Daniel v. M. J. Development, Inc.
| Decision Date | 02 August 1979 |
| Docket Number | No. 78-383,78-383 |
| Citation | 603 P.2d 947,43 Colo.App. 92 |
| Parties | Johnie R. DANIEL, d/b/a Adco Heating & Sheet Metal, Plaintiff, v. M. J. DEVELOPMENT, INC. and Porky's, Inc., Defendants, and Allied Trades, Inc., d/b/a Barnett Company, Label Glass, Inc., and Earl A. Dixon, Inc., Defendants-Cross-Claimants-Appellees. Richard D. TAXMAN and Jacqueline Rose, Defendants-Appellants and Third-Party Plaintiffs-Appellants, v. Ruby CRISP, Third-Party Defendant-Appellee, and Porky's, Inc., Third-Party Defendant. . III |
| Court | Colorado Court of Appeals |
Grossman & Grossman, Alan M. Grossman, Galchinsky & Silverstein, Herbert H. Galchinsky, Denver, for defendant-cross-claimant-appellee Allied Trades, Inc.
No appearance for defendant-cross-claimant-appellee Label Glass, Inc.
Louis A. Morrone, Denver, for defendant-cross-claimant-appellee Earl A. Dixon, Inc.
Weltzer & Worstell, Louis A. Weltzer, David L. Worstell, Denver, for defendants-appellants and third-party plaintiffs-appellants.
Samuel Berman, John A. Berman, Denver, for third-party defendant-appellee Ruby Crisp.
In an action to foreclose a mechanic's lien, the property owners, defendants, Richard D. Taxman and Jacqueline Rose, appeal from a judgment awarding liens to defendants, Allied Trades, Inc., Label Glass, and Earl A. Dixon, Inc. They also appeal from a personal judgment against them for the amount due Allied, Label, and Dixon. Finally, the owners appeal from a judgment dismissing their claim against a lessee of the property, Ruby Crisp. We affirm in part and reverse in part.
On February 1, 1975, the owners leased a portion of the subject property to Jack and Ruby Crisp for a restaurant business. In April of 1975, Jack Crisp died, and Ruby Crisp decided to close the restaurant.
On December 16, with the permission of the owners, Ruby Crisp assigned the remainder of her lease to Porky's, Inc. Porky's commenced extensive remodeling operations on the premises and employed M. J. Development Company as general contractor for that purpose. A number of subcontractors supplied materials for the project, and a new restaurant began operation on April 1, 1976.
On August 31, 1976, plaintiff Johnie R. Daniel filed a complaint pursuant to the mechanics' lien statute, § 38-22-101, Et seq., C.R.S. 1973, seeking to foreclose a lien. Daniel also requested personal judgment against the owners and M. J. Various other lien claimants were joined in the complaint, including Barnett, Label, and Dixon. Each of these lien claimants cross-claimed to foreclose their liens against the property as well as for personal judgments against the owners. The owners filed a third-party complaint against Ruby Crisp and Porky's, seeking indemnification for any judgment entered against them.
During the trial, the owners compromised their claim with Daniel. Following the trial, the court entered the judgment which is challenged on this appeal.
We affirm the trial court's dismissal of the owners' claim against Ruby Crisp. Contrary to the owners' contention, there was sufficient competent evidence to support the findings of the trial court that the assignment of the original lease by Crisp was made to Porky's with the express approval of the owners. The record also substantiates the court's finding that Crisp's liability under the lease was limited to the rent obligation only. Hence, those findings must be affirmed. Broncucia v. McGee, 173 Colo. 22, 475 P.2d 336 (1970).
Section 38-22-109(3), C.R.S. 1973 (1978 Cum. Supp.), provides:
"In order to preserve Any lien for work performed or materials furnished, there Must be a notice of intent to file a lien statement served upon the owner or reputed owner of the property or his agent . . . at least ten days before the time of filing the lien statement with the county clerk and recorder. . . ." (emphasis added)
The owners asserted at trial, Inter alia, that the lien claimants failed to provide notice as required by this statute. However, the trial court ruled that the owners waived their claim of inadequate notice by not raising same either as an affirmative defense in their pleadings pursuant to C.R.C.P. 9, or as an affirmative defense in their pretrial statement. The lien claimants assert that the trial court's ruling was correct. In addition, they argue that: (1) Even if such notice is required, their liens are valid because the owners failed to demonstrate that they were prejudiced by lack of notice; and (2) even if notice was not waived, as statutory principal contractors they were not required to give notice under the statute. We conclude that the trial court's ruling was error.
In construing a statute which required lien claimants to file a notice of lis pendens, our Supreme Court held in Kalamath Investment Co. v. Asphalt Paving Co., 153 Colo. 109, 384 P.2d 938 (1963), that a lien claimant has the burden of proving his right to a lien under the statute and that this burden includes the requirement of giving statutory notice. We view Kalamath as dispositive here. Hence, the owners' failure specifically to raise the defense of lack of notice is not material. For the same reason, the owners need not establish prejudice resulting from a lack of notice.
We must also reject claimants' final argument that, because of the owners' failure to record the improvement contract or to post notice, the lien claimants assumed the status of "statutory principal contractors," and as such were not required to give notice under § 38-22-109(3), C.R.S. 1973 (1978 Cum.Supp.).
Section 38-22-101(3), C.R.S. 1973, grants the status of principal contractor to a subcontractor where the contract for improvements exceeds $500 and where the contract or a memorandum thereof is not recorded. Prior to the 1975 amendments to the mechanics' lien statute, § 38-22-109(3), C.R.S. 1973, provided:
"In order to preserve a lien for work performed or materials furnished by a subcontractor, there must be served upon the owner or reputed...
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