Sundance Mechanical & Utility Corp. v. Armijo

• Decision Date: 01 September 1987
• Docket Number: No. 16600,16600
• Citation: 106 N.M. 249,1987 NMSC 78,741 P.2d 1370
• Parties: SUNDANCE MECHANICAL & UTILITY CORPORATION, a New Mexico Corporation, Plaintiff-Appellee, v. Victor Lee ARMIJO and Dora Lee Armijo, his wife, Defendants-Appellants, v. Arthur S. PADILLA d/b/a Padilla & Sons Plastering, et al., Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 1370

741 P.2d 1370

106 N.M. 249

SUNDANCE MECHANICAL & UTILITY CORPORATION, a New Mexico

Corporation, Plaintiff-Appellee, v. Victor Lee ARMIJO and Dora Lee Armijo, his wife, Defendants-Appellants, v. Arthur S. PADILLA d/b/a Padilla & Sons Plastering, et al.,

Defendants-Appellees.

No. 16600.

Supreme Court of New Mexico.

Sept. 1, 1987.

Tito D. Chavez, Albuquerque, for defendants-appellants.

James A. Artley, J. Kerwin Hollowwa, Albuquerque, for plaintiff-appellee Sundance.

Stuart Hines, Albuquerque, for defendant-appellee FED.

Sutin, Thayer & Browne, Jay D. Hertz, Sasha Siemel, Albuquerque, for defendant-appellee Whirlpool.

Bradford H. Zeikus, Albuquerque, for defendant-appellee McCullough.

[106 N.M. 250] Peter Everett, IV, Albuquerque, for defendant-appellee Hector gonzales.

Toulouse, Toulouse & Garcia, Narciso Garcia, Jr., Albuquerque, for defendants-appellees Gentry and Valdez.

OPINION

STOWERS, Justice.

This appeal presents a single question: In a case where the original contractor gives no notice to the owner of a residence (containing not more than four dwelling units) regarding the right of subcontractors to file mechanics' and materialmen's liens, does NMSA 1978, Section 48-2-10.1 (Repl.Pamp.1987) operate to discharge the owner from such liens filed less than ninety days after completion of construction but filed after the owner has made payment in full to the original contractor? The district court in this case held that NMSA 1978, Subsection 48-2-10.1(A) (Repl.Pamp.1987) does not operate to discharge mechanics' and materialmen's liens filed against residential real property after the owners have paid in full the original contractor where, as here, the original contractor failed to notify the owners in accordance with the requirements of NMSA 1978, Subsection 48-2-10.1(B) (Repl.Pamp.1987). The district court found the general lien statute, NMSA 1978, Section 48-2-6 (Repl.Pamp.1987), controlling in the absence of statutory notice and ruled that the subcontractor's claim of lien was valid under that statute.

After examining the language of Section 48-2-10.1, and in view of our interpretation of that statute in Aztec Wood Interiors, Inc. v. Andrade Homes, Inc., 104 N.M. 45, 716 P.2d 236 (1986), and also the Legislature's intention in enacting it, we conclude that the district court incorrectly interpreted Section 48-2-10.1. We hold that the statute discharges mechanics' and materialmen's liens recorded after the owner has made full payment for construction work performed when the owner has not been given the written notice of potential lien claims prescribed by Subsection 48-2-10.1(B). We therefore reverse and remand this case to the district court for further proceedings.

In February 1984, Sundance Mechanical & Utility Corporation (plaintiff) contracted with Pacheco Construction Company (Pacheco) and provided labor, supplies, and services in connection with the construction of two four-unit residential buildings. Pacheco, the general contractor on the project and at that time the owner of the real property, completed construction about March 6, 1984, and on March 9, transferred title to Victor Lee Armijo and Dora Lee Armijo (defendants). Upon closing on March 23, 1984, defendants paid Pacheco and mortgaged the property. Subsequently, a number of mechanics' and materialmen's liens were filed against the property. Plaintiff filed its claim of lien on May 8, 1984, within ninety days after completion of the construction but more than twenty days after Pacheco had presented its contract of sale for payment by defendants.

On May 3, 1985, still unpaid by Pacheco for its work on the project, plaintiff brought this suit against defendants for debt and money due and to foreclose its claim of lien. Defendants' answer alleged, as an affirmative defense, that plaintiff's claim was barred under Section 48-2-10.1. Rejecting that argument, the district court granted summary judgment in favor of plaintiff and later denied defendants' motion for reconsideration. After a trial on the merits to evaluate the other lien claims made against the real property, the court entered a judgment and decree ordering foreclosure. Questioning the district court's interpretation of Section 48-2-10.1, defendants appeal.

In interpreting a statute, the court must ascertain and give effect to the intention of the legislature, which is to be determined primarily from the language used in the statute as a whole. Arnold v. State, 94 N.M. 381, 383, 610 P.2d 1210, 1212 (1980). In enacting Section 48-2-10.1, plaintiff contends the Legislature intended not to extend protection from liens automatically to all owners of residential real property, but to offer the protection of Subsection 48-2-10.1(A) conditioned upon compliance with the notice procedures delineated in Subsection 48-2-10.1(B). To evaluate this argument, we must construe each part of the act in connection with every other part so as to produce a harmonious whole. Westgate Families v. County Clerk, 100 N.M. 146, 148, 667 P.2d 453, 455 (1983).

Subsection 48-2-10.1(A) in pertinent part states:

Payment by the owner to * * * any person entitled to such payment of all amounts due and owing for any construction * * * the performance of which could give rise to a lien pursuant to Section 48-2-2 NMSA 1978 to be performed upon a residence containing not more than four dwelling units shall discharge all such liens unless prior to such payment any person who is entitled to such a lien has filed for record his lien pursuant to Section 48-2-6 NMSA 1978.

Subsection 48-2-10.1(B) in pertinent part provides:

When an original contractor entitled to payment presents his bill for final payment, or an agreement for the sale of the premises, he shall notify the owner * * * in writing that liens may be filed within the next twenty working days. On the same day, he shall notify in writing [all unpaid subcontractors that the twenty-day period has commenced]. He shall furnish to the owner * * * an affidavit of mailing or delivery of such notification to [such subcontractors] * * *. If notice has been given to the owner * * * pursuant to this subsection, payment in full prior to the expiration of the twenty-day period shall not avail the owner * * * of the benefits of Subsection A of this section.

From the language used by the Legislature, it is clear to this Court that Subsection 48-2-10.1(A) generally discharges all liens for work done on residential buildings of four or fewer units recorded after the owner has made payment in full for the construction work. It is equally clear, from its final sentence, that Subsection 48-2-10.1(B) carves an exceptional twenty-day period for filing liens if proper notice has been given to the owner. We believe that the owner is entitled to the discharge of liens provided by Subsection 48-2-10.1(A) unless, and only unless, the owner has been given notice in compliance with Subsection 48-2-10.1(B).

We so stated in Aztec...