Mathis v. Thunderbird Village, Inc.

• Decision Date: 13 February 1964
• Citation: 236 Or. 425,389 P.2d 343
• Parties: Jack MATHIS, Respondent, v. THUNDERBIRD VILLAGE, INC., an Oregon corporation, and National Reserve Life Insurance Co., a corporation, Appellants.
• Court: Oregon Supreme Court

Page 343

389 P.2d 343

236 Or. 425

Jack MATHIS, Respondent, v. THUNDERBIRD VILLAGE, INC., an Oregon corporation, and National Reserve Life Insurance Co., a corporation, Appellants.

Supreme Court of Oregon, Department 2.

Argued and Submitted Nov. 1, 1963.

Decided Feb. 13, 1964.

William E. Duhaime, Medford, argued the cause for appellants. On the briefs were Brophy, Wilson & Duhaime, Medford.

E. R. Bashaw, Medford, and Edward M. Murphy, Roseburg, argued the cause for respondent. On the brief were Jones, Reeder & Bashaw, Medford, and Yates & Murphy, Roseburg.

Before PERRY, P. J., and O'CONNELL, GOODWIN, DENECKE and LUSK, JJ.

DENECKE, Justice.

Plaintiff builder contracted to build a supermarket for the defendant Thunderbird Village, Inc., hereinafter called owner; the defendant life insurance company is the lender. The contract price was cost-plus 10 per cent. The owner paid the plaintiff $231,000; the plaintiff claimed an additional $42,000, filed a claim of mechanics lien therefor, and brought this suit to foreclose his lien. The trial court awarded plaintiff $41,000 and foreclosed the lien.

Defendants assert that the complaint filed by the plaintiff is fatally defective because it does not specifically allege a date of completion of the contract.

The Oregon Mechanics Lien statute, ORS 87.035, provides:

'Every original contractor, within 60 days after the completion of his contract * * * shall file for recording * * * a claim containing a true statement of his demand * * *.'

The plaintiff alleged in his complaint generally that he was a general contractor and that he entered into contracts with the defendant owner to construct a building and a parking lot. He further alleged:

'VI.

'Pursuant to said contracts and agreements the plaintiff did, between the 30th day of June, 1960 and March 2, 1961, perform labor upon and furnish material for use in, to be used in, and which was used, in the construction of said building and parking lot above described and did in a workmanlike manner provide and perform all the labor and materials necessary for said construction and erection of said building in accordance with the drawings, specifications and plans provided therefore [sic], as corrected and changed from time to time, and that plaintiff performed all the terms and conditions of the contracts and agreements on his part to be performed, except as changed or modified by the owner during the progress of said work.

* * *

* * *

'VIII

'That plaintiff, on the 13th day of April, 1961, and within 60 days after the completion of his contract, filed with the County Clerk of Jackson County, State of Oregon, a claim of lien * * *.'

The defendants rely upon Anderson v. Chambliss, 199 Or. 400, 262 P.2d 298 (1953), in support of their contention that the complaint does not state a cause of suit because it does not allege a date of completion of the contract. In that case the plaintiff alleged work was performed between September 7, 1949, and March 8, 1950, and that the lien was filed May 1, 1950. The court commented:

'* * * Nowhere in the complaint is it alleged affirmatively, either directly or indirectly, that the contract was completed, giving the date of such completion, nor is it alleged therein that the contract was not completed, and stating a valid reason for such failure to complete it.

'Under the provisions of § 67-105, O.C.L.A. [ORS 87.035], supra, in order to perfect a valid lien, it is mandatory that an original contractor filed his claim within 60 days 'after the completion of his contract'. In a complaint to foreclose such a lien, it is necessary to charge that the contract was completed and to give the date of such completion, or if, for just cause, it was not completed, the reason therefor and the date on which the last labor or materials were furnished. In other words, it must affirmatively appear from the allegations contained in the complaint itself that the lien notice was filed within the 60 day period as required by the statute. A complaint that does not contain such essential allegation (or allegations equivalent thereto) fails to state a cause of suit and is fatally defective. * * *' (Emphasis added.) (199 Or. at 406, 262 P.2d at 301.)

We hold that in order to state a cause of suit it is not necessary literally to state that the contract was completed on a certain date. We hold it is sufficient to state that the contract has been completed and the claim of lien has been filed on a certain date, naming it, and within 60 days after completion of the contract.

This is in accord with the decision of Birkemeier v. Knobel, 149 Or. 292, 40 P.2d 694 (1935). This court there stated:

'* * * Defendants argue that the complaint does not allege performance of the contract on the part of the plaintiff, and that, if it does, it fails to allege that the plaintiff filed the lien notice within sixty days of completion of performance. The amended complaint repeatedly uses the term 'the construction of said building', stating in one place that the house was constructed 'in accordance with plaintiff's contract with defendants, dated August 5, 1932, for the construction of said building'. This often employed term, in our opinion denotes the complete erection of the dwelling house; in other words, it states, by inference at least, that the plaintiff completed performance of his contract. The complaint also alleges: 'Between August 1, 1932, and January 15, 1933, plaintiff herein, at the special instance and request of the defendants, furnished material and labor necessary to the construction of, and which was used in the construction of said building.' It also alleges: 'Plaintiff herein, on March 1, 1933, and within sixty days from the completion of his furnishing material and labor in the construction of said building, filed' the lien notice. The lien notice attached to the complaint states: 'Said materials were furnished, and said labor was performed between the dates of August 1, 1932, and January 15, 1933.' These averments, in our opinion, state the facts which the defendants believe are missing. The language is ill adapted to the purpose, and certainly does not meet the standards of a skillful pleader; but the absence of fine technique alone is not fatal.' (149 Or. at 312-313, 40 P.2d at 702.)

The defendants next assert that the suit should have been dismissed because the claim of lien was not timely filed. The plaintiff, being an 'original' contractor, had 60 days 'after the completion of his contract' within which to file his claim of lien. His lien claim was filed April 13, 1961. The trial court's finding that the work was completed within 60 days preceding this date is affirmed.

Defendants admit some work was performed on February 16, a date within the 60-day period. Their contention is that such work was too trivial to be considered as extending the time of completion. They rely upon Christenson v. Behrens, 231 Or. 458, 372 P.2d 494 (1962), and cases cited therein. Applying the principles set forth in the Christenson case, the plaintiff's work, performed for him by a subcontractor, correctly can be considered completion of the contract. The work done by the subcontractor was a contract obligation of plaintiff; it was requested by the owner's representative after an inspection of the building; the labor and materials for the work, insulating ducts, cost $500; and it took two men several days to complete. In addition, as we pointed out in Christenson v. Behrens, supra (231 Or. at 467, 372 P.2d at 499), minor work is less likely to be considered work done in the completion of the contract, if the defendant is an innocent owner who has fully paid his general contractor and is now being sued by an unpaid subcontractor or materialman for work for which the owner has already paid once. Here, the defendant owner is contesting the amount owed under his prime contract; whatever the outcome, the owner will not be required to pay twice for any work.

Defendants contend that the lien contains a number of nonlienable items, some of which are unsegregated in the lien claim. They insist that one such item is that labeled in the claim of lien as 'payroll taxes and insurance * * * consisting of Social Security, Industrial Accident Insurance, Unemployment tax and contributions to Union Health and Welfare Fund pursuant to Union Agreement.'

ORS 87.010 provides that a contractor shall have a lien for 'labor.' The question is whether the charges in this item are for 'labor.' In Paget v. Peters, 133 Or. 608, 619, 286 P. 983, 289 P. 1119 (1930), we held that a premium for insurance, paid by the contractor, and covering the possible liability of the contractor and landowner to laborers on the job was a lienable item. Willett v. Davis, 30 Wash.2d 622, 193 P.2d 321 (1948), held social security, industrial accident, and unemployment compensation payments to be lienable as direct labor charges. In United States for Benefit and on Behalf of Sherman v. Carter, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957), it was held that payments due the Union Health and Welfare Fund were considered within the cost of 'supplying labor' as that phrase is used in the Miller Act which provides for a surety bond 'for the protection of all persons supplying labor' on construction work for the United States. 49 Stat. 793, 794, 40 U.S.C. §§ 270a, 270b. Such a bond is a substitute for the right to a lien upon land and improvements.

Upon the basis of these decisions we affirm the trial court's ruling that payroll taxes and insurance are includable in the amount of the lien for 'labor.'

Defendants contend that the cost of erecting temporary sheds, and purchasing and renting small tools and equipment is a nonlienable cost. The trial court concluded that the costs of these items secured prior to December, 1960, had already been paid by the defendants and, therefore, were not a part of plaintiff's lien claim. Its decision in this regard is...