-: SJC-13142, Graycor Construction, Inc.
v. Podium Developer LLC, and others.
-: [Attorney Dockery] Okay, good morning.
-: Attorney Dockery, yep.
-: May it please the court,
Alex Dockery, on behalf of Podium Developer, LLC,
Podium Owner, LP, and Office Tower Owner, LP.
With me here is Peter Billows and Martin Van Tozi, as well.
The question before us today
is whether this court's COVID orders issued pursuant
to its general superintendent's authority
operated to toll the statutory period
for filing a notice of contract with the registry of deeds
pursuant to General Laws, chapter 254, section two.
As this court has recognized as recently as last year,
in Committee for Public Counsel Services
versus Chief Justice of the Trial Court,
this superintendent's authority, while broad,
is not unlimited and does not permit the court to usurp
or co-op the functions of the other branches of government.
The superior court erred in failing to analyze
whether application of the COVID orders
to the registry of deeds, to toll the deadline set forth
in section two of the mechanic's lien law
constituted an exercise of power intimately connected with
and necessary to the exercise of strictly judicial powers.
-: Well now, Counsel,
that point that the opposing counsel is making,
that if, that the action that maybe
our other statutory extensions or tolling of statutes
are fine because it effects court cases
and we have superintendents over the inferior courts,
but we don't have superintendentcy over
the registry of deeds, correct?
-: [Attorney Dockery] That is correct, your honor.
-: So what do you say to that argument,
that we can't do this because of that?
-: Well, in fact, your honor,
that is exactly what we are saying.
We are saying...
Justice Cypher: That is what you're saying.
-: Exactly. -: Okay.
I got my parties mixed up. Nevermind.
-: [Attorney Dockery] (laughs) No worries.
That's exactly what we're saying.
Justice Kafker: How about the intertwining?
Justice Cipher: Yeah.
-: How about that it's so intertwined
with what we do and our superintendents of the courts
that we can't separate it out?
-: Well, the fact of the matter is
that the superior court did not engage
in any of that analysis to determine the relationship
between the statute at issue
and the superintendent's authority.
-: That's not really a factual issue, right?
It's a legal issue, whether these different legal provisions
are so interconnected that it invokes
our superintendents power.
-: That's correct, but the registry of deeds
is not a court of inferior jurisdiction.
-: Well, I get that part.
I'm just trying to understand whether
what the registry of deeds does, which is very limited,
is sort of a critical first step
and meaning that they are intertwined.
I don't know the answer. I find it confusing.
But help me out here on why...
-: Counsel, let me back up on Justice Kafker's question then.
Ultimately, what happens if they perfect their lien
and they don't get paid?
Where did they go?
-: If they perfect the lien?
-: And they don't get paid. Where do they go?
-: Ultimately, they will file an action
in the superior court,
which then has to be recorded in the registry of deeds.
-: Right, but they're gonna come to us.
-: Ultimately, yes, but first they have to have
created the right to perfect the mechanic's lien.
What's at issue here is section two.
A mechanics lien does not exist
unless a notice of contract that complies with the statute
has been recorded in the registry of deeds.
-: Sure.
I was getting more to the point you first made,
was whether or not our authority
would extend to tolling these types of provisions,
because ultimately this is irrespective
of whether the registry of deeds is under our jurisdiction.
Ultimately, it comes here in order
to perfect whatever rights they have
under the mechanic's lien statute.
So wouldn't that be intertwined in what we do,
such that our orders should have these kinds of effects
to these kinds of statutes,
just like we did with statutes of limitations?
-: No, your honor, you have to look
at each piece of the mechanic's lien statute
to determine whether or not
the superintendent's authority would apply
and then should you find a nexus
between the statute at issue,
I think your honor is referencing Section 11,
where you have to commence an action in the superior court
and then record that subsequently in the registry of deeds,
that analysis would be a closer analysis
and the first part would be different,
but the result is ultimately the same,
because when you find that there is a nexus,
then you have to analyze whether or not
the power being exercised by this court
impermissibly supersedes a statute.
And when we examine the purpose of the registry of deeds,
which is to provide an accurate up-to-the-minute recording
of the status of the encumbrances on real property,
then we cannot permit a tolling of that
to create unreliability in the land records.
And so where it would be a closer question...
-: But counsel, the statute of limitations
is set by the legislature.
Is your position then that our COVID orders
cannot toll those as well?
-: No, your honor, the statutes of limitations
are inherently related to this court's
superintendent's authority of causes of action,
maintenance of actions, and the administration of justice.
Here, what is at issue is
the very deadline to create the right
to have a security interest on real property.
And so if a claimant does not record a notice of contract
in the registry of deeds,
there is no claim to perfect by filing
a statement of account and enforce
by commencing an action in the civil courts.
-: Would you say that we can't do anything
under superintendents about when the notice of contract
has to be filed, that's your position?
-: [Attorney Dockery] That's correct.
-: I understand.
Could we have said, but you don't have 90 days,
you have 120 days to files in the superior court?
-: No, and the reason for that relates
to the second piece of the analysis,
which is that the inherent reliability of the land records,
this court has repeatedly recognized the importance
of accuracy in the registry of deeds,
and in order to extend the deadline to commence,
let me back up.
Justice Lowy, you could extend the deadline
to commence the action here in the court.
What you could not do was then further extend the deadline
to record that action in the registry of deeds
after you had commenced it.
And so it's that nexus, first,
between the superintendent's authority,
but then there's that second essential piece
of the analysis, if you find the nexus,
which is, would the exercise of this power,
impermissibly supersede the statute?
And here, the superior court did not perform
either of those analyses in its ruling.
And for that, for that reason, it created error.
-: What do we actually have to do to record the lien?
What's the physical steps that you have to take to do that?
-: So you have to record what's called
the notice of contract.
It names the real property where you performed,
the contracting parties, the amount of the contract,
and then that is taken to the registry of deeds
in the county where the work was performed
and it's recorded on the land records.
And in fact, Graycor here did record
a notice of contract in April of 2020
during the pendency of these orders.
The registry of deeds, importantly,
was not closed for recording.
-: Well, that's where I was going.
What if the registry of deeds was closed
during the emergency, the period of time when there was,
you know, people couldn't do anything.
What if the registry had been closed for several weeks?
-: If the registry had been closed,
we would have to have examined what other steps
the registrar of deeds, who's in charge of the registries,
had taken in order to address that issue.
The fact of the matter is here,
were the registry is closed, individuals searching title
on the land records would have been on notice
that perhaps there was an unreliability
with respect to the status of those land records,
but here, the registry remained open,
documents were recorded, transfers occurred,
people were able to buy and sell property.
And for that reason, it is paramount
that the accuracy of the land records be preserved.
-: But some of them were closed, right?
Some of the registries were closed, right?
Some of the registries were closed,
so are we gonna have a rule that's gonna work where
if one registry closed during COVID,
you're out of luck and if they were open, you may be fine?
I'm just trying to get a sense of how that's gonna work.
-: Your honor's question actually gets
to the various central issue here,
which is the registry of deeds is its own department
and it governs itself.
And so each county as a register of deeds
is in charge of what goes on in that registry.
-: But again, they're the first step in a process.
They can't do what we did, right?
Can they, there's a statute out there,
could they have done this themselves
and issued a COVID suspension of that statute?
-: That would have been the purview of the legislature,
your honor.
-: Well, so then we kind of, we're in a box, aren't we?
If only the legislature could do it,
obviously that can't be the case,
'cause we can do it, right?
But the registry can't, so there,
the registry can shut down this process,
this ability to basically hold up title
for a mechanic's lien, but they can't do anything about it.
I'm confused by that.
We can fix it, but they can't during COVID
and don't they think we're fixing it for them?
-: No, your honor.
There's nothing in the record to indicate
that the registries believe that the SJC's orders
are fixing any sort of issue for them.
And I also don't believe it's accurate to say
that the registries were closed
for the recording of documents.
While they may have been physically closed,
I believe all of the registries
had electronic recording available here.
-: I understand the equities aren't so drastic in this,
because there's another way.
This is only the sort of process
where you used the mechanic's lean to get title.
They can still sue separately, right?
So they're not completely out of luck.
-: [Attorney Dockery] Absolutely.
-: But your argument, if we take it to its extension,
may leave a lot of people completely out of luck.
Administrative processes out there and everything.
So if you miss any of these administrative deadlines,
anywhere in the Commonwealth, I'm just trying to understand,
you're out of luck, is that right or am I wrong?
-: No, your honor, that analysis would have to be done
for each statute that governs the administrative process.
-: That's the thing, we can't mess with the executive branch.
We can't toll any of their time deadlines.
That's not our power.
Even if it's interwoven with one of our statutes
and our powers.
-: No, not at all.
What our argument is is that the analysis
has to be done in each instance.
First, whether the power that has to be exercised
is inherently connected with a necessary to
the exercise of strictly judicial powers.
And if so, then the separate analysis
is whether the action that is to be taken
is going to impermissibly supersede a general law.
I understand that in the abstract,
that's a nice distinction, but in reality, right,
isn't this pretty tight?
That deadline in the registry of deeds
is connected to two other court deadlines, right?
Or three other court deadlines, right?
-: [Attorney Dockery] No.
-: It's not?
If you miss the first one, you can't do anything, right?
-: That's correct, but it's not a court deadline.
The security interest is created by the initial filing
of the Section 2 notice of contract.
-: No, but if you miss the registry deadline,
that court process is short-circuited completely.
You can't do that process, right?
-: There is no claim to enforce in the court.
-: Exactly.
So missing that deadline puts you out of luck.
Now, let's to some administrative,
there are a lot of other statutes
that have an administrative exhaustion requirement.
I don't know if they have time deadlines in them.
I assume a bunch of them will,
but if your analysis is correct
and we can't do anything about it,
are all those things gonna be dead too,
because again, it's an inner-connected statutory deadline.
-: No, your honor, this deadline,
specifically related to the mechanic's lien
is unique in nature, because what it does
is create a security interest.
And because it is a creature of statute,
we require strict compliance.
What a mechanic's lien does
is it creates a right to encumber the real property
of another as security for a breach of contract claim.
And in fact, what is occurred here and what often occurs
is it's the right to encumber the real property of a party
with whom you may not even be in contractual privity.
So my clients are not actually in contractual privity
with the claimant in this case.
And so you cannot apply a broad conclusion
when what is at issue here is solely the deadline
to file and record a notice of contract
pursuant to Section 2 in the registry of deeds.
-: Counsel, do you know if we have
any superintendents of power
to remove the registrars of deeds?
-: [Attorney Dockery] Only with respect to the land court.
-: So we can only remove the registrar in the land court?
-: [Attorney Dockery] Yes, your honor.
-: How do the other registrars, are they elected
in all of the counties?
-: [Attorney Dockery] They are. They are elected officials.
-: And so removal would be by...
How could they get removed if they did anything wrong?
-: I believe it would be impeachment, but I'm not certain.
Justice Cypher: Okay, all right.
-: Having failed to determine whether the registry of deeds
constitutes a court of inferior jurisdiction
and whether the tolling of the deadlines
set forth in Section 2 was an exercise of power
intimately connected with and necessary
to the exercise of strictly judicial power
and further having wholly avoided any analysis
as to how such tolling would impact the essential functions
of the registry of deeds and the land records,
the superior court erred and must be reversed.
Thank you.
Woman: Okay, thank you.
Okay, Attorney Castello.
-: May it please the court,
Christopher Costello on behalf of the appellee
Graycor Construction, Inc.
Your honors, appellee contends
that the lower court was correct in its analysis
and that this court has the authority
under its inherent authority,
as well as its superintendent's authority
under a GL Chapter 211, Section 3.
-: Well, let's talk about that for a minute,
because your opposing counsel here
has pointed out that we really have very limited authority
with regard to the registry of deeds
and that it's in fact all handled
through an executive function
and that this is a unique thing,
because it creates a security interest.
Why is she incorrect in that analysis?
-: Well, I think, going back to Justice Georges' question,
that GL Chapter 254 in the whole establishes the connection
to the court system, because it is the first step,
but the first step means nothing unless you follow the steps
and under Section 5, you have to bring an action
in the superior court or the district court
in the district where the land lies.
Then you have to proceed under Section 11
to enforce your claim against the property
or under Section 14, to enforce it against the bond
that's filed to dissolve that lien.
And the court is involved in issuing orders
for foreclosure under Section 18, if you get that far.
And we're here today because the appellants
brought a verified complaint under Section 15 A
to dissolve the lien in the court.
So the courts are intimately connected
with this whole process,
such that the superintendent's authority
and the inherent authority of this court has to lie.
And furthermore, with extent to the...
I'm sorry.
-: Counsel, aren't you skipping a step there?
I mean, so the section two in and of itself
creates a right, right?
-: [Attorney Costello] Yes.
-: And that creation is notice to the world
that now I have a lien on this specific property.
That could be, in and of itself,
valuable without the courts.
That is, the courts are not intimately involved in that.
It's only when you go to seek
to enforce the mechanic's lien,
which then I think your opposing counsel
was correctly conceited.
At that point, our superintendent's powers
would extend to that, because you now need
to file something with the court,
but the nexus between the recording and the court
seems to me quite attenuated.
What Section 2 has noticed to the world
that I've got a lien against this property,
so if you're gonna buy this property,
you better clear that lien first.
-: But your honor, I would say that the,
while the lien is established under Section 2
and provides notice to the world,
the persons searching title know that that action
in and of itself, or even in combination
with the recording of a statement of account,
only have that lien in place for 210 days,
which is a very limited utility.
-: But that 210 Days, I think,
is something that we might be able to extend
under the COVID orders, right?
-: Your honor,
so if I'm understanding the question correctly,
you're understanding that you would only extend
the time period to subsequently
file an action and record it?
-: Right, at that point it touches the court.
-: Well, if that were the case, your honor,
then I would suggest that one of the primary goals
of the mechanic's lien statute
that the appellant's focus on,
and that is when a person goes into review title
and can be confident that after a certain period of time,
a lien has already been dissolved under its own weight,
that would sort of create the relation back problem
that this court has addressed to earlier.
If the court's authority were limited
to allowing to just extending the time period...
-: Then how did that relation back case go?
'Cause I didn't think that supported your side.
-: Well, the relation back case is fine
as long as the time period has not run
under the statutory deadlines,
but had the time period run,
then you're barred from moving back.
-: [Justice Wendlandt] Right, okay.
-: So what I'm saying here, your honor,
is if the court superintendent's power
only permitted the extension of time to file the complaint,
it's really what tells the world that there's an enforcement
of a lien happening is when they look and see
that there's a complaint that's filed
and recorded in the registry of deeds.
-: Right, so we can toll that deadline
without also tolling the deadline to create the lien itself.
-: The lien is created under Section 2.
-: [Justice Wendlandt] Yeah.
-: So persons searching the title records,
if they see that a lien is created
and now more than 200 days have elapsed
since the creation of the lien and no complaints been filed,
that implicates the certainty argument
that the appellants are making.
A title examiner going in and seeing that 200 days
have elapsed and no complaints have been filed
would be reasonably certain that
there is no more lien clouding title to this property.
-: Well, what about somebody looking
at a statute of limitations?
Wouldn't they also say, "Oh, well, you know,
it's been three years."
Wouldn't they have the same problem?
-: Well, I think as this court set forth in its COVID orders,
the statute of limitations are a very different thing
than deadlines under other statutes.
I think all litigates are pretty well aware
that the statute of limitations time period
can move under the discovery rule.
And there's nowhere where people would search to see,
where the world would search to see,
if a cause of action should have died under its own fine.
Justice Cypher: So this mechanic's lien
creates the right, correct, creates the cause of action?
-: Right, there's no claim without the file.
-: So a statute of limitations, that's a different issue,
but isn't this more like a statute of repose,
which is concerns about the extinguishment?
-: No, your honor, this court has already recognized
that statutes of, that the mechanics lien statute
is not a statute of repose in national lumber.
-: I know it's not, but I'm just saying, you know,
also with regard to statutes of repose,
I'm wondering how those would operate under the COVID rules.
Would they be in the same category as your mechanic's lien,
because statute of repose does a little bit more than,
it creates a right, doesn't it?
Isn't that, we're looking more at when the right is created?
Not when the lawsuit is filed.
The right gets extinguished after a certain period of time.
It's the right, not just the right,
the timing of the filing.
(Attorney Costello sighs)
-: I think that the deadlines imposed by a statute of repose
have been examined very differently by this court.
And they've been imposed very certain in the Sterns case
a year or two ago.
I think overall that in the context of the COVID pandemic,
as this court said in presenting its orders,
that you have authority, not only inherent authority,
but authority under your superintendent's power.
This is a very different circumstance
and the survival of mechanic's liens
and the ability of contractors to meet with counsel,
conduct a title search, and get the liens filed
is sort of the same considerations that this court looked at
in the Shaw vs Melendez case and looking at, you know,
what's the effect of the pandemic on the ability
of clients and counsel to initiate a claim?
-: But that's all in court though.
I mean, here, we've got this weird process
and it is separate, because like you can
vindicate your rights without going through it.
You can bring a lawsuit and sue for this damage
separate and apart from clouding title, right?
That's the norm.
I mean, I understand there are two ways
for you to get reimbursed.
There's the mucking about in the registries
and putting cloud on title,
and then there's another way, right?
You can go around it and go to court
and this doesn't impact that at all, does it?
-: It does not, your honor,
but I would submit that in the context of the pandemic
and particular to our case, as counsel mentioned,
Graycor was not a direct contractual party
with the podium entities.
There was the specific entity in between
that we contracted with that's since filed for bankruptcy.
So because of the COVID pandemic,
we've sort of been left without a remedy,
other than the enforcement of the mechanic's lien
as have the sort of down the chain subcontractors.
-: But the pandemic is not the reason
that you couldn't figure out who the notice of contract
was supposed to be?
-: So your honor, Graycor did attempt to file
a notice of contract earlier on
without the benefit of counsel,
without the benefit of a title search and from a distance.
It was only once counsel was retained
and were able to perform a title search
that we were able to uncouple sort of the Byzantine filings
to determine that the property
where the work was performed...
-: In that situation,
whether there's a higher counsel or not,
that has nothing to do with the pandemic,
which is not, you may disagree,
and if you do, please tell me,
but that's not an irrelevant point,
because we're dealing with, with the notice of contract,
something that really doesn't touch the court system.
-: But two points, your honor, in the Shaw vs Melendez case,
the court was focused on the ability of would-be litigants
and their counsel to initiate a claim.
Graycor tried to do that on its own
with respect to the COVID restrictions in effect
that affected its business and effected everyone.
-: Don't we have, I mean, if we adopt your view,
aren't we really running into
some constitutional separation of powers?
Because I don't know why this is different
than us taking every administration,
I'm thinking of Medicaid or all these other areas out there
where they are time deadlines for doing things.
Would we, do we have the ability to, you know,
change all those deadlines too?
I mean, I'm just, it seems like,
I don't understand how we can play here
without changing all of the sort of executive branch rules.
-: So I think this is where the nexus argument
where we fundamentally disagree comes into play.
We agree that there needs to be a nexus
to judicial administration.
We just think that there is one in this case.
-: But I think you say every time deadline
that's impacted in the executive branch,
we can fiddle with if it ends up
dealing with a court case, is that right?
Every single one of them?
'Cause I mean, I can't think of them off the top of my head,
but I'm just thinking, you've got a lot
of administrative time deadlines out there.
Did we have the ability to suspend all of those
through our COVID orders?
-: I think because this court distinguished between
the tolling put in effect for statute of limitations,
which was very broad, versus the tolling that you applied
in terms of deadlines under the statutes,
which is very narrow, it's only deadlines falling
within that narrow period that I think
the court exercised its authority in a way
that was so narrowly focused and consistent
with its inherent authority that you can do that
to the extent that there's an involvement in the judiciary.
-: You're saying because this statute,
because the statute expressly contained
a statute of a deadline for the registry,
that's different than if the administrative agencies
had created them through regulations or other things?
And we could, because we messed
with the statute of limitations in our COVID orders,
we could do that?
We couldn't do it if it were done through a regulation?
I'm not sure I follow.
-: I think it goes back to appellant's nexus argument.
I think it has to have a nexus
to the administration of justice,
and I think we have that here
because of how 254 is laid out,
requiring court action to do anything effective
in terms of enforcement or foreclosure or even dissolution.
-: But everything, I mean, we don't enforce through,
everything's enforced through the courts,
so there's gotta be some limitation on that rule, right?
Just because the ultimate resolution of the issue
will be in court can't be enough for us, right?
It has to have some narrower restriction that that.
-: No, and I think that the separation of powers issue
is what imposes the restriction.
And in this case, we would submit
that there's no separation of powers issue,
because the register's job as appellants point out
under the statute is to record.
You present the registrar with a notice of contract
or a document and a check.
-: But we don't tell, but we don't have any say
over how they do that.
-: That's exactly my point, your honor.
Your order does not tell the registrar,
the individual registrars,
to record or not record this notice of contract.
There's nothing in a notice of contract
that sets forth the date last,
the work was last performed on a project
so that they could even go about
making a determination of whether
the time period has lapsed.
They record the notice of contract
as long as the property description matches
what they have in their registry documents.
It's up for the courts to determine, under the statute,
whether or not, looking at the time,
whether the filing was timely
or whether the claim should be dissolved
or whether it should be enforced.
Justice Lowy: And if we do that, we're not superseding a,
if we do that, we're not superseding a statute?
-: No, your honor, 'cause the mechanics lien statute,
it has has two purposes, appellants focus on the recording
and the certainty of the recording statute,
but the other purpose of the statute
is to protect contractors who provided valuable services
to improve real property.
So we submit in this case,
the application of the COVID tolling orders
to our circumstances in this case,
is consistent with the legislative purpose
for the mechanic's lien.
It does not impact the certainty argument
that appellants make, because in reality,
a person searching the statute for these properties
at 60 and 80 Causeway Street
would see a notice of contract filed for the first time
on September 9th and the complaint to enforce that
on September 17th.
So this isn't a circumstance where someone would go in,
see that a notice of contract had been filed
and assume that a lien had dissolved
under its own weight through inaction.
If there are no other questions, your honors,
we rest on our brief as well as the lower court's ruling,
which we believe supports our arguments
and we request that the court answer the reported question
in the affirmative.
Thank you. Woman: Thank you.