Standard Water Control Sys., Inc. v. Jones, 15-0458
| Decision Date | 31 August 2016 |
| Docket Number | No. 15-0458,15-0458 |
| Citation | 888 N.W.2d 673 |
| Parties | STANDARD WATER CONTROL SYSTEMS, INC., Plaintiff-Appellees/Counterclaim-Defendants, v. Michael D. JONES and Cori Jones, Defendants-Appellants/Counterclaim-Plaintiffs. |
| Court | Iowa Court of Appeals |
John F. Fatino of Whitfield & Eddy, P.L.C., Des Moines, for appellant.
Jodie C. McDougal and Elizabeth R. Meyer of Davis Brown Law Firm, Des Moines, and Bradley M. Beaman of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellee.
Heard by Tabor, P.J., and Bower and McDonald, JJ.
Mike and Cori Jones contracted with Standard Water Control Systems to waterproof the basement of their residence. Standard Water started work on July 15, 2013. While working in the basement, one of Standard Water's employees struck a water line and a sewer line with a jackhammer. The water and sewer lines were encased within the concrete floor and the footings. The placement of the lines was unusual and not foreseeable. The ruptured water and sewer lines caused damage to the Joneses' property.
Standard Water continued to work on the basement on the day of July 15 but did not complete the job. Several witnesses testified the job was ninety-five percent complete at the end of the day. The Joneses would not allow Standard Water back on the property the next day or any day thereafter to finish the remainder of the work. Standard Water tendered a bill to the Joneses for $5,400, which represented the balance owed on the project. The Joneses stated they would not pay the bill because the work was incomplete and because Standard Water had damaged the property. The Joneses incurred costs to assess and repair the damage to their property.
Sixteen days after its first and last day of work at the Joneses' residence, Standard Water filed a notice of commencement of work and mechanic's lien. In October 2013, the Joneses sent Standard Water a letter demanding foreclosure of the mechanic's lien pursuant to Iowa Code section 572.28 (2013). Standard Water filed an action to foreclose the lien and for breach of contract, and the Joneses filed an answer and counterclaims. The district court found the Joneses were in breach of contract and entered judgment in personam against the defendants for $5400 plus interest at twelve percent and attorney fees in the amount of $43,835.25. The district court concluded Standard Water was entitled to in rem judgment against the property for the same amount and entitled to foreclose the mechanic's lien. The Joneses timely filed this appeal, challenging the validity of the lien, the validity of the parties' contract, and the amount of the fee award.
The Joneses argue Standard Water's mechanic's lien was invalid due to Standard Water's purported failure to comply with statutory filing and notice requirements. Actions to enforce mechanic's liens are equitable proceedings. See Flynn Builders, L.C., v. Lande , 814 N.W.2d 542, 545 (Iowa 2012). Normally, appeals from actions brought in equity are reviewed de novo. See Iowa R. App. P. 6.907. However, this dispute raises issues of statutory interpretation and construction. Our review of issues of statutory interpretation and construction is for the correction of legal error. See Bank of Am., N.A. v. Schulte , 843 N.W.2d 876, 880 (Iowa 2014).
We look no further than the language of the statute when it is unambiguous. Estate of Ryan v. Heritage Trails Assocs., Inc., 745 N.W.2d 724, 730 (Iowa 2008). If a statute is ambiguous, we turn to principles of statutory interpretation. In re Estate of Bockwoldt, 814 N.W.2d 215, 223 (Iowa 2012). A statute is ambiguous if reasonable people can disagree about its meaning. Id. When interpreting statutes, we seek the legislature's intent. Schaefer v. Putnam, 841 N.W.2d 68, 75 (Iowa 2013). Rather than analyzing words or phrases in isolation, we assess the entire statute. Hardin Cty. Drainage Dist. 55 v. Union Pac. R.R. Co., 826 N.W.2d 507, 512 (Iowa 2013). We consider a statute's legislative history, including prior versions of the statute. State v. Romer, 832 N.W.2d 169, 176 (Iowa 2013). Under the pretext of construction, we may not extend a statute, expand a statute, or change its meaning. Id.
At issue is Iowa Code section 572.13A(1) —a matter of first impression for this court, as section 572.13A was only enacted in 2013. That subsection provides, in pertinent part:
A general contractor or owner-builder who has contracted or will contract with a subcontractor to provide labor or furnish material for the property shall post a notice of commencement of work to the mechanics' notice and lien registry [MNLR] internet website within ten days of commencement of work on the property. A notice of commencement of work is effective only as to any labor, service, equipment, or material furnished to the property subsequent to the posting of the notice of commencement of work.
Iowa Code § 572.13A(1). The terms "general contractor," "owner-builder," and "subcontractor" are all defined by statute. See Iowa Code § 572.1.
The parties have different interpretations of the statute. The Joneses argue the doctrine of the last antecedent means the clause "who has contracted or will contract" modifies only the term "owner-builder." The Joneses thus contend the statute applies to (a) all general contractors and (b) those owner-builders who have contracted or will contract with a subcontractor to provide labor or furnish material to the property. Standard Water, as a covered general contractor, did not post a notice of commencement of work within ten days of first furnishing materials or furnishing labor. As a result, the Joneses claim, Standard Water was prohibited from filing and enforcing its mechanic's lien. Standard Water contends the last-antecedent rule is inapplicable here and the phrase "who has contracted or will contract" modifies both "general contractor" and "owner-builder." Standard Water did not contract with a subcontractor. Standard Water thus concludes it did not have to file a notice of commencement of work on the MNLR within ten days of commencing work as a prerequisite to filing and enforcing its mechanic's lien.
We conclude the challenged phrase could reasonably bear both interpretations and is thus ambiguous. See Bockwoldt, 814 N.W.2d at 223. Under the circumstances, the last-antecedent rule is not dispositive, and we turn to other interpretive aids. See Fjords N., Inc., v. Hahn , 710 N.W.2d 731, 738 (Iowa 2006) ( ).
We first look to the purpose of the statute. "The statute is intended to provide a mechanism by which owners of residential real estate receive notice of who was working on the property and claims by the same party." IAB Vol. XXXV, No. 11 (11/28/2012) p. 935, ARC 0464C. The Joneses argue that the phrase "claims by the same party" suggests the MNLR's primary purpose is to alert owners to liens filed against the property. The Joneses assert that exempting an entire subset of contractors from this notice requirement, viz. general contractors who do not hire subcontractors, defeats the spirit of the law. We disagree. The purpose of the statute is twofold. It requires identification of "who was working on the property" and notice of any claims by those persons. In short, the statute is intended to provide the owner with the identity of subcontractors unknown to the owner who might have potential claims against the property and provide a mechanism to force the subcontractors to file notice of any potential claims. The Joneses' interpretation of the statute is overbroad in the sense that it would require a contractor who did not hire any subcontractors to provide notice to the homeowner that the contractor was performing work on the property. This is obviously unnecessary and puts form over substance. In contrast, Standard Water's interpretation—that only general contractors who hire subcontractors provide the required notice—is in accord with the purpose of the statute without requiring the general contractor to engage in unnecessary filing.
The Joneses contend the statute as a whole supports their interpretation. The Joneses rely on section 572.13A(4) : "A general contractor who fails to provide notice pursuant to this section is not entitled to a lien and remedy provided by this chapter." They assert this section compels all general contractors to provide the notice of commencement of work as a prerequisite to filing and enforcing a mechanic's lien. The Joneses' position is circular. While the section upon which they rely provides that a general contractor who fails to provide notice pursuant to the statute is not entitled to the lien, the statute does not identify the class of general contractors required to provide notice pursuant to the statute. The Joneses' reliance on this provision merely presumes the answer to the relevant question.
We conclude the statute as a whole supports Standard Water's interpretation. Standard Water invokes section 572.13, the "owner notice" section. That section requires a "general contractor who has contracted or will contract with a subcontractor" to provide the owner with a notice that persons or companies improving real property may be entitled to a lien upon the improved property. Iowa Code § 572.13. A nearly identical section (substituting the phrase "original contractor" for "general contractor") was in effect prior to 2013 as well. See Iowa Code § 572.13 (2011). Standard Water argues that because section 572.13 relates to general contractors who hire subcontractors, it follows that section 572.13A also relates to general contractors who hire subcontractors. There is persuasive force in creating a parallel between the two provisions.
Section 572.13B also provides support for Standard Water's interpretation. That section requires...
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