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Chrysler Corp. v. Fedders Corp.

decided: January 25, 1982.

CHRYSLER CORPORATION, APPELLANT
v.
FEDDERS CORPORATION, SALVATORE GIORDANO, SR., SALVATORE GIORDANO, JR., BRUNO GIORDANO, IGNATIUS MACBRINN AND HOWARD S. MODLIN



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY (D.C. Civil No. 81-0661)

Before Adams, Hunter and Sloviter, Circuit Judges.

Author: Sloviter

Opinion OF THE COURT

I.

Introduction

Before us is an appeal by plaintiff Chrysler Corporation from the district court's order holding unconstitutional the New Jersey lis pendens statute, N.J.Stat.Ann. § 2A:15-6 et seq., and granting defendants' motion to vacate a notice of lis pendens filed by Chrysler pursuant to that statute. As set forth hereafter, we will reverse the district court's order.

The underlying controversy arises out of Chrysler's agreement on February 23, 1976 to sell its Airtemp Division to defendant Fedders Corporation for $18 million cash, a promissory note of $10.5 million, delivery of 1.5 million shares of Fedders Series B preferred stock, and the assumption by Fedders of certain disclosed liabilities of Airtemp. Fedders, charging that the Airtemps assets had been overstated and its losses understated, suspended payment of interest on the promissory note and discontinued payment of dividends on the preferred stock. Chrysler then initiated a series of lawsuits of which this is the seventh,*fn1 alleging that Fedders and several of its officers and directors, also named as defendants (jointly referred to as Fedders), engaged in a fraudulent conspiracy to acquire the assets of Airtemp without paying Chrysler the full agreed upon consideration.

In the instant complaint filed in the District of New Jersey on the basis of diversity of citizenship, Chrysler alleges, inter alia, that Fedders liquidated and converted the Airtemp assets into cash and used the cash to discharge mortgages and liens on property owned by Fedders in Edison, New Jersey. The complaint also alleges violations of section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), in connection with securities transferred under the purchase agreement. Chrysler seeks compensatory damages in the amount of $85 million, punitive damages, and the imposition of either a constructive trust or an equitable lien upon the Edison property. Since the object of the action includes the enforcement of a lien upon New Jersey real property, Chrysler filed a notice of lis pendens pursuant to N.J. Stat. Ann. § 2A:15-6, which provides for the filing of such a notice in any action "the object of which is to enforce a lien, other than a mechanic's lien, upon real estate or to affect the title to real estate or a lien or encumbrance thereon."

Fedders then moved to dismiss, transfer, or stay the action and to vacate the notice of lis pendens. The district court denied Fedders' motion in all respects but one; it granted that portion of the motion seeking to vacate the notice of lis pendens, and entered an order directing the clerk of Middlesex County, where the lis pendens notice had been filed, to discharge the notice. On July 14, 1981 this court granted Chrysler's motion for a stay of the district court's order and ordered an expedited appeal.*fn2

In its opinion issued orally, the district court held that the lis pendens statute violated the Fourteenth Amendment by depriving Fedders of a constitutionally protected property right because the statute required neither a pre-filing hearing nor an effective post-filing hearing.*fn3 Chrysler Corporation v. Fedders Corporation, 519 F. Supp. 1252 (D.N.J.1981). In reaching this conclusion the district court found that there was a taking of "something of worth" from the defendant in that the filing of the notice of lis pendens "severely restricts the ability of the defendant in an action to convey realty affected by the notice because he or she cannot convey a title free from the plaintiff's claims." Id. at 1260. The district court, without discussion, referred to "the state action of the county clerk filing the notice of lis pendens." Id.

Having found state action resulting in a deprivation of property, the court applied the factors enunciated in Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903, 47 L. Ed. 2d 18 (1976), to determine whether the procedures afforded defendants under the New Jersey lis pendens statute satisfied the demands of due process. The court found: (1) that those defendants, like Fedders, who have the "present intention of selling their realty" are "seriously affected by the filing of the lis pendens" because, given the length of time the land will be the subject of litigation, "it is unlikely that any purchaser can be found who would be willing to buy the property, even at a discounted price," 519 F. Supp. at 1262; (2) that the risk of erroneous deprivation is "great" because "even a meritless complaint could tie up the defendant's land for a significant period of time without any means of removing the lis pendens," id. at 1263; (3) that plaintiff also has an "important interest" which "may be significantly damaged" either because unique property may be conveyed or because it seeks to hold "whatever security it can in order to be fully compensated for its injuries," id. at 1262; and (4) that the lis pendens procedure protects significant governmental interests "by assuring courts of control over the subject matter of real property litigation," id. at 1263. The court concluded that the lis pendens provision does not satisfy the requirements of due process because "it fails to make any meaningful accommodation for the legitimate interests of the defendant whose property is affected." Id. at 1264. The court noted, in particular, "the (statute's) failure to require the plaintiff to make even a minimal showing of entitlement to the rights created by the filing of the notice of lis pendens at a meaningful time either before or closely following the filing of the notice." Id.

On appeal, Chrysler presents three arguments. First, it urges that there is no deprivation of a property interest because a notice of lis pendens does not affect the owner's possession, use or enjoyment of real property, but merely prevents a seller from withholding the fact that there are adverse claims to the realty. In this connection, it argues that Fedders has no constitutionally protected right to alienate the property to a bona fide purchaser free of adverse claims. Second, Chrysler contends that there is no state action in this case because neither the existence of a state law authorizing the filing of a notice of lis pendens nor the fact that the notice is recorded by a ministerial official constitutes state action. Finally, Chrysler argues that even if Fedders has been deprived of a property interest, the procedures and protections afforded defendants under the lis pendens provision satisfy due process standards because the lis pendens provisions are fundamentally fair and represent an acceptable accommodation of the competing interests of the parties.

II.

The Doctrine of Lis Pendens

Under the common law doctrine of lis pendens, the mere filing of a law suit affecting property imparted constructive notice of the pendency of the suit; one who acquired the property from a party litigant while the suit was pending took the property subject to the outcome of the action, despite having received no actual notice. See, e.g., Haughwout & Pomeroy v. Murphy, 22 N.J. Eq. 531, 544 (N.J.1871). The doctrine of lis pendens developed as a "doctrine of courts of equity, of ancient origin,"*fn4 id., because of the need to preserve the subject matter of the litigation so that the courts could render an effective final judgment. See Wood v. Price, 79 N.J. Eq. 620, 622, 81 A. 983, 984 (N.J.1911); Wendy's of South Jersey, Inc. v. Blanchard Management Corp., 170 N.J.Super. 491, 496-97, 406 A.2d 1337, 1339-40 (Ch.Div.1979). The genesis of the doctrine has been described as follows:

At early common law the principle that a judgment was binding only upon parties to an action was considered to be axiomatic. When this rule was applied to actions which concerned the title or right to possession of specific property, however, the courts often found themselves in the position of rendering hollow judgments, the subject matter of the litigation having been conveyed to a non-participating party prior to the judgment. It was in response to this somewhat embarrassing situation that the doctrine of lis pendens developed....

Note, Does California's Statutory Lis Pendens Violate Procedural Due Process?, 6 Pac. L.J. 62, 63 (1975) (hereafter referred to as Note, California's Statutory Lis Pendens) (quoting Comment, Abuses of the California Lis Pendens: An Appeal for Legislative Remedy, 39 S.Cal.L.Rev. 108, 109 (1966)).

The hardship wrought by application of the common law doctrine of lis pendens is evident. As Professor Casner noted, "Great hardship often arose due to the inability of the purchaser to discover after reasonable search the existence of a suit affecting the title. Deeds in relation to the land were easily found in the title records provided by the recording acts, but the same was not true with respect to suits and actions." 3 A. J. Casner, American Law of Property § 13.12, at 521 (1952) (footnote omitted). In time, the state legislatures enacted statutes designed to ameliorate the harshness of the common law doctrine. In 1902, New Jersey adopted the predecessor of its current lis pendens statute. Its key feature is the provision that any person claiming an interest in the real estate described in the notice of lis pendens through any defendant in the action as to which the notice of lis pendens is filed "shall be deemed to have acquired the same with knowledge of the pendency of the action, and shall be bound by any judgment entered therein as though he had been made a party thereto and duly served with process therein." N.J.Stat.Ann. § 2A:15-7. Further, until a notice of lis pendens is filed "no action, as to which such notice is required, shall ... be taken to be constructive notice to a bona fide purchaser or mortgagee of ... the affected real estate." N.J.Stat.Ann. § 2A:15-8.

The statute thus significantly alters the common law doctrine by providing a means for purchasers to obtain actual notice of the pendency of the suit. No longer can the mere filing of the lawsuit itself serve as constructive notice to potential purchasers who would take subject to the outcome of the action. See Wood v. Price, 79 N.J.Eq. at 622-23, 81 A. at 984; Schwartz v. Grunwald, 174 N.J.Super. 164, 168, 415 A.2d 1203, 1205 (Ch.Div.1980); Wendy's of South Jersey, Inc. v. Blanchard Management Corp., 170 N.J.Super. at 496, 406 A.2d at 1339. As at common law, however, once the notice of lis pendens is filed, a purchaser of the property takes the property subject to the outcome of the litigation. The filing of a notice of lis pendens "acts as constructive notice to all the world of the pendency of an action involving real property and that a purchaser of that property takes subject to the outcome of the litigation." Wendy's of South Jersey, 170 N.J.Super. at 496, 406 A.2d at 1339.

Under the New Jersey statute, which is set out in full in the Appendix to this opinion, a notice of lis pendens shall be filed in every action instituted in a New Jersey state court or in a federal court sitting in New Jersey if the object of the action "is to enforce a lien, other than a mechanic's lien, upon real estate or to affect the title to real estate or a lien or encumbrance thereon." N.J.Stat.Ann. § 2A:15-6. This provision was recently construed in Polk v. Schwartz, 166 N.J.Super. 292, 298, 399 A.2d 1001, 1004 (App.Div.1979), to mean that the lis pendens statute was applicable where plaintiffs sought the imposition of a constructive trust on property because they alleged that it was acquired by defendants with assets fraudulently acquired from plaintiffs. The court stated, in a case similar to that under consideration here, "(T)here is no doubt that an action to impress a constructive trust on realty affects title to that property, so that a notice of lis pendens may be filed under a statute such as ours." Id.

The notice of lis pendens must identify the action and describe the affected real estate. N.J.Stat.Ann. § 2A:15-6. It can be filed only after the filing of the complaint,*fn5 and must be filed in the "office of the county clerk or register of deeds and mortgages ... of the county in which the affected real estate is situate." Id. Once the notice is filed, the county clerk or register of deeds and mortgages is required to record the notice in a book kept for that purpose and to keep the record book properly indexed and available for examination by interested persons. N.J.Stat.Ann. § 2A:15-12.

The notice of lis pendens can be discharged in several ways: (1) it is discharged automatically after three years from the date of its filing, N.J.Stat.Ann. § 2A:15-11; (2) it may be discharged by order of the court wherein the action is pending if the plaintiff fails to prosecute the action "diligently" or "for other good cause shown," N.J.Stat.Ann. § 2A:15-10; (3) defendant can effect a discharge by giving "such sufficient security as the court having jurisdiction of the action shall direct" where the claim is for the payment of money, N.J.Stat.Ann. § 2A:15-15; (4) if a final judgment is made in favor of the defendant-property owner, the county clerk or register of deeds and mortgages is required to record the substance of the judgment which acts as a discharge "unless the plaintiff takes an appeal ... and files a similar notice of lis pendens ... stating in the notice the object of the appeal or proceedings," N.J.Stat.Ann. § 2A:15-14; (5) the county clerk or register of deeds and mortgages follows a similar procedure upon notification that a judgment made in the action is paid, satisfied or performed, or that the action has been settled by the parties or has been abandoned by the plaintiff. N.J.Stat.Ann. § 2A:15-17.

III.

Constitutional Issues

If Chrysler prevails as to any of its three arguments, i.e., that lis pendens does not constitute deprivation of property, that there is inadequate state action to invoke the Fourteenth Amendment, or that the procedures and safeguards provided are adequate to satisfy the requirements of procedural due process, the decision of the district court invalidating the lis pendens statute must be reversed. Each of Chrysler's three arguments is a constitutional one. Fedders concedes that under the New Jersey interpretation of its own lis pendens statute in Polk v. Schwartz, supra, the statute encompasses the kind of claim asserted by Chrysler in this action and on which the notice of lis pendens was predicated. Thus, we cannot avoid making a constitutional interpretation by seeking a statutory basis for our decision. However, even when a constitutional decision is required, we have been cautioned that constitutional pronouncements should not be rendered in broader terms than required. See Rescue Army v. Municipal Court, 331 U.S. 549, 569, 67 S. Ct. 1409, 1419, 91 L. Ed. 1666 (1947). That advice is particularly instructive in this case because, as noted below, resolution of the first of these issues would require significant extension of existing precedent, and the panel is divided on the state action issue. Thus, we decide this case on the ground that the lis pendens procedure does not violate due process. In light of the district court's holding, it is necessary to address all three issues.

A. Whether the Lis Pendens Constitutes a "Taking."

It is elementary that procedural due process is necessitated only if there has been a taking or deprivation of a protected interest. Board of Regents v. Roth, 408 U.S. 564, 569, 92 S. Ct. 2701, 2705, 33 L. Ed. 2d 548 (1972). In the principal cases from which the law governing procedures which must be accorded to debtors has evolved, the "taking" which resulted from the prejudgment creditor remedy was evident. The debtor was totally and actually dispossessed of the possession, use and enjoyment of property. For example, in Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969), the prejudgment garnishment procedure enabled a creditor to freeze half of the wages of a debtor in the hands of an employer pending the outcome of the litigation on the creditor's claim. In Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556 (1972), the prejudgment replevin procedure allowed a creditor to replevy consumer household goods in which the creditor held a security interest. In North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S. Ct. 719, 42 L. Ed. 2d 751 (1975), the prejudgment garnishment statute allowed the bank account of a debtor to be impounded and put beyond the debtor's use during the pendency of the litigation. See also Finberg v. Sullivan, 634 F.2d 50 (3d Cir. 1980) (en banc) (post-judgment attachment and freezing of bank account); Jonnet v. Dollar Savings Bank, 530 F.2d 1123 (3d Cir. 1976) (Pennsylvania foreign attachment procedures). In contrast to the deprivation which occurred in those cases, under the lis pendens provision at issue here defendant maintains full possession and use of its property. Furthermore, as Chrysler points out, defendant is not prevented from alienating its property.

On the other hand, there is evidence in the record which establishes that a lis pendens impairs the marketability of the property by depriving the owner of the ability to convey clear title while the litigation is pending. Fedders filed an affidavit of a title expert who stated that during the pendency of a filed lis pendens, a title insurance company would not issue a title commitment on a property and a title examiner would not certify the marketability or insurability of the property without an exception for the lis pendens claim. There is some support in both logic and precedent for Fedders' contention that a taking need not involve an actual physical taking of the property. It argues that a deprivation takes place when the free use and enjoyment of the property is affected and that, as in the case of the Edison property, when real property has been acquired for and is being held for resale the most beneficial use of the property lies in its marketability. Therefore it argues, and the district court agreed, that restrictions which practically prevent the free alienation of the property should be considered a taking.

Language in the creditor remedies cases suggests that the need for procedural due process may be triggered by something less than a total deprivation of property. Thus in Fuentes the Court stated that, "(a)ny significant taking of property by the State is within the purview of the Due Process Clause." 407 U.S. at 86, 92 S. Ct. at 1997. Justice Harlan in his concurring opinion in Sniadach also remarked that "(since) this deprivation cannot be characterized as de minimis, (the debtor) must be accorded the usual requisites of procedural due process." 395 U.S. at 342, 89 S. Ct. at 1823.

There is a line of cases involving non-possessory prejudgment real estate attachments in which courts have viewed the impairment of both marketability and mortgageability as a deprivation of a significant property interest within the protection of the Fourteenth Amendment. See Terranova v. Avco Financial Services of Barre, Inc., 396 F. Supp. 1402 (D.Vt.1975) (three-judge court); Bay State Harness Horse Racing & Breeding Association v. PPG Industries, Inc., 365 F. Supp. 1299 (D.Mass.1973) (three-judge court); Gunter v. Merchants Warren National Bank, 360 F. Supp. 1085 (D.Me.1973) (three-judge court); Clement v. Four North State Street Corp., 360 F. Supp. 933 (D.N.H.1973) (three-judge court). But see In re Northwest Homes of Chehalis, Inc., 526 F.2d 505 (9th Cir. 1975), cert. denied, 425 U.S. 907, 96 S. Ct. 1501, 47 L. Ed. 2d 758 (1976); In re The Oronoka, 393 F. Supp. 1311 (D.Me.1975). The reasoning of these cases may be equally applicable to a notice of lis pendens. While a lis pendens does not effect the same degree of deprivation as replevin or garnishment and leaves the owner with some attributes of ownership of the property, it nonetheless operates to restrict the owner's full enjoyment of the property in a significant respect. Since the owner's ability to sell the property is concededly diminished, and a sale may be the principal aim of the owner, a court writing on a blank slate might agree with the district court's conclusion that the lis pendens procedure effects a sufficient taking to warrant due process analysis. We note that the Supreme Court of Connecticut in invalidating Connecticut's lis pendens procedures has reached a similar conclusion. Kukanskis v. Griffith, 180 Conn. 501, 430 A.2d 21 (1980).

As on most constitutional issues, however, we do not write on a blank slate. In Spielman-Fond, Inc. v. Hanson's, Inc., 379 F. Supp. 997 (D.Ariz.1973) (per curiam), summarily aff'd, 417 U.S. 901, 94 S. Ct. 2596, 41 L. Ed. 2d 208 (1974), a three-judge district court held that the filing of mechanic's and materialmen's liens pursuant to Arizona statutes does not amount to a taking of a significant property interest and therefore the statutes do not violate the Fourteenth Amendment by failing to provide for notice and hearing prior to filing the lien. The Spielman-Fond court held that although the effect of the lien would make the owner's ability to alienate the property freely more difficult, because the owners remained in continued physical possession of the property against which the liens were filed, they had not been deprived of actual possession or use of their property as were the debtors in Sniadach or Fuentes. The court stated that although the effect of a lien is to cloud the title to the property and hamper marketability, the right to alienate the property still existed:

If the plaintiffs can find a willing buyer, however, there is nothing in the statutes or the liens which prohibits the consummation of the transaction. Even though a willing buyer may be more difficult to find, once he is found there is nothing to prevent plaintiffs from making the sale to him. The liens do nothing more than impinge upon economic interests of the property owner. The right to alienate has not been harmed, and the difficulties which the lien creates may be ameliorated through the use of bonding or title insurance.

Id. at 999.

Chrysler argues that the holding in Spielman-Fond is dispositive of the taking issue in this case. It correctly points out that a summary affirmance is a disposition on the merits that is binding on the lower courts. Hicks v. Miranda, 422 U.S. 332, 344-45, 95 S. Ct. 2281, 2289, 45 L. Ed. 2d 223 (1975). However, as we have recently noted, "under Mandel (v. Bradley, 432 U.S. 173, 97 S. Ct. 2238, 53 L. Ed. 2d 199 (1977)) and Illinois State Board (of Elections v. Socialist Workers Party, 440 U.S. 173, 99 S. Ct. 983, 59 L. Ed. 2d 230 (1979)), the precedential value of a summary disposition by the Supreme Court is to be confined to the exact facts of the case and to the precise question posed in the jurisdictional statement." Lecates v. Justice of the Peace Court No. 4, 637 F.2d 898, 904 (3d Cir. 1980).

It is manifest that Spielman-Fond compels a holding that the filing of a mechanic's or materialmen's lien does not amount to a taking of property, and the federal courts that have considered this issue since the Supreme Court action have so held. See, e.g., B & P Development v. Walker, 420 F. Supp. 704 (W.D.Pa.1976); In re Thomas A. Cary, Inc., 412 F. Supp. 667 (E.D.Va.1976), aff'd without opinion, 562 F.2d 48 (4th Cir. 1977). But see Barry Properties, Inc. v. Fick Bros. Roofing Co., 277 Md. 15, 353 A.2d 222 (1976) (construing both the state and federal constitutions); Roundhouse Construction Corp. v. Telesco Masons Supplies Co., 168 Conn. 371, 362 A.2d 778 (1975), vacated, 423 U.S. 809, 96 S. Ct. 20, 46 L. Ed. 2d 29 (1975) (remanded to consider whether judgment based upon federal or state grounds), aff'd on remand, 170 Conn. 155, 365 A.2d 393 (1976) (holding that prior decision invalidating Connecticut mechanic's lien statute was based upon both state and federal constitutional grounds and reaffirming prior decision), cert. denied, 429 U.S. 889, 97 S. Ct. 246, 50 L. Ed. 2d 172 (1976) (adequate state ground). A recent indication that the Supreme Court's affirmance in Spielman-Fond has not been undercut by its intervening decisions is given by the Supreme Court's action on the decision of a New York court in Carl A. Morse, Inc. v. Rentar Industrial Development Corp., 56 A.D.2d 30, 391 N.Y.S.2d 425 (1977), aff'd on opinion below 44 N.Y.2d 952, 404 N.Y.S.2d 343, 375 N.E.2d 409 (N.Y.1978), upholding New York's mechanic's lien law on the ground that the filing of a mechanic's lien does not result in the deprivation of any significant property interest and that the procedural safeguards incorporated into the statute " "(effect) a constitutional accommodation of the conflicting interests of the (several) parties.' " 56 A.D.2d 30, 391 N.Y.S.2d at 430 (quoting Mitchell v. W. T. Grant Co., 416 U.S. 600, 607, 94 S. Ct. 1895, 1900, 40 L. Ed. 2d 406 (1974)). The Supreme Court's dismissal of Morse for want of a substantial federal question, 439 U.S. 804, (1978), is considered to be on the merits and binding. Hicks v. Miranda, 422 U.S. 332 at 344-45, 95 S. Ct. 2281 at 2289, 45 L. Ed. 2d 223.

The rationale of Spielman-Fond has been applied beyond the mechanic's lien setting by courts considering non-possessory real estate attachments. Thus, in In re Northwest Homes of Chehalis, Inc., 526 F.2d 505 (9th Cir. 1975), cert. denied, 425 U.S. 907, 96 S. Ct. 1501, 47 L. Ed. 2d 758 (1976), the Ninth Circuit used Spielman-Fond to uphold Washington's non-possessory real estate attachment statute on the ground that the notice of attachment does "nothing more than impinge upon economic interests of the property owner." 526 F.2d at 506 (quoting Spielman-Fond, 379 F. Supp. at 999). Accord, In re The Oronoka, 393 F. Supp. 1311, 1317 (D.Me.1975). This court has also remarked, in dictum, that a statute which permits a municipality to create a lien by filing a claim without a pre-filing hearing is distinguishable from those at issue in Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S. Ct. 1895, 40 L. Ed. 2d 406 (1974) and North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S. Ct. 719, 42 L. Ed. 2d 751 (1975), where the state remedies provided for the deprivation of use of debtor property by a pre-hearing seizure. In Winpenny v. Krotow, 574 F.2d 176, 177 (3d Cir. 1978), we stated that "(under) the (Pennsylvania) Municipal Claims and Tax Liens Act the filing of the claim does not affect the alleged debtor's use of the property, and no interference with that use can take place until the municipality resorts to a judicial foreclosure."

We recognize that the majority of those courts that have considered the constitutionality of similar lis pendens provisions have upheld the statutes on the ground that the filing of a notice of lis pendens does not result in a significant taking of property. See Batey v. Digirolamo, 418 F. Supp. 695 (D.Hawaii 1976); George v. Oakhurst Realty, Inc., 414 A.2d 471 (R.I.1980); Empfield v. Superior Court, 33 Cal.App.3d 105, 108 Cal.Rptr. 375 (1973). See also Debral Realty, Inc. v. DiChiara, 383 Mass. 559, 420 N.E.2d 343 (Mass.1981). The issue is indeed a close one, and Judge Hunter in his concurring opinion makes a highly tenable case for our adoption of a similar position.

However, we should be cautious about extending the Spielman-Fond holding beyond the scope of the precise facts encompassed there for several reasons. In the first place, there is a significant distinction between the situation in which a mechanic's lien is filed and that where a lis pendens is filed. It may be possible to view the restriction on alienability caused by a mechanic's lien, as Fedders argues, as one consented to by the debtor. Certainly it may be viewed as one bargained for between the parties. The labor or materials which are the subject of the lien have presumably enhanced the value of the property. In return, the property owner was aware that nonpayment would subject it to a mechanic's lien, but also that any claim must be filed and suit begun within a limited period of time after the provision of the work or materials. Thus different equities and considerations inhere in the mechanic's lien situation. See Note, California's Statutory Lis Pendens, 6 Pac.L.J. at 67. At least one court, when considering a non-possessory personalty attachment statute, has held that because there has been a "pre-existing property right or relationship" in the case of a mechanic's lien which "gives the creditor special rights and a special interest in the particular property at issue," Spielman-Fond is inapplicable. Briere v. Agway, Inc., 425 F. Supp. 654, 661 (D.Vt.1977) (three-judge court).

Secondly, without the benefit of the reasoning on which the Supreme Court relied in its summary affirmance in Spielman-Fond, it is difficult to determine whether the same considerations are equally applicable in the lis pendens situation. There may be situations in which it would be unrealistic to view a property right as unitary and indivisible, so that a taking or deprivation in the constitutional sense would occur only if the owner is deprived of all of its attributes. In another context, Justice Rehnquist wrote that a "property interest is not a monolithic, abstract concept hovering in the legal stratosphere." Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 160 n.10, 98 S. Ct. 1729, 1735 n.10, 56 L. Ed. 2d 185 (1978). A holding that lis pendens does not entail a taking might impart too narrow a scope to the protection afforded by the Fourteenth Amendment. In light of our ultimate disposition in this ...


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