Walls v. RAF

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR. THE STATE OF SOUTH CAROLINA In The Court of Appeals Teddy Walls, formerly d/b/a Crafts Unlimited, Appellant/Respondent, v. RAF Enterprises of Greenville, LLC, Ryan Arnold, Red Brick Caf'e, Inc., and Synovus Financial Corp. d/b/a The National Bank of South Carolina, Defendants,/Of whom RAF Enterprises of Greenville, LLC, Ryan Arnold, Red Brick Caf'e, Inc.are, Respondents/Appellants. Appeal From Greenville County G. Edward Welmaker, Circuit Court Judge Unpublished Opinion No. 2006-UP-095 Heard November 9, 2006 – Filed February 14, 2006 REVERSED AND REMANDED Weston Trey Merck, of Piedmont, for Appellant-Respondent. Thomas Elihue Dudley, III, of Greenville, for Respondents/Appellants. PER CURIAM: Contractor Teddy Walls appeals the trial court’s dismissal of his mechanic’s lien action for failing to timely file his notice and certificate of mechanic’s lien and foreclosure action where the notice and action were erroneously brought in the name of Crafts Unlimited Contractors, Inc., a corporation Walls formed after entering into the construction contracts. RAF Enterprises of Greenville, LLC, Ryan Arnold and Red Brick Café, Inc. (collectively Defendants) filed a cross-appeal asserting the trial court erred in denying their request for attorney’s fees. We reverse the dismissal of Walls’ action and remand.[1] FACTS On July 8, 2003, Teddy Walls, as the Owner of Crafts Unlimited, a sole proprietorship, entered into a contract with Ryan Arnold for construction of a restaurant, the Red Brick Café, in a strip mall owned by RAF Enterprises. The contract price was $62,000.00. Walls’ last day of work on the project was December 22, 2003. In December of 2003, Walls incorporated his business under the name Crafts Unlimited Contractors, Inc (the Corporation). Although Walls performed the work under the contract doing business as Crafts Unlimited, the sole proprietorship, he served and filed a notice and certificate of mechanic’s lien he signed on behalf of the Corporation against RAF Enterprises on February 24, 2004. The Corporation subsequently brought this action against RAF Enterprises seeking foreclosure of the mechanic’s lien as well as claims for breach of contract and unjust enrichment. In its answer, RAF Enterprises claimed Walls contracted with The Red Brick Café, Inc and not RAF Enterprises. Thus, it asserted The Red Brick Café, which was the proper party to the action, was not named as a party. Furthermore, it alleged the Corporation was not a party to the written agreement and thus lacked standing to bring the action as it could not establish an agreement with it to perform work. On June 7, 2004, Walls filed an amended summons and complaint and lis pendens under his own name, formerly doing business as Crafts Unlimited, asserting claims for breach of contract, unjust enrichment, and foreclosure of a mechanic’s lien. In this complaint, he named RAF Enterprises, Ryan Arnold, and Red Brick Café, Inc. as defendants.[2] The Defendants moved for partial summary judgment on the claim for foreclosure of the mechanic’s lien. The trial court found it was undisputed the Corporation did not contract to provide labor and materials, nor did Walls produce any document evidencing a novation wherein the Defendants agreed that its contract was to be assigned to the Corporation. The court held the Corporation never acquired any lien rights upon which to base a lien claim. The court noted that Walls’ counsel admitted that Walls mistakenly used the corporate name when filing the mechanic’s lien. It ruled Walls, the current plaintiff, was a different, distinct entity from the Corporation. It held that since it had been more than ninety days since Walls had done any work on the subject property, the error in naming the wrong party could not be cured. Thus, as Walls did not timely file a notice of mechanic’s lien, the mechanic’s lien action must be dismissed. As an additional sustaining ground, the court held that since the entity that filed the mechanic’s lien was not properly licensed, it lacked standing to assert such a lien or lawsuit. The court denied the Defendants’ request for attorney’s fees. This appeal followed. LAW/ANALYSIS Walls argues the trial court erred in holding his notice of mechanic’s lien and foreclosure action were not timely served and filed. We agree. As a mechanic’s lien is purely statutory, the requirements of the statute must be strictly followed. Muller v. Myrtle Beach Golf & Yacht Club, 303 S.C. 137, 140, 399 S.E.2d 430, 432 (Ct. App. 1990), overruled on other grounds by Myrtle Beach Hosp., Inc. v. City of Myrtle Beach, 341 S.C. 1, 532 S.E.2d 868 (2000). If any one of these requirements is not met, the lien against the property is dissolved. Id. at 141, 399 S.E.2d at 432. However, as the mechanic’s lien statutes are remedial, they are to be given a liberal construction. Clo-Car Trucking Co. v. Clifflue Estates of S.C., 282 S.C. 573, 575-76, 320 S.E.2d 51, 53 (Ct. App. 1984). The mechanic’s lien statutes set forth the time limits in which a person seeking to enforce a mechanic’s lien must serve and file the notice and certificate of lien and foreclosure action. Section 29-5-90 of the South Carolina Code provides the time limits for serving and filing the notice of lien: [A mechanic’s] lien shall be dissolved unless the person desiring to avail himself thereof, within ninety days after he ceases to labor on or furnish labor or materials for such building or structure, serves upon the owner or, in the event the owner cannot be found, upon the person in possession and files in the office of the register of deeds or clerk of court of the county in which the building or structure is situated a statement of a just and true account of the amount due him, with all just credits given, together with a description of the property intended to be covered by the lien sufficiently accurate for identification, with the name of the owner of the property, if known, which certificate shall be subscribed and sworn to by the person claiming the lien or by someone in his behalf and shall be recorded in a book kept for the purpose by the register or clerk who shall be entitled to the same fees therefor as for recording mortgages of equal length. . . . S.C. Code Ann. § 29-5-90 (Supp. 2005). A suit to enforce the lien must be commenced within six months of the cessation of labor. S.C.Code Ann. § 29-5-120 (1991). In the present case, Walls filed his amended summons and complaint and lis pendens within six months of his cessation of labor. Thus, he complied with section 29-5-120 in timely commencing his suit to enforce the mechanic’s lien. The amended action, however, was served and filed well after the 90-day time limit set forth in section 29-5-90 for serving and filing the notice of mechanic’s lien. Therefore, we must decide whether the notice served and filed on February 24, 2004 meets the requirements of the statute to preserve Walls’ lien. Walls, “the person desiring to avail himself” of the lien, signed the notice himself, albeit on behalf of the Corporation. He also signed the affidavit of mechanic’s lien. Walls merely captioned the notice with the Corporation’s name. Where the purpose of the requirement that a particular statement be included in the claim of lien has been achieved and no one is prejudiced, technical requirements should not stand in the way of achieving the purposes of the mechanic’s lien law. Even though a claim contains some defect or error it will be upheld where the owner is informed of the claim and not misled by it or prejudiced. 53 Am.Jur. 2d Mechanic’s Liens § 235 (1996). The Defendants presented no evidence that they were misled by this caption or that they were prejudiced in any manner. In fact, it is impossible to discern how they could have been misled considering the documents were signed by Walls and the Corporation’s name is the same as the name of Walls’ sole proprietorship. We find under the facts of this case, Walls timely perfected his mechanic’s lien. As an additional holding, the trial court held that since the entity that filed the mechanic’s lien, the Corporation, was not properly licensed, it lacked standing to assert such a lien or lawsuit. The Corporation, however, is no longer a party in this suit. Walls, who is properly licensed, is the only party seeking to enforce the lien. The Corporation’s lack of a license has no bearing on Walls’ claim against the Defendants. Accordingly, the trial court’s dismissal of Walls’ action to foreclose the mechanic’s lien is REVERSED AND REMANDED.[3] HEARN, C.J., and HUFF and BEATTY, JJ., concur. [1] We decide this case without oral argument pursuant to Rule 215, SCACR. [2] Synovus Financial Corporation, d/b/a The National Bank of South Carolina was also named as a defendant. The bank is not a party to this appeal. [3] As we reverse the trial court’s dismissal of Walls’ foreclosure action, we need not address the Defendants’ claims that they were entitled to attorney’s fees.