RA McKell Excavating, Inc. v. Wells Fargo Bank, No. 20020716

• Decision Date: 18 June 2004
• Docket Number: No. 20020716, No. 20020855.
• Citation: RA McKell Excavating, Inc. v. Wells Fargo Bank, 2004 UT 48, 100 P.3d 1159 (Utah 2004)
• Parties: R.A. McKell Excavating, Inc., a Utah corporation, Plaintiff and Appellant, v. Wells Fargo Bank, N.A., a national banking association; Carter Construction Development, L.L.C., a Utah limited liability company, d.b.a. Carter Development, L.L.C.; The Ranches, L.C., a Utah limited liability company; and John Does 1-25, Defendants and Appellee.
• Court: Utah Supreme Court

2004 UT 48

100 P.3d 1159

R.A. McKell Excavating, Inc., a Utah corporation, Plaintiff and Appellant, v.Wells Fargo Bank, N.A., a national banking association; Carter Construction Development, L.L.C., a Utah limited liability company, d.b.a. Carter Development, L.L.C.; The Ranches, L.C., a Utah limited liability company; and John Does 1-25, Defendants and Appellee.

Nos. 20020716, 20020855.

Supreme Court of Utah.

FILED June 18, 2004.

This opinion is subject to revision before final publication in the Pacific Reporter.

Jack W. Reed, Mark S. Middlemas, Salt Lake City, for plaintiff.

J. Randall Call, James A. Boevers, Salt Lake City, for defendant.

WILKINS, Associate Chief Justice:

¶1PlaintiffR.A. McKell Excavating, Inc.("McKell") appeals the district court's grant of summary judgment to defendantWells Fargo Bank, N.A.("Wells Fargo" or the "Bank").In granting the Bank's motion, the district court concluded that McKell failed to timely file its mechanic's lien foreclosure action pursuant to Utah Code section 38-1-11(1)(a).We reverse.

FACTUAL AND PROCEDURAL HISTORY

¶2 In January 2000, Carter Construction Development, L.L.C.("Carter") hired McKell to perform excavation, grading, surface, and subsurface improvements on a proposed residential subdivision located in Utah County.The total contract price was approximately $204,000 and the scope of the project consisted of sewer line, water line, storm drain, sidewalk, and site work.On or about January 3, 2000, McKell commenced work under the contract.Two days later, on January 5, Wells Fargo recorded a trust deed on the real property to secure a $780,000 loan made to Carter for the purpose of funding the purchase of the subdivision lots.¹

¶3 As McKell's work proceeded, Carter was extremely slow in making payments.After repeated attempts to procure progress payments, as contemplated by the contract, McKell suspended operations on or about October 5, 2000.At that time, Carter owed McKell nearly $29,000 for already-completed work.McKell then entered into negotiations with Carter, in hopes of receiving remuneration for all services rendered prior to October 5, 2000.However, when it became clear that Carter was unable, or unwilling, to satisfy its obligations, McKell recorded a mechanic's lien on the real property on November 2, 2000.In accordance with Utah Code section 38-1-7(2)(c), McKell indicated on the lien notice that it last furnished labor, services, equipment or material to the project on or about October 5, 2000.Subsequently, McKell filed a complaint to foreclose its lien on November 21, 2001, one year and nineteen days after it was recorded.Wells Fargo counterclaimed, arguing that its trust deed had priority over the mechanic's lien due to McKell's failure to comply with the applicable statute of repose set forth in Utah Code section 38-1-11(1)(a).

¶4Section 38-1-11(1)(a) requires a non-residential property lien claimant to initiate an enforcement action within "12 months from the date of final completion of the original contract."Utah Code Ann. § 38-1-11(1)(a)(2001).Citing the lien notice, the Bank contended that "final completion of the original contract" occurred on October 5, 2000—the last date McKell provided labor, services, equipment, or material to Carter.Because McKell did not file its complaint until November 21, 2001, over one year later, Wells Fargo asserted that the foreclosure action was untimely and, therefore, the mechanic's lien was invalid.

¶5 In response, McKell emphasized that a portion of the original contract remained unfinished and, notwithstanding its earlier suspension of work, expressed an intent to fulfill its outstanding obligations to Carter if adequate progress payments were made for services rendered prior to October 5, 2000.According to McKell, "final completion"—and the attendant triggering of the statute of repose—did not occur until November 2001, when Carter's breach became apparent.Thus, McKell argued that its complaint was timely filed.

¶6 Following Wells Fargo's motion for judgment on the pleadings, which was treated as a summary judgment motion, the district court ruled in favor of the Bank.Specifically, the district court interpreted section 38-1-11(1)(a) and determined that "final completion of the original contract" does not require a mechanic's lien claimant to finish all work anticipated by the contract before commencing an enforcement action.Instead, it concluded that "cessation" or "abandonment" of work also constitutes "final completion" and found, sua sponte, that McKell terminated the project on October 5, 2000—the last day McKell furnished labor, services, equipment, or material to Carter, as evidenced by the lien notice.As such, the district court reasoned that the statute of repose began to run on October 6, 2000, and expired on October 5, 2001, forty-six days before McKell filed its complaint.Alternatively, the district court also noted that, even if it were to accept the recording date of the mechanic's lien—November 2, 2000—as the triggering event, McKell was still late.Thus, the district court awarded summary judgment to Wells Fargo.After having the order certified as a final judgment, McKell now appeals.

STANDARD OF REVIEW

¶7We review questions of statutory interpretation for correctness, affording no deference to the district court's legal conclusions.Stephens v. Bonneville Travel, Inc., 935 P.2d 518, 519(Utah1997).In the context of a summary judgment motion, we likewise employ a correctness standard and "view the facts and all reasonable inferences drawn therefrom in the light most favorable to the non-moving party."Hermansen v. Tasulis, 2002 UT 52, ¶ 10, 48 P.3d 235(internal quotation omitted).

ANALYSIS

¶8 The central issue presented in this appeal is whether, properly interpreted, Utah Code section 38-1-11(1)(a) bars McKell's mechanic's lien foreclosure action.Pursuant to general principles of statutory interpretation," we . . . look first to the . . . plain language," recognizing that "our primary goal is to give effect to the legislature's intent in light of the purpose the statute was meant to achieve."Evans v. State, 963 P.2d 177, 184(Utah1998).In doing so, we"assume that each term . . . was used advisedly; thus the statutory words are read literally, unless such a reading is unreasonably confused or inoperable."Johnson v. Redevelopment Agency, 913 P.2d 723, 727(Utah1995)(internal quotation omitted).

¶9 Here, McKell contends that the plain language of section 38-1-11(1)(a) mandates that "final completion of the original contract" occur before the statute of repose begins to run.SeeUtah Code Ann. § 38-1-11(1)(a)(2001).Referencing previous versions of this provision, McKell argues that the legislature was aware of alternative triggering events for the statute of repose, but specifically chose "final completion" to apply to non-residential property lien claimants.For example, McKell notes that prior to May 2, 1994, section 38-1-11 required enforcement actions to be initiated within "twelve months after the completion of the original contract, or the suspension of work thereunder for a period of thirty days."Id.§ 38-1-11(1988)(emphasis added).Likewise, the immediate predecessor to the current section 38-1-11(1)(a), which was in effect from May 2, 1994 to May 1, 1995, provided that a complaint be filed within "twelve months from the date the lien claimant last performed labor and services or last furnished equipment or material on an original contract."Id.§ 38-1-11(1)(a)(1994)(emphasis added).Finally, McKell points to section 38-1-11(1)(b) of the current statute, which addresses liens on residential property and, using language nearly identical to that found in the 1994 version of section 38-1-11(1)(a), dictates that enforcement actions be filed within "180 days from the date the. . . claimant last performed labor and services or last furnished equipment or material."Id.§ 38-1-11(1)(b)(2001)(emphasis added).In short, McKell asserts, based on the plain language of section 38-1-11(1)(a) and the selection of alternative triggering events in both section 38-1-11(1)(b) and earlier versions of the statute, that the legislature deliberately chose "final completion of the original contract" as the prerequisite for the running of the statute of repose for non-residential property lien claimants.We agree.

¶10 A straightforward examination of section 38-1-11(1)(a) supports our conclusion.The American Heritage Dictionary defines "final" as "[p]ertaining to or constituting the end result of a process or...