Forsberg v. Bovis Lend Lease, Inc., 20070338-CA.
Decision Date | 24 April 2008 |
Docket Number | No. 20070338-CA.,20070338-CA. |
Parties | Troy FORSBERG, et al., Plaintiffs and Appellants, v. BOVIS LEND LEASE, INC.; Travelers Casualty and Surety Company of America; Davis Hospital and Medical Center, Inc.; and Davis Hospital and Medical Center, LP, Defendants and Appellees. |
Court | Utah Court of Appeals |
Kenneth B. Grimes Jr. and Richard W. Perkins, Salt Lake City, for Appellants.
Robert R. Harrison, Brian J. Babcock, and Jason H. Robinson, Salt Lake City; and Cecil R. Hedger, South Jordan, for Appellees.
Before GREENWOOD, P.J., BENCH and McHUGH, JJ.
¶ 1 Appellants (the Funds)1 appeal the trial court's grant of partial summary judgment to Appellees Davis Hospital and Medical Center, Inc. and Davis Hospital and Medical Center, LP (collectively the Hospital) and Bovis Lend Lease, Inc. (Bovis), and its denial of the Funds' motion for partial summary judgment. We reverse.
¶ 2 The Hospital contracted with a general contractor, Bovis, to expand the Hospital's building (the Project). The Hospital owned the real property upon which the Project was built (the Property) during the time period relevant to this appeal. Bovis contracted with a subcontractor, Western States Electric, Inc. (WSE), for the Project's electrical work. The Hospital, Bovis, and Travelers Casualty and Surety Company of America (Travelers)—the surety of the bond to release the Funds' mechanics' lien—are collectively referred to as "Appellees."
¶ 3 WSE executed a collective bargaining agreement, which required it to make trust fund contributions and pay wage assessments for its employees. WSE was historically late on making its contributions. Therefore, the NECA Funds, some of the ERISA Trust Funds, and the Union Plaintiffs filed a lawsuit (the ERISA lawsuit) in the United States District Court for the District of Utah under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461 (2000), seeking payment of the delinquent contributions through June 2002. After the plaintiffs in the ERISA lawsuit obtained a judgment against WSE, the federal district court issued a Garnishee Order, requiring Bovis to retain $49,024.09 from WSE's earnings on the Project. This amount was credited against the most delinquent contributions.
¶ 4 Despite the fact that WSE was continually late in making its trust fund contributions, the Union continued to dispatch its members to work on the Project for WSE. In addition, the Union failed to obtain a surety bond from WSE, as required by the collective bargaining agreement. WSE union employees worked on the Project from about February 4, 2002, until July 20, 2003,2 and their hourly wages were fully paid. However, WSE failed to pay the trust fund contributions or wage assessments (collectively Fringe Benefits).
¶ 5 In July 2003, WSE filed for bankruptcy and the Funds filed a mechanics' lien against the Property. Bovis and its surety, Travelers, then executed a bond to release the lien. The Funds, along with the individual plaintiffs,3 next filed a lawsuit to recover the delinquent Fringe Benefits by foreclosing the mechanics' lien and collecting under the contractors' private payment bond statute (private bond statute). After the parties filed cross motions for summary judgment, the trial court concluded that the Funds did not have standing, that Fringe Benefits were not recoverable under either statute, and that both causes of action were preempted by ERISA. The Funds now bring this interlocutory appeal.
¶ 6 The Funds first argue that the trial court erred when it granted Appellees' motion for partial summary judgment and denied the Funds' cross motion on the ground that the Funds did not have standing to foreclose a mechanics' lien or to assert a claim under Utah's private bond statute. The Funds' second argument is that the trial court erred in its conclusion that their claims were preempted by ERISA. Finally, the Funds contend that Fringe Benefits are the proper subject of a mechanics' lien and recoverable under the bond.
¶ 7 This court "reviews a trial court's legal conclusions and ultimate grant or denial of summary judgment for correctness, and views the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party." Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citation and internal quotation marks omitted). Each issue raised by the Funds involves a question of law, and we therefore review them both for correctness.
¶ 8 Appellees challenge the Funds' standing to assert claims under the Utah mechanics' lien statute,4 see Utah Code Ann. § 38-1-3 (2005), and the Utah private bond statute,5 see Utah Code Ann. § 14-2-2 (2005). Specifically, Appellees argue the Funds do not have standing to avail themselves of the benefits of these statutes "because they did not [personally] supply any labor or materials to the Project." This is an issue of first impression in Utah, and we address it first because it implicates our subject matter jurisdiction. Jones v. Barlow, 2007 UT 20, ¶ 12, 154 P.3d 808 (alteration in original) (citations and internal quotation marks omitted) ( that common law doctrine of in loco parentis does not give a former domestic partner standing to assert visitation rights after the parent-like relationship has terminated); see also Jenkins v. Swan, 675 P.2d 1145, 1148 (Utah 1983) ().
¶ 9 The Utah mechanics' lien and private bond statutes set forth the classes of persons who may avail themselves of their protections. See Utah Code Ann. §§ 38-1-3, 14-2-2. Where the right at issue is one created by statute, "the law creating that right can also prescribe the conditions of its enforcement." State Farm Mut. Auto. Ins. Co. v. Clyde, 920 P.2d 1183, 1185 (Utah 1996) ( ). Standing to assert rights created by statute requires that the plaintiff be within the "zone of interest contemplated by [the statute]" and have suffered a distinct and palpable injury. See Ball v. Public Serv. Comm'n, 2007 UT 79, ¶¶ 61-62, 175 P.3d 545.
¶ 10 The question before this court with regard to standing is whether the Funds are within the zone of interest contemplated by the legislature.6 To answer that question, we first look to the language of the statutes themselves. See Clyde, 920 P.2d at 1186 ( ). Our mechanics' lien statute provides, in relevant part:
Contractors, subcontractors, and all other persons performing any services or furnishing or renting any materials or equipment used in the construction, alteration, or improvement of any building or structure or improvement to any premises in any manner ... shall have a lien upon the property ... for the value of the service rendered, labor performed, or materials or equipment furnished or rented by each respectively, whether at the instance of the owner or of any other person acting by his authority as agent, contractor, or otherwise . ... This lien shall attach only to such interest as the owner may have in the property.
Utah Code Ann. § 38-1-3 (emphasis added).
¶ 11 The private bond statute allows a cause of action against the bond if one is obtained, see Utah Code Ann. § 14-2-1(4) (2005), and directly against the owner if no bond has been purchased, see id. § 14-2-2. Although the briefs on appeal did not indicate which section would be applicable, Appellees agreed at oral argument that the Hospital did not obtain a payment bond. Thus, because a bond was not obtained, section 14-2-2 is applicable. That section provides:
An owner who fails to obtain a payment bond required under Section 14-2-1 is liable to each person who performed labor or service or supplied equipment or materials under the commercial contract for the reasonable value of the labor or service performed or the equipment or materials furnished up to but not exceeding the commercial contract price.
Id. (emphasis added).
¶ 12 Although the language in the two statutes is not identical, each limits its application to persons who actually performed labor or services, or furnished equipment or materials to the Project. There is no dispute that the beneficiaries who actually performed labor on the Project qualify as persons entitled to file a mechanics' lien against the Property or assert a private bond claim against the Hospital. The parties disagree, however, over whether the Funds, acting on behalf of those beneficiaries, can bring a mechanics' lien foreclosure action or a claim under the private bond statute. We hold that they can.
¶ 13 In the absence of state guidance on this issue, we find the reasoning of the United States Supreme Court on a related question helpful. In United States v. Carter, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957), the trustee of an employee benefits trust fund brought an action against the surety on a contractor's payment bond under the federal Miller Act. See id. at 212-13, 77 S.Ct. 793. Although the contractor had paid the wages due, it had not paid the fringe benefits directly to the trust as agreed under a master labor agreement. See id. at 211-13, 77 S.Ct 793. The trial court and the Ninth Circuit held that the trustee did not have standing under the...
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