Opinion ID: 2574927
Heading Depth: 1
Heading Rank: 6

Heading: RV's lien on improvements has priority over the Haselwoods' deed of trust

Text: ¶ 29 RV argues its lien has priority over the Haselwoods' deed of trust under the relation-back statute, RCW 60.04.061, because it delivered equipment to the property one week before the Haselwoods recorded their deed of trust. The Haselwoods argue that even if RV has a lien on the improvements to the land, RV's lien is junior to the Haselwoods' deed of trust because RV's lien does not attach to the publicly-owned real property, making the relation-back statute inapplicable. The Court of Appeals held that RCW 60.04.061 applies to RV's lien on improvements to give it priority over the Haselwoods' deed of trust. Haselwood, 137 Wash. App. at 888, 155 P.3d 952. We agree. ¶ 30 We must first determine whether RCW 60.04.061 applies to liens on improvements or only to liens that reach the underlying real property. If RCW 60.04.061 applies to liens on improvements, then RV's lien has priority because RV's first delivery of equipment to the site was one week before the Haselwoods recorded their deed of trust. ¶ 31 RCW 60.04.061 provides: The claim of lien created by this chapter upon any lot or parcel of land shall be prior to any lien, mortgage, deed of trust, or other encumbrance which attached to the land after or was unrecorded at the time of commencement of labor or professional services or first delivery of materials or equipment by the lien claimant. The Haselwoods argue that a lien upon any lot or parcel of land means the relation-back section of the statute applies only to real property, not improvements to the property. The Haselwoods contend the Court of Appeals erred in holding RCW 60.04.061 gives priority to a lien on improvements. ¶ 32 RCW 60.04.011(5) defines improvements: Improvement means: (a) Constructing, altering, repairing, remodeling, demolishing, clearing, grading, or filling in, of, to, or upon any real property or street or road in front of or adjoining the same; (b) planting of trees, vines, shrubs, plants, hedges, or lawns, or providing other landscaping materials on any real property; and (c) providing professional services upon real property or in preparation for or in conjunction with the intended activities in (a) or (b) of this subsection. The Court of Appeals accurately held [t]he activities described in subsections (a) and (b) strongly suggest that the resulting improvements will be permanently affixed to or part of the realty. Generally, such permanent improvements become a part of the realty unless a contrary intention is expressed. Haselwood, 137 Wash.App. at 886, 155 P.3d 952. However sometimes a lien will not reach the real property because the improvements to the property are completed for someone who owns less than a fee estate in the property. See Columbia Lumber Co. v. Bothell Dairy Farm, 174 Wash. 662, 664, 25 P.2d 1037 (1933). As the Court of Appeals correctly stated, [t]he legislature anticipated this problem and responded to it by enacting RCW 60.04.051, which permits a lienholder to remove its improvements if the lien does not attach to the real property. Haselwood, 137 Wash.App. at 886-87, 155 P.3d 952. ¶ 33 The improvements performed by RV included clearing; mass excavation; installing sewer lines, water lines, storm systems, and sidewalks; paving; and striping. These improvements permanently attached to the real property but were performed for BIA, which did not hold a fee estate in the real property. ¶ 34 The Court of Appeals interpreted the statutory language lot or parcel of land to include the improvements made by RV, stating: Under these circumstances, where the improvement cannot reasonably be treated as anything but a permanent structure, it is reasonable to conclude that the lien is upon a parcel of land within the meaning of RCW 60.04.061 because the lien attached to a permanent improvement on the lot. Id. at 887, 155 P.3d 952. In other words, the Court of Appeals interpreted the statutory language claim of lien created by this chapter upon any lot or parcel of land to include the lien RV filed on the improvements. The Court of Appeals reasoned, the work RV Associates performed would have become a part of the realty and inured to the City's benefit. Even though the agreement designates the improvements as personal property, the ice arena is nonetheless permanently situated on the City's real property. Id. ¶ 35 The Court of Appeals correctly held that the trial court erred in interpreting RCW 60.04.061 to relate back only when the lien attaches to real property. Id. at 888, 155 P.3d 952. RV's lien on the improvements therefore attached on the day it delivered the equipment to the site, so its lien has priority over the Haselwoods' deed of trust.