Hutter v. Dig-It, Inc.
| Decision Date | 27 October 2009 |
| Docket Number | No. 20080077.,20080077. |
| Citation | 219 P.3d 918,2009 UT 69 |
| Parties | Timothy and Tami HUTTER, Plaintiffs and Appellees, v. DIG-IT, INC., Defendant and Appellant. |
| Court | Utah Supreme Court |
Jeffrey D. Stevens, Salt Lake City, for plaintiffs.
Dana T. Farmer, Ogden, for defendant.
INTRODUCTION
¶ 1 This case arises out of a dispute over the enforceability of a mechanic's lien recorded by Dig-It, Inc., against property owned by Tim and Tamara Hutter. It calls for us to consider (1) the requirements for filing a notice of commencement under the 2006 version of section 38-1-31 of the Utah Code and (2) whether an unenforceable mechanic's lien is a wrongful lien subject to nullification under Utah's Wrongful Lien Injunction Act.1
¶ 2 We affirm the district court's determination that, because Dig-It failed to file a preliminary notice, Dig-It's mechanic's lien is unenforceable, but we reverse the court's nullification, under the Wrongful Lien Injunction Act, of Dig-It's mechanic's lien.
¶ 3 The Hutters are California residents who contracted with Jeromy's Homes to build a home in Weber County. On May 22, 2006, the Weber County Building Department ("Weber County") issued a building permit to Jeromy's Homes for construction of the Hutters' residence.
¶ 4 On May 26, 2006, Weber County, pursuant to the requirements of Utah's mechanic's lien statute,2 faxed a copy of the building permit to Utah Interactive, the designated agent3 for Utah's State Construction Registry. Four days later, on May 30, 2006, Utah Interactive entered the information from the building permit into the Construction Registry. Utah Interactive designated the filing as a notice of commencement and included all the information entered on the Hutters' building permit in its filing. But neither the building permit itself, nor Utah Interactive's corresponding entry into the Construction Registry, contained the Hutters' full California address. Despite the fact that there were blank spaces on the building permit for both the "Mailing Address" and the "City—Zip" of the property owner, only the Hutters' California street address was entered on the building permit. The "City—Zip" blank was left empty.
¶ 5 Early in the construction process, Jeromy's Homes contracted with Dig-It to do excavating work on the Hutters' home. Dig-It commenced its work on June 5, 2006, and completed its work on October 20, 2006. Dig-It did not file a preliminary notice of its work on the project. Dig-It alleges that Jeromy's Homes did not fully pay it for the work performed.
¶ 6 On June 6, 2007, Dig-It recorded a mechanic's lien against the Hutters' home, based on its claim that it had not been fully paid for its work. After Dig-It declined the Hutters' request to voluntarily release its lien, the Hutters filed a Petition for Civil Wrongful Lien Injunction, seeking to nullify Dig-It's lien under the Wrongful Lien Injunction Act. The district court granted the Hutters' petition, concluding that, because the Hutters had filed an enforceable notice of commencement, Dig-It's lien was unenforceable due to its failure to file a preliminary notice. The district court also determined that Dig-It's lien was a "wrongful lien" within the meaning of the Wrongful Lien Injunction Act and granted the Hutters' petition for nullification. Dig-It timely appealed the district court's ruling. We have jurisdiction pursuant to Utah Code section 78A-3-102(3)(j) (2008).
¶ 7 Whether a particular notice of commencement is enforceable is a mixed question of law and fact. Since the facts in this case that are determinative of whether the Hutters' notice of commencement is enforceable are not complex and do not depend significantly on the credibility of witnesses, we accord only a limited degree of deference to the district court's findings.4
¶ 8 The question of what constitutes a wrongful lien for purposes of the Wrongful Lien Injunction Act is a legal question of statutory interpretation. Thus, we review the district court's determinations for correctness.5
¶ 9 In 2004, the Utah Legislature passed House Bill 136, which revised the requirements and procedures for recording, perfecting, and enforcing mechanic's liens and created an online database—the Construction Registry—to manage mechanic's liens filings. According to the statutory scheme, the filing of a notice of commencement obligates subcontractors to file a preliminary notice in order to maintain their right to record a mechanic's lien.6 If an enforceable notice of commencement is not filed, however, subcontractors are under no obligation to file a preliminary notice.7
¶ 10 In this case, the Hutters contend that the transmission of the building permit information by Weber County and the entry of the information into the Construction Registry by Utah Interactive constituted an enforceable notice of commencement and that Dig-It has no right to maintain a mechanic's lien on the Hutters' home because Dig-It did not file a preliminary notice. The Hutters also assert that, because Dig-It's mechanic's lien is unenforceable, it qualifies as a "wrongful lien" and was properly nullified under the Wrongful Lien Injunction Act.
¶ 11 Dig-It, in contrast, argues that neither the transmission of the building permit by Weber County nor the entry of the permit information into the Construction Registry by Utah Interactive constituted a notice of commencement because the statute requires that notices of commencement be filed by property owners. Dig-It further argues that even if the notice of commencement for the Hutters' home is deemed to have been filed by an appropriate party, it is unenforceable because it did not contain the statutorily required content, the information in the notice was not verified prior to the filing deadline, and it was not timely filed since no payment receipt was obtained. In the alternative, Dig-It argues that, even if its mechanic's lien is unenforceable, it is not a "wrongful lien" for purposes of the Wrongful Lien Injunction Act because that act applies only to common law liens.
¶ 12 We begin by evaluating Dig-It's arguments relating to the notice of commencement and then turn to the wrongful lien question.
¶ 13 Section 38-1-31 of the Utah Code8 outlines the requirements for notices of commencement and the procedures for filing them. In the event that a building permit is issued for a construction project, the issuing municipality is required to "input the building permit application and transmit the building permit information" to the Construction Registry within 15 days of the building permit being issued.9 The statute provides that "such information shall form the basis of a notice of commencement."10 In cases where a building permit is not issued for a construction project, the statute provides that an "original contractor or owner-builder may file a notice of commencement with the database" no later than 15 days after physical construction has commenced at the building site.11
¶ 14 Dig-It contends that the statutory language should be read to require that notices of commencement be filed by owner-builders or original contractors, regardless of whether a building permit was issued for the project. In response, the Hutters argue that, although the burden to file notices of commencement rests on owners and original contractors for projects in which a building permit has not been issued, when a building permit has been issued the transmission of the building permit information to the Construction Registry by the issuing municipality constitutes the filing of a notice of commencement.
¶ 15 We begin our analysis by addressing Dig-It's argument regarding the relevancy of the 2007 amendments to section 38-1-31. In its opening brief, Dig-It cites to a version of section 38-1-31 that was enacted by the legislature in 2007, after the relevant events in this case had taken place. Although Dig-It acknowledges that it is the 2006, rather than the 2007, version of section 38-1-31 that governs this appeal, Dig-It argues that we should view the 2007 amendment of section 38-1-31 as a clarification of the meaning of the 2006 version.
¶ 16 We decline to do so. The only evidence that Dig-It points to in support of its contention that the 2007 amendments were clarifications rather than substantive changes is the following statement by Representative Morely:
This bill is a consensus industry bill that we've been working on, we've done that ... the last year or two in bringing forth just clarifications or changes that have been brought out during the course of the year, particularly concerning the [Construction Registry]. This clarifies time limits on liens, does not change those limits, just takes it out of one section and makes reference to it in another, so it clarifies it. It addresses issues regarding the enforcement of liens and timing—just clarifies timing on the filing of commencement notices and preliminary notices. It also exempts wage laborers from filing a preliminary notice and makes some revisions or clarifications to the Residential Lien Recovery Fund.12
While it is true that an amendment to an ambiguous statute "may indicate a legislative purpose to clarify the ambiguities in the statute rather than to change the law,"13 this is not the general rule, and this view of an amendment should be taken only where there is a strong indication that clarification was, in fact, the legislative intent.14 Representative Morely's general statement that the 2007 amendments were intended to clarify "timing on the filing of notices of commencement" is too slender a reed upon which to rest a general conclusion that the 2006 version of the statute should be construed in accordance with a...
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