Hanson Aggregates Arizona, Inc. v. Rissling Construction Group, Inc.

127 P.3d 910, 212 Ariz. 92, 470 Ariz. Adv. Rep. 3, 2006 Ariz. App. LEXIS 9
CourtCourt of Appeals of Arizona
DecidedFebruary 2, 2006
DocketNo. 1 CA-CV 03-0633
StatusPublished
Cited by7 cases

This text of 127 P.3d 910 (Hanson Aggregates Arizona, Inc. v. Rissling Construction Group, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanson Aggregates Arizona, Inc. v. Rissling Construction Group, Inc., 127 P.3d 910, 212 Ariz. 92, 470 Ariz. Adv. Rep. 3, 2006 Ariz. App. LEXIS 9 (Ark. Ct. App. 2006).

Opinion

OPINION

SNOW, Judge.

¶ 1 Hanson Aggregates Arizona, Inc. appeals the trial court’s dismissal of its action against a surety bond posted by Rissling Construction Group, Inc. and Western Surety Company. The trial court dismissed the claim finding that the bond had been discharged and Rissling and Western released due to Hanson’s failure to initiate an action against the bond within six months of recording its lien. For the following reasons, we reverse the trial court’s judgment and remand for further proceedings.

FACTUAL AND PROCEDURAL HISTORY

¶2 Hanson supplies ready-mix concrete materials and aggregates for construction projects. In August 2000, Pioneer Concrete, Hanson’s predecessor corporation,1 and Aggressive, Rissling’s concrete subcontractor for a project in Tempe, entered a credit agreement. Under the agreement, Hanson supplied ready-mix concrete materials and aggregates to Aggressive for several projects, including the Tempe project.

¶ 3 On August 26, 2002 Hanson recorded with the county recorder’s office a mechanics’ lien on the Tempe project property to secure payment of the $56,509.62 owed by Aggressive for materials supplied to that project. On December 17, 2002, Western issued a lien-discharge bond to Rissling, the contractor on the Tempe project, in the statutorily required amount of $84,764.43. On January 2, 2003, Rissling sent Hanson, by certified mail, a copy of the surety bond that had not yet been recorded. Four days later on January 6, 2003, Rissling recorded the bond with the county recorder’s office. Neither Rissling nor Western served Hanson with a copy of the bond after it was recorded. On February 14, 2003, Hanson learned through correspondence from Rissling’s counsel that the lien-discharge bond had been recorded.

¶ 4 On April 2, 2003, Hanson filed a complaint against Rissling and Western to recover against the lien-discharge bond. The Defendants on the bond moved to dismiss the complaint claiming that the bond was discharged pursuant to Arizona Revised Statutes (“A.R.S.”) section 33-1004(D)(l) (2000) because Hanson failed to commence its suit against the discharge bond within six months [94]*94of recording the lien. The court granted the motion and Hanson timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101(B) (2003).

ANALYSIS

¶ 5 On appeal, the parties dispute whether the trial court correctly interpreted A.R.S. § 33-1004 — the statute governing lien-discharge bonds. The question is one of statutory construction. We thus review the trial court’s decision de novo. Scruggs v. State Farm Mut. Auto. Ins. Co., 204 Ariz. 244, 248, ¶ 17, 62 P.3d 989, 993 (App.2003).

¶ 6 In interpreting a statute, we are required to read the statute as a whole and give meaningful operation to all of its provisions and ensure an interpretation that does not render meaningless other parts of the statute. Welch-Doden v. Roberts, 202 Ariz. 201, 206, ¶ 22, 42 P.3d 1156, 1171 (App.2002); see also Wylie v. Douglas Lumber Co., 39 Ariz. 511, 8 P.2d 256 (1932).

A. The Lien-discharge Statute

¶ 7 The discharge statute provides a method for persons with an interest in property subject to a lien, including a contractor such as Rissling, to discharge a hen against the property. To do so the interested party obtains a surety bond in favor of the hen claimant in an amount one and one-half times the amount of the claimed hen and records it with the county recorder. A.R.S. § 33-1004(B). After the bond is recorded, the hen is discharged and the claimant must pursue the bond for the hen payment as opposed to foreclosing on the property subject to the lien. A.R.S. § 33-1004(A), (E); Hatch Companies Contracting, Inc. v. Ariz. Bank, 170 Ariz. 553, 557, 826 P.2d 1179, 1183 (App.1991) (“The obvious policy of the hen discharge statute is to give property owners the ability to free their property from liens.”).

¶8 The Defendants on the bond claim (collectively “Rissling”) argued below, and the trial court agreed, that the statute required Hanson to assert its claim against the bond that discharged the hen within six months of the time Hanson filed its hen, and because it did not, the bond was discharged. However, Rissling misreads the statute.

¶ 9 Arizona Revised Statutes § 33-1004(D)(1) specifies that “[tjhe bond shah be discharged and the principal and sureties released upon ... [t]he failure of the lien claimant to commence a suit within the time allowed pursuant to § 33-998.” A.R.S. § 33-1004(D)(l)(emphasis added). Section 33-998 specifies that a statutory hen like the one granted Hanson continues for a period of six months after it is recorded. Thus, § 33-1004(D)(1) incorporates into the lien-discharge statute the underlying period for which the lien is vahd and prior to which suit must be brought to foreclose the hen. Once the hen is discharged by the recording of a discharge bond prior to expiration, however, the statute sets forth several supplemental provisions that regulate the rights and responsibilities of the parties in claims under the bond.

10 Of relevance to this ease, the statute requires the bond principal to serve the discharge bond on the claimant under the now discharged hen. A.R.S. § 33-1004(0) (“The principal on such bond shall, upon recordation thereof with the county recorder, cause a copy of the bond to be served within a reasonable time upon the hen claimant.”). If service of the hen is not accomplished as the hen-discharge statute requires, then “the claimant shall have six months after the discovery of such bond to commence an action thereon, except that no action may be commenced on such bond after two years from the date it was recorded as provided in this section.” A.R.S. § 33-1004(F).

¶ 11 Risshng argues that, as opposed to this interpretation the statute must be read to require the filing of an action within six months in all eases because there is no policy rationale justifying a longer statute of limitations for commencing actions against a bond that has been recorded “unbeknownst to the hen claimant, but not served, than if there had been no hen discharge bond at all” in which case the claimant would be required to foreclose its lien. We disagree.

¶ 12 It is advantageous for those with an interest in property to rid their property of hens. The grant of an interest in the under[95]

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Bluebook (online)
127 P.3d 910, 212 Ariz. 92, 470 Ariz. Adv. Rep. 3, 2006 Ariz. App. LEXIS 9, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanson-aggregates-arizona-inc-v-rissling-construction-group-inc-arizctapp-2006.