Jacksonville MacHine and Repair, Inc. v. Kent Sand and Gravel, LLC

ADKINS, J. This appeal challenges a ruling by the Circuit Court for Kent County that a dredge erected by appellant Jacksonville Machine and Repair, Inc. (“Jacksonville Machine”) inside a quarry operated by appellee Kent Sand and Gravel, LLC is ⁴ not subject to a mechanic’s lien because it is not a “machine” within the meaning of McLCode (1974, 2003 Repl.Vol., 2006 Cum.Supp.), section 9-102(c) of the Real Property Article (RP). We shall hold that the dredge may be a lienable machine, although we do not decide on this incomplete record whether a lien is warranted in this instance. FACTS AND LEGAL PROCEEDINGS Kent Sand and Gravel contracted with George Waldreck of Jacksonville, Florida, for the construction and installation of a “70' x 28' x 5"” dredge at an enclosed gravel quarry in Galena, which is leased by Kent Sand and Gravel. In turn, Waldreck subcontracted with Jacksonville Machine, also of Jacksonville, Florida, for construction services and materials to install and repair the dredge. 1 Waldreck allegedly failed to pay Jacksonville Machine for invoiced materials and work performed on site from May 16 through September 20, 2005.

Jacksonville Machine served Kent Sand and Gravel with notice of its intent to seek a mechanic’s lien. Waldreck died shortly thereafter. In February 2006, Jacksonville Machine filed a complaint to establish a $119, 799. 68 mechanic’s lien against the dredge under RP section 9-102(c). The Circuit Court for Kent County issued a show cause order.

At the conclusion of the show cause hearing, the circuit court dismissed Jacksonville Machine’s complaint. This timely appeal followed. DISCUSSION Standard Of Review In Gravett v. Covenant Life Church, 154 Md.App. 640, 645 , 841 A.2d 342 (2004), we set forth the standard by which we review the dismissal of a mechanic’s lien complaint: ⁵ “The proper standard for reviewing the grant of a motion to dismiss is whether the trial court was legally correct. In reviewing the grant of a motion to dismiss, we must determine whether the complaint, on its face, discloses a legally sufficient cause of action.” In reviewing the complaint, we must “presume the truth of all well-pleaded facts in the complaint, along with any reasonable inferences derived therefrom.” “Dismissal is proper only if the facts and allegations, so viewed, would nevertheless fail to afford plaintiff relief if proven.” (Citations omitted.) “Machine” A mechanic’s lien exists purely by virtue of statute.

It follows, therefore, that there can be no lien for anything which does not fall within the statutory provision. This Court has no power to extend the mechanic’s lien law to cases beyond its obvious design and plain requirements. Despite these restrictions, however, the statute is to be construed in favor of those for whom it was enacted. 5500 Coastal Hwy. Ltd. P’ship v. Elec.

Equipment Co., Inc., 305 Md. 532, 536-37 , 505 A.2d 533 (1986). The type of property that may give rise to a mechanic’s lien includes, inter alia, “buildings” 2 and “machines.” Our con ⁶ cem here is with a machinery lien, which is authorized by RP subsection 9 — 102(c): (c) Machines, wharves, and bridges. — Any machine, wharf, or bridge erected, constructed, or repaired within the State may be subjected to a lien in the same manner as a building is subjected to a lien in accordance with this subtitle. (Emphasis added.) Dating back to 1845, the General Assembly has permitted liens against machines via substantially identical language. See Denmead v. Bank of Baltimore, 9 Md. 179, 183-84 (1856); 1845 Md. Laws, ch. 176.

In this case, we must decide whether a dredge erected inside a gravel quarry might be a lienable machine. Although the Code does not define “machine,” and there is limited precedent regarding machinery liens, we conclude that a dredge may be lienable if it remains substantially fixed in one location on the premises in performing dredging operations, but remains a removable chattel. When interpreting an undefined term in the mechanic’s lien statute, we generally construe the word in its commonly understood and broad sense. See, e.g., Freeform Pools, Inc. v. Strawbridge Home for Boys, Inc., 228 Md. 297, 301 , 179 A.2d 683 (1962) (interpreting “building” before the term was defined by statute).

By doing so, we promote the purpose of a mechanic’s lien, which is “to protect materialmen who are not in a position to protect themselves if the owner negligently pays the contractor without first ascertaining that the materialmen have been paid[,]” and indirectly, “to encourage construction” by such assurance of payment. See Dickerson Lumber Co. v. Herson, 230 Md. 487, 491 , 187 A.2d 689 (1963); Barry Props., Inc. v. Fick Bros. Roofing Co., 277 Md. 15, 18 , 353 A.2d 222 (1976). Maryland cases addressing whether certain items of personal property qualify as a lienable machine are old but instructive.

As a general rule, they teach that equipment is not lienable as a machine once it becomes a permanent fixture or when it remains mobile in its operational use so that it may be removed intact from the premises. Yet a machinery lien ⁷ may attach to chattels that lack mobility when in use, but otherwise have “movability” in the sense that the mechanic may disassemble and/or detach the item for use in another location. In Stebbins v. Culbreth, 86 Md. 656 , 89 A. 321, 322 (1898), the Court of Appeals held that a machinery lien could not be claimed on a hotel steam-heating apparatus, consisting of a boiler and furnace, built in brick and cement, with pipes and radiators extending throughout the building, because [t]his structure is a part of the building, and is in the nature of a permanent fixture, and necessary for the comfortable, convenient, and customary use of the building as a hotel. If removed, it would not only impair the use of the hotel, but would practically destroy the purposes for which the building was used.

The legislature could never have intended to give a lien upon such a structure.... Id. See also Shacks v. Ford, 128 Md. 287 , 97 A. 511, 512 (1916) (hot water heating system installed in apartment building as a fixture was not a lienable machine). Thus, the only lien available in such circumstances would be a lien against the building.

See Stebbins, 39 A. at 322 . Of course, the claimant is only entitled to such a lien if the value of the work and materials exceeds 15% of the entire value of the building. See id.; RP § 9-102(a). The other end of this spectrum is explored in detail by New England Car Spring Co. v. B. & O.R. R. Co., 11 Md. 81 (1857).

In that seminal case, the Court of Appeals held that, although coal cars used by railroads are machines, “they are not such machines as are contemplated” by the mechanic’s lien statute, because they remain mobile throughout their operation. See id. at 89 . Despite the general rule of liberal construction, the Court narrowed the interpretation of “machine.” The word machine, if to be taken in its most extended signification, means every thing which acts by a combination of the mechanical powers, however simple or complex it may be.... [T]his word, if to be understood in its broad general sense, will not only comprehend locomotives, threshing ma ⁸ chines, and such like, but that all the various machines used in agriculture and commerce, carriages and vehicles in ordinary use, even watches and clocks, and all the machines in domestic use, would be alike embraced in the terms of the law. Can it be for a moment supposed that the legislature designed to subject all these to the operation of the lien laws?

Such things, like the coal cars in question, are mere chattels which pass by delivery; a construction which would embrace them within the provisions of the lien laws, would interrupt the daily transactions of trade in such articles, and render the rights of property in them insecure. Id. at 89-90 . Instead, the court relied on the purpose' of the lien law to protect mechanics without other practical recourse, observing that machinery that is not “fixed and stationary” may be more easily retained or reclaimed by the mechanic if payment is not made. In looking at the provisions of the lien laws, and ... in arriving at the intention of the legislature, we are the more convinced of the propriety of limiting and restraining the meaning of the word machine, used in the law to fixed or stationary machinery____ We are to inquire, “what was the mischief and defect against which the common law did not provide?” and which the statute was designed to cure; and “it is the duty of the court to make such construction as shall suppress the mischief and advance the remedy.” In this case the mischief to be cured was, that by the common law, the mechanic who erects, constructs or repairs fixed or stationary machinery, like him who builds a house, is without that safe security for compensation which a specific lien on the house or the machine would afford; the design of the act of 1838, and its supplements, was to afford that security.

But with reference to movable machines, the common law affords ample and complete security to the mechanic, by leaving in him ----the right to retain the possession and his right of property, or his lien, until his claim for con ⁹ struction or repair is paid.[ 3 ] There is no sound reason for imputing to the Legislature the intention of extending the operation of the lien laws to cases which were not within the mischief sought to be remedied — The act of 1845, makes machines subject to a lien, “in like manner as buildings are made subject, under the provisions of this and the original act, to which this is a supplement. The original act of 1838, and the supplement, must therefore be construed together, as one act; and looking to their various provisions, the manner in which the lien is to be asserted, the mode and time prescribed for filing the claim of record, and the form of the action and execution for its recovery, we cannot hesitate in saying, that many of the provisions of the law are inapplicable to movable machines., and conclusively show that the legislature did not intend to embrace them within its operation. Id. at 90-91 (emphasis added and citations omitted). In reaching this decision, the Court explicitly considered] the provisions of the act of 1845, ch. 287, which directs that the lien laws under consideration shall receive a liberal construction, as remedial acts.

But after mature reflection, we are constrained to adopt the conclusions already stated as entirely consistent with the rules of construction governing the subject. Id. at 91 . As an example of lienable machinery “of a fixed or stationary kind[,]” the New England Car Spring Court cited Wells & ¹⁰ Miller v. Canton Co., 3 Md. 234 (1852), involving four presses and heaters installed in a candle factory. The construction and installation work took more than two months to complete.

See id. at 240 . Concluding that “this machinery was no fixture, but movable, and therefore personal property, constituting no part of the factory building,” the Court of Appeals recognized that a lien arose as soon as the mechanic began “to put up the machine[.]” See id. at 241^42. The New England Car Spring Court also retreated from its analysis in another case, in which a steam engine with boilers and tanks was installed in a cotton factory. In Denmead v. Bank of Baltimore, 9 Md. 179 (1856), the Court stated that the statute authorizing mechanic’s liens on machines contemplates a lien on machinery arising in three different modes: 1st, where the machine is erected in a house or affixed to it or the soil; 2nd, where it is constructed and is movable in its operations, such as a locomotive, a threshing machine, and the like; and 3rd, where the machine is repaired, whether it be attached to the freehold, or movable in its operation and use.

Id. at 184 (emphasis added). The New England Car Spring Court disapproved the notion that mobile machines may be subjected to a lien. [A] careful consideration of the question before us, has convinced us that the construction of the word machine, in the act of 1845, as extending to such as are “movable in their operation and use, such as a locomotive, a threshing machine, and the like,” is not justified by sound rules of interpretation, or in accordance with the intention of the legislature____ New England Car Spring Co., 11 Md. at 91-92 (citation omitted). We regard the distinctions articulated in New England Car Spring Co. as identifying two necessary, albeit related, characteristics for a lienable machine. First, the machine must be immobile, in the sense that it does not move freely around or off the business premises in performing its intended ¹¹ use.

Second, the machine must nevertheless be movable, in the sense that it remains a removable