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Atlas Contracting, Inc. v. Saleh

Superior Court of Massachusetts, Middlesex

June 11, 2018

ATLAS CONTRACTING, INC.
v.
Catherine C. SALEH et al.

          DECISION AND ORDER ON DEFENDANTS’ MOTION FOR SUMMARY DISCHARGE OF MECHANIC’S LIEN

          Christopher K. Barry-Smith, Justice of the Superior Court

          This civil action concerns a dispute between the plaintiff contractor ("Atlas") and the defendant homeowners (the "Salehs") over payment for home renovation work performed by Atlas on the Salehs’ residence at 49 Hodge Road in Arlington between November 2016 and June 2017. In its complaint, Atlas alleged that the parties entered a contract for $240, 294.95, but that defendants approved contract modifications and additions totaling an additional $115, 484.84. Atlas acknowledges that the Salehs paid Atlas $234, 145.00. Thus, Atlas’ claim concerns principally payment for the alleged contractual additions of $115, 000. The Salehs dispute that they agreed to contractual modifications, contending that, throughout their relationship with Atlas, the Salehs emphasized that the renovation had to be limited to the agreed budget of $240, 000. The Salehs have brought counterclaims for breach of contract, breach of implied warranty to perform in a workmanlike manner, and for violation of the G.L.c. 142A, the Home Improvement Contractor Statute, and G.L.c. 93A prohibiting unfair or deceptive trade practices. The Salehs allege they had to pay others to complete, and to remedy, Atlas’s work.

         Before the court is the Salehs’ motion for summary discharge of a mechanic’s lien recorded by Atlas at the Middlesex Registry of Deeds on August 24, 2017. For the reasons set forth below, the Salehs’ motion is allowed.

         DISCUSSION

         After it stopped work on the Salehs’ residence in late spring 2017, Atlas obtained a mechanic’s lien on the Salehs’ residence by filing a Notice of Contract relative to performance of work and furnishing of material, pursuant to G.L.c. 254, §§ 1 and 2. Section 2 provides, in pertinent part:

A person entering into a written contract with the owner of any interest in real property ... for the whole or part of the erection, alteration, repair or removal of a building, structure, or other improvement to real property ... shall have a lien upon such real property ... as appears of record on the date when notice of said contract is filed or recorded with the registry of deeds ... to secure payment of all labor ... and material ... which shall be furnished by virtue of said contract.

G.L.c. 254, § 2.

         On August 24, 2017, Atlas recorded a Notice of Contract ("Notice"), which Notice was dated August 16, 2018 and executed by Silva Ozcan, president of Atlas. The Notice identified an original contract between Atlas and the Salehs dated December 12, 2016, with an "original contract price" of $240, 294.95. The Notice also identified "Change/Orders/Approved Add ons" in the amount of $115, 484.84. The Notice therefore claimed "total billings" of $355, 778.79. It acknowledged payments received of $234, 145.00, leaving a "balance owing" of 121, 634.79. Also on August 24, 2017, Atlas recorded a "Statement of Amount Due" pursuant to G.L.c. 254, § 8. The Statement identified the same total billings, payments received, and balance owing as did the Notice, and was signed by Ozcan for Atlas. Atlas commenced this lawsuit on November 21, 2017, including claims for breach of contract, quantum meruit and for enforcement of its mechanic’s lien.

          On March 19, 2018, the Salehs filed a motion for summary discharge of Atlas’s mechanic’s lien pursuant to G.L.c. 254, § 15A. That statute provides in pertinent part:

If any person in interest, including ... an owner ... claims: ... (b) it appears from the notice of contract or a statement of account that the claimant has no valid lien by reason of the character of, or the contract for, the labor or materials ... furnished and for which a lien has been claimed, ... or (d) that for any other reason a claimed lien is invalid by reason of failure to comply with any provision of this chapter, ... such person may apply to the superior court ... for an order (i) ruling on the matter involved, or (ii) summarily discharging of record the alleged lien or notice as the case may be.

G.L.c. 254, § 15A. Generally speaking, summary discharge of a mechanic’s lien is appropriate only if defects or noncompliance with the mechanic’s lien statute appear of record or are readily ascertainable by reference to undisputed documents. Madigan v. Trace Constr., Inc., 71 Mass.App. 1, 7 (2007) (factual dispute concerning whether commercial landlord had consented to tenant’s contracts with contractors, which served as basis for mechanic’s lien, precluded summary discharge).

         When the Salehs initially filed their motion for summary discharge, they relied principally on Atlas’ inability to produce a written contract that was signed by the parties. The Salehs dispute that they ever signed a written contract with Atlas, and submitted an affidavit to that effect. Affidavit of Catherine and Youssef Saleh, Attachment A to Motion for Summary Discharge ("Saleh Aff."). The Salehs testified that they entered only an oral contract with Atlas, in the fall of 2016. Saleh Aff. ¶ 3. They testified that, in May 2017, months after Atlas started the project, Ozcan handed Youssef a written contract, dated December 12, 2016, but neither Youssef nor Catherine ever signed the back-dated document. Id., ¶¶ 4-7. The Salehs argued that, although the mechanic’s lien statute requires a written contract, Atlas had never produced one during this litigation, because none existed.

         In opposition to the motion, Ozcan also submitted an affidavit. Affidavit of Ohan Ozcan, dated March 5, 2018 ("First Ozcan Aff."). He testified that, following negotiations in the fall of 2016, Atlas prepared a written contract, dated December 12, 2016. First Ozcan Aff. ¶ 8. Ozcan testified that he brought the contract to the Salehs’ house on December 20, 2016, and both he and Youssef signed the contract. Id. He described that Youssef signed the contract in Ozcan’s presence between 6:00 and 7:00 p.m., while Youssef sat in the front seat of Youssef’s car. Id., ¶ 9. Ozcan testified that the contract that Youssef signed was seven pages, dated December 12, 2016, contract number 3068, totaling $240, 294.95. Id., ¶ 8 & Exh. A to First Ozcan Aff. Ozcan explained further that Atlas had only an unsigned copy of the Atlas/Saleh contract because he had submitted the original to the Town of Arlington together with the application for building permit, and it had since been destroyed consistent with Arlington policy. First Ozcan Aff. ¶¶ 10-13. Ozcan confirmed, however, that the signed written contract, now missing, was for $240, 294.95. Id., ¶ 14. Atlas argued that, even though it did not possess a written contract signed by the parties, Ozcan’s testimony that such a contract existed, satisfied the "written contract" requirement of G.L.c. 254, § 2. The summary discharge proceeding, Atlas argued, was not the appropriate forum to resolve the pointed dispute as to whether the Salehs had signed a written contract.

          Had the record remained unchanged, Atlas might have been right. It would have been difficult, in a "summary" proceeding for discharge, to determine whether a written contract existed, which almost certainly would have required a credibility determination as between Ozcan and the ...


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