Court Opinion

ID: 9791947
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:20:53.206596+00
Date Added: 2024-06-11T07:37:39.678347
License: Public Domain

EHRLICH, Judge,
concurring in part and dissenting in part.
I concur in the majority opinion except for the section discussing timeliness of recordation. I believe that this portion of the opinion reaches an incorrect result and, therefore, I respectfully dissent from it.
I do not believe that A.R.S. § 33-993 clearly addresses the question in this case; it does not appear to contemplate multibuilding construction projects such as the one at issue. The statute states, in pertinent part, that every person, other than the original contractor, “claiming the benefit of this article, within sixty days after the completion of a building, structure or improvement, or any alteration of such building, structure or improvement ... shall” record a notice and claim of lien. A.R.S. § 33-993(A). “Completion” means the earlier of the “[a]ctual completion of the work” or the “occupation or use of the building, structure or improvement by the owner or his agent.” A.R.S. § 33-993(B). Sunland Drywall filed its lien against The Courts at Gainey Ranch development, as a single project, within 60 days of the completion of the last building. This case therefore presents the question whether the work undertaken by Sunland Drywall constituted a single “building, structure or improvement,” or whether it constituted a series of separate buildings, structures or improvements, each of which had to be the subject of a separate lien.
Arizona courts have repeatedly held that mechanic’s lien statutes are remedial in nature and are to be liberally construed in favor of the lienor. See e.g., Collins v. Stockwell, 137 Ariz. 416, 418, 671 P.2d 394, 396 (1983); Gene McVety, Inc. v. Don Grady Homes, Inc., 119 Ariz. 482, 486, 581 P.2d 1132, 1136 (1978); United Pacific Insurance Co. v. Cottonwood Properties, Inc., 156 Ariz. 149, 150, 750 P.2d 907, 908 *602(App.1987). The legislative intent is to protect the person who furnishes the labor or material which enhances the value of another’s property by giving him a lien. Collins, id. 137 Ariz. at 418, 671 P.2d 394; Northwest Federal Savings & Loan v. Tiffany Construction Co., 158 Ariz. 100, 102, 761 P.2d 174, 176 (1988). The particular purpose of A.R.S. § 33-993(A) is to give notice of a mechanic’s lien. Northwest Federal, id. We must keep these standards in mind when interpreting the requirements of A.R.S. § 33-993.
In Gene McVety, the Arizona Supreme Court addressed the question of whether a contractor had timely filed a lien against a subdivision when the lien was filed within sixty days of actual completion of the project, but more than sixty days after acceptance of the project. The project was covered by several contracts, one of which provided for the work completed after acceptance. In determining what completion date should apply to the filing date for mechanic’s liens; the Arizona Supreme Court stated:
It is, of course, the rule that two or more contracts cannot be tacked together so as to extend the time within which a lien notice must be filed. [Citations omitted.] This case is not, however, governed by the foregoing rule. Where work, distinct in nature, is performed at different times, the law supposes that it is performed under distinct contracts. But when work is done or materials furnished, all going to the same general purpose, if the several parts form an entire whole or are so connected together as to show that the parties had it in contemplation that the whole would form but one and not distinct matters of settlement, the whole must be treated as a single contract. [Citation omitted; emphasis added.]
119 Ariz. at 485, 581 P.2d at 1135. The Supreme Court concluded that the trial court had improperly granted summary judgment against the contractor that had filed the mechanic’s lien. It found that there was one project, although several distinct contracts were involved.
In this ease, the majority is treating a development covered by a single contract as a series of separate projects. Sunland Drywall filed its lien against the buildings constituting The Courts at Gainey Ranch in a timely manner. The contract between Drongo and Sunland Drywall governed all of the work that Sunland was to do on the entire development. There were not separate contracts for each building. Although the contract specified a price for the work to be done on each building, that point is not significant. The contract called for the same price for buildings 1, 3, 4, 5, 7, 8, 9,10 and 11. The plans appended to the contract show that all of these buildings conformed to the same floorplan. Buildings 2 and 6 and the ramada are smaller and, consequently, they were to be completed for less. Listing the individual buildings in the contract was simply an administrative mechanism to arrive at the total contract price; it did not create twelve separate contracts for work on twelve separate buildings.
Similarly, although Drongo provided Sunland with billing statements for each building, the payment schedule set forth in the contract called for monthly progress payments, not payment for the completion of each building. The retention of 10% of the payment on each building until its acceptance simply is a common mechanism for ensuring that the subcontractors will complete their work satisfactorily; it cannot be accorded great significance.
Finally, the contract taken as a whole indicates that the entire project was to be completed in phases, with each contractor commencing its part of the project upon the preceding contractor’s completion. The apparent motive for this arrangement was to keep the number of construction workers on the project site to a minimum in order to avoid the disruption of a neighboring golf course and nearby homes. Thus, the designation of individual buildings in the contract was to facilitate the scheduling of the various phases of construction, not to create separate contracts, or, as the majority contends, separate “settlements” for each building.
*603Under these facts, the reasoning of the Arizona Supreme Court in Gene McVety should apply. We should treat this contract as one providing for work on a single project consisting of a number of units. All of the units were owned by a single developer at the time when the parties entered into the contract. The parties did not contract for the individual buildings separately. Thus, there is no logical reason to require Sunland to have filed a separate lien on each building. The reasons for the contrary finding of the majority — that separate building permits and start orders were obtained for each building, that the buildings were not in the same stage of construction at any given time, that bills were submitted monthly on each building instead of on the project as a whole, and that 10% of the total due on work performed was retained until acceptance of the building — strike me as overly technical and inconsistent with the liberal interpretation of A.R.S. § 33-993 mandated by case law. This was a single project, the subject of a single contract to be executed in phases, and Sunland Drywall was entitled to protect itself through a single lien over all of the buildings on which it did work.
Sunland relies on this court’s opinion in Wahl v. Southwest Savings & Loan Ass’n, 12 Ariz.App. 90, 95, 467 P.2d 930, 935 (1970), for the proposition that a 24-build-ing project may constitute one improvement. The majority claims that this reliance is misplaced because Wahl is factually distinguishable from the present case. I do not find the majority’s factual distinctions convincing. I see no reason to distinguish between an apartment complex consisting of several buildings owned by a single entity and a condominium development consisting of several buildings owned by a single entity, later to be sold to individual owners. The remaining distinctions drawn by the majority — the recorded plats, separate permits for each building, designated costs for each building, and lack of a common delivery area — simply are differing administrative details of contracts for different projects. These differences have no bearing on the application of the reasoning found in Wahl to the present case. Wahl stands for the proposition for which Sunland cited it, and I believe that it supports a conclusion opposite that reached by the majority.
The majority also attempts to distinguish Gene McVety on the basis that it dealt with a water and sewer system benefiting an entire residential subdivision. I cannot agree with their suggestion that a water and sewer system is inherently more a single project than a unitary condominium development. Further, this distinction does not address Sunland’s underlying argument that Gene McVety sets forth the principles for the treatment of a mechanic’s lien with respect to large projects such as this one. See 119 Ariz. at 485, 581 P.2d at 1135. As long as the lien in question covers a single project, the nature of that project is immaterial.
There is one further problem with the majority’s resolution of this issue. In this case, Sunland Drywall filed a valid, sufficiently descriptive lien against buildings it worked on within a single project within 60 days of the completion of the work specified, yet the majority has found the lien to have been untimely filed through a needlessly technical analysis of the terms of the contract and the building schedule. A contractor is entitled to assume that a single contract for work on a single project can be covered by a single lien. The majority’s approach to this case presents contractors with an unworkable standard. Contractors are now forced to guess how the courts might interpret their contracts, and file liens accordingly. This result is clearly not consistent with the intent of A.R.S. § 33-993 or the case law interpreting it.
For the foregoing reasons, I respectfully dissent on the issue of the timeliness of the recordation of the lien.