Case Title: Redco Constr. v. Profile Props., LLC

Citation: 

Docket Number: S-10-0255

State: wyoming

Court: Wyoming Supreme Court

Date: 2012-02-23T00:00:00Z

Document:
REDCO CONSTRUCTION, a Wyoming Corporation, V. PROFILE PROPERTIES, LLC, A Wyoming LLC2012 WY 24Case Number: S-10-0255Decided: 02/23/2012This opinion is subject to formal revision before publication in Pacific Reporter Third.  Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.  
OCTOBER 
TERM, A.D. 2011
 
REDCO 
CONSTRUCTION, a Wyoming 
Corporation,Appellant(Plaintiff),v.PROFILE 
PROPERTIES, LLC, a Wyoming LLC,Appellee(Defendant).
 
Appeal 
from the District Court of Laramie County
The 
Honorable Michael K. Davis, Judge 
 
Representing 
Appellant:
Justin 
Kallal of Justin Kallal, PC, Jackson, Wyoming.
 
Representing 
Appellee:
Raymond 
W. Martin of Sundahl, Powers, Kapp & Martin, LLC, Cheyenne, 
Wyoming.
 
 
Before 
KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, 
JJ.
GOLDEN, 
Justice. 
 
[¶1]      This case is a 
lien foreclosure case involving a landlord, a tenant and a contractor. Profile 
Properties, LLC (Profile) leased commercial real property to Clean Start, LLC 
(Clean Start).  Clean Start sought 
to renovate the property to convert it from office space to a commercial laundry 
facility.  Profile granted Clean 
Start permission to renovate the property on the condition that Clean Start 
would pay for the renovations, and Clean Start thereafter contracted with Redco 
Construction (Redco) to perform the work.  
When Clean Start defaulted on its payments to Redco, Redco filed a lien 
against Profile’s property.
 
[¶2]      Redco thereafter 
filed a complaint against Profile and Clean Start, alleging claims for breach of 
contract, breach of the implied covenant of good faith and fair dealing, quantum meruit, unjust enrichment, and 
promissory estoppel, and seeking to foreclose on its lien against Profile’s real 
property.  The district court 
interpreted Wyoming’s lien statutes to allow a lien against a landlord’s real 
property for the debt of a tenant under two circumstances: 1) if the landlord 
agreed to pay for the improvements to the property; or 2) if the tenant was 
acting as the landlord’s agent in contracting for the improvements.  It then granted Profile’s motion for 
summary judgment finding that Profile did not agree to pay for the renovations 
to the property and that Clean Start was not acting as Profile’s agent in 
contracting for the improvements.  
We affirm.1
 
ISSUE
 
[¶3]      Redco presents 
the following single issue on appeal:
 
a.         
Did the trial court err as a matter of law by finding that for a valid 
mechanic’s lien to exist for improvements placed upon the landlord’s property by 
the tenant, “specifically authorized” as used in W.S. 29-2-105(a)(ii), requires 
the finding of something akin to an agency relationship between the landlord and 
tenant and granting summary judgment to the Defendant?
 
FACTS
 
[¶4]      Profile owns a 
commercial property in Cheyenne, Wyoming, that it historically leased as office 
and storage space.  In January 2008, 
Profile began negotiations to lease that commercial space to Clean Start.  From the outset of their negotiations, 
Profile understood that Clean Start desired to use the property as a commercial 
laundry facility and that it desired to eventually purchase the property.   Both Profile and Clean Start also 
understood that converting the property from office space to a space that would 
accommodate a commercial laundry operation would require substantial renovations 
to the property, including an upgrade in the property’s electrical supply.  
 
[¶5]      In January 2008, 
at the same time it was negotiating to lease Profile’s property, Clean Start 
contacted Redco, a general contractor.  
At Clean Start’s request, Redco examined the property to determine its 
suitability for a commercial laundry facility and advised Clean Start that the 
property could be renovated to accommodate a laundry operation.  Clean Start thereafter sought and 
received Profile’s permission to renovate the property.    
 
[¶6]      After receiving 
Profile’s permission to renovate the property, Clean Start hired Redco to 
perform the work.  Redco prepared 
the plans and specifications and obtained the necessary permits to complete the 
construction.  Redco began work on 
the renovations in March 2008, approximately two months before Profile and Clean 
Start memorialized their agreement with the execution of a Lease Agreement 
(Lease).  
 
[¶7]      During the 
negotiations between Profile and Clean Start and their subsequent relationship, 
Scot Cook acted on behalf of Profile, and David Sipe acted on behalf of Clean 
Start.  Scot Cook testified that on 
behalf of Profile, he authorized the renovations, and that he knew generally 
what those renovations would entail but no specifics.  David Sipe testified similarly.  Both Cook and Sipe further testified 
that Clean Start alone selected the contractor to perform the renovations, that 
no one from Profile reviewed or was shown the plans or specifications for the 
work, that Profile did not know the specific design details or costs of the 
renovations, that Profile did not assert any control over the renovations, that 
Clean Start was to pay the entire cost of the renovations, and that no one on 
behalf of Profile at any time met with Redco or its representatives to discuss 
the contract or the work being done to the property.  
 
[¶8]      With respect to 
control over the improvements and construction, Scot Cook testified more 
particularly:
 
Q.        
Acting on behalf of Profile, what was the extent that you had control 
over the construction work Clean Start was having performed on the 
building?
 
A.        
Profile did not have any control over the construction work.  Profile had a lease agreement with David 
Sipe with an option to purchase, being a triple net lease, and all construction 
costs were borne by David Sipe.
 
Q.        Could 
you have requested that Clean Start use specific contractors to perform 
work?
 
A.        
No.
 
* 
* * *
 
Q.        Did 
Profile have any control over who Clean Start used as a general contractor on 
the job?
 
A.        
No.
 
Q.        Did 
you ever object to Redco being used?
 
A.        
No.
 
* 
* * * 
 
Q.        Did 
Profile have the authority to tell Clean Start which modifications of the 
building it approved of and which ones it did not?
 
A.        
No.  In regards to structural 
issues or what have you; is that what you’re referring to?
 
Q.        I was 
kind of – a general modification.
 
A.        Under 
the lease terms with Clean Start, he has to conform to city 
codes.
 
Q.        And I 
guess what I meant is if he wanted to put in 30 washing machines, that was 
okay?
 
A.        
Yeah.  It’s his business. 

 
[¶9]      David Sipe’s 
testimony on the question of who controlled the details of the construction 
echoed that of Scot Cook.  He 
testified:
 
Q.        Did 
Scot Cook on behalf of Profile Properties ever make any of the construction 
decisions as to how that building was going to be 
remodeled?
 
A.        
No.
 
Q.        Were 
those decisions exclusive to yourself?
 
A.        Those 
– those decisions were a collaboration of me and Redco and Ted and outside 
parties as far as my equipment and things like that.
 
Q.        But 
none of that was done at the behest of Profile Properties; is that 
fair?
 
A.        
That’s fair.
 
[¶10]   M.J. Gertsch is the Redco principal 
who worked with Clean Start on the renovations to the property.  Gertsch testified that Redco’s contract 
was with Clean Start and that Redco had no contract with Profile.  Gertsch also testified that he knew 
Profile owned the building and property on which Redco was working, and Redco 
did not seek out or receive from Profile a guarantee that it would pay for the 
work if Clean Start was for any reason unable to pay Redco.  
 
[¶11]   Redco was not the sole contractor 
to perform work on the property renovations.  Some demolition work was done by a 
contractor known as C.H. Yarber, a company in which Scot Cook has an ownership 
interest.  Clean Start contracted 
with Yarber directly and paid it in full for the work that it did on the 
property.  Cook testified that he 
did not recommend Yarber for the work, and that he had no involvement in 
negotiating the contract between Yarber and Clean Start or in overseeing 
Yarber’s work on the project.  On 
appeal, Redco does not contend otherwise.  

 
[¶12]   The other contractor to perform 
work on the property was an electrical contractor.  In the course of their negotiations, 
Profile agreed to advance the funds necessary to complete the upgrade of the 
property’s electrical service.  
Clean Start agreed to repay the cost of the electrical upgrade through 
higher rental payments for the first two years of the Lease.  Scot Cook testified as follows 
concerning his involvement with the electrical contractor:
 
Q.        . . 
.  And did you – were you the person 
who hired Superior Electric?
 
A.        
Yes.
 
Q.        And 
did you – did you provide them with the scope of work?
 
A.        As in 
behalf of Profile Properties?
 
Q.        I 
just mean did you physically – I want to know who negotiated with them in case I 
need to talk to them.  I want to 
know who gave them the plans.
 
A.        David 
Sipe.  David Sipe coordinated with 
Superior Electric for his needs of what he needed specifically for the building, 
and then Superior Electric coordinated with me in reference to cost.  And then when I had the cost, I built it 
into the lease agreement, and that’s how we derived the terms.  But as – was I directing Superior 
Electric to say I need a 400-amp, three-phase, umpteen-gazillion circuit 
something or other?  
No.
 
[¶13]   Profile and Clean Start formally 
executed a Lease Agreement (Lease) on May 29, 2008.  It provided for an initial term of June 
1, 2008, to May 30, 2012, and a purchase option that allowed Clean Start to 
purchase the property after April 1, 2012.  
Alternatively, the Lease provided Clean Start the option of extending the 
Lease for an additional term through May 30, 2015.  
 
[¶14]   The Lease was a triple net lease 
that required Clean Start as the tenant to pay all real estate taxes, building 
insurance, and maintenance expenses, in addition to its monthly rental 
payment.  The monthly rental payment 
was $8,200, which would drop to $6,000 at the end of the first two years.  The additional $2,200 per month during 
the first two years was Clean Start’s repayment of the amount Profile fronted 
for the electrical upgrade.  The 
Lease did not require Clean Start to make improvements to the property, but it 
did allow Clean Start to make major alterations to the premises, provided Clean 
Start obtained Profile’s prior permission.  

 
[¶15]   David Sipe and Scot Cook both 
testified that the parties negotiated the Lease with the intention and 
expectation that Clean Start would exercise its option to purchase the 
property.  Cook 
testified:
 
Q.        And 
as construction progressed, you became aware in your capacity for Profile that 
substantial changes were being made to your building of returning [sic] it into 
a very specialized use building?
 
A.        We 
were under the assumption that David Sipe was going to execute his option to 
purchase, and he had intended and he had expressed the entire time that he was 
going to be purchasing the facility.
 
Q.        
Right.  But to answer my 
question directly, you were aware that your building was becoming very 
specialized, yes or no?
 
A.        We 
were under the understanding that the building was going to be used for a 
commercial laundry on behalf of David Sipe, and we were also under the 
impression that he was executing his option to purchase on the 12th of 
2012.  Thus – 
 
Q.        Is 
that a yes?
 
A.        I was 
under the impression, yes – no, I was under the impression that they were making 
the modifications for a commercial laundry.  Was it highly specialized?  I mean, it’s a commercial 
laundry.
 
Q.        
Right.  And so yes or 
no.  Were you aware that your 
building was [being] transformed into something – 
 
A.        Into 
being a commercial laundry, yes.
 
Q.        And 
that that is a very specialized use of a building?
 
A.        
Yes.
 
Q.        
Okay.  And based upon your 
belief in Mr. Sipe’s ability to perform, you were willing to take that 
risk?
 
A.        Mr. 
Sipe had expressed to us that he was going to execute his option to purchase, 
and with the conversations and visitations we had prior to the execution of the 
lease, knowing that he had financial backing, we had all assumptions he would be 
exercising his option to purchase.
 
Q.        And 
therefore, you took the risk by modifying your building?
 
A.        
Yes.
 
[¶16]   David Sipe 
testified:
 
Q.        As 
part of the lease, was there discussion about a purchase 
option?
 
A.        
Yes.
 
Q.        Tell 
me about the aspects of the option.
 
A.        The – 
every building that I – well, okay.  
With this building it was very important to me to have a purchase-lease 
option just because the amount of work that was going into the building, and as 
far as the equipment that was going to be there, the size, so I wanted to find a 
long-term home.
 
* 
* * *
 
Q.        Did 
you have every intention of exercising the purchase 
option?
 
A.        Oh, 
yes.
 
Q.        And 
you felt it would fit into your budget as time went on?

A.        
Mm-hmm.

Q.        
Yes?
 
A.        
Yes.
 
Q.        At 
the time that you started the remodel on that building, what was the gross 
income that your company was experiencing?
 
A.        It 
was close to I want to say 80 or $90,000 a month.
 
Q.        Did 
you make it known to Profile Properties, their manager, Scot Cook, that you had 
every intention of exercising the option?
 
A.        
Yes.
 
 [¶17]  After the renovation work began and 
before it was completed, Clean Start’s business failed, and it eventually 
stopped making its lease payments and fell behind in its payments to Redco.  According to Redco, the last date on 
which it performed work on the project was February 16, 2009.  On March 16, 2009, Profile sent Clean 
Start a Notice of Default, and on April 10, 2009, it followed with an eviction 
notice.  On April 21, 2009, Redco 
sent a letter to Profile and Clean Start demanding payment in the amount of 
$55,523.23 and warning that a lien would be placed on the property if payment 
was not received within ten days.    
 
[¶18]   When Redco stopped work on the 
project, the renovations necessary to convert the property to a commercial 
laundry operation were not complete.  
The building’s infrastructure was left incomplete and the parking lot 
that was torn up during the work on the project was not replaced or 
repaired.  
 
[¶19]   Clean Start and Redco provided 
differing accounts as to why Clean Start’s business failed and the renovations 
were left incomplete.  The district 
court summarized those accounts as follows:  
 
            
The Clean Start business venture ultimately failed.  A portion of the work at the P.S. Cook 
building was completed and some machinery was moved in, but that equipment did 
not provide sufficient capacity for Clean Start to fulfill its contracts.  David Sipe claims that Redco failed to 
timely complete its work on the second phase of the project, which was necessary 
to increase capacity.  Clean Start 
attempted to survive until the project could be completed by contracting with 
out-of-state commercial laundries.  
It also tried to hire contractors to do some of the work to keep the 
project moving.  The out-sourcing 
effort was expensive and unsatisfactory to its customers, and it lost its 
laundry contracts as a result.
 
            
Redco claims that it was progressing satisfactorily with the project and 
would have completed it, although Clean Start was behind on its draws or 
progress payments.  It claims that 
Clean Start failed because Profile evicted it and took control of the building, 
and that thereafter Redco had no ability to finish the project.  The washers and dryers in the building 
were removed by the holder of a security interest in them, leaving a structure 
with interior walls largely removed and other building features 
demolished.
 
[¶20]   Redco and Clean Start agreed that 
no material issues of fact were in dispute and filed cross motions for summary 
judgment.  The district court 
interpreted Wyoming’s lien statute and ruled that, under the undisputed facts of 
this case, the statute precluded Redco from filing a lien against Profile’s 
property for work Redco performed under contract with Profile’s 
tenant.
 
STANDARD 
OF REVIEW
 
[¶21]   Motions for summary judgment come 
before the trial court pursuant to Rule 56(c) of the Wyoming Rules of Civil 
Procedure, which provides that
 
[t]he 
judgment sought shall be rendered forthwith if the pleadings, depositions, 
answers to interrogatories, and admissions on file, together with the 
affidavits, if any, show that there is no genuine issue as to any material fact 
and that the moving party is entitled to a judgment as a matter of 
law.
 
Formisano 
v. Gaston, 
2011 WY 8, ¶ 3, 246 P.3d 286, 288 (Wyo. 2011). We review a grant of summary 
judgment as follows:
 
We 
review a summary judgment in the same light as the 
district court, using the same materials and following the same standards. [Snyder v. Lovercheck, 992 P.2d 1079, 
1083 (Wyo. 1999)]; 40 
North Corp. v. Morrell, 
964 P.2d 423, 426 (Wyo. 1998). 
We examine the record from the vantage point most favorable to the party 
opposing the motion, and we give that party the benefit of all favorable 
inferences that may fairly be drawn from the record. Id. 
A material fact is one which, if proved, would have the effect of establishing 
or refuting an essential element of the cause of action or defense asserted by 
the parties. Id. 
If the moving party presents supporting summary judgment materials demonstrating no 
genuine issue of material fact exists, the burden is shifted to the non-moving 
party to present appropriate supporting materials posing a genuine issue of a 
material fact for trial. Roberts 
v. Klinkosh, 
986 P.2d 153, 155 (Wyo. 1999); 
Downen 
v. Sinclair Oil Corp., 
887 P.2d 515, 519 (Wyo. 1994). 
We review a grant of summary 
judgment deciding a question of 
law de novo and afford no deference to the district court’s ruling. Roberts 
v. Klinkosh, 
986 P.2d  at 156; 
Blagrove 
v. JB Mechanical, Inc., 
934 P.2d 1273, 1275 (Wyo. 1997).
 
Lindsey 
v. Harriet, 
2011 WY 80, ¶ 18, 255 P.3d 873, 880 (Wyo. 2011).
 
 
 
 
 
DISCUSSION
 
[¶22]   Wyoming’s lien statutes have long 
addressed whether a lien may attach to real property when it is a tenant who 
contracts for improvements to a landlord’s property.  Before 1981, the governing statute 
read:
 
In 
all cases where a tenant is authorized by the landlord to put any improvements 
either within or on the outside of any building or upon the land upon which such 
building shall stand, the person doing any work or furnishing any material for 
the purpose of such improvement, shall have the same lien upon such house and 
land as is provided for in § 66-501; provided, it is agreed that the landlord is 
to pay the costs of such improvement.
 
Jordan 
v. Natrona Lumber Co., 
52 Wyo. 393, 403, 75 P.2d 378, 381 (1938) (quoting W.R.S. § 66-525 
(1931)).
 
[¶23]   This lien statute has now been 
amended to read:
 
            
(a)       
Notwithstanding the definition of “owner”, if a tenant places any 
improvements either within or on the outside of any building or on the real 
property on which the building stands, the person doing any work or furnishing 
any material for the purpose of the improvement shall have a lien upon the 
landlord’s and the tenant’s interest in the building and real property as 
provided by this chapter if:
 
            
(i)  The landlord has agreed 
to pay the costs of the improvement; or
 
            
(ii)  The improvements are 
specifically authorized by the landlord.
 
Wyo. 
Stat. Ann. § 29-2-105 (LexisNexis 2011).
 
[¶24]   The prior version of the statute 
imposed two conditions before a lien could attach to a landlord’s property for 
improvements made at a tenant’s request: first, the landlord must have 
authorized the tenant to make the improvements; and second, the landlord must 
have agreed to pay for the improvements.  
       
While the prior statute allowed the lien in only the single circumstance 
where the landlord both authorized the improvement and agreed to pay for the 
improvement, the revised statute appears to have broken the conditions into two 
separate circumstances under which a lien may attach.  The first circumstance under which a 
lien may attach is where the landlord has agreed to pay for the 
improvements.  The second 
circumstance is where the landlord has not agreed to pay for the improvements 
but has “specifically authorized” the improvements.
 
[¶25]   In this case, there is no 
suggestion that Profile, the landlord, agreed to pay Redco for the improvements 
it made to the property leased by Clean Start, the tenant, and the record is 
clear that no contract, implied or explicit, existed between Redco and Profile. 
Resolution of this case instead turns on whether Profile “specifically 
authorized” the improvements Redco made to the property pursuant to its contract 
with Clean Start.  Our analysis, 
then, must begin by determining the meaning of the term “specifically 
authorized.”
 
Meaning 
of Term “Specifically Authorized”
 
[¶26]   The question presented to the Court 
is one of statutory interpretation, and our rules for that task are well 
established:
 
In 
interpreting statutes, our primary consideration is to determine the 
legislature’s intent. All statutes must be construed in pari materia and, in 
ascertaining the meaning of a given law, all statutes relating to the same 
subject or having the same general purpose must be considered and construed in 
harmony. Statutory construction is a question of law, so our standard of review 
is de novo. We endeavor to interpret statutes in accordance with the 
legislature’s intent. We begin by making an inquiry respecting the ordinary and 
obvious meaning of the words employed according to their arrangement and 
connection. We construe the statute as a whole, giving effect to every word, 
clause, and sentence, and we construe all parts of the statute in pari materia. When a statute is 
sufficiently clear and unambiguous, we give effect to the plain and ordinary 
meaning of the words and do not resort to the rules of statutory construction. 
Moreover, we must not give a statute a meaning that will nullify its operation 
if it is susceptible of another interpretation.
 
Moreover, 
we will not enlarge, stretch, expand, or extend a statute to matters that do not 
fall within its express provisions.
 
Only 
if we determine the language of a statute is ambiguous will we proceed to the 
next step, which involves applying general principles of statutory construction 
to the language of the statute in order to construe any ambiguous language to 
accurately reflect the intent of the legislature. If this Court determines that 
the language of the statute is not ambiguous, there is no room for further 
construction. We will apply the language of the statute using its ordinary and 
obvious meaning.
 
Cheyenne 
Newspapers, Inc. v. Building Code Bd. of Appeals of City of 
Cheyenne, 
2010 WY 2, ¶ 9, 222 P.3d 158, 162 (Wyo. 2010) (citing  BP 
Am. Prod. Co. v. Dep’t of Revenue, 
2005 WY 60, ¶ 15, 112 P.3d 596, 604 (Wyo. 2005)).  Whether a statute is ambiguous is a 
question of law.  Cheyenne Newspapers, ¶ 10, 222 P.3d  at 
162.  “A 
statute is unambiguous if reasonable persons are able to agree as to its meaning 
with consistency and predictability, while a statute is ambiguous if it is vague 
or uncertain and subject to varying interpretations.”  Id.
 
[¶27]   Profile and Redco disagree as to 
the meaning of the term “specifically authorized,” as used in the lien statute, 
but they both contend that the statute is unambiguous.  Profile agrees with the district court’s 
interpretation that the term connotes an agency type relationship requiring that 
the tenant undertake the property improvements under the landlord’s control and 
to benefit the landlord.  Redco 
contends that the term means only that the landlord has knowledge of and has 
given its consent or permission for the improvements to proceed.  

[¶28]   The Wyoming lien statutes do not 
define the term “specifically authorized,” and we have reviewed other states’ 
lien statutes and found that no other state uses similar terminology.  We therefore look to the plain meaning 
of the words the legislature chose.  
“Specific” means “restricted to a particular individual, situation, 
relation, or effect,” Merriam-Webster’s 
Collegiate Dictionary 1198 (11th ed. 2007), or “[o]f, relating to, or 
designating a particular or defined thing.”  Black’s Law Dictionary 1528 (9th ed. 
2009).  “Authorize” means “[t]o give 
legal authority; to empower” or “[t]o formally approve; to sanction.”  Id. at 153.  These terms connote a formality and 
particularity that exceeds mere knowledge of and acquiescence in or consent to 
improvements.  

[¶29]   We find this confirmed by looking 
to the plain meaning of terms the legislature could have used in the statute but 
did not.  In particular, Redco 
contends “specifically authorized” should mean knowledge and consent, but these 
terms carry meanings that are distinct and different from the term 
“authorize.”  “Consent” means 
“[a]greement, approval, or permission as to some act or purpose, esp. given 
voluntarily by a competent person.”  
Black’s Law Dictionary 346 
(9th ed. 2007).  “Knowledge” means 
“[a]n awareness or understanding of a fact or circumstance.”  Id. at 950.  In contrast, the term “authorize” 
suggests a formal relationship – i.e., granting legal authority and 
empowering action. 
 
[¶30]   We conclude the legislature must 
have meant something different from mere knowledge and consent when it used the 
term “specifically authorized.”  
This conclusion finds support in the Minnesota Supreme Court’s 
interpretation of the term. 
 
[¶31]   As noted above, no other state has 
a tenant/landlord provision in its mechanic’s lien statutes similar to Wyoming’s 
provision.  Minnesota does, however, 
have a lien statute that uses the term “authorized,” when referring to 
improvements made to property by a person other than an owner.  The Minnesota provision reads, in 
part:
 
When 
improvements are made by one person upon the land of another, all persons 
interested therein otherwise than as bona fide prior encumbrancers or lienors 
shall be deemed to have authorized such improvements, in so 
far as to subject their interests to liens therefor. Any person who has not authorized the same may protect that 
person’s interest from such liens by serving upon the persons doing work or 
otherwise contributing to such improvement within five days after knowledge 
thereof, written notice that the improvement is not being made at that person’s 
instance, or by posting like notice, and keeping the same posted, in a 
conspicuous place on the premises. As against a lessor no lien is given for 
repairs made by or at the instance of the lessee.
 
Master 
Asphalt Co. v. Voss Construction Co., Inc. of Minneapolis, 
535 N.W.2d 349, 352 (Minn. 1995) (quoting Minn. Stat. § 514.06 (1994)) (emphasis 
added).
 
[¶32]   Master Asphalt was a lien foreclosure 
action brought by a subcontractor against the property of a landlord for 
improvements made by that landlord’s tenant.  The tenant in that case was a farmers 
market, and when the tenant and landlord negotiated the lease, they discussed 
that the property would require substantial alteration to make it usable as a 
farmers market.  Master Asphalt, 535 N.W.2d  at 
350-51.  The evidence in the case 
was that the tenant showed the landlord preliminary renderings of the planned 
improvements, but the landlord did not know when the work would begin or who 
would perform the work.  Id. at 351.
 
[¶33]   The lease contained provisions that 
required the landlord’s prior approval of improvements and twenty day’s notice 
before commencement of any work on the property.  Master Asphalt, 535 N.W.2d  at 350.  The tenant violated the lease by 
commencing work without the required prior notice and approval.  Id. at 351.  Because the landlord did not know that 
work had begun, the landlord did not have an opportunity to post notice that it 
would not be responsible for the improvements being made to the property, as 
provided by the above-quoted statute.  
Id.  The statute had been interpreted, 
however, to provide that if the landlord, regardless of not knowing that work 
had commenced, had in fact authorized the improvements, the statutory notice 
provisions were inapplicable.  Id.  Thus, the issue in Master Asphalt was whether the 
landlord’s discussion of the improvements with the tenant and knowledge that 
improvements would be made to the property constituted the landlord’s 
authorization of those improvements.  
Id.
 
[¶34]   The Minnesota Supreme Court held 
that a landlord’s knowledge of and permission to a tenant to make improvements 
to the landlord’s property were insufficient in themselves to constitute 
“authorization.”  Master Asphalt, 535 N.W.2d  at 352.  It characterized the equating of 
“permission” and “authorization” as unsound and held that “authorized” means 
“'authorized by contract with, or by direction, or at the instance of the owner 
or person interested, and not merely by 
his permission or consent at the instance of a tenant or vendee.’”  Id. (emphasis in original) (quoting Wallinder v. Weiss, 138 N.W. 417, 418 
(Minn. 1912)).  The court 
explained:
 
Any 
other holding would work disastrous results to lessors or vendors who in many 
instances lease or sell with the understanding, express or implied, that the 
tenant or vendee, to enjoy the interest acquired, must necessarily make 
improvements or alterations. Such mere consent ought not irrevocably to 
subject the interest of the owner to mechanic’s liens for work or material 
performed or furnished at the instance of a lessee or 
vendee.
 
Id. 
at 352-353 (emphasis in original) (quoting Wallinder, 138 N.W. at 
418).
 
[¶35]   The Minnesota court’s holding is in 
keeping with the majority rule that generally a landlord is not responsible for 
property improvements made at the behest of a tenant.
 
Ordinarily, 
when repairs, alterations or improvements are made to leased premises at the 
request of the tenant, the person furnishing labor or materials for this work is 
only entitled to impose liability for the labor or materials against the 
leasehold interest and not against the landlord’s interest in the premises. 
However, in certain situations, courts have found some act or omission of the 
landlord, such as a requirement in the lease that certain construction take 
place or a failure to post a notice of nonliability after acquiring knowledge of 
the construction, which suggested the landlord had rendered its interest liable 
for the work.
 
Elaine 
Marie Tomko, Annotation, Landlord’s 
Liability to Third Party for Repairs Authorized by Tenant, 46 A.L.R. 5th 1 
(1997).
 
[¶36]   While the Minnesota court appears 
to be the only court that has considered the term “authorization” and its 
meaning within the context of filing a lien for landlord-authorized 
improvements, other courts have considered more generally what conduct on the 
part of a landlord will open the door to a mechanic’s lien.  As the West Virginia Supreme Court of 
Appeals explained, that conduct usually must be more than acquiescence in the 
tenant-initiated improvements.
 
Where 
the terms of a lease simply authorize a lessee to make improvements to the 
leased premises, although the improvements become the property of the lessor 
upon termination of the lease, a party with whom the lessee has contracted to 
make the improvements may not assert a mechanic’s lien against the property 
interest of the lessor in the leased premises. See Hayward 
Lumber & Investment Co. v. Graham, 
104 Ariz. 103, 449 P.2d 31 (1968); 
Budget 
Electric Co. v. Strauss, 
417 So. 2d 1143 (Fla. Dist. Ct. App. 1982); 
Heflin 
v. W.D.M. Corp., 
391 So. 2d 357 (Fla. Dist. Ct. App. 1980); 
Indianapolis 
Raceway Park, Inc. v. Curtiss, 
179 Ind.App. 557, 386 N.E.2d 724 (1979); 
Miles 
Homes of Indiana, Inc. v. Harrah Plumbing and Heating Service Co., 
Inc., 
Ind.App., 408 N.E.2d 597 (1980); 
Landas 
Fertilizer Co. v. Hargreaves, 
206 N.W.2d 675 (Iowa 1973); 
Abbeville 
Lumber Co. v. Richard, 
350 So. 2d 1292 (La.Ct.App.1977); 
Messina 
Brothers Construction Co. v. Williford, 
630 S.W.2d 201 (Mo.Ct.App.1982); 
Met 
Painting Co., Inc. v. Dana, 
90 Misc.2d 289, 394 N.Y.S.2d 392 (1977); 
Kazmier 
v. Thom, 
63 Ohio App.2d 29, 408 N.E.2d 694 (1978); 
Commercial 
Fixtures and Furnishings, Inc. v. Adams, 
564 P.2d 773 (Utah 1977); 
McCombs 
Construction, Inc. v. Barnes, 
32 Wash. App. 70, 645 P.2d 1131 (1982). 
There must be some other evidence that the lessee was acting as the agent of the 
lessor in making improvements to the leased premises, however, mere acquiescence 
or inactive consent by the lessor of the leased premises to the improvements by 
the lessee is not sufficient to constitute a finding of agency between the 
lessor and lessee for the purpose of asserting a mechanic’s lien against the 
property interest of the lessor. See Miles 
Homes of Indiana, Inc. v. Harrah Plumbing and Heating Service Co., 
Inc., 
Ind.App. 408 N.E.2d  at 600; 
McCombs 
Construction, Inc. v. Barnes, 
32 Wash. App.  at 74-75, 645 P.2d  at 1134.
 
Dunlap 
v. Hinkle, 
317 S.E.2d 508, 511-12 (W. Va. 1984).
 
[¶37]   The legislature is presumed to act 
in a thoughtful and rational manner with full knowledge of existing law, and 
statutes are therefore “to be construed in harmony with the existing law, and as 
part of an overall and uniform system of jurisprudence.”  Thunderbasin Land, Livestock & 
Investment Co. v. County of Laramie, 5 P.3d 774, 780 (Wyo. 2000) (quoting Wetering v. Eisele, 682 P.2d 1055, 1061 
(Wyo. 1984)).  This Court is 
satisfied, given the plain meaning of the term “specifically authorized” and the 
existing law within which the legislature acted when it used the term, that the 
legislature meant something more than a landlord’s knowledge, acquiescence or 
permission when it made landlord authorization a basis for a mechanic’s 
lien.
 
[¶38]   Having determined what 
“specifically authorized” does not mean, the Court must determine what the 
legislature did intend with its use of the term.  As discussed above, the plain meaning of 
authorize is a formal approval, to give legal authority to or to empower.  We agree with the district court that 
this is synonymous with agency.  In 
Wyoming, “[a] relationship of 
agency is established when two 
parties agree that one, the agent, shall act on behalf of and subject to the 
control of the other, the principal.” 
  Maverick Motorsports Group, LLC v. Wyo. 
Dep’t of Revenue, 2011 WY 76, ¶ 28, 253 P.3d 125, 133 (Wyo. 2011).  In other words, an agency is created 
when one party is empowered or given legal authority to act on the other’s 
behalf.  
 
[¶39]   This Court holds that the term 
“specifically authorized,” as used in Wyo. Stat. Ann. § 29-2-105(a)(ii), 
requires a showing of an agency relationship between the landlord and tenant 
before a mechanic’s lien may attach to the landlord’s property.  Our conclusion is consistent with the 
plain meaning of the terms used in the lien statute and the legal backdrop 
against which the legislature passed the law.  Additionally, it serves the policy 
justifications for allowing a lien against a landlord’s property for 
improvements made by a tenant.  

 
[¶40]   In Jordan, this Court explained the conduct 
a lien was meant to thwart in the situation where a landlord did not agree to 
pay for improvements but did obligate the tenant to make the 
improvements:
 
If 
a view should be announced contrary to the doctrine of these authorities, it 
would, it seems to us, enable an owner deliberately to select a lessee with 
indifferent financial responsibility, place him in possession of the demised 
premises under an obligation in the lease to put material and substantial 
improvements thereon, and, when all were completed, to assert that he, the 
owner, could rightfully retain the improvements and the lessee only should be 
held accountable therefor; the consequence being that the owner would be able to 
secure labor, material, and improvements to his building without a penny’s 
expense to him, while those who supplied them would have parted with their work 
and property for little or nothing in return. As quite forcibly said by the 
Supreme Court of Iowa in Denniston 
& Partridge Co. v. Brown, 
183 Iowa 398, 167 N.W. 190, 191 [(1918)], 
“It would open the door to great fraud in practice to allow the owner of 
property to lease it to another, contract with the other to put on permanent 
improvements, improvements that are only valuable when standing upon the 
property, and then say that the materialmen and the laborers who place these 
permanent improvements upon defendant’s property have no claim against the 
property, and must go unrewarded if the tenant is insolvent. It would be an 
invitation to short leases with agreements in the lease that the tenant should 
build permanent structures upon the premises during the term of the lease, and 
this without jeopardizing any interest which the owner had in the property, 
while greatly profiting from the transaction.
 
Jordan, 
52 Wyo. at 407, 75 P.2d  at 382-83.
 
[¶41]   These policy considerations are at 
play when a landlord obligates a tenant to make improvements to the landlord’s 
property or empowers the tenant to make those changes subject to the landlord’s 
control and for the landlord’s benefit.  
In other circumstances, where improvements are made at the request of and 
to benefit the tenant, with no landlord control over the scope or details of the 
work, we agree with the district court’s view in this 
case:
 
            
Policy considerations support a requirement of more than acquiescence in 
the work.  A contractor may protect 
himself from exposure by inquiring as to the ownership of a structure, and by 
then asking for assurances that the owner will pay if the lease is 
terminated.  If the owner indicates 
that he has not authorized the work and will not pay for it, the contractor may 
decline the work or seek financial assurances from the lessee.2
Application 
of the Statute to this Case
 
[¶42]   Having held that the term 
“specifically authorized,” as used in Wyo. Stat. Ann. § 29-2-105(a)(ii), 
requires a showing of an agency relationship between the landlord and tenant 
before a mechanic’s lien may attach to the landlord’s property, we must turn 
then to the question of whether that relationship existed in this case.  
 
[¶43]   When the relationship of principal 
and agent is at issue, the party alleging agency has the burden of proving the 
existence and nature of that relationship.  Hull v. D’Arcy, 2009 WY 30, ¶ 17, 202 P.3d 417, 422 (Wyo. 2009); Fowler 
v. Westair Enters., Inc., 
906 P.2d 1053, 1055 (Wyo. 1995).  An agency relationship is not dependent on an 
express agreement of the parties, but may be implied from their words or 
conduct.  True v. Hi-Plains Elevator Machinery, 
Inc., 577 P.2d 991, 997 (Wyo. 1978).  
This Court has adopted the following test for determining the existence 
of an agency relationship:
 
The 
law creates the relationship of principal and agent if the parties, in the 
conduct of their affairs, actually place themselves in such position as requires 
the relationship to be inferred by the courts, and if, from the facts and 
circumstances of the particular case, it appears that there was at least an 
implied intention to create it, the relation may be held to exist, 
notwithstanding a denial by the alleged principal, and whether or not the 
parties understood it to be an agency.
 
On 
the other hand, where it does not appear that there was any express or implied 
intention to create the relation, it will not be held to exist, as where it 
appears that the agent was acting on his own behalf.
 
Id. 
at 998.  “[T]he most essential test 
in determining the existence of an implied agency is the right of the principal 
to control the conduct of the agent or the actual exercise of such 
control.”  Id. at 999.
 
[¶44]   In Jordan, this Court quoted with approval 
a Missouri decision that described the following circumstances under which a 
tenant should be deemed the landlord’s agent for purposes of allowing a lien for 
improvements the tenant has made to the landlord’s 
property:
 
It 
is true that a tenant, as such, is not the agent of the owner so as to establish 
a lien against the land of the owner for improvements made by the tenant. 
McGuinn 
v. Federated Mines & Milling Co., 
160 Mo.App. 28, loc. cit. 32, 141 S.W. 467 [(1911)]. 
Yet, on the other hand, this does not mean that a person, by reason of being the 
tenant, cannot be given the authority of agent to the extent of being able to 
bind the landlord’s property with a lien under any circumstances. The agency 
does not spring from the relationship of landlord and tenant, but it may spring 
from another source, to wit, any act or contract upon the part of the landlord 
which amounts to the establishment of the power of agent in the tenant. . . . 
[I]t has been uniformly held that whenever the landlord binds or obligates the 
tenant to build or construct permanent and substantial improvements beneficial 
to the reversionary interest of the landlord, the person furnishing any part of 
the material or work for said specified improvements under or by virtue of a 
contract with said tenant has the right to a mechanic’s lien against the 
reversionary interest of the landlord in the land improved--this, on the theory 
that the tenant, under such circumstances, becomes an agent of the owner within 
the contemplation of the mechanic’s lien statutes. Gruner 
& Bros. Lumber Co. v. Nelson et al., 
71 Mo.App. 110 [(1897).]
 
Jordan, 
52 Wyo. at 405, 75 P.2d  at 382.
 
[¶45]   These factors are consistent with 
our general agency principles that focus on the principal’s control over the 
agent’s conduct and the benefit to the principal.  Similarly, the state of Tennessee has 
statutorily refined the factors for determining agency under circumstances where 
a tenant makes improvements to a landlord’s property.  The Tennessee statute requires 
consideration of the following:
 
            
(1)  Whether the lease 
requires the lessee to construct a specific improvement on the fee owner’s 
property;
 
            
(2)  Whether the cost of the 
improvement actually is borne by the fee owner through corresponding offsets in 
the amount of rent the lessee pays;
 
            
(3)  Whether the fee owner 
maintains control over the improvement; and 
 
            
(4)  Whether the improvement 
becomes the property of the fee owner at the end of the 
lease.
 
Tenn. 
Code. Ann. § 66-11-102(d).  

 
[¶46]   The Tennessee statute’s tailoring 
of these factors to the landlord/tenant situation is instructive, but again, the 
focus of the factors is consistent with our general agency principles.  The key questions remain first, the 
landlord’s control over the improvements, and second, the benefit to the 
landlord.
 
[¶47]   The Tennessee Court of Appeals 
applied these factors to determine whether an agency relationship existed 
between a landlord and tenant for purposes of allowing a materialman’s lien in 
the case of Hussman Refrigeration, Inc. 
v. South Pittsburg Associates, 697 S.W.2d 588 (Tenn. Ct. App. 1985).  In Hussman, the landlord leased shopping 
center space to a tenant for a supermarket that was to be the shopping center’s 
anchor business.  Id. at 590.  The landlord worked with the tenant to 
develop the building plans and constructed the building to the tenant’s 
specifications, leaving the interior unfinished.  The lease then authorized the tenant to 
finish or alter the interior in any manner it elected so long as the building’s 
strength and integrity was maintained.  
Id. 
 
[¶48]   After the tenant completed its 
improvements and within two months of its opening, the tenant’s business 
failed.  Id. at 591.  The court applied the four factors set 
forth above and concluded no agency relationship existed between the landlord 
and tenant.  It 
explained:
 
When 
these criteria are applied to the facts of this case, it becomes evident that 
Alfred’s was not acting as SPA’s agent when it contracted with Hussmann. The 
lease between Alfred’s and SPA, as well as their course of conduct, makes it 
clear that SPA retained no control over the manner in which Alfred’s equipped 
its supermarket. It did not require that any specific improvement be made, and 
there was no pass-through provision in the lease whereby SPA would pay for the 
costs of those improvements. Finally, the lease specifically provided that the 
lessee, at its sole option, may remove any of the improvements it makes at the 
end of the lease. This supports a conclusion that the improvements Alfred’s 
obtained from Hussmann would not materially benefit the lessor’s fee simple 
interest in the property.
 
            
Hussmann in this case asserts that the refrigerant piping installed in 
the building is of permanent benefit to the lessor. We do not agree. The 
refrigerant piping installed by Hussmann was uniquely suited to its equipment. Upon the removal of the coolers and other 
equipment upon the termination of the lease, the copper pipes remaining in the 
building, if in fact they remained, would be of marginal value because the 
installation of new or different equipment would necessitate the installation of 
new piping in different configurations.
 
Id. 
at 593 (footnote omitted).
 
[¶49]   We resolve the question of agency 
similarly in this case.  First and 
foremost, while the record is clear that Profile, the landlord, gave permission 
to Clean Start, the tenant, to make improvements to the property, the record is 
equally clear that Profile did not require Clean Start to make any improvements, 
and Profile retained no control over the scope or details of the improvements 
Clean Start chose to make.  Profile 
did not review, approve, or participate in any manner in the preparation of the 
plans and specifications for the property renovation, and it had no contact at 
all with Redco, the contractor that performed the work.  
 
[¶50]   Additionally, Profile did not agree 
to pay for the improvements, directly or indirectly.  The only work Profile paid for was the 
electrical work, and it did so only on the condition that Clean Start would 
repay Profile those amounts through increased lease payments for the first two 
years of the lease.  No contract or 
other agreement existed between Profile and Redco, and the parties agree Profile 
never made any assurances to Redco concerning payment or responsibility for the 
work.
 
[¶51]   Finally, the improvements to the 
property were not made to benefit Profile.  
The improvements were intended to accommodate Clean Start’s business, and 
they were made with the clear intention and expectation that Clean Start would 
exercise its option to purchase the property.  Profile did not permit the alterations 
with the expectation that the property would be returned to it with 
improvements.  And, even in the 
event the property were returned to Profile, the lease permitted Clean Start to 
remove all equipment and machinery so long as the removal would not damage the 
property and no permanent fixtures were removed.  
 
[¶52]   The facts of this case do not 
present the scenario this Court cautioned against in Jordan, in which the landlord maneuvers 
through a tenant to obtain improvements for his gain and then escapes financial 
responsibility for the improvements.  
The equities in this case are quite the opposite and illustrate the 
appropriateness of defining “specifically authorized” to require a finding of 
agency between the landlord and tenant.  

 
[¶53]   Although Profile is not being held 
financially responsible for the obligations incurred by Clean Start for Clean 
Start’s benefit, it is not left without expense.  The evidence shows that the building and 
property Profile regained possession of were in a state of disrepair, and any 
Clean Start equipment was repossessed by other creditors and removed from the 
premises.  Profile did not enter 
into the lease with Clean Start seeking to benefit from the alterations to its 
property, and it did not in fact benefit from Redco’s work on the property.  
 
[¶54]   Additionally, because Profile did 
not retain control over the improvements, it was not in a position to prevent or 
otherwise address the payment and timing disputes that arose between Redco and 
Clean Start.  In this regard, the 
district court decision notes Redco’s contention that the reason Clean Start’s 
business failed and construction could not be completed was Profile’s eviction 
of Clean Start.  Redco’s position 
finds no support in the record, which shows that the last date on which Redco 
performed any work on the property was February 16, 2009, and that Profile’s 
eviction notice was not delivered until nearly two months later on April 10, 
2009.
 
CONCLUSION
 
[¶55]   The district court correctly 
interpreted Wyo. Stat. Ann. § 29-2-105(a)(ii) to require a finding of agency 
between the landlord and tenant before a mechanic’s lien may attach to the 
landlord’s property for work performed at the tenant’s behest.  In this case, that relationship did not 
exist.  The decision of the district 
court is affirmed.
 
FOOTNOTES
1The district court also granted Profile summary judgment on Redco’s quantum meruit claim against 
Profile.  Redco did not raise that 
part of the ruling as an issue on appeal or otherwise present argument on the 
issue.  We therefore will not 
address that part of the district court’s decision in our 
discussion.
 
  2This Court notes that a number of states have statutorily provided that a 
landlord with knowledge that work has commenced on his property must, within a 
prescribed time after learning of such work, conspicuously post on that property 
notice of the owner’s non-liability for the work.  If the landlord has knowledge of the 
work and fails to post the required notice, the property is subject to a 
mechanic’s lien.  See, e.g., Cal. Civ. Code § 8444 (10-day 
notice); Colo. Rev. Stat. § 38-22-105(2) (5-day notice); Minn. Stat. § 514.06 
(5-day notice).  The posting of such 
a notice is not statutorily required in Wyoming, and it would be of questionable 
legal significance, other than as some evidence that the landlord did not 
authorize or agree to pay for the improvements being made to the 
property.