Opinion ID: 2359920
Heading Depth: 1
Heading Rank: 11

Heading: The district court erred in granting summary judgment against O'Neil

Text: Both O'Neil and Hardy challenge the district court's determination that their failure to give SNMARK statutory pre-lien notice was fatal to their respective liens. We conclude that summary judgment against O'Neil and Hardy was improper. A genuine issue of material fact exists regarding whether SNMARK had actual knowledge of the potential lien claims of O'Neil and Hardy. In Fondren, we explained that a property owner who negotiates a lease with knowledge that substantial improvements need to be made to the property has actual knowledge of potential lien claims on the property. Fondren, 106 Nev. at 709, 800 P.2d at 721. If that owner fails to file a notice of nonresponsibility after knowledge of the construction, `the statute provides that the construction is at the instance of the owner.' Id. (quoting Matter of Stanfield, 6 B.R. 265, 268 (Bankr.D.Nev.1980)). This court concluded that the property owner in Fondren had negotiated the lease with the understanding that substantial remodeling would be required on the property. Id. In addition, a property owner has actual knowledge of potential lien claims if the property owner or the property owner's agent regularly inspects the remodeling project. Id. Actual knowledge by the property owner's agent is imputed to the property owner. Id. (citing Gould v. Wise, 18 Nev. 253, 259, 3 P. 30, 31 (1884)). An owner who witnesses the construction, either firsthand or through an agent, cannot later claim a lack of knowledge regarding future lien claims. Id. In Fondren, the property owner received regular updates from her lawyer and approved specific construction activities. Id. We concluded that the property owner in Fondren had actual knowledge of the potential lien claims because the property owner had both knowledge that the property required substantial remodeling and regular updates on the progress of the project from an agent who inspected the premises. Delivery of any pre-lien notice would have accomplished little or nothing and, therefore, was not required. Id. at 710, 800 P.2d at 722. However, `[t]he purpose of the pre-lien statute is to put the owner on notice of work and materials furnished by third persons with whom he has no direct [contract].' Id. at 709, 800 P.2d at 721 (quoting Matter of Stanfield, 6 B.R. at 269). Therefore, we conclude that actual knowledge requires that the owner has to have been reasonably made aware of the identity of the third party seeking to record and enforce a lien.