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43
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SENATE
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1982
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few weeks by the Supreme Court in the case of Lugar v.
Edmondson Oil Company, Inc., 639 F.2d 1058 (4th Cir. 1981),
cert, granted, 101 S.Ct. 3078 (1981) (No. 80-1730) (argued,
Dec. 8, 1981).
Assuming that there is State action, the principles of
the Court of Appeals' decision in Barry Properties would
suggest the unconstitutionality of Senate Bill 473.
In Barry Properties, the Court of Appeals concluded
that the mechanic's lien constituted a significant taking of
property interest sufficient to invoke the due process
requirement. Under the statute a "subsisting lien" arose as
soon as materials were supplied or work performed and
constituted a "cloud on the property owner's title" such
that "not only will [it] be extremely difficult" for the
owner to legally alienate or further encumber the property,
but additionally, his equity will be diminished to the
extent of the lien." 277 Md. at 23-24.
The Court then examined the mechanic's lien law which
did not require a general contractor to give notice to the
property owner of the establishment of the lien prior to its
filing with a court but did require a subcontractor to
inform the owner in writing of his intention to claim a
lien. In holding such a procedure to be defective, the
Court said:
"[N]otice of intent to claim a lien,
which is the only 'notice' the owner is
required to receive prior to being made aware
of a suit to enforce the claim, is not, in
our judgment, adequate. The filing of a
claim to a lien, although recorded, also does
not give the property owner constructive
notice of the lien ... There is no provision
requiring any hearing concerning the lien
prior to the filing of a suit to enforce it.
The statute is the same with respect to
general contractors, except that they need
not even provide notice of intent to claim a
lien. In short, the Maryland mechanic's lien
law permits an owner to be deprived of a
significant property interest without notice
or a prior hearing, and thus is
unconstitutional unless it provides
protections such as those discussed in
Mitchell [v. W. T. Grant, 416 U.S. 600
(1974)] and North Georgia Finishing [Inc. v.
Di-Chem, Inc., 419 U.S. 601 (1975)] ..." Id.
The safeguards demanded by Mitchell and North Georgia
included the provision of a sworn affidavit setting forth
the basis for the lien, the filing of a bond by the
lienholder to protect the debtor, preliminary scrutiny of
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