Title: J.D. Construction v. IBEX Int'l Group

State: nevada

Issuer: Nevada Supreme Court

Document:

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126 Nev., Advance Opinion 3
INTHE SUPREME COURT OF THE STATE OF NEVADA

 

J.D. CONSTRUCTION, INC., A No, 52543,
NEVADA CORPORATION; JERRY

DAUGHERTY, AN INDIVIDUAL; AND

PALER AN INDIE FILED
INDIVIDUAL,

| Appellants,

IBEX INTERNATIONAL GROUP, LLC,
|A NEVADA LIMITED LIABILITY
COMPANY,

Respondent.

oct 97 2vi0

 

JD. CONSTRUCTION, ING., A
NEVADA CORPORATION; JERRY
DAUGHERTY, AN INDIVIDUAL; AND |
CARRIE DAUGHERTY, AN
INDIVIDUAL,
Appellants,

vs.
IBEX INTERNATIONAL GROUP, LLC,
A NEVADA LIMITED LIABILITY
COMPANY,
Respondent.

No, 52961

|

 

Consolidated appeals from a district court order expunging a
mechanic's lien and from a post-judgment order awarding attorney fees,
Eighth Judicial District Court, Clark County; Robert E. Rose, Judge
Docket No. 52543); Eighth Judicial District Court, Clark County;
Elizabeth Goff Gonzalez, Judge (Docket No. 52961).

Affirmed

 

Pisanelli Bice, PLLC, and Todd L. Bice, Las Vegas; Peol Brimley LLP and
‘Michael W. Brimley, Robert E. Werbicky, and Cary B. Domina, Henderson,
for Appellants.

[022092

 

  
Glaser, Weil, Fink, Jacobs, Howard & Shapiro, LLP, and Adam Smith and
G. Lance Coburn, Las Vegas,
for Respondent.

BEFORE HARDESTY, DOUGLAS and PICKERING, JJ.

OPINION

 

By the Court, DOUGLAS, J.
Appellants J.D. Construction, Inc., Jerry Daugherty, and
Carrie Daugherty (collectively, J.D. Construction) placed a mechanic's lien

on property owned by respondent IBEX International Group, LLC. IBEX

 

sought to expunge the lien, pursuant to NRS 108.2275, arguing that it was
frivolous and/or excessive. The district court concluded that the lien was
excessive and expunged the lien.

In this opinion, we address the proper scope and nature of NRS
108.2275 proceedings where a property owner seeks to expunge a frivolous
or excessive lien, We conclude that when a property owner secks to remove
a lien by arguing it is frivolous or excessive, the district court must
determine the material facts in order to reach a conclusion regarding
whether a lien is frivolous or excessive.

We conclude that in making these factual determinations, the
district court is not required to hold a full evidentiary hearing, but instead
may base its decision on affidavits and documentary evidence submitted by
the parties.

We also conclude that this procedure meets due process
requirements, However, pursuant to the time frame mandated by NRS

108.2275(8), if the district court determines that a hearing is necessary,

 

 
the hearing must be held within 15 to 30 days of the court's order for a
hearing. And while any hearing must be initiated within that time frame,
the statute does not require the district court to resolve the matter within
that time frame,

Finally, we conclude that, in evaluating whether a lien is
Jexcessive, the district court must use a preponderance-of-the-evidence
standard, rather than the reasonable-cause standard used for frivolous
liens, and the burden is on the lien claimant to prove the lien and the
amount claimed.

In this case, J.D. Construction had the burden to show the
adequacy of its lien, and it failed to do so. Accordingly, we affirm the order
of the district court because it reached the right result even though for the
/wrong reason.!

FACTS AND PROCEDURAL HISTORY

‘The underlying dispute arises from a contract between IBEX
and J.D. Construction for J.D. Construction to build a medical facility for
$5,000,000. ‘The contract stated that J.D. Construction was to be paid in
installments based upon the percentage completed and required that any
changes to the contract amount be priced as a change order. The parties
agree that the contract amount was later increased to at least
$5,438,761.88. However, they submitted conflicting affidavits in district

1J.D. Construction also argues that the district court abused its
discretion in awarding attorney fees to IBEX. We conclude that the district
court did not abuse its discretion in awarding attorney fees to IBEX
Brunzell v, Golden Gate Nat'l Bank, 85 Nev. 345, 349, 455 P.2d 31, 33
(1969).

   

 

 
 

 

Jcourt regarding whether there were any additional amendments to the
contract.
J.D. Construction stopped working on the project on January
25, 2008.2 A few days prior to that, on January 21, 2008, Valley
[Construction Services, Inc. (VCS), the company designated by the parties
jt determine the percentage of the project that was complete, sent its
sspector, Gary Parrish, to calculate the percentage of completion. At that,
time, VCS adjusted its calculation of the percentage completed to 23.09
percent from the 39.55 percent it had previously calculated. In his
deposition, Parrish stated that the percentage completed dropped because
prior to the January inspection he conducted his inspections based on a
budget document that indicated a three-story structure. When he received
the plans and realized that the project was actually a four-story structure,
he had to adjust his estimates of completion accordingly. The parties
dispute the percentage of work completed when J.D. Construction stopped
work.
J.D. Construction recorded a notice of lien on the property in
the amount of $1,450,497.90.8 IBEX filed a complaint, alleging breach of
contract, breach of the covenant of good faith and fair dealing, unjust

enrichment, intentional _misrepresentation/fraud, and negligent

8J.D. Construction stopped work because it claimed IBEX had failed
to pay as agreed under the contract.

 

"The lien noted the original contract amount ($5,000,000), the total
increase on the base contract amount ($1,700,041), the total amount of
‘complete additional work above the base contract amount ($271,864), the
total amount of all payments received ($1,709,573.95), and the amount of
the lien after deducting just credits and offsets ($1,450,497.90).

 
4

 

misrepresentation, and requested a court order quieting title to the
property and expunging the lien,

IBEX then filed a motion to expunge or reduce J.D.

 

Construction’s allegedly frivolous and/or excessive lien pursuant to NRS
108.2275. IBEX alleged that the amount of the contract between IBEX and
J.D. Construction was $5,438,761.88 and that because the project was only
23.09 percent complete, J.D. Construction was actually overpaid and the
lien was excessive and/or frivolous. J.D. Construction responded with
affidavits and documents supporting the amount of its lien

At the July 2008 hearing on the motion to expunge, the district
court, after oral arguments, ordered the parties to conduct discovery on the
issue of percentage of completion. The district court ordered the parties to
depose IBEX's representative at the project and the person at VCS most
knowledgeable regarding the percentage completed. J.D. Construction was
only able to depose VCS's field inspector, Parrish, regarding the percentage
completed.© J.D. Construction submitted a supplemental brief, which

‘IBEX claimed that J.D. Construction had already been paid
$1,709,573.95, which was $453,764.04 in excess of the work actually
completed on the project at the time. IBEX also paid $363,000 directly to a
subcontractor, Pacific Coast Steel, on May 1, 2008, to remove Pacific Coast
Steel's lien.

 

8J.D. Construction never accounted for its payments to
subcontractors or whether it still owed subcontractors money, or if they
were included in the lien claim,

“Parrish did all the field inspections for VCS as to work completed;
however, he submitted his reports to VCS, which calculated the percentage
completed in house.

 
included an expert report estimating the project was 52 to 55 percent
[complete as of January 21, 2008,

At the continued hearing in September 2008, the district court
granted the motion to expunge the lien, finding “the lien is not frivolous,
[but is excessive.”? The district court found the amount of the contract was
$5,438,751, and stated: “Valley Construction Services, Inc. has provided
the most credible estimate of percentage completion, and based upon
Valley Construction Services, Inc.'s calculation the Project was 23.09%
‘complete upon J.D. Construction, Inc.’s departure from the Project.” J.D.
Construction now appeals.

DISCUSSION

In this appeal, we determine the proper scope and nature of
NRS 108.2275 proceedings where a property owner seeks to expunge a
frivolous or excessive lien,

We first address the proper scope of an NRS 108.2275 hearing.
Because the determination of whether a lien is frivolous or excessive
requires a determination of the material facts of the case, we conclude that
factual determinations are appropriate in an NRS 108.2275 hearing.

Second, we conclude that an evidentiary hearing is not
required in order for the district court to make factual determinations and
this procedure satisfies due process because NRS 108.2275(6) allows both
parties a sufficient opportunity to present their case.

"The district court held oral argument on the motion but did not hear
live testimony. ‘The parties were permitted to argue regarding the motion
but did not present evidence beyond the submitted moving papers,
affidavits, and depositions.

 

 
In reaching this conclusion, we consider the nature and timing
of an NRS 108.2275 hearing. We recognize that the use of “if” in the
statute implies that a hearing will not always be necessary and note that a
hearing is not necessarily required for the district court to make a ruling
Jon a motion to expunge a frivolous or excessive lien, Instead, a hearing is,
necessary only if there is a possibility that the lien will be expunged; the
district court can deny a motion based on the supporting documents alone
but must have a hearing if there is an issue of fact that needs to be
addressed.

Further, we note that if the district court issues an order for a
hearing, it must strictly follow the timeline for scheduling a hearing set
forth in NRS 108.2275. That notwithstanding, we conclude that the
statute does not require the matter be resolved within that time frame.

‘Third, we address the standard of proof for evaluating whether
a lien is excessive and for determining the sufficiency of the evidence in
‘cases involving motions to expunge mechanics’ liens. We determine that
‘the standard for evaluating whether a lien is excessive, pursuant to NRS.
108.2275, requires the lienholder to prove its validity by a preponderance
of the evidence; the district court properly applied this standard.

Scope of an NRS 108.2275 hearing

NRS 108.2275(1) permits a party in interest in a property
subject to a lien to move to dismiss the lien if it is frivolous or excessive,
NRS 108.2275(2)(b) specifically requires that the party seeking to expunge
a lien must submit affidavits and documentary evidence in support of its

motion. ‘The statute provides that if the court orders a hearing, the

applicant must serve notice of the application and order of the court on the
lien claimant within three days of the court’s order. NRS 108.2275(3). Any

 

 
sen ie

 

hearing must be held within 15 to 30 days of the court's order for a
hearing. Jd, After a hearing, the district court shall make one of three
determinations: (1) that the notice of lien is frivolous and made without
reasonable cause, (2) that the lien amount is excessive, or (3) that the
notice of lien is not frivolous or excessive and made with reasonable cause,
NRS 108.2275(6)(a)-(0); Crestline Inv. Group v. Lewis, 119 Nev. 365, 371,
75 P.3d 363, 367 (2003).
Legislative history
‘The legislative history of NRS 108.2275 provides further

 

 

insight with regard to the legislative intent concerning the scope of a
hearing pursuant to that statute, NRS 108.2275 was originally introduced
‘as Senate Bill 434 (S.B. 434). Proponents of $.B. 434 explained that the
bill was an attempt “to revamp Nevada Revised Statutes (NRS) chapter
108 in order to bring certainty into the statute and to avoid the need for
litigation in every instance where liens are placed against property.”
Hearing on $.B. 434 Before the Senate Comm. on Judiciary, 68th Leg.
(Nev., May 23, 1995). Charles Cook, legal staff for the Nevada Land Title
Association, explained that “S.B. 434 addresses changes to the mechanic's,
lien statutes only to bring Nevada in line with sister states in terms of
competitiveness and in continuity of economic investments.” Hearing on
8.B. 434 Before the Assembly Comm. on Judiciary, 68th Leg. (Nev., June
26, 1995).

‘The minutes of these committee hearings state that in enacting
NRS 108.2275, the Legislature contemplated the gathering of witnesses
and evidence and increased the number of days before the district court
must conduct a hearing to allow a defendant sufficient time to respond.
During one of the hearings, a citizen voiced concern that the section

regarding the hearing on frivolous liens removed a “defendant's due

 
 

process rights, because it does not allow sufficient time to answer or gather
witnesses or evidence.” Hearing on 8.B, 434 Before the Senate Comm. on
Judiciary, 68th Leg. (Nev., May 25, 1995). Senator Adler agreed and the
committee discussed how the speedy hearing requirement would be
affected by the reality of the court calendar. Id, The committee agreed to
extend the time frame for the hearing from between 6 and 15 days to
between 10 and 20 days. Id,

‘The minutes also note that “[ljooking to the level of proof
required to show the claim is frivolous, Senator Adler pointed out the
burden is such that the plaintiff must show there is absolutely no basis for
a claim. If there is any showing of good faith, the court will not dismiss the
lien.” Id. In formulating the proposed changes to Nevada's mechanic's lien
law, “proponents looked at statutes from other states in the region,”
specifically “Arizona, California, Oregon, and Washington.” Hearing on
S.B. 434 Before the Senate Comm. on Judiciary, 68th Leg. (Nev., May 23,

 

Competing views regarding the scope of a mechanic's lien hearing
‘There are two different views regarding the scope of a hearing

to expunge a mechanic's lien California allows determination of the
material facts of the case at a summary proceeding and does not require an
evidentiary hearing. See Jasper Constr., Inc. v, University Casework
Systems, Inc., 114 Cal. Rptr. 143, 144 (Ct. App. 1974). ‘The California
Supreme Court determined that due process is satisfied by a speedy
hearing on the probable validity of the lien. Connolly Dev., Inc. v. Superior
Court, 558 P.2d 637, 641 (Cal. 1976),

In contrast, Washington state courts have interpreted their
statute to limit determinations of factual disputes in a hearing to expunge

a frivolous or excessive lien. Washington courts have concluded that its

 

 
 

statute allows for resolutions of factual disputes but such resolution is
confined to the limited group of cases where the lien claim is clearly
meritless.” $.D, Deacon Corp. v. Gaston, 206 P.3d 689, 691 (Wash. Ct.
App. 2009). Washington’s summary proceeding is similar to a trial by
affidavit but is not a substitute for a trial on the merits: W.R.P, Lake
Union_v. Exterior Services, 934 P.2d 722 (Wash. Ct. App. 1997). It is
unclear what the exact limits of Washington's summary proceeding are for
factual disputes.

J.D. Construction argues that the district court exceeded its
[statutory authority by resolving highly disputed factual issues that should
have been resolved at trial. J.D. Construction asserts that an NRS
108.2275 hearing is an improper vehicle to resolve disputed material issues
of fact concerning the amount of work performed or the payment due or
owing. Rather, J.D. Construction argues that a hearing held pursuant to
NRS 108.2275 should be limited to the determination of facts that can be
determined by affidavit

J.D. Construction urges this court to adopt the approach taken
by Washington because Washington's statute for removal of frivolous or
excessive mechanics’ liens, Washington Revised Code section 60.04.081
(West 2009), is comparable to NRS 108.

 

'5. Washington has interpreted
its statute to limit a district court's ability to make factual determinations
in a hearing on a motion to expunge, and J.D. Construction argues that
NRS 108.2275 should be interpreted in the same manner.

 

*Arizona and Oregon do not use a similar hearing to quickly
challenge excessive or frivolous liens.

10

 
IBEX instead argues that Nevada has not adopted Washington
caselaw, and urges this court to adopt California's approach, which allows
factual determinations to be made at summary proceedings.? IBEX argues
that the summary procedure in NRS 108.2275 provides a speedy hearing
‘on the probable validity of the lien, just like California. IBEX argues that
if the district court is to determine whether the lien was excessive, it must

make findings of fact based on the affidavits, documents, and depositions

"The summary proceedings for stop notices is codified in California
and provides:

If the original contractor asserts...that the
amount of the claim as specified in the stop notice
is excessive, or... there is no basis in law for the
claim ...he may have the question determined in,
a summary proceedings in accordance with the
provisions of Sections 3198 to 3208, inclusive.

Cal. Civ. Code § 3197 (West 1993). Either the original contractor or
claimant may file an action entitling them to a hearing within 15 days for
the purpose of determining each party's rights. Cal. Civ. Code § 3201
(West 1993). ‘The original contractor, who is challenging the stop notice,
has the burden of proof at this proceeding. Cal. Civ. Code § 3202 (West
1993), Importantly,

[nJo findings shall be required in a summary
proceeding under this article. When the hearing is
before the court sitting without a jury and no
evidence other than the affidavit and
counteraffidavit is offered, if the court is satisfied
that sufficient facts are shown thereby, it may
make its determination thereon; otherwise, it shall
order the hearing continued for the production of,
other evidence, oral or documentary, or the filing of,
other affidavits and counteraffidavits,

Cal. Civ. Code § 3208 (West 1993).

 

 
submitted to the district court. We agree with IBEX and conclude that the
plain language of NRS 108.2275 requires the district court to consider the
material facts of the case in order to make a determination regarding

whether the lien is excessive or frivolous,

 

“Lien claims are statutory’ and a dispute over the
interpretation of a lien statute is one of statutory construction. Crestline
119 Nev. at 368, 75 P.3d at 365. As statutory construction is a question of
law, it is subject to de novo review. California Commercial v, Amedeo
Vegas I, 119 Nev. 143, 145, 67 P.3d 328, 330 (2003). When this court
engages in a de novo review of an issue of statutory construction, “[t]he
‘court first looks to the plain language of the statute.” Crestline, 119 Nev
at 368, 75 P.3d at 365 (quoting A.P. Constr. Co. v. Virgin River Casino, 118
Nev. 699, 703, 56 P.3d 887, 890 (2002). “Where the language of a statute
is plain and unambiguous and its meaning clear and unmistakable, there
is no room for construction, and the courts are not permitted to search for
its meaning beyond the statute itself” Madera v. SHS, 114 Nev. 253, 257,
956 P.2d 117, 120 (1998) (internal quotations omitted). A statute’s
language is ambiguous when it is capable of more than one reasonable
interpretation. Leven v, Frey, 123 Nev. 399, 404, 168 P.3d 712, 716 (2007).
We conclude that NRS 108.2275 is unambiguous. The plain
language of NRS 108.2275 allows a property owner to challenge @ lien as
frivolous or excessive and requires the district court to make a finding of
whether the lien is frivolous, excessive, or neither. In order for the district
court to make a finding that the lien is excessive or frivolous, the district
court must consider the material facts of the case. We are unpersuaded

that this language can be read any other way. The plain language of the

 

 
statute requires the district court to determine the material facts in order
to make a ruling as to whether the lien is frivolous or excessive.
Nature and timing of an NRS 108.2275 hearing

In deciding the motion to expunge the lien, the district court
held two hearings, ordered two depositions, and received affidavits
Neither party requested a full evidentiary hearing. J.D. Construction now
argues that it was a violation of due process for the district court to rule on
an NRS 108.2275 motion based solely upon affidavits and that the district
court needed to hold an evidentiary hearing and observe live testimony.
IBEX argues a mechanié’s lien does not create a property right, but is
instead a taking without due process that is only permissible because of
the expedited hearing available pursuant to NRS 108.2275. IBEX also
argues that J.D. Construction was afforded due process; there were two
hearings with the opportunity for both sides to present their case through
motions and affidavits, as well as the opportunity to conduct discovery in
between the two hearings, We agree.

NRS 108.2275(2) requires a party to set forth its legal and
factual grounds for its motion to expunge, supported by an affidavit and
documentary evidence. NRCP 43(¢) provides that “[w]hen a motion is
based on facts not appearing of record the court may hear the matter on
affidavits presented by the respective parties, but the court may direct that
the matter be heard wholly or partly on oral testimony or depositions.”
Moreover, NRCP 78 provides that “{tJo expedite its business, the court may

make provision by rule or order for the submission and determination of

motions without oral hearing upon brief written statements of reasons in
support and opposition.” We conclude that NRS 108.2275 and the NRCP
do not require an evidentiary hearing; instead, as discussed further below,

 

 
ee ie

 

a decision based on affidavits and deposition testimony can satisfy due
process,
‘Duc process considerations

A mechanic's lien is a “taking” in that the property owner is
deprived of a significant property interest, which entitles the property
owner to federal and state due process. Connolly Develop.. Inc. v. Sp, Ct. of
Merced Cty,, 553 P.2d 637, 644 (Cal. 1976). Due process is satisfied by
giving both parties “a meaningful opportunity to present their case.”
Mathews v. Eldridge, 424 U.S. 319, 349 (1976). In determining whether a
procedure meets the due process requirements of notice and an opportunity
to be heard, as set forth in Mathews, we note that “due process is flexible
and calls for such procedural protections as the particular situation
demands.” Burleigh v, State Bar of Nevada, 98 Nev. 140, 145, 643 P.2d
1201, 1204 (1982) (internal quotations omitted). In reaching a
determination regarding due process, the court considers,

[first, the private interest that will be affected by

the official action; second, the risk of an erroneous

deprivation of such interest through the procedures

used, and the probable value, if any, of additional

or substitute procedural safeguards; and finally,

the Government's interest, including the function

involved and the fiscal and administrative burdens

that the additional or substitute procedural

requirement would entail.
Mathews, 424 U.S. at 335,

The California Supreme Court determined that due process is
satisfied by a speedy hearing on the probable validity of the lien and that
“the safeguards provided by California law to protect property owners
against unjustified liens are sufficient to comply with due process

requirements.” Connolly, 558 P.2d at 654. In so doing, the court opined

“4

 
that while “the taking of property occasioned by a stop notice or mechanics’
lien is not de minimis, it is nonetheless of relatively minor effect.”
Connolly, 553 P.2d at 652. “The mechanics’ lien... does not deprive the
owner of the interim possession or use of the liened property...” Id,
However, “the laborer and materialman have an interest in the specific
property subject to the lien since their work and materials have enhanced
the value of that property.” Connolly, 553 P.2d at 653.

We are persuaded by the California Supreme Court's
reasoning. Nevada has previously agreed with this reasoning and held
that “[t]he object of the lien statutes is to secure payment to those who
perform labor or furnish material to improve the property of the owner.”
Schofield v. Copeland Lumber, 101 Nev. 83, 85, 692 P.2d 519, 520 (1985),
In considering the procedure to expunge a lien, both the property owner

 

and the lien claimant's rights must be addressed.

While a mechanic's lien is a “taking,” the protections provided
by NRS 108.2275 are sufficient to comply with due process requirements.
‘The district court does not violate due process when it decides factual
issues on the basis of affidavits and supporting documents. As the United
States Supreme Court recognized in Mathews, due process is not a fixed
‘concept susceptible to rigid definition. 424 U.S. at 334. Instead, “{djue
process is flexible and calls for such procedural protections as the
particular situation demands.” 1d. (quoting Morrissey v. Brewer, 408 U.S.
471, 481 (1972). Due process is satisfied where interested parties are
given an “opportunity to be heard at a meaningful time and in a
meaningful manner.” Id, at 333 (internal quotation omitted)

Applying the factors enumerated in Mathews, we recognize

that the owner has a significant interest in having his or her property be

 

 
free of encumbrances. We also recognize that the state has a significant
interest in securing payments for those who improve the owner's property.
Schofield, 101 Nev. at 85, 692 P.2d at 520. The lien claimant also has an
equally strong interest in ensuring that there are adequate assets
available to collect from if it obtains a favorable result. However, there is
little risk of erroneous deprivation. NRS 108.2275(7) expressly provides
that a determination as to the validity of the mechanic's lien does not affect
the other rights and remedies available to the parties. Therefore, we
conclude that a determination on expunging a mechanic's lien does not
provide any law-of-the-case or preclusion effect

While there are strong competing public and private interests,
an evidentiary hearing is not mandatory in these situations because of the
low risk of an erroneous deprivation. Furthermore, the probative value of
additional procedures will be very limited this early in the litigation
Under the procedure described here, both the property owner and the lien
claimant are provided a meaningful opportunity to present their case and
their right to due process is satisfied.

In this situation, due process was satisfied, as both parties
were afforded sufficient opportunity to present their case through
affidavits and supporting documents.1° J.D. Construction was not denied

due process in the proceedings on the motion to expunge its lien.

19In this case, the district court also granted J.D. Construction's
request to conduct depositions. However, J.D. Construction did not request
live testimony as to any material issue of fact, and we do not consider any
abuse of discretion at this time as to any issue not raised before the district
court.

 

 
We also note that in arguing that the district court should not
consider the material facts of the case, J.D. Construction argued that the
time frame mandated by the statute would not allow for a full

consideration of the facts necessary to make @ ruling. However, to satisfy

 

the mandates of due process and the requirements of NRS 108.2275, any
hearing held by the district court must be held within 15 to 30 days of the
court's order for a hearing. While any hearing must be initiated within
that time frame, the statute does not require the district court to resolve
the matter within that time frame, This conclusion comports with the
interests of justice as the district court should be permitted the latitude to
decide to order additional depositions or another hearing with live
testimony. While the district court does not have to resolve the matter
within the time frame, we note that the matter should be addressed
expeditiously.
Standard of proof and sufficiency of evidence

In finding J.D. Construction’s lien excessive and expunging it
pursuant to NRS 108.2275, the district court applied a preponderance-of-
the-evidence standard. J.D. Construction asserts that NRS 108.2275 only
requires it to show a good faith basis for its lien amount and therefore the
district court applied the wrong standard of proof in making its factual
determinations. IBEX contends that because NRS 108.2275 requires a
determination of the amount of a lien to determine if it is excessive or
frivolous, the district court properly followed the enumerated procedures,
and that J.D. Construction’s lien was properly expunged.

Determination of the correct standard of proof to be used by a

tribunal is a legal question, subject to de novo review. Matter of
Halverson, 123 Nev. 493, 509, 169 P.3d 1161, 1172 (2007). If the statutory

 

 
me

 

language does not address the issue, then this court looks to reason and

 

 

public policy to determine the Legislature's intent. Crestline, 119 Nev, at
368, 75 P.3d at 365.
NRS 108.2275(6) provides for the summary discharge of a

 

mechanic's lien:

 

If, after a hearing on the matter, the court
determines that:
(a) The notice of lien is frivolous and was

made without reasonable cause, the court shall

make an order releasing the lien and awarding

costs and reasonable attorney's fees to the

applicant for bringing the motion,

()The amount of the notice of lien is

excessive, the court may make an order reducing

the notice of lien to an amount deemed appropriate

by the court and awarding costs and reasonable

attorney's fees to the applicant for bringing the

motion.

(©) The notice of lien is not frivolous and was

made with reasonable cause or that the amount of

the notice of lien is not excessive, the court shall

make an order awarding costs and reasonable

attorney's fees to the lien claimant for defending

the motion.

(Hmphases added.)

‘The statute does not clearly state what standard of proof the
district court should use in determining whether the lien is excessive. The
plain language of NRS 108.2275(6) is clear that if the district court
determines that a mechanic's lien was made “without reasonable cause,”
then the lien is frivolous and the district court may expunge the lien,
However, the “without reasonable cause” language does not appear in the
paragraph relating to whether the lien is excessive. Therefore, the statute

“is capable of more than one reasonable interpretation” and is ambiguous.

18

 
Leven v, Frey, 123 Nev. 399, 404, 168 P.3d 712, 716 (2007). Asa result, we
must look beyond the plain language of the statute to determine what
standard of proof the district court should use to determine if a lien is

excessive,

 

Here, the legislative history does not provide any assistance, as
it refers only to determinations of whether a lien is frivolous—there is no
mention of what level of proof is required to show that the lien is excessive,
‘The legislative history of S.B. 434 states: “Looking to the level of proof
required to show the claim is frivolous, Senator Adler pointed out the
burden is such that the plaintiff must show there is absolutely no basis for
aclaim. If there is any showing of good faith, the court will not dismiss the

 

lien.” Hearing on 8.B. 434 Before the Senate Comm. on Judiciary, 68th
Leg. (Nev., May 25, 1995) (emphases added). Because the legislative
history is not helpful, this court must look to reason and public policy to
determine what the Legislature intended the evidentiary standard to be for
the district court to determine whether a lien is excessive.

We conclude that the district court must apply a
preponderance-of-the-evidence standard to determine whether a lien is
excessive, We conclude that this standard comports with reason and public
policy because the preponderance-of-the-evidence standard is the general
civil standard. Irving v. Irving, 122 Nev. 494, 497, 134 P.3d 718, 720
(2006). “[PJreponderance of the evidence’ merely refers to ‘[t]he greater
weight of the evidence.” McClanahan v. Raley’s, Inc., 117 Nev. 921, 925-
26, 34 P.3d 573, 576 (2001) (quoting Black’s Law Dictionary 1201 (7th ed.
1999)). If parties present conflicting evidence during an NRS 108.2275
hearing, the distriet court should determine which evidence has greater

weight and, accordingly, whether the lien is excessive. Thus, the district

 

 
court applied the correct standard in evaluating the evidence presented in
this case,
J.D. Construction further argues that the district court erred

in concluding the mechanic's lien was excessive because the district court's

 

decision was not based on admissible, reliable, or substantial evidence. We
disagree.

This court will not disturb the district court's factual
determinations if substantial evidence supports those determinations.
Radaker_v, Scott, 109 Nev. 653, 657, 855 P.2d 1087, 1040 (1993),
“Substantial evidence is that [evidence] which “a reasonable mind might
accept as adequate to support a conclusion.” Id, (quoting State Emp.
Security v. Hilton Hotels, 102 Nev. 606, 608, 729 P.2d 497, 498 (1986)
(quoting Richardson v. Perales, 402 U.S. 389, 410 (1971))). Therefore, this
court will only set aside findings that are clearly erroneous. Id,

While we do not agree completely with the district court’s
reasoning regarding who was the most credible witness in this case, we
affirm its decision because we conclude that it nonetheless reached the
correct result, Sengel v. IGT, 116 Nev. 565, 570, 2 P.3d 258, 261 (2000)
(affirming where the district court reached the right result for the wrong
reason). J.D. Construction had the burden to show the adequacy of its lien,
but it failed to do so. J.D. Construction failed to address the
subcontractors’ claims and whether its lien included money. for the
subcontractors. Further, despite being given the opportunity to depose the
person with the most knowledge regarding the completion of the project,
J.D. Construction failed to present substantial evidence regarding the

percentage completed and the total amount of the contract in light of

 

 
 

affidavits and evidence submitted by IBEX. Therefore, J.D. Construction’s
claims must fail.

We conclude that the district court did not err in expunging the
lien because it applied the correct standard of proof and substantial

jevidence supported its decision. Accordingly, we affirm the order of the

aval

jouglas

district court.

We concur:

Matec