NO. 05-13-01428-CV

IN THE

FIFTH COURT OF APPEALS

AT DALLAS, TEXAS

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CRAWFORD SERVICES, INC.,

Appellant,

vs.

SKILLMAN INTERNATIONAL FIRM, L.L.C.,

Appellee.

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Appealed from the 95th District Court of Dallas County, Texas

Amicus Curiae Brief on Behalf of Texas Construction Association in Support of Appellant

Richard Gary Thomas Texas Bar No. 19865500 rgthomas@tfandw.com THOMAS, FELDMAN & WILSHUSEN, LLP 9400 N. Central Expressway, Suite 900 Dallas, Texas 75231 Telephone: (214) 369-3008 Facsimile: (214) 369-8393 ATTORNEYS FOR TEXAS CONSTRUCTION ASSOCIATION

ACCEPTED05-13-01428-CV

FIFTH COURT OF APPEALSDALLAS, TEXAS

4/17/2014 2:22:22 PMLISA MATZ

CLERK

i.

TABLE OF CONTENTS

TABLE OF CONTENTS………………………………………………………………….i TABLE OF AUTHORITIES..……………………………………..………………….ii, iii ISSUE PRESENTED BY AMICUS CURIAE……………………………………………1 IDENTITY OF AMICUS………………...……………………………………….1, 2, 3, 4 STATEMENT OF FACTS AND SUMMARY OF ARGUMENT……………………….4 ARGUMENT……………………………………………………………………………...4

I. History of Mechanic’s Liens…………………………………………….5, 6

II. Fundamental Purpose of Mechanic’s Liens……………………………..6, 7

III. Meaning of the Word “Security”…………………….……………….7, 8, 9

IV. The Texas Lien Statutes……………………………………………9, 10, 11

V. Effect of Trial Court’s Ruling……..………………………….11, 12, 13, 14 CONCLUSION AND PRAYER…………………………………………………….14, 15

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TABLE OF AUTHORITIES

Cases

Bob DeGeorge Associates, Inc. v. Hawthorn Bank, 377 S.W.3d 592 (Mo. banc 2012) ................ 7

Connolly Develop., Inc. v. Sup. Ct. of Merced Cty., 553 P.2d 637 (Cal. 1976).............................. 7

First Nat. Bank in Dallas v. Whirlpool Corp., 517 S.W. 2d 262 (Tex. 1974).............................. 11

In Re Fontainebleau Las Vegas Holdings, 289 P.3d 1199 (Nev. 2012)................................. 5, 6, 7

In Re: Waterpoint Intern LLC, 330 F.3d 339 (5th Cir. 2003) .................................................. 10, 11

Moore-Mansfield Const. Co. v. Indianapolis, N.C.& T. Ry. Co, 101 N.E. 296 (Ind. 1913)...... 5, 6

Smith v. Gunniss, 144 P.2d 186 (Mont.1943) ................................................................................. 7

Vanderbilt Mortg and Finance Inc. v. Flores, 746 F. Supp. 2d 819 (S.D. Texas 2010)…….10, 11

Williams Bros. Const. v. Vaughn, 631 P.2d 688 (Mont. 1981)....................................................... 7

Constitutional Provisions Tex. Const. Art. XVI, § 37…………………………………………………………………9

Statutes

Gammel, Hans Peter Mareus Neilsen. The Laws of Texas, 1822-1897 Volume 8, Book, 1898; digital images, p. 927-928 (http://texashistory.unt.edu/ark:/67531/metapth6731/ : accessed April 10, 2014), University of North Texas Libraries, The Portal to Texas History, http://texashistory.unt.edu; crediting UNT Libraries, Denton, Texas. ..................................... 10

Tex. Prop. Code Ann. § 53.001 et seq………………………………………...…..…10, 14 Tex. Rev. Civ. Stat. Ann. arts. 5452 - 5472e (Vernon 1961)….………………………...10

iii

Rules

Tex. R. App. P. 11…………………………………………………………………………………..1

Secondary Sources

Black's Law Dictionary, 4th Rev. Ed. 1968 ................................................................................. 7, 8

E. Youngblood, Youngblood On Texas Mechanic’s Liens, James Publishing, Inc. (1999)……………………………………………………………………………….5, 6, 7, 9, 10

Jimmie Hinze & Andrew Tracey, The Contractor-Subcontractor Relationship: The Subcontractor’s View, Vol. 120 J. Const. Eng’g & Mgmt. 274 (Issue 2 1994) (available at www.bizjournals.com/tampabay/stories/2001/03/12/focus6.html) ............................................ 2

Keisha Rutledge, Subcontractors Building Recognition on the Job, Tampa Bay Bus. J. (Mar. 12, 2001) ........................................................................................................................................... 2

Student Author, Mechanics’ Liens And Surety Bonds in the Building Trades, 68 Yale L.J. 138 (1958).............................................................................................................................. 3, 5, 7, 8

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Amicus Curiae, Texas Construction Association (“TCA”), offers this brief in

support of Appellant, Crawford Services, Inc. in accordance with Tex. R. App. P. 11.

ISSUE PRESENTED BY AMICUS CURIAE

Should the Trial Courts be given discretionary authority whether or not to order

foreclosure of perfected mechanic’s liens?

IDENTITY OF AMICUS

The office of the Texas Construction Association (“TCA”) is located in Austin,

Texas. TCA was formed in 1998 and is a conglomeration of subcontractor and material

supplier associations located within Texas. One of its primary purposes is to promote

reasonable laws pertaining to the construction industry in Texas, with an emphasis upon

the rights of subcontractors and material and equipment suppliers to construction

projects. The Board of Directors of TCA is made up of representatives of the following

associations:

1. The American Subcontractors Association of Texas, Inc., the membership of

which is comprised of local Texas chapters of the national American Subcontractors

Association located in (a) North Texas, (b) Houston, (c) San Antonio, (d) Rio Grande

Valley, and (e) Central Texas (in the Waco, Temple, and Killeen, Texas area);

2. Central Texas Subcontractors Association located in Austin, Texas;

3. Drywall and Acoustical Contractors Association located in the Dallas/Fort

Worth, Texas area;

4. Fire Sprinklers Contractors Association of Texas;

5. Mechanical Contractors Association of Texas;

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6. National Electrical Contractors Association –Texas;

7. Painting & Decorating Contractors of America;

8. Plumbing-Heating-Cooling Contractors of Texas;

9. Precast Concrete Manufacturers Association;

10. Southwest Terrazzo Association. 11. Texas Glass Association; 12. Texas Masonry Council;

13. Texas Structural Steel Institute;

14. Texas Crane Owners Association; and

15. Texas Iron Workers Employers’ Association.

In addition to these associations, TCA membership also includes numerous individual

subcontractor and material supplier companies located throughout Texas.

TCA members include the whole spectrum of businesses including large, midsize

and small closely held corporations as well as sole proprietorships. These members

provide labor and materials on construction projects all over Texas. Unknown to many

people outside of the construction industry, subcontractors commonly perform

approximately 80-90% of the work on commercial construction projects like the project

at issue in this case.1 This has been the case for quite some time.2 Subcontractors furnish

1 Jimmie Hinze & Andrew Tracey, The Contractor-Subcontractor Relationship: The Subcontractor’s View, Vol. 120 J. Const. Eng’g & Mgmt. 274 (Issue 2 1994) (available at www.bizjournals.com/tampabay/stories/2001/03/12/focus6.html); Keisha Rutledge, Subcontractors Building Recognition on the Job, Tampa Bay Bus. J. (Mar. 12, 2001).

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the great majority of the materials and provide most of the skilled trade workers and

payroll to build improvements to property owned by others.

It is the subcontractors and material suppliers, therefore, that rely heavily upon

Mechanic’s Liens for security of payment for the labor and materials they provide

amounting to 80%-90% of the work in this country. For sure, there are very large

subcontractors as well as mid-sized ones. Small family-owned or closely held companies,

however, comprise the large majority of the subcontracting industry. Many of them are

small sole proprietorships. These are an important part of the small businesses that are the

backbone of Texas, and indeed this nation’s, economy.

These smaller subcontractors, however, are ill equipped to sustain losses because

of non-payment for the work they provide to construction projects. One bad monetary

loss could cause many of them to go out of business. These are the companies that will

feel the effect if the trial court’s ruling is allowed to stand.

In essence, many smaller subcontractors put the very existence of their companies,

and indeed their family’s livelihoods, “on the line” each time they perform work on a

construction project. This is the very reason why Mechanic’s Liens were adopted in this

country: To provide security of payment to those building this country. The trial court’s

refusal to order foreclosure of the perfected Mechanic’s Lien in this case strips away that

assurance for subcontractors (and general contractors as well). That is why TCA submits

2 Student Author, Mechanics’ Liens And Surety Bonds in the Building Trades, 68 Yale L.J. 138 (1958)

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this brief through the undersigned attorneys who have been compensated for their time by

TCA.

STATEMENT OF FACTS AND SUMMARY OF ARGUMENT

The trial court found that the Appellee (“Defendant”) is indebted to Appellant,

Plaintiff in the trial court, for labor and materials to improve defendant’s real property.3

The trial court also found that Plaintiff took all steps necessary in a timely manner to

perfect a mechanic’s and materialmen’s lien (“Mechanic’s Lien”).4 Despite those

findings, the trial court made the incredibly remarkable decision to refuse to order

foreclosure of Plaintiff’s Mechanic’s Lien. In doing so, the trial court ignored the basic,

and indeed the most fundamental purpose of Mechanic’s Liens: To provide security to

contractors and subcontractors for the payment of labor and materials used to improve

the owner’s property. The trial court’s ruling unnecessarily shifts risks onto

subcontractors who are ill equipped to bear them. These new risks will be recognized by

increased pricing causing the costs of construction to correspondingly increase. The

result will be fewer construction projects being built. The ruling will adversely affect the

construction industry and Texas’ economy as a whole. Accordingly, the trial court

holding should be reversed.

ARGUMENT To best understand the basic purpose of Mechanic’s Liens, one must understand

the history of why such liens were created.

3 See trial court’s Findings of Fact and Conclusions of Law (CR 1:281-285). 4 See trial court’s Findings of Fact and Conclusions of Law (CR 1:284-285).

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I.

History of Mechanic’s Liens.

A. In General. The first known concept of a Mechanic’s Lien was in ancient

Roman Law.5 Mechanic’s Liens were unknown under English common law, but

something very similar to them was allowed under the civil law in countries such as

France, Belgium and Spain.6

B. In The United States. In the beginning of this country, and well before the

District of Columbia was created, the nation’s capitol was in the State of Maryland.

President George Washington appointed Thomas Jefferson and James Madison, among

others, to serve on a commission to encourage the development of the City of

Washington.7 That commission realized that those constructing the vast improvements

needed for the desired development of the city must be given financial security in order

to provide an incentive for such an immense amount of construction. The outgrowth of

that commission was the adoption by the State of Maryland in 1791 of the first

5 In Re Fontainebleau Las Vegas Holdings, 289 P.3d 1199, 1210 (Nev. 2012). 6 Moore-Mansfield Const. Co. v. Indianapolis, N.C.& T. Ry. Co, 101 N.E. 296, 301 (Ind. 1913); In Re Fontainebleau Las Vegas Holdings, 289 P.3d at 1210; E. Youngblood, Youngblood On Texas Mechanic’s Liens, § 101.2 (p.1-5) James Publishing, Inc. (1999). 7 Moore-Mansfield Const. Co. v. Indianapolis, N.C.& T. Ry. Co, 101 N.E. 296, at 301; In Re Fontainebleau Las Vegas Holdings, 289 P.3d 1199, at 1210; Student Author, Mechanics’ Liens And Surety Bonds in the Building Trades, 68 Yale L.J. 138 Fn. 14 (1958).

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Mechanic’s Lien law in the United States.8 Today, all fifty states have Mechanic’s Lien

law statutes.9

II.

Fundamental Purpose of Mechanic’s Liens.

The basic purpose of Mechanic’s Lien laws is to provide a way for contractors and

subcontractors to get security of payment for the work and materials they provide to

improve the real property of others. It is security for the credit extended to the owner of

the real property that was improved. That security is in the form of a lien that can be

foreclosed upon should the owner fail to pay for the improvements to its real property.

This is established by the historical purpose of the first Mechanic’s Lien law adopted in

this country.

The commission appointed by President George Washington for encouraging the

development of the City of Washington adopted a “memorial” in 1791 expressing the

reason for recommending the adoption by Maryland of a Mechanic’s Lien law. It states in

part as follows:

Your memorialists conceive it would encourage master-builders to contract for the erecting and furnishing of houses for certain prices agreed on, if a lien was created by law for their just claim on the house erected, and the lot of ground on which it stood.10

8 In Re Fontainebleau Las Vegas Holdings, 289 P.3d at 1210; Moore-Mansfield Const. Co. v. Indianapolis, N.C.& T. Ry. Co, 101 N.E. at 301; E. Youngblood, Youngblood On Texas Mechanic’s Liens, § 101.2 (p.1-5) James Publishing, Inc. (1999). 9 In Re Fontainebleau Las Vegas Holdings, 289 P.3d at 1210; E. Youngblood, Youngblood On Texas Mechanic’s Liens, § 101.3 (p.1-5) James Publishing, Inc. (1999). 10 E. Youngblood, Youngblood On Texas Mechanic’s Liens, § 101.3 [a] (p.1-5) James Publishing, Inc. (1999)(Emphasis supplied).

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Historically, therefore, the essential function of Mechanic’s Liens is to provide

security of payment for labor and materials to persons improving the real property of

others. Today, this remains the essential function of Mechanic’s Lien laws. In In Re

Fontainebleau Las Vegas Holdings,11 the Supreme Court of Nevada held:

Legislators have created a means to provide contractors secured payment for their work and materials – “contractors are generally in a vulnerable position because they extend large blocks of credit; invest significant time, labor and materials into a project; and have any number of workers vitally depend upon them for eventual payment.”

Indeed, it appears well recognized generally that the raison d’etre of Mechanic’s

Lien laws is to create security for contractors and subcontractors for payment for their

work and materials.12 If Mechanic’s Liens create a security or provides secured payment

for contractors and subcontractors, one must examine precisely what a security or

secured payment means in the general context of liens.

III.

Meaning of the Word “Security”

What does the word “security” mean in the context of liens on real property?

Black’s Law Dictionary13 defines “security” in general as:

11 289 P.3d 1199, at 1210, (citing Lehrer McGovern Bovis v. Bullock Insulation, 197 P.3d 1032, 1041 (2008) [citing Connolly Develop., Inc. v. Sup. Ct. of Merced Cty., 553 P.2d 637, 653 (Cal. 1976) (Emphasis supplied)]. 12 See, Bob DeGeorge Associates, Inc. v. Hawthorn Bank, 377 S.W.3d 592, 598 (Mo. banc 2012); Williams Bros. Const. v. Vaughn, 631 P.2d 688, 690, (Mont. 1981) (quoting Smith v. Gunniss, 144 P.2d 186, 189, (Mont.1943); Student Author, Mechanics’ Liens And Surety Bonds in the Building Trades, 68 Yale L.J. 138, 141 (1958); E. Youngblood, Youngblood On Texas Mechanic’s Liens, § 101.3 [b] (p.1-6) James Publishing , Inc. (1999). 13 Black’s Law Dictionary, 4th Rev. Ed. 1968

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. . . The term is usually applied to an obligation, pledge, mortgage, deposit, lien etc., given by a debtor in order to make sure the payment or performance of his debt, by furnishing the creditor with a resource to be used in case of a failure in the principal obligation . . . . 14

How can a Mechanic’s Lien be a resource to be used in case of non-payment if it is not

foreclosed upon? The answer is it cannot be such a resource without foreclosure. In that

case, the lien does not provide the basic function of a “security.”

The author of Mechanic’s Liens And Surety Bonds in the Building Trades, best

explained the fundamental mission of Mechanic’s Liens in the construction industry as

follows:

A mechanic’s lien is, essentially, the right of a builder to seek a judicial sale of the owner’s property in order to satisfy unpaid claims. . . . So long as the lienor remains unpaid, he is entitled to the security afforded by the property; consequently, he may institute foreclosure proceedings and, along with other lien claimants, share in any resulting distribution of proceeds.15

The basic purpose of a Mechanic’s Lien, therefore, is to provide the means for the

unpaid contractor to foreclose upon the owner’s real property, selling it at a judicial sale,

and applying the proceeds of that sale to the debt owed the contractor. That is what

security means in the context of Mechanic’s Liens. This is universal in all fifty states.

How can this fundamental mission of Mechanic’s Liens be met when all necessary steps

were timely taken by the claimant to perfect a Mechanic’s Lien, but the court refuses to

order a judicial sale of the liened property? Refusal to order foreclosure denies

14 Id., (Emphasis supplied). 15 Student Author, 68 Yale L.J. 138, 141 (1958)

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Mechanic’s Liens claimants the security, i.e., the resource for payment, that is the

underlying mission of Mechanic’s Liens. The trial court’s ruling in this case is in direct

conflict with the very purpose of the Mechanic’s Lien laws. It should not stand. It

should be overruled.

IV.

The Texas Lien Statutes

Mechanic’s Liens in Texas have the same primary purpose as Mechanic’s Liens

generally in the other 49 states. The first Texas Mechanic’s Lien Law appeared in 1839

when Texas was an independent nation or republic. This was the foundation that molded

the present statutory lien scheme of the State of Texas.16 After becoming a state of the

United States, Texas built upon the original statute by passing various Mechanic’s Lien

statutes.17 In 1877, the State of Texas adopted Tex. Const. Art. XVI, § 37 that is

currently in effect as follows:

Mechanic’s, artisans, and material-men of every class, shall have a lien upon the buildings and articles made or repaired by them for the value of their labor done thereon or material furnished therefore; and the Legislature shall provide by law for the speedy and efficient enforcement of said liens.

Accordingly, in 1878 the Texas Legislature passed a new Mechanic’s Lien statute

that stated, among other things, that the statute was to, “secure payment for labor done,

16 E. Youngblood, Youngblood On Texas Mechanic’s Liens, § 102.1 (p.1-6) James Publishing, Inc. (1999). 17 See generally, E. Youngblood, Youngblood On Texas Mechanic’s Liens, §§ 102 – 103.2 (p.1-6) James Publishing, Inc. (1999) for an outline of the history of Texas Mechanic’s and Materialman’s legislative statutes.

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lumber, material, or fixtures furnished for construction or repairs.”18

The Hardeman Act19 is the foundation for the Mechanic’s Lien statute of today. It

was passed in 1961 and was basically codified in 1983 into the present Chapter 53 of the

Texas Property Code20 that has been amended from time to time.21 Like the first

mechanic’s lien statute adopted in this country, it is designed to provide secured payment

for people expending labor and materials to improve the property of others. Just like the

rest of the states, the fundamental purpose of the Texas Mechanic’s Lien statute, “is to

secure payment for those who furnish labor or materials in connection with the

construction of improvement to real property . . .”22 It follows that Texas Mechanic’s

Liens have the same general purpose as Mechanic’s Liens in the other states; namely, to

create security for those improving the property.

The only way for Texas’ Mechanic’s Lien statute to function as security for

payment is for courts to institute foreclosure of the Mechanic’s Lien through a judicial

foreclosure sale of the owner’s real property. Indeed, in construing the Hardeman Act

that was codified in today’s Chapter 53 of the Texas Property Code, the Texas Supreme

Court held that, “ . . .[T]he very nature of the Hardeman Act . . . is intended to encompass

18 Gammel, Hans Peter Mareus Neilsen. The Laws of Texas, 1822-1897 Volume 8, Book, 1898; digital images, p. 927-928 (http://texashistory.unt.edu/ark:/67531/metapth6731/ : accessed April 10, 2014), University of North Texas Libraries, The Portal to Texas History, http://texashistory.unt.edu; crediting UNT Libraries, Denton, Texas. (Emphasis supplied). 19 Tex. Rev. Civ. Stat. Ann. Arts. 5452 – 5472e (Vernon 1961). 20 Tex. Prop. Code Ann. § 53.001 et seq. 21 E. Youngblood, Youngblood On Texas Mechanic’s Liens, §§ 103.2,[l ] (p.1-15) & 103.2[q] (p. 1-17) James Publishing, Inc. (1999). 22 In re: Waterpoint Intern LLC, 330 F.3d 339, 343 (5th Cir. 2003); Vanderbilt Mortg. and Finance, Inc. v. Flores, 746 F. Supp. 2d 819, 829 (S.D. Texas 2010). (Emphasis supplied).

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realty and [certain categories of personal property] . . . 23 How can a perfected

Mechanic’s Lien secure payment to the contractor without a foreclosure of the liened

property? A Mechanic’s Lien intended to provide security for a debt is no security at all

when foreclosure of that lien is denied. The Mechanic’s Lien must be foreclosed to

perform its primary charge.

The trial court’s ruling in this case thwarted the very reason Texas Mechanic Liens

exist. The trial court removed the mechanics lien as a security for the payment of labor

and material furnished by the contractor-Plaintiff. The removal of that security is at

counter purposes with the fundamental purpose of the Texas Mechanic’s Lien law. The

purpose of that statutory scheme is to affirmatively provide security, not to remove it.

Instead, the trial court should have ordered a judicial sale of the owner’s property

and applied the proceeds to the owner’s debt to the Plaintiff “to secure payment for

[contractors and subcontractors]” who improve the real property of others.24 That would

have fulfilled the purposes of the Texas Mechanic’s Lien laws. Since the trial court did

the opposite, the ruling of the trial court should be rejected.

V.

Effect of Trial Court’s Ruling

What is the effect if the trial court’s ruling is allowed to stand? That may be

explained by using an analogy. Mechanic’s Liens are in many ways analogous to deed of

23 First Nat. Bank in Dallas v. Whirlpool Corp., 517 S.W. 2d 262, 266 (Tex. 1974). 24 In re: Waterpoint Intern LLC, 330 F.3d 339, 343 (5th Cir. 2003); Vanderbilt Mortg. and Finance, Inc. v. Flores, 746 F. Supp. 2d 819, 829 (S.D. Texas 2010).

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trust liens (or mortgages) used in the purchase of a house. They both serve the function as

being security for the payment of a debt. 25

In the case of a purchase of a house, the homeowner borrows money to buy the

house evidenced by a promissory note that contains monthly payment terms of how the

homeowner repays the lender. The deed of trust lien is the lender’s security for the debt

represented by the promissory note. If the homeowner fails to make those monthly

payments, the lender forecloses its deed of trust lien and causes the house to be sold at

public auction. Afterward, the proceeds realized from the public sale of the house are

applied to the homeowner’s debt to the lender. The right to foreclosure of their security is

understood to be a “given” in the home lending industry today and is a fundamental

factor in the decision to make residential purchase money loans.

Imagine what would happen to the home building industry if it should be

determined that the foreclosure sale of the house was dependent upon the mere discretion

of a trial judge. The certainty of the right to foreclose would be exchanged for the

uncertainty of the mere discretion of a trial judge. Lenders could no longer rely upon the

security for their home loans because a trial judge may elect not to foreclose upon the

house in the case of a default.

Lenders would then make substantially fewer purchase money home loans. That

would result in many people being unable to buy homes and the home building industry

25 Deed of trust liens may be judicially foreclosed or non-judicially foreclosed while Mechanic’s Liens are only judicially foreclosed. Regardless of the method of foreclosure, however, they are both liens that are forecloseable. The manner of foreclosure is unimportant for the purpose of this argument.

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constructing many fewer homes, causing many to lose their jobs. Further, the value of

people’s homes would then be substantially less because of fewer potential buyers,

causing the value of the individual estates of the public to decrease. The loss of certainty

of a foreclosure sale of the security would have a chilling effect on the economy and

people’s lives. What good is a deed of trust lien that is not foreclosed upon when a

default occurs? A lien intended to provide security is no security at all when foreclosure

of the lien is denied.

The loss of certainty of foreclosure of perfected Mechanic’s Liens operates the

same way for the construction industry. Texas contractors for 175 years, like their

counterparts in other states, depended upon Mechanic’s Liens to secure payment for the

labor and materials provided to improve the property of owners. General contractors and

subcontractors understand that if they are unpaid, and perfect their claim for a

Mechanic’s Lien, they can count upon foreclosure of that lien and payment of the

proceeds of a judicial sale of the owner’s property in payment for the debt owed to them.

Frankly, that has been considered a “given” in the construction industry. It is still

considered a “given” today. Contractors and subcontractors rely upon their rights to

foreclose a perfected Mechanic’s Lien in making business decisions.

If foreclosure of their Mechanic’s Liens becomes discretionary with trial judges,

contractors and subcontractors can no longer depend upon that security for payment. The

certainty of foreclosure is exchanged for the uncertainty of the mere discretion of a trial

judge. Their risk of non-payment is now increased.

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When business risks are increased, prices are increased to reflect that risk. That

will cause construction costs to increase. When construction costs increase, there will be

fewer commercial buildings, warehouses, pipelines, tenant finishes, apartments,

condominiums, and residential homes built. That means there will be a reduction of

construction workers, or at best, fewer construction jobs created. That, in turn, will have a

ripple effect upon the economy in general. In all, that would be a most negative impact on

the construction industry and the Texas economy in general.

What does society gain in return for this negative effect upon the economy? The

answer is: Nothing, absolutely nothing. There is no benefit to society, whatsoever, for

this loss of certainty of payment. The only effect of the trial court’s ruling is negative for

the Texas economy. The trial court’s ruling should be rejected.

CONCLUSION AND PRAYER

The trial court refused to foreclose upon Plaintiff’s perfected Mechanic’s Lien. In

doing so, it appears that the sole focus of the trial court was upon the single word “may”

in Tex. Prop. Code §53.154. The trial court exercised “tunnel vision” by focusing upon

only one small “tree” of a very large forest of a great many large trees.

The trial court’s decision making process must not have considered the centuries -

old fundamental reason of why Mechanic’s Lien Laws were conceived in this country in

the first place: To provide a high degree of certainty to builders that they would be paid

for their work. The trial court must not have put any weight upon the fact that great

American leaders like Thomas Jefferson and James Madison recommended the adoption

of the very first Mechanic’s Law to fulfill this purpose. The trial court’s reasoning must

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not have focused upon the reason Mechanic’s Liens, in general, exist in this country: To

provide security for payment to contractors through judicial foreclosures.

The trial court must not have considered the 175-year heritage of Mechanic’s Lien

statutes in Texas. It must not have considered that the basic function of the Texas

Mechanic’s Lien statute is to provide contractors assurance of payment. The trial court

must not have considered the Texas Constitutional provision relating to Mechanic’s

Liens. The trial court must not have considered that for over 53 years of the existence of

the current Texas Lien Law statute (the Hardeman Act subsequently codified in Chapter

53 of the Texas Property Code), there has been no case law interpreting this statute that

foreclosure of a fully perfected Mechanic’s Lien is optional.

The trial court’s decision must not have considered the negative impact of its

ruling on the construction industry and the general Texas economy. Finally, the trial court

must not have considered that Texas society receives no benefit, whatsoever, from its

ruling. The only impact is negative.

This leads to only one conclusion: The trial court’s ruling is bad policy for Texas.

TCA respectfully prays that the Court overrule, reverse, and render the trial court’s

ruling.

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Respectfully Submitted,

THOMAS, FELDMAN & WILSHUSEN, LLP /s/ Richard Gary Thomas

Richard Gary Thomas Texas Bar No. 19865500 9400 N. Central Expressway, Suite 900 Dallas, Texas 75231 Telephone: (214) 369-3008 Facsimile: (214) 369-8393

ATTORNEYS FOR THE AMERICAN TEXAS CONSTRUCTION ASSOCIATION

CERTIFICATE OF SERVICE

The undersigned hereby certifies that a true and correct copy of the foregoing instrument was served upon the following counsel Via E-mail, and Certified Mail, Return Receipt Requested, on this 17th day of April, 2014.

Via E-mail: jmweston@bennettWeston.com Also Via Certified Mail Return Receipt Requested: 7008 1300 0001 7021 7135 J. Michael Weston BENNETT, WESTON, LAJONE & TURNER 1603 LBJ Freeway, Suite 280 Dallas, Texas 75234 Counsel for Skillman International Via E-Mail: smhines@cutler-smith.com Also Via Certified Mail Return Receipt Requested: 7008 1300 0001 7021 7142 Stephen M. Hines CUTLER-SMITH, P.C. 12750 Merit Drive Park Central 7, Suite 1450 Dallas, Texas 75251 Counsel for Crawford Services

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Via E-Mail: cwmartin@fordnassen.com Via E-Mail: dltolin@fordnassen.com Requested: 7013 2630 0001 6926 5137 Curtis W. Martin David L. Tolin, Jr. FORD NASSEN & BALDWIN, P.C. One Riverway, Suite 2070 Houston, Texas 77056 Counsel for Associated Contractors of Texas, Inc. – Texas Building Branch /s/ Richard Gary Thomas Richard Gary Thomas