Woodley v. Style Corp.

• Decision Date: 11 February 2019
• Docket Number: No. 77352-6-I
• Citation: Woodley v. Style Corp., 7 Wash.App.2d 543, 453 P.3d 739 (Wash. App. 2019)
• Court: Washington Court of Appeals
• Parties: Denise Brackett WOODLEY, Respondent, v. STYLE CORPORATION doing business as Servpro of Shoreline/Woodinville, lien claimant, Appellant.

7 Wash.App.2d 543

453 P.3d 739

Denise Brackett WOODLEY, Respondent,

v.STYLE CORPORATION doing business as Servpro of Shoreline/Woodinville, lien claimant, Appellant.

No. 77352-6-I

Court of Appeals of Washington, Division 1.

FILED: February 11, 2019

Anthony Robert Scisciani III, Scheer Law Group LLP, Matthew Erickson, Scheer, Holt, Woods & Scisciani LLP, 701 Pike St. Ste. 2200, Seattle, WA, 98101-2358, for Appellant.

Gordon Arthur Woodley, Woodley Law, Po Box 53043, Bellevue, WA, 98015-3043, Susan Lynne Fullmer, Susan L. Fullmer, Attorney At Law, 1546 Nw 56th St. #599, Seattle, WA, 98107, for Respondent.

PUBLISHED OPINION

Verellen, J. ¶1 A materialmen’s lien must be released pursuant to RCW 60.04.081 if it is frivolous and made without reasonable cause. Because Style Corporation’s (Servpro) lien presents debatable issues of law and fact, it is not frivolous and should not have been released.

¶2 A lien is clearly excessive under RCW 60.04.081 when the amount claimed on the face of the lien is unquestionably far greater than the usual or agreed amount. Because Servpro’s lien clouds the title to Denise Brackett Woodley’s condominium unit for the entire $183,945.09 listed on its face for services provided to Woodley worth, at most, $6,001.90, the trial court correctly concluded the lien was clearly excessive.

¶3 Therefore, we reverse in part, affirm in part, and remand for further proceedings consistent with this opinion.

FACTS

¶4 Denise Brackett Woodley owns unit 208 in building E of the Bellevue Park condominium complex. Because of ongoing roof construction and a rainstorm, water leaked into Woodley’s unit and 19 others on September 17, 2016.¹

That day, Bellevue Park’s property management company, MacPherson’s Property Management, called Servpro and asked it to clean up the water and conduct restoration work. MacPherson’s signed a work authorization contract with Servpro on the behalf of "Bellevue Park Condos," and Servpro began placing drying equipment in affected units.

¶5 Woodley’s unit was occupied by a tenant who gave Servpro permission to enter and set up its equipment. Interior surfaces in the unit’s living room, dining room, bedrooms, and bathroom needed to be dried. Three days later, Servpro returned to monitor drying progress and to perform asbestos testing.

¶6 Woodley did not speak with Servpro or her tenant prior to the work completed between September 17 and September 20. Servpro’s equipment remained in Woodley’s unit until mid-November.

¶7 The Bellevue Park condominium owners association planned to pay Servpro for its services and recoup the money from unit owners via a special assessment. But the association failed to pay because it was trying unsuccessfully to obtain the money from the roofing company.

¶8 Servpro filed a single lien for the total value of its services on January 26, 2017. The lien claimed a debt of $183,945.09. The lien named the association as the indebted person but recited that it applied to the 20 specific units and a common storage area where Servpro provided services. The lien also names each owner of the 20 units but does not allocate a specific portion of the total debt to each unit.

¶9 Pursuant to RCW 60.04.081, Woodley filed a motion to release the lien. Finding it both frivolous and clearly excessive, the court released the lien. The court denied a motion for reconsideration.

¶10 Servpro appeals.

ANALYSIS

¶11 When evaluating release or reduction of a lien under RCW 60.04.081, we review the court’s legal conclusions de novo and review factual findings for substantial evidence.²

¶12 A materialmen’s lien is authorized for "any person furnishing labor, professional services, materials, or equipment for the improvement of real property ... for the contract price of labor, professional services, materials, or equipment furnished at the instance of the owner, or the agent or construction agent of the owner."³ After a claimant files a lien, RCW 60.04.081 authorizes a "narrow and limited"⁴ "summary proceeding" to determine whether the lien " ‘is frivolous and made without reasonable cause or clearly excessive.’ "⁵ A court must release the lien "if frivolous and made without reasonable cause" or reduce the lien if "clearly excessive."⁶ This "trial by affidavit" should not be a substitute for trial on the merits where the facts "do not clearly indicate" the lien is frivolous or clearly excessive.⁷

Servpro’s Lien Is Not Frivolous

¶13 A lien is frivolous if "improperly filed beyond legitimate dispute" and "so devoid of merit that it has no possibility of succeeding."⁸ Even if a lien is invalid, it may not be frivolous.⁹ This high standard exists to ensure contractors and laborers are not deprived of their right to trial on a legitimate lien claim.¹⁰ Thus, a lien is not frivolous if it presents debatable issues of law and fact.¹¹

¶14 Woodley makes several arguments to explain why Servpro’s lien is frivolous, but none meet this high standard.

¶15 First, Woodley argues Servpro’s lien is frivolous because she never directly authorized any of Servpro’s work after September 26, 2016. Servpro agrees that Woodley herself never directly authorized its services. But Woodley’s brief does not contest, and she confirmed at oral argument that she views the association as having actual authority under the condominium declaration for three days following the roof leak to arrange for Servpro’s emergency repairs to her unit. Woodley’s admission creates debatable issues of law and fact around the scope of agency authorized by the condominium declaration.¹²

¶16 Second, Woodley contends the lien is frivolous because it was filed after the 90-day statutory limitations period lapsed. The court found Servpro stopped providing beneficial services to Woodley on September 21, 2016, and filed its lien more than 90 days later on January 26, 2017. Servpro argues the limitations period did not lapse before filing because it continued to provide beneficial services to Woodley through November 17, 2016, when it removed its equipment from her unit. But even though an untimely lien is presumptively invalid, that does not mean the lien is frivolous.

¶17 A materialmen’s lien must be filed "not later than [90] days" after the lien claimant stops providing services.¹³ This "strict time limit"¹⁴ is "a period of limitation," so "no action to foreclose a lien shall be maintained" if the claimant failed to file within the limitations period.¹⁵ A lien filed after the 90-day limit is presumptively invalid.¹⁶ Any provision of supplies or services at the owner’s request extends the limitation period for another 90 days.¹⁷

¶18 In Intermountain Electric, Inc. v. G-A-T Brothers Construction, Inc., a lien was invalid because it was filed 94 days after the lien claimant, an electrician, stopped providing beneficial services to a general contractor.¹⁸ On June 6, 2000, the electrician performed its last active work for the contractor and left its construction trailer at the construction site in anticipation of future work.¹⁹ The electrician filed a lien 94 days later but argued its lien was valid because it was still furnishing equipment to the general contractor at the time it filed.²⁰ Because the general contractor neither requested nor required the electrician’s construction trailer, the electrician stopped providing beneficial services on June 6 and did not have a valid lien.²¹ But the court declined to hold the lien frivolous, despite it being invalid because it presented debatable issues of law and fact.²²

¶19 Like the electrician in Intermountain Electric, Servpro stopped providing beneficial services to Woodley well before it retrieved its equipment.²³ But without more, the lien is not frivolous even accepting it was invalidly filed more than 90 days after Servpro concluded beneficial work.

¶20 Third, Woodley contends the lien was frivolous because the contract between MacPherson’s and Servpro did not state the actual amount charged. Authorized liens are only for "the contract price" of what the claimant provided.²⁴ But RCW 60.04.011(2) defines "contract price" as "the amount agreed upon by the contracting parties, or if no amount is agreed upon, then the customary and reasonable charge therefor." An authorized lien does not require a specific agreed-upon contract price before a claimant begins work.

¶21 Finally, Woodley contends the lien is frivolous because it contains factual inaccuracies, one inaccuracy being that Servpro’s work was "ongoing" when it filed the lien.²⁵ The other is that the association owned the properties listed on the lien. These inaccuracies may be material to the ultimate validity of the lien, but they do not automatically make it frivolous.²⁶

¶22 Because Servpro’s lien presents debatable issues of law and fact, it is not frivolous.

Servpro’s Lien Is Clearly Excessive

¶23 Servpro argues that its lien was not clearly excessive because it did not file it in bad faith or with an intent to defraud. Servpro cites to Pacific Industries, Inc. v. Singh for the proposition that "[a] materialman’s lien will be declared invalid because it is excessive only if the amount is claimed with an intent to defraud or in bad faith."²⁷ But this standard relies on cases that predate RCW 60.04.081 and consequently, fail to account for the statute.

¶24 In Knibb v. Mortensen, our Supreme Court noted that liens "must be claimed in good faith" and that "willful excess would vitiate the whole lien" regardless of evidence of bad intent.²⁸ The court released the lien because the claimant "burdened a little dwelling with twice as much [debt] as he had a right to claim by lien, and, in our opinion, he did it willfully, out of an ill humor which is exhibited in sundry features of the record."²⁹

¶25 In Radley v. Raymond, the court considered whether a mechanic lost his lien by overcharging a customer for a rebuilt engine.³⁰ An overcharge could lead to release of the lien if "the court finds that such mistake or error [on the face of...