Skip to main content

Publications

Jan 2011
26
January 26, 2011

Moldbuilders/Tool Builders Beware: Permanent Means Permanent

To have an enforceable lien under Michigan's Molder’s Lien Act, a moldbuilder must “permanently record” its name and address on its mold, die or form and file a UCC financing statement. The Michigan Court of Appeals recently interpreted, for the first time, the "permanently recorded" requirement. The Court's decision puts moldbuilders — and special tool builders — on notice that their liens will not be enforceable if their identifying information can be removed.

The moldbuilder in the Court of Appeals case attached an identification tag on a "riser" that it delivered along with its molds and dies. That was not enough, according to the Michigan Court of Appeals, to meet the "permanently recorded" requirement because the riser could be separated from the die and transferred for use with other tools. The Court noted that the purpose of the "permanently recorded" requirement is to give subsequent purchasers of the dies actual notice of possible liens on the dies. That purpose was not met where the moldbuilder permanently affixed identifying information to a riser easily removed from the dies.

The Michigan Court of Appeals decision affects both moldbuilders and special tool builders. In order to have an enforceable lien, both must permanently affix their name and address to their molds, dies or tooling. Liens will not be enforced if the identifying information appears on a part that can be removed.

If you have any questions about the Michigan Court of Appeal's decision, please contact Steve Grow (616.752.2158 or sgrow@wnj.com), Dennis Loughlin (248.784.5186 or dloughlin@wnj.com), Tom Manganello (248.784.5007 or tmanganello@wnj.com) or any member of Warner Norcross & Judd's Bankruptcy and Creditors' Rights or Automotive Groups.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.

ACCEPTCANCEL

Text

+ -

Reset