Court Opinion

ID: 2714747
Source: CourtListenerOpinion
Date Created: 2014-08-06 16:24:51.626738+00
Date Added: 2024-06-11T12:31:09.008700
License: Public Domain

Based on alleged increased costs associated with work delays,
                 Mata tendered a 15-day notice of intent to lien to Georgetown, indicating
                 an outstanding balance of $20,197.02. 1 Georgetown has never disputed
                 that it owed the $16,197.02 balance due under the contract. Mata
                 recorded a notice of intent to lien, again in the amount of $20,197.02,
                 naming Georgetown as the owner of the property. Subsequently, Mata
                 recorded a notice of lien in the amount of $20,197.02; however, this notice
                 of lien named 150 individual homeowners as the owners of the property.
                 Mata recorded an amended notice of lien and a second amended notice of
                 lien in the amount of $93,724.64, indicating that each homeowner was
                 responsible for $624.83 of this amount.
                              In response to the second amended notice of lien, Georgetown
                 filed a complaint in district court, along with a motion for an order to show
                 cause why a reduction or a release of the mechanic's lien should not issue.
                 Georgetown argued that NRS 108.245 required Mata to provide a notice of
                 right to lien to the individual homeowners upon entering into the contract.
                 Alternatively, Georgetown cited NRS 108.2275 and argued that even if the
                 lien was procedurally valid, it was excessive due to Mata's inclusion of the
                 $77,527.62 that was not supported, authorized, and approved by a
                 properly executed change order.
                              In opposition, Mata argued both the merits of its lien and that
                 Georgetown invoked NRS 108.2275 incorrectly. Specifically, Mata argued
                 that (1) Georgetown should not have obtained a hearing date for its
                 motion, but rather should have first sought an order to show cause via an

                       1 It
                         appears that this dollar amount was derived from the contractual
                 amount owed, plus $4,000 for root damage repairs.

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                  ex parte motion; (2) Mata was not required to serve a notice of right to lien
                  to the individual homeowners because it "contracted directly with the
                  owner of the property" since each homeowner is a member of Georgetown
                  and Georgetown acts on behalf of the individual owners; and (3) its lien
                  was not excessive, as evidenced by payroll records and rental cost
                  documents that were attached to the opposition.
                              After a hearing, the district court granted Georgetown's
                  motion, expunging the lien. The district court found that the common
                  area was owned by the individual homeowners, and that Georgetown had
                  not executed any change orders for the additional $77,527.62 claimed by
                  Mata. As a result, it ruled that the lien was invalid because NRS 108.245
                  required Mata to provide the individual homeowners—the owners of the
                  common area—with a notice of right to lien, and the lien was excessive as
                  the contract provided for a specific amount. Mata now appeals.
                  The district court did not violate NRS 108.2275 or Mata's due process
                  rights by ruling on the validity of the mechanic's lien at the initial hearing
                              On appeal, Mata argues that the district court erred in
                  expunging its lien at the initial hearing requesting an order to show cause,
                  in violation of NRS 108.2275 and in violation of its due process rights.
                  Mata argues that it only filed a "limited" opposition that "was mainly
                  based on procedural issues. . . not a substantive opposition to the claims
                  against the mechanic's lien itself." Thus, Mata argues that without the
                  show cause hearing, it "was not given the opportunity to present evidence
                  in the form of affidavits or testimony, and was allowed very little legal
                  argument." We do not agree.
                              The parties disagree regarding how this court's prior decision
                  in J.D. Construction, Inc. v. IBEX International Group, LLC, 126 Nev. ,
                  240 P.3d 1033 (2010), influences this case. In J.D. Construction, this court
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                      concluded that due process does not require a district court "to hold a full
                      evidentiary hearing, but instead [the district court] may base its decision
                      on affidavits and documentary evidence submitted by the parties." 126
                      Nev. at , 240 P.3d at 1036. This court held that a summary proceeding
                      did not violate the lien claimant's due process rights because (1) the risk of
                      an erroneous deprivation was low, and (2) both parties were afforded
                      sufficient opportunity to present their case through affidavits and
                      supporting documents. Id. at , 240 P.3d at 1041 (analyzing the three
                      due process factors enumerated in Mathews v. Eldridge, 424 U.S. 319, 335
                      (1976)). Thus, while J.D. Construction provides some guidance regarding
                      the procedural due process analysis under NRS 108.2275, it merely
                      addresses whether factual disputes must be reserved for trial, not whether
                      a district court may rule on a motion to expunge a lien at the initial
                      hearing.
                                  Based on our review of the record, we conclude that Mata was
                      afforded adequate due process. While Mata did not receive a second
                      hearing and the limited discovery afforded the lien claimant in           J.D.

                      Construction, "[d]ue process, unlike some legal rules, is not a technical
                      conception with a fixed content unrelated to time, place and
                      circumstances." Mathews, 424 U.S. at 334 (alteration in original) (internal
                      quotations omitted). Rather, it "is flexible and calls for such procedural
                      protections as the particular situation demands."    Id. (internal quotations
                      omitted).
                                  Here, the primary issues before the district court were issues
                      of law, which did not require extensive discovery to resolve. Additionally,
                      Mata argued the merits of its lien in its opposition to Georgetown's motion
                      and submitted documentary evidence in support of its lien. We are

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                therefore not persuaded by its argument that it was not given the
                opportunity to present evidence to the district court. Thus, given the
                primarily legal issues before the court and the fact that Mata's opposition
                was filed with documentary evidence attached, we conclude that Mata was
                given "the opportunity to be heard at a meaningful time and in a
                meaningful manner."       Mathews, 424 U.S. at 333 (internal quotations
                omitted). Therefore, the district court did not err in expunging the motion
                at the initial hearing.
                The district court erred in ruling that the individual owners were entitled
                to service of a notice of right to lien under NRS 108.245 because Maki
                contracted with their agent
                             Mata argues that it was not required to serve a notice of right
                to lien on the individual owners because it contracted with them through
                Georgetown, their agent.    See Hardy Companies, Inc. v. SNMARK,       LLC,
                126 Nev. „ 245 P.3d 1149, 1157 (2010) ("Actual knowledge by the
                property owner's agent is imputed to the property owner."). Mata argues
                that Georgetown controlled the project as the agent for the individual
                owners pursuant to the CC&Rs. Thus, Mata argues that its service of pre-
                lien notice on the homeowners' agent renders pre-lien notice on the
                homeowners themselves unnecessary. We agree.
                             Under NRS 108.245(5), a contractor who contracts directly
                with an owner is not required to give pre-lien notice. Thus, pre-lien notice
                is only required when a potential lien claimant contracts with a third
                party, rather than the owner.     See Hardy, 126 Nev. at 245 P.3d at
                1157; cf. NRS 108.245(5). However, this court has concluded that a lien
                claimant is not required to provide pre-lien notice when the owner has
                actual knowledge of the potential lien claims via regular progress updates
                from an agent who inspected the premises.      Hardy, 126 Nev. at 245

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                P.3d at 1157. In that situation, this court determined that "[d]elivery of
                any pre-lien notice would. . . accomplish[ ] little or nothing and, therefore,
                [is] not required." Id. (internal quotations omitted).
                            Here, the record shows that Georgetown regularly
                communicated with Mata regarding the progress of the project and
                payments made. Thus, this situation is similar to Hardy in that the
                owners' agent contracted with the lien claimant and kept abreast of
                construction progress on behalf of the owners. We therefore conclude that
                the district court erred in finding that the mechanic's lien was invalid
                based on a lack of pre-lien notice. See Hardy, 126 Nev. at , 245 P.3d at
                1157 ("An owner who witnesses the construction, either firsthand or
                through an agent, cannot later claim a lack of knowledge regarding future
                lien claims."). However, as discussed below, the district court properly
                found the lien to be excessive.
                The district court did not err in finding that the lien was excessive because
                the contract provided for the total payment amount and Mata failed to
                provide change orders or other evidence supporting its unilateral
                $77,527.62 increase in price
                            In analyzing evidence presented regarding the validity of a
                mechanic's lien, "the district court must apply a preponderance-of-the-
                evidence standard to determine whether a lien is excessive." J.D. Constr.,
                126 Nev. at 240 P.3d at 1043. "This court will not disturb the district
                court's factual determinations if substantial evidence supports those
                determinations." Id. at , 240 P.3d at 1043. "Substantial evidence is
                that [evidence] which a reasonable mind might accept as adequate to
                support a conclusion." Id. at , 240 P.3d at 1043 (alteration in original)
                (internal quotations omitted). "Therefore, this court will only set aside
                findings that are clearly erroneous." Id. at 240 P.3d at 1043.

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                                    Georgetown argues that NRS 108.222(1)(a) controls in
                      situations where the parties have entered into a contract stating a specific
                      price or a method of determining a specific price.' Georgetown argues that
                      Math, in instituting its $93,724.64 lien, ignored the statutory cap on the
                      legally lienable amount, which is "the unpaid balance of the price agreed
                      upon" by contract, or the $16,197.02 Georgetown admits it owes. NRS
                      108.222(1)(a). Thus, Georgetown argues that even if Mata were entitled to
                      a lien against the homeowners' property, the district court correctly ruled
                      that the $77,527.62 was excessive because the allowable lien amount is set
                      by the contract and by statute at the remaining balance of the agreed-
                      upon price: $16,197.02. We agree.

                            2 NRS   108.222 states:

                                          1. Except as otherwise provided in
                                    subsection 2, a lien claimant has a lien upon the
                                    property, any improvements for which the work,
                                    materials and equipment were furnished or to be
                                    furnished, and any construction disbursement
                                    account established pursuant to NRS 108.2403,
                                    for:
                                          (a) If the parties agreed, by contract or
                                    otherwise, upon a specific price or method for
                                    determining a specific price for some or all of the
                                    work, material and equipment furnished or to be
                                    furnished by or through the lien claimant, the
                                    unpaid balance of the price agreed upon for such
                                    work, material or equipment, as the case may be,
                                    whether performed, furnished or to be performed
                                    or furnished at the instance of the owner or the
                                    owner's agent . . . .

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                            The contract between the parties provided for the amount to
                be paid, and required any change orders to be agreed to in writing. Mata
                has not provided any evidence in district court or on appeal indicating it
                was legally entitled to any amount over $16,197.02. Therefore, we
                conclude that the district court did not err in finding that Mata's lien was
                excessive in the amount of $77,527.62.
                            Accordingly, we ORDER the judgment of the district court
                AFFIRMED IN PART AND REVERSED IN PART AND REMAND this
                matter to the district court for further proceedings consistent with this
                order.

                                                   Hardesty

                cc: Hon. Douglas W. Herndon, District Judge
                     Pezzillo Lloyd
                     Flangas McMillan Law Group, Inc.
                     Leo P. Flangas
                     Eighth District Court Clerk

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