Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Syllabus Robert P. Young, Jr. Stephen J. Markman
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
Richard H. Bernstein
Joan L. Larsen
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions:
prepared by the Reporter of Decisions for the convenience of the reader. Corbin R. Davis
RONNISCH CONSTRUCTION GROUP, INC v LOFTS ON THE NINE, LLC
Docket No. 150029. Argued November 5, 2015 (Calendar No. 4). Decided July 26,
2016.
Ronnisch Construction Group, Inc. (Ronnisch), brought an action in the Oakland Circuit
Court against Lofts on the Nine, LLC (LOTN), and others, alleging breach of contract and unjust
enrichment and seeking foreclosure of a lien. The contract between Ronnisch and LOTN
involved the construction of a condominium building in Ferndale, Michigan, and required that
any claim arising out of or related to the contract be submitted to arbitration. Because of a
deficiency in payment, Ronnisch had filed a claim of lien under the Construction Lien Act
(CLA), MCL 570.1101 et seq., with the Oakland County Register of Deeds. The parties agreed
to a stay of the proceedings in the circuit court and proceeded with arbitration, during which
LOTN asserted claims of its own related to faulty or incomplete work. The arbitrator awarded
damages to both Ronnisch and LOTN, resulting in a net award to Ronnisch. LOTN paid
Ronnisch the net award amount plus interest. Ronnisch then moved the circuit court for
confirmation of the arbitration award and sought attorney fees and costs under MCL 570.1118(2)
of the CLA. LOTN argued that Ronnisch’s motion should be denied because LOTN had already
satisfied the arbitration award by paying Ronnisch and that no attorney fees were warranted
because once Ronnisch’s breach-of-contract claim had been satisfied, its lien foreclosure claim
became moot. The circuit court, Shalina Kumar, J., denied Ronnisch’s motion. With respect to
attorney fees, the circuit court held that because LOTN had paid Ronnisch the amount owed
under the arbitration award and neither the circuit court nor the arbitrator had adjudicated
Ronnisch’s lien foreclosure claim, Ronnisch was not a prevailing lien claimant and the circuit
court did not have discretion to award Ronnisch attorney fees and costs under the CLA.
Ronnisch appealed. The Court of Appeals, JANSEN, P.J., and SAAD and DONOFRIO, JJ., vacated
that portion of the circuit court order concerning attorney fees and remanded the case,
determining that Ronnisch was a prevailing party under the CLA and that the circuit court had
discretion to award Ronnisch attorney fees. 306 Mich App 203 (2014). The Supreme Court
granted LOTN’s application for leave to appeal. 497 Mich 1003 (2015).
In an opinion by Justice VIVIANO, joined by Justices MARKMAN, MCCORMACK, and
BERNSTEIN, the Supreme Court held:
MCL 570.1118(2) of the CLA provides that in an action to enforce a construction lien
through foreclosure, the court may allow reasonable attorney fees to a lien claimant who is the
prevailing party. A party may be awarded reasonable attorney fees if it prevails in arbitration on
a related contract claim brought in the same action as its lien foreclosure claim and if it was a
lien claimant under the CLA when it became the prevailing party. In this case, the circuit court
had discretion to award attorney fees to Ronnisch because Ronnisch was a lien claimant who
prevailed in an action to enforce a construction lien through foreclosure.
1. Under MCL 570.1118(2), in an action to enforce a construction lien through
foreclosure, the court shall examine each claim and defense that is presented and determine the
amount, if any, due to each lien claimant or to any mortgagee or holder of an encumbrance and
their respective priorities. The court may allow reasonable attorney fees to a lien claimant who
is the prevailing party. MCL 570.1105(2) defines “lien claimant” as a person having a right to a
construction lien under the CLA. Ronnisch had a valid claim of lien that attached to LOTN’s
interest in the property. Further, it is undisputed that LOTN did not tender full payment to
Ronnisch on the contract amount before the arbitration award. Therefore, when Ronnisch
received its arbitration award, it was a lien claimant because it possessed a right to a construction
lien under the CLA. The fact that Ronnisch was not determined to be a lien claimant before the
arbitration award was not dispositive. Instead, the material inquiry was whether Ronnisch, as the
party seeking fees, was a lien claimant under the CLA when it became the prevailing party by
virtue of the arbitration award in its favor.
2. The plain language of MCL 570.1118(2) does not expressly limit the trial court’s
ability to award attorney fees to a lien claimant who is the prevailing party on the lien claim.
Rather, reading the statute as a whole makes clear that a lien claimant who is the prevailing party
may seek attorney fees in an action to enforce a construction lien through foreclosure. In MCL
570.1118(2) the phrase “action to enforce a construction lien through foreclosure” refers to a
civil judicial proceeding in which foreclosure of a construction lien is sought, and it is comprised
of all the claims asserted in the action, including any related claim for breach of contract. By
beginning with the phrase “[i]n an action to enforce a construction lien through foreclosure,”
MCL 570.118(2) establishes that the focus is on whether the lien claimant is a prevailing party in
the action (i.e., the entirety of the judicial proceeding) in which the lien foreclosure claim was
asserted. There is no indication from the language of MCL 570.1118(2) that the lien claimant
must receive a judgment on its foreclosure claim for it to be the prevailing party. The
Legislature directed the trial court to examine each claim and defense that is presented and
determine the amount, if any, due to each lien claimant. Consistently with this directive, a lien
claimant in such an action might prevail on its related breach of contract claim and receive the
entire amount to which it is entitled under its lien claim. Under Michigan law, a lien foreclosure
claim and a claim for breach of the underlying contract are integrally related. A contract is a
necessary prerequisite to a construction lien. A construction lien stems from the underlying
contract, and its amount is determined by the contract’s terms. These principles are reflected
throughout the CLA. In essence, the lien is but a means for enforcing the payment of the debt
arising from the performance of the contract. A party may proceed to enforce its lien through
foreclosure while simultaneously seeking recovery based on the contract from which the lien
arose. But there can only be one satisfaction. Thus, a lien foreclosure claim and a claim for
breach of the underlying contract are integrally related and allowing a party to pursue both
merely gives the party a better chance of recovering what it is owed.
3. A “prevailing party” is the party to a suit who successfully prosecutes the action,
prevailing on the main issue, even though not necessarily to the extent of the party’s original
contention. The prevailing party is the one in whose favor the decision or verdict is rendered and
judgment entered. For there to be a prevailing party, there must have been a material and
enforceable alteration of the legal relationship of the parties resulting from judicial imprimatur.
In this case, Ronnisch received an award on its contract claim pursuant to a final and binding
arbitration. This award constituted a conclusive determination of the rights and obligations of
the parties. That is, the arbitration produced an enforceable award that altered the legal
relationship of the parties. Moreover, through the arbitration award, Ronnisch prevailed on the
main issue in the action, i.e., it obtained an enforceable award compensating it for its labor and
materials. Under the CLA, a lien claimant becomes the prevailing party when the rights and
obligations of the parties that are at the heart of its lien claim are conclusively determined in its
favor. Ronnisch’s contract and lien foreclosure claims both sought to obtain payment for the
labor and materials supplied by Ronnisch, and both claims necessarily required determinations to
be made regarding the parties’ rights and obligations stemming from the underlying contract. By
prevailing on one of those claims—the contract claim—Ronnisch successfully prosecuted the
action, receiving the requisite conclusive determination and thereby prevailing on its main issue.
4. That the circuit court never entered a judgment confirming the arbitration award did
not preclude the Michigan Supreme Court from determining that Ronnisch was the prevailing
party. The lack of judicial imprimatur in Ronnisch’s favor was a direct result of the circuit
court’s failure to confirm Ronnisch’s arbitration award upon its motion. Contrary to the circuit
court’s conclusion, LOTN’s payment of the arbitration award did not obviate the need to confirm
the award. In certain circumstances, confirmation may be necessary even if the award has been
satisfied, as in the instant case, when a party seeks attorney fees. A party cannot avoid
confirmation by paying an arbitration award before the confirmation proceeding. Therefore,
LOTN’s payment of the arbitration award should not have precluded the circuit court from
providing the necessary judicial imprimatur in this case by confirming the award. Ronnisch was
entitled to seek attorney fees under the CLA because it prevailed on the main issue in its
construction lien action when it received a favorable arbitration award on its contract claim. The
arbitration award constituted a conclusive and enforceable determination of the rights and
obligations of the parties that were at the heart of Ronnisch’s lien claim. Therefore, Ronnisch
was the prevailing party in its action to enforce a construction lien through foreclosure.
Affirmed. Case remanded to the circuit court for further proceedings.
Chief Justice YOUNG, joined by Justices ZAHRA and LARSEN, dissenting, concluded that
recovery of attorney fees under the CLA is permitted only to those parties who prevail on a
construction lien. Under MCL 570.1118(2), the court may allow reasonable attorney fees to a
lien claimant who is the prevailing party. The term “lien claimant” is statutorily defined as a
person having a right to a construction lien under the CLA. Grammatically, this requires that the
claimant have a present, not a previous or theoretical, right to a lien at the time the claimant is
the prevailing party. Additionally, MCL 570.1107(1) states that a lien cannot exceed the amount
of the lien claimant’s contract less payments made on the contract. In this case, the circuit court
determined that Ronnisch had prevailed only on its contract claim, not its lien foreclosure claim.
Ronnisch received and accepted full payment for all its damages incurred under the contract. By
doing so, Ronnisch extinguished any claimed lien. The majority opinion simply fails to
acknowledge that Ronnisch was never more than a presumptive lien claimant that extinguished
its lien before the validity of its lien claim was ever determined. Before the acceptance of the
payment, there had never been any determination that Ronnisch was a valid lien claimant—that
is, whether Ronnisch had a right to a construction lien. And after Ronnisch accepted the
payment, there was no more debt on which any lien could be based. Accordingly, when
Ronnisch moved in the circuit court for an award of attorney fees, it was no longer a person
having a right to a construction lien under the CLA. The effect of the majority’s construction of
the CLA is to undercut the lien foreclosure statutory process and attorney fees remedy entirely to
permit the recovery of attorney fees based on a simple common-law contract claim. It is
doubtful that the Legislature created an unnecessary lien foreclosure process with the intention of
establishing a new route to recover attorney fees for an existing common-law contract claim. In
purporting to construe the CLA, the majority has converted a statutory attorney fees remedy
requiring prevailing on a lien foreclosure action into one in which prevailing on the main issue of
the lawsuit is sufficient, but there is no textual support for an attorney fees remedy under the
CLA by prevailing on the main issue. Because Ronnisch did not meet the statutory definition of
“lien claimant” under the CLA, and because it voluntarily extinguished its lien claim before the
circuit court could have determined that it was a lien claimant, Ronnisch was not entitled to
attorney fees, and Chief Justice YOUNG would have reversed the Court of Appeals on that issue.
©2016 State of Michigan
Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
OPINION Robert P. Young, Jr. Stephen J. Markman
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
Richard H. Bernstein
Joan L. Larsen
FILED July 26, 2016
STATE OF MICHIGAN
SUPREME COURT
RONNISCH CONSTRUCTION GROUP,
INC.,
Plaintiff-Appellee,
v No. 150029
LOFTS ON THE NINE, LLC,
Defendant-Appellant,
and
LOFTS ON THE NINE CONDOMINIUM
ASSOCIATION, HOTLINE ELECTRIC, INC.,
RAM CONSTRUCTION SERVICES OF
MICHIGAN, INC., EAM ENGINEERS, INC.,
MICHIGAN AIR PRODUCTS CO., STOCK
BUILDING SUPPLY, LLC, WILLIAMS
DISTRIBUTING CO., NORTH STAR
PARTNERS, LLC, and THE STATE BANK,
Defendants.
BEFORE THE ENTIRE BENCH
VIVIANO, J.
At issue in this case is whether plaintiff, Ronnisch Construction Group (RCG), can
seek attorney fees under § 118(2), MCL 570.1118(2), of the Construction Lien Act
(CLA) from defendant Lofts on the Nine, LLC (LOTN), 1 given that plaintiff received a
favorable arbitration award on its related breach of contract claim but did not obtain a
judgment on its construction lien claim. We hold that the trial court may award attorney
fees to RCG because RCG was a lien claimant who prevailed in an action to enforce a
construction lien through foreclosure. Therefore, we affirm the judgment of the Court of
Appeals and remand to the trial court for further proceedings not inconsistent with this
opinion.
I. FACTS AND PROCEDURAL HISTORY
On May 25, 2007, RCG entered into a construction contract with LOTN to
construct a condominium building. RCG last provided labor and materials on April 24,
2009. LOTN withheld payment of a portion of the contract amount, maintaining that
RCG breached the contract by providing defective construction, dishonestly charging
LOTN, and failing to complete the project on time. On June 2, 2009, RCG recorded its
Claim of Lien, claiming a construction lien in the amount of $626,163.73, subject to
interest on late payments in accordance with the contract. RCG also filed a notice of lis
pendens against the subject property.
1
MCL 570.1101 et seq. Before enactment of the CLA in 1980, its predecessor, the
Mechanics’ Lien Act, former MCL 570.1 et seq., governed construction liens in
Michigan.
2
On November 25, 2009, RCG filed this suit against LOTN, seeking foreclosure of
the lien and raising claims for breach of contract and unjust enrichment. 2 RCG sought a
judgment in the amount of $626,163.73, together with interest, costs, and attorney fees.
However, the parties agreed to stay the proceedings to pursue contractually mandated
arbitration. Following arbitration, the arbitrator awarded $636,058.72 to RCG and
awarded $185,238.36 to LOTN on its recoupment defense and counterclaims, resulting in
a net award of $450,820.36 in RCG’s favor. The arbitrator did not address RCG’s claim
for attorney fees and costs and instead reserved the issue for the trial court.
A few weeks later, LOTN paid the arbitration award in full. Thereafter, RCG filed
a motion requesting that the trial court lift the stay of proceedings, confirm the arbitration
award, and award RCG its actual attorney fees and costs under § 118(2). The trial court
denied RCG’s motion, determining that RCG’s lien foreclosure claim had not been
adjudicated by the arbitrator or the trial court and that RCG’s lien was satisfied when it
voluntarily accepted LOTN’s tender of payment. Thus, the trial court held that RCG was
not a prevailing lien claimant under the CLA, a necessary predicate to the recovery of
attorney fees under § 118(2), and that the court therefore did not have the discretion to
award attorney fees to RCG.
On appeal, the Court of Appeals vacated the portion of the trial court’s order
denying RCG’s request for attorney fees and remanded for further proceedings. 3 The
2
RCG’s unjust enrichment claim is not at issue in this appeal.
3
Ronnisch Constr Group, Inc v Lofts on the Nine, LLC, 306 Mich App 203, 214; 854
NW2d 744 (2014).
3
Court of Appeals held that, having brought both a contract claim and a foreclosure of lien
claim, the fact that RCG “substantially prevail[ed] on the amounts it sought under the
claim of lien made it a prevailing party” under the CLA. 4 The Court of Appeals also
distingushed this Court’s order in H A Smith Lumber & Hardware Co v Decina, 5 noting
that, unlike the instant case, the subcontractors in Decina did not prevail on their lien
claims because their liens could not legally attach to the property. 6 Accordingly, the
Court of Appeals concluded that the trial court had discretion under § 118(2) to award
attorney fees. 7
LOTN sought leave to appeal in this Court. We granted leave to appeal, asking
the parties to address:
whether the Court of Appeals erred in holding that the plaintiff contractor,
who filed a claim of lien under the Construction Lien Act (CLA), MCL
570.1101 et seq., and then filed a circuit court action against the defendant
property owner, alleging breach of contract, foreclosure of lien, and unjust
enrichment claims, was entitled to an award of attorney fees as a
“prevailing party” under MCL 570.1118(2), when the plaintiff prevailed in
binding arbitration on its contract claim, but neither the arbitrator nor the
circuit court resolved the plaintiff’s foreclosure of lien claim. See HA Smith
Lumber & Hardware Co v Decina, 480 Mich 987 (2007).[8]
4
Id. at 211.
5
H A Smith Lumber & Hardware Co v Decina, 480 Mich 987 (2007).
6
Ronnisch, 306 Mich App at 213.
7
Id. at 211.
8
Ronnisch Constr Group, Inc v Lofts on the Nine, LLC, 497 Mich 1003 (2015).
4
II. STANDARD OF REVIEW
We review a trial court’s award of attorney fees and costs for an abuse of
discretion. 9 An abuse of discretion occurs when the trial court’s decision is outside the
range of reasonable and principled outcomes. 10 A trial court necessarily abuses its
discretion when it makes an error of law. 11
Questions of statutory interpretation are reviewed de novo. 12 In interpreting
§ 118(2), our goal is to give effect to the Legislature’s intent, focusing first on the
statute’s plain language. 13 In doing so, we examine the statute as a whole, reading
individual words and phrases in the context of the entire legislative scheme. 14 When a
statute’s language is unambiguous, the Legislature must have intended the meaning
clearly expressed, and the statute must be enforced as written. 15
III. ANALYSIS
The CLA is “intended to protect the interests of contractors, workers, and
suppliers through construction liens, while protecting owners from excessive costs.” 16
9
Moore v Secura Ins, 482 Mich 507, 516; 759 NW2d 833 (2008).
10
Id.
11
People v Duncan, 494 Mich 713, 723; 835 NW2d 399 (2013).
12
Madugula v Taub, 496 Mich 685, 695; 853 NW2d 75 (2014).
13
Id. at 696.
14
Id.
15
Id.
16
Vugterveen Sys, Inc v Olde Millpond Corp, 454 Mich 119, 121; 560 NW2d 43 (1997);
see also 1980 PA 497, title (stating that the CLA is an act “to establish, protect, and
5
The fundamental purpose of the CLA with respect to contractors, workers, and suppliers
is to provide a method to secure payment for their labor and materials. 17 The Legislature
has declared that the CLA is “a remedial statute . . . [that] shall be liberally construed to
secure the beneficial results, intents, and purposes of th[e] act.” 18 Accordingly, when
interpreting the CLA, we should always be mindful of the CLA’s intended purpose. 19
In this case, RCG sued to recover the unpaid amount on its contract and, after
receiving a favorable arbitration award, sought attorney fees under § 118(2) of the CLA,
which reads in pertinent part:
enforce by lien the rights of persons performing labor or providing material or equipment
for the improvement of real property”).
17
See Smalley v Gearing, 121 Mich 190, 198; 79 NW 1114 (1899) (stating that the
Mechanics’ Lien Act “provide[d] a method for securing payment to those whose labor or
material goes into the building . . . .”). That the CLA is designed to protect the interests
of such parties is further supported by the substantial-compliance provision contained in
the act. See MCL 570.1302(1).
18
MCL 570.1302(1). This provision, like its predecessor in the Mechanics’ Lien Act,
former MCL 570.27, codifies the longstanding principle that construction lien statutes
must be liberally construed to effectuate their purpose. See Scales v Griffin, 2 Doug 54,
59 (Mich, 1845). We agree with the dissent that a “provision requiring that a statute be
liberally construed ‘should be regarded as requiring a fair interpretation as opposed to a
strict or crabbed one—which is what courts are supposed to provide anyway.’ ” Ante at 5
n 12, quoting Scalia & Garner, Reading Law: The Interpretation of Legal Texts (St Paul:
Thomson/West, 2012), p 233. We disagree that merely citing such a directive—like the
dissent’s author did recently in Associated Builders & Contractors v Lansing, 499 Mich
177; ___ NW2d ___ (2016)—implies otherwise. Notably, it is this very principle—fairly
interpreting the text of the statute at issue—that impels us to reject the dissent’s
“crabbed” interpretation of the statute.
19
Spartan Asphalt Paving Co v Grand Ledge Mobile Home Park, 400 Mich 184, 188;
253 NW2d 646 (1977).
6
In an action to enforce a construction lien through foreclosure, the
court shall examine each claim and defense that is presented and determine
the amount, if any, due to each lien claimant or to any mortgagee or holder
of an encumbrance and their respective priorities. The court may allow
reasonable attorneys’ fees to a lien claimant who is the prevailing party.[20]
Application of § 118(2) in this case requires us to determine whether RCG was (1) a lien
claimant, (2) in an action to enforce a construction lien through foreclosure, (3) who was
the prevailing party.
A. RCG WAS A LIEN CLAIMANT
The first inquiry in determining whether a party may seek attorney fees under the
CLA is whether the party is a lien claimant. Under § 118(2), the trial court has discretion
to award attorney fees to “a lien claimant who is the prevailing party.” The CLA defines
a “lien claimant” as “a person having a right to a construction lien under [the] act.”21
RCG had a valid claim of lien that attached to LOTN’s interest in the property. 22 Further,
20
Additionally, the statute provides that a court may allow reasonable attorney fees to a
prevailing defendant if the court determines that the lien claimant’s action to enforce a
construction lien was vexatious. MCL 570.1118(2).
21
MCL 570.1105(2).
22
RCG’s construction lien on LOTN’s interest in the condominium building arose once it
made improvements to the condominium building. MCL 570.1107(1). That lien
attached to LOTN’s entire interest. MCL 570.1107(2). RCG properly filed its claim of
lien in the amount of $626,163.73 within 90 days after it last furnished labor or material,
and its lien was properly recorded on June 2, 2009. See MCL 570.1111(1). Therefore,
we agree with the trial court’s determination that RCG perfected its lien. However, if a
lien claim has not been adjudicated when a dispositive ruling on the underlying contract
claim is made, and questions regarding the validity of a plaintiff’s lien remain, they can
be resolved in conjunction with a motion to award attorney fees. The plaintiff then would
still have the burden to prove the validity of the lien. See Skyhook Lift-Slab Corp v
Huron Towers, Inc, 369 Mich 36, 39; 118 NW2d 961 (1963) (stating the plaintiff bears
the burden of demonstrating compliance with the statutory requirements necessary for a
lien claim); In re Eddy Estate, 354 Mich 334, 348; 92 NW2d 458 (1958) (recognizing
7
it is undisputed that LOTN did not tender full payment to RCG on the contract amount
before the arbitration award. Therefore, when RCG received its arbitration award, it was
a lien claimant because it possessed “a right to a construction lien” under the CLA. 23
Our conclusion that RCG was a lien claimant makes the instant case
distinguishable from this Court’s order in Decina. LOTN’s argument that Decina
controls the outcome of this case overlooks the crucial distinction between the two—
RCG was a lien claimant under § 118(2) when it received a favorable determination on
its contract claim whereas the subcontractors in Decina were not.
The litigation in Decina stemmed from a construction contract dispute between
homeowners, their general contractor, and two subcontractors. 24 The dispute arose after
the homeowners withheld final payment to the general contractor and after the general
contractor did not pay the subcontractors for the labor and materials they provided. 25
that the party seeking attorney fees bears the burden of proving entitlement to those fees).
23
MCL 570.1105(2). The fact that RCG was not determined to be a lien claimant before
the arbitration award is not dispositive. Instead, the material inquiry is whether RCG, as
the party seeking fees, was a lien claimant under the CLA when it became the prevailing
party by virtue of the arbitration award in its favor. Contrary to the dissent’s view, we do
not believe that whether RCG was a lien claimant at that critical moment is contingent on
a prior or contemporaneous judicial determination that it had a right to a lien. It is ironic
that in an opinion that claims a monopoly on the statutory text, the dissent hinges its
analysis on a requirement that is nowhere to be found in the text of the CLA. See MCL
570.1105(2) (defining “lien claimant” as “a person having a right to a construction lien
under this act.”).
24
H A Smith Lumber & Hardware Co v Decina, 258 Mich App 419, 421-422; 670 NW2d
729 (2003), vacated in part 471 Mich 925 (2004). The subcontractors contracted with the
general contractor to provide materials and labor. Decina, 258 Mich App at 422.
25
Id.
8
Pertinent to this case, the subcontractors brought lien foreclosure claims against the
homeowners and breach of contract claims against the general contractor. 26
Following a bench trial, the trial court ruled that the homeowners had paid the
entire contract amount to the general contractor and that the subcontractors’ liens
therefore did not attach to the property because the homeowners had paid the contract
amount in full. 27 But the trial court ruled in favor of the subcontractors on their breach of
contract claims and subsequently ordered the general contractor to pay their attorney
fees. 28 The Court of Appeals affirmed, holding that the subcontractors were a prevailing
party because they had prevailed on “a claim brought in the alternative for the same
injury or loss raised in the CLA claim.” 29
This Court reversed by order and vacated the trial court’s order granting attorney
fees. This Court stated that to be a “prevailing party” under § 118(2), the party “must
prevail on the lien foreclosure action.” 30 This Court then held that the subcontractors lost
on their lien claim and therefore could not recover attorney fees, stating:
26
Id. at 423. Although the subcontractors did not contract with the homeowners directly,
they were nevertheless at least initially entitled to a construction lien under the CLA. See
MCL 570.1107(1) (“Each . . . subcontractor . . . who provides an improvement to real
property has a construction lien upon the interest of the owner or lessee who contracted
for the improvement to real property . . . .”).
27
H A Smith Lumber & Hardware Co v Decina (On Remand), 265 Mich App 380, 382;
695 NW2d 347 (2005), rev’d 480 Mich 987 (2007).
28
Id.
29
Id. at 384-385.
30
Decina, 480 Mich at 988.
9
In this case, the unpaid subcontractors filed a lien foreclosure action against
the property owners and a breach of contract action against the general
contractor. The subcontractors lost on their lien claim but prevailed on the
breach of contract claim. While the statute allows a lien claimant to bring
an underlying contract action at the same time as the lien foreclosure action,
it does not preclude the option of bringing the two actions separately. MCL
570.1117(5). If the subcontractors had chosen to bring their breach of
contract claims against the general contractor as a separate action, they
would not have been allowed to recover attorney fees. The language of
MCL 570.1118(2) does not permit recovery of attorney fees on the contract
action merely because it was brought together with the lien foreclosure
action.[31]
As noted earlier, the crucial distinction between Decina and the instant case is that
the subcontractors in Decina were not lien claimants. In Decina, the trial court found that
the homeowners had paid the entire contract amount owed to the general contractor. 32
The homeowners’ tender of full payment extinguished the subcontractors’ right to a
construction lien under the CLA. 33 Accordingly, this Court rightly acknowledged that
the subcontractors lost on their lien claims. 34 Therefore, the Decina subcontractors no
longer had “a right to a construction lien under [the CLA]” and thus could no longer be
considered “lien claimants.” 35 The rule that emerges from Decina is simple—a party
cannot lose on its lien claim and receive attorney fees under § 118(2). As a result, the
31
Id.
32
Decina, 258 Mich App at 424, 431.
33
See MCL 570.1107(1) and (6); see also Vugterveen, 454 Mich at 129 (recognizing that
MCL 570.1107(6) provides a real property owner with a defense to a claim of lien if the
owner can show that the sum of payments made pursuant to the specific contract plus the
claim of lien exceed the price of the contract).
34
Decina, 480 Mich at 988.
35
MCL 570.1105(2).
10
subcontractors in Decina could not seek attorney fees under § 118(2) because fees under
that section may only be awarded to “a lien claimant who is the prevailing party.” 36
Accordingly, Decina does not control the outcome of this case. In contrast to the
subcontractors in Decina, RCG was a lien claimant when it received its arbitration award
because it possessed “a right to a construction lien” under the CLA. 37
B. RCG BROUGHT AN ACTION TO ENFORCE A CONSTRUCTION LIEN
THROUGH FORECLOSURE
We next turn to whether RCG was the prevailing party in an action to enforce a
construction lien through foreclosure, when its lien claim was not adjudicated but it
prevailed on its related contract claim. We conclude that the plain language of § 118(2)
does not expressly limit the trial court’s ability to award attorney fees to a lien claimant
who is the prevailing party on the lien claim. Rather, reading the statute as a whole
makes clear that a “lien claimant who is the prevailing party” may seek attorney fees
“[i]n an action to enforce a construction lien through foreclosure . . . .” 38
The language of § 118(2) indicates that the Legislature was aware that an action to
enforce a construction lien through foreclosure may involve multiple, separate claims.
The first sentence of § 118(2) reads, “In an action to enforce a construction lien through
36
MCL 570.1118(2) (emphasis added). Accordingly, this Court correctly recognized that
§ 118(2) did “not permit recovery of attorney fees on the contract action merely because
it was brought together with the lien foreclosure action.” Decina, 480 Mich at 988. Put
simply, bringing lien foreclosure and contract claims in the same action did not allow the
Decina subcontractors to evade the lien claimant requirement.
37
MCL 570.1105(2).
38
MCL 570.1118(2).
11
foreclosure, the court shall examine each claim and defense that is presented and
determine the amount, if any, due to each lien claimant or to any mortgagee or holder of
an encumbrance and their respective priorities.” 39 We presume the Legislature knew the
meaning of the words it used when drafting this provision. 40 And, here, the Legislature
used the terms “action” and “claim” in the same sentence. An “action” is “[a] civil or
criminal judicial proceeding.” 41 “A party bringing an ‘action’ seeks to recover from the
opposing party . . . .” 42 On the other hand, “a claim consists of facts giving rise to a right
asserted in a judicial proceeding, which is an action. In other words, the action
encompasses the claims asserted.” 43 Accordingly, in § 118(2), the phrase “action to
39
Emphasis added. The Legislature’s understanding that separate claims could be
brought in the foreclosure action is also reflected elsewhere in the CLA. See MCL
570.1117(5) (“In connection with an action for foreclosure of a construction lien, the lien
claimant also may maintain an action on any contract from which the lien arose.”).
40
Auditor General v McLaulin, 83 Mich 352, 354; 47 NW 233 (1890).
41
Black’s Law Dictionary (10th ed). To understand the meaning of words in a statute
that are not otherwise defined, we may resort to dictionary definitions for guidance.
People v Jones, 467 Mich 301, 304; 651 NW2d 906 (2002). Because the terms at issue in
this case have a peculiar legal meaning, it is appropriate to consult a legal dictionary. Id.
at 304-305. See also MCL 8.3a.
42
Epps v 4 Quarters Restoration LLC, 498 Mich 518, 530; 872 NW2d 412 (2015).
43
CAM Constr v Lake Edgewood Condo Ass’n, 465 Mich 549, 555; 640 NW2d 256
(2002). Black’s Law Dictionary (10th ed) defines “claim” as:
1. A statement that something yet to be proved is true . . . . 2. The assertion
of an existing right; any right to payment or to an equitable remedy, even if
contingent or provisional . . . . 3. A demand for money, property, or a legal
remedy to which one asserts a right; [especially], the part of a complaint in
a civil action specifying what relief the plaintiff asks for.
12
enforce a construction lien through foreclosure” refers to a civil judicial proceeding in
which foreclosure of a construction lien is sought, and it is comprised of all the claims
asserted in the action, including any related claim for breach of contract. 44 By beginning
with the phrase “[i]n an action to enforce a construction lien through foreclosure,”
§ 118(2) establishes that the focus is on whether the lien claimant is a prevailing party in
the action (i.e., the entirety of the judicial proceeding) in which the lien foreclosure claim
was asserted. 45
There is no indication from the language of § 118(2) that the lien claimant must
receive a judgment on its foreclosure claim for it to be the prevailing party. The
Legislature directed the trial court to “examine each claim and defense that is presented
44
Some of the confusion underlying the proper interpretation of § 118(2) may stem from
the fact that “action” and “cause of action,” i.e., a claim, are often used synonymously,
although they do not strictly and technically have the same meaning. Otto v Village of
Highland Park, 204 Mich 74, 80; 169 NW 904 (1918). For instance, in MCL
570.1117(5), the Legislature used “action” to refer both to a judicial proceeding and to a
claim that may be asserted within that proceeding. In such circumstances, we must be
careful to look for contextual clues in discerning the meaning of the words in the statute.
In Decina, this Court correctly noted that under § 118(2), the party must prevail on
the lien foreclosure action which, under the plain language of § 118(2), refers to a judicial
proceeding. But, perhaps influenced by the inartful drafting of the CLA, the Decina
Court also used the terms “action” and “claim” interchangeably. See, e.g., Decina, 480
Mich at 988 (“The subcontractors lost on their lien claim but prevailed on the breach of
contract claim. While the statute allows a lien claimant to bring an underlying contract
action at the same time as the lien foreclosure action, it does not preclude the option of
bringing the two actions separately.”). Nevertheless, despite this confusion, the rule
emerging from Decina is clear—a party that lost on its lien claim cannot receive attorney
fees under § 118(2).
45
In interpreting statutes, “words and clauses will not be divorced from those which
precede and those which follow.” Sanchick v State Bd of Optometry, 342 Mich 555, 559;
70 NW2d 757 (1955).
13
and determine the amount, if any, due to each lien claimant . . . .” 46 Consistent with this
directive, a lien claimant in such an action might prevail on its related breach of contract
claim and receive the entire amount to which it is entitled under its lien claim. In that
scenario, the lien claimant would have prevailed in its action to enforce the construction
lien, despite not winning its specific lien foreclosure claim and, thus, would be entitled to
attorney fees under § 118(2). 47
Under Michigan law, a lien foreclosure claim and a claim for breach of the
underlying contract are integrally related. A contract is a necessary prerequisite to a
construction lien. 48 A construction lien stems from the underlying contract, 49 and its
amount is determined by the contract’s terms. 50 These principles are reflected throughout
the CLA. 51 In essence, “[t]he lien is but a means for enforcing the payment of the debt
46
MCL 570.1118(2) (emphasis added).
47
As explained later in this opinion, this is because the lien claimant will have used the
CLA to achieve its main objective in filing suit, i.e., to obtain payment for its labor or
materials.
48
See Willard v Magoon, 30 Mich 273, 279 (1874).
49
See Canvasser Custom Builders, Inc v Seskin, 38 Mich App 643, 647-648; 196 NW2d
859 (1972).
50
Erb Lumber Co v Homeowner Constr Lien Recovery Fund, 206 Mich App 716, 722;
522 NW2d 917 (1994).
51
For example, in order to enter a judgment of foreclosure, the court must find that the
amount adjudged to be due on the contract has not been paid. MCL 570.1121(1); Dane
Constr, Inc v Royal’s Wine & Deli, Inc, 192 Mich App 287, 294; 480 NW2d 343 (1991).
(“We conclude, therefore, that although the amount of damages that plaintiff can recover
for breach of contract has been fixed by the mediation award, thereby limiting the amount
that may be claimed under the construction lien, plaintiff maintains its right to collect
those damages through the remedy provided by the construction lien.”). See also MCL
14
arising from the performance of the contract . . . .” 52 A party may proceed to enforce its
lien through foreclosure while simultaneously seeking recovery based on the contract
from which the lien arose. 53 But there can only be one satisfaction. 54 Thus, a lien
foreclosure claim and a claim for breach of the underlying contract are integrally related
and allowing a party to pursue both “merely gives it a better chance of recovering what it
is owed.” 55
In the instant case, RCG filed a complaint alleging claims for breach of contract
and foreclosure of its lien. Because these claims are integrally related, if RCG is able to
establish that it prevailed on its breach of contract claim, it will have prevailed in its
“action to enforce a construction lien through foreclosure . . . .” 56
570.1107(1) (“A construction lien acquired pursuant to this act shall not exceed the
amount of the lien claimant’s contract less payments made on the contract.”); MCL
570.1113(1) (stating that an owner or lessee must make a copy of the contract available
for inspection upon written demand by a lien claimant); MCL 570.1114 (stating that a
contractor must have a written contract in order to have a right to a construction lien on
the interest of an owner or lessee in a residential structure); MCL 570.1117(5) (“In
connection with an action for foreclosure of a construction lien, the lien claimant also
may maintain an action on any contract from which the lien arose.”).
52
John S Hanes & Co v Wadey, 73 Mich 178, 181; 41 NW 222 (1889).
53
F M Sibley Lumber Co v Wayne Circuit Judge, 243 Mich 483, 485-489; 220 NW 746
(1928). This may occur by bringing foreclosure and contract claims in the same action,
as in the instant case, or by proceeding with separate contract and foreclosure actions, as
in Bosch v Altman Constr Corp, 100 Mich App 289, 292-293; 298 NW2d 725 (1980).
54
See F M Sibley, 243 Mich at 486, quoting 40 CJ, p 367.
55
Old Kent Bank of Kalamazoo v Whitaker Constr Co, 222 Mich App 436, 439; 566
NW2d 1 (1997).
56
See MCL 570.1118(2).
15
C. RCG WAS A PREVAILING PARTY
Having determined that RCG was a lien claimant in an action to enforce a
construction lien through foreclosure, we must finally determine whether RCG was the
prevailing party given that it received a net arbitration award of $450,820.36 in its
favor. 57
Neither the CLA nor Decina define the term “prevailing party”; however, as a
legal term of art, it must be construed and understood according to its peculiar and
appropriate meaning. 58 A “prevailing party” is “[t]he party to a suit who successfully
prosecutes the action . . . , prevailing on the main issue, even though not necessarily to
the extent of his original contention. The one in whose favor the decision or verdict is
rendered and judgment entered.” 59 For there to be a “prevailing party,” there must have
been a material and enforceable alteration of the legal relationship of the parties resulting
from judicial imprimatur. 60
In this case, RCG received an award on its contract claim pursuant to a final and
binding arbitration. This award constituted a conclusive determination of the rights and
57
As the Court of Appeals panel observed, the amount awarded was 72% of the amount
RCG requested. Ronnisch, 306 Mich App at 207 n 4.
58
MCL 8.3a. In ascertaining the meaning of a term, a court may determine the meaning
at the time the statute was enacted by consulting dictionaries from that time. See, e.g.,
Cain v Waste Mgt, Inc (After Remand), 472 Mich 236, 247; 697 NW2d 130 (2005); Title
Office, Inc v Van Buren Co Treasurer, 469 Mich 516, 522; 676 NW2d 207 (2004).
59
Black’s Law Dictionary (5th ed).
60
See Buckhannon Bd & Care Home, Inc v West Virginia Dep’t of Health & Human
Resources, 532 US 598, 602-605; 121 S Ct 1835; 149 L Ed 2d 855 (2001); id. at 622
(Scalia, J., concurring).
16
obligations of the parties. 61 That is, the arbitration produced an enforceable award that
altered the legal relationship of the parties. Moreover, through the arbitration award,
RCG prevailed on the main issue in the action, i.e., it obtained an enforceable award
compensating it for its labor and materials. 62 Under the CLA, a lien claimant becomes
the prevailing party when the rights and obligations of the parties that are at the heart of
its lien claim are conclusively determined in its favor. RCG’s contract and lien
foreclosure claims both sought to obtain payment for the labor and materials supplied by
RCG, and both claims necessarily required determinations to be made regarding the
parties’ rights and obligations stemming from the underlying contract. 63 By prevailing on
one of those claims—the contract claim—RCG successfully prosecuted the action,
61
See Corallo v Merrick Central Carburetor, Inc, 733 F2d 248, 252 (CA 2, 1984);
Marion Mfg Co v Long, 588 F2d 538, 541 (CA 6, 1978); Nix v Spector Freight Sys, Inc,
264 F2d 875, 877 (CA 3, 1959).
62
As previously noted, one of the fundamental purposes of the CLA is to protect
contractors, workers, and suppliers by providing a method to secure payment for their
labor and materials.
63
The dissent frets that allowing attorney fees when a party prevails on the related
contract action will open the floodgates to claims for attorney fees under § 118(2) any
time a party prevails on other, unspecified, ancillary claims. However, it is hard to
imagine other ancillary claims bearing as close a relationship as the lien foreclosure and
underlying contract claims. The plain language of the CLA contemplates that a party
may achieve its main objective through either of these integrally related claims. And, not
surprisingly, while the CLA repeatedly refers to the underlying contract, it does not
specifically refer to any other ancillary claims. See note 51 of this opinion. In any event,
such claims are not at issue here and, to the extent they may exist, this Court can address
them in a future case.
17
receiving the requisite conclusive determination and thereby prevailing on its main
issue. 64
Further, that the trial court never entered a judgment confirming the arbitration
award does not preclude us from determining that RCG was the prevailing party. The
lack of judicial imprimatur in RCG’s favor is a direct result of the trial court’s failure to
confirm RCG’s arbitration award upon its motion. 65 Contrary to the trial court’s
conclusion, LOTN’s payment of the arbitration award did not obviate the need to confirm
the award. In certain circumstances, confirmation may be necessary even if the award
has been satisfied. For instance, the winning party at arbitration may desire to seek
costs. 66 Or, as in the instant case, a party may wish to seek attorney fees. Although
Michigan courts have not spoken on the issue, we agree with a number of other courts
64
That RCG did not recover the full amount of damages sought is not dispositive with
regard to whether it was a prevailing party. For the related determination whether a party
is the prevailing party for the purposes of MCR 2.625 (concerning taxation of costs),
courts have held that recovery of the full amount of damages is unnecessary. See Forest
City Enterprises, Inc v Leemon Oil Co, 228 Mich App 57, 81; 577 NW2d 150 (1998).
Instead, “in order to be considered a prevailing party, that party must show, at the very
least, that its position was improved by the litigation.” Id. RCG can certainly
demonstrate that its position was improved by the litigation given that it recovered 72%
of the amount sought.
65
Under MCR 3.602(I), “[a] party may move for confirmation of an arbitration award
within one year after the award was rendered.” “Confirmation is a summary proceeding
where the court merely converts an arbitration award into a final judgment.” 6 CJS,
Arbitration, § 181, p 248 (2004). A party may seek confirmation for various reasons.
For instance, a party may initiate confirmation proceedings if it desires that an official
record of the confirmation and judgment be made. See 6 CJS, Arbitration, § 178, pp 244-
246 (2004).
66
See MCR 3.602(M).
18
that a party cannot avoid confirmation by paying an arbitration award before the
confirmation proceeding. 67 Therefore, LOTN’s payment of the arbitration award should
not have precluded the trial court from providing the necessary judicial imprimatur in this
case by confirming the award. 68
67
See, e.g., Henderson v Summerville Ford-Mercury Inc, 405 SC 440, 454; 748 SE2d
221 (2013) (holding payment does not moot a confirmation request); Drummond v State
Farm Mut Auto Ins Co, 280 Neb 258, 262; 785 NW2d 829 (2010) (same); Mikelson v
United Servs Auto Ass’n, 122 Hawaii 393, 400-401; 227 P3d 559 (Hawaii Ct App, 2010)
(concluding that satisfaction did not render confirmation moot because confirmation was
statutorily mandated and because confirmation is concerned with the propriety of the
award itself and is unrelated to enforcement); In re Bernstein Family Ltd Partnership v
Sovereign Partners, LP, 66 AD3d 1, 6; 883 NYS2d 201 (2009) (“[I]t is irrelevant in a
proceeding to confirm an award whether there is a dispute about whether the award has
been fully satisfied.”); Collins v D R Horton, Inc, 361 F Supp 2d 1085, 1093 (D Ariz,
2005) (holding that confirmation was mandatory, regardless of payment, unless the award
is modified, vacated, or corrected); Pacific Law Group: USA v Gibson, 6 Cal App 4th
577, 580; 7 Cal Rptr 2d 878 (1992) (holding that nothing in California’s arbitration
statute limits confirmation to circumstances in which the award has not been paid).
But see Stewart Title Guaranty Co v Tilden, 2003 Wy 31, ¶ 9; 64 P3d 739 (2003)
(holding a trial court may deny a confirmation motion when satisfaction has rendered the
controversy moot); Murphy v Nat’l Union Fire Ins Co, 438 Mass 529, 533; 781 NE2d
1232 (2003) (same); Kenneth W Brooks Trust A v Pacific Media LLC, 111 Wash App
393, 400; 44 P3d 938 (2002) (same); Derwin v Gen Dynamics Corp, 719 F2d 484, 491-
493 (CA 1, 1983) (affirming the trial court’s denial of confirmation of the award on the
ground that confirmation was unwarranted given that the award had been satisfied).
68
Nor does LOTN’s payment of the arbitration award before confirmation affect RCG’s
status as a prevailing party. Rather, its status as a prevailing party is determined as of the
date of the arbitration award, not any subsequent judgment confirming the award. See
Marion, 588 F2d at 541 (“Thus, if the [arbitration] award is upheld in a reviewing court,
the rights of the parties are determined from the date of the award and not the date of the
court’s judgment confirming the award.”); 4 Am Jur 2d, Alternative Dispute Resolution,
§ 204, p 261 (2016).
19
Finally, we disagree with the dissent’s interpretation of the statute, which would
require RCG to refuse the proffered payment and continue to litigate its foreclosure claim
to remain eligible to seek attorney fees under § 118(2). Such a conclusion would
encourage gamesmanship by defendants, allowing them to prolong litigation and delay
payment on the contract claim in an attempt to drain the lien claimant’s resources before
it can obtain a judgment on its lien claim and seek attorney fees. 69 It also directly
contravenes this Court’s policy of encouraging settlements and discouraging litigation. 70
Therefore, we instead conclude that RCG’s acceptance of payment did not preclude it
from seeking attorney fees. 71
We hold that RCG was entitled to seek attorney fees under the CLA because it
prevailed on the main issue in its construction lien action when it received a favorable
arbitration award on its contract claim. The arbitration award constituted a conclusive
69
Cf. Solution Source, Inc v LPR Assoc Ltd Partnership, 252 Mich App 368, 381; 652
NW2d 474 (2002) (“A lien claimant without significant financial resources could end up
being forced to abandon his valid lien claim if met with resistance from the lienor at
every turn.”).
70
See Mayhew v Berrien Co Rd Comm, 414 Mich 399, 410; 326 NW2d 366 (1982);
People v Gill, 247 Mich 479, 480; 226 NW 214 (1929).
71
The dissent asserts that RCG’s acceptance of LOTN’s payment extinguished its right to
a lien, thereby precluding it from later seeking attorney fees. But this argument loses
sight of the CLA’s plain language, which only requires that a party be a lien claimant
when it becomes the prevailing party, not when it seeks attorney fees. See MCL
570.1118(2). Because RCG became the prevailing party by virtue of the arbitration
award in its favor, LOTN’s subsequent payment did not bar RCG from seeking attorney
fees. See Solution Source, 252 Mich App at 381 (“Therefore, we hold that satisfaction of
a lien does not bar a lien claimant who is the prevailing party from recovering its
appellate and postjudgment attorney fees incurred in connection with enforcement of its
lien.”).
20
and enforceable determination of the rights and obligations of the parties that were at the
heart of RCG’s lien claim. Therefore, RCG was the prevailing party in its action to
enforce a construction lien through foreclosure. 72
IV. CONCLUSION
We hold that that the trial court may award attorney fees to RCG because it was a
lien claimant who was the prevailing party in an action to enforce a construction lien
through foreclosure by virtue of receiving a favorable arbitration award on its breach of
contract claim. The judgment of the Court of Appeals is affirmed, and the case is
remanded to the trial court for further proceedings not inconsistent with this opinion. 73
David F. Viviano
Stephen J. Markman
Bridget M. McCormack
Richard H. Bernstein
72
We disagree with the dissent’s assertions that our opinion is not faithful to the text,
context, and purpose of the CLA. Instead, we believe it is painstakingly so and that the
dissent’s histrionics are a poor substitute for proper legal analysis.
73
We note that under MCL 570.1118(2), “[t]he court may allow reasonable attorneys’
fees . . . .” (Emphasis added.) The use of the term “may” indicates discretionary, rather
than mandatory, action. Murphy v Mich Bell Tel Co, 447 Mich 93, 100; 523 NW2d 310
(1994). Thus, a party who demonstrates that it is a prevailing lien claimant in an action
to enforce a construction lien through foreclosure may seek and be awarded attorney fees
under MCL 570.1118(2) but is not entitled to them. On remand, the decision to award
reasonable attorney fees remains within the sound discretion of the trial court. See
Vugterveen, 454 Mich at 133 (“A court has discretion to award attorney fees to a
prevailing lien claimant . . . .”).
21
STATE OF MICHIGAN
SUPREME COURT
RONNISCH CONSTRUCTION GROUP,
INC.,
Plaintiff-Appellee,
v No. 150029
LOFTS ON THE NINE, LLC,
Defendant-Appellant,
and
LOFTS ON THE NINE CONDOMINIUM
ASSOCIATION, HOTLINE ELECTRIC,
INC., RAM CONSTRUCTION SERVICES
OF MICHIGAN, INC., EAM ENGINEERS,
INC., MICHIGAN AIR PRODUCTS CO.,
STOCK BUILDING SUPPLY, LLC,
WILLIAMS DISTRIBUTING CO., NORTH
STAR PARTNERS, LLC, and THE STATE
BANK,
Defendants.
YOUNG, C.J. (dissenting).
I respectfully, but vigorously, dissent. The majority opinion has done a
remarkable thing. It has, through creative statutory interpretation, transformed an act that
it acknowledges is solely designed to compensate workers and contractors who prevail on
their construction liens into a vehicle for recovery of attorney fees for parties who have
not prevailed—and cannot now prevail—on their construction liens. Inasmuch as I
believe that the Legislature has, by every means at its disposal, textually communicated
that recovery of attorney fees under the Construction Lien Act (CLA) 1 is permitted only
to those parties who prevail on a construction lien, I cannot join the majority opinion.
I. FACTS AND PROCEDURAL HISTORY
While I agree with the majority opinion’s statement of the facts, I provide here
certain additional facts that I think are important to the proper outcome in this case. At
the conclusion of arbitration, the arbitrator rendered a net award of $450,820.36 to
Ronnisch Construction Group (RCG). The arbitration award expressly stated that RCG’s
award was based on “[d]irect damages for work performed under the Construction
Contract.” Additionally, at three separate places within the award, the arbitrator noted
that he was reserving the issue of RCG’s attorney fees under the CLA. The arbitrator
expressly stated:
The Arbitrator makes no award as to RCG’s claim for attorney fees
and costs under [MCL 570.1118(2)], and the issue of such attorney fees and
costs under the Construction Lien Act is reserved for the Circuit Court in
the underlying lawsuit . . . .
Lofts on the Nine (LOTN) paid the arbitration award in full by wiring
$484,319.76 2 to the client trust account of RCG’s counsel. RCG never returned or
otherwise rejected the wire transfer payment. And RCG seemed to realize that
acceptance of full payment jeopardized its attorney fees claim because it attempted to
condition its acceptance of the payment on being able to seek attorney fees in the trial
1
MCL 570.1101 et seq.
2
This payment included the net arbitration award plus accrued interest.
2
court. This offer of conditional acceptance was declined by LOTN. 3 RCG then moved in
the trial court to lift the stay of proceedings, affirm the arbitration award, and award
attorney fees under the CLA, claiming that it was a prevailing-party lien claimant under
MCL 570.1118(2). The trial court denied RCG’s motion for attorney fees, determining
that at no point in the proceedings had RCG’s CLA claim ever been adjudicated—either
by the arbitrator or the trial court. Most important for this case, the trial court also held
that RCG’s lien claim was extinguished when RCG voluntarily accepted LOTN’s tender
of payment before equitable proceedings on the lien claim.
The Court of Appeals vacated the portion of the trial court’s order pertaining to
RCG’s attorney fees and remanded the case to the trial court for further proceedings,
holding that the trial court erred by holding that it could not award RCG attorney fees and
costs under the CLA because RCG “did not solely seek recovery on a breach of contract
claim: plaintiff’s complaint listed both a contract claim and a foreclosure-of-lien claim.” 4
On this basis, the Court of Appeals panel concluded that RCG was a prevailing lien
3
RCG thus implicitly recognized that, by unconditionally accepting payment, its attorney
fees claim could be extinguished, which it, in fact, was. To maintain that claim, RCG
could have refused to accept the proffer of payment and extinguishment of its lien—as
contemplated in Bosch v Altman Constr Corp, 100 Mich App 289, 297; 298 NW2d 725
(1980) (“[A] lienor is not required to accept tender of payment after a complaint has been
filed if he wishes to pursue his statutory right to attorney fees.”)—or it could have
bargained with LOTN for a larger payment that took into account that accepting payment
before adjudication of RCG’s lien claim would extinguish the lien claim and RCG’s
attendant claim for attorney fees. None of that happened in this case.
4
Ronnisch Constr Group, Inc v Lofts On the Nine, LLC, 306 Mich App 203, 205, 212;
854 NW2d 744 (2014).
3
claimant under MCL 570.1118(2). 5 LOTN applied for leave to appeal, which this Court
granted. 6
II. STANDARD OF REVIEW
This Court reviews a trial court’s decision whether to award attorney fees for an
abuse of discretion. 7 An abuse of discretion occurs when the trial court’s decision is
outside the range of reasonable and principled outcomes. 8 Issues of statutory
construction are reviewed de novo. 9
III. ANALYSIS
Surprisingly, the CLA is about construction liens. The title of the CLA explicitly
states that its purpose is
to establish, protect, and enforce by lien the rights of persons performing
labor or providing material or equipment for the improvement of real
property; to provide for defenses to construction liens; to provide remedies
and prescribe penalties; and to repeal acts and parts of acts.[10]
5
Id. at 214.
6
Ronnisch Constr Group, Inc v Lofts on the Nine, LLC, 497 Mich 1003 (2015).
7
Moore v Secura Ins, 482 Mich 507, 516; 759 NW2d 833 (2008).
8
Smith v Khouri, 481 Mich 519, 526; 751 NW2d 472 (2008).
9
Speicher v Columbia Twp Bd of Trustees, 497 Mich 125, 133; 860 NW2d 51 (2014).
10
1980 PA 497, title, as amended by 2010 PA 147 (emphasis added). “Although a [title]
is not to be considered authority for construing an act, it is useful for interpreting its
purpose and scope.” Malcolm v East Detroit, 437 Mich 132, 143; 468 NW2d 479 (1991).
4
The majority begins, as it must, by recognizing the purpose of the act. The majority does
not have to speculate on this point because the Legislature has been kind enough to spell
out the purpose of the CLA—both in the title and the text of the statute. As the majority
opinion observes:
The CLA is “intended to protect the interests of contractors,
workers, and suppliers through construction liens, while protecting owners
from excessive costs.” The fundamental purpose of the CLA with respect
to contractors, workers, and suppliers is to provide a method to secure
payment for their labor and materials. The Legislature has declared that the
CLA is “a remedial statute . . . [that] shall be liberally construed to secure
the beneficial results, intents, and purposes of th[e] act.” Accordingly,
when interpreting the CLA, we should always be mindful of the CLA’s
intended purpose.[11]
And that is the last time the majority opinion pays attention to the purpose and text of the
CLA. 12
The CLA actually defines who can recover attorney fees and requires that there be
a present “right” to a lien. As I stated at the outset, the Legislature has textually
11
Ante at 5-6 (citations omitted; alterations in original).
12
The majority disregards this Court’s duty to give the statutory language its fair
meaning by relying, at least in part, on the legislative directive that the act be “ ‘liberally
construed.’ ” See ante at 6 (citation omitted). The majority has mistaken the directive
for liberal construction as free rein to expand the statute to construct an attorney fees
remedy that lacks textual and contextual support. Statutory interpretation, whether liberal
or strict, is rendered illegitimate when the fair meaning of a text is disregarded. See
Scalia & Garner, Reading Law: The Interpretation of Legal Texts (St Paul:
Thomson/West, 2012), p 233 (stating that a legislative provision requiring that a statute
be liberally construed “should be regarded as requiring a fair interpretation as opposed to
a strict or crabbed one—which is what courts are supposed to provide anyway.”). A
liberal interpretation is “ ‘clearly inadmissible, if it extends beyond the just and ordinary
sense of the terms.’ ” Id. at p 364, quoting 1 Story, Commentaries on the Constitution of
the United States (2d ed, 1858), § 429, p 304.
5
communicated that this act concerns one thing: how construction lien disputes should be
resolved. Not surprisingly, the Legislature begins by calling the statute the “construction
lien act” 13 and then prescribes a procedure by which claims associated with construction
lien disputes shall be resolved. 14 The Legislature was also very specific regarding who
can recover attorney fees in these cases:
In an action to enforce a construction lien through foreclosure, the
court shall examine each claim and defense that is presented and determine
the amount, if any, due to each lien claimant or to any mortgagee or holder
of an encumbrance and their respective priorities. The court may allow
reasonable attorneys’ fees to a lien claimant who is the prevailing party.[15]
Again, the Legislature has been careful to inform us who is entitled to recover attorney
fees under the CLA because it has also defined a critical term in the quoted provision—
who is a “lien claimant.” The term “lien claimant” is statutorily defined as “a person
having a right to a construction lien under this act.” 16 Grammatically, this requires that
the claimant have a present, not a previous or theoretical, right to a lien at the time the
claimant is “the prevailing party.” Therefore, under a plain reading of the statute, a trial
court may only award attorney fees to a person who “ha[s] a right to a construction lien
13
MCL 570.1101.
14
See, e.g., MCL 570.1117 (providing extensive procedural requirements for the
enforcement of a construction lien under the CLA).
15
MCL 570.1118(2) (emphasis added). Additionally, the statute provides that a court
may allow reasonable attorney fees to a prevailing defendant if the court determines that
the lien claimant’s action to enforce a construction lien was vexatious. MCL
570.1118(2).
16
MCL 570.1105(2) (emphasis added).
6
under [the CLA]” 17 when that person “is the prevailing party” “[i]n an action to enforce a
construction lien through foreclosure . . . .” 18
While there are many additional textual indications that the Legislature intended to
make attorney fees available only to those who prevailed on their lien claims (some of
which I shall shortly address), the fatal flaw of the majority opinion is that it gives no
meaning to this definition when it provides attorney fees to RCG, which, not having been
adjudicated the prevailing party on the construction lien claim before accepting full
payment, plainly was no longer a lien claimant, much less a prevailing one.
In this case, as it was permitted to do under the statute, RCG asserted claims under
both the CLA and standard contract law. 19 Importantly, the trial court determined that
RCG had prevailed only on its contract claim, for which attorney fees are not generally
available. 20 RCG’s contract claim and lien claim were for identical amounts—a common
occurrence, as the CLA expressly requires that a lien under the act “shall not exceed the
amount of the lien claimant’s contract less payments made on the contract.” 21 While
RCG prevailed at arbitration, it did so only on its contract claim, not the lien claim. Most
17
Id. Under the CLA, “person” is defined as “an individual, corporation, partnership,
sole proprietorship, association, other legal entity, or any combination thereof.” MCL
570.1106(1).
18
MCL 570.1118(2).
19
MCL 570.1117(5) (“In connection with an action for foreclosure of a construction lien,
the lien claimant also may maintain an action on any contract from which the lien
arose.”).
20
See Haliw v Sterling Heights, 471 Mich 700, 706-707; 691 NW2d 753 (2005).
21
MCL 570.1107(1).
7
legally significant, it received and accepted payment in full for all its damages incurred
under the contract. As the trial court held at the time RCG moved for attorney fees, RCG
had extinguished any claimed lien by accepting full payment. Neither the Court of
Appeals nor the majority opinion explains why the trial court’s holding is erroneous.
There is a reason: the trial court’s holding is legally correct.
The majority opinion simply fails to acknowledge that RCG was never more than a
presumptive lien claimant that extinguished its lien before the validity of its lien claim
was ever determined. No one has disputed that acceptance of the full amount of the
arbitration award on the contract actually extinguished RCG’s lien. The CLA provides
that a lien cannot “exceed the amount of the lien claimant’s contract less payments made
on the contract.” 22 Accordingly, when RCG moved in the trial court for an award of
attorney fees, it was no longer a “person having a right to a construction lien under this
act.” 23 Even though RCG could no longer legally satisfy the statutory definition of a
“lien claimant who is the prevailing party,” 24 the majority opinion has ignored this as an
22
MCL 570.1107(1) (emphasis added). Once there was no longer any amount still owed
on the construction contract, RCG clearly did not “hav[e] a right to a construction lien
under this act.” MCL 570.1105(2) (emphasis added). See also Solution Source, Inc v
LPR Assoc Ltd Partnership, 252 Mich App 368, 380; 652 NW2d 474 (2002) (“[I]f a
construction lien has not been satisfied or discharged before trial, a court still has
jurisdiction to award attorney fees in relation to enforcement or collection of the lien.”)
(emphasis added). In this case, the lien was satisfied before it was ever adjudicated on
the merits, and the trial court properly held that LOTN paid RCG the amount required by
arbitration on the contract claim. Therefore, the trial court did not err by holding that
RCG “cannot be deemed to be a prevailing lien claimant in this matter.”
23
MCL 570.1105(2) (emphasis added).
24
MCL 570.1118(2).
8
inconvenient fact en route to permitting RCG’s recovery of attorney fees for prevailing
on a contract claim.
In sum, there are two separate periods at issue in this case: (1) before RCG
accepted LOTN’s offer of full payment on the arbitration award, and (2) after it accepted
full payment. Before the acceptance of the payment, there had never been any
determination that RCG was a valid “lien claimant”—that is, whether RCG was “a person
having a right to a construction lien under this act.” 25 And after RCG accepted the
payment, there was no more debt on which any lien could be based. 26
The majority opinion ignores the grammatical tense of the critical provisions—that
attorney fees are only available to “a lien claimant who is the prevailing party” 27 and that
a lien claimant is someone “having a right to a construction lien . . . .” 28 This is the
Achilles’ heel of the majority opinion, one it attempts to conceal by holding that a trial
court can order a hearing after a purported lien claimant files a motion for attorney fees
and make factual findings on all elements of the party’s lien claim at that later time. 29
25
MCL 570.1105(2) (emphasis added).
26
MCL 570.1107(1). See also MCL 570.1115(2) (“A lien claimant who receives full
payment for his or her contract shall provide to the owner, lessee, or designee a full
unconditional waiver of lien.”); Bosch, 100 Mich App at 297 (“[A] lienor is not required
to accept tender of payment after a complaint has been filed if he wishes to pursue his
statutory right to attorney fees.”) (emphasis added).
27
MCL 570.1118(2) (emphasis added).
28
MCL 570.1105(2) (emphasis added).
29
Ante at 7 n 22. In the instant case, the majority offers that such a hearing could have
been held when RCG moved for confirmation of the arbitration award. Unfortunately for
the majority position, that is not what happened below. Further, the majority opinion’s
9
The majority opinion transforms the statutory requirement for the adjudication of a
present right to a lien to a mere theoretical right. Even if a trial court could resolve
whether the lien claim was valid in some cases in which the lien claimant has not
extinguished its lien claim, the majority’s proposal cannot apply in this case. As noted,
RCG had already accepted full payment from LOTN before it moved for attorney fees or
confirmation of the arbitration award. Thus, as the trial court properly held, by the time
the motion was filed, RCG had extinguished any right it had to a lien and could not
honestly contend that it was then a lien claimant. 30 By that time RCG simply could not
validly contend that it “ha[d] a right to a construction lien under” 31 the CLA. For the
majority, this is a matter of indifference.
The majority opinion could have stopped as soon as it recognized that this plaintiff
had no legal basis for asserting a valid right to a lien by the time RCG actually moved to
proposal for curing its Achilles’ heel problem completely contradicts the majority’s own
description of what a confirmation of award proceeding is. See ante at 18 n 65, quoting 6
CJS, Arbitration, § 181, p 248 (2004) (“Confirmation is a summary proceeding where the
court merely converts an arbitration award into a final judgment.”) (emphasis added).
30
This is not to say that an alleged lien claimant will always have to reject payment of an
award to recover attorney fees. In fact, in the typical case brought under the CLA, the
lien claimant will necessarily have been adjudicated a “lien claimant” under the CLA
when it prevails. The majority fails to give any meaning to the defined term “lien
claimant,” which requires that the claimant be a person “having a right” to a lien, MCL
570.1105(2) at the time it “prevail[s],” MCL 570.1118(2). Those provisions require an
adjudication that the majority now holds can happen after the right to a lien has been
extinguished, not before. If a putative lien claimant attempts to recover attorney fees on a
now-satisfied, never-adjudicated lien claim, the prior acceptance of judgment satisfying
the lien extinguishes both the lien, MCL 570.1107(1), and any claim to attorney fees
under the act, MCL 570.1118(2).
31
MCL 570.1105(2).
10
confirm the arbitration award, much less when it moved to recover attorney fees.
Nonetheless, the majority opinion goes even further, creating a remedy that the plain
language of the CLA precludes and that cannot apply to RCG on the facts of this case.
At no point does the majority opinion contradict the proposition that, under the
CLA and our caselaw, acceptance of full payment extinguishes a lien. Because it does
not address this fundamental principle concerning liens and ignores that the CLA dictates
that one cannot have a lien for more than is owed, 32 the majority is obligated to deflect
the reader’s attention to other matters. The majority expends a lot of effort to avoid
recognizing that RCG never had—and could not have—a valid lien after it accepted full
payment of the arbitration award and without a prior adjudication of its right to a lien:
Further, that the trial court never entered a judgment confirming the
arbitration award does not preclude us from determining that RCG was the
prevailing party. The lack of judicial imprimatur in RCG’s favor is a direct
result of the trial court’s failure to confirm RCG’s arbitration award upon
its motion. Contrary to the trial court’s conclusion, LOTN’s payment of the
arbitration award did not obviate the need to confirm the award. In certain
circumstances, confirmation may be necessary, even if the award has been
satisfied. For instance, the winning party at arbitration may desire to seek
costs. Or, as in the instant case, a party may wish to seek attorney fees.
Although Michigan courts have not spoken on the issue, we agree with a
number of other courts that a party cannot avoid confirmation by paying an
arbitration award before the confirmation proceeding. Therefore, LOTN’s
payment of the arbitration award should not have precluded the trial court
from providing the necessary judicial imprimatur in this case by confirming
the award.[33]
32
MCL 570.1107(1).
33
Ante at 18-19 (citations omitted).
11
None of the foregoing statements about the necessity of confirmation of an
arbitration award addresses why a party that has extinguished its lien by accepting full
payment is nevertheless a party that has a present right to a lien. Instead, the majority
opinion shifts to talk about the validity of the confirmation of the arbitration award, rather
than the validity of the underlying lien.
The majority suggests that only its interpretive gobbledygook can prevent what it
considers the gamesmanship of a party’s acceptance or rejection of payment:
Finally, we disagree with the dissent’s interpretation of the statute,
which would require RCG to refuse the proffered payment and continue to
litigate its foreclosure claim to remain eligible to seek attorney fees under
[MCL 570.1118(2)]. Such a conclusion would encourage gamesmanship
by defendants, allowing them to prolong litigation and delay payment on
the contract claim in an attempt to drain the lien claimant’s resources before
it can obtain a judgment on its lien claim and seek attorney fees. It also
directly contravenes this Court’s policy of encouraging settlements and
discouraging litigation. Therefore, we instead conclude that RCG’s
acceptance of payment did not preclude it from seeking attorney fees.[34]
The majority opinion’s purpose-driven, not textual, argument ignores the
underlying problem with its remedy in this case and shifts the discussion to what it sees
as the opportunity for “gamesmanship” available to defendants under my construction of
the CLA. 35 Whether the legal consequences of having to choose to accept full payment
or seek a judicial determination regarding the validity of RCG’s lien imposes a cost can
be characterized as promoting gamesmanship, the majority opinion has wholly ignored
34
Ante at 20 (citations omitted).
35
Ante at 20.
12
one requirement of a lien claim on which CLA attorney fees necessarily must be
predicated—that there is some construction contract payment owed to the lien claimant. 36
Settlements do sometimes require parties to choose among options, and sometimes
selecting one may preclude complete optimization of the party’s preferred outcome. If
none of the options is sufficiently acceptable, a party may opt to have someone adjudicate
the dispute. RCG chose to accept full payment with full awareness that doing so might
jeopardize its claim for CLA attorney fees. 37
Apart from the fact that the majority opinion creates a remedy that RCG cannot
legally receive, arguably the most startling thing about the majority opinion is that it
takes a statutory framework called the “construction lien act” 38 and turns it into a vehicle
for attorney fees wholly divorced from success on the specific lien foreclosure action that
this statutory scheme creates and defines. It is by delinking the entitlement to CLA
attorney fees from success on the lien foreclosure action that the majority opinion creates
a second problem: How does one draw the line on which ancillary claims create an
entitlement to attorney fees and which do not? This is an exquisitely difficult question
for the majority to answer because both the CLA and our court rules provide permission
36
MCL 570.1107(1).
37
See note 3 of this opinion.
38
MCL 570.1101. Again, the CLA was intended to “establish, protect, and enforce by
lien the rights of persons performing labor or providing material or equipment for the
improvement of real property; to provide for defenses to construction liens; [and] to
provide remedies and prescribe penalties . . . .” 1980 PA 497, title, as amended by 2010
PA 147 (emphasis added).
13
to join ancillary claims to the lien foreclosure claims. 39 Once success on the lien claim is
no longer the necessary precondition to an attorney fees award under the CLA, unless
success on most ancillary claims can be eliminated as a trigger for attorney fees, the
majority allows a very expansive holding in favor of a general right to attorney fees on
any claim brought with a construction lien foreclosure claim.
To avoid triggering attorney fees through success on any and all ancillary claims,
the majority devises a new rule: success on contract claims alone is a trigger for the
recovery of attorney fees under the CLA. The majority adopts this rule because it
believes that the only thing the CLA requires as a precondition to an award of attorney
fees is recovery on a claim “integrally related” to the CLA claim. 40
Presumably, had the Legislature been content with the majority’s broader
approach to a contract-based recovery of attorney fees for claims of unpaid construction
debts, it would not have bothered with enacting the CLA’s exacting lien foreclosure
process, which requires recording a lien within a prescribed time frame, among other
obligations. Indeed, at common law, a contractor always had a contract claim for any
unpaid bills but no entitlement to attorney fees. So, the effect of the majority’s
construction of the CLA is to undercut the lien foreclosure statutory process and attorney
fees remedy entirely to permit the recovery of attorney fees based on a simple common-
law contract claim.
39
MCL 570.1117(5); MCL 570.1118(2); MCR 2.203(A); MCR 2.203(B).
40
Ante at 17 n 63.
14
That strikes me as a surprising result. I think it doubtful that the Legislature
created an unnecessary lien foreclosure process with the intention of establishing a new
route to recover attorney fees for an existing common-law contract claim—particularly
when the Legislature went so far to create a statutory regime that repeatedly highlights
that the prevailing foreclosure lien claimant is eligible for recovery of attorney fees.
Should the Legislature decide to pass the Construction Contract Claim Act with a similar
provision for attorney fees for construction contract claims, I will surely join the
majority’s conclusion that success on a contract claim suffices to allow such an award.
Until then, I find the majority’s construction untenable.
The great irony is that, in purporting to construe the CLA, the majority has
converted a statutory attorney fees remedy requiring prevailing on a lien foreclosure
action into one in which prevailing on the “main issue” of the lawsuit is sufficient. Very
simply, there is no textual support for an attorney fees remedy under the CLA by
“ ‘prevailing on the main issue . . . .’ ” 41 Of course, this extension of entitlement to
statutory attorney fees to any ancillary claims, and the subsequent purported limitation to
contract claims, finds no anchor in the actual text of the CLA; nor does the majority
opinion explain how the “main issue” envisioned by a statute designed to establish lien
rights for persons performing labor or providing material or equipment for the
improvement of real property42 is addressed by awarding attorney fees on a standard
common-law contract claim. The majority opinion’s rationale ignores both the actual
41
Ante at 16 (citation and quotation marks omitted).
42
See 1980 PA 497, title, as amended by 2010 PA 147.
15
text and context of the CLA. This is a remarkable, but not laudable, accomplishment for
a court. The majority opinion gives primacy to what it perceives as the purpose of the
legislative scheme at the expense of the statute’s text. This Court abandoned that so-
called approach to statutory construction almost twenty years ago, striving to achieve
statutory constructions founded on the actual language of an act. 43
The majority opinion justifies including contract claims and excluding other
ancillary claims as a trigger for entitlement to attorney fees by asserting that lien claims
and contract claims are “integrally related” to lien foreclosure actions. While I concede
that a contract claim for labor or materials is logically related to a lien foreclosure
action, 44 that conclusion does not explain why other ancillary claims are less “integrally
related” to lien claims and, therefore, do not trigger an entitlement to attorney fees. 45 It is
43
“[W]hen reviewing questions of statutory construction, our purpose is to discern and
give effect to the Legislature’s intent. We begin by examining the plain language of the
statute. It is a fundamental principle of statutory construction that the words used by the
Legislature shall be given their common and ordinary meaning, and only where the
statutory language is ambiguous may we look outside the statute to ascertain the
Legislature’s intent.” Nawrocki v Macomb Co Rd Comm, 463 Mich 143, 159; 615 NW2d
702 (2000) (MARKMAN, J.) (citation omitted).
44
See MCL 570.1107(1).
45
This problem is one that will surely arise in future litigation. The Michigan Court
Rules require parties to join every claim the pleader has against an opposing party arising
out of the transaction or occurrence that is the subject matter of the action. MCR
2.203(A). Further, like the CLA joinder provisions, “[a] pleader may join as either
independent or alternate claims as many claims, legal or equitable, as the pleader has
against an opposing party.” MCR 2.203(B) (emphasis added). I fear the majority
opinion will generate additional litigation over just how “integrally related” ancillary
claims must be in order to recover attorney fees (e.g., “The general contractor ran over
my toolbox, thereby increasing my cost of performance on this construction contract.”)
And, in fact, the majority explicitly notes that future litigation will be needed to
determine future ancillary claims. See ante at 17 n 63.
16
not surprising that the majority offers no additional explanation for its line drawing
because its rationale is not tied to the text of the CLA. Once the connection between
success on the lien foreclosure action and entitlement to attorney fees is broken, the
majority is forced to draw an arbitrary line to make its expansion of entitlement to
attorney fees appear to be more modest than it is.
Stunningly, what the majority opinion does today is exactly that which this Court
rejected in H A Smith Lumber & Hardware Co v Decina. 46 Though it attempts to
distinguish Decina, the majority’s analysis fails either to make a legally significant
distinction between that case and the instant dispute or provide a tenable construction of
the statutory text. The lien claimants, in both Decina and the instant appeal, brought
alternative claims—a CLA claim and a contract claim—for the same remedy. The trial
courts in both Decina and this case granted relief on the basis of the contract claim. In
Decina, whether accurate or not, the trial court actually stated that the plaintiffs “ ‘each
ha[d] valid claims of lien,’ ” 47 even though the liens did not attach to the construction
property. 48 In the instant case, the trial court expressly stated, repeatedly, that neither it
nor the arbitrator had ever adjudicated RCG’s lien claim and held that RCG had
extinguished its lien. Thus, the Decina lien claimants had an arguably stronger—though
46
H A Smith Lumber & Hardware Co v Decina, 480 Mich 987 (2007).
47
H A Smith Lumber & Hardware Co v Decina (On Remand), 265 Mich App 380, 382;
695 NW2d 347 (2005), rev’d 480 Mich 987 (2007).
48
It is hard to imagine how one could have a valid claim of lien that never attaches to the
property in question. Nevertheless, the lien claimants in Decina certainly did not prevail
on the lien claims they alleged.
17
ultimately unsuccessful—argument that the trial court had actually adjudicated its lien
claim than RCG does in the instant case.
At the time plaintiff accepted full payment, it could not plausibly argue that it
“ha[d] a right to a construction lien under [the CLA],” 49 when no such right was ever
determined to exist by the trial court. Interestingly, the majority has no problem calling
RCG a “lien claimant,” 50 despite the fact that neither the trial court nor the arbitrator—the
only fact-finding entities that have been involved in this case—ever made such a
determination. It is axiomatic that this Court is not a fact-finding body. I believe that
any finding that RCG meets all the requirements of a lien claimant is one that can only be
made by the fact-finder, i.e., the trial court or the arbitrator, and in this case both
expressly refused to do so. 51 Unexplained is how a subsequent hearing on attorney fees
now ordered by the majority can revive RCG’s lien, which it extinguished by accepting
full payment. As a consequence, the majority opinion has ordered a futile act, disguising
that it has abandoned the statute to create an attorney fees remedy the Legislature never
contemplated.
49
MCL 570.1105(2).
50
Ante at 7-11.
51
In this case, as stated, the trial court held that RCG had extinguished its lien claim by
accepting full payment. The majority opinion never bothers to explain why this holding
is erroneous and must be overruled.
18
IV. CONCLUSION
For the reasons stated, I do not believe that RCG is entitled to attorney fees. The
attorney fees provision of the CLA only allows a trial court to award attorney fees “to a
lien claimant who is the prevailing party.” 52 Because RCG did not meet the statutory
definition of “lien claimant” under the CLA, and because it voluntarily extinguished its
lien claim before the trial court could have so determined, I do not believe RCG is
entitled to attorney fees and would reverse the Court of Appeals on that issue. For these
reasons, I dissent.
Robert P. Young, Jr.
Brian K. Zahra
Joan L. Larsen
52
MCL 570.1118(2).
19
Ronnisch Construction Group, Inc v. Lofts on the Nine, LLC
Combined Opinion