Order Michigan Supreme Court
Lansing, Michigan
December 21, 2018 Stephen J. Markman,
Chief Justice
156341 Brian K. Zahra
Bridget M. McCormack
David F. Viviano
SEJASMI INDUSTRIES, INC., Richard H. Bernstein
Plaintiff/Counterdefendant- Kurtis T. Wilder
Appellee, Elizabeth T. Clement,
v SC: 156341 Justices
COA: 336205
A+ MOLD, INC., d/b/a TAKUMI Macomb CC: 2014-004273-CB
MANUFACTURING COMPANY,
Defendant/Cross-Defendant,
and
QUALITY CAVITY, INC.,
Defendant/Counterplaintiff/Cross-
Plaintiff/Third-Party Plaintiff-
Appellant,
and
NKL MANUFACTURING, INC.,
Third-Party Defendant.
_________________________________________/
On October 9, 2018, the Court heard oral argument on the application for leave to
appeal the July 27, 2017 order and the April 5, 2016 judgment of the Court of Appeals.
On order of the Court, the application is again considered, and it is DENIED, because we
are not persuaded that the question presented should be reviewed by this Court.
MARKMAN, C.J. (dissenting).
I respectfully dissent from this Court’s order denying leave to appeal. Plaintiff
Sejasmi Industries contracted with defendant A+ Mold, Inc. (doing business as Takumi
Manufacturing) for the construction of several molds for the fabrication of plastic parts
by plaintiff. Takumi in turn contracted with defendant Quality Cavity for it to perform
some of the construction work. The molds were duly constructed and delivered to
plaintiff. Plaintiff then paid Takumi on a timely basis; however, Takumi failed to pay
defendant in full. Consequently, defendant sought to enforce its statutory moldbuilder’s
liens against the molds possessed by plaintiff, see MCL 445.619, and plaintiff filed a
declaratory action seeking a court order stating that the liens had been extinguished. The
trial court granted summary disposition in favor of plaintiff, and the Court of Appeals
affirmed in part and remanded to the trial court for further proceedings in a split decision,
with Judge HOEKSTRA dissenting in part. Sejasmi Indus, Inc v A+ Mold, Inc,
unpublished per curiam opinion of the Court of Appeals, issued April 5, 2016 (Docket
No. 328292). This Court then scheduled oral argument on defendant’s application for
leave to appeal. 501 Mich 968 (2018).
This case concerns statutory protections for moldbuilders in the tool-and-die
industry, in particular the proper understanding of MCL 445.619, which establishes a
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nonpossessory moldbuilder’s lien. This provision is a part of the statutory scheme set
forth by 2002 PA 17, which added MCL 445.611 through MCL 445.620c to 1981 PA 155
as amended by 1986 PA 103, entitled “An act to provide for ownership rights in dies,
molds, and forms for use in the fabrication of plastic parts under certain conditions and to
establish a lien on certain dies, molds, and forms.” The provisions within the act
specifically concerning moldbuilder’s liens are MCL 445.619 through MCL 445.620c.
The remaining provisions are not directly relevant here.
To better understand why the Legislature enacted MCL 445.619-- a law that
remains unexamined by this Court in the 16 years since its enactment in 2002-- I find
helpful the amicus curiae brief filed by the American Mold Builders Association,
explaining as the rationale for the law that “prior to the 2002 lien law, mold and tool
builders had a practice of waiting until an unpaid tool came back to the toolmaker for
service, or engineering changes, and then holding it hostage until the molder . . . paid
past-due balances.” Amicus Curiae Brief of the American Mold Builders Association et
al, p 7. “Granting a nonpossessory lien virtually stopped that practice overnight, for
those toolmakers that took the time to file liens, resulting in fewer disruptions to the
supply chain.” Id. “The tooling company . . . can [now] charge less for the mold or tool,
begin production sooner, and accept deferred payment arrangements, all of which allow
for faster time to market and lower pricing for the supply chain and ultimately the end
consumer.” Id. Put simply, MCL 445.619 not only protects moldbuilders by establishing
security for payment through a nonpossessory lien, but also provides benefits for the tool-
and-die industry as a whole.
With that in mind, MCL 445.619 sets forth the creation and attachment of a
moldbuilder’s lien:
(1) A moldbuilder shall permanently record on every die, mold, or
form that the moldbuilder fabricates, repairs, or modifies the moldbuilder’s
name, street address, city, and state.
(2) A moldbuilder shall file a financing statement in accordance with
the requirements of [MCL 440.9502].
(3) A moldbuilder has a lien on any die, mold, or form identified
pursuant to subsection (1). The amount of the lien is the amount that a
customer or molder owes the moldbuilder for the fabrication, repair, or
modification of the die, mold, or form. The information that the
moldbuilder is required to record on the die, mold, or form under
subsection (1) and the financing statement required under subsection (2)
shall constitute actual and constructive notice of the moldbuilder’s lien on
the die, mold, or form.
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(4) The moldbuilder’s lien attaches when actual or constructive
notice is received. The moldbuilder retains the lien that attaches under this
section even if the moldbuilder is not in physical possession of the die,
mold, or form for which the lien is claimed.
(5) The lien remains valid until the first of the following events takes
place:
(a) The moldbuilder is paid the amount owed by the customer or
molder.
(b) The customer receives a verified statement from the molder that
the molder has paid the amount for which the lien is claimed.
(c) The financing statement is terminated. [Emphasis added.]
Here, the parties do not dispute that Takumi is the “customer,” defendant the
“moldbuilder,” and plaintiff the “molder.” See MCL 445.611(a) through (c). Nor do the
parties dispute that defendant possessed valid liens against the molds because the
requirements of MCL 445.619(1), (2), and (4) had been satisfied. The sole issue is
whether the liens possessed by defendant were extinguished pursuant to MCL
445.619(5)(b) when plaintiff sent a “verified statement” to Takumi indicating that
plaintiff had paid Takumi for the construction of the molds. That is, the issue is whether
the “customer receive[d] a verified statement from the molder that the molder has paid
the amount for which the lien is claimed.” Plaintiff contends that MCL 445.619(5)(b)
does not require a verified statement that payment was made to the moldbuilder for the
lien amount, while defendant argues that the provision does, in fact, require such a
statement. For the following reasons, I agree with defendant that MCL 445.619(5)(b)
requires a verified statement that payment was made to the moldbuilder for the lien
amount.
First, while it is true that MCL 445.619(5)(b) does not explicitly identify to whom
the payment must be made by the molder, when that section is read in its entirety, it is
apparent that MCL 445.619(5)(b) requires a verified statement that payment was made to
the moldbuilder for the lien amount. In particular, MCL 445.619(3) states in relevant
part that “[t]he amount of the lien is the amount that a customer or molder owes the
moldbuilder” for the mold. That is, “the amount” refers to the amount owed to the
moldbuilder. This makes sense, as the entirety of this statute, MCL 445.619, concerns
the subject of moldbuilder’s liens. Furthermore, although “paid” is not specifically
defined in the statute, the pertinent definition is “to [have] discharge[d] or settle[d] (a
debt, obligation, etc.), as by transferring money or goods, or by doing something.”
Random House Webster’s College Dictionary (2001). Consequently, for a molder to
have “paid the amount for which the lien is claimed,” it must have discharged a debt to
the moldbuilder. Thus, where MCL 445.619(5)(b) refers to a statement that “the molder
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has paid the amount,” it seems best understood to refer to a statement that the molder has
paid the amount owed to the moldbuilder for the mold. This undisputedly did not occur
here.
Second, when interpreting statutes, “the entire act must be read and the
interpretation to be given to a particular word in one section arrived at after due
consideration of every other section so as to produce, if possible, a harmonious and
consistent enactment as a whole.” Detroit Trust Co v Hartwick, 278 Mich 139, 148
(1936), quoting Grand Rapids v Crocker, 219 Mich 178, 182-183 (1922). Here, taking a
slightly broader look at the context of the statute of which MCL 445.619(5)(b) is a part,
this too seems to contemplate payment to the moldbuilder. MCL 445.620 provides that
to enforce a lien acquired under MCL 445.619, the moldbuilder must provide notice to
the customer and the molder stating that “a lien is claimed, the amount that the
moldbuilder claims it is owed for fabrication, repair, or modification of the die, mold, or
form, and a demand for payment.” (Emphasis added.) There can be little doubt that a
“demand for payment” by the moldbuilder pertains to payment of the amount owed to the
moldbuilder itself. And MCL 445.620a further provides that “if the moldbuilder has not
been paid the amount claimed in the notice . . . within 90 days . . . , the moldbuilder has a
right to possession of the die, mold, or form . . . .” (Emphasis added.) MCL 445.620a
thus also seemingly contemplates payment to the moldbuilder. Furthermore, MCL
445.620c(1) provides that “[i]f the proceeds of the sale are greater than the amount of the
lien, the proceeds shall first be paid to the moldbuilder in the amount necessary to satisfy
the lien. All proceeds in excess of the lien shall be paid to the customer.” (Emphasis
added.) Once again, MCL 445.620c(1) seemingly and altogether logically contemplates
payment to the moldbuilder. Put simply, if MCL 445.619(5)(b) did not contemplate
payment to the moldbuilder, it would stand alone as the only provision within a statutory
scheme concerning moldbuilder’s liens that contemplated payment to someone other than
the moldbuilder.
In concluding otherwise, the Court of Appeals reasoned that if MCL 445.619(5)(b)
required a verified statement that the moldbuilder had been paid in full, then that
provision would be duplicative. Sejasmi, unpub op at 5 (“To require, as suggested by
[defendant], that the verified statement in subsection (5)(b) submitted by the molder to
the customer must indicate that the molder paid the moldbuilder would be merely a
duplication of and an additional step effectuating subsection (5)(a) rather than a separate
and distinct mechanism to invalidate the lien . . . .”). That is, according to the Court of
Appeals’ understanding of defendant’s argument, MCL 445.619(5)(a) would require that
the moldbuilder had been paid in full and MCL 445.619(5)(b), immediately following,
would require that the moldbuilder had been paid in full and that the customer had
received a verified statement of that fact. Consequently, the receipt of a verified
statement by the customer would never be a relevant occurrence in actually extinguishing
a lien because such lien necessarily would already have been extinguished by the
preceding circumstance that the moldbuilder had been paid in full. Thus, according to the
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Court of Appeals, MCL 445.619(5)(b) would serve no purpose in the overall statutory
scheme because the lien would already have been extinguished under MCL
445.619(5)(a).
Respectfully, the Court of Appeals’ reasoning here is flawed because it fails to
recognize the industry-specific purpose of MCL 445.619(5)(b). “When an OEM
[original equipment manufacturer, i.e., a customer such as an automobile manufacturer]
contracts with a tier-1 supplier [i.e., a molder], the contract often requires that the tier-1
provide legal documentation that there are no liens on the mold or tool.” Amicus Curiae
Brief of the American Mold Builders Association at 9.1 “This ensures there will be no
interruptions in the supply chain later from a foreclosure on the lien.” Id. In some cases,
however, even when the molder has fully paid the moldbuilder for the mold, the
moldbuilder will fail or refuse to acknowledge that the lien has or should be extinguished.
See id. That is, the moldbuilder will not cooperate with the molder by confirming in
writing that it has been “paid the amount owed,” MCL 445.619(5)(a), or by terminating
the financing statement, see MCL 445.619(5)(c). Perhaps, for example, the moldbuilder
believes that it is owed more money for the mold. See Amicus Curiae Brief of the
American Mold Builders Association, id. at 15. In such a case, the molder need not sue
the moldbuilder to establish that the lien has been extinguished to satisfy its contract with
the OEM. Id. at 9. Rather, under MCL 445.619(5)(b), “[o]nce the molder has paid the
moldbuilder for the lien, it can confirm to the OEM . . . that the lien is extinguished by
sending the verification, and the OEM can rely on that verification because the
verification itself extinguishes the lien by operation of law.” Amicus Curiae Brief of the
American Mold Builders Association at 9. Stated otherwise, once “[t]he customer
receives a verified statement from the molder that the molder has paid the amount for
which the lien is claimed,” MCL 445.619(5)(b), the lien is extinguished, and the molder
and the moldbuilder can litigate any dispute in court without the threat of an interruption
in the supply chain because of a foreclosure on the lien. Put simply, it appears that the
purpose of MCL 445.619(5)(b) is to facilitate commerce in the tool-and-die industry even
when the moldbuilder fails or refuses to acknowledge that it has been paid in full and that
the lien is accordingly extinguished. Because the Court of Appeals did not recognize that
MCL 445.619(5)(b) has a purpose independent from MCL 445.619(5)(a), its analysis of
the former provision was deficient.
Moreover, an assessment of the Court of Appeals’ reasoning further illustrates the
flaw in its interpretation. MCL 445.619(5)(a) does not explicitly specify to whom the
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I recognize that in this particular case, the “customer” is not the end-user of the molded
parts, such as an automobile manufacturer that uses molded parts to build an automobile.
However, in most instances, “[t]he customer is . . . the manufacturer desiring an end
product made by the molder using a mold.” Amicus Curiae Brief of the American Mold
Builders Association at 16. “The money for the mold typically flows from the customer
to the molder and then to the moldbuilder . . . .” Id.
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“amount” is owed. Rather, it is only implicit within MCL 445.619(5)(a) that the
“amount” is owed to the moldbuilder. That is, although MCL 445.619(5)(a) only
explicitly states that the lien is extinguished when the “moldbuilder is paid the amount
owed by the customer or molder,” it means that the lien is extinguished when the
“moldbuilder is paid the amount owed to the moldbuilder by the customer or molder.”
The Court of Appeals thus had no difficulty in understanding MCL 445.619(5)(a) to
include such an implicit limitation, yet failed to recognize that MCL 445.619(5)(b)
encompasses the same implicit limitation.
The Court of Appeals also reasoned that interpreting MCL 445.619(5)(b) as
requiring a verified statement that payment has been made to the moldbuilder would
“read into the statutory provision language that is absent.” Sejasmi, unpub op at 5. I
respectfully disagree. “[T]he Legislature is not required to be overly repetitive in its
choice of language.” Robinson v City of Lansing, 486 Mich 1, 16 (2010). See also Rock
v Crocker, 499 Mich 247, 266 (2016) (“[I]t was unnecessary for the Legislature to repeat
the phrase ‘the time of the occurrence’ in every instance given that the context of MCL
600.2169(1)(a), (b), and (c) makes it clear that the time of the occurrence is the relevant
point in time.”). As already explained, MCL 445.619, as well as the broader context of
the statute concerning moldbuilder’s liens, contemplates payment to the moldbuilder.
The Legislature was not required to repeat “to the moldbuilder” throughout the statute,
when the context sufficiently makes clear that payment “to the moldbuilder” is the
obvious and manifest subject of these provisions. Indeed, if the Court of Appeals was
correct that MCL 445.619(5)(b) did not contemplate payment to the moldbuilder, there
would then be no textual or otherwise principled reason why a moldbuilder’s lien could
not be extinguished under that provision whenever a customer receives a verified
statement from the molder that it has paid the amount for which the lien is claimed to
anyone. For example, if the moldbuilder claimed a lien in the amount of $100,000, a
verified statement from the molder to the customer that the molder has paid $100,000 in
taxes to the federal government would apparently extinguish the lien by the Court of
Appeals’ reasoning since that amount constitutes “the amount for which the lien is
claimed.” Such an interpretation of MCL 445.619(5)(b), however, is obviously absurd
and unreasonable and contrary to the principle that “[w]hen undertaking statutory
interpretation, the provisions of a statute should be read reasonably and in context.”
McCahan v Brennan, 492 Mich 730, 739 (2012).
Adhering to the reasoning of the Court of Appeals, which suggests that any
statutory reference to payment must expressly identify the party to whom the payment
must be made, would lead to other peculiar and potentially chaotic outcomes concerning
liens in the tool-and-die industry. In addition to cases such as the instant one, in which a
moldbuilder’s lien can be extinguished by a molder without the moldbuilder having
received any payment or notice, consider MCL 445.618, which states concerning the
molder’s lien:
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A molder has a lien, dependent on possession, on any die, mold, or
form in the molder’s possession belonging to a customer for the amount
due the molder from the customer for plastic fabrication work performed
with the die, mold, or form. A molder may retain possession of the die,
mold, or form until the amount due is paid. [Emphasis added.]
It strikes me as reasonably clear that the molder retains a possessory lien until the amount
due to the molder has been paid. However, because MCL 445.618 also does not
explicitly specify to whom the amount due must be paid, the possessory lien is again
seemingly extinguished whenever anyone has been paid the amount due, at least
according to the reasoning of the Court of Appeals. I respectfully submit that no
reasonable person would interpret MCL 445.618 in such an odd manner. Instead, when
MCL 445.618 is also read reasonably and in context, it is clear that payment is again
contemplated to the molder. And I discern no principled reason why MCL 445.619(5)(b)
should be interpreted any differently. When that statute is read reasonably and in context,
it is clear that it contemplates payment to the moldbuilder.
As a consequence of our decision not to correct what I view as the incorrect
opinion below, it will stand as the only authority of this state concerning MCL
445.619(5)(b). Moldbuilders will as a result be left in a position of uncertainty in which
their nonpossessory liens may be unilaterally extinguished by the molder absent payment
or even notice being made to the moldbuilder, despite the commands of an industry-
focused statute designed to afford specific lien protections to those engaged in this
industry. Such an outcome, I believe, is inconsistent with the Legislature’s intentions in
MCL 445.619 to afford actual, not illusory, protections for participants in the industry
that is the subject of this provision. Accordingly, I respectfully dissent from this Court’s
order of denial and instead would reverse the judgment of the Court of Appeals and
remand to the trial court for further proceedings consistent with the analysis herein.
VIVIANO, J., did not participate due to a familial relationship with the presiding
circuit court judge in this case.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
December 21, 2018
a1218
Clerk