Secured transactions; Personal property liens under the mechanics’ lien statute; MCL 570.185; Consideration of an affidavit; Violation of MCR 2.119(C); Discretion to consider untimely documents; Harmless error

The court held that any error in the trial court’s considering an affidavit was harmless, and that the trial court did not err in imposing a statutory lien under MCL 570.185 against proceeds from the sale of the collateral. The case was “a secured-transactions case primarily involving liens and other security interests against boats and boat parts.” Plaintiff contracted with defendant-Aquaform to provide Aquaform financing to manufacture boats for customers. Under the contract, plaintiff had a “‘first priority purchase money security interest’ in those boats and other related personal property.” It later sued Aquaform and sought possession of the collateral. Appellee-Northshore Dock asserted “that under MCL 570.185, it was entitled to retain possession of 19 boats” it worked to assemble and complete for sale. The trial court order at issue on appeal established liens against the collateral, and proceeds from its sale, in Northshore Dock’s favor under the mechanics’ lien statute. Plaintiff first argued the trial court erred in considering an “affidavit and accompanying documents served by Northshore three days before the dispositive motion hearing,” in violation of MCR 2.119(C). But the court noted that plaintiff did not argue or otherwise show “how the outcome of this case might have been different had the affidavit been served in compliance with MCR 2.119(C) or had the trial court otherwise exercised its judicial discretion.” It did not actually dispute the affidavit’s contents or argue “that the trial court’s ultimate ruling would have been different had plaintiff been given a few extra days to review the affidavit.” Plaintiff also asserted that in “imposing a lien against proceeds from the sale(s), the trial court effectively awarded Northshore monetary relief from plaintiff without requiring [it] to commence a separate action.” However, the court noted that “the trial court did not enter judgment against plaintiff on behalf of Northshore. That is, plaintiff is not personally liable to Northshore under the trial court’s order. Rather, the trial court imposed a mechanic’s lien against the collateral and proceeds from the sale(s) of the collateral, such that Northshore may be entitled to some or all of those proceeds in accordance with that lien. Courts have long recognized that a mechanic’s lien may attach to the sale proceeds of collateral that itself is subject to a mechanic’s lien.” Affirmed.