Court Opinion

ID: 9797562
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:24:08.470021+00
Date Added: 2024-06-11T08:57:10.442623
License: Public Domain

Justice RICE,
dissenting.
In an opinion that relies primarily on policy concerns rather than statutory analysis, the majority holds that any person who so much as pounds a nail or delivers a brick to a construction project has an inchoate right to a “lien” and therefore can bring a statutory claim at any time in the future against a contractor under Colorado’s Trust Fund Statute. Because I think this holding is overbroad and without statutory support, I respectfully dissent.
I would answer the Tenth Circuit’s question in the affirmative and hold that the language “may have a hen” in Colorado’s Trust Fund Statute refers only to a claimant who is still able to file a lien under the time limitations provided by the Colorado Mechanics’ Lien Statute. While I agree with the majority that the Trust Fund Statute provides an additional remedy to aggrieved subcontractors, laborers, and suppliers, the language of the Trust Fund Statute only makes sense if it is limited by the terms of the Colorado Mechanics’ Lien Statute.
The majority’s opinion is flawed in three fundamental ways. First, the majority broadly defines the word “lien” as simply meaning an inchoate right given to any person who adds value to property. This definition relies on a simplistic and incomplete analysis of the Mechanics’ Lien Statute.
Second, the majority’s opinion fails in its attempt to construe the language of the Trust Fund Statute. The majority’s opinion does not make sense unless the critical phrase at issue here — -“may have a lien” — is completely read out of the Trust Fund Statute. It is improper for courts to add or subtract words in a way that makes statutory language superfluous.
Finally, the majority’s opinion effectively eliminates any incentive for subcontractors, laborers, or material suppliers to file liens under the Mechanics’ Lien Statute. Had the General Assembly intended to create such a disincentive to the use of the Mechanics’ Lien Statute in favor of an action under the Trust Fund Statute, it would have done so explicitly-
I. Definition of Lien
The majority looks to the language in section 38-22-101(1) of the General Mechanics’ Lien Statute and claims that it defines the word “lien” as simply an interest in property given to anyone who provided value to the property. Maj. op. at 1284. This definition allows anyone who worked on a construction project or sold supplies to a construction project to claim a lien without having to do anything more. The claimant would not have to take any further action, such as providing notice to the owner or even calculating an amount due, to have a Trust Fund claim. This broad definition fails for two reasons: (1) the majority relies on an overly simplified ■ reading of a single statutory section and (2) the word “lien” is a term of art that has a particularized legislative definition.
First, subparagraph (1) of section 38-22-101 does not attempt to provide a definition of a lien as claimed by the majority. Rather, it provides a definition of a person who can file a lien and receive the benefits of a lien. In fact, the title of section 38-22-101 is “Liens in favor of whom — when filed — definí*1290tion of a person.” The majority uses this section out of context as providing support for its broad definition of lien. Maj. op. at 1284-85. However, the word “lien” is never actually defined in the statutory language of section 38-22-101.
The word “lien” is in fact defined by the entirety of its enabling legislative scheme. A lien requires more than just a claim of work done or materials provided. Rather, a mechanics’ lien is a creature of statute and is defined by the statutory requirements put forth by the General Assembly. See Indep. Trust Corp. v. Stan Miller, Inc., 796 P.2d 483, 487 (Colo.1990). Throughout our state statutes, the General Assembly has created eleven different statutory articles defining various types of property liens. See Title 38, Articles 2027, C.R.S. (2006). For mechanics’ liens, the General Assembly adopted 34 different statutory sections defining various aspects of a mechanics’ lien. §§ 38-22-101 to 133, C.R.S. (2006). This extensive statutory system demonstrates that the General Assembly intended the word “lien” to be a technical term of art that is to be defined by all the relevant statutory sections.
“Words and phrases that have acquired a technical or particular meaning, whether by legislative definition or otherwise, shall be construed accordingly.” § 2-4-101, C.R.S. (2006). Given that the word “lien” is a technical term, we must read all the parts of its legislative scheme to arrive at a definition. This definition includes notice, filing, and time elements. § 38-22-101(3), C.R.S. (2006) (written contract requirement); § 38-22-102, C.R.S. (2006) (payment requirements); § 38-22-103, C.R.S. (2006) (attachment rules); § 38-22-105 to 105.5, C.R.S. (2006) (notice requirements); § 38-22-109, C.R.S. (2006) (lien statement requirements); § 38-22-110, C.R.S. (2006) (foreclosure requirements). In order to have a lien, a claimant must “show that he has complied with all of the essential requirements of the statute under which he claims.” Kalamath Inv. Co. v. Asphalt Paving Co., 153 Colo. 109, 114, 384 P.2d 938, 941 (1963) (citations omitted).
In essence, a person who works on a project or provides materials to a project is only “eligible to claim a mechanics’ lien under the statute.” Jack Greenwald & Gilbert Egle, Colorado Liens and Claims Handbook § 2.1.1 (4th ed.2006); see also Cathy Stricklin Krendl & James R. Krendl, 1C Colo. Prac., Methods of Practice § 48.3 (5th ed.) (“[Ejvery person who performs labor or furnishes material ... is entitled to claim a mechanics’ lien under the statute.”).
By broadening the statutory definition of a lien in the Trust Fund Statute, the majority is attempting to provide protection to those like Fowler & Peth who have claims that would go unsecured in the bankruptcy of a disreputable contractor. The majority forecasts other potential evils that may occur if the Trust Fund Statute is read too narrowly, i.e., flurry of liens on homeowners, no full remedy for providers of value to property, and unjust enrichment of bad actors. Maj. op. at 1284. However, a court cannot mend a statutory problem by judicial fiat. Common Sense Alliance v. Davidson, 995 P.2d 748, 755 (Colo.2000) (“We, therefore, must resist the temptation to change the statutory language, and rather must leave any repair to the General Assembly or the electorate.”).
In any event, the Mechanics’ Lien Statute already provides several opportunities for aggrieved subcontractors, laborers, or suppliers to seek redress. For example, Fowler & Peth could have timely filed for a mechanics’ lien or they could have required security on the credit sale of supplies. In addition, they could have timely filed a Trust Fund claim while they still had time to file a mechanics’ lien. However, they made a business decision not to take advantage of any of these remedies. It is not now the job of this court to expand the technical meaning of the Trust Fund Statute to create an additional new and unrestrained remedy for subcontractors, laborers, and suppliers in Fowler & Peth’s position.
II. Statutory Language Must Retain Some Meaning
It is improper in statutory construction for courts to add or subtract words that contravene legislative intent. People v. Cross, 127 P.3d 71, 73 (Colo.2006). We should reject interpretations that cause parts of a statute to be superfluous, and should attempt to *1291harmonize any potentially conflicting provisions. Id. The majority, by its overbroad definition of lien, makes the words “may have a lien” in section 38-22-127(1) superfluous and in effect subtracts those words from the statute. In order for the language “may have a hen” to have any meaning, there must exist a situation where someone may not have a lien. However under the majority’s definition of hen, any subcontractor, laborer, or supplier automatically has a hen just by virtue of providing value to a property. Under this definition, all subcontractors, laborers, or suppliers would fit the first part of the Trust Fund Statute as people “who have a lien.” There is no one left to fit into the category of “may have a hen” or “may not have a hen.”1 Therefore, the majority’s interpretation effectively subtracts the words “may have a hen” by making them meaningless.
On the other hand, the narrower interpretation that I would adopt harmonizes the language “may have a hen” with an interpretation of the Mechanics’ Lien Statute that is espoused by many commentators. See Green-wald & Egle, supra at § 2.1.1; Krendl & Krendl, supra at § 48.3 (that one is only “entitled” or “eligible” to claim a hen but does not have a hen yet if one only does work on or provides supplies for property).
III. Disincentive to Use Mechanics’ Liens
Under today’s construction of the Trust Fund Statute, the majority creates a Trust Fund claim that can be filed by any claimant at any time in the future. This effectively turns the mechanics’ hen statutory scheme on its head by allowing individuals to sit on their rights and simply rely on an expansive reading of the Trust Fund Statute. Furthermore, this holding could cause chaos in the construction industry by creating a judicial disincentive for an historic legal tool for property owners, contractors, subcontractors, laborers, and suppliers.
The majority’s interpretation of the Trust Fund Statute creates a statutory claim that has no time limitation. The Trust Fund Statute itself contains no internal statute of limitations for Trust Fund claims. However, the majority opinion speculates that under its broad interpretation, Trust Fund claims may face a three-year statute of limitations or maybe a six-year statute of limitations or possibly an even longer statute of limitations given tolling doctrines. Maj. op. at 1287 n. 6. Such conjecture is completely improper statutory interpretation. This court should never assume that the legislature intended to create a claim that does not have a definite statute of limitations. See Campbell v. City of Haverhill, 155 U.S. 610, 616, 15 S.Ct. 217, 219-20, 39 L.Ed. 280 (1895). (“[W]e have the anomaly of a distinct class of actions subject to no limitation whatever, a class of privileged plaintiffs who, in this particular, are outside the pale of the law, and subject to no limitation of time in which they may institute their actions. This cannot have been within the contemplation of the legislative power.”).
In contrast to such an openended time limit, there exists a definite time limit for Trust Fund claims if we read the Mechanics’ Lien Statute and the Trust Fund Statute together. Courts must construe statutes “to give effect to the General Assembly’s intent and chosen legislative scheme.” Denver Pub. Co. v. Bd. of County Comm’rs of County of Arapahoe, 121 P.3d 190, 195 (Colo.2005) (citations omitted). In construing a statute, the court reads the statute as a whole, giving sensible effect to all of its parts whenever possible. CLPF-Parkridge One, L.P. v. Harwell Invs., Inc., 105 P.3d 658, 660 (Colo. 2005).
Under the Mechanics’ Lien Statute, a supplier must serve a Notice of Intent to File a Lien upon the property owner and contractor *1292in order to have a lien. § 38-22-109, C.R.S. (2006); see also Greenwald & Egle, supra at § 2.8.4. At least ten days after serving such notice, a supplier must file a Lien Statement and a copy of the Intent to File a Lien with the county clerk and recorder. § 38-22-109(1). This filing must be done within four months of the last day materials were supplied. § 38-22-109(5). After filing, a lien’s duration is only one year from the filing date unless suit is brought to foreclose the lien. § 38-22-109(8); see also David Wells, Terry W. Scoby & L. Jay Labe, Mechanics’ Liens, Construction Bonds and Remedies for Nonpayment under Colorado Law 1124 (1990). In foreclosure, the lien will either be dismissed or converted into a judgment. § 38-22-113, C.R.S. (2006). Consequently, when the foreclosure case ends, the subcontractor, laborer, or supplier no longer has or may have a lien, and should no longer be able to use the Trust Fund Statute.
By incorporating these time limits into the Trust Fund Statute, an internal time limit is created for Trust Fund claims. Under this time limit, a general contractor would be required to hold funds in trust while all subcontractors, laborers, or suppliers can still file mechanics’ liens,2 until all filed liens have expired,3 or until a foreclosure action is concluded on any perfected liens. The majority dismisses this overall mechanics’ lien legislative scheme and instead holds that it should not be utilized for Trust Fund claims. Maj. op. at 1283-84. However, the majority’s holding creates an indefinite constructive trust imposed on general contractors and gives subcontractors, laborers, and suppliers a Trust Fund claim without limit. Such a radical change to the construction industry could tie up payment funds indefinitely and slow the ability of contractors to start new construction projects. Furthermore, the specter of criminal liability from the Trust Fund Statute will be left hanging over general contractors indefinitely.
An additional consequence of the majority’s opinion is that it would allow multiple causes of action on the same dispute and could lead to inconsistent judgments. “Though a supplier who has foreclosed on a perfected lien and obtained a judgment may no longer have a lien, they nonetheless qualify for protection under the Trust Fund Statute.” Maj. op. at 1288. Thus, a supplier who failed to meet his burdens in a foreclosure action has another opportunity to bring a Trust Fund claim. In addition, a general contractor can fully satisfy a mechanics’ lien in the course of a lien foreclosure proceeding, but then still be liable under the Trust Fund Statute and face possible criminal penalties.4
The most dire consequence of the majority’s interpretation of the Trust Fund Statute is that it would create a disincentive for the use of the Mechanics’ Lien Statute by judicial fiat. Under the majority’s opinion, the Trust Fund Statute would be easier and less expensive to comply with than the Mechanics’ Lien Statute. This would make compliance with the Mechanics’ Lien Statute irrational. No subcontractor, laborer, or supplier would undertake all the steps of the Mechanics’ Lien Statute to gain the protection of a mechanics’ lien when they could simply sit on their rights and rely on the Trust Fund Statute to protect them indefinitely. Such a result would no longer make the Trust Fund “separate from, though related to” the Mechanics’ Lien Statute as *1293claimed by the majority. Maj. op. at 1284. Rather it would supplant the whole legislative scheme for mechanics’ liens.
Likewise, such an interpretation cannot be correct, given the placement of the Trust Fund Statute within the Mechanics’ Lien Statute. “[PJlaeement of a statute within other statutory provisions provides an indication of subject matter and legislative intent.” Fabec v. Beck, 922 P.2d 330, 337 (Colo.1996) (citing with approval Ass’n of Nat'l Advertisers, Inc. v. Lungren, 44 F.3d 726, 729 (9th Cir.1994)). The General Assembly would not have placed the Trust Fund Statute within the Mechanics’ Lien Statute if it intended for the Trust Fund Statute to supersede the mechanics’ lien statutory scheme.
Mechanics’ liens have been part of Colorado’s statutory history for over a hundred years and have legally developed over the years to balance the interests of property owners, contractors, subcontractors, laborers, and suppliers. However, by its overly broad definition of the word “lien,” the majority has adopted an interpretation of the Trust Fund Statute that would eliminate any need for the mechanics’ lien process by subcontractors, laborers, or suppliers and could ultimately render the Mechanics’ Lien Statute superfluous.
IV. Conclusion
For the reasons set forth above, I believe that Colorado’s Construction Trust Fund Statute applies only to claimants who have a current mechanics’ lien on property or who are still able to file such a lien within the time limitations provided by the Colorado Mechanics’ Lien Statute. Therefore, I dissent from the majority’s answer to the Tenth Circuit’s Certified Question and instead would answer the question in the affirmative.
I am authorized to state that Justice COATS and Justice EID join in this dissent.

. The majority reads the language "have a lien or may have a lien” as referring to "a person who has added value or may have added value to property" which is simply replacing the words "a lien” with the words "added value.” However, it is still unclear who would be considered to "may have added value to property.” Under the majority's broad definition, all subcontractors, laborers, or suppliers who did work or provided supplies, added value. Therefore, "may have added value to property" refers to the same group of people as "have added value.” The language "may have added value” is still meaningless since everyone who "may have added value” also fits the definition of those who "have added value.”

. This window exists at most for four months after the last day labor or materials are supplied on a project, § 38-22-109(5), or for two months after the last day labor or materials are supplied if the work is being done by the day or by piece. § 38-22-109(4).

. Mechanics’ liens expire a year from filing. § 38-22-109(8).

. In a mechanics’ lien foreclosure action by a subcontractor, laborer, or material supplier who has not been paid, a plaintiff can bring an in rem claim against the property owner and an in per-sonam claim against the general contractor. As such, a plaintiff could receive a personal judgment against the general contractor. Similarly, the Trust Fund Statute creates a direct action, much like the in personam mechanics’ lien action, which could result in another personal judgment against the general contractor for the same failure to pay the plaintiff. Under the majority's holding then, a general contractor could be found not liable in personam in a mechanics' lien foreclosure action but then liable in a later direct action under the Trust Fund Statute. However, both causes of action are essentially the same claim. Therefore, the majority’s holding creates the possibility of inconsistent judgments.