Court Opinion

ID: 9554100
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:41:37.548505+00
Date Added: 2024-06-11T15:33:00.266695
License: Public Domain

Young, C. J.,
with whom Rose, J., concurs,
dissenting:
The majority opinion will enjoy limited value as a precedent unless Boulder City with unexampled largesse desires to continue paying for labor and materials used on private property where suppliers have not, pursuant to common practice, protected themselves by liens or bonds from subdividers or contractors. The record is devoid of any evidence that the ordinance was ever interpreted by the City or anyone else as set forth by the majority. In fact, an affidavit indicated that for many years the ordinance had been interpreted as not to require such bonds. Now the City is being told that because of its failure to properly interpret language which is ambiguous and uncertain, it must pay nearly $150,000.
There is no question that had Boulder City required a payment bond from the subdivider, appellants Brown and Delta would have recovered the money owed them by Boulder Development, the subdivider. However, the majority claim that (1) the City’s ordinance created a self-imposed duty to withhold approval of the subdivision until a bond was submitted by the subdivider; and (2) *510the approval of a subdivision without a payment bond automatically made the City liable. The majority assert in defense of their conclusion that the language of the ordinance is plain and unambiguous, and that no judicial construction is necessary. I cannot agree.
The ordinance in question provides that the City Council shall approve the subdivision map “[wjithin fifteen (15) days of the filing of the final map and other documents as required by this Chapter with the City Clerk . . . .” BCMC § ll-36-5(L)(l) (emphasis added). The majority contend that “other documents” includes a payment bond. This is the linchpin for holding the city liable. I respectfully disagree with the reasoning of the majority opinion for reasons stated herein.
Nothing in the language of the ordinance expressly states that the City must withhold approval until a payment bond for labor and materials is filed. The only mandatory language pertinent to the City requires it to approve a final map “if it conforms with all applicable provisions . . . .” BCMC § ll-36-5(L)(l). This language does not prohibit the approval of a final map if it fails to conform with every possible interpretation of all applicable provisions.
The ordinance in question refers to bonds numerous times in the section on performance bond or deposit. Obviously, the draftsmen were familiar with the term and its use. To now hold without any evidence of the legislative intent, years after enactment and contrary to the City’s interpretation and practice, that “other documents” has at all times included bonds, is a highly questionable predicate for liability.
The majority rely on BCMC § ll-36-12(A) which states in part: “The subdivider shall also file a bond in an amount required by law on bonds for public construction and by its terms insure labor and materials payment . . . .” The opinion argues that this language plainly and unambiguously shows that the subdivider was thereby obligated to file the payment bond even though no public construction was involved. In my view, however, an equally plausible reading of the ordinance requires the subdivider to file a payment bond only in the case of public construction where liens cannot be asserted.
Reason supports this interpretation. The City obviously has an interest in having a performance bond so that the promised improvements are completed, but no reason to intrude in what is essentially a private relationship between the subdivider and those supplying labor and materials. Indeed, in many cases, payment bonds may already have been provided to some or all vendors by the general contractor or subdivider. The majority *511opinion in its stern, it-is-required-by-the-ordinance approach would require yet another such bond.
The leading rule for the construction of statutes is to ascertain the intention of the legislature in enacting the statute, and the intent, when ascertained, will prevail over the literal sense. Welfare Div. v. Washoe Co. Welfare Dep’t, 88 Nev. 635, 637, 503 P.2d 457, 458 (1972). The court will give meaning to an ambiguous or uncertain ordinance by examining its context and by considering the reason or spirit of the law. City of Las Vegas v. Macchiaverna, 99 Nev. 256, 258, 661 P.2d 879, 880 (1983).
Nevada uses mechanics’ liens and contractors’ bonds to protect subcontractors from the risk of nonpayment for their labor and materials. The contractors’ bond statutes require a public body to ensure that contractors furnish both performance and payment bonds for public construction when the cost exceeds $20,000.00. NRS 339.025(1). Thus, the payment bond required for public works is in lieu of lien statutes. It protects those who supply labor and materials for public buildings. Flaugh v. Empire Clay Products, Inc., 402 P.2d 932, 933 (Colo. 1965). In the instant case, the off-site improvements were on private property and did not become City property until after completion and dedication to the City.
Mechanics’ lien statutes, on the other hand, protect laborers and materialmen working on improvements of private property interests at the request of owners. NRS 108.221-.246. Because subdivision construction entails work on private land owned by the subdivider, the mechanics’ lien statutes are available to protect those involved in subdivision improvements. NRS 108.224. Brown and Delta could have insisted on a bond from the subdi-vider insuring payment for labor and materials but apparently chose not to do so. Instead they filed mechanics’ liens against the subdivider, Boulder Development. Unfortunately, the construction lender’s deed of trust had priority, and foreclosure of the deed of trust extinguished appellants’ liens. Legal action against Boulder Development was thwarted when the subdivider went bankrupt.
Considering the stated intent of Boulder City and the state statutory scheme, I decline to follow the majority’s reading of the payment bond provision of BCMC § ll-36-12(A). See Breen v. Caesars Palace, 102 Nev. 79, 84, 715 P.2d 1070, 1073 (1986) (declining to read statute literally in light of statutory scheme). Rather, I construe the provision as applying only to public construction. I discern no reason why Boulder City would by ordinance impose an unnecessary and expensive duty on itself to ensure that those supplying labor and materials receive multiple layers of protection — including one from the City — for off-site *512improvements on private property! In fact, for many years, the City had not required payment bonds under circumstances present in the instant case. Such a longstanding interpretation of the City’s ordinance, by the officials charged with its enforcement, is entitled to great deference. See Hewlett-Packard Co. v. Dep’t of Revenue, 749 P.2d 400, 406 (Colo. 1988).
Furthermore, Brown apparently began work about a month before the City accepted and recorded the final map. Delta did not even contract to do work until several months later. It seems absurd to expect, as the majority do, that the City would have to determine how much work had been done by Brown or others at the time the subdivision map was approved, or was to be done by Delta or others thereafter on subcontracts that may not have yet been executed, in order to establish accurate sums for payment bonds under BCMC § ll-36-12(A).
Moreover, what would happen if the subdivider for financial reasons was then unable to furnish a payment bond? Would the City be obliged to stop further work? Would the City be liable if work proceeded? Obviously, neither Delta nor Brown relied on such a bond. It was a matter of public knowledge that no bond had been filed when Brown began work or, after the map was recorded, when Delta commenced work.
If there were multiple subcontractors at various stages of work, under the majority’s view the City must, apparently under penalty of becoming liable itself, identify all suppliers of labor and materials, compute the amount of each contract, ascertain what if anything has been paid, and then determine the cost of labor and materials remaining to be furnished and require a bond sufficient to pay potential claimants. If the bond proves inadequate because of unforeseen extras or misinformation, presumably under the majority opinion the City will then be liable for the bond deficiency. Arguably, under the reasoning in the majority opinion, the claimant would not even have to exhaust remedies against the subdivider or general contractor but could proceed directly against the City!
Such an interpretation of the ordinance is totally unrealistic. It would be unduly burdensome on the City with no corresponding benefit. Therefore, I conclude that BCMC § ll-36-12(A) does not require Boulder City to ensure that a payment bond was posted for the protection of Brown and Delta. Accordingly, I believe that no basis exists to support appellants’ negligence claim.
Contrary to the majority’s view, I submit that this case falls squarely within the general rule that municipalities are not usually liable for failure to enforce ordinances. See, e.g., Frye v. Clark County, 97 Nev. 632, 637 P.2d 1215 (1981). Because I *513disagree that the ordinance mandated the City to compel the subdivider to file a payment bond, or pay the claim if it did not, I believe this case is no more than a simple failure to enforce.
Moreover, I do not believe that the City, under its ordinance, assumed a special duty to those furnishing labor and materials for off-site work. In Frye, this court said that “[s]uch a duty may exist where, [sic] official conduct has created specific reliance on the part of individuals, or where the official negligence affirmatively causes the individual harm.” Id. at 634, 637 P.2d at 1216 (citation omitted).
Here, neither Brown nor Delta in fact relied on the filing of a payment bond by the subdivider. They did nothing to verify the bond’s existence and unsuccessfully sought payment by filing mechanics’ liens. Can we now fairly hold Boulder City liable for approximately $150,000 because the “other document” language of the ordinance supposedly mandates a payment bond for the benefit of Brown and Delta? This is a particularly tenuous predicate in light of the fact that for many years the City had a widely known practice and policy of not requiring payment bonds under these circumstances. Presumably the City will now move to amend the ordinance and eliminate even the remotest possibility that it could ever again be called on to pay suppliers of labor and materials who because of their own oversight are unable to collect from those traditionally responsible.
For these reasons I conclude that the district court properly granted summary judgment in favor of Boulder City in all respects. Accordingly, I dissent.