The Massachusetts Supreme
Judicial Court’s decision in City
Electric Supply Co. v. Arch Insurance
Co. SJC-12561 (3/29/19) clarifies whether a claimant seeking to enforce claims
against a target mechanic’s lien bond must record a copy of its complaint in
the registry of deeds pursuant to the
.
The City Electric Supply Co. case arose after the plaintiff
electrical supplier recorded a mechanic’s lien on real property in Brookline.
The project’s general contractor obtained and recorded a target lien bond to
“bond off” City Electric’s mechanic’s lien. M.G.L. c.254, §14 provides that once the
target lien bond is recorded, the lien is “dissolved.”
Plaintiff, City Electric then
sought to enforce its claims against the target lien bond by timely filing an
action in the Superior Court pursuant to the Massachusetts Mechanic’s Lien
Statute, M.G.L. c. 254 §14. Although the plaintiff properly served its
complaint on the defendant, the plaintiff did not record a copy of its
complaint in the registry of deeds within thirty days of commencing the action.
The defendant moved for summary judgment, arguing that the statute required the
plaintiff to record an attested copy of its complaint to enforce its target
lien bond claim in the registry of deeds within thirty days of filing the
complaint and the plaintiff’s failure to comply with this provision of the lien
statute was fatal to its claim. A judge
in the Superior Court agreed and allowed the defendant’s motion for summary
judgment. The Supreme Judicial Court
granted the plaintiff’s petition for direct appellate review.
The Supreme Judicial Court
vacated the order granting summary judgment, and held that a party seeking to
enforce claims against a target lien bond pursuant to M.G.L. c. 254 § 14 is not
required to record a copy of the complaint in the registry of deeds as a
condition precedent to asserting a target lien bond claim. Although the Court
recognized that § 14 of the statute must be read in conjunction with §5
which requires recording of a complaint in the context of a mechanic’s lien
enforcement action, the Court refused to imply such a requirement in a case
where a target lien bond has been posted.
In its decision, the Court noted that requiring a party to record a
complaint to enforce a claim against a target lien bond “would not support the
(statutory) goal of ensuring that a person searching the land records in a
registry of deeds can determine with certainty whether or not title to a
particular parcel of land is encumbered by a mechanic’s lien.”
The City Electric decision puts to rest any existing confusion as to
whether in a target lien bond context, the party asserting the bond claim must pursuant
to G.L. c.254, §5, record an attested copy of its complaint in the registry
district where the real property in question is located to validate and pursue
its bond claim.
Co-chair
of REBA’s Construction Law Section, Hugh J. Gorman focuses his practice on
construction law, creditors’ rights, and general business litigation. As Chair of Prince Lobel’s construction law group,
Hugh brings to the firm more than 25 years of experience working with general
contractors, developers, owners, subcontractors, and suppliers who depend on
his expertise and advice in all aspects of private and public construction law
and claims. Hugh can be contacted by email at
hgorman@princelobel.com.
