Pacific Industries, Inc. v. Singh
Pacific Industries, Inc. v. Singh
Opinion of the Court
—Appellant Pacific Industries (PI) appeals a trial court’s decision denying its motion to release a mechanics’ lien and awarding attorney fees to the lien claimant, Respondent Joginder P. Singh. It claims the trial court erred by ruling that the lien was not frivolous when Singh did not have the right to file a lien under chapter 60.04 RCW, the lien was not excessive, and Pi’s motion for reconsideration was filed after the 10-day period allowed under Civil Rule 59 expired. We conclude that although the development services Singh performed are not lienable services under chapter 60.04 RCW, the trial court correctly determined the
FACTS
From April 1990 to November 2001, Singh worked as a property developer
In November 2001, before any Poole’s Park phase was completed, the parties agreed they would not develop any more projects together. As part of their mutual decision to terminate their working relationship, they reviewed the accountings of net profits for projects they worked on together.
On March 19, 2002, PI commenced an action under RCW 60.04.081, seeking a court order releasing Singh’s lien as frivolous and made without reasonable cause, or alternatively, a court order reducing what PI claimed was an excessive lien amount. It also sought attorney fees. In April 2002, PI and Singh agreed to retain an independent accountant. The show cause hearings for the lien, required by RCW 60.04.081, were continued pending the accountant’s completed report. During the six months the accounting was pending, Singh agreed to execute partial lien releases to enable PI and its buyer to close on the completed phases of the project. In the end, the accountant concluded that Poole’s Park did not make a profit but in fact operated at a loss. Based on the report, Singh fully released the lien against Poole’s Park.
The parties agreed to schedule a show cause hearing to address the issue of attorney fees. At a hearing on January 7, 2003, the King County Superior Court denied Pi’s motion and granted Singh’s motion for attorney fees. It also denied Pi’s motion for reconsideration and its motion opposing Singh’s entry of judgment. On March 5, 2003, the court entered a $10,063.50 judgment against PI for Singh’s attorney fees. PI appeals.
ANALYSIS
I. Was the lien frivolous?
To be frivolous, a lien must be improperly filed beyond legitimate dispute.
PI argues Singh’s lien for the work he performed for the Poole’s Park project is frivolous because his services are not lienable under chapter 60.04 RCW. Singh asserts the work he performed was “labor” under the statute. We conclude the development services Singh performed are not lienable services under chapter 60.04 RCW. The services a developer like Singh provides do not clearly come within the statute’s terms, and the case Singh cites as authority for his proposition is distinguishable from this case.
Except as provided in RCW 60.04.031, any person furnishing labor, professional services, materials, or equipment for the improvement of real property shall have a lien upon the improvement for the contract price of labor, professional services, materials, or equipment furnished at the instance of the owner, or the agent or construction agent of the owner.
Singh argues that his work on Poole’s Park constitutes “furnishing labor. . . for the improvement of real property.”
Type 1 — Negotiation
• He negotiated the purchase price of the Poole’s Park property and the terms of the promissory note;
• He negotiated the terms of Pi’s land acquisition and development loan;
• He negotiated the terms of the purchase and sales agreement with Harbor Homes;
Type 2 — Contract Execution
• He signed the agreement to purchase the Poole’s Park property;
*8 • He signed the purchase and sale agreement with Harbor Homes, the subdivided lots purchaser, on behalf of PI;
• He signed contracts on behalf of PI with various licensed contractors to perform preliminary site work, including a home demolition on the property and retention pond construction;
• He entered into a contract on behalf of PI with a licensed general contractor to construct plat improvements;
• He executed developer agreements from utility companies to provide electrical, sewer, and water service to the property.
Type 3 — Construction Management & Coordination
• He obtained the necessary permits for improvements to the property;
• He met with the engineers about changes to the engineering drawings;
• He purchased and provided materials for construction;
• He managed the construction;
• He periodically visited the site to check on the construction progress.
It is clear under the express terms of the statute that the first two types of services — contract negotiation and execution — do not constitute “labor” because they are administrative tasks that do not “improve” the subject property and are not performed “at the site.” Similarly, the management and coordination services that Singh performed do not clearly constitute an “exertion of the powers of body or mind performed at the site for compensation”
In Willett, a contractor sought to foreclose a lien for the unpaid balance of its contract. The issue was whether a contractor could lien the services of a superintendent and a foreman as “labor” under the lien statute when they “sawed no boards, hammered no nails, and handled no tools.”
We next address Pi’s argument that because Singh’s services are not covered under the lien statute, his lien is
II. Was the lien excessive?
An appellate court will uphold a trial court’s finding of fact if it is supported by substantial evidence.
In this case, PI contends the trial court erred by concluding the lien was not clearly excessive. We disagree for two reasons. First, the trial court’s finding is supported by substantial evidence. In his affidavit, PI President Bruce Clibborn testified that PI anticipated a profit of $55,000 on the Poole’s Park project. In contrast, Singh testified that he believed the profits from Poole’s Park would be a minimum of $400,000. This testimony suggests there was a legitimate dispute about the profit amount. The trial court is not required to decide the merits of the dispute in a summary proceeding under RCW 60.04.081 when the facts do not clearly indicate the lien is excessive.
III. Motion for reconsideration
Amotion for reconsideration under Civil Rule 59 is addressed to the sound discretion of the trial court, and it will not be reversed absent a showing of manifest abuse.
PI complains that the trial court abused its discretion when it refused to consider its motion for reconsideration
Cox, A.C.J., and Ellington, J., concur.
Reconsideration denied February 3, 2004.
Singh is a principal in JG Real Estate Northwest L.L.C., which is a licensed contractor. As an individual, Singh is not a licensed contractor in the state of Washington.
Twenty lots were scheduled to close 30 days after final plat approval and when building permits were issued (Phase I). Twenty more lots were scheduled to close 150 days after Phase I closing (Phase II). And 18 lots were scheduled to close 150 days after Phase II closing (Phase III).
Over the 10 years it employed him, PI paid Singh a total of $1,337,130 for his services, including $280,317 in 2001.
W.R.P. Lake Union Ltd. P’ship v. Exterior Servs., Inc., 85 Wn. App. 744, 752, 934 P.2d 722 (1997).
Intermountain Elec., Inc. v. G-A-T Bros. Constr., 115 Wn. App. 384, 394, 62 P.3d 548 (2003).
Dean v. McFarland, 81 Wn.2d 215, 219-20, 500 P.2d 1244 (1972).
TPST Soil Recyclers of Wash., Inc. v. W.F. Anderson Constr., Inc., 91 Wn. App. 297, 299-300, 957 P.2d 265 (1998).
Intermountain Elec., 115 Wn. App. 384.
Schumacher v. Williams, 107 Wn. App. 793, 799, 28 P.3d 792 (2001), review denied, 145 Wn.2d 1025 (2002).
New Castle Invs. v. City of LaCenter, 98 Wn. App. 224, 229, 989 P.2d 569 (1999) (citing People’s Org. for Wash. Energy Res. v. Utils. & Transp. Comm’n, 104 Wn.2d 798, 825, 711 P.2d 319 (1985)), review denied, 140 Wn.2d 1019 (2000).
Id. (citing Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 813-14, 828 P.2d 549 (1992)).
RCW 60.04.021.
RCW 60.04.011(4).
RCW 60.04.011(7).
RCW 60.04.011(15).
RCW 60.04.011(5)(a).
ROW 60.04.011(7) (emphasis added).
30 Wn.2d 622, 193 P.2d 321 (1948).
Intermountain Elec., 115 Wn. App. at 394.
W.R.P., 85 Wn. App. at 750.
Structurals N.W., Ltd. v. Fifth & Park Place, Inc., 33 Wn. App. 710, 715, 658 P.2d 679 (1983); CHG Int’l, Inc. v. Platt Elec. Supply, Inc., 23 Wn. App. 425, 426, 597 P.2d 412 (1979).
W.R.P., 85 Wn. App. at 753 (“[T]he statute’s implicit requirement that the trial court make ... factual [findings] does not turn [the] summary proceeding into a substitute for a trial on the merits when the facts do not clearly indicate the lien is frivolous and without reasonable cause or is excessive.”).
Because the hen is neither frivolous nor excessive, Singh is entitled to attorney fees by statute. Under RCW 60.04.081(4), “[i]f the court determines that the lien is not frivolous and was made with reasonable cause, and is not clearly excessive, the court shall issue an order so stating and awarding costs and reasonable attorneys’ fees to the hen claimant to be paid by the applicant.”
Perry v. Hamilton, 51 Wn. App. 936, 938, 756 P.2d 150, review denied, 111 Wn.2d 1017 (1988).
State v. Stenson, 132 Wn.2d 668, 701, 940 P.2d 1239 (1997), cert. denied, 523 U.S. 1008 (1998).
Reference
- Full Case Name
- Pacific Industries, Inc. v. Joginder (\Joe\") P. Singh"
- Cited By
- 23 cases
- Status
- Published