DKS Construction Management, Inc. v. Real Estate Improvement Co.
DKS Construction Management, Inc. v. Real Estate Improvement Co.
Opinion of the Court
¶1
— RCW 60.04.091 requires a lien claimant to record its notice of lien no later than 90 days after the
FACTS
¶2 REICO is the owner of the Marcus Whitman Hotel and Conference Center in Walla Walla, Washington. REICO contracted with DKS Construction Management, Inc., (DKS) to renovate the hotel. DKS subcontracted with SMK to complete heating, ventilation, and air conditioning work.
¶3 SMK recorded its original mechanics’ lien on REICO’s property on September 17, 2001. The mechanics’ lien stated that the last day of work performed was June 18, 2001. SMK thereafter amended its mechanics’ lien to change the property description and the amount claimed. The amended mechanics’ lien restated that the last day of work performed was June 18, 2001. In December 2001, DKS commenced its lien foreclosure action and named SMK as a defendant. In its response, SMK asked the court for an order foreclosing its lien.
¶4 During discovery, SMK decided that its mechanics’ lien was not timely recorded. Accordingly, on its own initiative, SMK released its mechanics’ lien on September
¶5 The trial court granted SMK’s motion and retroactively reinstated its lien. In its ruling, the court explained that it had balanced the equitable factors of excusable negligence, good faith, prejudice, and public policy against the statutory mandates of RCW 60.04.091. The court reasoned that the equities favored reinstatement of SMK’s lien. Thereafter, the court granted SMK’s motion to foreclose the lien.
¶6 REICO appeals. REICO and SMK each contend it is entitled to attorney fees if it prevails on appeal.
ANALYSIS
¶7 REICO asserts the trial court erred by reinstating SMK’s voluntarily-released mechanics’ lien. Essentially, REICO argues the trial court lacked equitable power to reinstate a voluntarily-released lien after the 90-day statutory period had expired. SMK contends its reinstated lien was valid because it was initially recorded during the statutory 90-day period, and reinstatement in such circumstances is an appropriate exercise of the court’s equitable powers and consistent with chapter 60.04 RCW, the mechanics’ lien statute. Washington case law has not previously addressed this issue.
¶8 The issue of whether SMK’s reinstated lien complies with RCW 60.04.091 is a question of law which we review de novo. Intermountain Elec., Inc. v. G-A-T Bros. Constr., Inc., 115 Wn. App. 384, 390, 62 P.3d 548 (2003).
¶10 In reviewing a mechanics’ lien courts have determined that the rights arising as part of a mechanics’ lien are created by statute and are to be strictly construed. Northlake Concrete Prods., Inc. v. Wylie, 34 Wn. App. 810, 813, 663 P.2d 1380 (1983). As such, in order to benefit from a mechanics’ lien, the complaining party’s mechanics’ lien must “come clearly within its terms.” Id. (citing Dean v. McFarland, 81 Wn.2d 215, 219-20, 500 P.2d 1244 (1972)). Accordingly, the burden of establishing the right to a mechanics’ lien rests upon the person claiming it. Id. (citing Westinghouse Elec. Supply Co. v. Hawthorne, 21 Wn.2d 74, 77, 150 P.2d 55 (1944)).
¶11 Under this framework, our courts have consistently denied relief to lienholders whose asserted mechanics’ liens did not strictly come within the terms of the statute. Wenatchee Fed. Sav. & Loan Ass’n v. Mission Ridge Estates, 80 Wn.2d 749, 754, 498 P.2d 841 (1972); TPST Soil Recyclers v. W.F. Anderson Constr., Inc., 91 Wn. App. 297, 301-02, 957 P.2d 265, 967 P.2d 1266 (1998); Fair Price House Moving Co. v. Pacleb, 42 Wn. App. 813, 816-17, 714 P.2d 321 (1986); Seattle Lumber Co. v. Richardson & Elmer Co., 66 Wash. 671, 673-74, 120 P. 517 (1912). Indeed, we have held that mechanics’ liens that were not filed within 90 days of completion of work are invalid on their face. Intermountain Elec., 115 Wn. App. at 392-93.
¶13 The rationale for Washington’s insistence upon strict compliance with the lien statute is readily explained. Unlike mortgages and deeds of trust, a mechanics’ lien is an involuntary encumbrance on the real property itself. The statute provides for a lien, even if there is no direct contractual relationship between the property owner and the lien claimant. In many instances, a property owner may be required to satisfy obligations left unpaid by the general contractor. Such was the case here. For that reason, the statutory lien is perfected only by strict compliance with the provisions of RCW 60.04.091. And, equitable remedies cannot be asserted to establish equitable relief in derogation of statutory mandates for perfection of the lien. Paulsen v. Dep’t of Soc. & Health Servs., 78 Wn. App. 665, 669, 898 P.2d 353 (1995) (quoting Dep’t of Labor & Indus. v. Dillon, 28 Wn. App. 853, 855-56, 626 P.2d 1004 (1981)).
¶14 For the reasons stated in this opinion, we conclude SMK’s lien was extinguished when it voluntarily and intentionally released its lien. The trial court lacked equitable power to retroactively reinstate SMK’s lien. The court erred by holding otherwise. We reverse the order reinstating the lien and the order granting summary judgment.
¶16 Reversed and remanded.
Sweeney, A.C.J., and Brown, J., concur.
Review denied at 154 Wn.2d 1027 (2005).
Reference
- Full Case Name
- DKS Construction Management, Inc. v. Real Estate Improvement Company, L.L.C., SMK Construction Co., Inc.
- Cited By
- 4 cases
- Status
- Published