Noone Electric Co. v. Frederick Mall Associates

Singley, J., delivered the opinion of the Court. In this case, two tenants of uncompleted stores in a shopping center complex employed a general contractor to complete the premises which the tenants had leased. The question presented is whether a subcontractor who had not been paid by the general contractor may assert a mechanic’s lien against the owner of the shopping center. The subcontractor argues that it can assert its lien against the entire center because its work involved the completion of the building, and that the trial court erred in holding that the lien could be asserted only against the tenant’s leasehold interest.

We conclude that the trial court was correct, and shall affirm. Frederick Mall Associates, a limited partnership (the Owner), contracted with Hannan-East Construction Company (Hannan-East) for the construction of a shopping center, Frederick Towne Mall, on the outskirts of Frederick, Maryland. Under the terms of the Owner’s contract with Hannan-East, the latter was responsible only for the construction of public areas, access ways, the enclosed mall and “shells” of preformed and reinforced concrete, each facing the mall, consisting basically of “modules” having ⁵⁶ three walls, a floor and a roof, which could be completed as stores to meet the needs of the particular tenant. 1 The Owner then proceeded with negotiations looking toward the leasing of the individual modules to tenants. This case involves two such leases: one, dated 11 February 1972, between the Owner and Friendly Ice Cream Corporation (Friendly); the other, dated 15 June 1972, between the Owner and Time Out Amusement Centers, Inc. (Time Out).

Each lease provided for the completion of the modules by the tenant, and both tenants contracted with Marmik Construction Company (Marmik), a general contractor, for the performance of this work. Marmik subcontracted the necessary electrical work to Noone Electric Company, Inc. (Noone), the appellant. The work was performed in the summer of 1972. When Noone completed its work and was not paid by Marmik, Noone gave both the Owner and the tenants notice of its intention to assert a mechanic’s lien for unpaid balances of $7,493.01 for work done on the Friendly store and of $7,088.21 for work done on the Time Out store, and thereafter filed a lien only against the owner of the entire shopping center.

Noone then sought to enforce its lien against the Owner in an action brought in the Circuit Court for Frederick County on 25 July 1973. 2 The timeliness and adequancy of the notice, the description of the property, and the bill of complaint to enforce the lien were stipulated, as was the fact that Noone’s work had been performed “for and at the behest of the tenants” and not “directly for or at the behest of the owners.” The constitutionality of our mechanic’s lien procedure was not raised, see Barry Properties v. Fick Bros., 277 Md. 15 , 353 A. 2d 222 (1976). The two cases brought by Noone were consolidated for trial together with the case of A. Pessaro & Co., Inc. v. ⁵⁷ Frederick Mall Associates, also pending in the Circuit Court for Frederick County, which involved additional work performed by Pessaro in the space leased to Friendly, for which a balance of $6,300.00 remained unpaid. In due course, the Owner and the sureties filed a motion for summary judgment, bottomed on the contention that because the work done and materials furnished were supplied under contracts with the tenants, the liens which had been asserted against the Owner would attach only had they been asserted against tenants’ respective leasehold interests and could not attach to the estate of the Owner. From an order granting the motion for summary judgment, and dismissing the petitions, Noone and Pessaro appealed to the Court of Special Appeals.

We granted certiorari while the case was pending in that court in order that we might consider the matter. Maryland Code (1957, 1972 Repl. Vol.) Art. 63, § 9, which was in force when the work was completed, provided: “Where a building shall be erected by a lessee or tenant for life or years of a farm or lot of ground or by an architect, builder, or other person employed by such lessee or tenant the lien shall only apply to the extent of the interest of such lessee or tenant.” 3 This Court has had occasion to invoke the rule of this statute many times, 4 Grinnell v. City of Crisfield, 264 Md. 552, 559-60 , 287 A. 2d 486 (1972) (tenant’s interest cannot be subject to lien, even though tenant has right to approve construction contract and has option to buy, if tenant is not obligated in construction contract); United States Tile & Marble Co. v. B & M Welding & Iron Works, Inc., 254 Md. 81, 87 , 253 A. 2d 838, 841-42 (1969) (lien attached to interest of one joint tenant); Dente v. Bullis, 196 Md.