Daniel v. Hawkeye Funding, Ltd. P'ship

• Citation: 150 N.H. 581,843 A.2d 946
• Decision Date: 26 February 2004
• Docket Number: No. 2003–173.,2003–173.
• Parties: Duke/Fluor DANIEL v. HAWKEYE FUNDING, LIMITED PARTNERSHIP & a.
• Court: Supreme Court of New Hampshire

150 N.H. 581

843 A.2d 946

Duke/Fluor DANIEL

v.HAWKEYE FUNDING, LIMITED PARTNERSHIP & a.

No. 2003–173.

Supreme Court of New Hampshire.

Argued: Jan. 7, 2004.

Opinion Issued: Feb. 26, 2004.

Rehearing Denied March 31, 2004.

Cook, Little, Rosenblatt & Manson, P.L.L.C., of Manchester (Arnold Rosenblatt and Michael S. Owen on the brief, and Mr. Owen orally), for the plaintiff.

Gallagher, Callahan & Gartrell, P.A., of Concord (Michael D. Ramsdell on the brief and orally), for the defendants.

MEMORANDUM OPINION

NADEAU, J.

This case comes before us on interlocutory appeal from a ruling of the Superior Court (McHugh , J.), see Sup.Ct. R. 8, holding that the plaintiff, Duke/Fluor Daniel, is not permitted to have a prejudgment attachment in this action and ordering the plaintiff to remove the attachment it had obtained. We affirm and remand.

The following facts appear in the trial court's order. The plaintiff sued the defendants, Hawkeye Funding, Limited Partnership (Hawkeye) and Newington Energy, LLC, alleging that it built a power plant for the defendants and is owed money under the parties' contract. The plaintiff also filed a petition to attach the power plant pursuant to the mechanic's lien statute, RSA chapter 447. The attachment was initially granted prior to the defendants having an opportunity to object.

The defendants moved to dismiss the attachment, arguing that the plaintiff had waived its right to a mechanic's lien in the parties' contract. The trial court agreed, ruling that according to the unambiguous language of section 3.15 of the contract, the plaintiff was prohibited from obtaining a prejudgment lien on the power plant.

In this interlocutory appeal, the trial court submitted eight questions of law. The first seven, however, all deal with whether the court correctly interpreted section 3.15 of the parties' contract. We will therefore directly address only that issue. The final question presented is whether the court erred in concluding that the power plant would retain sufficient value at the end of the lawsuit to guarantee payment of a judgment.

The contract provision primarily at issue provides, in pertinent part:

3.15. No Liens.

So long as no undisputed amounts due hereunder are outstanding, in which such case only to the extent of such outstanding undisputed amount, Contractor shall not directly or indirectly create, incur, assume, or suffer to be created by any of its subcontractors, vendors, laborers, materialmen, other suppliers of goods or services, or any other Person, any Lien on the Facility Site, the Facility, or any part of or interest in either.

The trial court found that although this provision does not explicitly refer to mechanic's liens or prejudgment attachments, both are encompassed by the definition of "Lien" in the contract. It also concluded that the language of section 3.15 was not ambiguous and that "[i]t includes the contractor, in this case the plaintiff, as well as any subcontractors in the category of persons or entities that are prohibited from placing any prejudgment lien on the facility."

"The interpretation of a contract, including whether a contract term is ambiguous, is ultimately a question of law for this court to decide." Appeal of Reid , 143 N.H. 246, 249, 722 A.2d 489 (1998) (quotation omitted). Accordingly, "we review the trial court's interpretation of the contract de novo ." Lawyers Title Ins. Corp. v. Groff, 148 N.H. 333, 336, 808 A.2d 44 (2002) (quotation omitted). In interpreting a contract,

we give the language used by the parties its reasonable meaning, considering the circumstances and the context in which the agreement was negotiated, and reading the document as a whole.

Absent ambiguity, however, the parties' intent will be determined from the plain meaning of the language used in the contract.

Id. at 336–37, 808 A.2d 44 (quotations and citation omitted).

The plaintiff points out that section 3.15 applies because the amounts here are disputed. However, the plaintiff asserts that section 3.15 cannot be interpreted to cover its own mechanic's liens because, under the mechanic's lien statute, it cannot create a lien on its own behalf. It argues that such "liens are created when one procures labor or materials and fails to pay for them." Thus, the plaintiff claims, its lien was created not by it but by Hawkeye, and the only way it could create a lien is "by having subcontractors perform work and not paying them." Accordingly, the plaintiff argues, section 3.15 covers only subcontractors' liens.

RSA 447:2 (2002) provides:

If any person shall, by himself or others, perform labor or furnish materials to the amount of $15 or more for erecting or repairing a house or other building or appurtenances ... by virtue of a contract with the owner thereof, he shall have a lien on any material so furnished and on said structure, and on any right of the owner to the lot of land on which it stands.

We have noted that it is "[t]he provision of labor or materials [that] creates a [mechanic's] lien," Pine Gravel, Inc. v. Cianchette d/b/a Site Prep., 128 N.H. 460, 464, 514 A.2d 1282 (1986), and that "the contractor's lien is created as soon as any work or materials are furnished under the contract, increasing in amount according to the progress of the work until performance is completed." Boulia–Gorrell Lumber Co. v. Company, 84 N.H. 174, 177, 148 A. 28 (1929) (construing earlier version of statute). Thus, creation of the lien does not depend upon the owner's nonpayment; rather, the contractor "creates" its own lien by performing the work or furnishing the materials.

The plaintiff argues that interpreting the contract term "create" in this manner would "make no sense—because to comply with it [the plaintiff] would have to refrain from doing the very thing that the contract expressly requires, namely, build the plant." Because we interpret contract language according to its reasonable meaning, Lawyers Title Ins...