McCormick Construction Co. v. 9690 Deerco Road Ltd. Partnership

JAMES S. GETTY, Judge, Specially Assigned. This is an appeal by McCormick Construction Company from an order by the Circuit Court for Baltimore County staying a mechanic’s lien action filed by McCormick against Deerco Road Limited Partnership pending arbitration of the disputes between the parties. The facts giving rise to this appeal are not controverted. McCormick claims that it was entitled to establish probable cause and obtain an interlocutory mechanic’s lien before the matter was submitted to arbitration for resolution of the merits of its claim.

Deerco alleges that the trial court correctly refused to take any action after being advised of the arbitration clause in the contract between the parties. McCormick’s purpose in obtaining a preliminary lien is to establish its priority among lien creditors. McCormick entered into a Construction Agreement with Riparius Development Corporation, general partner of Deerco, for the erection of a single level parking deck in Timonium. Four of twelve requisitions for payment, according to McCormick, remain unpaid with the balance due for materials and services furnished totaling $347,141.00.

Deerco contests the amount of the indebtedness claimed and alleges instances of faulty and defective construction. ¹⁸⁰ The case came before the Circuit Court for Baltimore County on October 6, 1988, and the court heard oral argument and concluded that it had no discretion to continue once a petition to arbitrate was filed and, accordingly, the court stayed McCormick’s petition to establish a mechanic’s lien, retained jurisdiction and ordered arbitration. The contract between the parties contained the following arbitration clause: All claims, controversies or disputes between the Owner and the Builder arising out of, in connection with or relating to this Agreement, or the breach thereof, or the rights and obligations of the parties hereunder shall be settled and determined by arbitration in Baltimore County, Maryland, and conducted under and in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then in effect. This agreement to arbitrate shall be enforceable under applicable law. The costs and expenses of the arbitration shall be borne as determined in the arbitration, the arbitration award shall be final and a judgment may be entered thereon by any court having jurisdiction.

We are confronted by two issues. They are:’ 1. Bid the trial court err in staying the mechanic’s lien case due to the arbitration clause without first allowing McCormick to present evidence and establish probable cause for the entry of an interlocutory lien? 2. Is the granting of Beerco’s motion to compel arbitration a final appealable order?

We shall address the issues in reverse order. Generally, Maryland law does not permit appeals unless and until the trial court has rendered a final judgment. Md.Cts. & Jud.Proc.Code Ann., § 12-301. Notwithstanding the general rule, section 12-303 of the Courts Article allows appeals from certain interlocutory orders.

McCormick, asserts that its right to appeal is within the ambit of Courts Article, § 12-3Q3(a) authorizing an appeal of: ¹⁸¹ (a) An order entered with regard to the possession of property with which the action is concerned or with reference to the receipt or charging of the income, interest, or dividends therefrom, or the refusal to modify, dissolve or discharge such an order. McCormick would have us construe “possession of property” as including a petition to establish a mechanic’s lien since the right of possession is ultimately determined at the time of foreclosure. We disagree. Whether § 12-303(a) has been the subject of earlier interpretation has not been brought to our attention by either party herein.

We think the legislative intent in enacting the section was to permit an appeal of an interlocutory order where a controversy exists over the right to possession of property or the benefits generated therefrom during the pendency of the litigation. Clearly, McCormick has no present right to possession and whether any such right may ultimately exist is purely speculative. The fact that after foreclosure of a mechanic’s lien someone will eventually possess the property does not supply a predicate for allowing an appeal of an interlocutory order “entered with regard to the possession of property with which the action is concerned.” The trial court’s order, staying the proceedings pending the outcome of arbitration, simply does not address any issue of possession. Generally speaking, only those interlocutory orders specified in § 12-303 are immediately appealable.

Cant v. Bartlett, 292 Md. 611 , 440 A.2d 388 (1982). The Court of Appeals has seen fit to expand the General Assembly’s list by two: (1) a denial of a motion to dismiss on the basis of double jeopardy, and (2) an order which exceeds the jurisdiction of the court. We note that the General Assembly’s laundry list of appealable interlocutory orders includes a situation where a trial court grants a petition to stay arbitration pursuant to § 3-208 of the Courts Article. Apparently, the Legislature considered the right to appeal from interlocutory orders in the arbitration context and concluded that only a stay of arbitration should be included. ¹⁸² We hold that McCormick has not established a right to appeal under § 12-303 of the Courts Article and, furthermore, the trial court has not entered a final judgment from which an appeal would lie.

An appealable judgment is one that “must be so final as to determine and conclude rights involved, or deny the appellant means of further prosecuting his rights and interest in the subject matter of the proceeding.” Fred W. Allnutt, Inc. v. Commissioner of Labor & Industry, 289 Md. 35 , 421 A.2d 1360 (1980); Brooks v. Ford Motor Credit Co., 261 Md. 278 , 274 A.2d 345 (1971); Nu-Car Carriers, Inc. v. Everett, 33 Md.App. 310 , 364 A.2d 71 (1976). McCormick’s right to establish a mechanic’s lien has not been denied or impaired by the staying of the court case. The court, being advised that the contract required arbitration, stayed the proceedings, retained jurisdiction, and granted the motion to arbitrate. The court order settled nothing; neither did it conclude any rights or deny any party the means of proceeding further.

Not being a final order, it was not appealable. See, Eisel v. Howell, 220 Md. 584 , 155 A.2d 509 (1959); Frederick Contractors, Inc. v. Bel Pre Medical Center, Inc., 274 Md. 307 , 334 A.2d 526 (1975) (holding that Bel Pre’s demand for arbitration should have had the effect of staying a foreclosure of a mechanic’s lien until an award is returned by the arbitrators). McCormick may still return to the circuit court for further relief after the amount owed by Deerco is determined by arbitration. We do not suggest that a court order referring a case to an arbitrator may never be the subject of an immediate appeal.

The Court of Appeals recognized the right to appeal from orders involving arbitration issues in Litton Bionetics v. Glen Construction Company, Inc., 292 Md. 34 , 437 A.2d 208 (1981). The Court held that the refusal of the circuit court to consolidate two arbitration proceedings involving the same construction project was a final appeal-able order, because the denial of the consolidation motion completely terminated the proceedings in the circuit court. ¹⁸³ In the present case, however, the proceedings were stayed; jurisdiction remained in the court to take further action following the arbitration award. Presumably, that action would include foreclosure of the lien obtained through the arbitration process. McCormick’s second issue asserts that the contractor’s right to a mechanic’s lien is severable from the right to arbitrate disputes existing between them as to the amount due to the contractor.

Although we have determined that McCormick has no appealable final order, a brief discussion