Court Opinion

ID: 3175684
Source: CourtListenerOpinion
Date Created: 2016-02-08 22:14:08.259545+00
Date Added: 2024-06-11T07:38:52.166414
License: Public Domain

Filed 2/8/16
                           CERTIFIED FOR PUBLICATION

               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                            SECOND APPELLATE DISTRICT

                                    DIVISION EIGHT

HUB CONSTRUCTION SPECIALTIES,                  B263398
INC.,
                                               (Los Angeles County
        Plaintiff and Appellant,               Super. Ct. No. GC050916)

        v.

ESPERANZA CHARITIES, INC.,

        Defendant and Respondent.

        APPEAL from a judgment of the Superior Court for the County of Los Angeles.
John P. Doyle, Judge. Reversed and remanded.

        Howard Goodman for Plaintiff and Appellant.

        Romero Law and Alan J. Romero for Defendant and Respondent.

                       ____________________________________
                                        SUMMARY
       A preliminary written notice to the property owner is a necessary prerequisite to
the validity of a mechanic‟s lien. The issue in this case is whether a mechanic‟s lien is
invalid because the plaintiff lienholder did not strictly comply with the then-effective
statutory requirement governing proof that the preliminary written notice was served on
the defendant property owner by certified mail.
       The defendant stipulated that the notice was served by certified mail, that the U.S.
Postal Service website tracking certified mail items showed the notice was delivered, and
that defendant actually received the notice. Despite these stipulations, the defendant
contends the lien is invalid because the plaintiff has no return receipt, and the statute
applicable at the time required plaintiff to prove the notice was served by “affidavit . . .
accompanied either by the return receipt of certified or registered mail, or by a photocopy
of the record of delivery and receipt maintained by the post office, showing the date of
delivery and to whom delivered . . . .” (Former Civ. Code, § 3097.1, subd. (a); Stats.
2010, ch. 697, § 16 [repealed].) The trial court agreed and dismissed the case, concluding
that plaintiff had not strictly complied with the statute.
       We reverse the judgment. While strict compliance with the notice provisions of
the mechanic‟s lien law is required, the applicable precedents do not require or justify
applying that rule to the statutory provisions governing proof that the required notice was
properly given. A stipulation eliminates the need for proof. Accordingly, where it is
stipulated that notice was given in the statutorily prescribed manner, to require further
proof would elevate form over substance to a degree that cannot be countenanced in light
of the long-established principle that the mechanic‟s lien law is “remedial legislation, to
be liberally construed for the protection of laborers and materialmen.” (Connolly
Development, Inc. v. Superior Court of Merced County (1976) 17 Cal. 3d 803, 826-827
(Connolly).)
                                           FACTS
       The parties stipulated to the pertinent facts as follows.

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       Plaintiff Hub Construction Specialties, Inc., supplied rebar and other materials to
the general contractor on a construction project on property owned by defendant
Esperanza Charities, Inc. The general contractor failed to pay plaintiff $81,857.55 for the
materials, a claim plaintiff has determined is uncollectible.
       On March 16, 2012, “[plaintiff] caused a „California Preliminary Notice‟ to be
mailed by Certified Mail, to [the general contractor], [defendant], and the project
construction lender, . . . as attested to by Proof of Service executed 9/28/12.”
       Plaintiff “furnished postage to the U.S. Postal Service sufficient to serve all
certified mail items and possesses a „Certified Mailer Manifest for: 3-16-12‟ reflecting
[the general contractor, defendant and the construction lender] as addressees and bearing
an Official Stamp of the U.S. Postal Service.”
       Plaintiff did not request, and did not pay a fee to the U.S. Postal Service for, a
“return receipt” for the notices.
       “The U.S. Postal Service website tracks certified mailed items and the tracking for
the certified mailed items indicates that they were all delivered. Further, [defendant] has
acknowledged in verified discovery responses that it received the preliminary notice
which [plaintiff] served. There is no signed return receipt.”
       On December 12, 2012, defendant recorded a notice of completion, reciting that
the project was completed on December 3, 2012. On December 27, 2012, plaintiff
recorded a mechanic‟s lien against the property in the claim sum of $81,857.55. On
February 6, 2013, plaintiff filed a complaint to foreclose the mechanic‟s lien.
       The value of the rebar that plaintiff furnished to the project from February 24,
2012 (20 days prior to the preliminary notice) was $53,070.18, and interest through
December 1, 2014, amounted to $9,287.25. Plaintiff sought a judgment for foreclosure of
the mechanic‟s lien, and defendant sought a judgment that the lien was invalid and an
order expunging the lien.
       The case was initially scheduled for a court trial on the stipulated facts, but the
court ordered a modified summary judgment procedure instead (without separate
statements, and based on the stipulated facts). After a hearing, the trial court denied

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plaintiff‟s motion for summary judgment and ordered the property released from
plaintiff‟s lien. The court found plaintiff “cannot provide sufficient proof of service by
documentation of the return receipt of certified mail, [or] a photocopy of the record of
delivery and receipt maintained by the post office, showing the date of delivery and to
whom delivered . . . as required under the statute in effect at the time the effectiveness of
the preliminary notice as given is sought to be established.”
       Plaintiff filed a timely notice of appeal.
                                        DISCUSSION
       Plaintiff contends the absence of a return receipt does not bar enforcement of the
mechanic‟s lien, because proof of service is unnecessary where service by certified mail
has been admitted. Defendant contends the law in effect when plaintiff served the
preliminary notice applies and must be strictly construed; because that law required a
“return receipt” or a “record of delivery” to prove service of the notice, neither of which
plaintiff has, plaintiff‟s lien is unenforceable.1
       We conclude from the relevant authorities that, while the principle of strict
construction applies to “the manner or form of serving notice upon an affected party”
(Harold L. James, Inc. v. Five Points Ranch, Inc. (1984) 158 Cal. App. 3d 1, 6 (Harold L.
James)), it does not extend to matters of proof in a case where the defendant has admitted
that notice was served in the statutorily prescribed manner.
       We begin by reciting the statutory provisions in effect when the preliminary notice
was served, and then turn to the relevant case authorities.

1      The “certified mailer manifest” shows plaintiff‟s payment for certified mail items
on March 16, 2012, addressed to defendant, the contractor, and the construction lender,
but does not show the date of delivery. Former Civil Code section 3097.1 required, as
proof of service by mail, an affidavit accompanied by either the return receipt or “a
photocopy of the record of delivery and receipt maintained by the post office, showing
the date of delivery and to whom delivered . . . .” (Id., subd. (a).)

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1.     The Statutory Background
       Under current law, this case would not be before us. The law that became
operative on July 1, 2012 – several months after plaintiff served the preliminary 20-day
notice, but before execution of plaintiff‟s affidavit of service – expanded methods of
giving notice and methods of proving that notice was given. Defendant concedes that,
under current law, the “certified mailer manifest” proffered by plaintiff “might well have
sufficed as a record of „payment.‟ ”2 The statutes that were operative until July 1, 2012,
however, stated as follows:
       Former Civil Code section 3097 provided that: “[E]very person who furnishes . . .
material for which a lien . . . otherwise can be claimed under this title, . . . shall, as a
necessary prerequisite to the validity of any claim of lien, . . . cause to be given to the
owner or reputed owner, to the original contractor, or reputed contractor, and to the
construction lender, if any, or to the reputed construction lender, if any, a written
preliminary notice as prescribed by this section.” (Id., subd. (a).) Further: “The notice
required under this section may be served as follows: [¶] . . . by first-class registered or
certified mail, postage prepaid, addressed to the person to whom notice is to be given at
his or her residence or place of business address . . . .” (Id., subd. (f)(1); ); Stats. 2010,
ch. 697, § 16 [repealed].)
       Former Civil Code section 3097.1 provided that: “Proof that the preliminary 20-
day notice required by Section 3097 was served in accordance with subdivision (f) of
Section 3097 shall be made as follows: [¶] (a) If served by mail, by the proof of service
affidavit described in subdivision (c) of this section accompanied either by the return
receipt of certified or registered mail, or by a photocopy of the record of delivery and
receipt maintained by the post office, showing the date of delivery and to whom
delivered, or, in the event of nondelivery, by the returned envelope itself.”

2     Notice by mail now may be proved using several different documents, including
“[d]ocumentation provided by the United States Postal Service showing that payment
was made to mail the notice using registered or certified mail, or express mail.” (Civ.
Code, § 8118, subd. (b)(1).)

                                                5
       Former Civil Code section 3114 provided that: “A claimant shall be entitled to
enforce a lien only if he has given the preliminary 20-day notice (private work) in
accordance with the provisions of Section 3097, if required by that section, and has made
proof of service in accordance with the provisions of Section 3097.1.” (Stats. 2010,
ch. 697, § 16 [repealed].)
       Current law states that, notwithstanding its July 1, 2012 operative date, “the
effectiveness of a notice given or other action taken on a work of improvement before
July 1, 2012, is governed by the applicable law in effect before July 1, 2012, and not by
this part.” (Civ. Code, § 8052, subds. (a) & (b).)
2.     Case Authorities
       We begin by noting the well-established principle that the mechanic‟s lien law is
“remedial legislation, to be liberally construed for the protection of laborers and
materialmen.” (Connolly, supra, 17 Cal.3d at pp. 826-827.) At the same time, the
Legislature “imposed the notice requirements for the concurrently valid purpose of
alerting owners and lenders to the fact that the property or funds involved might be
subject to claims arising from contracts to which they were not parties and would
otherwise have no knowledge.” (Romak Iron Works v. Prudential Ins. Co. (1980) 104
Cal. App. 3d 767, 778 (Romak).) The liberal construction rule “may not be applied to
frustrate the Legislature‟s manifested intentto exact strict compliance with the
preliminary notice requirement.” (Ibid.)
       Several Court of Appeal cases tell us that strict compliance with the notice
requirements of former Civil Code section 3097 is necessary (although another case,
described post, validated a mechanic‟s lien against an owner who was properly served
with notice, even though the subcontractor failed to comply with the statutory
requirement of sending notice to the contractor). Still other cases tell us that substantial
compliance with other provisions of the mechanic‟s lien law suffices under some
circumstances. There is no published authority determining whether strict compliance
with the proof of service provisions of former section 3097.1 is required. Here is a brief
review:

                                              6
       IGA Aluminum Products, Inc. v. Manufacturers Bank (1982) 130 Cal. App. 3d 699
(IGA) is the principal case cited for the proposition that notice requirements are to be
strictly construed. In IGA, the question on appeal was “whether the notice requirement of
[Civil Code] section 3097 is satisfied by actual written notice delivered by ordinary first
class mail, and thus if there were a triable issue of fact raised as to whether such notice
was given.” (Id. at p. 702.) The court rejected the premise of the plaintiff‟s argument:
“that actual written notice, even though not transmitted in strict compliance with the
terms of section 3097, satisfies the statutory notice requirement.” (Ibid.) “We conclude
that such premise is incorrect as a matter of law,” and so summary judgment was proper.
(Ibid.; see id. at pp. 703, 704 [“[o]bviously the substantial compliance doctrine has no
application in the present case”; former section 3097 was “unambiguous as to its notice
requirement, and therefore there is no room for judicial construction, liberal or
otherwise”]; see also Romak, supra,104 Cal.App.3d at pp. 778, 773 [the plaintiff failed to
give preliminary 20-day notice to the defendant construction lender; notice given to
owner did not suffice; compliance was not excused by lack of knowledge of the identity
of the lender, as the statute allowed plaintiff to mail notice to the job site; statute
“imposed on [the plaintiff] an absolute obligation („must‟) to give a preliminary 20-day
notice to [the construction lender] „as a necessary prerequisite to the validity‟ of any stop
notice given it later”].)
       On the other hand, in Industrial Asphalt, Inc. v. Garrett Corp. (1986) 180
Cal. App. 3d 1001 (Industrial Asphalt), the plaintiff served the required preliminary 20-
day notice on the defendant owner, but did not serve the required notice on the original
contractor (who later declared bankruptcy). (Id. at p. 1005.) The Court of Appeal
reversed the trial court‟s invalidation of the lien, stating: “To construe the statute strictly
would require us to invalidate a lien against an owner who received notice because
someone else, the original contractor, did not receive notice. That strict statutory
construction would allow a party who received the required notice to be insulated from
liability because another party did not receive notice. We do not believe that the statute‟s
purpose should, or does, lead to this aridly formalistic result. We hold that the plaintiff‟s

                                                7
notice to the defendant satisfied the prerequisites for a valid lien against the defendant,
and we reverse the trial court‟s judgment.” (Id. at p. 1006; see id. at p. 1007 [“where the
lien claimant has observed the property owner‟s right to notice, he should be allowed to
proceed to perfect his lien. We see no reason, in the absence of prejudice to the property
owner [citations], why the subcontractor‟s failure to serve notice upon an original
contractor should render unenforceable a lien against an owner who did receive proper
notice. To hold otherwise would allow the statute to frustrate enforcement of the
constitutional remedy instead of to effectuate it.”]; id. at p. 1008 [“statutory notice to the
original contractor would have been a useless, even futile act which the law does not
require”].)
       Several other cases involve other aspects of former Civil Code section 3097, and
other provisions of the mechanic‟s lien law, and confirm that strict compliance with the
law is not always required.
       The court in Harold L. James reviewed cases such as IGA and Romak requiring
strict compliance, as well as cases finding that other mistakes in lien documents did not
preclude enforcement of the lien. (E.g., Wand Corp. v. San Gabriel Valley Lumber Co.
(1965) 236 Cal. App. 2d 855 (Wand Corp.) [mistake in failing to designate the contractor
in the lien document did not preclude enforcement of the lien, where the contractor was
correctly designated in the prelien notice, and the document itself was not fraudulent or
misleading].)
       Harold L. James distilled the following principle reconciling cases requiring strict
compliance and cases calling for liberal construction of lien statutes: “The general
principles of liberal construction enunciated in Wand Corp. are still good law, subject to
this refinement . . . : where the Legislature has provided a detailed and specific mandate
as to the manner or form of serving notice upon an affected party that its property
interests are at stake, any deviation from the statutory mandate will be viewed with
extreme disfavor.” (Harold L. James, supra, 158 Cal.App.3d at p. 6.)
       Harold L. James involved former Civil Code section 3097 requirements for the
content of the preliminary 20-day notice. The statute required “a boldface alert to the

                                               8
property owner” with “explicit warning of the danger of losing his property in connection
with the labor or materials which were or were to be furnished by the subcontractor
giving the notice.” (Harold L. James, supra, 158 Cal.App.3d at p. 7.) The plaintiff‟s
notice used outdated statutory language “in rather small print” (id. at p. 3), and the Court
of Appeal observed that the Legislature, in amending the statute in 1976, “unmistakably
expressed its dissatisfaction with the former statutory language and the manner of its
presentation” and “was concerned with making the notification process as conspicuous to
the owner as possible” (id. at p. 7). The court concluded that “the Legislature‟s explicit
mandate requires a finding that, as a matter of law, plaintiff‟s use of outdated statutory
language in its preliminary notice did not substantially comply with section 3097 . . . .”
(Ibid.)
          Harold L. James continued: “we need not speculate as to what, if any, deviations
from the currently specified statutory lien language might permit a court to determine that
such deviations did not render the subsequent lien unenforceable.” (Harold L. James,
supra, 158 Cal.App.3d at p. 7.) The court held: “we conclude that the transmittal
methods and notice requirements must be strictly construed. However, the issue of minor
errors in the body of the notice must be independently addressed on a case-by-case basis,
if and when such a case is presented.” (Ibid.; see also San Joaquin Blocklite v. Willden
(1986) 184 Cal. App. 3d 361, 366, 364-365 [applying the same rule in a public works case;
the plaintiff admitted not sending a preliminary 20-day notice, but argued that the
defendant‟s actual knowledge of the material supplier, plus a notice sent by the state
about the materials, either excused compliance or constituted a kind of substantial
compliance; “transmittal methods and notice requirements” must be strictly construed].)3

3      Defendant also cites Truestone, Inc. v. Simi West Industrial Park II (1984) 163
Cal. App. 3d 715. Truestone involved a statutory exception to the notice requirement for
“one under direct contract with the owner.” (Former Civ. Code, § 3097, subd. (a).) In
Truestone, the plaintiff admitted that the 20-day preliminary notice was sent by first class
regular mail, rather than by certified or registered mail, and that it had no proof of
service. (Id. at p. 720.) But declarations in the case showed the property owner admitted
he had received two 20-day notices, was “having trouble” with the contractor, and

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3.     This Case
       From the stipulated facts and case authorities, several points are clear.
       First, the cases demonstrate that the courts do not demand strict compliance with
every aspect of the mechanic‟s lien law. The cases go no further than to say that
“transmittal methods and notice requirements must be strictly construed.” (Harold L.
James, supra, 158 Cal.App.3d at p. 7.)
       Second, plaintiff in fact served the preliminary notice on defendant in strict
compliance with former Civil Code section 3097, that is: “by first-class . . . certified
mail, postage prepaid, addressed to the person to whom notice is to be given . . . .”
(Former § 3097, subd. (f)(1).) Service by first-class certified mail “is complete at the
time of the deposit of that . . . certified mail.” (Id., subd. (f)(3).) Defendant agreed this is
so when it stipulated that on March 16, 2012, plaintiff “caused a „California Preliminary
Notice‟ to be mailed by Certified Mail, to [the general contractor], [defendant], and the
project construction lender, . . . as attested to by Proof of Service executed 9/28/12.”
       Third, defendant in fact received the preliminary notice that plaintiff served by
certified mail. The stipulated facts tell us not only that defendant actually received the
notice (a point that is not determinative), but also that plaintiff actually mailed the
preliminary notice by certified mail to defendant (a point that is determinative). And if
that were not enough, the stipulated facts also tell us that plaintiff furnished sufficient
postage to the U.S. Postal Service for the certified mail items; that plaintiff has a stamped
record from the U.S. Postal Service (a “Certified Mailer Manifest for: 3-16-12”)

promised to pay for the materials supplied to the contractor if the plaintiff would continue
to make deliveries. (Id. at pp. 720-721.) The court pointed out the exception to the
notice requirement for “one under direct contract with the owner,” and found there was
“a factual issue concerning the existence of a contract between [the plaintiff and the
owner].” (Id. at p. 722.) Truestone also stated that in some cases, “even where there is
no contractual relationship between the parties, actual knowledge may estop the property
owner from asserting the notice requirements of section 3097.” (Ibid.) The court
observed that the policy of the law favors protection of laborers and materialmen, and
“[t]herefore, an exception to the statutory notice requirement precludes the defeat of the
lien on meaningless technicalities where a materialman is known to the property owner
and makes deliveries in reliance on his promise to pay.” (Id. at p. 723.)

                                              10
“reflecting [the contractor, defendant, and the construction lender] as addressees”; and
that the U.S. Postal Service website tracking for the certified mailed items “indicates that
they were all delivered.”
        In the face of the agreed facts and in the absence of binding authority to the
contrary, we decline to find that plaintiff‟s lien is unenforceable for lack of a return
receipt. We do not disagree with the rule that strict compliance with the notice
requirements of former Civil Code section 3097 is required. It is undisputed that plaintiff
complied with that statute. We merely decline to extend the rule of strict construction to
the proof of service requirements of former section 3097.1. In short, in a case where
defendant has admitted that notice was served in the statutorily prescribed manner,
plaintiff need not comply with the statutory requirements for proving that notice was
served in the statutorily prescribed manner. To hold otherwise would defy reason and
serve no conceivable purpose. Like the court in Industrial Asphalt, “We do not believe
that the statute‟s purpose should, or does, lead to this aridly formalistic result.”
(Industrial Asphalt, supra, 180 Cal.App.3d at p. 1006; see ibid. [“strict statutory
construction would allow a party who received the required notice to be insulated from
liability”].)
                                       DISPOSITION
        The judgment is reversed, and the cause is remanded to the trial court with
directions to vacate its order releasing the property from plaintiff‟s lien and enter a new
order for foreclosure of the mechanic‟s lien. Plaintiff is to recover its costs on appeal.

                                                           GRIMES, J.
        WE CONCUR:

                      BIGELOW, P. J.

                      RUBIN, J.

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