Bankers Trust Co. v. El Paso Pre-Cast Co.
| Decision Date | 22 February 1977 |
| Docket Number | PRE-CAST,Nos. 27087,27143,s. 27087 |
| Citation | 560 P.2d 457,192 Colo. 468 |
| Parties | BANKERS TRUST COMPANY, Plaintiff-Appellant, v. EL PASOCOMPANY et al., Defendants-Appellees. EL PASOCO., Plaintiff-Appellee, v. The BREAKS LAND CORP. and Bankers Trust Co., Defendants-Appellees, G. L. Williams & Partners, Ltd., formerly Lovejoy & Williams, Defendant-Appellant. |
| Court | Colorado Supreme Court |
Fairfield & Woods, Patrick F. Kenney, Peter F. Breitenstein, Denver, for Bankers Trust Co.
Wesley G. Davis, Colorado Springs, for El Paso Pre-Cast Co.
Dawson, Nagel, Sherman & Howard, Craig A. Christensen, Denver, for Lumberjack, Inc. Mason, Reuler & Peek, P.C., William M. Peek, Denver, for General Buildings Service & Supply, Inc.
Preston, Altman & Parlapiano, Wm. David Lytle, Pueblo, for Southwestern Supply Co.
Robinson-Robinson, P.C., Wm. Hedges Robinson, Jr., Lakewood, for Western States Machinery Co.
Meadoff & King, Harold L. Meadoff, Denver, for Acme Door Co. of Colorado.
Carleno & Parkinson, P.C., Louis Parkinson, Englewood, for Crossings, Inc.
Charles J. Haase, Colorado Springs, for Lloyd Cisneros Concrete & Excavating Co. and Bob Arnold Concrete Contractor.
Donald E. King, Colorado Springs, for G. L. Williams & Partners, Ltd.
These cases, consolidated on appeal, concern a priority dispute between Bankers Trust Company of New York (Bankers), beneficiary of a deed of trust, and the holders of several mechanics' liens on the same property. The El Paso County District Court found Bankers' interest junior to the interests of all but one of the lien claimants. We affirm the judgments.
The Breaks Land Corporation (BLC), owner of a Colorado Springs apartment project, hired Steven Jacobs and Associates (Jacobs), an architectural firm, in June 1972 to prepare preliminary plans and drawings for the project. BLC also hired Lovejoy & Williams, Inc. (now G. L. Williams & Partners, Ltd.), an engineering firm, to perform engineering services for the project. Neither Jacobs nor Lovejoy & Williams had a written contract with BLC.
BLC submitted Jacobs' plans and drawings to Bankers to obtain financing for the project. Bankers made the construction loan to BLC in mid-November 1972, which was secured by a deed of trust on the property, dated November 14, 1972, and recorded November 20, 1972.
BLC retained Cokany Construction Company (Cokany) as general contractor for the project, by a contract dated November 14, 1972. However, Cokany did not obtain its Colorado license until March 22, 1973.
Pursuant to its loan agreement, Bankers disbursed approximately $1.27 million from November 1972 to January 1974. When BLC defaulted on its obligations, Bankers began proceedings to foreclose its deed of trust through the public trustee. The public trustee sold the property at public sale on May 23, 1974, to Bankers, the sale was approved by order of the district court, and on December 30, 1975, Bankers received a public trustee's deed to the property.
El Paso Pre-Cast Company, a supplier of materials for the property, filed a complaint on February 6, 1974, to foreclose its mechanics' lien against the property. Bankers was named a party defendant and asserted a first lien under its deed of trust. It also challenged the constitutionality of the mechanics' lien statutes.
Work on the project substantially ceased on February 15, 1974. However, in late February and again on March 1, Lovejoy & Williams performed site inspections. It did not bill BLC for these unrequested site inspections, nor did it report its findings to BLC. Its last work billed to BLC occurred on February 8, 1974.
Lovejoy & Williams filed a lien statement on May 16, 1974. On April 4, 1975, numerous lien claimants, including Lovejoy & Williams, intervened in the action filed by El Paso Pre-Cast.
After trial, the district court ruled that the interests of ten lien claimants related back to a time prior to the filing for record of Bankers' deed of trust and thus were senior to Bankers' lien. The court denied Lovejoy & Williams' lien on the grounds that it had not been timely filed. Bankers' challenge to the constitutionality of the mechanics' lien statutes was rejected by the court.
Bankers appeals from the district court judgment in favor of the lien claimants contending that its deed of trust is prior to all of the mechanics' liens, and that the Colorado mechanics' lien procedures violate due process. Lovejoy & Williams appeals the denial of its lien for failure to timely file a lien statement.
Section 38--22--106(1), C.R.S. 1973, concerning priority of mechanics' liens, provides:
'All liens established by virtue of this article shall relate back to the time of the commencement of work under the contract between the owner and the first contractor, or, if said contract is not in writing, then such liens shall relate back to and take effect as of the time of the commencement of the work upon the structure or improvement, and shall have priority over any lien or encumbrance subsequently intervening * * *.'
The district court ruled that the commencement of work by Jacobs and by Lovejoy & Williams before Bankers filed its deed of trust established the priority date for all valid mechanics' liens on the project. Thus, under the foregoing statute, these liens had priority over Bankers' deed of trust.
Bankers argues in the first instance that determination of the priority date depends upon whether there was a written contract between the owner and the 'first contractor'; and that since here there was a written contract between Cokany and BLC, the owner, the priority date related back to the commencement of the work under the written contract. It follows, it is argued, that since no work was performed under the written contract until long after Bankers' deed of trust was recorded, the lien of the deed of trust was therefore prior to the interests of the mechanic-lien claimants. We do not agree.
Regarding the contention that Cokany, not Jacobs or Lovejoy & Williams, was the 'first contractor,' the mechanics' lien statutes do not define 'first contractor.' However, section 38--22--108(1) defines principal and subcontractors as follows:
'Every person given a lien by this article whose contract, either express or implied, is with the owner or reputed owner or his agent or other representative, is a principal contractor and all others are subcontractors * * *.'
Based on this statute, every lienholder is a contractor, either a principal contractor or subcontractor, and this does not depend on whether the contract is in writing. And section 38--22--101(1) expressly includes architects and engineers in the class of those eligible for mechanics' liens. Consequently, Jacobs and Lovejoy & Williams were both contractors within the contemplation of section 38--22--106(1).
Whether one is a 'first contractor' does not depend upon whether the contract is in writing, but rather at what time the contract, either express or implied, is entered into with the owner. There is no dispute that Jacobs' and Lovejoy & Williams' contracts with BLC were prior to Cokany's written contract. Thus, Cokany was not the 'first contractor' whose work set the priority date for mechanics' liens.
Alternatively, Bankers argues that, even if Jacobs or Lovejoy & Williams is determined to be the 'first contractor,' the priority date is the commencement of work upon the structure or improvement. Section 38--22--106(1). In this context, Bankers contends: 'work' means 'lienable work'; and the commencement of work upon the structure or improvement means the start of actual, on-site construction; since the work of the architect or engineer, done before November 20, 1972 (the date of recording of the deed of trust), was not done on the structure or improvement, such work was not lienable work; on-site, actual construction did not start until after Bankers' deed of trust was recorded. Therefore, in the view of Bankers, the trial court erred in granting a first lien to the mechanic-lien claimants.
The district court assumed without deciding, and Bankers agreed, that 'work' in the context of section 38--22--106(1) means lienable work. Assuming the correctness of this definition, it is clear by decisions of this court that an architect's and engineer's preliminary work is lienable. Sontag v. Abbott, 140 Colo. 351, 344 P.2d 961, citing Park Lane v. Fisher, 89 Colo. 591, 5 P.2d 577; Annot., 28 A.L.R.3d 1014. Consequently, Jacobs and Lovejoy & Williams performed 'work' before November 20, 1972, the record date of Bankers' trust deed.
We have construed 'commencement of the work' broadly, in accord with the principle that mechanics' lien laws should be construed in favor of lien claimants. 3190 Corp. v. Gould, 163 Colo. 356, 431 P.2d 466. Thus, International Trust Co. v. Clark Co., 66 Colo. 210, 180 P. 300, interpreted that phrase to include furnishing of materials as well as labor. More on point, Park Lane v. Fisher, supra, held that an architect's lien related back to the commencement of his work upon the plans and drawings.
We recognize that the architect in Park Lane had a written contract, so that his lien related back to the commencement of work 'under the contract' rather than 'upon the structure or improvement.' But in Sontag v. Abbott, supra, where the lien claimant delivered building materials upon an oral request, we cited Park Lane, supra, as well as International Trust Co., supra, in support of our holding that delivery of materials constitutes 'work upon the structure or improvement.' In accord with these cases and the policy of mechanics' lien law, we hold that Jacobs' and Lovejoy & Williams' services here constitute 'commencement of the work upon the structure or improvement' under section 38--22--106(1).
As a result, the district court correctly ruled that the interests of all lienholders were superior to Bankers' interest under its...
To continue reading
Request your trial
-
Mobile Components, Inc. v. Layon
...of Colorado, in rejecting a very similar constitutional attack to their lien statutes observed, in Bankers Trust Co. v. El Paso Pre-Cast Co., et al., Colo. 560 P.2d 457, 462-463, (1977) "To require the full panoply of due process protections before filing a lien statement would impair the n......
-
South Central Dist. of Pentecostal Church of God of America, Inc. v. Bruce-Rogers Co., BRUCE-ROGERS
...Hotel Co. v. Jones, 193 U.S. 532, 24 S.Ct. 576, 48 L.Ed. 778 (1904). The Colorado Supreme Court, in Bankers Trust Co. v. El Paso Pre-Cast Co., 192 Colo. 468, 560 P.2d 457 (1977), has pointed out a factor of some significance in seeking to find accommodation of the competing property interes......
-
Ketchum, Konkel, Barrett, Nickel & Austin v. Heritage Mountain Development Co.
...in favor of the lien claimant. Calder Bros. Co. v. Anderson, 652 P.2d 922, 924 (Utah 1982) (citing Bankers Trust Co. v. El Paso Pre-Cast Co., 192 Colo. 468, 560 P.2d 457 (1977)); see also Tripp v. Vaughn, 747 P.2d 1051, 1055 (Utah The precise statutory construction issue presented is the me......
-
Keith Young & Sons Const. Co. v. Victor Senior Citizens Housing, Inc.
...Connolly Development, Inc. v. Superior Court of Merced County, 17 Cal.3d 803, 132 Cal.Rptr. 477, 553 P.2d 637; Bankers Trust Co. v. El Paso Pre-Cast Co., 560 P.2d 457 (Colo.); Tucker Door & Trim Corp. v. Fifteenth Street Co., 235 Ga. 727, 221 S.E.2d 433; Carl A. Morse, Inc. v. Rentar Indust......
-
Colorado's Mechanics' Lien Law
...v. Pinion Springs Condominiums, Inc., ___ Colo. ___, 563 P.2d 346 (1977); Bankers Trust v. El Paso Pre-Cost Co., ___ Colo. ___, 560 P.2d 457 (1977); Park Lane Properties, supra, note 63. 65. Sontag, supra, note 4. 66. C.R.S. 1973, § 38-22-103(2); Atkinson v. Colo. Title and Trust Co., 59 Co......
-
CHAPTER 6 PROTECTION AGAINST JOINT VENTURE LIABILITIES: THE RMMLF MODEL FORM, BANKRUPTCY AND RELATED CONCERNS
...in Levit v. Ingersoll Rand Financial Corp., supra n. 62. [66] See 11 U.S.C. § 509. [67] Bankers' Trust Co. v. El Paso Pre-Cast Concrete, 192 Colo. 468, 560 P.2d 457 (1977). [68] UCC § 9-204 and 9-303. [69] UCC § 9-403. [70] See text at page 6-3, infra. [71] CRS § 34-44-101 et seq. [72] 11 U......