Geo Exchange Systems, L.L.C. v. Cam

65 P.3d 11, 115 Wash. App. 625, 2003 Wash. App. LEXIS 211
CourtCourt of Appeals of Washington
DecidedFebruary 14, 2003
DocketNo. 27587-2-II
StatusPublished
Cited by3 cases

This text of 65 P.3d 11 (Geo Exchange Systems, L.L.C. v. Cam) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Geo Exchange Systems, L.L.C. v. Cam, 65 P.3d 11, 115 Wash. App. 625, 2003 Wash. App. LEXIS 211 (Wash. Ct. App. 2003).

Opinion

Hunt, C.J. —

Geo Exchange Systems, LLC (GES), and Total Energy Concepts, Inc. (TECI), appeal the trial court’s reduction of a private construction lien claim, which the trial court deemed excessive under RCW 60.04.081 by approximately $1 million. GES and TECI argue that the trial court erred in (1) ruling that the statute of limitations in RCW 60.04.141 extinguished TECI’s right to collect the $1 million, which had been the subject of an earlier expired lien, and (2) reducing the later lien in a summary proceed[627]*627ing. GES and TECI also seek attorney fees and costs under RCW 60.04.081(4) and RAP 18.1.

We hold that the statute of limitations for private project construction liens did not extinguish TECI’s right to collect the earlier lien amount included in the later lien claim filed while work was still in progress. Accordingly, we reverse.

FACTS

In 1997, Pirfil and Elena Cam began constructing the North Bonneville Hot Springs Resort in Skamania County. Pirfil is the president of Cam Construction, Inc., a closely held corporation that is the general contractor for the resort project.

In September 1997, Cam Construction contracted with TECI to install a geothermal heating system. Cam Construction agreed to pay TECI a total of $1,997,000 under the contract, with $500,000 payable during the first four months of the project and the remaining balance of $1,497,000 payable in monthly installments of $12,231.71, beginning June 15, 1998. TECI assigned the contract to GES.

I. Liens

A. The First Lien

On December 26, 1997, GES recorded a $998,500 lien against the Cams’ Bonneville Hot Springs property. The lien included notations that “[c]laimant continues to perform at the site” and that GES was TECI’s assignee. It is undisputed that GES failed to take legal action to foreclose this first lien. In December 1999, GES reassigned its contract rights to TECI.

B. The Second Lien

On December 18, 2000, TECI recorded a second lien against the Cams’ Bonneville Hot Springs property for [628]*628$1,527,163.54, which included the unpaid $998,500 from the first lien. TECI listed December 8, 2000, as the “LAST DATE ON WHICH LABOR WAS PERFORMED; PROFESSIONAL SERVICES WERE FURNISHED; CONTRIBUTIONS TO AN EMPLOYEE BENEFIT PLAN WERE DUE; OR MATERIAL, OR EQUIPMENT WAS FURNISHED Clerk’s Papers (CP) at 16. The lien noted, “IF THE CLAIMANT IS THE ASSIGNEE OF THIS CLAIM SO STATE HERE: None.” CP at 17. TECI continued to work at the resort.

II. Procedure

On March 6, 2001, the Cams moved for an order to show cause under RCW 60.04.081. They claimed that the statute of limitations in RCW 60.04.141 barred the first lien and, thus, the second lien was frivolous and clearly excessive because it included the amount set forth in the first lien.

After the show cause hearing on May 31, 2001, the trial court ruled that the second lien was excessive because “it includes work for which a lien was claimed by Geo Exchange Systems LLC on December 24, 1997” (the first lien).1 CP at 26. The trial court reduced the second lien ($1,527,163.54) by the amount of the first lien ($998,500), leaving only $528,663.54 on the second lien. GES and TECI timely appealed.

ANALYSIS

I. Standard op Review

We consider a summary procedure under RCW 60.04.081 analogous to a trial by affidavit; thus, we may review both the legal and factual determinations on appeal. See W.R.P. Lake Union Ltd. P’ship v. Exterior Servs., Inc., [629]*62985 Wn. App. 744, 750, 934 P.2d 722 (1997). The parties here do not dispute the facts underlying the trial court’s legal conclusion to which GES and TECI assign error, namely that the lien was excessive. We review legal issues de novo. Nghiem v. State, 73 Wn. App. 405, 412, 869 P.2d 1086 (1994).

II. Statute of Limitations for Mechanics’ and Materialmen’s Liens

A. General Statutory Requirements

Under RCW 60.04.021, “any person furnishing labor, professional services, materials, or equipment for the improvement of real property shall have a lien upon the improvement for the contract price of labor, professional services, materials, or equipment furnished at the instance of the owner ....” A lien claimant must

file for recording, in the county where the subject property is located, a notice of claim of lien not later than ninety days after the person has ceased to furnish labor, professional services, materials, or equipment or the last date on which employee benefit contributions were due.

RCW 60.04.091.

To collect on a lien, a claimant must commence a legal action in superior court within eight calendar months after recording a lien claim. RCW 60.04.141.2 This eight-month period is considered “a statute of limitations upon the duration of a mechanics’ lien.” Curtis Lumber Co. v. Sortor, 83 Wn.2d 764, 767, 522 P.2d 822 (1974).3 Thus, if an action is not filed within eight months, the right to recover [630]*630on this recorded lien expires. Curtis Lumber, 83 Wn.2d at 767-68.

Neither the statute nor the case law, however, precludes the claimant from thereafter seeking satisfaction of the underlying debt that triggered the expired lien. The issue here is whether a claimant’s right to file successive liens under RCW 60.04.021 is extinguished if (1) the claimant does not file an action to foreclose on a previously-filed lien within eight months under RCW 60.04.141, and (2) the initial eight-month period expires before the claimant completes work on the project.

B. Case Law Interpreting the Statutory Requirements

In the early 1900s, Washington courts interpreted the lien statutes liberally to the benefit of lien claimants. See, e.g., Lindley v.

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Bluebook (online)
65 P.3d 11, 115 Wash. App. 625, 2003 Wash. App. LEXIS 211, Counsel Stack Legal Research, https://law.counselstack.com/opinion/geo-exchange-systems-llc-v-cam-washctapp-2003.