Opinion
11-P-597
03-19-2012
INFRA METALS CO. & another v. JAROSZ WELDING CO. & others.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This case arises out of the construction of a fitness center in Saugus. Several subcontractors filed mechanic's liens against the project owner, L.A. Fitness International, LLC (L.A. Fitness) and Insurance Company of the West (ICOW) (L.A. Fitness's surety) after Pinncon, LLC (Pinncon), the general contractor for the project, failed to complete the project and filed for bankruptcy. [FN3] Jarosz Welding Co. (Jarosz) was a subcontractor on the project and filed a mechanic's lien against L.A. Fitness. A Superior Court judge allowed ICOW's motion for summary judgment on Jarosz's mechanic's lien claim, and Jarosz appeals from that judgment. We affirm.
Background. Pinncon and L.A. Fitness were parties to a general contract whereby Pinncon agreed to submit monthly requests for payment to L.A. Fitness. Pinncon would then pay any subcontractors out of the monies it received from L.A. Fitness. After receiving the first payment, and in order to receive subsequent payments, Pinncon was required under the contract to 'furnish proof of payment of construction obligations for all prior payments received by [Pinncon].' Such proof was a 'condition precedent' to Pinncon's entitlement to subsequent payments. The contract provided that L.A. Fitness 'shall not be obligated to make any payment to [Pinncon] if,' among other things, '(1) [Pinncon] has failed to perform any of its obligations hereunder or otherwise is in default under this [a]greement; [or] (2) [Pinncon] has failed to furnish to [L.A. Fitness] satisfactory proof of payment to its subcontractors and suppliers . . . .'
Pinncon submitted its first application and certification for payment to L.A. Fitness on December 31, 2007, which was paid in full on January 30, 2008. On January 28, 2008, Pinncon submitted its second application and certification for payment to L.A. Fitness in the amount of $690,996. L.A. Fitness paid this amount to Pinncon on March 4, 2008. The $690,996 figure included $427,573.25 sought by Jarosz for work performed and materials provided to Pinncon from November 30, 2007, through January 25, 2008. Pinncon did not pay any portion of the $690,996 it received from L.A. Fitness to Jarosz.
On February 22, 2008, Pinncon submitted its third application and certification for payment to L.A. Fitness in the amount of $654,816. Although L.A. Fitness's architect certified the application on March 6, 2008, L.A. Fitness made no further payments to Pinncon.
Discussion . 'We review a grant of summary judgment de novo,' Miller v. Cotter, 448 Mass. 671, 676 (2007), looking to the summary judgment record to determine 'whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law.' Augat, Inc. v. Liberty Mutual Ins. Co., 410 Mass. 117, 120 (1991). The judge granted ICOW's motion for summary judgment on the basis that Pinncon wilfully defaulted under its contract with L.A. Fitness before Jarosz filed its lien. Because Pinncon was not entitled to any money under the contract, the judge concluded that Jarosz's lien claim must fail.
A mechanic's lien 'shall not exceed the amount due or to become due under the original contract as of the date notice of the filing of the subcontract is given by the subcontractor to the owner.' G. L. c. 254, § 4, as amended through St. 1996, c. 364, § 5. It is undisputed that Jarosz filed its notice of contract on March 31, 2008, and that L.A. Fitness received notice of the filing on April 2, 2008. After amending the statement of account pursuant to G. L. c. 254, § 8, Jarosz's stated lien was in the amount of $510,673.25. To defeat ICOW's motion for summary judgment, Jarosz was required to demonstrate the existence of a triable issue with respect to Pinncon's entitlement under its contract with L.A. Fitness to at least $510,673.25 as of April 2, 2008. See BloomSouth Flooring Corp. v. Boys' & Girls' Club of Taunton, Inc., 440 Mass. 618, 623 (2003) (holding that the language of G. L. c. 254, § 4, 'limit[s] the lien to the amount due the contractor at the time notice is served on the property owner or to an amount that may become due afterward').
To satisfy this burden, Jarosz relies upon the certification of Pinncon's third application and certification for payment by L.A. Fitness's architect. Under the general contract, certification by the architect 'will constitute a representation that the [c]ontractor is entitled to payment in the amount certified.' However, such certification 'will not be a representation that the [a]rchitect has . . . (3) reviewed copies of requisitions received from [s]ubcontractors and material suppliers and other data requested by the [o]wner to substantiate [c]ontractor's right to payment, or (4) made examination to ascertain how or for what purpose the Contractor has used money previously paid . . . .' It is undisputed that Pinncon did not pay Jarosz amounts due Jarosz from Pinncon's second application and certification for payment and, under the contract, Pinncon was required to 'furnish proof of payment of construction obligations for all prior payments received by [Pinncon]' to be entitled to further payments from L.A. Fitness. The contract clearly predicates Pinncon's entitlement to further payment on proof of payment to subcontractors, and the undisputed fact that Pinncon did not pay its subcontractors from the funds it received on March 4, 2008, demonstrates that Pinncon was not entitled to payment thereafter.
Because no amount of money was due or to become due to Pinncon under its contract with L.A. Fitness as of April 2, 2008, Jarosz does not have an enforceable lien under G. L. c. 254, § 4. See Maverick Constr. Mgmt. Servs., Inc. v. Fidelity & Deposit Co. Of Md., 80 Mass. App. Ct. 264, 269 (2011) ('The test for a viable lien continues to reside in the very language of the statute: whether, at the time of assertion . . . , as a matter of entitlement and sufficient amount, payment was 'due or to become due' from the owner to the general contractor under their contract'). Accordingly, ICOW was entitled to summary judgment.
Judgment affirmed.
By the Court (Sikora, Carhart & Sullivan, JJ.),
New Millennium Building Systems.