Cubit Corp. v. Hausler

• Decision Date: 25 August 1992
• Docket Number: No. 20033,20033
• Citation: 1992 NMSC 50,845 P.2d 125,114 N.M. 602
• Parties: , 31 A.L.R.5th 878 CUBIT CORPORATION, Plaintiff-Appellee, v. Travis M. HAUSLER, Defendant-Appellant.
• Court: New Mexico Supreme Court

Page 125

845 P.2d 125

114 N.M. 602, 31 A.L.R.5th 878

CUBIT CORPORATION, Plaintiff-Appellee, v. Travis M. HAUSLER, Defendant-Appellant.

No. 20033.

Supreme Court of New Mexico.

Aug. 25, 1992.

J. Robert Beauvais, Ruidoso, for defendant-appellant.

Mel B. O'Reilly, Albuquerque, for plaintiff-appellee.

OPINION

FROST, Justice.

In 1984, Cubit Corporation sought to foreclose its claim of a mechanic's lien against property owner Travis M. Hausler in the amount of $4,573.78 for planning and design services relating to real estate which was to be part of a planned community development in Lincoln County, New Mexico. As a result of Hausler's subsequent bankruptcy proceedings, the case was closed subject to reopening upon proper application. Reinstatement occurred in January 1990 with the parties stipulating to submission of the case on briefs and depositions in lieu of trial.

The trial court issued a letter decision in November 1990, which subsequently was withdrawn and set aside. A bench trial was held in March 1991, with findings of fact, conclusions of law, and judgment for Cubit entered in May. All of Cubit's requested findings of fact and conclusions of law were adopted by the court; Hausler's trial counsel failed to file any proposed findings and conclusions. The trial court concluded that personal judgment against Hausler was barred under 11 U.S.C. Sec. 524 (1988 & Supp. II 1990); that the court had in rem jurisdiction over the subject property which was not included in Hausler's bankruptcy estate; that Cubit established a valid claim of lien; and that the project was abandoned by Hausler without fault of Cubit, constituting completion under Albuquerque Lumber Co. v. Montevista Co., 39 N.M. 6, 38 P.2d 77 (1934). In addition to foreclosing the claim of lien, the judgment awarded Cubit costs and attorney fees. We affirm.

Before discussing the merits, we note that Hausler attempts to support his argument by referring to portions of the trial tapes without specifically challenging any findings or conclusions entered by the district court.¹ Our law is clear that oral statements by the court do not constitute its decision. Peace Found., Inc. v. City of Albuquerque, 76 N.M. 757, 758, 418 P.2d 535, 536-37 (1966); Pritchard v. Halliburton Serv., 104 N.M. 102, 105, 717 P.2d 78, 81 (Ct.App.), cert. denied, 103 N.M. 798, 715 P.2d 71 (1986); Walker v. L.G. Everist, Inc., 102 N.M. 783, 790, 701 P.2d 382, 389 (Ct.App.), cert. denied, 105 N.M. 94, 728 P.2d 845 (1985); see also SCRA 1986, 1-052(B) (Repl.Pamp.1992). A district court's oral remarks are subject to change at any time before entry of its decision. Mathieson v. Hubler, 92 N.M. 381, 390, 588 P.2d 1056, 1065 (Ct.App.), cert. denied, 92 N.M. 353, 588 P.2d 554 (1978). Moreover, "[h]aving failed to request findings and conclusions, [Hausler] cannot obtain a review of the evidence." Peace Found., Inc., 76 N.M. at 758, 418 P.2d at 537. Accordingly, all findings entered by the district court are deemed conclusive. SCRA 1986, 12-213(A)(3) (Repl.Pamp.1992).

We further note Hausler's violation of Rule 12-213(A)(2) in failing to include references to the record in the summary of facts. Counsel for appellant is encouraged to comply with our appellate rules in the future. See Fenner v. Fenner, 106 N.M. 36, 41-42, 738 P.2d 908, 913-14 (Ct.App.) (appellate counsel advised to read and follow rules to avoid future violations), cert. denied, 106 N.M. 7, 738 P.2d 125 (1987).

Hausler presents two factual grounds for the contention that Cubit was not entitled to claim a lien; however, both were incorporated into the court's findings of fact and, as stated above, are deemed conclusive on appeal. In affirming the judgment, we discuss only the legal question of whether a mechanic's or materialman's lien can attach to property where no improvement occurred due to the owner's abandonment of the project through no fault of the claimant. This question presents an issue of first impression in New Mexico, although several New Mexico cases have addressed closely related issues. Our holding today extends New Mexico law to permit a lien on unimproved property under certain limited circumstances.²

The statute under which a mechanic's or materialman's lien may be claimed, NMSA 1978, Section 48-2-2 (Cum.Supp.1992), states in pertinent part:

Every person performing labor upon, providing or hauling equipment, tools or machinery for, or furnishing materials to be used in the construction, alteration or repair of any mining claim, building, ... or any other structure, who performs labor in any mining claim, or is a registered surveyor or who surveys real property has a lien upon the same for the work or labor done, for the specific contract or agreed upon charge for the surveying or equipment, tools or machinery hauled or provided, or materials furnished by each respectively, whether done, provided, hauled or furnished at the instance of the owner of the building or other improvement or his [or her] agent, and every contractor, subcontractor, architect, builder or other person having charge of any mining, or of the construction, alteration or repair, either in whole or in part, of any building or other improvement shall be held to be the agent of the owner for the purposes of this section.

"The purpose of our lien statute is 'to protect those who, by their labor, services, skill, or materials furnished, have enhanced the value of the property sought to be charged.' " Vulcraft v. Midtown Business Park, Ltd., 110 N.M. 761, 765, 800 P.2d 195, 199 (1990) (quoting Hobbs v. Spiegelberg, 3 N.M. 357, 363, 5 P. 529, 531 (1885)). Although in derogation of the common law, the lien statute is remedial in nature, equitable in its enforcement, and is to be liberally construed. Vulcraft, 110 N.M. at 765, 800 P.2d at 199; Lyons v. Howard, 16 N.M. 327, 331, 117 P. 842, 843 (1911). In interpreting our lien law, New Mexico appellate courts have looked with favor to California case law for guidance. See Lembke Constr. Co. v. J.D. Coggins Co., 72 N.M. 259, 261, 382 P.2d 983, 984 (1963); Tabet v. Davenport, 57 N.M. 540, 542, 260 P.2d 722, 723 (1953). Our discussion of this issue will consider relevant case law from other jurisdictions as well.

Under present New Mexico law, an architect is entitled to a mechanic's lien for preparing and furnishing plans, even if the architect does not supervise the construction, so long as the plans are actually used in the construction of the building. Gaastra, Gladding & Johnson v. Bishop's Lodge Co., 35 N.M. 396, 299 P. 347 (1931). In resolving a priority question between an architect and mortgage holder, a federal bankruptcy court in In re Commercial Investments, Ltd., 92 B.R. 488 (Bankr.D.N.M.1988), interpreted the Gaastra holding as follows:

[S]ome physical work must commence on the designed structure in order for the architect's lien to rise. The Gaastra case requires that the architect's plans be actually used in the construction before the architect is entitled to a lien. Therefore, the lien cannot arise until some physical work has commenced upon the site (or until materials have been delivered thereto).

Id. at 491. Several New Mexico cases, however, have suggested that abandonment of a project, if through no fault of the lien claimant, does not affect the claimant's right to a mechanic's lien.

In Dysart v. Youngblood, 44 N.M. 351, 102 P.2d 664 (1940), the only improvement upon the property was a dry water well, which the trial court characterized as a "structure" within the contemplation of the statute. A lien was established on the well and the land upon which it was situated, on the theory that the land was needed for the "convenient use and occupation" of the well. Id. at 352, 102 P.2d at 664-65. The court based its holding on "the evident intention of the Legislature to protect laborers and materialmen against loss." Id. at 353, 102 P.2d at 664-65. Of significance, however, for our purposes, is the Dysart court's ruling that "[i]t makes no difference ... that the improvement was abandoned, and therefore worthless as adding value to the land. The lien obtains for what it is worth, if the abandonment occurred through no fault of the lien claimant." Id. at 355, 102 P.2d at 667 (citing Albuquerque Lumber Co. v. Montevista Co., 39 N.M. 6, 38 P.2d 77 (1934)).

The district court based its conclusion that Hausler's abandonment of the project constituted completion under Albuquerque Lumber Co. v. Montevista Co., which upheld a lien attached to property where the improvement had commenced but later was abandoned by the property owner. The claimant successfully filed a lien against the property upon which only a foundation and part of a wall had been constructed before the project was abandoned through no fault of the claimant. This Court held that the worthless improvement presented no obstacle to the claimant's recovery. 39 N.M. at 12, 38 P.2d at 81. In so holding the Court stated:

While fundamentally and in a broad sense presumptive[,] benefit to the land improved by another's labor or material from the beginning has afforded constitutional justification for and still supports the theory of mechanics' lien legislation, yet so to recognize does not mean that a showing of benefit in a particular case is indispensable to the right to the lien.... Such a construction would greatly restrict the field of usefulness of these remedial acts as against those intended to be aided thereby.

Id. at 12-13, 38 P.2d at 81 (citations omitted). Accordingly, the Court incorporated into New Mexico lien law the general rule that "abandonment [of construction] through fault of the owner and without fault of the lien claimant constitutes constructive completion under our statute, both as respects the right to lien and the time within which it must be filed." Id. at 15, 38 P.2d at 82.

Application of this rationale to the case at bar is consistent with the well-established public policy...