Case No. 295726 (MI Ct. App., Aug. 2, 2011) AmT CADC Venture, LLC, formerly known as AmTrust Bank, appeals the trial court’s grant of summary disposition to plaintiffs, Jeddo Drywall, Inc. and Stock Building Supply, LLC. For the reasons set forth below, we affirm.
I. FACTS AND PROCEEDINGS
The issue presented here is whether construction liens recorded by Jeddo Drywall and Stock Building Supply have priority over a mortgage lien recorded earlier by AmTrust Bank. Cambridge Meadows, LLC failed to pay Jeddo and Stock for labor and materials they supplied to build a residential structure on lot 204 in the Cambridge Meadows subdivision in Brownstown Township.
On March 17, 2005, in exchange for a loan of $757,500, Cambridge Meadows, LLC executed a land acquisition, future advance construction mortgage with AmTrust secured by Cambridge Meadows Subdivision No. 3, which is a parcel of property that includes lot 204.
The mortgage was recorded on March 25, 2005. Though prior clearing, grading, paving and utility work had been done in the subdivision, on February 3, 2006, Brownstown Township issued a permit for the construction of a single family home on lot 204. On the same date, Stock first provided material to construct the home on lot 204. Jeddo supplied labor and materials to build the house on lot 204 in September 2006.
As noted, Jeddo and Stock were not paid and both companies filed construction liens under the Michigan Construction Lien Act (CLA), MCL 570.1101 et seq.
AmTrust foreclosed on the mortgage securing Cambridge Meadows Subdivision No. 3 during the fall of 2008 and a sheriff’s sale was conducted on December 3, 2008. The property was not redeemed. On December 4, 2008, Jeddo filed this action against, among others, Jeffrey and Rodney Walker, Cambridge Meadows LLC, Cambridge Meadows Investment Group, Fountain Homes, and AmTrust to foreclose on its construction lien.
Thereafter, on May 13, 2008, Stock filed a cross/counter/third-party complaint to foreclose on its construction liens. The trial court entered default judgments against several defendants and Jeddo and Stock filed motions for summary disposition against AmTrust, arguing that their construction liens have priority over the mortgage held by the bank.
The trial court agreed with Jeddo and Stock and ruled that there are no genuine issues of material fact and, because actual physical improvements were made to the property before AmTrust recorded its mortgage, under MCL 570.1119 the construction liens have priority as a matter of law.
The trial court granted summary disposition to Jeddo and Stock pursuant to MCR 2.116(C)(10). As this Court explained in Michigan Pipe & Valve-Lansing, Inc v Hebeler Enterprises, Inc, ___ Mich App ___; ___ NW2d ___ (Docket No. 294530, issued March 22, 2011), slip op p 3:
We review de novo a trial court’s decision on a motion for summary disposition. Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). Summary disposition is proper under MCR 2.116(C)(10) if “there is no genuine issue as to any material fact, and the moving party is entitled to judgment or partial judgment as a matter of law.”