Michael Weller, Inc. v. Aetna Cas. & Sur. Co.

• Decision Date: 01 May 1980
• Docket Number: No. 1,CA-CIV,1
• Citation: 126 Ariz. 323,614 P.2d 865
• Parties: MICHAEL WELLER, INC., an Arizona Corporation, Plaintiff-Appellant, v. The AETNA CASUALTY AND SURETY COMPANY, a Connecticut Corporation, Howard N. Mizener and Lavern C. Mizener, husband and wife, John R. Lee and Kathryn Lee, husband and wife, Forrest B. Tuttle and Nana L. Tuttle, husband and wife, David J. Funk and Barbara N. Funk, husband and wife, Chuck Purcell Carpet Distributors, Inc., a Colorado Corporation, Scottsdale Park Villas Incorporated, a Nevada Corporation, Kaufman Mortgage SPV, a general partnership, Beneficial Standard Mortgage Investors, a Real Estate Investment Trust, The Valley National Bank of Arizona, a national banking association, Arizona Trust Deed Corporation, an Arizona Corporation, as Trustee, Southwest Savings and Loan Association, an Arizona Corporation, Joseph F. Link and Norene M. Link, his wife, as joint tenants with right of survivorship, John Stuart Babb, a single man, Eleanor C. Knippel, an unmarried woman, Margaret M. Arbuckle, a widow, Roy C. Collins and Linda J. Collins, his wife, as joint tenants with right of survivorship, Kenneth R. Stafford, an unmarried man, Charles E. Wait and Carolyn J. Wait, his wife, as joint tenants with right of survivorship, A. Gordon Phillips and Gertrude G. Phillips, his wife, as joint tenants with right of survivorship, Walter E. Crowel and Phyllis J. Crowel, his wife, as joint tenants with right of survivorship, E. Lamar Gostin and Marie P. Gostin, his wife, as joint tenants with right of survivorship, Jay Michael Martin and Jane Bennett Martin, his wife, as joint tenants with right of survivorship, William A. Wolfe and Margaret K. Wolfe, his wife, as joint tenants with right of survivorship, Ralph E. Smith and Jeannette J. Smith, his wife, as joint tenants with right of survivorship, Nancy W. Spooner, a widow, Lawrence T. Holmes and Dorothy A. Holmes, his wife, as joint tenants with right of survivorship, Robert E. Nealon and Kathleen E. Nealon, his wife, as joint tenants with right of survivorsh
• Court: Arizona Court of Appeals

Page 865

614 P.2d 865

126 Ariz. 323

MICHAEL WELLER, INC., an Arizona Corporation, Plaintiff-Appellant, v. The AETNA CASUALTY AND SURETY COMPANY, a Connecticut Corporation, Howard N. Mizener and Lavern C. Mizener, husband and wife, John R. Lee and Kathryn Lee, husband and wife, Forrest B. Tuttle and Nana L. Tuttle, husband and wife, David J. Funk and Barbara N. Funk, husband and wife, Chuck Purcell Carpet Distributors, Inc., a Colorado Corporation, Scottsdale Park Villas Incorporated, a Nevada Corporation, Kaufman Mortgage SPV, a general partnership, Beneficial Standard Mortgage Investors, a Real Estate Investment Trust, The Valley National Bank of Arizona, a national banking association, Arizona Trust Deed Corporation, an Arizona Corporation, as Trustee, Southwest Savings and Loan Association, an Arizona Corporation, Joseph F. Link and Norene M. Link, his wife, as joint tenants with right of survivorship, John Stuart Babb, a single man, Eleanor C. Knippel, an unmarried woman, Margaret M. Arbuckle, a widow, Roy C. Collins and Linda J. Collins, his wife, as joint tenants with right of survivorship, Kenneth R. Stafford, an unmarried man, Charles E. Wait and Carolyn J. Wait, his wife, as joint tenants with right of survivorship, A. Gordon Phillips and Gertrude G. Phillips, his wife, as joint tenants with right of survivorship, Walter E. Crowel and Phyllis J. Crowel, his wife, as joint tenants with right of survivorship, E. Lamar Gostin and Marie P. Gostin, his wife, as joint tenants with right of survivorship, Jay Michael Martin and Jane Bennett Martin, his wife, as joint tenants with right of survivorship, William A. Wolfe and Margaret K. Wolfe, his wife, as joint tenants with right of survivorship, Ralph E. Smith and Jeannette J. Smith, his wife, as joint tenants with right of survivorship, Nancy W. Spooner, a widow, Lawrence T. Holmes and Dorothy A. Holmes, his wife, as joint tenants with right of survivorship, Robert E. Nealon and Kathleen E. Nealon, his wife, as joint tenants with right of survivorship, Antonio J. Castillo and Patricia L. Castillo, his wife, as joint tenants with right of survivorship, Rodney R. Hinton and Sarah J. Hinton, his wife, as joint tenants with right of survivorship, Rex T. Meyer and Margaret F. Meyer, his wife, as joint tenants with right of survivorship, The First National Bank of Colorado Springs, The Arizona Bank, an Arizona Corporation, The Arizona Bank, an Arizona Corporation, as Trustee, William R. Hulings and Joan Hulings, husband and wife, Jane Gliege, wife of Gerhardt J. Gliege, and Howard Homes, Inc., a Nevada Corporation, Defendants-Appellees.

No. 1 CA-CIV 4349.

Court of Appeals of Arizona, Division 1, Department C.

May 1, 1980.

Rehearing Denied June 9, 1980.

Review Denied July 1, 1980.

Barry Allen Reiss, P. C., Phoenix, for plaintiff-appellant

John G. Gliege, Scottsdale, for defendants-appellees Charles E. and Carolyn J. Wait; William R. and Joan Hulings; and Jane Gliege.

Alston, Edwards, Scott & Novak, P. C. by Robert J. Novak, Phoenix, for defendants-appellees Howard N. and Lavern C. Mizener; Forrest B. and Nana L. Tuttle; David J. and Barbara N. Funk; John R. and Kathryn Lee; and Chuck Purcell Carpet Distributors, Inc.

Duecy, Moore, Robinson & Bennett by Lewis B. Moore, Jr. and William F. Bennett, Scottsdale, for defendants-appellees Ralph E. and Jeannette J. Smith; and E. Lamar and Marie P. Gostin.

John S. Schaper, Phoenix, for defendant-appellee First National Bank of Colorado Springs.

Jennings, Strouss & Salmon by Gary G. Keltner, Phoenix, for all remaining defendants-appellees.

OPINION

JACOBSON, Judge.

The primary issue on this appeal from the granting of a motion for summary judgment is whether a mechanic's and materialman's notice and claim of lien purporting to cover 47 lots in a subdivision without designating the amount claimed on each individual lot complies with the statutory requirement of perfecting the lien.

This litigation was commenced by plaintiff-appellant, Michael Weller, Inc. (Weller) against Howard Homes, Inc. (Homes), various lending institutions and individual purchasers of lots in Scottsdale Park Villas, a subdivision located within the city limits of Scottsdale. Weller's complaint sought (1) the balance due under a construction subcontract, (2) to foreclose a mechanic's lien and (3) to impose liability upon The Aetna Casualty Insurance Co. (Aetna) as surety on a bond posted for Homes.

Following various amendments to the original complaint and the filing of answers by some of the defendants, some of which were not verified, a portion of the defendants moved for summary judgment on the basis that Weller's notice and claim of lien upon which it sought foreclosure was invalid either on the basis that it did not comply with statutory requirements or that it was filed untimely. These motions for summary judgment were granted in defendants' favor and a written judgment was filed containing the requisite finality language of Rule 54(b), Arizona Rules of Civil Procedure. In addition, the trial court refused to enter default judgments against various non-appearing defendants and by its judgment declared Weller's lien invalid as against all defendants, including those who did not appear. Weller timely perfected an appeal from that judgment.

Subsequently Aetna filed a motion for summary judgment, asserting that liability never accrued for Weller's debt under its bond. This motion was also granted in a written judgment containing the appropriate Rule 54(b) language. A timely appeal by Weller was likewise perfected from that judgment.

At that point, there remained to be litigated in the trial court the amount of indebtedness, if any, owed by Homes to Weller; the amount, if any, due Homes from Weller on its counterclaim for poor workmanship; and various cross-claims and third-party complaints. In connection with these remaining issues, Weller filed various motions to compel directed to Homes' answers to interrogatories propounded by Weller. These motions to compel were denied by the trial court and Weller has sought to appeal this order of denial.

The facts as developed by affidavits and depositions used in connection with the various motions for summary judgment are that prior to September 13, 1972, Homes was the owner of a large tract of land known as Tract R, Paseo Village, located in Scottsdale, Arizona. On September 13, 1972, Homes recorded a subdivision plat which comprised a portion of Tract R, known as Scottsdale Park Villas. The plat divided the subdivision into 48 separate residential lots and tracts A, B, C, D, E, F, G, H, I, J, K, L and M. The alphabetically designated tracts comprise common use areas and recreation facilities.

On October 13, 1972, Homes entered into a subcontract agreement with the predecessor in interest of Weller, whereby Weller agreed to perform certain drywall and painting work at "Scottsdale Park Villas, Tract R, located in Paseo Village, a recorded plat in Maricopa County, Scottsdale, Arizona," and Homes agreed to pay Weller $105,356. This subcontract was part of an overall construction project by Homes to build 48 residential homes and a recreation building and to improve certain common areas.

The subcontract between Homes and Weller specifically provided:

Payments on all units are to be made on the following

schedule for completed units, drywall and paint, less

10% retainage; retainage to be paid after final City

inspection:

                    Unit A     --    $2,210. x    7        =  $15,470
                    Unit B     --     1,910. x   16        =   30,560
                    Unit C     --     2,010. x   17        =   34,170
                    Unit A2    --     2,410. x    8        =   19,280.
                Recreation building --                          2,800.
                Common area --                                  3,076.
                                                              --------
                  TOTAL AMOUNT OF
                    CONTRACT                                            $105,356.
                

Prior to commencement of construction, Homes obtained individual building permits for each of the 48 lots from the City of Scottsdale. In addition, individual final inspections by the City of Scottsdale were performed on each residence. These final inspections (that is, when a building or construction was completed, and all electrical, plumbing, and mechanical fixtures were in place, but prior to occupancy) were conducted on all 48 residences in the time period between February 8, 1973 and August 1, 1973.

On June 8, 1973, Weller submitted an invoice to Homes showing the work to be performed by it was "100% complete" and claimed a balance due under the subcontract of $15,856.58. Apparently, a dispute arose concerning the quality of the workmanship of Weller and Weller's bill went unpaid.

On January 4, 1974, Weller recorded its notice and claim of lien in the amount of $24,463.83 and described the property to be covered by the lien as:

Lots 1 through 47, SCOTTSDALE PARK VILLAS, according to the Plat of Record in the Maricopa County Arizona Recorder's office in Book 154 of Maps, Page 14.

While under Weller's subcontract it was to perform work on lot 48 and the alphabetically designated tracts of the subdivision, these were not included in its notice and claim of lien. In addition, the notice and claim of lien did not specify what portion of the claimed $24,463.83 was due and owing on any particular one of each of the 47 lots subject to the lien.

The sole basis of Weller's claim of liability against Aetna is as surety for Homes under its bond issued pursuant to A.R.S. § 32-1152. Aetna became a surety for Homes on June 30, 1973 and its bond remained in effect until October 20, 1974. Based upon Weller's "100% complete" invoice of June 8, 1973, Aetna moved for summary judgment on the basis that the work performed by Weller was completed prior to it incurring liability on its bond. In response to this motion, Weller filed an affidavit, which appellant's opening brief indicates stated in part as follows:

(P)ainting...