Eells v. Taco Bell Corp..

• Decision Date: 21 October 2011
• Docket Number: No. 2 CA–CV 2010–0188.,2 CA–CV 2010–0188.
• Citation: 619 Ariz. Adv. Rep. 7,228 Ariz. 134,263 P.3d 683
• Court: Arizona Court of Appeals
• Parties: DELMASTRO & EELLS, an Arizona corporation, Plaintiff/Counterdefendant/Appellant,v.TACO BELL CORP., a California corporation and its affiliates, Defendant/Counterclaimant/Appellee.

228 Ariz. 134

263 P.3d 683

619 Ariz. Adv. Rep. 7

DELMASTRO & EELLS, an Arizona corporation, Plaintiff/Counterdefendant/Appellant,

v.TACO BELL CORP., a California corporation and its affiliates, Defendant/Counterclaimant/Appellee.

No. 2 CA–CV 2010–0188.

Court of Appeals of Arizona, Division 2, Department A.

Oct. 21, 2011.

Berens, Kozub, Kloberdanz & Blonstein, PLC By William A. Kozub and Richard W. Hundley, Phoenix, Attorneys for Plaintiff/Counterdefendant/Appellant.Snell & Wilmer L.L.P. By William N. Poorten, III, Andrew M. Jacobs, and Melissa A. Marcus, Tucson, Attorneys for Defendant/Counterclaimant/Appellee.

OPINION

ECKERSTROM, Presiding Judge.

¶ 1 This appeal concerns a mechanic's lien recorded by appellant Delmastro & Eells, Inc., against property owned by appellee Taco Bell Corp. ¹ After Delmastro filed a complaint seeking to foreclose the lien, Taco Bell filed an answer and counterclaim alleging wrongful recording of a lien and lis pendens pursuant to A.R.S. § 33–420. On appeal, Delmastro contends the trial court erred by granting Taco Bell's motion for summary judgment, thereby dismissing the foreclosure count and granting relief on the statutory counterclaim. We affirm for the reasons set forth below.

Factual and Procedural Background

¶ 2 “In reviewing a grant of summary judgment, we view the facts and the reasonable inferences to be drawn from those facts in the light most favorable to the party against whom judgment was entered.” Diaz v. Phx. Lubrication Serv., Inc., 224 Ariz. 335, ¶ 10, 230 P.3d 718, 721 (App.2010). Because Delmastro has improperly cited to its own appendix to support certain factual assertions in its opening brief, we disregard those assertions and rely instead on Taco Bell's statement of facts and our own review of the record. See State Farm Mut. Auto. Ins. Co. v. Arrington, 192 Ariz. 255, 257 n. 1, 963 P.2d 334, 336 n. 1 (App.1998); Lansford v. Harris, 174 Ariz. 413, 417 n. 1, 850 P.2d 126, 130 n. 1 (App.1992).

¶ 3 Venture Development Group (VDG) owned two blocks of platted property, specifically, Blocks 1 and 3, included in the Riverside Crossing III commercial complex at 2190 W. River Road, in Tucson. In January 2008, Delmastro entered into a contract with VDG to build the Tutor Time Child Care Center, located on Block 1 of the complex, and to make other improvements. Delmastro started work on the project that same month. Taco Bell acquired title to Block 3 from VDG several months later, recording its deed on June 18, 2008.

¶ 4 Delmastro sent VDG three preliminary twenty-day notices pursuant to A.R.S. § 33–992.01: one on January 17, 2008; another on June 24, 2008; and the last on October 16, 2008. In all three preliminary notices, Delmastro asserted it had provided “materials and/or labor” for a building, structure, or improvement located at “2190 W. River Road” in “Tucson, Pima County, Arizona,” that was “legally described as ... Tutor Time Child Care.” Delmastro acknowledges that Taco Bell was neither named in, nor served with, any preliminary notice.

¶ 5 Pursuant to A.R.S. § 33–993, Delmastro subsequently filed a notice and claim of lien in January 2009 against property that included Block 3. Delmastro maintains it “was not aware Defendant Taco Bell had acquired title to Block 3 until after the lawsuit had commenced.” Consequently, the lien did not name Taco Bell as the owner of this parcel, and Taco Bell did not receive any notice of the lien until Delmastro filed an amended complaint seeking to foreclose against Block 3 in May 2009.

¶ 6 In its motion for summary judgment, Taco Bell claimed the lien against Block 3 was invalid because (1) Delmastro did not serve Taco Bell with a preliminary twenty-day notice, as required by § 33–992.01(B); (2) its preliminary notices did not sufficiently describe the jobsite and the nature of work and materials furnished, as required by § 33–992.01(C); (3) Delmastro failed to name Taco Bell as the owner of the property in its notice and claim of lien filed pursuant to § 33–993; and (4) the notice and claim of lien failed to apportion value for the work performed on Block 3, as required by A.R.S. § 33–991. Taco Bell also sought damages and attorney fees for the wrongful recording of a lien and lis pendens under A.R.S. § 33–420(A). The trial court granted the motion and entered judgment pursuant to Rule 54(b), Ariz. R. Civ. P. This appeal followed.

Discussion

¶ 7 Delmastro first argues the trial court erred in entering summary judgment on the lien foreclosure count.² Summary judgment is appropriate when the pleadings and items in the record “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Ariz. R. Civ. P. 56(c)(1); accord Villa De Jardines Ass'n v. Flagstar Bank, FSB, 227 Ariz. 91, ¶ 5, 253 P.3d 288, 291–92 (App.2011). Under this standard, “if the facts produced in support of the claim or defense have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion advanced by the proponent of the claim or defense,” then summary judgment should be granted. Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990).

¶ 8 We review a grant of summary judgment de novo. Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, ¶ 13, 38 P.3d 12, 20 (2002). Although the trial court did not specify its reasons for granting Taco Bell's motion here, we will affirm the ruling if it is correct on any ground. See Jones v. Cochise Cnty., 218 Ariz. 372, ¶ 16 & n. 5, 187 P.3d 97, 102 & n. 5 (App.2008); Miller v. Hehlen, 209 Ariz. 462, n. 2, 104 P.3d 193, 197 n. 2 (App.2005). We address first whether the lien was valid. See Commercial Cornice & Millwork, Inc. v. Camel Constr. Servs. Corp., 154 Ariz. 34, 36–37, 739 P.2d 1351, 1353–54 (App.1987) (invalid lien warrants dismissal of foreclosure action).

Validity

¶ 9 Because mechanic's liens are creations entirely of statute, Morgan v. O'Malley Lumber Co., 39 Ariz. 400, 404, 7 P.2d 252, 253 (1932), we require strict compliance with the statutes relating to them. Irwin v. Murphey, 81 Ariz. 148, 155, 302 P.2d 534, 538 (1956); MLM Constr. Co. v. Pace Corp., 172 Ariz. 226, 229, 836 P.2d 439, 442 (App.1992). When construing the provisions of these statutes, however, we interpret them liberally so as to effectuate their purposes. A.R.S. § 1–211(B); Leeson v. Bartol, 55 Ariz. 160, 168, 99 P.2d 485, 489 (1940); R & M Oxford Constr., Inc. v. Smith, 172 Ariz. 241, 246, 836 P.2d 454, 459 (App.1992). ³ In effect, this means a lien claimant must demonstrate substantial compliance with each statutory requirement consistent with its purpose. See Fagerlie v. Markham Contracting Co., 227 Ariz. 367, ¶ 13, 258 P.3d 185, –––– (App.2011); MLM Constr. Co., 172 Ariz. at 229, 836 P.2d at 442; Lewis v. Midway Lumber, 114 Ariz. 426, 431, 561 P.2d 750, 755 (App.1977).

¶ 10 We find Delmastro's lien was invalid, at minimum, because the descriptions of the jobsite and labor and materials it had provided in its preliminary notices were legally inadequate to secure a lien against Taco Bell's property. Under the circumstances here, a preliminary twenty-day notice is a necessary prerequisite to recording a valid lien. A.R.S. §§ 33–981(D), 33–992.01(B). A lien claimant's preliminary notice must include both “[a] general description of the labor, professional services, materials, machinery, fixtures or tools furnished or to be furnished and an estimate of the total price thereof,” § 33–992.01(C)(1), as well as “[a] legal description, subdivision plat, street address, location with respect to commonly known roads or other landmarks in the area or any other description of the jobsite sufficient for identification.” § 33–992.01(C)(4).

¶ 11 We agree with both parties that Westinghouse Electric Supply Co. v. Western Seed Production Corp., 119 Ariz. 377, 580 P.2d 1231 (App.1978), establishes the standard to be used for determining the adequacy of these descriptions. There, we held that “the test to be applied is whether a stranger to the underlying transaction, based upon the description contained in the notice and claim of lien and [his or her] general knowledge of the area, could ascertain the property to which the lien attached.” Id. at 379, 580 P.2d at 1233. Westinghouse specifically addressed the description requirement of former § 33–993 and did not prescribe a standard for the subsequently enacted § 33–992.01(C). 119 Ariz. at 379, 580 P.2d at 1233; see also 1966 Ariz. Sess. Laws, ch. 63, § 20. Nevertheless, the operative language of these provisions is essentially the same,⁴ and logic compels extending the Westinghouse standard to the descriptions within a preliminary lien notice.

¶ 12 The descriptions required by § 33–992.01(C), therefore, must be sufficient to allow a stranger to the transaction to identify both what the lien claimant has provided and to which specific property any future lien will attach. In this way, a court may assess whether claims are precluded under § 33–992.01(E).⁵ In addition, the recipient of a preliminary notice can assess the accuracy of the information within it, see § 33–992.01(J), and comply with the disclosure obligations specified in § 33–992.01(I). ⁶

¶ 13 Such descriptions further the general purpose of § 33–992.01. Like the California statute on which it was patterned, our pre-lien notice statute

“was intended as a means of identifying ... unknown persons, who are potential lien claimants, so that meaningful communication could be had among the property owner, lending institution and general contractor to insure timely payment of these persons' claims and avoid[ ] ... costly work stoppages, mechanics' lien foreclosure sales, and double payments by the owner.”

Schrader Iron Works, Inc. v. Lee, 26 Cal.App.3d 621, 103 Cal.Rptr. 106, 111 (1972), quoting 51 Op. Cal. Att'y Gen. 69; see also...