Perfecting A Lien Under The Michigan Molders Lien Act

An interesting opinion was issued January 20, 2011 by the Michigan Court of Appeals clarifying the steps a mold/tool builder must take to perfect a lien under the Michigan Molders Lien Act.  The case is C.G. Automation & Fixture, Inc., v. Autoform, Inc., Autoliv A.S.P., Inc., Key Plastics, L.L.C., and Chrysler, L.L.C., Case No. 286361.  There, CG sued to recover possession of its die under the Molders Lien Act.  The Court of Appeals held that in order for a valid lien to attach, a moldbuilder must do both of the following:  1) permanently record is name, street address, city, and state on every die, mold, or form that the moldbuilder fabricates, repairs or modifies; and 2) file a financing statement under the UCC. The Court held that the first requirement is not satisfied if the moldbuilder’s identifying information is attached to the mold in a non-permanent manner or in a manner in which it is removable.  In the case, C.G. Automation, the moldbuilder, affixed its name and address to risers that were attached to, but removable from, certain dies that it sold to Autoform.  It also filed a UCC financing statement.  Autoform never paid for the dies, but sold them to Key Plastics to produce parts for Autoliv that were ultimately delivered to Chrysler.  Autoform also ceased doing business.  C.G. attempted to enforce a moldbuilder’s lien against Key Plastics.  However, when Key Plastics received the dies, they did not have the risers and so there was no identifying information as to C.G. on the dies.  The Circuit Court originally granted relief to C.G. Automation, awarding possession or payment for the dies by Key Plastics, but the Court of Appeals reversed, holding that C.G. failed to perfect a lien since its identifying information was not permanently affixed to the die.

E. Powell Miller

Marc L. Newman

Martha J. Olijnyk

The Miller Law Firm, P.C.