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A Better Partnership
April 25, 2015

MSC to decide whether contractors that prevail on contract claims are entitled to attorney fees under the Construction Lien Act where their lien foreclosure claims remain unresolved

In Ronnisch Construction Group Inc. v. Lofts on the Nine, L.L.C., No. 150029, the Michigan Supreme Court granted the application for leave to appeal the Court of Appeals’ July 24, 2014 judgment.  The Court of Appeals held that a lien claimant under the Construction Lien Act may be entitled to recover attorney fees even when the lien claim is not fully adjudicated.  Further, a lien claimant may be entitled to attorney fees even though its related breach of contract claim is settled and the lienee reasonably disputes the amounts owed.
In granting the application, the Supreme Court instructed the parties to address whether the Court of Appeals erred in holding that the plaintiff contractor, who filed a claim of lien under the Construction Lien Act, MCL 570.1101 et seq., and then filed a circuit court action against the defendant property owner, alleging breach of contract, foreclosure of lien, and unjust enrichment claims, was entitled to attorney fees as a “prevailing party” under MCL 570.1118(2), when the plaintiff prevailed in arbitration on its contract claim, but neither the arbitrator nor the circuit court resolved the plaintiff’s foreclosure of lien claim.  The Supreme Court referred the parties to its decision in HA Smith Lumber & Hardware Co v Decina, 480 Mich 987 (2007), in which it concluded that lien claimants that did not prevail on their foreclosure action could not recover attorney fees.  The Court of Appeals found the facts of Decina “easily distinguishable” because, unlike Ronnisch’s lien, the claimants’ liens in Decina never attached to the property.  (See previous coverage here.)

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