Bethlehem Constr., Inc. v. Portland Gen. Elec. Co.

• Decision Date: 26 June 2019
• Docket Number: A164486
• Citation: 298 Or.App. 348,447 P.3d 18
• Parties: BETHLEHEM CONSTRUCTION, INC., a Washington corporation, Plaintiff-Respondent, v. PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation, Defendant-Appellant, and Liberty Mutual Insurance Company, et al., Defendants.
• Court: Oregon Court of Appeals

298 Or.App. 348

447 P.3d 18

BETHLEHEM CONSTRUCTION, INC., a Washington corporation, Plaintiff-Respondent,

v.PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation, Defendant-Appellant,andLiberty Mutual Insurance Company, et al., Defendants.

A164486

Court of Appeals of Oregon.

Argued and submitted February 5, 2018.

June 26, 2019

Edwin C. Perry argued the cause for appellant. Also on the brief were Scott G. Seidman and Tonkon Torp LLP. With them on the reply brief was Megan K. Houlihan.

Richard T. Wetmore argued the cause for respondent. Also on the brief was Dunn & Black, P.S.

Before Ortega, Presiding Judge, and Egan, Chief Judge, and Powers, Judge.^*

POWERS, J.

In this case involving a construction lien, Portland General Electric Company (PGE) appeals from a limited judgment in favor of Bethlehem Construction, Inc., which the trial court entered after granting summary judgment for Bethlehem on its lien foreclosure claim.¹ PGE contends that the trial court erred in granting summary judgment to Bethlehem and denying it to PGE because the lien was not recorded within 75 days after Bethlehem "ceased to provide labor, rent equipment or furnish materials," as required by ORS 87.035(1). We conclude that the trial court did not err and, accordingly, affirm.

The facts are undisputed. PGE contracted with Abeinsa Abener Teyma General Partnership (Abeinsa) for construction of a power plant in Boardman, Oregon, known as the Carty Generating Station. Abeinsa subcontracted with Bethlehem by entering into a purchase order in which Bethlehem agreed to produce and deliver precast concrete panels to be used as part of the generation building. The contract price was $122,851. Bethlehem produced and delivered the panels, completing the work required by the purchase order in April 2015 and submitting its final billing to Abeinsa.

In December 2015, Abeinsa contacted Bethlehem by email with a request for additional work. Another contractor had drilled through a prestressed strand in one of the concrete panels, and Abeinsa requested an engineering opinion on whether the damage compromised the panel’s ability to bear the necessary load. The parties agreed to a change order to the original contract; the cost for the additional work was $578.13. The next day, December 15, 2015, Bethlehem provided the engineering opinion.

PGE terminated its contract with Abeinsa on December 18, 2015. On January 11, 2016, Bethlehem recorded its lien, which covers both the original contract for the fabrication of the concrete panels and the change order for the engineering analysis. Abeinsa did not pay Bethlehem the final payment due under the original contract or the amount due under the change order.

In February 2016, PGE, now acting as its own general contractor, contacted Bethlehem for an engineering opinion about a design change affecting the concrete panels. PGE and Bethlehem agreed to a second change order, Bethlehem provided the engineering opinion, and PGE paid Bethlehem the amount due under the second change order.

Bethlehem filed this action, asserting, among other things, a lien foreclosure claim, and the parties filed cross motions for summary judgment on that claim. The trial court concluded that Bethlehem did not cease to provide labor or furnish materials within the meaning of ORS 87.035(1) until it performed the additional work requested by Abeinsa in December 2015, pursuant to the first change order. Accordingly, the court concluded that Bethlehem’s lien, recorded in January 2016, was timely, and the court granted summary judgment for Bethlehem and denied summary judgment for PGE.

On appeal, PGE contends that the trial court erred in concluding that Bethlehem’s additional work in December renewed its lien rights as to the work it undertook earlier in the year. PGE’s argument is twofold: First, it contends that the December work could not revive Bethlehem’s lien rights because the work under the original contract was complete in April; it asserts that the earlier work and the later work took place under separate contracts, as a matter of law. Second, PGE asserts that the December work was trivial or trifling and, consequently, under Oregon case law, was insufficient to revive the lien claim.

On appeal of a judgment disposing of cross motions for summary judgment, we review "to determine whether there are any disputed issues of material fact and whether either party was entitled to judgment as a matter of law." Hynix Semiconductor Mfg. America v. EWEB , 276 Or. App. 228, 230-31, 367 P.3d 927 (2016) (internal quotation marks omitted); see also ORCP 47 C (providing standards for summary judgment).

ORS 87.035(1) requires a construction lien claimant like Bethlehem to record the lien "not later than 75 days after the person has ceased to provide labor, rent equipment or furnish materials or 75 days after completion of construction, whichever is earlier." Here, as noted above, the only question is when Bethlehem ceased to provide labor or furnish materials.² To answer that question, we consult the substantial body of case law addressing it. See Pro Excavating, Inc. v. Ziebart , 148 Or. App. 436, 439, 939 P.2d 1187 (1997) (answering the same question by reference to case law).

"For purposes of [ ORS 87.035(1) ], the date on which the 75-day period begins to run is the date on which the person’s contribution to the project is ‘substantially complete.’ " Id. We and the Supreme Court have frequently considered the effect on construction lien rights when a contractor performs all or nearly all of the work required under a contract, stops work for a period of time sufficient for lien rights to lapse, and later performs some more work and files a lien for all of the work. Bethlehem points out that, in Avery v. Butler , 30 Or. 287, 293, 47 P. 706 (1897), the Supreme Court held that, "when the builder, after a substantial completion of the structure, at the request of the owner, makes additions to it which are useful or necessary to its enjoyment, the final completion dates from the time such additions are made." See also Farrell v. Lacey , 264 Or. 505, 511, 507 P.2d 31 (1973) (quoting and applying that rule from Avery ). In Bethlehem’s view, that rule applies here, and, thus, the lien was timely.

On the other hand, PGE relies on Hobkirk v. Portland B. B. Club , 44 Or. 605, 76 P. 776 (1904), and Spaeth v. Becktell , 150 Or. 111, 41 P.2d 1064 (1935). In Hobkirk , the Supreme Court held that a contractor’s replacement of the roof of a baseball stadium (which he had built not long before) and other work that he performed after he completed the work in his original contract did not revive his right to a lien for the initial work.

There, the court explained,

"When extra work is done or material furnished by a contractor during the performance of his agreement, as a part of or in furtherance of the same general object, it will be deemed, for the purpose of a mechanic’s lien, a part of the original contract, and the time in which to file the lien for the amount due on the contract and the extra work will commence to run from the date of the completion of the work as a whole. But the performance of other or additional work by the original contractor after the completion of his contract cannot be tacked to or connected therewith so as to extend the time for the filing of a lien therefor."

Id. at 609-10, 76 P. 776 (citations omitted). In that case, the court found, the later-performed work "was no part of the original contract, but was done under separate and independent contracts made after the completion of the original work." Id. at 609, 76 P. 776.

In Spaeth , the court quoted the rule as follows:

" ‘Where work, distinct in its nature, is performed at different times, the law supposes it to have been performed under distinct engagements, as where the work at one time is for building and at another time for repairing. So where two distinct contracts are in fact made, as for different parts of the work, the work done under each contract must be considered as entire of itself. But when work or material is done or furnished, all going to the same general purpose, as the building of a house or any of its parts, though such work be done or ordered at different times, yet if the several parts form an entire whole, or are so connected together as to show that the parties had it in contemplation that the whole should form but one, and not distinct matters of settlement, the whole account must be treated as a unit, or as being but a single contract.’ "

150 Or. at 115, 41 P.2d 1064 (quoting Samuel Louis Phillips, A Treatise on the Law of Mechanics’ Liens on Real and Personal Property § 229 (3d ed. 1893)). Applying that rule to the facts of the case, the court rejected the lien claimant’s argument that the parties had entered into a continuing contract for "the construction, alteration, and repair" of a hotel, explaining that it was "unable to conclude that the various items listed in the notice of lien were contemplated by the parties to be considered as part of one entire continuous contract." Id. at 120, 41 P.2d 1064.

PGE contends that, under those cases, Bethlehem’s lien rights as to the initial work were not revived by the later work because Bethlehem completed its work under the initial contract before ...