CG AUTOMATION & FIXTURE INC V AUTOFORM INC

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STATE OF MICHIGAN COURT OF APPEALS C.G. AUTOMATION & FIXTURE, INC., FOR PUBLICATION January 20, 2011 Plaintiff-Appellee, v No. 286361 Kent Circuit Court LC No. 07-009314-CK AUTOFORM, INC. AND AUTOLIV A.S.P., INC., Defendants, and KEY PLASTICS, L.L.C., Defendant-Appellant, and CHRYSLER, L.L.C., Defendant-Appellee. Before: MARKEY, P.J., and ZAHRA and GLEICHER, JJ. GLEICHER J. (concurring). I fully concur in the majority opinion, but write separately to express my belief that MCL 445.619(4) renders that section of the molder’s lien act ambiguous. In my view, legislative reconsideration of the statutory language would benefit the tool and die and automotive industries, as well as the legal community. In MCL 445.619(1) and (2), the Legislature clearly and unambiguously commanded that molders seeking an enforceable lien undertake two mandatory actions: “[a] moldbuilder shall permanently record” specified identifying information on every die, mold, or form, subsection (1), and a moldbuilder “shall file a financing statement” under MCL 440.9502, subsection (2). However, at this point the waters of statutory interpretation become muddied. Subsection (3) envisions that a moldbuilder “has a lien on any die, mold, or form identified pursuant to subsection (1).” One reasonable interpretation of this language suggests that even absent the moldbuilder’s filing of a financing statement, the moldbuilder acquires an enforceable lien if it -1- has permanently affixed identifying information on the tool. But subsection (3) then continues, “The information that the moldbuilder is required to record on the die, mold, or form under subsection (1) and the financing statement required under subsection (2), shall constitute actual and constructive notice of the moldbuilder’s lien . . . .” (Emphasis added). This sentence reasonably lends itself to construction in either of two ways. The first is that the combination of permanent moldbuilder identification and the filing of a UCC financing statement together amount to actual and constructive notice of a lien. Alternatively, the Legislature perhaps intended that permanent identification constitutes actual notice, while a filed UCC statement equates to constructive notice; acceptance of this alternate reading would essentially obligate a court to engraft onto the final clause of subsection (3) the notion that the permanent recording and the UCC filing “shall constitute actual and constructive notice[, respectively,] of the moldbuilder’s lien . . . .” (Emphasis added). Adoption of the second alternate reading of subsection (3) thus would ignore the well-established principle of statutory construction that a court “is not free to add language to a statute or to interpret a statute on the basis of this Court’s own sense of how the statute should have been written.” Kirkaldy v Rim, 478 Mich 581, 587 (concurring opinion by Cavanagh, J.); 734 NW2d 201 (2007); see also In re Wayne Co Prosecutor, 232 Mich App 482, 486; 591 NW2d 359 (1998) (emphasizing that “[a] court must not judicially legislate by adding into a statute provisions that the Legislature did not include”). Subsection (4) intensifies the interpretive difficulties presented by the molder’s lien act. That subsection provides that a moldbuilder’s lien attaches “when actual or constructive notice is received.” MCL 445.619(4) (emphasis added). In the estimation of federal bankruptcy Judge Phillip J. Shefferly, who construed the molder’s lien act in In re Plastech Engineered Products, Inc, 418 BR 235, 245 (ED Mich Bankr, 2009), subsections (3) and (4), when read together, render the statute “inescapably ambiguous.”1 Judge Shefferly reasoned: Subparagraph 4 injects an additional element of doubt in construing the statutes by providing that the lien “attaches when actual or constructive notice is received.” The problem caused by this language is that under subsection 3, the references to the information required to be inscribed on the tooling and the financing statement required to be filed are written with the conjunctive and, which suggests that both acts together constitute actual and constructive notice of the lien. However, subsection 4 arguably calls this construction into question by using the disjunctive or between “actual” and “constructive” notice. The disjunctive or in this sentence suggests that there might be actual notice without constructive notice and vice versa. In other words, if the lien can attach when there is only the actual notice provided by the inscription on the tooling, does this mean that attachment can occur without the constructive notice that a UCC financing statement provides? Similarly, if there is only a UCC financing 1 Although this Court may choose to agree with the analysis of a federal court decision, “federal court decisions are not precedentially binding on questions of Michigan law.” American Axle & Mfg, Inc v City of Hamtramck, 461 Mich 352, 364; 604 NW2d 330 (2000). -2- statement that provides the constructive notice, can attachment occur without the actual notice that is provided by the inscription on the tooling? [Id. at 244 (emphasis in original).] Judge Shefferly resolved the statute’s apparent ambiguity by examining its structure, legislative history, applicable case law and secondary sources. Id. at 244-247. He concluded that MCL 445.619 “require[s] a two step process in order to obtain an enforceable lien: the permanent recording of information on the mold or tool, and the filing of a financing statement in accordance with section 9502 of the UCC.” Id. at 247 (emphasis added). Judge Shefferly’s reconciliation of the statutory language is entirely consistent with the result we reach today. Our Supreme Court has emphasized that “a provision of the law is ambiguous only if it irreconcilably conflicts with another provision or when it is equally susceptible to more than a single meaning.” Fluor Enterprises, Inc v Dep’t of Treasury, 477 Mich 170, 177-178 n 3; 730 NW2d 722 (2007) (internal quotation omitted, emphasis in original). I would hold that with regard to whether a molder’s lien exists in the absence of a UCC filing statement, the statutory language is equally susceptible to more than a single meaning. I agree entirely with the sentiments expressed in an article published in the November 2010 Michigan Bar Journal, that the molders lien act is “in desperate need of overhaul,” and that amendment “would foster more predictability in judicial construction and interpretation of the statutory language.” Mears, Amending the Michigan tooling lien statutes, 89 Mich B J 11, p 40 (2010). Nevertheless, I believe that the statute clearly and unambiguously envisions that absent the permanent recording of identifying information, a moldbuilder possesses no lien. /s/ Elizabeth L. Gleicher -3-

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