The Cote Corporation v. Kelley Earthworks, Inc.

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2014 ME 93
Docket: Ken-13-448
Argued: June 11, 2014
Decided: July 17, 2014
Panel: SAUFLEY, C.J., and ALEXANDER, SILVER, MEAD, GORMAN, and JABAR, JJ.
THE COTE CORPORATION
v.
KELLEY EARTHWORKS, INC., et al.
MEAD, J.
[¶1] Kelley Earthworks, Inc. (Kelley), appeals, and The Cote Corporation
(Cote) cross-appeals, from an amended summary judgment entered by the Superior
Court (Kennebec County, Murphy, J.) awarding Cote a money judgment of
$29,990, plus interest and attorney fees, in satisfaction of a mechanic’s lien that the
court found Cote held on Kelley’s real property. Kelley contends that the court
erred in (1) granting summary judgment to Cote after Kelley did not respond to
either Cote’s complaint or its motion for summary judgment; (2) awarding interest
and attorney fees as part of the judgment; and (3) denying in part Kelley’s motion
for relief pursuant to M.R. Civ. P. 60(b), filed after the court entered a final
judgment in favor of Cote. Cote, citing 10 M.R.S. § 3265 (2013), contends that the
court erred in amending its original judgment by striking a provision ordering the
sale of Kelley’s real property to satisfy the mechanic’s lien and instead awarding a
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money judgment. Because we agree that the court erred in striking the provision of
its order requiring a sale of the property, we vacate the judgment and remand for
entry of an order for the sale of at least a portion of Kelley’s land.
I. BACKGROUND
[¶2] In June 2012, Cote filed a mechanic’s lien in the Kennebec County
Registry of Deeds against real property owned by Kelley. On August 9, Cote
brought a complaint to enforce the lien against defendants Kelley and RC & Sons
Paving, Inc. (RC), and party-in-interest Rent-It, Inc. Only Kelley is a party to this
appeal. 1 Kelley’s clerk/registered agent was served with the complaint on
August 30. The complaint alleged that Kelley leased land to RC, and that pursuant
to a contract with RC, and with Kelley’s consent, Cote constructed an asphalt plant
on Kelley’s land. It further alleged that Cote worked on the project through
April 2012 but was not paid in full.
[¶3] Kelley did not respond to the complaint, and on November 9 the court
entered its default. In January 2013, Cote moved for summary judgment and
requested an order that Kelley’s property be sold to satisfy the lien. Kelley did not
respond to the motion, which the court granted on April 4. It entered judgment for
Cote in the amount of $29,990, plus interest and attorney fees, and ordered that the
1
RC defaulted and the court entered judgment against it. It has not appealed. Rent-It, Inc., filed a
mechanic’s lien against Kelley but failed to perfect it; the court found its lien to be “void and invalid.”
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property be sold to satisfy the judgment if it was not redeemed by Kelley within
ninety days.
[¶4] On April 19, ten days after the judgment was entered on the docket,
Kelley appeared for the first time and filed motions to set aside its default pursuant
to M.R. Civ. P. 55(c) and for relief from the judgment pursuant to M.R.
Civ. P. 60(b). Following a hearing, the court declined to set aside the default. It
did, however, grant Kelley relief by treating its Rule 60(b) motion as a motion to
alter or amend the judgment pursuant to M.R. Civ. P. 59(e), and striking its order
to sell what Kelley represented was a property worth more than $1 million and
awarding Cote a money judgment in its place.
[¶5] Kelley’s appeal and Cote’s cross-appeal followed.
II. DISCUSSION
A. The Summary Judgment Granted to Cote
[¶6] The statute governing the creation of a mechanic’s lien provides, in
the part relevant here, that
[w]hoever performs labor or furnishes labor or materials . . . used in
erecting, altering, moving or repairing a . . . building or appurtenances
. . . by consent of the owner, has a lien thereon and on the land on
which it stands and on any interest such owner has in the same, to
secure payment thereof, with costs. If the owner of the building has
no legal interest in the land on which the building is erected . . . the
lien attaches to the building, and . . . may be enforced as provided.
10 M.R.S. § 3251 (2013).
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[¶7] Kelley contends that the court erred in finding that on the summary
judgment record there was no genuine issue of fact concerning three of
section 3251’s requirements, namely that (1) Cote built the asphalt plant with
Kelley’s consent; (2) RC, the owner of the plant, had a legal interest in the Kelley
land on which it was constructed; and (3) concerning the measure of damages, that
Kelley’s property was improved by Cote’s work.
[¶8] We will
review the grant of a summary judgment de novo, viewing the
summary judgment record in the light most favorable to the
nonprevailing party to determine whether it demonstrates that there is
no genuine issue of material fact and the moving party is entitled to
judgment as a matter of law. When, as here, the plaintiff has moved
for summary judgment, the plaintiff has the burden to demonstrate
that each element of its claim is established without dispute as to
material fact within the summary judgment record.
Cach, LLC v. Kulas, 2011 ME 70 ¶ 8, 21 A.3d 1015 (quotation marks omitted).
Even when the nonmoving party’s response is inadequate, or, as here, nonexistent,
the moving party has the burden to show why summary judgment is appropriate:
A moving party’s factual assertions may not be deemed admitted
because of an improper response unless those factual assertions are
properly supported. As we have explained, a party who moves for a
summary judgment must properly put the motion and, most
importantly, the material facts before the court, or the motion will not
be granted, regardless of the adequacy, or inadequacy, of the
nonmoving party’s response.
Id. ¶ 9 (alteration, citation, and quotation marks omitted).
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1. Consent
[¶9] Cote’s mechanic’s lien stated that the work it performed was done with
Kelley’s knowledge and consent. Cote made the same assertion in its statement of
material facts, and supported that statement with the affidavit of its controller,
Daniel Gagne. The affidavit was not challenged, and the statement of material
facts was uncontroverted and is thus deemed admitted. M.R. Civ. P. 56(h)(4).
Accordingly, in entering a summary judgment for Cote, the court had a sufficient
basis to find that Kelley consented and therefore “Cote is entitled to Judgment . . .
and is entitled to enforce its lien.” See Platz Assocs. v. Finley, 2009 ME 55, ¶ 24,
973 A.2d 743 (“[Defendant’s] failure to respond to [plaintiff’s] request for
admission establishes as fact that [defendant] knew about and consented to the
work. . . .”).
2. RC’s Legal Interest in Kelley’s Land
[¶10] Kelley argues that the summary judgment record contained
insufficient evidence to establish that RC had a “legal interest in the land on which
the building is erected,” 10 M.R.S. § 3251, a showing necessary to allow Cote’s
mechanic’s lien to attach to the land and not just the asphalt plant itself. Kelley did
not raise that argument in its Rule 60(b) motion in the trial court. Accordingly, it
has waived the issue on appeal. See Thayer Corp. v. Me. Sch. Admin. Dist. 61,
2012 ME 37, ¶ 4 n.4, 38 A.3d 1263.
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[¶11] Even if it were not waived, the argument fails because Cote’s
uncontroverted statement of material facts, supported by the unchallenged Gagne
affidavit, states that the site of the plant was “owned by Defendant Kelley . . . and
leased by RC.” Beyond the four corners of the summary judgment record, an
affidavit executed by Peter Kelley, an officer of Kelley Earthworks, Inc., filed in
support of Kelley’s Rule 60(b) motion, states that “Kelley, Inc. entered into a lease
with RC” and “[t]he lessee was to pay to Kelley Inc. rent of at least $80,000 per
year.” Furthermore, the Rule 60(b) motion itself refers to “claimed acts of [Cote]
on behalf of Kelley’s lessee.” RC’s leasehold interest is a sufficient “legal interest
in the land” to support the court’s judgment. 10 M.R.S. § 3251; see Benham v.
Morton & Furbish Agency, 2007 ME 83, ¶ 17, 929 A.2d 471 (“It is clear that a
lease conveys a possessory interest in the land to another for a period of time.”
(quotation marks omitted)); Stewart v. Aldrich, 2002 ME 16, ¶ 14, 788 A.2d 603
(“A bedrock principle of our jurisprudence has been that a lease . . . is equivalent to
a conveyance for almost all purposes . . . .”); Fischbach & Moore, Inc. v. Presteel
Corp., 398 A.2d 397 (Me. 1979) (affirming a mechanic’s lien filed against a
building owner when the leaseholder arranged for work to be done with the
owner’s consent).
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3. Calculation of Damages
[¶12] The uncontroverted statement of material facts states that Cote was
owed $29,990 plus interest, costs, and attorney fees. The Gagne affidavit reflects
that amount, and it includes as an exhibit copies of invoices from Cote to RC. The
court, without comment, awarded Cote the amount that it requested in its entry of
summary judgment and again in granting Kelley Rule 59(e) relief.2
[¶13] A bill for the cost of improvements is evidence, albeit not dispositive
evidence, of enhanced value to the property owner. A.F.A.B., Inc. v. Town of Old
Orchard Beach, 657 A.2d 323, 325 (Me. 1995). Here, by failing to oppose Cote’s
motion for summary judgment, Kelley ensured that the invoices were the only
evidence of damages. “Although an award must be supported by some evidence of
the amount of loss, damages need not be proved to a mathematical certainty.”
Graham v. Brown, 2011 ME 93, ¶ 12, 26 A.3d 823 (quotation marks omitted). The
court did not err in relying on the only competent evidence of Cote’s damages that
was before it.
B. Denial of Rule 60(b) Relief
[¶14] Kelley contends that the court erred in denying it relief from summary
judgment pursuant to Rule 60(b)3 because Cote committed a fraud against the court
2
We have considered Kelley’s argument that the court erred in awarding Cote interest and attorney
fees as part of its judgment, find it to be unpersuasive, and do not discuss it further.
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in several representations it made in its statement of material facts and in
supporting documents. We review the denial of Rule 60(b) relief for an abuse of
discretion that “works a plain and unmistakable injustice against the defendant.”
In re David H., 2009 ME 131, ¶ 41, 985 A.2d 490 (quotation marks omitted).
[¶15] As an initial matter, the trial court did not find sufficient proof to
conclude that Cote had worked a fraud against it, nor do we. In all of Kelley’s
pleadings, it does not dispute that Cote built an asphalt plant on land owned by
Kelley. Furthermore, Kelley cannot meet its burden on this issue because
“Rule 60(b) presupposes that a party has performed [its] duty to take legal steps to
protect [its] own interests in the original litigation.” Id. (quotation marks omitted);
see also McKeen & Assocs. v. Dep’t of Transp., 1997 ME 73, ¶ 4, 692 A.2d 924
(same). By defaulting on Cote’s complaint and then taking no steps to oppose
summary judgment until ten days after a final judgment was entered, Kelley failed
to protect its own interests. It was not a “plain and unmistakable injustice” for the
3
Maine Rule of Civil Procedure 60(b) provides, in part:
On motion and upon such terms as are just, the court may relieve a party or the party’s
legal representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence
which by due diligence could not have been discovered in time to move for a new trial
under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic),
misrepresentation, or other misconduct of an adverse party; (4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon
which it is based has been reversed or otherwise vacated, or it is no longer equitable that
the judgment should have prospective application; or (6) any other reason justifying relief
from the operation of the judgment.
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trial court to hold Kelley to the consequences of that failure. In re David H.,
2009 ME 131, ¶ 41, 985 A.2d 490 (quotation marks omitted).
C. Cote’s Cross-Appeal
[¶16] In its cross-appeal, Cote contends that the court was statutorily
required to order a sale of Kelley’s real property upon finding that Cote was
entitled to enforce its mechanic’s lien, and that it did not have the authority to
amend the remedy to a money judgment. In striking its original order that the
property be sold, the court found that (1) Kelley’s equity argument, namely that its
real property was worth more than $1 million, was insufficient to warrant setting
aside Cote’s lien altogether pursuant to Rule 60(b); but (2) that information did,
pursuant to Rule 59(e),4 warrant relief from a forced sale of the property. We
review the amended judgment for “a clear and manifest abuse of discretion.”
Ringuette v. Ringuette, 594 A.2d 1076, 1078 (Me. 1991) (quotation marks
omitted).5 A court abuses its discretion if it enters a judgment contrary to a
controlling statute. See Scott v. St. Pierre, 137 Me. 331, 331, 16 A.2d 473 (1940)
4
Maine Rule of Civil Procedure 59(e) concerns motions to alter or amend a judgment.
5
Ringuette v. Ringuette, 594 A.2d 1076 (Me. 1991), cited by the trial court as authority for its
amended judgment, is distinguishable from facts presented here. In Ringuette, a divorce case, the court
reopened the evidence and subsequently amended its divorce judgment. 594 A.2d at 1076-77. We
affirmed, recognizing the divorce court’s “wide discretion in determining a just division of marital
property.” Id. at 1078. Here, the issue is the remedy required by the mechanic’s lien statutes, not the
broad discretion of a divorce court.
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(“When . . . the case is barren of proof of the statutory requirements . . . the ruling
below is one contrary to law and is an abuse of discretion.”).
[¶17] We conclude that the mechanic’s lien statutes require a sale of
Kelley’s property in order to satisfy Cote’s lien, but they do not necessarily require
a sale of the entire parcel. In its original judgment, the court ordered a sale
pursuant to 10 M.R.S. § 3259 (2013). That section provides, in part:
If it is determined that the parties or any of them . . . have a lien upon
said building and land . . . the court may decree that said property . . .
shall be sold, and shall prescribe the place, time, terms, manner and
conditions of such sale. . . . If justice requires, the court may provide
in the order of sale that the owner shall have a right to redeem the
property from such sale within a time fixed in the order of sale. If the
court shall determine that the whole of the land on which the lien
exists is not necessary therefor, it shall describe in the order of sale a
suitable lot therefor; and only so much shall be sold.
10 M.R.S. § 3259. After the sale of the entire property or “a suitable lot,” id., the
statutory scheme then allows a money judgment to satisfy any remaining
deficiency:
If the proceeds of the sale after payment of costs and expenses of sale
are insufficient to pay the lien claims and costs in full, the court may
render judgment against the debtor in favor of each individual lienor
for the balance of his claim and costs remaining unpaid, and may
issue executions therefor.
10 M.R.S. § 3260 (2013).
[¶18] The plain language of the statutory scheme formed by sections 3259
and 3260 does not contemplate a money judgment as an alternative to the sale of
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property subject to a lien; rather, a money judgment is authorized only when
proceeds of the sale are insufficient to satisfy the lien. See Hickson v. Vescom
Corp., 2014 ME 27, ¶ 15, 87 A.3d 704 (stating that the Law Court “examine[s] the
plain meaning of the statutory language seeking to give effect to the legislative
intent” (quotation marks omitted)). This construction is supported by 10 M.R.S.
§ 3265, which is the statutory provision cited by Cote on its cross-appeal. That
section provides that
[w]hen a judgment is rendered in any action authorized by chapters
601 to 6316 against any . . . building or appurtenances, . . . and the
land on which it stands . . . said property shall be taken and sold on
execution in the same manner that rights of redeeming mortgaged real
estate may be taken and sold.
10 M.R.S. § 3265 (2013).
[¶19] Sections 3259 and 3265 both require a sale of property that is subject
to a lien. See Hickson, 2014 ME 27, ¶ 15, 87 A.3d 704 (stating that the Law Court
“construe[s] the whole statutory scheme of which the section at issue forms a part
so that a harmonious result, presumably the intent of the Legislature, may be
achieved” (quotation marks omitted)). Accordingly, the trial court abused its
discretion in setting aside the remedy of a sale altogether and substituting a money
judgment.
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10 M.R.S. §§ 3201-4012 (2013).
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[¶20] The court was, however, authorized to include in its judgment a right
of redemption, as it did. Furthermore, going forward, it is authorized to partition
off a “suitable lot” in lieu of ordering a sale of the entire property if it deems that
course of action to be appropriate. In Twin Island Dev. Corp. v. Ross, we modified
and then affirmed a judgment entered by the Superior Court finding that a
mechanic’s lien existed and ordering the debtor to segregate and sell a fifty-acre
parcel of the property subject to the lien. 522 A.2d 901, 901-03 (Me. 1987). At
the Superior Court’s discretion, a similar remedy could be employed in this case to
balance the requirements of the mechanic’s lien statutes with the equities that the
court found to exist.
The entry is:
Judgment vacated. Remanded for entry of a
judgment in favor of The Cote Corporation
consistent with this opinion.
On the briefs and at oral argument:
C.H. Spurling, Esq., Gardiner, for appellant Kelley Earthworks,
Inc.
Theodore Small, Esq., Isaacson & Raymond, P.A., Lewiston, for
appellee The Cote Corporation
Kennebec County Superior Court docket number RE-2012-66
FOR CLERK REFERENCE ONLY