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A Better Partnership
January 29, 2018

Can a molder extinguish the moldbuilder's lien by paying the amount owed the moldbuilder to someone else?

The Michigan Supreme Court has granted mini-oral argument in Sejasmi Industries, Inc v Quality Cavity, Inc, No. 156341, to consider the interpretation and application of the molder’s lien act, MCL 445.619(5)(b).  Specifically, the MSC will hear argument as to whether the statutory provision requires payment to the moldbuilder to extinguish the moldbuilder's lien.  This provision provides that a moldbuilder's lien is extinguished when "the customer receives a verified statement from the molder [who uses the mold] that the molder has paid the amount for which the lien is claimed."  In this case, Sejasmi paid the customer (Takumi Manufacturing) who had ordered the mold, (instead of the moldbuilder) and then served a complaint for declaratory relief on Takumi that alleged Sejasmi had paid Takumi the amount owed Quality Cavity.  Meanwhile, Quality Cavity remained unpaid.  Nevertheless, the trial court and Court of Appeals both found that this complaint qualified as a satisfactor verified statement under subsection (5)(b), extinguishing the lien.  The MSC will hear argument to consider whether to grant leave to appeal this question.  

Disclaimer:  Warner Norcross & Judd represents the American Moldbuilder Association and 17 other amici curiae in support of Quality Cavity's application.

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