R. D. Reeder Lathing Co. v. Allen

• Decision Date: 18 April 1967
• Citation: 425 P.2d 785,66 Cal.2d 373,57 Cal.Rptr. 841
• Court: California Supreme Court
• Parties: , 425 P.2d 785 R.D. REEDER LATHING CO., Inc., Plaintiff and Respondent, v. Francis E. ALLEN, J., Defendant and Appellant. L.A. 28821. In Bank

Page 841

57 Cal.Rptr. 841

66 Cal.2d 373, 425 P.2d 785

R.D. REEDER LATHING CO., Inc., Plaintiff and Respondent, v. Francis E. ALLEN, J., Defendant and Appellant.

L.A. 28821.

Supreme Court of California,

In Bank.

April 18, 1967.

Rehearing Denied May 17, 1967.

George Magit, Beverly Hills, for defendant and appellant.

Mantalica, Barclay & Teegarden and Lewis C. Teegarden, Los Angeles, for plaintiff and respondent.

TRAYNOR, Chief Justice.

Defendant appeals from a summary judgment for plaintiff in an action to foreclose a mechanic's lien. The judgment decreed that defendant was personally liable to plaintiff for the value of the labor and materials it supplied and impressed the improved property with mechanic's liens.

The part of the judgment that defendant is personally liable to plaintiff is clearly erroneous. In the absence of a contract between a lien claimant and the property owner, the right to enforce a mechanic's lien against real property does not give rise to personal liability of the owner. (Golden Gate Bldg. Materials Co. v. Fireman (1928) 205 Cal. 174, 177--178, 270 P. 214; Roberts v. Security Trust & Sav. Bank (1925) 196 Cal. 557, 573--584, 238 P. 673.) Although the complaint states that plaintiff performed its work at the request of defendant, it appears from plaintiff's own affidavits that the request came, not from defendant directly, but from his prime contractor.

The complaint alleged that plaintiff supplied lathing materials and performed labor, for which it had not been paid, in the construction of houses on 18 separate lots owned by defendant. In an amended answer defendant denied that plaintiff had performed the work alleged and set up affirmative defenses of waiver and estoppel.

Plaintiff then filed its motion for summary judgment (Code Civ.Proc., § 437c), supported by the affidavit and declaration of its president, Robert D. Reeder, and the declaration of Robert M. Thomas, a materialman. Defendant filed counteraffidavits.

In considering a motion for summary judgment the trial court must determine whether the defendant has by affidavit presented any facts that give rise to a triable issue. (Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417, 42 Cal.Rptr. 449, 398 P.2d 785; Eagle Oil & Ref. Co. v. Prentice (1942) 19 Cal.2d 553, 555, 122 P.2d 264.) The court does not resolve conflicting factual allegations, for the purpose of the procedure is to discover whether the parties have evidence requiring assessment at a trial. Such summary procedure is drastic and should be used with caution so that it does not become a substitute for trial. (Towne Development Co. v. Lee (1965) 63 Cal.2d 147, 148, 45 Cal.Rptr. 316, 403 P.2d 724; Stationers Corp. v. Dun & Bradstreet, Inc., supra; Desny v. Wilder (1956) 46 Cal.2d 715, 725--726, 299 P.2d 257; Coyne v. Krempels (1950) 36 Cal.2d 257, 260--261, 223 P.2d 244; Eagle Oil & Ref. Co. v. Prentice, supra, 19 Cal.2d at p. 556, 122 P.2d 264.) Accordingly, the affidavits of the moving party are strictly construed and those of his opponent, even if in conclusionary terms, are liberally construed. Summary judgment is proper only if the affidavits in support of the moving party are sufficient to sustain a judgment in his favor and his opponent does not by affidavit show facts sufficient to present a triable issue.

Examination of the affidavits in this case shows that plaintiff has established for purposes of its motion that it performed the claimed work on defendant's houses and that it has not been paid. It did the work pursuant to a contract with the prime contractor for the lathing and plastering, West Valley Plastering, Inc., which is now bankrupt. The critical issue is whether plaintiff has waived its lien or is estopped to assert it.

Defendant contends that plaintiff conspired with West Valley to keep defendant ignorant of plaintiff's contribution to the construction so that defendant would be unable to protect himself against plaintiff's potential lien. According to defendant's affidavits, toward the end of 1962 West Valley was experiencing difficulty getting finances to carry on its business. In disregard of West Valley's weak financial condition and relying for security primarily on its access to lien rights, plaintiff offered West Valley extended credit in exchange for West Valley's agreement to subcontract all its lathing work to plaintiff. West Valley agreed to those terms and also that plaintiff 'would either furnish WEST VALLEY with labor lien releases signed in blank, or permit WEST VALLEY to prepare its own labor releases, which WEST VALLEY could then in turn complete as progress payments became due from buildings and owners, thereby permitting WEST VALLEY to receive its money when due. In this connection, (plaintiff) would provide WEST VALLEY with a list of all lathers employed by (plaintiff) so that WEST VALLEY, in turn, could type in the names of said lathers for the purpose of completing the labor lien releases. * * *' Defendant makes further allegations from which a trier of fact might infer that Thomas Building Supply Co., which was the only materialman on the job to whose existence defendant had been alerted, was aiding plaintiff in carrying West Valley on the shaky credit basis by providing the materials that plaintiff supplied defendant. A trier of fact might also infer that plaintiff had a financial interest in Thomas Building Supply Co., which was later reorganized into Deering Building Co. by the president of plaintiff and the president of Thomas Building Supply Co.

Thus, defendant seeks to prove a scheme whereby plaintiff extended imprudent credit without bearing the risk itself but counting on the lien law to leave the risk on the unsuspecting and innocent property owner. To further the scheme, plaintiff and West Valley had to conceal plaintiff's existence and identity from defendant, else he would demand a lien waiver from plaintiff be fore paying West Valley, thus destroying either plaintiff's secret security or West Valley's advantageous credit arrangement. In support of his allegations defendant filed affidavits by himself and his attorney and declarations by Addis Johnston and Raymond J. Croteau, formerly the president and vice-president of West Valley. The Johnston and Croteau declarations had been prepared for use in a different lawsuit. After the trial court franted plaintiff's motion for summary judgment, defendant moved for reconsideration and supplied declarations of Johnston and Croteau prepared specifically for the case at bench, setting out substantially the same facts as their other declarations. Defendant's motion was denied.

These affidavits raise triable issues of fact in regard to estoppel. Estoppel may be invoked against a liening materialman when he gives the contractor a waiver of lien, a false receipt of payment, or a promise to look only to the contractor for his money, to induce payment from the owner. (E.g., E. K. Wood Lumber Co. v. Higgins (1960) 54 Cal.2d 91, 94, 4 Cal.Rptr. 523, 351 P.2d 795; Ware Supply Co. v. Sacramento Savings & Loan Assn. (1966) 246 A.C.A. 449, 459--460, 54 Cal.Rptr. 674; J. & W. C. Shull v. Doerr (1930) 110 Cal.App. 613, 615--616, 294 P. 464.) After giving the contractor a receipt for payment a materialman's failure to inform the owner that the contractor's checks to him were dishonored also gives rise to an estoppel. (Jaekle v. Halton (1938) 25 Cal.App.2d 706, 78 P.2d 447.) 'Waiver of (or estoppel to assert) mechanic's lien rights does not require a dormal contract, but may be inferred from the circumstances and the conduct of the parties.' (E. K. Wood Lumber Co. v. Higgins, supra, 54 Cal.2d at p. 94, 4 Cal.Rptr. at p. 525, 351 P.2d at p. 797; see also Goodwin Tile & Brick Co. v. DeVries (1944) 234 Iowa 566, 569, 13 N.W.2d 310, 155 A.L.R. 346; Detroit Graphite Co. v. Carney (1935) 175 Okl. 583, 53 P.2d 584, 586.)

Given the alleged secret contract between plaintiff and West Valley, plaintiff's familiarity with the contracting business and its alleged knowledge that defendant was relying on lien releases supplied by West Valley in authorizing payments, plaintiff had a duty to speak, and its silence supports an inference of guile. (See Code Civ.Proc., § 1962, subd. 3, now Evid.Code, § 623; Cal. Lettuce Growers, Inc. v. Union Sugar Co. (1955) 45 Cal.2d 474, 483, 289 P.2d 785, 49 A.L.R.2d 486; People v. Ocean Shore R.R. (1948) 32 Cal.2d 406, 421, 196 P.2d 570, 6 A.L.R.2d 1179; American Bldg. Maint. Co. v. Indemnity Ins. Co. (1932) 214 Cal. 608, 617--618, 7 P.2d 305; Bruce v. Jefferson Union High School Dist. (1962) 210 Cal.App.2d 632, 634, 26 Cal.Rptr. 762; Dettamonti v. Lompoc Union School Dist. (1956) 143 Cal.App.2d 715, 721, 300 P.2d 78; Balestreiri v. Argues (1942) 49 Cal.App.2d 664, 669, 122 P.2d 277; Merry v. Garibaldi (1941) 48...