Bay Harbor Farm, LC v. Sumsion

2014 UT App 133, 329 P.3d 46, 762 Utah Adv. Rep. 4, 2014 WL 2612403, 2014 Utah App. LEXIS 133
CourtCourt of Appeals of Utah
DecidedJune 12, 2014
DocketNo. 20120812-CA
StatusPublished
Cited by10 cases

This text of 2014 UT App 133 (Bay Harbor Farm, LC v. Sumsion) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bay Harbor Farm, LC v. Sumsion, 2014 UT App 133, 329 P.3d 46, 762 Utah Adv. Rep. 4, 2014 WL 2612403, 2014 Utah App. LEXIS 133 (Utah Ct. App. 2014).

Opinion

Opinion

ORME, Judge:

{1 Steven R. Sumsion appeals a district court order nullifying his lien under the Wrongful Lien Act. We reverse and direct the district court to dismiss Bay Harbor Farm's wrongful lien petition.

BACKGROUND

12 Bay Harbor Farm owns property in Utah County on which it operated a farm. In 2002, a farm worker was injured while working with a tractor on or near the farm. That worker subsequently brought a workers' compensation claim against Bay Harbor and Donald Proctor, a manager and forty-five-percent owner of Bay Harbor. Proctor [47]*47retained Sumsion, an attorney, to defend him against the workers' compensation claim. Sumsion provided Proctor with an engagement letter confirming that Sumsion would represent Proctor on "numerous matters involving Bay Harbor Farms and various personal matters." Proctor signed the letter twice, onee on a line labeled "Donald Proctor," and again on a line labeled "Bay Harbor Farms, LLC, Don Proctor, Manager."

T3 In 2006, Sumsion recorded a notice of attorney's lien on Bay Harbor's property because he had not been paid for his work on the workers' compensation matter. In June 2011, Bay Harbor demanded that Sumsion release his lien. Sumsion refused and sent documents to Bay Harbor that he believed supported the validity of his attorney's lien. Sumsion also recorded an amended notice of his lien, in which he maintained that his lien was a valid attorney's lien "in accordance with the provisions of Sections 88-2-7 et seq." of the Utah Code because Sumsion "was engaged and provided legal services at the request of and for Bay Harbor" and the property subject to his lien "was the subject of or connected with work performed by [Sumsion] for Bay Harbor."

T4 Bay Harbor filed a petition in the district court to have Sumsion's lien declared wrongful under the Wrongful Lien Act. See Utah Code Ann. § 88-9-7 (LexisNexis 2010). Bay Harbor also requested and obtained a hearing in accordance with the Wrongful Lien Act. See id. § 38-9-7(8)(b).

T5 The district court granted Bay Harbor's petition and nullified Sumsion's lien. It ruled that Sumsion's lien was a wrongful lien under the Wrongful Lien Act because it was not expressly authorized by statute. See id. § 38-9-1(6)(a) (stating that liens that are "expressly authorized by this chapter or another state or federal statute" are not wrongful liens). Sumsion appeals.

16 Sumsion challenges the district court's interpretation of the Wrongful Lien Act, Whether a lien is wrongful under section 38-9-1 of the act is a question of law, and we therefore review the district court's determination for correctness. See Pratt v. Pugh, 2010 UT App 219, ¶ 7, 238 P.3d 1073; Russell v. Thomas, 2000 UT App 82, ¶ 8, 999 P.2d 1244.

ANALYSIS

T7 The Wrongful Lien Act provides that "[alny record interest holder of real property against which a wrongful lien ... has been recorded may petition the district court in the county in which the document was recorded for summary relief to nullify the lien." Utah Code Ann. § 88-9-7(1) (LexisNexis 2010). However, a lien may be nullified through this type of expedited procedure only if, at the time the lien was recorded, it was not "expressly authorized by [the Wrongful Lien Act] or another state or federal statute." Id. § 38-9-1(6).

T8 Sumsion contends on appeal, as he did below, that because the Utah Code authorizes attorney's liens, his lien is expressly authorized by statute and therefore not subject to nullification in an expedited hearing under the Wrongful Lien Act. The district court, however, determined that Sumsion's lien was not authorized by statute. In reaching this conclusion, the district court analyzed the enforceability of Sumsion's lien under the attorney's lien statute. Quoting the statute, the district court explained that

[tlhe attorney lien statute requires two relevant elements: first, [Bay Harbor] must have been the "client" of [Sumsion] for the work performed; second, that the Property must have been "the subject of or connected with work performed for the client."

See Utah Code Ann. § 38-2-7(2) (LexisNexis 2010). The court then noted that it was "unable, upon this expedited proceeding, to find whether or not [Bay Harbor] was a client of [Sumsion]" for the work performed on the workers' compensation case. But the court did find that the Bay Harbor property "was not the subject of or connected with [Sumsion's] work on the [workers' compensation] matter." The district court then concluded that because Sumsion's lien was unenforceable as an attorney's lien under section [48]*4838-2-7, it was a wrongful lien under the Wrongful Lien Act and "void ab initio."1

T°9 The Utah Supreme Court considered this issue under factually similar cireum-stances in Hutter v. Dig-It, Inc., 2009 UT 69, 219 P.3d 918. In Hutter, the parties disputed the meaning of the phrase "expressly authorized by statute" found in the Wrongful Lien Act. Id. ¶ 46. The lien claimant contended that "because the right to file a mechanic's lien is granted by statute, all mechanic's liens-even if they ultimately prove unenforceable-are expressly authorized by statute and therefore are not wrongful liens." Id. The property owners, however, argued "that an unenforceable lien cannot be expressly authorized by statute since the statute only allows liens to be recorded that comply with the statutory terms." Id.

110 The Hutter court concluded that the phrase "expressly authorized by ... statute" was ambiguous and therefore turned to the statute's legislative history for guidance. Id. 49. The court then focused on one particular legislative exchange sparked by a concern that Senator Richard Carling raised about the Wrongful Lien Act: " '[Ilt appears [to gol to all liens, not just common law liens'" and " 'somebody might think that they have a valid lien against somebody, they're going to file a lien and it might be determined invalid" Id. ¶ 50 (quoting Senate Floor Debate, S.B. 178, 42nd Leg., Gen. Sess. (February 21, 1985) (statement of Senator Carling)). After recounting several other senators' responses to Senator Carling's misgiving, the Supreme Court held, "This legislative history makes clear that the legislature intended that the definition of "wrongful lien' should encompass only common law liens. Therefore, we conclude that the phrase 'not expressly authorized by ... statute' in the Wrongful Lien Act does not include statutorily created liens," even those "that ultimately prove unenforceable." Id. ¶ 52. The Court then concluded that because the lien claimant "filed a me-chanie's lien, which is expressly authorized by statute, the lien, though unenforceable ..., is not wrongful." Id.

{11 Closely analogous to the circumstances presented in Hutter, Sumsion filed an attorney's lien, which is expressly authorized by statute, and it is therefore not wrongful. This is true even if it ultimately proves unenforceable, whether because Bay Harbor was not Sumsion's client, because the Bay Harbor property was unconnected to the workers' compensation claim, or on some other basis. But an expedited hearing under the Wrongful Lien Act is not the right vehicle for analyzing the lien's enforceability under the attorney's lien statute. See Utah Code Ann.

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Cite This Page — Counsel Stack

Bluebook (online)
2014 UT App 133, 329 P.3d 46, 762 Utah Adv. Rep. 4, 2014 WL 2612403, 2014 Utah App. LEXIS 133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bay-harbor-farm-lc-v-sumsion-utahctapp-2014.