Graycon Bldg. Grp. v. Med Ridge W.
| Decision Date | 02 December 2022 |
| Docket Number | 124,361 |
| Parties | Graycon Building Group, Inc., Appellant, v. Med Ridge West, LLC, Appellee. |
| Court | Kansas Court of Appeals |
NOT DESIGNATED FOR PUBLICATION
Appeal from Sedgwick District Court; Faith A.J. Maughan, judge.
Neil C. Gosch, of Triplett Woolf Garretson LLC, of Wichita, for appellant.
Todd E. Shadid and Michael L. Baumberger, of Klenda Austerman LLC of Wichita, for appellee.
Before Warner, P.J., Hurst, J., and Timothy G. Lahey, S.J.
Graycon Building Group, Inc. (Graycon) appeals a finding by the district court that its mechanic's lien against property owned by Med Ridge West, LLC (MRW) was invalid under K.S.A 58-4301(e)(2). Following our review of the record, we reverse the ruling of the district court. A district court considering a petition challenging a mechanic's lien under K.S.A. 58-4301 is limited to resolving the question of whether the purported lien is fraudulent, as that term is defined in K.S.A. 58-4301. We find Graycon's lien is not fraudulent under the statutory definition and that any other challenge to the validity of Graycon's mechanic's lien is governed by K.S.A. 60-1101 et seq.
On August 27, 2019, MRW contracted with Graycon to build a restaurant on property MRW owned in Wichita, Kansas. A dispute arose between MRW and Graycon regarding the timeliness and quality of Graycon's work and the amount due under the contract. Graycon claimed MRW owed it $284,818.24, while MRW claimed that Graycon owed it $74,051.83. In the parties' contract, the project architect was tasked with serving as an "Initial Decision Maker" when there was a contractual dispute between the parties. MRW asked the project architect to resolve the dispute. Graycon did not participate or submit any documents to the architect, although MRW submitted information it had received from Graycon concerning various aspects of the dispute. The architect determined that after issuance of the architect's final Certificate of Payment MRW would owe $9,897.15 to Graycon.
Shortly after receiving the architect's determination, Graycon filed a General Contractor's Mechanic's Lien Statement contending that the value of its lien was $216,209.41. Having last provided materials and labor under the MRW contract on October 5, 2020, and having filed a notice of extension, Graycon was required to file a mechanic's lien statement on or before March 5, 2021-the date upon which the lien statement was filed-in order to perfect and preserve its lien rights. See K.S.A. 60-1102 (a) and (c). In response, MRW filed a motion for judicial review of Graycon's "purported mechanic's lien" as authorized by the fraudulent-lien statute, K.S.A. 58-4301. MRW alleged Graycon was "not entitled to payment from [MRW] and therefore [had] no basis to file a lien." MRW requested the court invalidate the lien, find it fraudulent and direct the clerk to nullify the lien.
The district court reviewed the documents attached to MRW's motion and allowed argument by counsel for the parties. MRW clarified that it was alleging Graycon's lien was fraudulent under K.S.A. 58-4301(e)(2). The district court ruled that Graycon's lien violated K.S.A. 2020 Supp. 58-4301(e)(2), but expressly declined to call it "fraudulent," stating, "I will find that the lien-I won't use the word fraudulent, but it is invalid based on the amount." The district court gave Graycon the option of having its entire lien invalidated or accepting a reduction to $9,897.15-the amount the architect determined Graycon was owed. Graycon chose to accept the reduction.
Graycon filed a motion to reconsider, again arguing that it was improper to use the expedited procedure in K.S.A. 58-4301 to address the merits of the lien, and further argued that the determination by the architect was not final because the contract provided for mediation and binding dispute resolution. Oddly, the form of binding dispute resolution chosen by the parties was also mediation. Nonetheless, the district court agreed, and MRW conceded, the amount due to Graycon could change because the contract provided for mediation following the architect's decision. The district court amended its ruling to find the architect's determination, while "final and binding," was subject to mediation. The district court's decision reducing Graycon's lien remained in effect.
In this timely appeal, Graycon contends the district court exceeded its statutory authority by adjudicating Graycon's lien instead of just determining whether the lien was fraudulent or not. Relying largely on our court's analysis in In re Lien Against the District at City Center, 57 Kan.App.2d 884, 462 P.3d 181 (2020), Graycon asserts the district court may examine only the question of whether a lien is fraudulent under K.S.A. 58-4301, and any other question about the validity of the lien must be addressed by applying the procedures in K.S.A. 60-1101 et seq. MRW contends another published opinion from our court, In re Mechanic's Lien Against City of Kansas City, 37 Kan.App.2d 440, 154 P.3d 515, rev. denied 284 Kan. 946 (2007), permits the district court to address the issues raised by MRW using the expedited procedure in the fraudulent-lien statute.
Interpretation of K.S.A. 58-4301 is a legal question reviewed de novo as is the district court's ruling because it was based on documents filed by the parties. City of Kansas City 37 Kan.App.2d at 443; see Montgomery v. Saleh, 311 Kan. 649, 654, 466 P.3d 902 (2020). The most fundamental rule of statutory interpretation is the Legislature's intent governs if that intent is ascertainable. Courts first try to determine intent through the statutory language, giving common words their ordinary meaning. 311 Kan. at 654. When a statute is plain and unambiguous, courts do not speculate about the legislative intent behind the clear language and refrain from "reading something into the statute that is not readily found in its words." 311 Kan. at 654-55; see In re M.M., 312 Kan. 872, 874, 482 P.3d 583 (2021) ("We will only review legislative history or use canons of construction if the statute's language or text is ambiguous."). "When statutory language is clear and unambiguous, we simply interpret the words used by the Legislature." Glaze v. J.K. Williams, 309 Kan 562, 564, 439 P.3d 920 (2019) (citing Ambrosier v. Brownback, 304 Kan. 907, 911, 375 P.3d 1007 [2016]). Here, "[t]he provisions of K.S.A. 58-4301 are clear and unambiguous." City of Kansas City, 37 Kan.App.2d 440, Syl. ¶ 4.
Under the fraudulent-lien statute, a property owner, who has reason to believe that a document purporting to create a lien or claim against real property is fraudulent, can file a motion for judicial review of the status of the documentation and must include an affidavit containing a concise statement of the facts upon which the claim for relief is based. See K.S.A. 2021 Supp. 58-4301(a)(1). The district court reviews the documentation or instrument attached to the motion and may make its findings ex parte and without testimony or notice of any kind. See K.S.A. 2021 Supp. 58-4301(b). The court's findings and conclusions "may include an order setting aside the lien and directing the filing officer to nullify the lien instrument purporting to create the lien or claim." K.S.A. 2021 Supp. 58-4301(c)(2).
The term "fraudulent" as used in the fraudulent-lien statute is a term of art with a specific and limited definition, which is found in K.S.A. 2021 Supp. 58-4301(e):
MRW relies on the definition set forth in subsection (e)(2) of K.S.A. 58-4301- that the lien documentation was not created by the consent or agreement of MRW.
MRW gave implied and express consent to the filing of the lien statement.
To establish a presumption the lien documentation is fraudulent, MRW must first show that a document or instrument purports to create a lien or assert a claim against MRW's property. This element is satisfied by Graycon's filing of its lien statement because it "assert[s] a claim" against MRW's property. K.S.A. 2021 Supp. 58-4301(e). The second required definitional element MRW must establish is that the documentation is not "created by implied or express consent or agreement" of MRW "if required under the laws of this state." K.S.A. 2021 Supp. 58-4301(e)(2). We find the documentation submitted for review by the district court reflects that MRW gave both implied and express consent to the filing of the lien statement by Graycon.
K.S.A. 60-1101 provides in relevant part: "Any person furnishing labor, equipment, material, or supplies used or consumed for the improvement of real property, under a contract with the owner . . ., shall have a lien upon the property."
The precise requirements of K.S.A. 60-1101 match the facts in this case. Under a contract with MRW, Graycon furnished labor, equipment,...
To continue reading
Request your trial