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Gagnon's v. Michaud
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MAINE SUPREME JUDICIAL COURT				Reporter of Decisions
Decision:1998 ME 265
Docket:Aro-98-198
Submitted
on Briefs:	November 17, 1998
Decided:December 14, l998


Panel:WATHEN, C.J., and CLIFFORD, DANA, SAUFLEY, ALEXANDER, and 
	CALKINS, JJ.






GAGNON'S HARDWARE & FURNITURE, INC. v. SCOTT MICHAUD, et al, FIRST CITIZENS BANK v. SCOTT MICHAUD, et al.



WATHEN, C.J.


	[¶1]  In this consolidated appeal,{1} Gagnon's Hardware & Furniture,
Inc. ("Gagnon's") appeals from the summary judgments entered in the
Superior Court (Aroostook County, Pierson, J.) in favor of First Citizens Bank
("First Citizens").  Gagnon's argues that the court erred in giving First
Citizens' mortgage priority over Gagnon's mechanics' lien.  Finding no error,
we affirm.
	[¶2]  The facts, viewed in the light most favorable to Gagnon's, may be
summarized as follows: In October, 1995, Scott Michaud requested a loan
from First Citizens Bank to purchase certain real estate for business
purposes. Michaud met with Peter Hallowell, a commercial banking officer
at First Citizens, in connection with the loan request and discussed, among
other matters, Michaud's plans to create two apartments upstairs and a
laundromat on the ground floor.  First Citizens encouraged the conversion in
order to generate a sufficient stream of income for Michaud to be able to
make his mortgage payments.  The loan closed on November 15, 1995, and
Michaud executed a note and mortgage to First Citizens Bank.  At that time,
Hallowell knew of the planned renovations to the property. 	
	[¶3] Between November 17, 1995, and February 6, 1997, Michaud
purchased materials and supplies  from Gagnon's for the renovations to the
property in question.  First Citizens did not enter into any agreement with
Gagnon's for the furnishing of materials to Michaud.  Further, First Citizens
did not survey, view, or visit the premises to assess the progress or nature of
any renovations, improvements or alterations and did not agree, in writing
or otherwise, to permit Gagnon's mechanics' lien to take priority over First
Citizens' mortgage.  On one occasion in March of 1996, Hallowell met with a
representative of Gagnon's to determine the extent of the improvements.
	[¶4]  On April 29, 1997, Gagnon's filed a complaint for mechanics' lien
in the District Court (Madawaska) against Michaud as the owner of the
property in question and First Citizens as the mortgagee.  Pursuant to M.R.
Civ. P. 76C, First Citizens removed the complaint to the Superior Court
(Aroostook County) and filed a motion for summary judgment with a
statement of material facts.  Gagnon's filed an objection to First Citizens'
motion with a statement of contested facts and additional facts.  Thereafter,
First Citizens filed a complaint for foreclosure against Scott Michaud as
mortgagor of the property. The complaint included Gagnon's and the Town
of Van Buren as parties-in-interest for their respective lien interests on the
property.  First Citizens filed a motion for summary judgment and Gagnon's
filed a motion in opposition. The two actions were consolidated, and, after
hearing, the court entered summary judgment in both actions in favor of
First Citizens, giving First Citizens' mortgage priority over Gagnon's
mechanics' lien. Gagnon's appeals.	
	[¶5] We review the Superior Court's "entry of summary judgment for
errors of law, viewing the evidence in the light most favorable to the party
against whom the judgment was entered."  Rodrigue v. Rodrigue, 1997 ME
99, ¶ 8, 694 A.2d 924, 926 (citation omitted). Summary judgment will be
upheld if the evidence produced demonstrates that there is no genuine
issue as to any material fact and that the moving party is entitled to
judgment as a matter of law. Id.  When the trial court rules on a motion for
summary judgment, "'[it] is to consider only the portions of the record
referred to, and the material facts set forth, in the Rule 7(d) statements.'"
Handy Boat Serv., Inc. v. Professional Servs., Inc., 1998 ME 134, ¶ 16, 711
A.2d 1306, 1310 (quoting Gerrity Co. v. Lake Arrowhead Corp., 609 A.2d
293, 295 (Me. 1992)).
	[¶6]   Mechanics' liens are controlled by statute.  The statute provides
that a person who "performs labor or furnishes labor or materials . . . used in
erecting, altering, moving or repairing a house, building or appurtenances . .
. , by virtue of a contract with or by consent of the owner, has a lien
thereon." 10 M.R.S.A. § 3251 (1997), amended by P.L. 1997, ch. 264, § 1.
For purposes of Maine's mechanics' lien statute, a mortgagee is considered
an owner to the extent of its mortgage interest.  Carey v. Boulette, 158 Me.
204, 206, 182 A.2d 473, 474 (1962).
	[¶7]  It is undisputed that First Citizens did not contract with
Gagnon's for the provision of materials to the property in question.  Gagnon's
argues, however, that it generated a genuine issue whether First Citizens
consented to the provision of materials.  "Consent" is not defined by the
statute, but we have interpreted it as requiring the following:  

A mechanics' lien cannot have priority over the mortgage
without knowledge on the part of the [mortgagee] of the nature
and extent of the work being performed on the mortgaged
premises.  With such knowledge the conduct of the [mortgagee]
will be examined to ascertain whether in the light of all the
circumstances there is any basis for subordinating the mortgage
to the lien claim, and if so, to what extent. 

Carey, 158 Me. at 213, 182 A.2d at 478.  Further, it is the lienor's burden to
prove knowledge. Id.
	[¶8] Even viewing the evidence in the light most favorable to
Gagnon's, the court did not err in concluding that First Citizens had
insufficient knowledge of the nature and extent of the work to establish
consent.  Even though First Citizens had knowledge at the time of the
closing of the intended conversion of the property, it did not have
knowledge of any specific details of the actual work to be performed or of
the actual delivery of goods and services subsequently made by Gagnon's. See
Maxim v. Thibault, 124 Me. 201, 203, 126 A. 869, 870-71 (1924) (consent
of owners not to be inferred from general knowledge alone that repairs were
contemplated, but in the case of leases, from the language of the lease, their
knowledge of what was contemplated and actually being done, and their
conduct); J. A. Greenleaf & Sons Co. v. Free-Andrews Shoe Co., 123 Me. 352,
357, 123 A. 36, 37 (1923) (distinction between general knowledge of what
alterations are being made and general knowledge that alterations are being
made).  
	[¶9]  The meeting that occurred with Hallowell in March of 1996
provides no basis for finding consent.  The meeting has no significance with
regard to prior deliveries, see Morse v. Dole, 73 Me. 351, 353-54 (1882)
("consent of the owner must go along with the delivery of the materials to
give the lien").  Moreover, Gagnon's presented no facts demonstrating that
First Citizens acquired any knowledge at the meeting that future work was
contemplated.  Knowledge that prior work had been performed is not
sufficient to raise a genuine issue of fact whether First Citizens had
knowledge of any future work to be performed.  
	[¶10]  Therefore, we find no error in the court's determination that
First Citizens lacked sufficient knowledge to constitute consent pursuant to
the mechanics' lien statute. Accordingly, it did not err in giving First
Citizens' mortgage priority over Gagnon's mechanics' lien.	  
	The entry is:
					Judgments affirmed. 

Attorneys for the Appellant: Curtis E. Kimball, Esq. Rudman & Winchell The Graham Building 84 Harlow St. Bangor, Maine 04402-1401 Philip P. Parent, Esq. 33 Main St. P.O. Box 9 Van Buren, Maine 04785-0009 Attorneys for the Appellees: Richard L. Currier, Esq. Currier & Trask 505 Main St. Presque Isle, Maine 04769 (for First Citizen's Bank) Amicus Curiae: Mark L. Walker, Esq. Maine Bankers Association 132 State St. Augusta, Maine 04332-0745
FOOTNOTES******************************** {1}This is a consolidated appeal of two actions. The first action (RE-97-019) is a mechanics' lien action filed by Gagnon's Hardware & Furniture, Inc., against Scott Michaud and First Citizens Bank on Michaud's property. The second action (RE-97-022) is a foreclosure action on the property filed by First Citizens Bank against Scott Michaud as defendant and Gagnon's Hardware & Furniture, Inc. and the Town of Van Buren as parties-in-interest. Default was entered against defendant Scott Michaud. The Town of Van Buren held a priority lien and is not joined in this appeal.