MASTEC RENEWABLES CONSTRUCTION COMPANY, INC. VS. SUNLIGHT GENERAL MERCER SOLAR, LLC (L-0336-14, MERCER COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1833-15T4

MASTEC RENEWABLES

CONSTRUCTION COMPANY,

INC.,

APPROVED FOR PUBLICATION

Plaintiff-Appellant, February 6, 2020

APPELLATE DIVISION

v.

SUNLIGHT GENERAL MERCER

SOLAR, LLC,

Defendant,

and

MERCER COUNTY IMPROVEMENT

AUTHORITY,

Defendant-Respondent.

________________________________

Argued December 5, 2018 – Decided February 6, 2020

Before Judges Fuentes, Accurso and Moynihan.

On appeal from the Superior Court of New Jersey,

Law Division, Mercer County, Docket No. L-0336-14.

Louis Anthony Modugno argued the cause for

appellant (Mc Elroy Deutsch Mulvaney & Carpenter,

LLP, attorneys; Richard J. Williams, Louis Anthony

Modugno, Eric James Hughes, and Greg Trif, of

counsel and on the briefs).

William Harla argued the cause for respondent (De

Cotiis FitzPatrick Cole & Giblin LLP, attorneys;

William Harla and Thomas A. Abbate, of counsel;

Alice M. Bergen, of counsel and on the briefs).

Florio Perrucci Steinhardt & Cappelli, LLC, attorneys

for amicus curiae Utility & Transportation Contractors

Association of New Jersey, Inc. (Adrienne L. Isacoff,

on the brief).

The opinion of the court was delivered by

FUENTES, P.J.A.D.

SunLight General Mercer Solar, LLC (SunLight) was the general

contractor of a project to construct a renewable solar generating facilit y (SGF)

on the campus of the Mercer County Community College (College). SunLight

hired MasTec Renewables Construction Company, Inc. (MasTec) as the

subcontractor to design and construct the SGF. The Mercer County

Improvement Authority (MCIA) issued bonds in excess of $29,000,000 to fund

the project. SunLight, as the designated owner of the SGF, entered into a

power purchase agreement with the College through which it sold renewable

energy at a fixed price during the term of its lease agreement with the MCIA.

MasTec completed the project and alleged it was owed in excess of

$10,000,000 from Sunlight. When it was unable to resolve this dispute with

Sunlight, MasTec filed a mechanics' lien notice against the MCIA in the

amount $10,250,500. Counsel for the MCIA responded in January 2014 and

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informed MasTec that its mechanic's lien was not valid because the County

Improvement Authorities Law (CIAL), N.J.S.A. 40:37A-44 to -135,

specifically exempts the property of a county improvement authority from

"judicial process." MasTec settled its claims against Sunlight and agreed to

reduce its lien claim to $6,900,000. Thereafter, MasTec filed a complaint

against the MCIA to foreclose on its mechanic's lien to recover the payment

owed by Sunlight. The Law Division granted the MCIA's motion to dismiss

MasTec's foreclosure complaint under Rule 4:6-2(e). The trial court held that

pursuant to N.J.S.A. 40:37A-127, all of MCIA's property is exempt from

judicial process.

In this appeal, MasTec argues its municipal mechanic's lien is

enforceable against the MCIA's SGF project fund pursuant to the Municipal

Mechanics' Lien Law (MMLL), N.J.S.A. 2A:44-125 to -142. Amicus curiae

Utility and Transportation Contractors Association of New Jersey, Inc.

(UTCA) supports MasTec's legal position. MasTec and amicus UTCA seek

that this court declare that a subcontractor on a municipal construction project

can enforce and foreclose on a municipal mechanics' lien against the project

fund held by a county improvement authority. The MCIA urges us to reject

this argument and hold that monies in that fund are exempt from judicial

process.

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In our view, the resolution of this appeal does not lie on MasTec's ability

to foreclose on a municipal mechanics' lien. The threshold question is whether

MasTec has the right to file a valid lien in the first place.

The CIAL defines a county improvement authority as "a public body

politic and corporate constituting a political subdivision of the State[.]"

N.J.S.A. 40:37A-55. Furthermore, "an authority shall not constitute or be

deemed to be a county or municipality or agency or component of a

municipality for the purposes of any other law[.]" N.J.S.A. 40:37A-90. Liens

under the MMLL attach only to the funds held by a "public agency," wh ich the

MMLL defines as "any county, city, town, township, public commission,

public board or other municipality[.]" N.J.S.A. 2A:44-126 -128. The MMLL

does not apply to county improvement authorities. In this light, we hold that

the lien notice MasTec filed against the MCIA is not valid. We thus affirm the

order dismissing the foreclosure complaint as a matter of law under Rule 4:6-

2(e) for reasons other than those expressed by the trial court. See Hayes v.

Delamotte, 231 N.J. 373, 387 (2018).

I

In May 2011, the MCIA issued a request for proposals (RFP) for the

development, design, and construction of an SGF on the grounds of the

College. In response to the RFP, SunLight and Mastec submitted a joint

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proposal. SunLight was "the lead entity" responsible for financing, future

operations, and maintenance. MasTec was "the subcontractor" responsible for

all upfront design and construction work. The MCIA accepted this proposal.

To finance the project, the MCIA agreed to pay SunLight seventy

percent of the fixed costs by issuing federally taxable, county-guaranteed

municipal Series 2011A Local Bonds (Bonds) in the amount of $29,550,000.

These "Public Project Funds" were deposited into a separate account

administered by a designated trustee. SunLight agreed to finance the

remaining thirty percent of the project's fixed costs by providing an equity

contribution of the funds it received from a federal cash grant for solar

developers and contractors (the 1603 Grant Funds). 1

Despite the role of the independent trustee, MasTec alleged in its

foreclosure complaint that the MCIA "exercised control over the Public Project

Funds at all times." On December 1, 2011, the MCIA and the trustee signed

an "Indenture of Trust . . . Securing $29,550,000 COUNTY OF MERCER

GUARANTEED RENEWABLE ENERGY PROGRAM LEASE REVENUE

NOTES AND BONDS, SERIES 2011A AND ADDITIONAL BONDS OF

THE MERCER COUNTY IMPROVEMENT AUTHORITY." Article V of that

1

Section 1603 of the American Recovery and Reinvestment Tax Act of 2009,

26 U.S.C. § 48, directed the United States Treasury Department to provide

grants for certain energy property in lieu of tax credits.

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indenture created: (1) the Project Fund consisting of a bonds' proceeds

account, an account for SunLight's thirty-percent equity contribution and a

restoration security account; (2) the Administrative Fund; (3) the Revenue

Fund consisting of the lease payments from SunLight; (4) the Debt Service

Fund consisting of an interest account, a principal account, and a capitalized

interest account; (5) the County Security Fund encompassing the initial

$3,000,000 from the 1603 Grant Funds to secure payment of the debt service

on the bonds; and (6) the General Fund.

The trustee was directed to pay the costs of the project from the Project

Fund in accordance with a separate lease purchase agreement between the

MCIA, SunLight, and the College. Article V also stated:

Each of the Funds and Accounts created by this

Indenture, other than the Administrative Expense

Account and the Costs of Issuance Account within the

Administrative Fund [and] the Restoration Security

Account within the Project Fund . . . , is hereby

pledged to, and charged with, the payment of the

principal or Redemption Price, if any, of the interest

on the Bonds as the same shall become due.

Article VIII, Section 8.03, entitled, "Liens, Encumbrances and Charges,"

stated in part: "The Authority shall not create or cause to be created and shall

not suffer to exist any lien, encumbrance or charge upon the Trust Estate,

except the pledge, lien and charge created for the security of the Holders of the

Bonds." The "Trust Estate" included the lease revenue payments from

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SunLight, any monies paid through the Mercer County's guaranty, and the

funds and accounts created by the Indenture. The latter did not include the

Administrative Expense Account; the Costs of Issuance Account within the

Administrative Fund; the Restoration Security Account within the Project

Fund; and "any other amounts received from any other source by or on behalf

of the [MCIA] and pledged by the [MCIA] . . . as security for the payment of

the principal, redemption premium, if any, and interest on the Bonds."

The MCIA thereafter executed three agreements with SunLight and the

College dated December 1, 2011: (1) a site license agreement; (2) a lease

purchase agreement; and (3) a power purchase agreement. MasTec was not a

party to any of these agreements. The site license agreement permitted

SunLight to access the College's property to, among other things, construct,

operate, and maintain the SGF.

Under the lease purchase agreement, the MCIA was responsible to fund

the majority of the costs. SunLight was obligated to construct the project, pay

the initial $3,000,000 of its 1603 Grant Funds into the County Security Fund,

and provide the procedure for the MCIA to release payments for project costs.

To receive payments from the Project Fund, SunLight was required to submit

"Draw Papers" to the Trustee that were acknowledged by the College and

acknowledged, as to form only, by the MCIA. The MCIA limited its financing

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to the net amounts received from the issuance of the bonds and expressly

assumed no liability for cost overruns or excess project costs.

The lease purchase agreement: (1) conveyed to SunLight a leasehold

interest in the SGF; (2) obligated SunLight to make periodic lease payments in

amounts sufficient for the MCIA to pay the costs, expenses, and debt service

on the Series 2011A Bond; and (3) granted SunLight an option to purchase the

leased property at the end of a fifteen-year term specified in the power

purchase agreement. The lease also required SunLight to remove or discharge

"any materialman's, mechanics' or construction lien . . . filed against the

Project or any part thereof." The power purchase agreement required SunLight

to sell all of the generated renewable energy to the College at a specified fixed

price during the leasehold. This agreement defined MasTec as the "EPC

[Engineering, Procurement, and Construction] Contractor, a Florida

Corporation and an affiliate of PPM LLC."

On December 21, 2011, SunLight, the designated "Owner," and MasTec,

the designated "Turnkey Contractor," executed a Turnkey Design,

Engineering, Procurement, and Construction Contract (the EPC Contract).

Section 20.6 of the EPC Contract expressly provided that the Turnkey

Contractor

is an independent contractor. Nothing contained in

this Agreement, nor the act of the Parties in submitting

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a joint Proposal in response to the RFP, nor any act of

a Party in pursuing its rights or fulfilling its

obligations under this Agreement, will be construed as

creating a partnership or joint venture relationship

between the Parties, nor shall it be construed as

creating any relationship whatsoever between Owner

and Turnkey Contractor's employees.

In the EPC Contract, MasTec agreed, for a fixed and non-negotiable fee,

to assume and perform SunLight's obligations for designing, permitting,

supplying, constructing, installing, and testing the SGF. MasTec alleged: (1)

the original base price of the EPC Contract was $30,062,500; (2) the price

would be adjusted if the kilowatt capacity increased by a certain percentage, if

the layout or design changed, or if there was a material change to the site ; and

(3) SunLight and the MCIA agreed that the 1603 Grant Funds associated with

the project would be used to pay MasTec for the costs of construction. If

MasTec disputed the payments from SunLight, it could "initiate a [d]ispute

proceeding," which involved good faith negotiations and then arbitration, and

SunLight would have five business days to pay any amount found due and

owing, plus interest.

II

Article 16 of the EPC Contract is denoted "Titles; Liens." In lieu of

quoting at length each of the six carefully drafted subsections, we note that

subsection 16.5 and 16.6 state, in relevant part that: (1) "Turnkey Contractor

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shall in no event assert a Lien on the property of the [College] arising out of or

in connection with the Work"; and (2) "Unless Owner fails to make payment

. . . , Turnkey Contractor shall not directly . . . assert or suffer to exist any Lien

on the SGF, or any part of it, or the Owner's licensed estate."

MasTec alleged that the project was plagued by cost overruns; change

orders; and extensive delays caused by SunLight, the MCIA, and Superstorm

Sandy. These factors significantly increased the project's costs.

Notwithstanding these hurdles, MasTec claimed it completed major

construction on the SGF and submitted its bills and payment applications to

SunLight for $10,250,500 plus $2,650,817.92 for the additional work.

SunLight refused to pay. 2 Consequently, pursuant to the EPC Contract,

MasTec filed a demand for arbitration to adjudicate its dispute with SunLight.

MasTec also filed a municipal mechanics' lien notice with the MCIA for

$10,250,500, an amount that MasTec alleged was greater than the balance of

the Public Project Fund at that time, excluding the 1603 Grant Funds. In

paragraph fifty-two of its verified complaint filed in the Law Division, MasTec

averred that its "Municipal Mechanic's Lien was filed both before the entire

work was performed and the project was completed by Sunlight and before the

2

In its appellate brief, the MCIA asserts that major construction was

completed by October 1, 2013, and that the project is presently operational.

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project was accepted by resolution of the Authority, or within the 60 days

thereafter, in accordance with N.J.S.A. 2A:44-132."

SunLight settled its dispute with MasTec. In a comprehensive

settlement agreement, SunLight agreed to: (1) adjust the EPC Contract 's price

to $29,625,817; (2) wire MasTec an initial cash payment of $4,302,575; (3)

escrow the remaining $2,100,000 of the 1603 Grant Funds "solely in

recognition of the fact that the MCIA has asserted . . . that it [was] owed some

amount of 1603 Grant Funds;" and (4) apply to the U.S. Treasury for more

funding estimated to be approximately $750,000 based on the adjusted contract

price. SunLight also agreed not to contest the validity of MasTec 's lien,

agreed to submit draw papers to the Trustee requesting the release of

$6,900,000 to be paid to MasTec from the Project Fund, and stipulated that

nothing in the settlement agreement could be construed as an admission of fact

or law as to any issue. 3

III

MasTec argues that the trial court erred when it dismissed its complaint

to foreclose on a municipal mechanics' lien for failure to state a cause of action

3

In the brief filed in this appeal, the MCIA claims it is not aware of any

requisitions by SunLight to the Trustee. It has asserted a default against

Sunlight due to its invasion of the 1603 Grant Funds.

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upon which relief can be granted. We disagree, albeit, for reasons other than

those expressed by the Law Division.

Under Rule 4:6-2(e), a motion to dismiss for failure to state a claim must

be denied if, giving plaintiff the benefit of all the allegations asserted in the

pleadings and all favorable inferences, a claim has been established. "At this

preliminary stage of the litigation the court is not concerned with the ability of

plaintiffs to prove the allegation contained in the complaint." Printing Mart-

Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989).

"[T]he test for determining the adequacy of a pleading [is] whether a

cause of action is 'suggested' by the facts." Ibid. (quoting Velantzas v.

Colgate-Palmolive Co., 109 N.J. 189, 192 (1988)). "[A] reviewing court

'searches the complaint in depth and with liberality to ascertain whether the

fundament of a cause of action may be gleaned even from an obscure statement

of claim, opportunity being given to amend if necessary.'" Ibid. (quoting Di

Cristofaro v. Laurel Grove Mem'l Park, 43 N.J. Super. 244, 252 (App. Div.

1957)). "When a motion challenging the legal sufficiency of a complaint is

filed, plaintiff is entitled to a liberal interpretation and given the benefit of all

favorable inferences that reasonably may be drawn." N.J. Dep't of Treasury,

Div. of Inv. ex rel. McCormack v. Qwest Commc'ns Int'l, Inc., 387 N.J. Super.

469, 478 (App. Div. 2006). Under that standard, motions to dismiss "should

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be granted in only the rarest of instances." Printing Mart-Morristown, 116 N.J.

at 772.

We review a dismissal for failure to state a claim pursuant to Rule 4:6-

2(e) de novo, following the same standard as the trial court. Castello v.

Wohler, 446 N.J. Super. 1, 14 (App. Div. 2016). In this context, we accept as

true the complaint's factual assertions. Banco Popular N. Am. v. Gandi, 184

N.J. 161, 165-66, 183-84 (2005). "The court may not consider anything other

than whether the complaint states a cognizable cause of action." Rieder v.

State Dep't of Transp., 221 N.J. Super. 547, 552 (App. Div. 1987). "It is the

existence of the fundament of a cause of action in those documents that is

pivotal; the ability of the plaintiff to prove its allegations is not at issue."

Banco Popular N. Am., 184 N.J. at 183.

Municipal Mechanics' Lien Law

The MMLL, the Public Works Bond Act (Bond Act), N.J.S.A. 2A:44-

143 to -147, and the New Jersey Trust Fund Act (Trust Fund Act), N.J.S.A.

2A:44-148, have historically worked together to protect subcontractors

supplying material or labor on municipal construction projects. Key Agency v.

Cont'l Cas. Co., 31 N.J. 98, 104 (1959) (stating the three Acts had an "obvious

relationship" and "must be construed together"); see also Unadilla Silo Co. v.

Hess Bros., 123 N.J. 268, 277 (1991) (stating MMLL and Bond Act were "to

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be construed together" (quoting Morris Cty. Indus. Park v. Thomas Nicol Co.,

35 N.J. 522, 527 (1961))).

The Bond Act, originally enacted in 1918, L. 1918, c. 75, requires

contractors on public works construction projects to furnish a bond in an

amount equal to or more than the contract price, conditioned on the proper

completion of the work, and payable to all subcontractors for any indebtedness

that may accrue in an amount not exceeding the sum specified in the bond.

N.J.S.A. 2A:44-144. The Trust Fund Act, originally enacted in 1951, L. 1951,

c. 344, provides that any money paid by the contracting public entity to the

contractor shall constitute trust funds in favor of the unpaid subcontractors.

N.J.S.A. 2A:44-148.

The Legislature enacted the present MMLL in 1918. L. 1918, c. 280.

The Supreme Court recounted the MMLL's long history in Unadilla, 123 N.J.

at 275-76 (citations omitted):

In 1891 and 1892, the Legislature enacted the

antecedents of the present Municipal Mechanics' Lien

Law. L. 1891, c. 225, and L. 1892, c. 232. Those

statutes specifically provided laborers or materialmen

with the right to assert a lien on funds in the

municipality's control that had not yet been paid to the

contractor. Initially, it was held that the 1892 act did

not repeal the right of laborers or materialmen to bring

an action against a public body under the general

Mechanics' Lien Law. In 1909, however, the

Legislature amended the statute, L. 1909, c. 171, § 7,

and this Court held [in Key Agency, 31 N.J. at 106,]

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that that amendment indicated the Legislature's

"intention that the act of 1892 should be the sole

means for acquiring a mechanics' lien because of any

public improvement."

The MMLL gives unpaid subcontractors, materialmen, and laborers

having a contractual relationship either with a prime contractor or a

subcontractor, a lien "for the value of the labor or materials, or both, upon the

moneys due or to grow under the contract and in the control of the public

agency." N.J.S.A. 2A:44-128 (emphasis added). The lien acts as security for

payment of the services rendered or improvements made with respect to the

property. The lien only "attaches to funds appropriated for the payment of

such public work and still in the hands of the public agency." Wilson v.

Robert A. Stretch, Inc., 44 N.J. Super. 52, 55 (Ch. Div. 1957) (citing Johnson

v. Fred L. Emmons, Inc., 115 N.J. Eq. 335, 340 (Ch. 1934), aff'd, 119 N.J. Eq.

88 (E. & A. 1935)).

"'Public agency' means any county, city, town, township, public

commission, public board or other municipality in this state authorized by law

to make contracts for the making of any public improvement in any city, town,

township or other municipality." N.J.S.A. 2A:44-126. Counties are also

considered "municipalities" under the MMLL. Herman & Grace v. Bd. of

Chosen Freeholders of Essex Cty., 71 N.J. Eq. 541, 547 (Ch. 1906), aff'd o.b.,

73 N.J. Eq. 415, 417 (E. & A. 1907). However, the State and its agencies are

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not included in the MMLL's definition of "public agency," which is "limited to

counties and conventional municipal corporations." Morris Cty. Indus. Park,

35 N.J. at 528 (dictum) (citing Curtis & Hill Gravel & Sand Co. v. State

Highway Comm'n, 91 N.J. Eq. 421, 432-33 (Ch. 1920)).

The extent of the MMLL's lien protection is limited to the amount the

public agency owes

to the prime contractor at the time the notice of lien

claim is filed or thereafter becoming due. The former

cannot be liable for more than the total amount of the

prime contract, provided it pays the prime contractor

in accordance with the terms thereof and withholds a

sum sufficient to cover lien claims filed, and

satisfaction of the claim cannot be had out of the

public property which is the subject of the project.

[Hiller & Skoglund, Inc. v. Atl. Creosoting Co., 40

N.J. 6, 12-13 (1963).]

The MMLL lien is created by filing a notice with the public agency.

N.J.S.A. 2A:44-129; N.J.S.A. 2A:44-132. Upon receipt of the notice, the

public agency may require the prime contractor to show cause why the claim

should not be paid. N.J.S.A. 2A:44-135. The public agency may deny a lien

claim even if no legitimate objection is made. Bd. of Educ. of Bayonne v.

Kolman, 111 N.J. Super. 585, 588 (Ch. Div. 1970). Alternatively, the public

agency may pay the claim out of the funds in its possession. N.J.S.A. 2A:44 -

136.

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If the public agency refuses to pay the MMLL lien, the lien claimant

may enforce its rights by commencing an equitable action in the superior court

"against the fund," N.J.S.A. 2A:44-137, within a specific time limit, N.J.S.A.

2A:44-138. See Boardwalk Props., Inc. v. BPHC Acquisition, Inc., 253 N.J.

Super. 515, 526 (App. Div. 1991) (finding the Superior Court is a unitary court

and "[t]he jurisdiction of the Chancery Division to adjudicate all controversies

. . . and render both legal and equitable remedies is co-extensive with that of

the Law Division"). "If the public agency is not a corporation, then the county

or municipality under which it is constituted shall be made a party defendant."

N.J.S.A. 2A:44-139.

The process to enforce a MMLL lien is considered a statutory

proceeding in rem, which assumes that the personal liabilities of the prime

contractor against the municipality are not the objects of the action.

Commonwealth Quarry Co. v. Gougherty, 105 N.J. Eq. 642, 649 (Ch. 1930)

During the action, N.J.S.A. 2A:44-140 directs that

[t]he superior court shall determine the validity and

priorities of the liens . . . and the amount due from the

public agency to the contractor under the contract and

from the contractor or subcontractor to the respective

claimants and shall enter judgment directing the

public agency, out of moneys due from it to the

contractor, to pay to the several claimants the sums

found due to them respectively, with interest and costs

upon claims adjudged to be just and valid under this

article.

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In addition, the public agency may "pay into the superior court the amount

which it admits to be due [to] the principal contractor upon the contract. The

contractor or claimants shall not be precluded thereby from seeking judgment

for a further sum." N.J.S.A. 2A:44-141.

Nonetheless, if the claimant neglects to bring an action within the

specified time limit, it will be barred from recovering the value of the lien,

which will be discharged. N.J.S.A. 2A:44-138; N.J.S.A. 2A:44-142(b). The

lien also may be discharged by: (1) a certificate to that effect from the

claimant to the financial officer of the public agency, (2) satisfaction of a

decree in an action to enforce the lien, or (3) final decree in an action to

enforce the lien. N.J.S.A. 2A:44-142.

Notwithstanding a claimant's right to file a MMLL lien, N.J.S.A. 2A:44-

127 states that "[n]othing in this article contained shall affect or impair the

right of a creditor for labor performed or materials furnished to maintain an

action to recover such debt against the person liable therefor." That is,

recovery under the MMLL is not the unpaid subcontractor's sole remedy and

will not affect or impair recovery against a responsible party.

County Improvement Authorities Law

The Legislature enacted the CIAL in 1960. L. 1960, c. 183. Its purpose

was, in part, to allow counties to create a flexible financing vehicle, the county

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improvement authority, that would serve almost any county purpose. N.J.S.A.

40:37A-47.1. The Legislature stated that every authority created under the

CIAL was, among other things, to provide: (1) "public facilities for use by the

State, the county or any beneficiary county, or any municipality in any such

county, or any two or more or any subdivisions, departments, agencies or

instrumentalities of any of the foregoing for any of their respective

governmental purposes"; and (2) "the planning, design, acquisition,

construction, improvement, renovation, installation, maintenance and

operation of facilities or any other type of real or personal property within the

county." N.J.S.A. 40:37A-54(a) and (i).

Accordingly, the CIAL makes every county improvement authority "a

public body politic and corporate constituting a political subdivision of the

State established as an instrumentality exercising public and essential

governmental functions to provide for the public convenience, benefit and

welfare and shall have perpetual succession and, for the effectuation of its

purposes[.]" N.J.S.A. 40:37A-55 (emphasis added). In fact, the MCIA was

created by ordinance of the Mercer County Board of Chosen Freeholders "as a

public body corporate and politic of the State pursuant to and in accordance

with the [CIAL]."

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Most noteworthy here, the CIAL grants each improvement authority

with independent powers:

(b) To sue and be sued;

(c) To acquire, hold, use and dispose of its facility

charges and other revenues and other moneys;

(d) To acquire, rent, hold, use and dispose of other

personal property for the purposes of the authority;

....

(f) . . . to lease to any governmental unit or person, all

or any part of any public facility for such

consideration and for such period or periods of time

and upon such other terms and conditions as it may fix

and agree upon;

....

(i) . . . to make agreements of any kind with any

governmental unit or person for the use or operation

of all or any part of any public facility for such

consideration and for such period or periods of time

and upon such other terms and conditions as it may fix

and agree upon;

(j)(1) To borrow money and issue negotiable bonds or

notes or other obligations and provide for and secure

the payment of any bonds and the rights of the holders

thereof, and to purchase, hold and dispose of any

bonds;

(2) To issue bonds, notes or other obligations to

provide funding to a municipality that finances the

purchase and installation of renewable energy systems

and energy efficiency improvements by property

owners . . . ;

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(k) To . . . accept . . . grants of real or personal

property, money, material, labor or supplies for the

purposes of the authority from any governmental unit

or person, and to make and perform agreements and

contracts and to do any and all things necessary or

useful and convenient in connection with the

procuring, acceptance or disposition of such gifts or

grants;

....

(o) To acquire, purchase, construct, lease, operate,

maintain and undertake any project and to fix and

collect facility charges for the use thereof;

(p) To mortgage, pledge or assign or otherwise

encumber all or any portion of its revenues and other

income, real and personal property, projects and

facilities for the purpose of securing its bonds, notes

and other obligations or otherwise in furtherance of

the purpose of this act;

....

(t) To enter into any and all agreements or contracts,

execute any and all instruments, and do and perform

any and all acts or things necessary, convenient or

desirable for the purposes of the authority . . . subject

to the "Local Public Contracts Law[.]"

[N.J.S.A. 40:37A-55(b) to (t).]

"Public facility" means "any lands, structures, franchises, equipment, or

other property or facilities acquired, constructed, owned, financed, or leased

by the authority or any other governmental unit or person to accomplish any of

the purposes of an authority[.]" N.J.S.A. 40:37A-45(p). "Real property"

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means "lands within or without the State, above or below water, and

improvements thereof or thereon, or any riparian or other rights or interests

therein[.]" N.J.S.A. 40:37A-45(q).

In furtherance of the Legislature's underlying public policy, the CIAL

gives an improvement authority certain tax exemptions. N.J.S.A. 40:37A-85

states that "[a]ll properties of an authority . . . and all public facilities, whether

or not owned by the authority . . . shall be exempt from all taxes and special

assessments of the State or any subdivision thereof." It also states that

[a]ll bonds issued pursuant to this act are hereby

declared to be issued by a political subdivision of this

State and for an essential public and governmental

purpose and to be a public instrumentality and such

bonds, and the interest thereon and the income

therefrom, and all facility charges, funds, revenues

and other moneys pledged or available to pay or

secure the payment of such bonds, or interest thereon,

shall at all times be exempt from taxation except for

transfer inheritance and estate taxes.

[Ibid.]

Particularly relevant to our analysis, the CIAL states:

All property of the authority, except as otherwise

provided herein, shall be exempt from levy and sale

by virtue of an execution and no execution or other

judicial process shall issue against the same nor shall

any judgment against the authority be a charge or lien

upon its property; provided, that nothing herein shall

apply to or limit the rights of the holder of any bonds,

bond anticipation notes or other notes or obligations to

pursue any remedy for the enforcement of any pledge

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or lien given by the authority on its revenues or other

moneys; and provided, further, that nothing herein

shall limit the authority's ability to enter into

partnerships, limited partnerships, joint ventures or

other associations as a general partner, limited partner

or participant therein.

[N.J.S.A. 40:37A-127 (emphasis added).]

Similarly, the CIAL states:

All property of an authority shall be exempt from levy

and sale by virtue of an execution and no execution or

other judicial process shall issue against the same nor

shall any judgment against an authority be a charge or

lien upon its property; provided, that nothing herein

contained shall apply to or limit the rights of the

holder of any bonds to pursue any remedy for the

enforcement of any pledge, mortgage or lien given by

an authority on its facility revenues or other moneys,

or on its real or personal property.

[N.J.S.A. 40:37A-82 (emphasis added).]

IV

MasTec and amicus UTCA argue the trial court erred when it failed to

harmonize the MMLL and the CIAL. Instead, the trial court held that the plain

language in N.J.S.A. 40:37A-127 exempts the execution of municipal

mechanics' liens against county improvement authorities. 4 MasTec and UTCA

4

The record shows the trial court's decision was substantially influenced by

the reasoning in an unpublished opinion from this court. Rule 1:36-3 makes

clear that

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thus argue that funds purposely appropriated for a public works project under

the control of a county improvement authority are private, personal property.

As such, these funds are not subject to the judicial process exemption in

N.J.S.A. 40:37A-127. Furthermore, because the MMLL liens never attach to

the public, real property of any public agency, appellants argue they may

impose a lien confined to the amounts owed to the prime contractor or to the

subcontractor.

MasTec further asserts that judicial process against a county

improvement authority is not per se precluded by the CIAL. According to

MasTec, N.J.S.A. 40:37A-55(a) expressly permits authorities to be sued and

does not prevent an authority from being named in an in rem proceeding as a

necessary party under the MMLL in its capacity as stakeholder and custodian

of the Project Fund. Because the public agency does not have a claim to the

[n]o unpublished opinion shall constitute precedent or

be binding upon any court. Except for appellate

opinions not approved for publication that have been

reported in an authorized administrative law reporter,

and except to the extent required by res judicata,

collateral estoppel, the single controversy doctrine or

any other similar principle of law, no unpublished

opinion shall be cited by any court.

[(Emphasis added).]

None of the exemptions codified in the Rule apply here.

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Project Fund, MasTec argues it is not personally affected by a mandamus-type

judgment directing distribution of those monies. Finally, MasTec argues the

holder of a statutory mechanics' lien has a constitutionally protected property

interest. Thus, the trial court violated its constitutional rights by const ruing

N.J.S.A. 40:37A-127 to foreclose the means of enforcing its municipal

mechanics' lien against the MCIA.

Amicus UTCA maintains that the CIAL is not in conflict with the

MMLL's protections that allow liens to be filed against funds owed to

contractors. According to the UTCA, the trial court's decision vitiates the

MMLL's long history of protecting subcontractors, suppliers, and laborers and

discourages them from participating in public works projects. Pursuing this

line of reasoning, the UTCA argues that MasTec must be able to foreclose on

its lien because the MCIA did not require SunLight to furnish a performance

and payment bond. In citing to Picker v. Bayonne, 60 N.J. Super. 251, 257

(App. Div. 1960), UTCA also argues this action by the MCIA removed the

safety net for subcontractors afforded by the Bond Act.

The MCIA argues that the plain language in CIAL shows that "all

property" is exempt from judicial process and that includes the funds from

bondholders held by a Trustee and controlled by a county improvement

authority. According to the MCIA, the MMLL does not apply to this

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construction project due to the complex financing arrangement between the

authority and the joint venture team of MasTec and SunLight. It argues that

SunLight is the true owner of the project and MasTec is not a subcontractor.

Therefore, the MCIA is merely the financing vehicle for SunLight's lease

payments and the bondholders have a first priority lien.

We review matters of statutory interpretation de novo. Verry v. Franklin

Fire Dist. No. 1, 230 N.J. 285, 294 (2017). "The Legislature's intent is the

paramount goal when interpreting a statute and, generally, the best indicator of

that intent is the statutory language." DiProspero v. Penn, 183 N.J. 477, 492

(2005). Thus, any analysis to determine legislative intent begins with the

statute's plain language. Ibid. "We ascribe to the statutory words their

ordinary meaning and significance and read them in context with related

provisions so as to give sense to the legislation as a whole." Ibid. (citations

omitted). Our authority is bound by clearly defined statutory terms. Febbi v.

Bd. of Review, Div. Emp. Sec., 35 N.J. 601, 606 (1961). Where a specific

definition is absent, "[w]e must presume that the Legislature intended the

words it chose and the plain and ordinary meaning ascribed to those words."

Paff v. Galloway Twp., 229 N.J. 340, 353 (2017).

However, this court's review "is not limited to the words in a challenged

provision." State v. Twiggs, 233 N.J. 513, 532 (2018). A court "can also draw

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inferences based on the statute's overall structure and composition and may

consider the entire legislative scheme of which [the statute] is a part." Ibid.

(alteration in original) (citations omitted). We do not "view [statutory] words

and phrases in isolation but rather in their proper context and in relationship to

other parts of [the] statute, so that meaning can be given to the whole of [the]

enactment." Ibid. (alterations in original) (quoting State v. Rangel, 213 N.J.

500, 509 (2013)). A court must make every effort to avoid rendering any part

of a statute inoperative, superfluous or meaningless. Jersey Cent. Power &

Light Co. v. Melcar Util. Co., 212 N.J. 576, 587 (2013).

"'[S]tatutes that deal with the same matter or subject should be read in

pari materia and construed together as a unitary and harmonious whole.'" Nw.

Bergen Cty. Utils. Auth. v. Donovan, 226 N.J. 432, 444 (2016) (quoting Saint

Peter's Univ. Hosp. v. Lacy, 185 N.J. 1, 14-15 (2005)). Furthermore, "'[t]he

Legislature is presumed to be familiar with its own enactments, with judicial

declarations relating to them, and to have passed or preserved cognate laws

with the intention that they be construed to serve a useful and consistent

purpose.'" Ibid. (alteration in original) (quoting State v. Federanko, 26 N.J.

119, 129-30 (1958)). Thus, unless there are other clues, a court must "presume

that the Legislature intended for its two statutory schemes . . . to generally

work harmoniously, not in conflict with one another." Ibid. Finally, when a

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statute is silent on an issue and both parties have competing interests in how

the statute is interpreted, the reviewing court's "task is to fashion protections

for both interests, if it can reasonably be done, within the four corners of the

statutory scheme." Thomas Grp., Inc. v. Wharton Senior Citizen Hous., Inc.,

163 N.J. 507, 518-19 (2000).

N.J.S.A. 40:37A-127 excludes all of the MCIA's property from

"execution or other judicial process," except "its revenues or other moneys" in

actions brought by "the holder of any bonds, bond anticipation notes or other

notes or obligations" to enforce any pledge or lien. This text can be construed

to show that subcontractors cannot recover against the MCIA's revenues or

other moneys by foreclosure of a municipal mechanics' lien. However, that

construction of the statute does not consider the Legislature's intent in the

MMLL to protect unpaid subcontractors supplying material or labor on

municipal construction projects by enabling them to claim against monies due

to the general contractor payable by the public agency.

Our Supreme Court has rejected an approach that elevates form over

substance when interpreting statutes. Times of Trenton Pub. Corp. v.

Lafayette Yard Cmty. Dev. Corp., 183 N.J. 519, 535-36 (2005). We presume

that the Legislature was aware of the MMLL, which was enacted in 1918,

when it enacted the CIAL in 1960. Thus, the two statutes should be

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considered together. However, when we connect the CIAL with the MMLL,

an ambiguity in N.J.S.A. 40:37A-127 is revealed in the phrase "all property."

The CIAL is silent on what is covered under the phrase "all property" in

N.J.S.A. 40:37A-127. The question therefore becomes whether, in light of the

MMLL's legislative intent, "all property" includes the Project Fund created

from the MCIA's bond issuance and allocated for the SGF project.

"When the statutory language is ambiguous and 'leads to more than one

plausible interpretation,' courts may resort to extrinsic sources, like legislative

history and committee reports." Twiggs, 233 N.J. at 532 (quoting DiProspero,

183 N.J. at 492-93). The CIAL's legislative history of its initial enactment and

of its subsequent amendments provides no assistance here, as there is no hint

that the Legislature ever considered the MMLL in relation to the CIAL or its

judicial process exemption.

The resolution lies not in MasTec's attempt to execute or foreclose a

municipal mechanics' lien, but in its right, or lack thereof, to file a valid lien in

the first place. While mechanics' lien laws may be "liberally construed as to

provisions for enforcement," our Supreme Court has instructed that such laws,

"being of statutory origin and in derogation of the common law, should be

strictly construed with respect to the provisions giving rise to the lien." Morris

Cty. Indus. Park, 35 N.J. at 526 (emphasis added). The Court explained:

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This is really saying no more than that where a statute

imposes a non-contractual obligation or charge, and

one which may result in one party . . . having to

satisfy the debt of another party, a court should not

extend the substantive benefit thereby given beyond

the fair intent and purpose of the legislation, to be

discerned primarily from the language of the statute

itself and related enactments.

[Ibid.]

Following that direction of strict construction, under the MMLL's

N.J.S.A. 2A:44-128(a), a subcontractor on a public improvement project can

obtain a lien upon moneys due under the contract and in the control of the

"public agency." N.J.S.A. 2A:44-126 defines "public agency" as "any county,

city, town, township, public commission, public board or other municipality in

this state authorized by law to make contracts for the making of any public

improvement in any city, town, township or other municipality." A county

improvement agency is not mentioned in that definition.

We agree with the Chancery Division's conclusion that there is "no

question" that a municipal housing authority is a "public agency" within the

meaning of N.J.S.A. 2A:44-126. Brown Strober Bldg. Supply Corp. v.

Fannew Realty, Inc., 174 N.J. Super. 491, 497 (Ch. Div. 1980) (concluding

that the MMLL did not apply because subcontractors also asserted liens under

the CLL's predecessor). However, N.J.S.A. 40:37A-55 states that, under the

CIAL, every county improvement authority is "a public body politic and

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corporate constituting a political subdivision of the State," and the State and its

agencies are excluded from the reach of the MMLL's liens. The Legislature's

express intent to exempt county improvement authorities from the terms of the

MMLL is found in N.J.S.A. 40:37A-90, which states:

This act shall be construed liberally to effectuate the

legislative intent and as complete and independent

authority for the performance of each and every act

and thing herein authorized, and an authority shall not

constitute or be deemed to be a county or municipality

or agency or component of a municipality for the

purposes of any other law; provided, however, that no

authority, other than an authority created in or

performing services for a county of the second class

having a population in excess of 265,000, but less than

350,000 inhabitants, in a county of the third class

having a population not in excess of 70,000

inhabitants, or in a county of the fifth class having a

population in excess of 150,000, but less than 300,000

inhabitants, shall exercise the powers of a common

carrier in any such county, and, except as hereinabove

in this section set forth, nothing contained in this act

shall in any way affect or limit the jurisdiction, rights,

powers or duties of any State regulatory agencies.

[(Emphasis added).]

This explicit language, guided by the mandate to construe the CIAL

liberally, makes clear that the MCIA cannot constitute or be deemed to be a

county or municipality or agency or component of a municipality for the

purposes of "any other law," such as the MMLL. The only exception to

N.J.S.A. 40:37A-90 can be found in N.J.S.A. 40:37A-55(t), which expressly

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makes a county improvement authority's agreements and contracts subject to

the Local Public Contracts Law (LPCL). See Meadowbrook Carting Co. v.

Borough of Island Heights, 138 N.J. 307, 313 (1994) (stating the LPCL

requires "that municipalities and counties advertise for bids on public contracts

that exceed the statutory threshold amount"). Although this exception does not

apply here, it shows that the Legislature has made exceptions to N.J.S.A.

40:37A-90, just not one for the MMLL.

N.J.S.A. 40:37A-90 has been cited in a published opinion by this court

only once. In Clean Earth Dredging Techs., Inc. v. Hudson Cty. Improvement

Auth., 379 N.J. Super. 261, 263-267 (App. Div. 2005), we were asked to

decide whether a lease executed by a county improvement authority was

subject to public bidding laws under the Local Lands and Building Law,

N.J.S.A. 40A:12-1 to -30. Relying on the CIAL, we held:

We are satisfied, however, as was the trial court, that

the Improvement Authority is not subject to the Local

Lands and Building Law. N.J.S.A. 40A:12-14 details

the bidding requirements for the leasing of real

property; that statute only applies, however, to

counties and municipalities. It does not apply to a

public body such as defendant Improvement

Authority.

. . . The Legislature, moreover, specifically included

within the [CIAL] authorizing the creation of an

improvement authority the directive that such an

authority "shall not constitute or be deemed to be a

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county or municipality . . . for the purposes of any

other law." N.J.S.A. 40:37A-90.

....

We consider it clear that the Legislature has made a

conscious choice to exempt improvement authorities

from the terms of the Local Lands and Buildings Law.

We are not authorized to second-guess or ignore that

choice.

[Id. at 271-72.]

Following that reasoning, it is clear that "the Legislature has made a

conscious choice[,]" id. at 272, to exempt county improvement authorities,

like the MCIA, from the terms of the MMLL and its protections. Thus, the

lien notice that MasTec filed against the MCIA is not valid. Consequently,

MasTec held no constitutionally protected property interest.

Finally, the dire policy implications predicted by amicus UTCA, that

subcontractors will be discouraged from supplying material or labor on

municipal construction projects are speculative and unlikely. In Friedman v.

Stein, 4 N.J. 34, 41 (1950), the Supreme Court pointed out that a statutory lien

is separate and distinct from the underlying debt, and only affords a

cumulative remedy for enforcement of that debt. Thus, recovery under the

MMLL is not an unpaid subcontractor's sole remedy. See N.J.S.A. 2A:44-127

("Nothing in [the MMLL] shall affect or impair the right of a creditor for labor

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performed or materials furnished to maintain an action to recover such debt

against the person liable therefor.").

Our courts have found that statutes that prohibit levy and execution,

similar to Section 127 of the CIAL, permit enforcement by writ of mandamus.

See First Nat'l Bank of Chicago v. Bridgeton Mun. Port Auth., 338 N.J. Super.

324, 329 (App. Div. 2001) (N.J.S.A. 40:68A-60 permits enforcement of bank

loans in action in lieu of prerogative writs for mandamus); Jersey Cent. Power

& Light Co. v. Kingsley Arms, Inc., 271 N.J. Super. 68, 80 (Law Div.)

(creditor barred from execution on housing authority's bank accounts under

N.J.S.A. 40A:12A-34, but "appropriate remedy to obtain satisfaction of its

judgments" existed "in the form of an action in lieu of prerogative writs"),

supplemented, 273 N.J. Super. 607 (Law Div. 1993).

In this light, we hold that the lien notice filed by MasTec against the

MCIA is not valid under N.J.S.A. 40:37A-90 and affirm the trial court's order

dismissing MasTec's lien foreclosure complaint.

Affirmed.

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