The Massachusetts Mechanic's Lien Law § 5.8.1, in Massachusetts
Construction Law and Litigation (2d ed. 2018) ("Once filed, the
[blanket lien] bond, by its terms, acts as a substitute for the
real property. The liens of subcontractors and vendors attach
to the bond as an alternate form of security for the property").
A target lien bond dissolves a lien that already has attached to
a property. See G. L. c. 254, § 14.
A mechanic's lien is created when a notice of contract is
filed in the registry of deeds. See G. L. c. 254, § 4; Tremont
Tower Condominium, LLC v. George B.H. Macomber Co., 436 Mass.
677, 683 (2002) ("filing of the notice of contract is . . . the
step that creates the lien in the first instance"). When a
target lien bond is issued and recorded pursuant to G. L.
c. 254, § 14, in a penal sum equal to a mechanic's lien that has
been placed on a property, the mechanic's lien is dissolved and
no longer encumbers the property. See National Lumber II, 440
Mass. at 729 ("the lien was dissolved when the [party] recorded
[a company's] surety bond" in accordance with G. L. c. 254,
§ 14). See also G. L. c. 254, § 14. After a target lien bond
is recorded pursuant to the terms and procedural requirements of
7
G. L. c. 254, § 14, a claimant becomes newly able to "recover on
[its] claim for . . . labor and materials" by enforcing the
target lien bond itself, as distinct from the then-dissolved
mechanic's lien. See G. L. c. 254, § 14.
At the same time, statutory dissolution of a lien under
G. L. c. 254, § 14, does not dissolve a claimant's ability to
recover costs incurred "for labor or labor and materials that
served as the basis of the lien." NES Rentals, 465 Mass. at 865
n.13. A claimant seeking to enforce a target lien bond under
G. L. c. 254, § 14, may recover, through a civil enforcement
action, "to the extent that the claimant would have been able to
recover" under the lien. See NES Rentals, supra; G. L. c. 254,
§ 14. In this way, G. L. c. 254, § 14, limits a claimant's
ability to recover on a target lien bond to the amount of the
claim that once formed the basis of the dissolved lien. As a
result, "[a] lien dissolution bond is inextricably connected to
the underlying lien." NES Rentals, supra.
3. Discussion. As stated, this case concerns CES's
efforts to enforce a target lien bond. As it did in the
Superior Court, CES argues that it was not required, pursuant to
G. L. c. 254, § 14, to record a copy of the complaint in the
registry of deeds within thirty days of commencing an action to
enforce the bond. Accordingly, CES argues that the allowance of
Arch's motion for summary judgment was error. We agree.
8
a. Standard of review. We review the allowance of a
motion for summary judgment de novo. See Miller v. Cotter, 448
Mass. 671, 676 (2007). "Summary judgment is appropriate where
there are no genuine issues of material fact and the moving
party is entitled to judgment as a matter of law." Twomey v.
Middleborough, 468 Mass. 260, 267 (2014), citing Kourouvacilis
v. General Motors Corp., 410 Mass. 706, 716 (1991); Mass. R.
Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002).
b. Statutory interpretation. "The starting point of our
analysis is the language of the statute, 'the principal source
of insight into Legislative purpose.'" Simon v. State Examiners
of Electricians, 395 Mass. 238, 242 (1985), quoting Commonwealth
v. Lightfoot, 391 Mass. 718, 720 (1984). "Where the language
[of a statute] is plain and unambiguous, it is conclusive of the
Legislature's purpose." National Lumber II, 440 Mass. at 727,
citing Pyle v. School Comm. of S. Hadley, 423 Mass. 283, 285
(1996).
i. Statutory language. The plain language of G. L.
c. 254, § 14 -- the statutory provision pursuant to which CES
commenced its civil action -- contains no requirement that a
claimant must record an attested copy of a complaint in order to
enforce a target lien bond. This is in contrast to G. L.
c. 254, § 12, which explicitly requires a party seeking to
enforce a blanket lien bond to record a copy of the complaint in
9
the registry of deeds. See G. L. c. 254, § 12 ("An attested
copy of the complaint shall be filed and recorded in the
registry of deeds"). General Laws c. 254, § 14, instead,
provides simply that "[a]ny person in interest may dissolve a
lien under this chapter by recording . . . a bond of a surety
company . . . in a penal sum equal to the amount of the lien
sought to be dissolved; and that "[u]pon the recording of the
bond, the lien shall be dissolved." "Notice of the recording
shall be given to the claimant by serving on the claimant a copy
of the notice of recording together with a copy of the bond by
an officer qualified to serve civil process or by delivering
same to the claimant." Id. A claimant must commence a civil
action to recover on a target lien bond "within ninety days
after the later of the filing of the statement required by [§] 8
or receipt of notice of recording of the bond." Id.
When interpreting the absence of language in an otherwise
"detailed and precise [statute], we regard [an] omission as
purposeful." Leary v. Contributory Retirement Appeal Bd., 421
Mass. 344, 348 (1995). General Laws c. 254 is detailed and
precise; it sets forth a "comprehensive scheme" to govern
mechanic's liens and lien bonds (citation omitted). See Ng
Bros. Constr., Inc. v. Cranney, 436 Mass. 638, 642 (2002)
("Individual sections of the statute delineate time requirements
for creating, maintaining, and enforcing a lien"). General Laws
10
c. 254, § 14, itself establishes various procedural requirements
for acquiring, recording, and enforcing a target lien bond. See
id. "We do not read into the statute a provision which the
Legislature did not see fit to put there, whether the omission
came from inadvertence or of set purpose." National Lumber II,
440 Mass. at 727, quoting General Elec. Co. v. Department of
Envtl. Protection, 429 Mass. 798, 803 (1999). Indeed, we have
long recognized that "statutes must be interpreted as enacted
and statutory omissions cannot be supplied by the court."
Modern Cont. Constr. Co. v. Lowell, 391 Mass. 829, 839–840
(1984). "Where language in certain provisions is noticeably
absent from other provisions of the same statute, such as here,
we have consistently held that the language should not be
implied where it is not present." National Lumber II, 440 Mass.
at 728, quoting Hallet v. Contributory Retirement Appeal Bd.,
431 Mass. 66, 69 (2000).
By contrast, with regard to blanket lien bonds, G. L.
c. 254, § 12, expressly requires that a complaint be recorded in
the registry of deeds. As discussed, a blanket lien bond issued
pursuant to G. L. c. 254, § 12, does not dissolve a lien but,
rather, prevents future liens from attaching to a property.
Because a blanket lien bond is issued before the conclusion of a
construction project, it may comprise only a "person's fair
estimate of the contract sum." See G. L. c. 254, § 12. As a
11
result, subcontractors and suppliers conceivably might record
notices of contract on a project in amounts greater than the
amount of a blanket lien bond, such that the blanket lien bond
may prove insufficient to protect the property from becoming
subject to a lien. Because a lien burdens the title of a
property, potential purchasers and others retain an interest in
knowing about suits to enforce blanket lien bonds that may fail
to prevent liens from attaching to the property.
Arch argues that, in light of this court's obligation to
read G. L. c. 254, § 14, alongside G. L. c. 254, § 5, which
requires recording of a complaint in the context of a lien
enforcement action, a claimant must record a complaint in order
to enforce a target lien bond. As stated, G. L. c. 254, § 5,
obliges a claimant seeking to enforce a lien to record an
attested copy of its complaint "within thirty days of the
commencement of the action, or such lien shall be dissolved."
Thus, pursuant to G. L. c. 254, § 5, the recording of a
complaint is one of several steps necessary to perfect a lien.
See National Lumber I, 430 Mass. at 668. Arch maintains that
because G. L. c. 254, § 14, provides that the recording of a
target lien bond does "not create any rights which the claimant
would not have had, or impair any defense which the obligors
would have had, in an action to enforce a lien," the recording
requirement of G. L. c. 254, § 5, is transmuted into a
12
requirement that a claimant record its complaint in order to
enforce a target lien bond issued under G. L. c. 254, § 14. We
do not agree.
To be sure, "[w]hen the meaning of a statute is brought
into question, a court properly should read other sections and
should construe them together" (citation omitted). LeClair v.
Norwell, 430 Mass. 328, 333 (1999). As Arch correctly notes, we
previously have indicated that, as with the provisions of any
statute, G. L. c. 254, § 14, should be read together with other
provisions of the lien statute. See, e.g., NES Rentals, 465
Mass. at 868 (referring to procedural requirements of G. L.
c. 254, § 5, in construing G. L. c. 254, § 14). At the same
time, however, "[w]e do not 'interpret a statute so as to render
it or any portion of it meaningless.'" Volin v. Board of Pub.
Accountancy, 422 Mass. 175, 179 (1996), quoting Adamowicz v.
Ipswich, 395 Mass. 757, 760 (1985).
General Laws c. 254, § 5, provides that dissolution of a
lien is a consequence of a plaintiff's failure to record a
complaint to enforce the lien. In an action to enforce a target
lien bond, however, the underlying lien already has been
dissolved. Therefore, to ascribe to Arch's interpretation would
be to render the phrase "or such lien shall be dissolved," G. L.
c. 254, § 5, unnecessary surplusage in the context of a target
13
lien bond enforcement action.4 "[T]he canon against surplusage
is strongest when an interpretation would render superfluous
another part of the same statutory scheme." Marx v. General
Revenue Corp., 568 U.S. 371, 386 (2013).
ii. Legislative history. A review of the legislative
history of G. L. c. 254 also supports our reading of the
statute. "A fundamental principle of statutory interpretation
is that a statute must be interpreted according to the intent of
the Legislature ascertained from all its words construed by the
ordinary and approved usage of the language, considered in
connection with the cause of its enactment, the mischief or
imperfection to be remedied and the main object to be
accomplished, to the end that the purpose of its framers may be
effectuated" (quotation and citation omitted). Harvard Crimson,
Inc. v. President & Fellows of Harvard College, 445 Mass. 745,
749 (2006).
The Legislature previously has considered and rejected
language suggesting that G. L. c. 254, § 14, should be
considered subject to all of the procedural requirements of
4 We address today the narrow issue whether G. L. c. 254,
§ 14, requires that a claimant seeking to enforce a lien bond
must record a copy of an attested complaint in the registry of
deeds. We do not conclude that a lien bond "replace[s] the Lien
Law in its entirety," as Arch suggests would be the result of a
ruling against it, and, indeed, draw no conclusions with respect
to any other procedural rights or defenses under G. L. c. 254,
§ 14.
14
G. L. c. 254, § 5. In 1973, the Legislature amended G. L.
c. 254, § 14, as part of an effort to bring the General Laws
into conformity with the then newly adopted rules of civil
procedure and rules of appellate procedure. The year before,
the Legislature had revised G. L. c. 254, § 14, to provide for a
new cause of action to enforce target lien bonds, beyond the
context of a suit under G. L. c. 254, § 5. See St. 1972,
c. 774, § 10. Notwithstanding this then-recent adoption of the
new cause of action, a 1973 Senate bill proposed the following
language to bring G. L. c. 254, § 14, into conformity with the
rules of civil procedure,
"Section 14 of said chapter 254, as appearing in the
Tercentenary Edition, is hereby amended by striking out the
first sentence and inserting in place thereof the following
sentence: In a civil action under section five, the court
may, in its discretion, accept a bond, with sufficient
surety or sureties, to dissolve the lien of any creditor or
all liens, as to the whole or any part of the property, or
any interest therein."
1973 Senate Doc. No. 11, at 190. The proposed language
referenced an outdated version of the mechanic's lien statute,
and was dropped from the final act as adopted, thereby rejecting
any reference to G. L. c. 254, § 5. See St. 1973, c. 1114,
§ 320 ("The last sentence of section 14 of said chapter 254, as
appearing in section 10 of chapter 774 of the acts of 1972, is
hereby amended by striking out the words 'petition in equity
filed' and inserting in place thereof the words: -- civil
15
action commenced"). "Where the Legislature has deleted . . .
language, apparently purposefully, the current version of the
statute cannot be interpreted to include the rejected
requirement. Reading in language that the Legislature chose to
remove . . . violates basic principles of statutory construction
and impermissibly interferes with the legislative function."
Aids Support Group of Cape Cod, Inc. v. Barnstable, 477 Mass.
296, 303 (2017), quoting Commonwealth v. Porges, 460 Mass. 525,
530 (2011).
Arch's reliance on Valentine Lumber & Supply Co. v.
Thibeault, 336 Mass. 411 (1957) (Valentine Lumber), in support
of its argument that recording of the complaint was required is
misplaced.5 In Valentine Lumber, supra at 412-413, this court
concluded that a claimant's failure to record a complaint
(called a "subpoena") to enforce a target lien bond precluded
the claimant from recovering under the mechanic's lien statute.
Under the statutory scheme in existence when Valentine Lumber
5 We recognize, as Arch argues, that many entities,
including the general contractor and other subcontractors, may
have an interest in knowledge of a target lien bond enforcement
action; as they are not interested parties to the lawsuit, they
will not receive notice through timely service of process. For
example, here CES provided Franciosi and Arch -- the two named
parties in its enforcement action -- with notice of its claim on
the target lien bond. Tocci, the general contractor, however,
who was not a party to the action, did not receive such notice,
and under the terms of the statute, CES was not obligated to
provide it. Any resolution of this issue, however, is for the
Legislature.
16
was decided, G. L. c. 254, § 5, expressly mandated that, where a
plaintiff sought to enforce a target lien bond, a copy of the
complaint (subpoena) had to be recorded. See Valentine Lumber,
supra at 413 ("the failure to record the subpoena was an
omission to do something required in mandatory language by the
statute, and there is nothing in the statute which excuses
compliance with its provisions"); St. 1915, c. 292, §§ 4, 9. As
discussed, after this court's decision in Valentine Lumber,
supra, the Legislature created within G. L. c. 254, § 14, an
independent action to enforce target lien bonds in which it
included no express recording requirement. See St. 1972 c. 774,
§ 10.
Under the terms of the mechanic's lien statute in effect
since 1972, "[o]nce a bond is recorded in accordance with § 14,
the lien is dissolved on the record, and any concern about
uncertainty of title arising from that lien is eliminated." NES
Rentals, 465 Mass. at 869. Thus, recording a complaint to
enforce a target lien bond would not support the goal of
"ensur[ing] that a person searching the land records in a
registry of deeds can determine with certainty whether or not
title to a particular parcel of land is encumbered by a
mechanic's lien."6 National Lumber I, 430 Mass. at 668.
6 Arch argues that "it is standard practice in the industry
for lien claimants to record attested copies of complaints
17
4. Conclusion. The order allowing summary judgment is
vacated and set aside, and the matter is remanded to the
Superior Court for further proceedings.
So ordered.
against target lien bond sureties." We do not read G. L.
c. 254, § 14, to preclude interested entities from filing
attested copies of complaints to enforce target lien bonds in
the registry of deeds; we merely interpret the statutory text
not to mandate such recording. While industry "practice may be
helpful in discerning the Legislature's intent," Tremont Tower
Condominium, LLC, 436 Mass. at 688, "[a]n industry practice,
standing alone, does not necessarily dictate our construction of
a statute." Id. at 687-688.