Abc Plumbing & Heating Company, Inc. v. Vernon Sav. & L. Assn.

ABC Plumbing & Heating Company, Inc. (ABC) appeals a judgment in favor of Vernon Savings & Loan Association (Vernon) after the court dismissed ABC’s complaint for breach of contract, to foreclose a mechanic’s lien, and to enforce a stop notice against Vernon for lack of subject matter jurisdiction. The primary issue in this case is whether a subcontractor which has filed and served a lawsuit in state court in compliance with state statutes enacted for its protection can be denied access to a court for adjudication of its claims because a construction lender is declared insolvent after the state court has assumed jurisdiction over the parties. We hold the subcontractor cannot be denied access to a court of competent jurisdiction, and we reverse the judgment dismissing the complaint.

Factual and Procedural Background

In March 1984 ABC entered into a subcontract with Tucker Construction Company, Inc. (Tucker) to furnish and install plumbing at the Laurel Terrace project. Alex Tucker Development Corporation (Alex Tucker) was the reputed owner of the real property. Vernon and Construction Financial Inc. provided financing for the project as construction lenders.

Tucker…