Case Title: In re Fontainebleau Las Vegas Holdings, LLC

Citation: 128 Nev. Adv. Op. No. 53

Docket Number: 

State: nevada

Court: Nevada Supreme Court

Date: 2012-10-25T00:00:00Z

Document:
428 Nev,, Advance Opinion 53
IN THE SUPREME COURT OF THE STATE OF NEVADA

IN RE: FONTAINEBLEAU LAS VEGAS No. 56452

HOLDINGS, LLC.

WILMINGTON TRUST FSB, AS FILED

ADMINISTRATIVE AGENT, ~

Appellant, oct 252012
vs.

AL CONCRETE CUTTING & Seg

DEMOLITION, LLC; A COMPANY wis

PORTABLE RESTROOMS, INC., D/B/A
A COMPANY, INC.; A TRACK-OUT
SOLUTION LLC; ABATIX
ENVIRONMENTAL CORP., D/B/A
ABATIX CORP.; ABSOCOLD
CORPORATION, D/B/A ECON
APPLIANCE; ABSOLUTE METALS,
LLC; AHERN RENTALS, INC.; AIR
DESIGN TECHNOLOGIES, LLC; AIR
SYSTEMS, INC.; AIRTEK PRODUCTS
LLC; AK CONSTRUCTORS, INC.;
ALABAMA METAL INDUSTRIES
CORPORATION; ALLEGHENY
MILLWORK PBT, D/B/A ALLEGHENY
MILLWORK & LUMBER CO.; ALLEN
DRILLING INC.; ALPINE STEEL LLC;
AMERICAN AIR BALANCE CO,, INC.;
AMERICAN CRANE & HOIST |
ERECTORS, LLC; AMERICAN METAL,
FABRICATORS LLC; AMERICAN
PACIFIC EXCAVATION INC.;
AMERICAN SAND & GRAVEL, LTD.;
ANIXTER INC., D/B/A ANIXTER
INTERNATIONAL INC.; APEX
CONCRETE CUTTING AND CORING,
INC. ARCELORMITTAL
INTERNATIONAL AMERICA, LLC; |
ARCHITECTURAL MATERIALS INC., |
D/B/A AARON SMITH OF
ARCHITECTURAL MATERIALS, INC.;

 

 

 

 

Ja - 33760

 
  

ARCON FLOORING, INC.; ARIZONA.
TILE, LLC; ATLAS CONSTRUCTION
CLEANUP INC.; ATLAS
CONSTRUCTION SUPPLY, INC.; ATSS,
INC., D/B/A ALLIED TRENCH
SHORING SERVICE TRAFFIC
CONTROL SERVICE, INC.; AUSTIN
GENERAL CONTRACTING, INC.;
AUSTIN HARDWOODS, INC.; AZ-PUS,
INC.; AZTECH INSPECTION
SERVICES, LLC; BAKERSFIELD PIPE,
AND SUPPLY, INC.; BERGMAN,
WALLS, & ASSOCIATES, LTD.—
ARCHITECTS; BESAM US, INC., D/B/A
BESAM ENTRANCE SOLUTIONS;
BESAM WEST, INC., D/B/A BESAM
ENTRANCE SOLUTIONS; BOETHING
‘TREELAND FARMS, INC.; BRADFORD
PRODUCTS, LLC; BROWN-STRAUSS
STEEL SALES, INC; BURKE
ENGINEERING CO,; C.R. LAURENCE
CO., INC.; CADILLAC STONE WORKS,
LLC; CALIFORNIA FLEX
CORPORATION; CALIFORNIA,
WHOLESALE MATERIAL SUPPLY,
LLC, D/B/A CALPLY DOOR SYSTEMS
LV INC; CARRARA MARBLE.
COMPANY OF AMERICA; CASHMAN
EQUIPMENT COMPANY; CCCS
INTERNATIONAL LLC; CECO
CONCRETE CONSTRUCTION, LLC;
CELLCRETE CORPORATION; CEMEX
CONSTRUCTION MATERIALS
PACIFIC, LLC; CENTURY STEEL,
INC.; CHEROKEE ERECTING
COMPANY, LLC; CITY ELECTRIC
SUPPLY COMPANY; CLARK COUNTY
FENCE COMPANY, LLC; CLQ?S, LLC,
F/K/A COMPASS LOGISTICS; CMC
GROUP, LLC; CODALE ELECTRIC
‘SUPPLY, INC.; COLLINGS

    

 

 
 

INTERIORS, LLC; COMMERCIAL
SCAFFOLDING OF NEVADA, INC.;
COMMERCIAL ROOFERS, INC.;
COMMUNICATIONS SUPPLY
CORPORATION; CONCRETE CORING
OF NEVADA, INC.; CONSTRUCTION.
SEALANTS SUPPLY, INC.;
CONSUMERS PIPE AND SUPPLY CO,
CONTI ELECTRIC, INC.;
CONTINENTAL GLASS &
HARDWARE, INC.; COPPER STATE
BOLT & NUT COMPANY, INC.;
CORESLAB STRUCTURES (L.A.) INC.;
CRESCENT ELECTRIC SUPPLY
COMPANY, INC.; CUMMINS ROCKY
MOUNTAIN, LLC; CURTIS STEEL CO,,
INC.; CWCI INSULATION OF NEVADA
INC.; D&D STEEL, INC.; D’ALESSIO
CONTRACTING, INC.; DAL-TILE
CORPORATION; DANA KEPNER
COMPANY, INC.; DERR AND
GRUENEWALD CONSTRUCTION CO,;
DESERT LUMBER LLC; DESERT
PLUMBING & HEATING CO., INC.;
DESIGN SPACE MODULAR
BUILDINGS, INC.; DIELCO CRANE
SERVICE, INC.; DIRECT PAVING &
GRADING; DIRECT PAVING &
GRADING, LLC; DIVERSIFIED
CONCRETE CUTTING, INC.;
DIVERSIFIED CONSTRUCTION
SUPPLY, LLC; DOOR & HARDWARE
MANAGEMENT, INC.; DOOR-KO, INC;
DSE CONSTRUCTION, INC.; DUNN-
EDWARDS CORPORATION; EAGLE
ENTERPRISES OF TN LLC; EAST
IOWA DECKS SUPPORT, INC.;
EBERHARD/SOUTHWEST ROOFING,
INC.; EGGERS INDUSTRIES, INC.;
EIDS STEEL COMPANY, LLC;
ELMCO/FORD, INC., D/B/A ELMCO_

 

 

  

 

 

 

 
  

MECHANICAL LAS VEGAS; EM&C |
‘TRUCKING, LLC; EMBASSY GLASS; |
EMBASSY STEEL; ENERGY |
PRODUCTS OF NEVADA, INC. |
EUGENIO PAINTING COMPANY; F.
RODGERS CORPORATION;
FASTENERS INC. SOUTHWESTERN
SUPPLY; FERGUSON ENTERPRISES,
INC.; FF&E PURCHASING
ASSOCIATES, LLC; FISK ELECTRIC
COMPANY; FLIPPIN’S TRENCHING,
LLP; FOUNTAIN SUPPLY COMPANY;
FREHNER CONSTRUCTION
COMPANY, INC.; GALLAGHER-
KAISER CORPORATION; GARRETT.
MATERIALS, LLC, D/B/A GARRETT
MATERIALS PROBUILD; GENERAL
SUPPLY & SERVICES, INC., D/B/A.
GEXPRO; GEO CELL SOLUTIONS,
INC,, F/K/A GEO CELL SOLUTIONS,
LLC; GEORGE M. RAYMOND CO.;
GILLETTE CONSTRUCTION, LLC;
GIROUX GLASS, INC.; GLENN
RIEDER, INC.; GLOBAL SERVICES OF
NEVADA, INC.; GRANT
INSTALLATION INC.; GRAYBAR
ELECTRIC COMPANY, INC; H&E |
EQUIPMENT SERVICES, INC.;
HALTON CO.; HAMMOND CAULKING,
INC.; HAMPTON TEDDER ELECTRIC
COMPANY; HAMPTON TEDDER,
‘TECHNICAL SERVICES;
HARRINGTON INDUSTRIAL
PLASTICS, LLC; HARSCO.
CORPORATION, D/B/A PATENT.
CONSTRUCTION SYSTEMS; HD
SUPPLY CONSTRUCTION SUPPLY,
LIMITED PARTNERSHIP, D/B/A HD
SUPPLY INC.; HD SUPPLY
WATERWORKS, LP; HD SUPPLY
WATERWORKS, LP, D/B/A HD SUPPLY.

 

 

 
en

 

KIMLEY-HORN AND ASSOCIATES,

WATERWORKS PC REGION; HD
SUPPLY WATERWORKS, LP, D/B/A HD
SUPPLY WHITE CAP; HEATING AND
COOLING SUPPLY, INC.; HELOU &
SONS, INC., D/B/A HELOU
CONSTRUCTION, INC.; HENRI
SPECIALTIES CO., INC., OF NEVAD:
HERSHBERGER BROS. WELDING,
INC.; HERTZ EQUIPMENT RENTAL
CORPORATION; HILTI, INC.; HOTZ,
LLC, D/B/A DRI-DESIGN; IBA
CONSULTANTS WEST, LLC; IDEAL
‘MECHANICAL, INC.; ILLUMINATING
CONCEPTS, LTD.; INNCOM
INTERNATIONAL, INC.; INSTEEL,
LLC; INSULFOAM LLC; INSULPRO
PROJECTS, INC., D/B/A GALE |
BUILDING PRODUCTS; INTEGRATED |
MECHANICAL GROUP, LLC, D/B/A,

IMG MECHANICAL GROUP;
INTERMOUNTAIN LOCK & SUPPLY
CO., D/B/A INTERMOUNTAIN LOCK &
SECURITY; ITAL STONE, INC.; J&I
ENTERPRISES SERVICES, ING,; J.F.
DUNCAN INDUSTRIES, INC., D/B/A.
DURAY; J.B.A. CONSULTING
ENGINEERS, INC.; JANIS SERVICES
WEST, LLC; JENSEN ENTERPRISES,
INC., D/B/A JENSEN PRECAST; JOHN
A, MARTIN & ASSOCIATES OF
NEVADA, INC.; JOHNSON
CONTROLS, INC.; ENGINEERED EQ.
& SYSTEMS CO.; JOHNSON
CONTROLS, INC., D/B/A JPRA.
ARCHITECTS, P.C.; JS&S, INC.; KK
CONSTRUCTION SUPPLY, INC.; KCG,
INC., D/B/A REW MATERIALS;
KEENAN, HOPKINS, SUDER &
STOWELL CONTRACTORS, INC.
KELLY'S PIPE & SUPPLY CO., INC.;

 

 

 
nee

 

INC.; KNORR SYSTEMS, INC.; L&P
INTERIORS, LLC; L&W SUPPLY
CORPORATION, D/B/A CALPLY; L.A.
NEVADA, INC., D/B/A G&G SYSTEM!
LALLY STEEL, INC.; LANGAN
ENGINEERING & ENVIRONMENTAL
SERVICES, INC.; LAS VEGAS
AWNINGS, LLC; LAS VEGAS PAVING
CORPORATION; LAS VEGAS
ROOFING SUPPLY, LLC; LAS VEGAS
WINDUSTRIAL CO,; LEWIS CRANE &
HOIST, LLC; LOCHSA, LLC, D/B/A.
LOCHSA ENGINEERING; LONE
MOUNTAIN EXCAVATION & |
UTILITIES, LLC; LUKZ TRUCKING,
INC,; LVI ENVIRONMENTAL OF
NEVADA, INC.; M&H BUILDING
SPECIALTIES, INC; MAC ARTHUR
CO,; MARNELL MASONRY, INC.
MCKEON DOOR OF NEVADA, INC.
MECHANICAL INSULATION
SPECIALISTS; MECHANICAL |
PRODUCTS NEVADA, INC.;
MECHANICAL SYSTEMS WEST, IN
MERLI CONCRETE PUMPING OF
NEVADA, INC.; METAL-WELD |
SPECIALTIES, INC.; MIDWEST
DRYWALL CO., INC.; MIDWEST PRO
PAINTING, INC, MIGHTY CRANE
SERVICE, LLC; MITCHELL |
CONSTRUCTION SERVICES, INC,
D/B/A WESTERN DIAMOND;
MODERNFOLD OF NEVADA, LLC;
MOJAVE ELECTRIC COMPANY, LLC,
A/K/A WEST EDNA ASSOCIATES,
D/B/A MOJAVE ELECTRIC, INC.
MORRIS-SHEA BRIDGE COMPANY,
INC. MUNDEE TRUCKING, INC.;
NEDCO SUPPLY; NES RENTALS
HOLDINGS, INC., D/B/A NES
RENTALS; NEVADA CONSTRUCTION

 

 

 

 

 

 
CLEAN-UP; NEVADA READY MIX
CORPORATION; NORMAN S. WRIGHT
MECHANICAL EQUIPMENT
CORPORATION; NOVA
ENGINEERING AND
ENVIRONMENTAL OF NEVADA, INC.
F/K/A OWENS GEOTECHNICAL INC.
OLDCASTLE GLASS, INC., D/B/A
OLDCASTLE GLASS WRIGHT CITY;
OLSON PRECAST COMPANY; ORECO
DUCT SYSTEMS, INC.; OSSIS IRON
WORKS; P&S METALS; PACIFIC
COAST STEEL, INC.; PACIFIC
INSULATION COMPANY; PACIFIC
STAIR CO.; PAHOR MECHANICAL
CONTRACTORS, INC.; PAPE,
MATERIAL HANDLING, INC., A/K/A
PAPE MATERIAL HOLDING, D/B/A
PAPE RENTS; PAR ELECTRICAL
CONTRACTORS, INC.; PARAMOUNT
MANAGEMENT ENTERPRISES, LTD;
PARAMOUNT SCAFFOLD, IN
PARTITION SPECIALTIES, INC.; PAUL
BEBBLE & ASSOCIATES, INC.; PDM
STEEL SERVICE CENTERS, INC.;
PENHALL COMPANY;
PERFORMANCE CONTRACTING,

INC.; POTTER ROEMER; POWELL
CABINET & FIXTURE CO.; PREMIER
STEEL, INC.; PRIMARY STEEL, INC;
PRIME CONTRACTING, INC., D/B/A
PRIME GRADING & PAVING: PRIME
FABRICATION & SUPPLY; QED, INC;
QTS LOGISTICS, INC., D/B/A QUALITY
‘TRANSPORTATION SERVICES OF
NEVADA, INC.; QUALITY CABINET
AND FIXTURE COMPANY; QUALITY
‘TRANSPORTATION SERVICES OF
NEVADA, INC.; QUICK CRETE
PRODUCTS CORP.; RAM

   

 

 

CONSTRUCTION SERVICES OF

|

 

 

 
rn ie

 

MICHIGAN, INC.; RAMON
FERNANDEZ, AS ADMINISTRATOR
OF THE ESTATE OF ANA
FERNANDEZ; RAUL ESCOBEDO; RC
WHITE CONSULTING, INC.; READY
MIX, INC., D/B/A READY MIX
CONCRETE; RED MOUNTAIN
MACHINERY COMPANY; RELIABLE
STEEL, INC.; REPUBLIC CRANE, LLC;
RJF INTERNATIONAL CORP.;
ROADSAFE TRAFFIC SYSTEMS, INC.,
F/K/A NES TRAFFIC SAFETY LP;
ROCKWAY PRECAST, INC.;
RONCELLI, INC.; RSC EQUIPMENT
RENTAL, INC.; SAFE ELECTRONICS,
INC.; SAFEWORKS LLC; SC STEEL,
INC.; SIERRA GLASS & MIRROR, INC.;
SILVER STATE MARBLE, LLC;
SILVERADO ASSOCIATES, LLC;
SMALLEY & COMPANY; SMITH PIPE.
& STEEL COMPANY (WHICH WILL
DO BUSINESS IN CALIFORNIA AS.
CAZ STEEL COMPANY); SMK, IN
SOUTHERN NEVADA PAVING, INC;
SOUTHWEST IRON WORKS, LLC;
SQUIRES LUMBER COMPANY,
STARLITE CONSTRUCTION, INC.,
D/B/A SHAWMUT DESIGN &
CONSTRUCTION; STEEL
ENGINEERS, INC.; STEEL
STRUCTURES, INC.; STEELMAN
PARTNERS, LLP; STERLING
CORPORATE CUSTOM ELEVATOR
INTERIORS; STETSON ELECTRIC,
INC.; STINGER WELDING, INC.;
STONE CONNECTION, LLC, D/B/A
SAMFET; STRIPING SOLUTIONS,
INC.; SUMMIT EXCAVATION, INC.
SUMMIT SAND & GRAVEL, INC.
SUNBELT RENTALS, INC.; SUNSTATE,
EQUIPMENT CO., LLC; SUPERIOR.

 

 

 

 

 

 
‘TILE & MARBLE, INC.; SYRACUSE
CASTINGS WEST CORP.;T.
NICKOLAS CO.; TECHNICOAT
MANAGEMENT, INC.; THE GLIDDEN
COMPANY, D/B/A ICI PAINTS; THE
PENTA BUILDING GROUP, LLC; THE
‘SHERWIN-WILLIAMS COMPANY; THE
SOUTHWEST CIRCLE GROUP, INC;
‘THE WINROC CORPORATION’
(NEVADA); THYSSEN ELEVATOR
CORPORATION; THYSSENKRUPP |
SAFWAY, INC., D/B/A SAFWAY
SERVICES INC. (LV);
THYSSENKRUPP SAFWAY, INC.;
‘'TMCX NEVADA, LLC; TOMARCO
CONTRACTOR SPECIALTIES, INC.;
TOTTEN TUBES, INC.; TRACTEL,
INC.; TRACY & RYDER LANDSCAPE, |
INC,; TRENCH PLATE RENTAL CO; |
‘TRL-POWER GROUP, INC.; ULMA
FORM-WORKS, INC.; UNI
ERECTORS, LLC; UNITED RENTALS
GULF, LLC; UNITED RENTALS
NORTHWEST, INC.; UNIVERSAL
"ALLEYCREST
LANDSCAPE DEVELOPMENT, INC:
VENTURA MARBLE, LLC; VF, INC.
W&W STEEL, LLC OF NEVADA; W.R.
GRACE & CO.-CONN., D/B/A GRACE.
CONSTRUCTION PRODUCTS; WACO
INTERNATIONAL (WEST), INC., D/B/A
WACO SCAFFOLDING & EQUIPMENT;
WALNUT INVESTMENT CO., LLC,
D/B/A ACOUSTICAL MATERIAT.
SERVICES; WARD & HOWES
ASSOCIATES, LTD,; WASHOUT.
SYSTEMS, LLC; WATER FX, LLC;
WELLS CARGO, INC.; WHITE CAP
CONSTRUCTION SUPPLY, INC.;
WILLIAMS FURNACE CO; WINTER |
COMPOSITES, LLC; YOUNG. |

 

   

 

 

  

 

 

 
ELECTRIC SIGN COMPANY; YWS |
ARCHITECTS, LO; ZETIAN

SYSTEMS, INC,; Z-GLASS, INC., D/B/A

% WALL INC,; Z-GLASS, INC.; AND

JMB CAPITAL PARTNERS MASTER |

 

FUND LLP, AS ASSIGNEE OF ALL
CLAIMS HELD BY ASSIGNOR LIEN
CLAIMANTS ADERHOLDT

SPECIALTY COMPANY, INC., AMI
HOSPITALITY, LLC, A/RK/A
ARCHITECTURAL MATERIALS
INCORPORATED, BOMBARD
ELECTRIC, LLC, BOMBARD
MECHANICAL, LLC, COLASANTI
SPECIALTY SERVICES, INC., DESERT
FIRE PROTECTION, PEREGRINE
INSTALLATION, CO., AND WARNER
ENTERPRISES, INC., D/B/A SUN
VALLEY ELECTRIC SUPPLY CO,
Respondents. __]

Certified questions, pursuant to NRAP 5, regarding equitable
subrogation and contractual subordination in a mechanics’ liens context.
United States Bankruptcy Court for the Southern District of Florida; A.
Jay Cristol, Judge.

Questions answered in part.
Parsons Behle & Latimer and Rew R. Goodenow, Reno,
for Appellant Wilmington Trust FSB.

‘Thomas L. Abrams, Plantation, Florida,
for Respondents Ahern Rentals, Inc.; and Reliable Steel, Inc,

 

Baker Hostetler and Richard J. Bernard, New York, New York,

for Respondents Coreslab Structures (L.A.) Inc.; Keenan, Hopkins, Suder
& Stowell Contractors, Inc; QTS Logistics, Ine; and Quality
‘Transportation Services of Nevada, Inc.

 

 
 

Carla M, Barrow, Coral Gables, Florida,
for Respondent Fisk Eleetrie Company.

Brown Robert LLP and Seth P. Robert, Fort Lauderdale, Florida,
for Respondent McKeon Door of Nevada, Inc.

Cooksey, Toolen, Gage, Duffy & Woog and Andrew R, Muehlbauer, Las
Vegas,
for Respondent Steelman Partners, LLP.

Shea & Carlyon, Ltd., and Candace C. Carlyon, Las Vegas,
for Respondent Young Electric Sign Company.

Duane Morris LLP and Jeffrey W. Spear, Pittsburgh, Pennsylvania;
Duane Morris LLP and Warren D. Zaffuto, Miami, Florida,
for Respondents Century Steel, Inc.; and Pacific Coast Steel, Inc.

Ehrenstein Charbonneau Calderin and Robert P. Charbonneau and Daniel
L, Gold, Miami, Florida,

for Respondents Absocold Corporation; Austin General Contracting, Inc;
Austin Hardwoods, Inc.; Glenn Rieder, Ine.; Powell Cabinet & Fixture Co.;
Safe Electronics, Inc.; Stone Connection, LLC; and Union Erectors, LLC,

Fahrendorf, Viloria, Oliphant & Oster, LLP, and Scott F. Gilles and Jason
‘A. Rose, Reno,
for Respondents Bradford Products, LLC; and Insteel, LLC.

Gibbs, Giden, Locher, Turner & Senet LLP and Becky Ann Pintar, Las
Vegas,

for Respondents D'Alessio Contracting, Ine.; and WACO International
(West), Ine.

Gordon & Rees LLP and Robert E. Schumacher and Jon M. Ludwig, Las
‘Vegas; Ehrenstein Charbonneau Calderin and Robert P. Charbonneau and
Daniel L. Gold, Miami, Florida,

for Respondent JMB Capital Partners Master Fund LLP.

Gordon Silver and Gregory E. Garman, Thomas H. Fell, and Gabrielle A.
Hamm, Las Vegas,

for Respondents Southern Nevada Paving, Inc.; Air Design Technologies,
LLC; AirTek Products LLC; Cadillac Stone Works, LLC; Cemex

ul

 
mn ee

 

Construction Materials Pacific, LLC; Collings Interiors, LLC; Commercial
Roofers, Ine,; Conti Electric, Inc.; Desert Plumbing & Heating Co., Inc.
Eberhard/Southwest Roofing, Inc.; EIDS Steel Company, LLC; Gallagher-
Kaiser Corporation; Geo Cell Solutions, Inc.; Inncom International, Ine;
JF. Duncan Industries, Inc,; JS&S, Inc.; Lally Steel, Inc.; L.A. Nevada
Ine; LVI Environmental of Nevada, Inc; Marnell Masonry, Inc;
‘Mechanical Insulation Specialists; Midwest Drywall Co., Inc.; Midwest Pro
Painting, Inc.; Modernfold of Nevada, LLC; Mojave Electric Company,
LLC; Paramount Management Enterprises, Ltd.; Penhall Company;
Performance Contracting, Inc; Ram Construction Services of Michigan,
Inc, Silver State Marble, LLC; Superior Tile & Marble, Inc.; The PENTA.
Building Group, LLC; Technicoat Management, Ine.; Universal Piping,
Ine; W&W Steel, LLC of Nevada; Water FX, LLC; and Wells Cargo, Inc.

 

Herold & Sager and Emily L. Grant and Linda L. Sager, Encinitas,
California,
for Respondent Ital Stone, Inc.

John C. Dotterrer Counsellors at Law and John C. Dotterrer and Jenny
Torres, Palm Beach, Florida,

for Respondents Kimley-Horn and Associates, Ine.; Nova Engineering and
Environmental of Nevada, Inc.; and Valleycrest Landscape Development,
Ine.

Leiderman Shelomith, P.A., and Zach B. Shelomith, Fort Lauderdale,
Florida,
for Respondent KCG, Ine.

Markowitz, Davis, Ringel & Trusty, P.A, and Ross R. Hartog, Miami,
Florida; John R. Stevenson, Birmingham, Michigan,
for Respondent Eugenio Painting Company.

May, Meacham & Davell, P.A., and Robert C. Meacham, Fort Lauderdale,
Florida,

for Respondents Cashman Equipment Company; Communications Supply
Corporation; Crescent Electric Supply Company, Inc; Derr and
Gruenewald Construction Co.; Graybar Electric Company, Inc. H&E
Equipment Services, Inc.; Hilti, Inc.; Integrated Mechanical Group, LLC;
Morris-Shea Bridge Company, Inc; Quality Cabinet and Fixture
Company; Sierra Glass & Mirror, Ine; Tracy & Ryder Landscape, Inc.;
W.R. Grace & Co-Conn.; Z-Glass, Inc.; and Zetian Systems, Inc.

 

2

 
ere ae

 

McAlpine & Associates and Don W. Blevins, Auburn Hills, Michigan;
Lawrence H. Meuers, Naples, Florida,
for Respondent CCCS International LLC.

‘McDonald Hopkins, LLC, and Tina M. Talarchyk, West Palm Beach,
Florida,

for Respondents Giroux Glass, Inc.; and John A. Martin & Associates of
Nevada, Ine.

Messana Rosner & Stern and Thomas M. Messana and David N. Stern,
Fort Lauderdale, Florida,

for Respondents QTS Logistics, Inc.; and Quality Transportation Services
of Nevada, Inc.

Michael R. Mushkin & Associates, P.C., and Michael R. Mushkin, Las

Vegas,
for Respondent Illuminating Concepts, Ltd.

Harold W. Mitts, Jr., Overland Park, Kansas,
for Respondent Pahor Mechanical Contractors, Inc.

 

& Varricchio and Phillip T. Varricchio, Las Vegas,
for Respondent Anixter Inc.

Ozark Perron & Nelson, P.A., and Andre R. Perron, Bradenton, Florida;
Adam M. Shonson, Miami, Florida,
for Respondent The Sherwin-Williams Company.

Palumbo Bergstrom and Erik D. Buzzard, Irvine, California,
for Respondent Winter Composites, LLC,

Jimmy D. Parrish, Orlando, Florida,
for Respondents Coreslab Structures (L.A.) Inc; and Keenan, Hopkins,
Suder & Stowell Contractors, Ine.

Pezzillo Lloyd and Brian J. Pezzillo and Jennifer R. Robinson, Las Vegas,

for Respondents Cashman Equipment Company; Communications Supply
Corporation; Derr and Gruenewald Construction Co,; Graybar Electric
Company, Inc; H&E Equipment Services, Inc.; Hilti, Inc; Quality Cabinet

13.

 
(owe ae

 

and Fixture Company; Tracy & Ryder Landscape, Ine; W.R. Grace & Co~
Conn,; and Zetian Systems, Ine.

Robert F. Reynolds, Fort Lauderdale, Florida,
for Respondents American Crane & Hoist Erectors, LLC; and Republie
Crane, LLC.

D. Jean Ryan, Miami, Florida,
for Respondent Tractel, Inc.

Beverly J, Salhanick, Las Vegas,
for Respondent Reliable Steel, Ine.

Shraiberg Ferrara & Landau, PA, and Philip J. Landau, Boca Raton,
Florida,

for Respondents Allegheny Millwork PBT; Architectural Materials Inc.;
Bergman, Walls, & Associates, Ltd.—Architects; Dana Kepner Company,
Inc; Desert Lumber LLC; Dieleo Crane Service, Inc.; Door & Hardware
Management, Inc.; Door-Ko, Inc.; Eagle Enterprises of TN, LLC; George
M. Raymond Co.; Henri Specialties Co., Inc., of Nevada; J.B.A. Consulting
Engineers, Inc.; Johnson Controls, Inc; L&P Interiors, LLC; Lochsa, LLC;
‘ThyssenKrupp Safway, Ine.; TMCX Nevada, LLC; and YWS Architects,
LLC.

Wright, Fulford, Moorhead & Brown, P.A, and Edward M. Baird,
Altamonte Springs, Florida,
for Respondent Insulpro Projects, Inc.

A Company Portable Restrooms, Inc.; A Track-Out Solution LLC; Abatix
Environmental Corp.; Absolute Metals, LLC; Air Systems, Inc; AK
Constructors, Inc.; Alabama Metal Industries Corporation; Allen Drilling
Inc.; Alpine Steel LLC; American Air Balance Co., Inc; American Metal
Fabricators LLC; American Pacific Excavation Inc; American Sand &
Gravel, Ltd.j Apex Concrete Cutting and Coring, Ine; Arcelormittal
International America, LLC; Arcon Flooring, Ine.; Arizona Tile, LLC; Atlas
Construction Cleanup Inc.; Atlas Construction Supply, Ine.; AZ-PUS, Inc;
Aztech Inspection Services, LLC; Bakersfield Pipe and Supply, Inc.
Besam US, Inc; Besam West, Inc.; Boething Treeland Farms, Inc.; Brown-
‘Strauss Steel Sales, Inc.; Burke Engineering Co.; C.R. Laurence Co., Ine.
California Flex Corporation; California Wholesale Material Supply, LLC;
Carrara Marble Company of America; CECO Conerete Construction, LLC;

 

 

14

 
 

Cellerete Corporation; Cherokee Erecting Company, LLC; City Electric
Supply Company; Clark County Fence Company, LLC; CLQTS, LLC; CMC
Group, LLC; Codale Electric Supply, Ine; Commercial Scaffolding of
Nevada, Ine; Concrete Coring of Nevada, Inc; Construction Sealants
Supply, Ine; Consumers Pipe and Supply Co.; Continental Glass &
Hardware, Inc.; Copper State Bolt & Nut Company, Inc.; Cummins Rocky
Mountain, LLC; Curtis Steel Co., Inc; CWCI Insulation of Nevada Ine.;
D&D Steel, Ine.; Dal-Tile Corporation; Design Space Modular Buildings,
Ine.; Direct Paving & Grading; Direct Paving & Grading, LLC; Diversified
Conerete Cutting, Inc; Diversified Construction Supply, LLC; DSE
Construction, Ine.; Dunn-Edwards Corporation; East Iowa Decks Support,
Inc Eggers Industries, Inc.; Elmeo/Ford, Inc; EM&C Trucking, LLC;
Embassy Glass; Embassy Steel; Energy Products of Nevada, Inc.;
Engineered Eq. & Systems Co.; Raul Escobedo; F. Rodgers Corporation;
Fasteners Inc. Southwestern Supply; Ferguson Enterprises, Inc.; Ramon
Fernandez, as Administrator of the Estate of Ana Fernandez; FF&E
Purchasing Associates, LLC; Flippin's Trenching, LLP; Fountain Supply
Company; Frehner Construction Company, Ine.; Garrett Materials, LLC;
General Supply & Services, Inc.; Gillette Construction, LLC; Global
Services of Nevada, Inc.; Grani Installation Inc; Halton Co; Hammond
Caulking, Inc; Hampton Tedder Electrie Company; Hampton Tedder
Technical Services; Harrington Industrial Plastics, LLC; Harsco
Corporation; HD Supply Construction Supply, LP; HD Supply
Waterworks, LP; Heating and Cooling Supply, Ine.; Helou & Sons, Inc;
Hershberger Bros. Welding, Inc, Hertz Equipment Rental Corporation;
Hotz, LLC; IBA Consultants West, LLC; Ideal Mechanical, Inc.; Insulfoam
LLC; Intermountain Lock & Supply Co.; J&J Enterprises Services, Inc;
Janis Services West, LLC; Jensen Enterprises, Inc; K&K Construction
Supply, Inc.; Kelly’s Pipe & Supply Co., Inc.; Knorr Systems, Inc.; L&W
Supply Corporation; Langan Engineering & Environmental Services, Inc.
Las Vegas Awnings, LLC; Las Vegas Paving Corporation; Las Vegas
Roofing Supply, LLC; Las Vegas Windustrial Co.; Lewis Crane & Hoist,
LLC; Lone Mountain Excavation & Utilities, LLC; Lukz Trucking, Inc;
M&H Building Specialties, Inc; Mac Arthur Co.; Mechanical Products
Nevada, Inc.; Mechanical Systems West, Inc.; Merli Concrete Pumping of
Nevada, Inc. Metal-Weld Specialties, Inc.; Mighty Crane Service, LLC;
Mitchell Construction Services, Inc.; Mundee ‘Trucking, Inc; Nedco
Supply; NES Rentals Holdings, Ine; Nevada Construction Clean-Up;
Nevada Ready Mix Corporation; Norman S. Wright Mechanical
Equipment Corporation; Oldcastle Glass, Inc.; Olson Precast Company;
Oreco Duct Systems, Ine.; Ossis Iron Works; P&S Metals; Pacific

  

 

 

   

15

 

 
ne

Insulation Company; Pacific Stair Co.; Papé Material Handling, Inc.; Par
Electrical Contractors, Ine; Paramount Scaffold, Inc; "Partition
Specialties, Inc; Paul Bebble & Associates, Inc; PDM Steel Service
Centers, Inc; Potter Roemer; Premier Steel, Inc.; Primary Steel, Inc.;
Prime Contracting, Inc, Prime Fabrication & Supply; QED, Inc.; Quick
Crete Products Corp; RC White Consulting, Inc.; Ready Mix, Inc.; Red
‘Mountain Machinery Company; RJF International Corp.; Roadsafe Traffic
Systems, Inc; Rockway Precast, Inc.; Roncelli, Inc.; RSC Equipment
Rental, Ine; Safeworks LLC; SC Steel, Inc.; Silverado Associates, LLC;
Smalley & Company; Smith Pipe & Steel Company; SMK, Inc.; Southwest
Iron Works, LLC; Squires Lumber Company; Starlite Construction, Ine.;
Steel Engineers, Inc.; Steel Structures, Inc.; Sterling Corporate Custom
Elevator Interiors; Stetson Electric, Ine; Stinger Welding, Inc.; Striping
Solutions, Inc.; Summit Excavation, Ine; Summit Sand & Gravel, Inc.;
Sunbelt Rentals, Inc.; Sunstate Equipment Co., LLC; Syracuse Castings
West Corp.; T. Nickolas Co.; The Glidden Company; The Southwest Circle
Group, Ine; The Winroc Corporation (Nevada); Thyssen Elevator
Corporation; Tomareo Contractor Specialties, Inc.; Totten Tubes, Inc.;
Trench Plate Rental Co.; Tri-Power Group, Inc.; Ulma Form-Works, Inc.;
United Rentals Gulf, LLC; United Rentals Northwest, Inc.; Ventura
Marble, LLC; VFC, Inc.; Walnut Investment Co., LLC; Ward & Howes
Associates, Ltd.; Washout Systems, LLC; White Cap Construction Supply,
Ine; and Williams Furnace Co.,

in Proper Person.

 

 

  

Jones Vargas and John P. Sande, III, John P. Desmond, and John P.
Sande IV, Reno,
for Amicus Curiae Nevada Bankers Association.

Snell & Wilmer LLP and Leon F. Mead, II, Laura Ellen Browning, Marek
P. Bute, and Kelly H. Dove, Las Vegas,

for Amici Curiae Associated General Contractors, Las Vegas Chapter;
Nevada Association of Mechanical Contractors; and Nevada Chapter of the
Associated General Contractors.

‘Taggart & Taggart, Ltd., and Paul G. Taggart, Carson City,
for Amicus Curiae Nevada Land Title Association.

16

 

 
BEFORE THE COURT EN BANC.

OPINION
By the Court, CHERRY, C.J.:

‘The United States Bankruptcy Court for the Southern District
of Florida has certified three questions to this court relating to the
viability of equitable subrogation and the enforceability of contractual
subordination against mechanic's lien claimants under Nevada's
mechanic's and materialman’s lien statutes, codified in NRS Chapter 1082

‘The Honorable Kristina Pickering, Justice, voluntarily recused
herself from participation in the decision of this matter.

*The three certified questions were presented to us as follows:

1, Whether the Senior Lenders’ mortgage is
senior to the mechanics’ liens by virtue of the legal
doctrine of equitable subrogation and/or loan
replacement and modification, inasmuch as loan
proceeds secured by Bank of America, as
administrative agent for the Senior Lenders, were
used to completely satisfy a senior mortgage which
was rerecorded prior to the commencement of any
work on the Project, with the expectation that the
new loan would be secured by a lien with the same
priority as the loan being satisfied?

2, Whether NRS [Chapter 108] prohibits
the use of equitable subrogation as found in the
Restatement [(Third)] of (Prop.:] Mortgages § 7.6,
or the use of replacement and modification as
found in the Restatement [(Third)] of (Prop.:]
‘Mortgages § 7.3, to allow a mortgage to “step into
the shoes of” a pre-existing lien (which was fully
satisfied by the mortgagee) when such pre-existing,
lien was recorded prior to the commencement of
any work or improvement giving rise to a
statutory lien under NRS [Chapter 108]?

continued on next page...

 

 
 

While we decline to answer the first question, we entertain questions two
and three because the answers may be determinative of part of the federal
case, there is no controlling Nevada precedent, and the answers will help
settle important questions of law. See NRAP 5; Volvo Cars of North
America v. Ricci, 122 Nev. 746, 750-51, 137 P.3d 1161, 1164 (2006).

‘The second question focuses on whether the doctrine of

 

equitable subrogation may be applied against mechanic's lien claimants,
such that a mortgage incurred after the commencement of work on a
project will succeed to the senior priority position of a preexisting lien
satisfied by the mortgagee, despite the existence of intervening mechanics’
liens. Although this court has adopted mortgage subrogation principles,
see American Sterling Bank v. Johnny Mgmt. LV, 126 Nev. _,_, 245
P.3d 635, 538 (2010); Houston v. Bank of America, 119 Nev. 485, 488, 78
P.3d 71, 73 (2003); see also Restatement (Third) of Prop.: Mortgages § 7.6
emt, a (1997), we have never addressed whether equitable subrogation

 

applies in the mechanic's lien context. NRS 108.225 is the controlling
authority in Nevada regarding the priority of mechanics’ liens. It
expressly provides that every other mortgage or encumbrance imposed
after the commencement of construction of a work of improvement is
subordinate and subject to the mechanics’ liens regardless of the recording
dates of the notices of liens. Because principles of equity cannot tramp an
express statutory provision, we conclude that equitable subrogation does
not apply against mechanic's lien claimants.
=.continued
3. Whether subordination agreements
executed by certain mechanics and materialman

lien claimants, purporting to subordinate their
liens to a new mortgage, are enforceable?

18

 
The third question asks this court to determine whether
contractual subordination agreements executed by mechanic's lien
claimants are enforceable. Pursuant to NRS 108.2453 and NRS 108.2457,
we conclude that subordination agreements purporting to subordinate
‘mechanics’ liens prospectively are not enforceable. However, mechanic's
lien claimants may waive their statutorily protected rights when the
precise requirements of NRS 108.2457 are met.

EA DURAL HISTORY

‘This court's review is limited to the facts provided by the
certification order from the United States District Court for the Southern
District of Florida and the complaint attached thereto, and we answer the
questions of law posed to us based on those facts, In re Fontainebleau Las
‘Vegas Holdings, 127 Nev. _, __, 267 P.3d 786, 795 (2011).

Debtor Fontainebleau Las Vegas Holdings, LLC, sought to

 

construct and develop a $2.8 billion hotel-casino resort with gaming,
lodging, convention, and entertainment amenities in Las Vegas, Nevada
(the Project). In 2005, Bank of America, N.A., in its capacity as an
administrative agent for a syndicate of prepetition lenders, loaned
Fontainebleau $150 million secured by a deed of trust in first priority
position. Over 300 contractors and suppliers started construction on the
Project, some of whom later asserted statutory mechanics’ liens against
the property. In 2007, Fontainebleau sought construction financing for
the Project, and Bank of America, as agent, agreed to loan Fontainebleau
$1.85 billion, to be dispersed in three stages. As partial security for the

"The Project is situated on approximately 24.4 acres at the sites of
the former El Rancho Hotel and Algiers Hotel on the north end of the Las
Vegas Strip. The Project is approximately 70 percent complete.

 

 
omn e

 

loan, Fontainebleau agreed to execute a deed of trust in favor of Bank of
America to be recorded in first priority position. The 2007 credit
agreement included a provision requiring the general contractor and
subcontractors to subordinate their liens to the Bank of America deed of
trust. Construction proceeded for a time, but at some point it appears that
Bank of America refused to advance further funds under the existing loan
commitments.‘ Work ceased, and Fontainebleau filed a petition for relief
under Chapter 11 of the bankruptey code in the United States District
Court for the Southern District of Florida. Eventually, the property was
sold, with the liens to attach to the proceeds, and the Chapter 11
reorganization proceeding was converted to a Chapter 7 liquidation.
Appellant Wilmington Trust FSB succeeded Bank of America
as administrative agent for the lenders. In 2009, Wilmington Trust filed
an adversary proceeding in the bankruptcy court against respondents, a
multitude of contractors, subcontractors, and suppliers that have asserted
statutory mechanics’ liens against the property. ‘The dispute between
Wilmington ‘Trust and the various contractors and suppliers over the

priority of their respective liens on the property is at the center of the

‘The parties to the loan commitments are currently in litigation in
the United States District Court for the Southern District of Florida in a
proceeding unrelated to the adversary proceeding in which the certified
questions arise.

*Fontainebleau sold substantially all of its assets to Ieahn Nevada
Gaming Acquisition, LLC. The sale was approved by the United States
District Court for the Southern District of Florida in January 2010. The
following month, Fontainebleau closed the sale transaction with Icahn,
transferring its assets free and clear of all liens and encumbrances, with
all liens and encumbrances from the Project attaching to the sale
proceeds.

20

 
bankruptcy court's certified questions. In particular, the bankruptcy court
‘has sought a ruling from this court regarding the application of equitable
subrogation and contractual subordination in the context of the mechanics’
liens. The bankruptcy court entered an order staying the proceedings
until resolution of the certified questions by this court.*
DISCUSSION

The decision to consider certified questions is within this
court's discretion, See NRAP 5(a) (stating that this court may answer
certified questions). In determining whether to exercise its discretion to
consider certified questions, this court looks to whether the “answers may
‘be determinative’ of part of the federal case, there is no controlling
[Nevada] precedent, and the answer will help settle important questions of

law.” Volvo Cars of North America v, Ricci, 122 Nev. 746, 750-61, 137
P.3d 1161, 1164 (2006) (quoting Ventura Group v, Ventura Port Dist., 16

P.3d 717, 719 (Cal. 2001). This court is also constrained “to resolving
legal issues presented in the parties’ pleadings.” Orion Portfolio Serve, 2
vs Clark County, 126 Nev. _, 245 P.3d 527, 530 (2010) (quoting
‘Terracon Consultants v. Mandalay Resort, 125 Nev. 66, 72, 206 P.3d 81,
85 (2009).

Because the first question presented by the district court is

 

largely factual and the discovery process is in its infancy, we decline to

answer it, except to the extent that its answer is implicated in the answer

 

“The Las Vegas Chapter of the Associated General Contractors, the
Nevada Chapter of the Associated General Contractors, and the Nevada
Association of Mechanical Contractors filed an amici brief supporting
respondents. The Nevada Bankers Association and the Nevada Land Title
Association filed amicus briefs supporting Wilmington Trust.

 

 
me

 

to question two. See Badillo v. American Brands, Inc,, 117 Nev. 34, 38, 16
P.3d 435, 437 (2001) (declining to answer a certified question).’ However,
the remaining questions posed by the bankruptcy court squarely fit within
the Volvo criteria. We conclude that our consideration of questions two
and three is appropriate. We streamline questions two and three in order
to best resolve the legal issues presented. See Boorman v. Nevada Mem'l
Cremation Society, 126 Nev. _, __, 236 P.3d 4, 6 (2010) (rephrasing
certified questions under NRAP 5). Both questions present issues of aw
that we review de novo. American Sterling Bank v. Johnny Mgmt. LV.
126 Nev, _, _, 245 P.3d 535, 538 (2010); Southern Nev, Homebuilders
v, Clark County, 121 Nev. 446, 449, 117 P.8d 171, 173 (2005).

Do Nevada's c's and materialman’s lien statutes prohibit the
of equitable subrogation?

‘The second question concerns whether the doctrine of
equitable subrogation can apply to allow a subsequent lender to claim the
senior priority status of an original loan that the subsequent lender
satisfied when contractors and suppliers hold intervening mechanics’
liens.

We have previously applied equitable subrogation in the realm
of mortgages in Houston v. Bank of America, 119 Nev. 485, 488, 78 P.3d
71, 73 (2003). In Houston, we recognized that the doctrine of equitable

 

"We also decline to address whether this court should adopt
Restatement (Third) of Prop.: Mortgages § 7.3 (1997).

“This court has recognized the doctrine of equitable subrogation in a
variety of situations. See, e.g., AT&T Technologies, Inc, v, Reid, 109 Nev.
592, 855 P.2d 533 (1993) (workers’ compensation); Federal Ins. Co. v.
Toivabe Supply, 82 Nev. 14, 409 P.2d 623 (1966) (negotiable instruments);

continued on next pag

 

22

 
ones

 

subrogation “permits ‘a person who pays off an encumbrance to assume
the same priority position as the holder of the previous encumbrance.” Id.
(quoting Mort v. U.S., 86 F.3d 890, 893 (9th Cir. 1996)), In other words,
the doctrine “enables ‘a later-filed lienholder to leap-frog over an
intervening lien(holder|.”" American Sterling Bank v. Johnny Mgmt. LV,
126 Nev. __, __, 246 P.3d 535, 539 (2010) (alteration in original) (quoting
Hicks v, Londre, 125 P.8d 452, 456 (Colo. 2005); see Grant S. Nelson &

Dale A. Whitman, Adopting Restatement Mortgage Subrogation
Principles: Saving Billions of Dollars for Refinancing Homeowners, 2006

BYU L. Rev. 305, 305 n.2 (2006) (lien priority is critical due to the risk
“that the foreclosure proceeds will be insufficient to pay the (lien) in full’).
“The practical effect of equitable subrogation is a revival of the discharged
lien and underlying obligation and assignment to the payor or subrogee,
permitting the subrogee to enforce the seniority of the satisfied lien
against junior lienors.” American Sterling, 126 Nev. at __, 245 P.3d at
539. Although equitable subrogation has the effect of an assignment of
the discharged lien, it is not an absolute right and will not be granted if it,

will result in injustice or prejudice to an intervening lienor, Houston, 119

  

Nev. at 491, 78 P.3d at 75. After considering multiple approaches in
applying the doctrine, we adopted the position taken by the Restatement
(Third) of Property: Mortgages, whereby

a mortgagee will be subrogated when it pays the
entire loan of another as long as the mortgagee
“was promised repayment and reasonably
expected to receive a security interest in the real

 

“continued
Globe Indem,_v, Peterson-McCaslin, 72 Nev. 282, 303 P.2d 414 (1956)
(surety); Laffranchini v, Clark, 39 Nev. 48, 153 P. 250 (1915) (mortgages).

23

 
os

 

estate with the priority of the mortgage being
discharged, and if subrogation will not materially
prejudice the holders of intervening interests in
the real estate.”

Id, at 490, 78 P.3d at 74 (quoting Restatement (Third) of Prop.: Mortgages
§ 7.6(aX4) (1997)); see Nelson & Whitman, Real Estate Finance Law §
10.6, at 27 (Sth ed. 2007).

While we have previously applied equitable subrogation
principles, we have not addressed whether the doctrine displaces the
priority plainly and specifically afforded to mechanic's lien claimants in
NRS 108.225, See Skyrme v. Occidental Mill and Mining Co., 8 Nev. 219,
292 (1873) (“a mechanic's lien is different from a mortgage executed by the
consent of the parties”). In resolving the novel question presented to us by
the bankruptey court, we will independently review whether equitable
subrogation applies under the framework of mechanics’ liens. American
Sterling, 126 Nev. at __, 245 P.8d at 638; see Hicks, 125 P.3d at 455,
Before we resolve whether the doctrine applies under the circumstances
tory of

 

 

presented in this case, we will examine the purpose and
‘mechanics’ liens.

‘A mechanic's lien is a statutory creature established to help
ensure payment for work or materials provided for construction or
improvements on land. Lehrer McGovern Bovis v. Bullock Insulation, 124
Nev. 1102, 1115, 197 P.3d 1032, 1041 (2008); see Van Stone v, Stillwell &
Bierce Mfg, Co, 142 U.S. 128, 136 (1891); California Commercial v,
Amedeo Vegas I, 119 Nev. 143, 146, 67 P.3d 928, 381 (2003); Schofield v,
Copeland Lumber, 101 Nev. 83, 84, 692 P.2d 519, 520 (1985); Brunzell v..
Lawyers Title, 101 Nev. 395, 396-97, 705 P.2d 642, 644 (1985); see also
Black's Law Dictionary 1008 (9th ed. 2009) (defining a mechanic's lien as
“(al statutory lien that secures payment for labor or materials supplied in

24

 
improving, repairing, or maintaining real or personal property, such as a
building, an automobile, or the like”). We have previously held “that the
‘mechanic's lien statutes are remedial in character and should be liberally
construed.” Lehrer McGovern, 124 Nev. at 1115, 197 P.8d at 1041
(quoting Las Vegas Plywood v. D & D Enterprises, 98 Nev. 378, 380, 649
P.2d 1367, 1368 (1982)); see Hardy Companies, Inc. v. SNMARK, LLC,
126 Nev. __, __, 245 P.3d 1149, 1155 (2010); Peceole v. Luce &
Goodfellow, 66 Nev. 360, 373, 212 P.2d 718, 725 (1949); Lamb v. Lucky
Boy M, Co, 37 Nev. 9, 16, 138 P, 902, 904 (1914); Malter v, Falcon M. Co,
18 Nev. 209, 212, 2 P. 50, 50 (1883). Legislators have created a means to

 

provide contractors secured payment for their work and materials—
“contractors are generally in a vulnerable position because they extend
large blocks of credit; invest significant time, labor, and materials into a
project; and have any number of workers vitally depend upon them for
eventual payment.” Lehrer McGovern, 124 Nev. at 1116, 197 P.3d at 1041
(citing Connolly Develop., Inc. v. Sup. Ct. of Merced Cty,, 553 P.2d 637,
653 (Cal. 1976)); see Ferro v, Bargo M, Co,, 37 Nev. 139, 141, 140 P. 527,
528 (1914),

‘The concept of a mechanic's lien originated in ancient Roman
law. Edward H. Cushman, The Proposed Uniform Mechanics’ Lien Law,
80 U. Pa. L. Rev. 1083, 1083 (1932). It was later embraced in France by
the Code Napoleon and in other countries that have adopted civil law as

the basis of their jurisprudence, including Belgium and Spain. Moore:
Mansfield Const, Co. v. Indianapolis, N. C. & T. Ry, Co,, 101 N.E. 296, 301
(Ind. 1913); Samuel L. Phillips, A Treatise on the Law of Mechanics’ Liens
on Real and Personal Property 9-10 (24. ed. 1883). ‘The first mechanic's

lien law in America involving real property was enacted by Maryland in

 

 
 

1791. Frederick Contractors, Inc. v. Bel Pre Med, Ctr, Ine,, 334 A.2d 526,
580 (Md. 1975); Key Ageney v. Continental Cas. Co., 155 A.2d 547, 551
(NJ, 1959); Blose v. Havre Oil & Gas Co., 31 P.2d 738, 741 (Mont, 1934).
Enacted upon the urging of Thomas Jefferson and James Madison, the
goal of the law was to enable the swift construction of our nation’s new
capitol in the District of Columbia by protecting the interests of
“bricklayers, carpenters, joiners, or other workingmen.” Monroe & Co, v.
Hannan, 18 D.C. (7 Mackey) 197 (1889); see Morris v. United States, 174
U.S. 196, 301 (1899) (White, J., dissenting); Premier Investments v, Suites
of America, 644 N.E.2d 124, 127 n.1 (Ind. 1994); Fleming-Gilehrist Const,
Co, v. MeGonigle, 89 S.W.2d 15, 19 (Mo. 1935); Boyle v. Mountain Key
Min. Co., 50 P. 347, 352-53 (N.M. 1897). Today, all 50 states have
promulgated mechanic's lien statutes. Independent ‘Trust v. Stan Miller,
Inc., 796 P.2d 483, 487 (Colo. 1990); Frank H. Conner Co. v, Spanish Inns
Charlotte N.C., 242 S.E.2d 785, 791 (N.C. 1978); Nesdahl Surveying &
Eng. v. Ackerland, 507 N.W.2d 686, 690 (N.D. 1993); see Thomas Warner
Smith, III, Note, Mechanic's Lien Priority Rights for Design Professionals,
46 Wash. & Lee L. Rev. 1035, 1038 (1989).

Prior to statehood, the Legislative Assembly of the Territory of
‘Nevada passed this state's first mechanic's lien law in 1861, 1861 Laws of
the Territory of Nevada, ch. 16, at 35; see Skyrme v, Occidental Mill and
Mining Co,, 8 Nev. 219, 228 (1873); Hunter v. Savage Mining Co,, 4 Nev.

"There is some indication that Pennsylvania implemented a
mechanic's lien law relating to shipbuilders in 1784, Neil v. Kinney, 11
Ohio St. 58, 66 (Ohio 1860).

26

 

 
men ee

 

153, 155 (1868).!° As a “product of legislative fiat" in derogation of
common law, Fisher Bros.. Ine. v. Harrah Realty Co., 92 Nev. 65, 67, 545
P.2d 203, 204 (1976), “Nevada's mechanie(’ls lien law is unique in the
United States,” because it has been “almost entirely derived by work of the
‘Nevada state legislature." Leon F. Mead Il, Nevada Construction Law §
8.1 (2010).!* In 2003 and 2005, in response to the Venetian lien litigation,
see Venetian Casino Resort v. Dist. Ct,, 118 Nev. 124, 41 P.3d 827 (2002),
the Legislature substantially revised the mechanic's lien statutes with the
intent “to facilitate payments to lien claimants.” Hardy Companies, Ine. v,
SNMARK, LLC, 126 Nev. _, __, 245 P.3d 1149, 1156 (2010); Mead Il,
‘supra, at § 8.1; see Hearing on S.B. 343 Before the Assembly Judiciary
Comm., 73d Leg. (Nev., May 13, 2005) (mechanics’ liens “assist people who

have improved real property so that they can get paid for their efforts”).

 

 

Other western states, including Idaho, Montana, Oregon, Utah,
and Wyoming, also enacted similar mechanic's lien legislation before being
recognized as states. Inre GVR Ltd. Co., Inc., 695 P.2d 1240, 1241 (Idaho
1985); Merrigan v. English, 22 P. 454, 456 (Mont. 1889); Auld v, Starbard,
173 P. 664, 666 (Or. 1918); Doane v. Clinton, 2 Utah 417, 419 (1877);
Weyerhaeuser Co. v, Walters, 707 P.2d 733, 739 (Wyo. 1985) (Rose, J.,
dissenting).

 

 

MAlthough Nevada’s mechanic's lien statutes have been extensively
revised since 1861, they were originally “borrowed from California.”
Hunter v. Truckee Lodge, 14 Nev. 24, 26 (1879).

1=Promulgation of a uniform mechanics’ lien act was first attempted
in 1925 and resulted in the Uniform Mechanics’ Lien Law.” Sara E.
Dysart, Comment, r

ESLTAL Article 5-—Consirastion Liana Analzaed_ia
Light of Current Texas Law on Mechanics’ and Materialmen’s Liens, 1

St. Mary's L.J. 113, 116 n.17 (1980). However, only one ste -Florla
adopted it. Geiser v, Permacrete, Inc,, 90 So, 2d 610, 612 (Fla. 1956).

27

 
con ae

 

NRS 108.225 is the controlling authority in Nevada regarding
the priority of mechanics’ liens. Amended in 2003, NRS 108.225
affirmatively gives mechanic's lien claimants priority over all other liens,

 

mortgages, and encumbrances that attach after the commencement of a
work of improvement:
1. [Mechanics' liens . . . are preferred to:
(a) Any lien, mortgage or other encumbrance
which may have attached to the property after the
commencement of construction of a work of
improvement,
(b) Any lien, mortgage or other encumbrance
of which the lien claimant had no notice and which
was unrecorded against the property at the
commencement of construction of a work of
improvement,
2, Every mortgage or encumbrance imposed
upon, or conveyance made of, property affected by
[mechanics'] liens... after the commencement of
construction of a work of improvement are
subordinate and subject to the {mechanics’)
liens... regardless of the date of recording the
notices of liens.
Despite the plain and unambiguous language of the statute,
Wilmington Trust requests that this court apply equitable subrogation, as
it did in Houston v. Bank of America, 119 Nev. 485, 488, 78 P.3d 71, 73

(2003), in the mechanic's lien context. See MGM Mirage v, Nevada Ins.

\8Wilmington Trust and amici Nevada Bankers Association and
Nevada Land Title Association assert that this court should follow other
Jurisdictions that employ equitable subrogation in the realm of mechanics’
liens. See Lamb Excavation v. Chase Manhattan Mortg,, 95 P.3d 542,
543-46 (Ariz. Ct. App. 2004); Peterman-Donnelly Eng. & Con, Corp, v.
First Nat. Bank, 408 P.2d 841, 846 (Ariz. Ct. App. 1965); Parker v. Tout,
279 P, 431, 432 (Cal. 1929); Detroit Steel Products Co, v. Hudes, 151
continued on next page...

 

28

 
a

Guaranty Ass'n, 125 Nev. 223, 228-29, 209 P.3d 766, 769 (2009) (“when
the language of a statute is plain and unambiguous, such that it is capable
of only one meaning, this court should not construe that statute
otherwise”). Nearly 100 years ago, we recognized in Lamb v. Lucky Boy
M, Co,, 37 Nev. 9, 16, 138 P. 902, 904 (1914), that mechanics’ liens “halvel
no place in equity jurisprudence.” Moreover, “[wle have recognized
that . .. equitable principles will not justify a court’s disregard of statutory
requirements.” Pellegrini v. State, 117 Nev. 860, 878, 34 P.3d 519, 531

(2001); see Blaine Equip. Co. v. State, Purchasing Div., 122 Nev. 860, 867-
68, 138 P.3d 820, 824-25 (2006); Mello v. Woodhouse, 110 Nev. 366, 373,
872 P.2d 337, 341 (1994); Smith v. Smith, 68 Nev. 10, 23, 226 P.2d 279,

=.continued
N.E.2d 136, 139 (Ill. App. Ct. 1958); Houston Lumber Co. v, Skaggs, 613
P.2d 416, 417-18 (N.M. 1980); Rock River Lumber v. Universal Mortg.
Etc,, 262 N,W.2d 114, 119-20 (Wis. 1978); Bank of Baraboo v, Prothero,
255 N.W. 126, 128 (Wis. 1934). “However, every state seems to have a
different version of the law with different requirements, different affected
pactios, and different beneficiaries” Ethan Glass, Old_Statutes Never
Nor Do They Fade Away: A Proposal for Modernizin; ies!
Lien Law by Federal Action, 27 Ohio NU. L- Rev. 67,96 (2000). Because
of the diversity of mechanic's lien laws across the country, caselaw from
other states “should be approached with caution.” Independent Trust v.
Stan Miller, Inc,, 796 P.2d 483, 487 (Colo. 1990); see Nickel Mine Brook v.
Joseph_E. Sakal, 585 A.2d 1210, 1213 (Conn. 1991); Woolridge wv,
Torgrimson, 229 N.W. 805, 805 (N.D. 1930). Having considered our
statutory scheme and the purpose behind our mechanic's lien statutes, we
decline to adopt the cases from other jurisdictions that apply equitable
subrogation in circumstances surrounding mechanics’ liens because our
lien laws are exclusive to this state. Unlike the apparent trend in other
courts, we are not persuaded that equitable power contravenes express
statutory language. Furthermore, Wilmington Trust had ample means to
minimize its financial risk through the proper channels of contractual
subordination. See Ex Parte Lawson, 6 So. 3d 7, 15-16 (Ala. 2008)

 

 
Ss

 

285 (1951). The Legislature has spoken and has created a specific
statutory scheme whereby a mechanic's lien is afforded priority over a
subsequent lien, mortgage, or encumbrance in order to safeguard payment
for work and materials provided for construction or improvements on land.

ehrer McGovern Bovis v. Bullock Insulation, 124 Nev. 1102, 1115, 197
P.8d 1032, 1041 (2008); see Ex Parte Lawson, 6 So. 3d 7, 15 (Ala. 2008).
‘Therefore, we conclude that the plain and unambiguous language of NRS

 

108.225 precludes application of the doctrine of equitable subrogation, as
it unequivocally places mechanic's lien claimants in an unassailable
priority position. See Beazer Homes Nevada, Ine. v. Dist, Ct, 120 Nev.
575, 578 n.4, 97 P.3d 1132, 1134 n.4 (2004) (“When a statute is clear,
unambiguous, not in conflict with other statutes and is constitutional, the
judicial branch may not refuse to enforce the statute on public policy
grounds. That decision is within the sole purview of the legislative
branch.”); Freeman v, Davidson, 105 Nev. 13, 16, 768 P.2d 885, 887 (1989)
(The legislature's intent should be given full effeet.”). This position
“accords with Nevada's policy favoring contractors’ rights to secured
payment for labor, materials, and equipment furnished.” Lehrer
McGovern, 124 Nev. at 1116, 197 P.3d at 1041.

Are_subordination_agreements executed by mechanic's lien claimants

enforceable?

The third question asks us to determine whether contractual
subordination agreements defining or altering the rights and priorities of
creditors’ liens are enforceable when they are executed by mechanic’s lien
claimants. We conclude that subordination agreements that purport to
subordinate the liens prospectively are unenforceable but that non-
prospective subordination may be pursued through compliance with the

30

 
os

 

requirements of NRS 108.2457, Accordingly, in appropriate
circumstances, contracts can be structured to achieve subordination.

Our decision is guided by the statutory scheme. NRS
1108.2453(1) provides that “[e]xcept as otherwise provided in NRS 108.221
to 108.246, inclusive, a person may not waive or modify a right, obligation
or liability set forth in the provisions of NRS 108.221 to 108.246,
inclusive.” See also NRS 108.2453(2Xa) (“A condition, stipulation or
provision in a contract or other agreement for the improvement of property
or for the construction, alteration or repair of a work of improvement in
this State that attempts to do any of the following is contrary to public
policy and is void and unenforceable: (a) Require a lien claimant to waive
rights provided by law to lien claimants or to limit the rights provided to
lien claimants, other than as expressly provided in NRS 108.221 to
108.246, inclusive.”). NRS 108.2457 specifies, in relevant part, that

5. The waiver and release given by any lien
claimant is unenforceable unless it is in the
following forms in the following circumstances:

(a) Where the lien claimant is required to
execute a waiver and release in exchange for or to
induce the payment of a progress billing and the
lien claimant is not in fact paid in exchange for
the waiver and release or a single payee check or
Joint payee check is given in exchange for the
waiver and release,

(b) Where the lien claimant has been paid in
full or a part of the amount provided for in the
progress billing, .

(©) Where the lien claimant is required to
execute a waiver and release in exchange for or to
induce payment of a final billing and the lien
claimant is not paid in exchange for the waiver
and release or a single payee check or joint. payee

 

 

31

 
check is given in exchange for the waiver and
release, ....

(@) Where the lien claimant has been paid
the final billing.

See also NRS 108.2457(1) (allowing for lien waivers only when the lien

 

 

claimant: “(a) Executes and delivers a waiver and release that is signed by
the lien claimant or the lien claimant's authorized agent in the form set
forth in this section; and (b) In the case of a conditional waiver and
release, receives payment of the amount identified in the conditional
waiver and release.”).

Concerning the interplay between NRS 108.2453 and NRS
108.2457, the parties take divergent positions. Wilmington Trust
contends that the Legislature, by failing to explicitly proseribe
subordination, did not intend to prevent lenders from seeking to protect
their interest through subordination. It asserts that subordination
agreements executed by mechanic's lien claimants that purport to
subordinate their liens to a new mortgage are enforceable when they are
not prospective. Respondents argue that NRS 108.2453 and NRS
108.2457 unambiguously prohibit the enforcement of contractual
provisions requiring lien claimants to subordinate their interests to
others, including lenders. Because these statutes are “eapable of being

understood in two or more senses by reasonably informed persons,” they
are ambiguous. Estate of LoMastro v, American Family Ins,, 124 Nev.
1060, 1073, 195 P.3d 339, 348 (2008) (quoting McKay v. Bd. of
Supervisors, 102 Nev. 644, 649, 730 P.2d 438, 442 (1986)); see also Hardy
Companies, Inc. v. SNMARK, LLC, 126 Nev. _, _, 246 P.8d 1149, 1154
(2010) (concluding that NRS 108.2453(1) is ambiguous).

 

 
 

Whether the statutes provide for prospective waivers is not
clear from the plain language of the statutes; thus, we must look to the
legislative history. Ambiguous statutes are interpreted in accordance with
the Legislature's intent. Hardy, 126 Nev. at _, 245 P.3d at 1154. The
legislative history behind the enactments of NRS 108.2453 and NRS
108.2457" illuminates the Legislature's intent that prospective waivers of
mechanics’ liens are unenforceable. See Hearing on S.B. 206 Before the
Senate Judiciary Comm., 72d Leg. (Nev., March 11, 2003) (“The purpose of

 

this bill is to prohibit the prospective waiver of a lien claimant's rights,
and to confirm, clarify, and standardize the procedures and forms required
for a waiver and release upon payment.” (testimony of Steve G, Holloway,
lobbyist for bill sponsors)); Hearing on S.B. 206 Before the Assembly
Judiciary Comm., 72d Leg. (Nev., May 8, 2003) (“Senate Bill 206 prohibits
the prospective waiver of a lien claimant's rights. Doing so is good public
policy....Nevada deservedly has a reputation in the construction
industry as being the worst state in the western United States in which to
do business. Passage of $.B. 206 will do much to negate that reputation.”
(testimony of Steve G. Holloway). To the extent that the subordination

1«[T]n 2003, the Legislature amended NRS Chapter 108 to prohibit
lien waivers unless such waivers comply with the statutory requirements
outlined in NRS 108.2453 and NRS 108.2457.” Lehrer McGovern Bovis v.
Bullock Insulation, 124 Nev. 1102, 1115 n.39, 197 P.3d 1032, 1041 n.39
(2008); see 2003 Nev. Stat., ch. 427, §§ 25-26, at 2590-95,

33

 
anes Be

 

provisions are prospective, we conclude that NRS 108.2453 and NRS
108.2457 prohibit the enforcement of those subordination provisions.

However, non-prospective subordination agreements may be
enforceable, as neither NRS 108.2453 nor NRS 108.2457 completely
prohibit waiver of or impairment to the right to a mechanic's lien after it
arises, ‘Therefore, non-prospective subordination agreements may be
enforced as long as they meet the statutory requirements of NRS
108.2457. Accordingly, while prospective subordination agreements are
unenforceable, respondents could have waived those rights provided by
law after those rights arose provided that the requirements of NRS
108.2457 were met.

We therefore answer the certified questions as set forth above.

cs.
We concur: Cheney [

 

 

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