Court Opinion

ID: 9917098
Source: CourtListenerOpinion
Date Created: 2024-01-11 16:14:38.189558+00
Date Added: 2024-06-11T08:01:00.002949
License: Public Domain

FILE                                                                    THIS OPINION WAS FILED
                                                                                   FOR RECORD AT 8 A.M. ON
                                                                                       JANUARY 11, 2024
       IN CLERK’S OFFICE
SUPREME COURT, STATE OF WASHINGTON
       JANUARY 11, 2024
                                                                                      ERIN L. LENNON
                                                                                   SUPREME COURT CLERK

                 IN THE SUPREME COURT OF THE STATE OF WASHINGTON

                                       )
        VELAZQUEZ FRAMING, LLC,        )               No. 101591-7
                                       )
                       Petitioner,     )
                                       )               En Banc
             v.                        )
                                       )
        CASCADIA HOMES, INC.,          )               Filed: January 11, 2024
                                       )
                       Respondent.     )
        _______________________________)

               GONZÁLEZ, C.J. — Legislatures have long sought to balance the need to

        ensure that those who provide labor, professional services, equipment, or materials

        are paid for their work and the need to ensure that property owners have notice and

        the ability to avoid paying duplicative liens. In so doing, there is often a

        distinction drawn between those who labor and those who provide other things.

        Chapter 60.04 RCW strikes this balance. Chapter 60.04 RCW gives contractors

        the right to lien property they improve through their labor, professional services,

        materials, or equipment. RCW 60.04.021. Chapter 60.04 RCW specifically

        requires prelien notice for professional services, materials, or equipment liens.

        RCW 60.04.031(1). It does not say prelien notice is required for a labor lien.
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

      In this case, a second-tier subcontractor was not paid for the work it did. It

filed a lien for labor and materials without giving prelien notice. We must decide

whether, taken as a whole, chapter 60.04 RCW requires prelien notice for labor

liens. We conclude it does not. Accordingly, we reverse the Court of Appeals and

remand for the trial court to determine the value of labor performed.

                                        FACTS

      Cascadia Homes Inc., a general contracting company, purchased real

property in Lakewood, Washington to build a home on. Cascadia had worked with

High End Construction LLC before and asked it to submit a bid for framing the

home. High End successfully bid and then orally contracted with Velazquez

Framing LLC to finish the framing work. High End subcontracted the work to

Velazquez Framing without informing Cascadia.

      After Velazquez Framing did that work, High End billed Cascadia.

Cascadia paid High End. High End did not pay Velazquez Framing. Velazquez

Framing contacted Cascadia directly in December 2019 about its unpaid work.

      Velazquez Framing was not paid, and the next month, it filed a lien on the

Lakewood property. In its lien, Velazquez Framing asserted that it “furnished

labor, professional services, materials and/or equipment to the subject property . . .

at the request of Cascadia Homes, Inc.” Clerk’s Papers at 56. Velazquez Framing

later explained that it provided labor, a generator, a compressor, and five boxes of

                                          2
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

nails for the project. Velazquez Framing mailed Cascadia a copy of the lien.

Velazquez Framing acknowledges it did not give prelien notice. Appellant’s Reply

Br. at 5-6 (Wash. Ct. App. No. 56513-7-II (2022)).

      After Cascadia did not pay, and after waiting several months, Velazquez

Framing sought to foreclose on its lien. Concluding that prelien notice was

required, the trial court dismissed the foreclosure action at summary judgment.

The Court of Appeals affirmed. Velazquez Framing, LLC v. Cascadia Homes,

Inc., 24 Wn. App. 2d 780, 521 P.3d 257 (2022). We granted review.

                                      ANALYSIS
      We must first decide whether our lien statutes require prelien notice to lien

for labor. This is a question of statutory interpretation we review de novo. Dep’t

of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002). Our

objective in statutory interpretation is to identify and implement the legislature’s

intent. Id. Our analysis begins with the statutory language and frequently ends

there when its meaning is plain. State v. Gonzalez, 168 Wn.2d 256, 263, 226 P.3d

131 (2010). “In discerning the plain meaning of a provision, we consider the entire

statute in which the provision is found, as well as related statutes or other

provisions in the same act that disclose legislative intent.” State v. Alvarado, 164

Wn.2d 556, 562, 192 P.3d 345 (2008). Whenever possible, we interpret the

statutory language such that “‘no clause, sentence or word shall be superfluous,

                                           3
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

void, or insignificant.’” City of Seattle v. Long, 198 Wn.2d 136, 148, 493 P.3d 94

(2021) (internal quotation marks omitted) (quoting Kasper v. City of Edmonds, 69

Wn.2d 799, 804, 420 P.2d 346 (1966)).

      Where the statutory language is plain on its face, we give effect to that plain

language and our inquiry ends. Gonzalez, 168 Wn.2d at 263. Where the statutory

language is ambiguous—allowing for more than one reasonable interpretation—we

may turn to legislative history. Jametsky v. Olsen, 179 Wn.2d 756, 762, 317 P.3d

1003 (2014); State v. Evans, 177 Wn.2d 186, 192-93, 298 P.3d 724 (2013).

      Velazquez Framing argues that the plain language of RCW 60.04.031

requires that prelien notice be provided for professional services, materials, and

equipment, but not for labor. We agree.

      The legislature has given contractors a right to lien to secure payment for

their services. Specifically,

      [e]xcept as provided in RCW 60.04.031, any person furnishing labor,
      professional services, materials, or equipment for the improvement of
      real property shall have a lien upon the improvement for the contract
      price of labor, professional services, materials, or equipment furnished
      at the instance of the owner, or the agent or construction agent of the
      owner.

RCW 60.04.021 (emphasis added). The legislature has also required some

claimants to provide prelien notice:

      Except as otherwise provided in this section, every person furnishing
      professional services, materials, or equipment for the improvement of
      real property shall give the owner or reputed owner notice in writing of
                                          4
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

         the right to claim a lien. . . . The notice may be given at any time but
         only protects the right to claim a lien for professional services,
         materials, or equipment.

RCW 60.04.031(1) (emphasis added). If a claimant required to provide prelien

notice fails to do so, their lien will not be enforced. See RCW 60.04.031(6). But

under the plain language of RCW 60.04.031(1), no prelien notice is required for

labor.

         Other portions of the statute bolster this conclusion. The legislature has

provided a sample prelien notice form that claimants must substantially follow in

cases where prelien notice is required. RCW 60.04.031(4). The form is intended,

in part, to tell the owner “who is providing professional services, materials, or

equipment for the improvement of [their] property and to advise [the owner] of the

rights of these persons.” Id. The form gives owners notice that claimants “have or

will be providing professional services, materials, or equipment” and may claim a

lien for such, but the form does not include “labor.” Id.

         Similarly, RCW 60.04.091 provides a sample claim of lien form. Unlike the

sample prelien notice form, the lien claim form includes language concerning

labor. RCW 60.04.091. Pertinently, this form includes the “first and last date on

which the labor, professional services, materials, or equipment was furnished or

employee benefit contributions were due.” RCW 60.04.091(1)(b) (emphasis

added).

                                            5
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

      Taken together, these provisions of chapter 60.04 RCW require prelien

notice for professional services, materials, and equipment, but not for labor. The

presence and absence of “labor” throughout chapter 60.04 RCW is consistent with

no prelien notice for labor being required. Under RCW 60.04.021, a lien claimant

is explicitly entitled to a lien for their labor. However, “labor” is noticeably absent

in the prelien notice requirement statute. RCW 60.04.031(1). The plain language

of RCW 60.04.031(1) instead suggests that the legislature intended to require

prelien notice in a limited set of circumstances: for the provision of professional

services, materials, or equipment. Id.

      Cascadia urges us to adopt a different interpretation of the statute. Cascadia

argues that unless an exception under RCW 60.04.031(2) applies, a subcontractor

must provide prelien notice. We disagree. Under RCW 60.04.031(2) notice is not

required by

             (a) Persons who contract directly with the owner or the owner’s
      common law agent;
             (b) Laborers whose claim of lien is based solely on performing
      labor; or
             (c) Subcontractors who contract for the improvement of real
      property directly with the prime contractor, except as provided in
      subsection (3)(b) of this section.

      None of these exceptions apply to the labor done by Velazquez Framing.

Taken together, however, the statutes do not require prelien notice to lien for labor,

either by a subcontractor that provides the labor or by the laborers themselves.

                                           6
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

RCW 60.04.021 entitles everyone, including Velazquez Framing, to lien for their

labor. Cascadia is correct that the general right to lien under RCW 60.04.021 is

subject to the requirements of RCW 60.04.031. However, Cascadia’s proposed

reading of RCW 60.04.031(2), requiring prelien notice in all but three

circumstances, violates the plain language of RCW 60.04.031(1). We hold the

statutes unambiguously did not require Velazquez Framing to give prelien notice

before filing a labor lien.

      Even if the plain language of our lien statutes was ambiguous, legislative

history leads to the same conclusion that prelien notice is not required to lien for

labor. Our legislature began seriously considering changes to our lien laws in

1991. See LAWS OF 1991, ch. 281 (codified in RCW 19.27.095 and scattered

sections of Title 60 RCW). The legislative history suggests that consumer

protection concerns motivated these changes. FINAL B. REP. ON SUBSTITUTE S.B.

5497, at 1, 52d Leg., Reg. Sess. (Wash. 1991). The legislature and the attorney

general received reports from homeowners about subcontractors making lien

claims after the homeowners paid the general contractor. Id. The legislation was

proposed, in part, to address this concern.

      Although the legislature seemed primarily concerned with consumer

protection, the legislature was responding to other concerns as well. FINAL B. REP.

ON SUBSTITUTE S.B. 5497, at 1. Specifically, “construction lien laws ha[d] not

                                          7
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

been substantially amended or modernized during [the 20th] century” and

“[v]irtually all industry segments ha[d] reported problems with the current [lien]

law[s].” Id. As a result, much of Substitute S.B. 5497 was also “concerned with

simply modernizing the language of the existing law without making substantive

changes” and with addressing industry concerns about the law. S.B. REP. ON

SUBSTITUTE S.B. 5497, at 2, 52d Leg., Reg. Sess. (Wash. 1991).

      The enacted language does not require prelien notice for labor. Legislative

history in the house is consistent. A house bill report explains that under current

law, “[a] notice of the right to claim a lien is required to establish a lien for

material and equipment supplied for the project (not labor liens)” and that under

the new notice requirements, “notice of the right to claim a lien is not required for

a person supplying labor.” H.B. REP. ON SUBSTITUTE S.B. 5497, at 2, 3, 52d Leg.,

Reg. Sess. (Wash. 1991).

      A legislative memorandum concerning a public hearing on Substitute S.B.

5497 mirrors this intent. The memo provides a comparison between the prelien

notice requirement in then current lien laws and Substitute S.B. 5497. H. COM. &

LAB. COMM., PUB. HR’G MEM. ON SUBSTITUTE S.B. 5497, at 2, 52d Leg., Reg. Sess.

(Wash. 1991). The memo explains that under the lien laws at the time, “pre-lien

notice [was] required for material and equipment liens only (not labor liens).” Id.

Under Substitute S.B. 5497, “pre-lien notice is not required for a person supplying

                                            8
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

labor, or for a person providing professional services, materials, or equipment who

contracts directly with the property owner, or for a subcontractor who contracts

directly with the prime contractor.” Id.

       The robust legislative history concerning our lien laws illuminates the

complexity of the legislature’s intent in enacting the lien granting and prelien

notice requirement statutes. We conclude that this history is consistent with the

plain language of the statutes. The legislature intended to require prelien notice

unless the lien was based on labor.

       Because Velazquez Framing did not lien solely for labor, we must next

decide whether a claimant who provides materials and equipment in addition to

labor may lien for their labor despite not having provided prelien notice. We

conclude they may. Although Velazquez Framing will not be able to lien for its

materials and equipment, its labor lien is still enforceable.

       Pre-1990s case law1 establishes the practice of lien segregation. These cases

suggest that where a claimant liens for both labor and material without providing

prelien notice, the claimant may enforce that portion relating to labor so long as the

court has an evidentiary basis to segregate the value of the labor from materials.

1
  Cascadia argues, and the Court of Appeals agreed, that this body of case law is not relevant or
helpful for determining legislative intent because it predates the legislative amendments
discussed above. See Velazquez Framing, 24 Wn. App. 2d at 790 n.5. We conclude that this case
law interprets earlier lien statutes that are substantially similar in substance and form to our
current lien statutes. Accordingly, this case law is relevant and helpful to the issue of lien
segregation.
                                               9
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

See Hallett v. Phillips, 73 Wash. 457, 464, 132 P. 51 (1913); Culbert v. Lindvall,

73 Wash. 643, 646, 132 P. 729 (1913); Northlake Concrete Prods., Inc. v. Wylie,

34 Wn. App. 810, 818-19, 663 P.2d 1380 (1983). Where a contractor liens for

both labor and equipment without prelien notice, remand to determine the value of

labor is usually appropriate. See Northlake, 34 Wn. App. at 815, 818-19.

      A claimant may not maintain a lien for labor where the record does not

allow the value of the labor to be determined. See Hallett, 73 Wash. at 464. In

Hallett, subcontractors liened for their labor and materials without providing

notice. Id. at 459-60, 464. This court determined that the subcontractors could not

maintain a lien for their materials without providing notice. Id. at 464. We

explained that because there was no evidence “showing what proportion of [the]

claims was for material and what proportion was for labor . . . it [was] impossible

to fix or award any amount for which [the subcontractors could] maintain labor

liens.” Id.

      Conversely, a claimant may maintain its lien for labor where there is

evidence to segregate the value of the labor from that of the materials and

equipment. In Culbert, we concluded that a subcontractor who provided a furnace

and labor could not lien for the furnace without providing notice but could lien for

its labor. 73 Wash. at 645-46. We explained that the evidence “segregates the

                                         10
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

value of the labor that went into the construction of the furnace, and for [that the

subcontractor] is entitled to the foreclosure of its lien.” Id. at 646.

      We conclude that Velazquez Framing can lien for its labor so long as it can

establish an evidentiary basis for segregation.

                                     CONCLUSION

      The plain language of our lien statutes does not require prelien notice to lien

for labor. Legislative history supports this interpretation. Accordingly, we reverse

the Court of Appeals and remand to the trial court for further proceedings

consistent with this opinion. Velazquez Framing’s RAP 18.1 request for attorney

fees is granted.

                                           11
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7

                                          ____________________________

WE CONCUR:

_____________________________             ____________________________

_____________________________             ____________________________

_____________________________             ____________________________

_____________________________             ____________________________

                                     12