H. A. M. S. Co. v. Electrical Contractors of Alaska, Inc.

• Court: Alaska Supreme Court
• Writing for the Court: Before BOOCHEVER; RABINOWITZ; BOOCHEVER
• Citation: H. A. M. S. Co. v. Electrical Contractors of Alaska, Inc., 563 P.2d 258 (Alaska 1977)
• Decision Date: 06 May 1977
• Docket Number: No. 2871,2871
• Parties: H.A.M.S. COMPANY et al., Appellants, v. ELECTRICAL CONTRACTORS OF ALASKA, INC., an Alaskan Corporation, and Tote'em Steel, Ltd., Appellees.

Page 258

563 P.2d 258

H.A.M.S. COMPANY et al., Appellants, v. ELECTRICAL CONTRACTORS OF ALASKA, INC., an Alaskan Corporation, and Tote'em Steel, Ltd., Appellees.

No. 2871.

Supreme Court of Alaska.

May 6, 1977.

Order May 26, 1977. See 566 P.2d 1012.

Karl S. Johnstone and Mark C. Rowland, Anchorage, for appellants.

Kenneth N. McCaskey, Anchorage, for appellees.

Before BOOCHEVER, C. J., and RABINOWITZ, CONNOR, ERWIN and BURKE, JJ.

OPINION

RABINOWITZ, Justice.

This appeal concerns a judgment which was entered by the superior court foreclosing mechanics and materialmen's liens against real property. Here and below appellants have challenged the validity of the lien claims on the ground the lien claims were not verified by oath as required by AS 34.35.070(c)(5). ¹ We reverse the judgment of the superior court. ²

Appellants contracted with a general contractor, Irvin and Co., for the repair and improvement of the H.A.M.S. building which was located in Anchorage. Irvin and Co. in turn entered into contracts with several subcontractors, including Electrical Contractors of Alaska (ECA) and Tote'em Steel Ltd. (Tote'em Steel). After a substantial amount of the work had been completed, Irvin and Co. found, due to financial difficulties, that it was unable to pay ECA and Tote'em Steel amounts due and owing (approximately $45,000) under their subcontracts. In late May of 1973 both ECA and Tote'em Steel recorded claims of lien against H.A.M.S. Co.'s real property. The lien foreclosure cases were tried to the superior court without a jury, and judgment was entered in favor of ECA and Tote'em Steel against H.A.M.S. Co. and its partners jointly and severally. ³

The judgment which was entered contains no explicit reference to the validity of the liens which ECA and Tote'em Steel had filed against appellants' real property. The judgment does state that the respective amounts recovered by appellees 'shall constitute liens against the H.A.M.S. Company property.' On the other hand we note that the superior court's conclusions of law state that the judgment awarded ECA and Tote'em Steel 'be satisfied unless paid by foreclosure of plaintiff's claim of lien against the property which is the subject of plaintiff's claim of lien.'

In this appeal appellants claim that the superior court erred in declining to hold the lien claims invalid for lack of verification as required by AS 34.35.070(c)(5). Appellees counter by taking the position that the corporate acknowledgements which constituted the conclusion of each of the questioned lien claims constitute 'substantial compliance' with AS 34.35.070(c)(5) and therefore render the liens valid.

It is established in law that a verification is a sworn statement of the truth of the facts stated in the instrument which is verified. ⁴ A verification differs from an acknowledgement in that the latter is a method of authenticating an instrument by showing that it was the act of the person executing it. ⁵ The text of AS 34.35.070(c)(5) is clear. It requires that the claim of lien shall 'be verified by the oath of the claimant or another person having knowledge of the facts.'

Neither of the questioned claims of lien contains a verification that the facts stated in the lien claims are true. The respective jurats merely state that the person executing the document did so on behalf of the corporation and acknowledge that the corporation executed the document pursuant to its bylaws or a resolution of the Board of Directors. The jurat at the end of the claim of lien of Electrical Contractors of Alaska, Inc. reads:

THIS IS TO CERTIFY that on this 18 day of May, 1973, before me the undersigned notary public, personally appeared E. Don Butts, known to me and to me known to be the President of Electrical Contractors of Alaska, Inc., a corporation, and known to me to the be person who executed the same instrument on behalf of the corporation herein named, and acknowledged to me that such corporation executed the same pursuant to its bylaws or a resolution of its Board of Directors.

WITNESS MY hand and official seal. (signed by notary public)

The jurat at the end of the claim of lien of Tote'em Steel states:

On this 21 day of May, 1973, before me the undersigned notary public, personally appeared Jerry H. Goode, known to me to be the President of Tote'em Steel, Ltd., and he acknowledged that he executed the within instrument on behalf of the corporation herein named, and pursuant to its bylaws or a resolution of its Board of Directors.

WITNESS MY hand and official seal. (signed by notary public)

Courts which have addressed the issue presented in this appeal have held that an acknowledgement is not sufficient to satisfy a mechanics' lien statute which requires verification of the claim of lien by the claimant. In Bell and Zajicek, Inc. v. Heyward-Robinson Co., 182 A.2d 339 (1962), a factually similar case to the one at bar, the liens which were declared invalid were not sworn to by the claimant, rather the liens:

were signed by the president of the plaintiff corporation, but instead of the truth of the contents of the certificates being sworn to, the officer subscribing to the certificates merely made an acknowledgment before a commissioner of the Superior Court that he was the signer and sealer of the instrument and that it was his free act and deed and the free act and deed of the plaintiff corporation.

182 A.2d at 340. The Supreme Court of Connecticut concluded that 'the plain meaning of the language of the statute (requiring a verification) cannot be ignored,' ⁶ and that 'a certificate which merely recites that the claimant 'acknowledges' execution of the lien is insufficient.' ⁷

In the somewhat analogous case of Hoffman v. Palm Springs, 169 Cal.App.2d 645, 337 P.2d 521, 523 (1959), the California court held that an unverified claim for damages against a municipality, where the applicable statute required a verified claim, justified the granting of the municipality's motion for judgment on the pleadings. In so holding, the court rejected the claimant's contention that the pleading was in substantial compliance with the controlling statute. There the court said:

The statute involved here provides merely that the claim be verified. . . . No particular form of verification is prescribed. . . . A verification is an affidavit of the truth of the matters stated. . . . Its object is to insure good faith in the averments (of) statements of a party. . . . The term 'verified,' as applied to claims against municipalities, has a settled meaning, and refers to an affidavit attached to the claim, as to the truth of the matters therein set forth. . . . The chief test of the sufficiency of an affidavit is whether it is so clear and certain that an indictment for perjury may be sustained on it if false. . . . (citations omitted) ⁸

The Hoffman court concluded:

In the instant case there is no affidavit attached to the claim as to the truth of the matters therein set forth and it does not appear that an indictment of perjury could be sustained on it if false. ⁹

In opposition to those authorities which have held that the failure to complay with a statutory requirement of verification is fatal to the lien's validity, appellees take the position that lien statutes are remedial and should be liberally construed, and thus since their lien claims substantially complied with all the statutory prerequisites for the creation of valid liens, the questioned liens should be held validly created. Subsections (a) and (b) of AS 34.35.020 provide:

(a) No mistake in formality or lack of statement in the lien notice or the pleadings is ground for dismissal or unnecessary delay in an action to foreclose a lien.

(b) Substantial compliance with the law relating to the contents of the lien notice is considered sufficient, if the notice satisfactorily shows the name of the claimant, the amount of his demand, the time of his employment, the property sought to be charged with the lien sufficient for identification and the name of the owner or reputed owner of the property. ¹⁰

Stephenson v. Ketchikan Spruce Mills, Inc., 412 P.2d 496 (Alaska 1966), marks the only previous occasion this court has had to address issues arising under AS 34.35.070(c)(5) (verification requirement) and AS 34.35.020 (substantial compliance). In Stephenson, one of the issues on appeal was whether a claim of lien was invalid because the claim was not verified in accordance with AS 34.35.070(c)(5). In Stephenson, the claimant's signature was missing from the jurat, although it appeared at the bottom of the claim of lien and the jurat was signed by a notary public. There the jurat stated:

Lyle E. Anderson, being first duly sworn, upon oath deposes and says: That he is the Manager of Ketchikan Spruce Mills, Inc. and makes this verification for and on behalf of said corporation; that Ketchikan Spruce Mills, Inc. is the claimant named in the foregoing claim of lien; that he has read the same and knows the contents thereof, and that the same is true of his own knowledge.

Subscribed and sworn to before me this 5th day of March, 1962.

(signed by notary public)

412 P.2d at 498 (emphasis added). In Stephenson we commented that:

Substantial compliance with the verification requirement is sufficient. There is substantial compliance here. The form of oath followed by the words 'subscribed and sworn to before me * * *', and the notary public's signature, amounts in substance to a certificate by the notary that the claim of lien was verified by the oath of Anderson. The claim of lien is not ineffective by reason of any insufficiency in the requirement for verification. ¹¹ (footnote omitted)

In our view, Stephenson addressed a different issue that we are confronted with in the instant case. ¹² In that case there was an affirmation of the truth of the contents of the lien claims in the form of an oath, and a signature of the lien claimant. Thus, we determined that the...