Duckett v. Olsen

699 P.2d 734, 1985 Utah LEXIS 793
CourtUtah Supreme Court
DecidedApril 1, 1985
Docket18950
StatusPublished
Cited by6 cases

This text of 699 P.2d 734 (Duckett v. Olsen) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Duckett v. Olsen, 699 P.2d 734, 1985 Utah LEXIS 793 (Utah 1985).

Opinion

PER CURIAM:

Wasatch Bank appeals from a judgment and decree of foreclosure by which the trial court declared that certain mechanic’s liens, filed pursuant to U.C.A., 1953, § 38-1-1, et seq., 1 were entitled to priority over the bank’s trust deed on the same real property. We affirm.

The real property was owned by David and Laurie Olsen, who, in late 1980, contracted with the several materialmen and contractors for the construction of a house on the property. They arranged for financing of the construction by Wasatch Bank, which took a trust deed to the property as security. After the house was constructed, the Olsens filed a petition in bankruptcy, on October 20, 1981, and were discharged of their debts in December 1981. On December 23, 1981, the bankruptcy trustee abandoned the real property, the subject of this action, as an asset of the bankrupts’ estate. This action was filed to foreclose liens and determine the priorities of the claimants.

Construction of the residence on the property was commenced August 4, 1980, by G & C Construction Company, which excavated the basement and graded and filled the lot. G & C completed its contract and, upon receiving payment for its work, executed a lien waiver on November 21, 1980. Wasatch Bank recorded its trust deed on November 12, 1980.

The materialmen and contractors who filed mechanic’s liens against the property performed their separate contracts beginning in December 1980. Construction of the residence, with the exception of final landscaping, was completed by July 1981. It is undisputed that each lien was filed in a timely manner pursuant to section 38-1-7.

Because the mechanic’s lienors contracted directly with the owners, the parties stipulated, and the trial court found, that they were each original contractors under section 38-1-2. The trial court ruled that the mechanic’s liens had equal priority under section 38-1-10, that the liens attached under section 38-1-5 as of the commencement of construction on August 4, 1980, and that they therefore had priority over the trust deed of Wasatch Bank. The contractors were granted judgment in the amount of their respective liens and were awarded reasonable attorney fees and costs pursuant to section 38-1-18.

Wasatch Bank contends that since the mechanic’s lienors were all original contractors performing separate contracts with the owners, the liens attach from the commencement of their separate contracts, and section 38-1-5 does not apply. That section provides:

The liens herein provided for shall relate back to, and take effect as of, the time of the commencement to do work or furnish materials on the ground for the structure or improvement, and shall have priority over any lien, mortgage or other encumbrance which may have attached subse *736 quently to the time when the building, improvement or structure was commenced, work begun, or first material furnished on the ground ....

Section 38-1-3 provides that contractors, as well as subcontractors, and persons performing labor or furnishing materials used in the construction, are entitled to a lien upon the property. Clearly, the right to have a lien relate back to the commencement of work on the ground under section 38-1-5 is not defeated merely because the owners did not employ a general contractor.

The question is whether all the work was done pursuant to a single project contemplated by the owners. As we said in Colder Brothers Co. v. Anderson, Utah, 652 P.2d 922, 924 (1982):

For one contractor’s lien to relate back to the commencement of work or supplying of materials by another contractor however, both contractors’ projects must have been performed in connection with what is essentially a single project performed under a common plan prosecuted with reasonable promptness and without material abandonment.

The cases cited by Wasatch Bank are not contrary to that rule. See Gwilliam Lumber & Coal Co. v. El Monte Springs Corp., 87 Utah 134, 48 P.2d 463 (1935); Cahoon & Brother v. Fortune Mining & Milling Co., 26 Utah 86, 72 P. 437 (1903); Fields v. Daisy Gold Mining Co., 25 Utah 76, 69 P. 528 (1902). Each of these cases involved a single lien claimant who had furnished materials on a running account on which payments had been made from time to time. In each case, the question was whether the last materials furnished related to a single contract or several separate contracts between the materialman and the owner.

In Fields, the trial court found that all of the materials were furnished under a single contract, while in Cahoon and Gwilliam, the trial court found that separate and distinct contracts were intended. In Gwilliam, this Court said:

A review of this case convinces us that the question of whether all of the materials furnished over the three years were for a unit purpose contemplated in conversations between the parties in April of 1928, or whether for distinct purposes and under different contracts, as was the case in the action of Cahoon [& Brother] v. Fortune Min. & Mill. Co., 26 Utah 86, 72 P. 437, was a question of fact for the court.

87 Utah 142, 48 P.2d 466.

There is no question in this case that construction of the residence as a single project was contemplated. The trial court so found, and Wasatch Bank does not contest that finding. As the evidence supports the trial court’s finding, it will not be disturbed by this Court. Gwilliam, supra.

Wasatch Bank contends that because G & C Construction Co. executed a waiver of its lien and no other liens had attached prior to the recording of the trust deed, the contractors who commenced work later do not have priority over the trust deed. In First of Denver Mortgage Investors v. C.N. Zundel and Associates, Utah, 600 P.2d 521 (1979), we held that a release signed by one contractor does not affect the status of other contractors who were not parties to the release and did not consent to its terms. This point is, therefore, without merit.

As the contractors completed portions of their work, Wasatch Bank issued checks to them out of the construction loan funds in payment for the completed work. Imprinted on the back of these checks was a waiver of lien above the place for endorsement of the check. This waiver recites in part:

In consideration of payment of the within check, the payee upon endorsement hereby waives and releases all lien or right of lien now existing for work or labor performed or materials furnished on or before the date of this check for the improvement of the property as described on the face of this instrument.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Wachovia Bank National Ass'n v. Superior Construction Corp.
718 S.E.2d 160 (Court of Appeals of North Carolina, 2011)
Nu-Trend Electric, Inc. v. Deseret Federal Savings & Loan Ass'n
786 P.2d 1369 (Court of Appeals of Utah, 1990)
KETCHUM, KONKEL v. Heritage Mt.
784 P.2d 1217 (Court of Appeals of Utah, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
699 P.2d 734, 1985 Utah LEXIS 793, Counsel Stack Legal Research, https://law.counselstack.com/opinion/duckett-v-olsen-utah-1985.