This summary also appears under Construction Law
Issues: The Construction Lien Act (MCL 570.1101 et seq.); Awarding attorney fees under MCL 570.1118(2); Whether the plaintiff could be deemed a "prevailing lien claimant"; Bosch v. Altman Constr. Corp.; The former Mechanics' Lien Act; Whether the fact that no foreclosure ever occurred was relevant; Solution Source, Inc. v. LPR Assocs. Ltd. P'ship; Distinguishing HA Smith Lumber & Hardware Co. v. Decina; Whether the trial court was required to award attorney fees on remand; Use of the word "may" in the statute; AFSCME v. Detroit
Court: Michigan Court of Appeals (Published)
Case Name: Ronnisch Constr. Group, Inc. v. Lofts on the Nine, L.L.C.
e-Journal Number: 57686
Judge(s): Donofrio, Jansen, and Saad
Holding that the plaintiff was a prevailing party under MCL 570.1118(2) because it substantially prevailed on the amounts it sought under the claim of lien, the court vacated the portion of the trial court's order denying its request for attorney fees under the Construction Lien Act and remanded. However, the trial court was not required to award attorney fees on remand. Rather, it must "exercise its discretion in deciding whether to award attorney fees." After filing a claim of lien, plaintiff sued defendant-Lofts on the Nine alleging breach of contract, foreclosure of lien, and unjust enrichment. Since the contract required the submission of claims to arbitration, the parties stipulated to stay the trial court action and proceeded with arbitration, where defendant asserted claims of its own. The arbitrator awarded plaintiff a total of $636,058.72. However, the arbitrator specifically declined to address plaintiff's request for attorney fees as a prevailing lien claimant under MCL 570.1118(2), expressly reserving that issue for the trial court. The arbitrator awarded defendant $185,238.36 on its counter-claims, resulting in a net award of $450,820.36 to plaintiff. Defendant paid the net award amount plus interest. Plaintiff filed a motion to lift the stay, to confirm the arbitration award, and to request attorney fees and costs under MCL 570.1118(2). The trial court determined that plaintiff could not be deemed a prevailing lien claimant. The court concluded that this case was analogous to Bosch, where it affirmed the award of attorney fees under the predecessor statute, the Mechanics' Lien Act, noting that the facts here were "remarkably similar to those in Bosch." Both plaintiffs filed a breach of contract claim and a claim for foreclosure of lien. In both cases, "the amount that was owed under the contract/lien was established in a proceeding distinct from any actual lien foreclosure proceeding." Notably, in both cases, "the amount finally determined to be owed was less than the initial amount claimed on the lien." The defendants in both cases also paid the amount determined to be "owed under the contract before any lien foreclosure proceedings commenced." Thus, the court concluded that this case was entitled to the same outcome as Bosch. Pursuant to Solution Source, the fact that "no foreclosure ever occurred is not pertinent." Further, Decina, on which defendant and the trial court relied, was not applicable because the facts were distinguishable. Here, it was "undisputed that the landowner, defendant, did not pay the full amount of the contract price to the general contractor, plaintiff." There also was no question that plaintiff's lien had attached to the property.
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