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BUSINESS LAW 15: Plaintiff filed a construction lien.

Plaintiff designs, fabricates, and installs food service equipment for restaurant and institutional use. Defendant operates a Mall, which includes retail stores and restaurants.

Defendant executed a lease of space at the mall, for the purpose of operating a restaurant. The restaurant’s chef approached plaintiff to provide design and installation services for the restaurant’s kitchen. Plaintiff fabricated and installed stainless steel equipment, such as a dishwashing area, a chef island, a cooking line, a salad prep station, cocktail serving stations, and a sushi station, much of which was attached to the walls with anchors or pinned to the floor.

Construction Lien

Plaintiff billed the restaurant $274,424.20 for the project, but it paid only $61,035.00 of that amount. Plaintiff filed a construction lien in the amount of $213,389.20, naming defendant as the owner of the property.

Plaintiff filed a motion for summary disposition under MCR 2.116(C)(9) and (10), requesting that the court foreclose its construction lien and enter judgment for plaintiff in the amount of $213,389.20. Defendant filed a response to the motion, asserting in part that under MCL 570.1107(1), plaintiff’s lien attached only to the restaurant’s leasehold interest, and not to defendant’s interest in the property.

Eviction

Defendant’s counsel e-mailed plaintiff’s counsel, announcing defendant’s intention to evict the restaurant from the premises and to allow the restaurant to remove its equipment from the restaurant and inviting plaintiff to attend a potential walk-through of the premises to identify any equipment subject to its lien. The restaurant removed equipment and fixtures fabricated and installed by plaintiff from the premises.

No Agency Relationship

The trial court denied plaintiff’s motion for summary disposition. The evidence indicated that any improvements made to the premises by the restaurant were primarily for the benefit of the tenant, rather than the landlord, and were improvements essential to the restaurant’s business operations. The trial court also found that no agency relationship existed between defendant and the restaurant. Finding of implied agency requires a showing that the improvements are of substantial benefit to the lessor.

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