Pacific Industries, Inc. v. Singh

86 P.3d 778
Court of Appeals of Washington·Decided November 17, 2003·No. 52011-3-1·Published·Cited by 1 cases

Opinion

86 P.3d 778 (2003)
120 Wash.App. 1

PACIFIC INDUSTRIES, INC., a Washington corporation, Appellant,
v.
Joginder ("Joe") P. SINGH, a married man; and the marital community comprised of Joginder P. Singh and Jane Doe Singh, husband and wife, Respondents.

No. 52011-3-1.

Court of Appeals of Washington, Division 1.

November 17, 2003.
Publication Ordered and Reconsideration Denied February 3, 2004.

*779 Michael W. Babcock, Montgomery Purdue Blankenship & Austin PLLC, Seattle, Counsel for Appellants.

Christopher R. Osborn, Foster Pepper & Shefelman PLLC, Scott R. Sleight, Short Cressman & Burgess PLLC, Seattle, Counsel for Respondents.

*780 AGID, J.

Appellant Pacific Industries (Pl) appeals a trial court's decision denying its motion to release a mechanics lien and awarding attorney fees to the lien claimant, Respondent Joginder Singh. It claims the trial court erred by ruling that the lien was not frivolous when Singh did not have the right to file a lien under chapter 60.04 RCW, the lien was not excessive, and Pl's motion for reconsideration was filed after the 10 day period allowed under Civil Rule 59 expired. We conclude that although the development services Singh performed are not lienable services under chapter 60.04 RCW, the trial court correctly determined the lien was not frivolous or excessive. We also conclude the trial court denied the motion for reconsideration on untenable grounds. But, because we review and affirm the decision here, there is no reason to remand the case.

FACTS

From April 1990 to November 2001, Singh worked as a property developer[1] with Pl, a Washington corporation engaging in acquiring property for residential development. Under an oral contract, Singh managed and coordinated residential developments in return for 50 percent of all net profits from each project, plus wages. In the summer of 2000, Pl acquired Poole's Park, a 10 acre parcel located in Covington, Washington. The project was divided into three phases, and at the end of each phase, approximately one third of the total number of lots was to close.[2] Singh managed and coordinated the project's development. Under the financing arrangements with the lending bank, all the proceeds from the sale of Phase I and II lots were to be paid to satisfy Pl's loan obligations. Under this arrangement, Pl would not begin to make a profit until after the Phase III closing.

In November 2001, before any Poole's Park phase was completed, the parties agreed they would not develop any more projects together. As part of their mutual decision to terminate their working relationship, they reviewed the accountings of net profits for projects they worked on together.[3] Pl told Singh that because there would be little or no profit from Poole's Park, it would not owe him any money for that project. Pl provided Singh with accountings to support the lack of profits on the project. Singh disputed them because he believed they included unsubstantiated costs that improperly increased the project expenses. Singh filed a lien against the Poole's Park property, claiming Pl owed him $250,000 that represented what he believed was half the net profits.

On March 19, 2002, Pl commenced an action under RCW 60.04.081, seeking a court order releasing Singh's lien as frivolous and made without reasonable cause, or alternatively, a court order reducing what Pl claimed was an excessive lien amount. It also sought attorney fees. In April 2002, Pl and Singh agreed to retain an independent accountant. The show cause hearings for the lien, required by RCW 60.04.081, were continued pending the accountant's completed report. During the six months the accounting was pending, Singh agreed to execute partial lien releases to enable Pl and its buyer to close on the completed phases of the project. In the end, the accountant concluded that Poole's Park did not make a profit but in fact operated at a loss. Based on the report, Singh fully released the lien against Poole's Park.

The parties agreed to schedule a show cause hearing to address the issue of attorney *781 fees. At a hearing on January 7, 2003, the King County Superior Court denied Pl's motion and granted Singh's motion for attorney fees. It also denied Pl's motion for reconsideration and its motion opposing Singh's entry of judgment. On March 5, 2003, the court entered a $10,063.50 judgment against Pl for Singh's attorney fees. Pl appeals.

ANALYSIS

I. Was the lien frivolous?

To be frivolous, a lien must be improperly filed beyond legitimate dispute.[4] Even if a lien is ultimately found to be invalid, it is frivolous "only if it presents no debatable issues and is so devoid of merit that it had no possibility of succeeding."[5] Every frivolous lien is invalid, but not every invalid lien is frivolous.[6] Statutory liens are in derogation of common law.[7] A lien statute must be strictly construed to determine whether the lien attaches, and its benefits will be extended only to those who clearly come within the statute's terms.[8] A trial court's interpretation of the construction lien statute is a question of law that the Court of Appeals reviews de novo.[9] A court's principal objective in interpreting a statute is to give effect to the Legislature's intent[10] and its clear language.[11] If a term is defined in a statute, we must use that definition.[12]

Pl argues Singh's lien for the work he performed for the Poole's Park project is frivolous because his services are not lienable under chapter 60.04 RCW. Singh asserts the work he performed was "labor" under the statute. We conclude the development services Singh performed are not lienable services under RCW 60.04. The services a developer like Singh provides do not clearly come within the statute's terms, and the case Singh cites as authority for his proposition is distinguishable from this case.

RCW 60.04.021 states:

Except as provided in RCW 60.04.031, 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, or the agent or construction agent of the owner.

Singh argues that his work on Poole's Park constitutes "furnishing labor ... for the improvement of real property."[13] The lien statute defines "furnishing labor" as "the performance of any labor ... for the improvement of real property."[14] It defines labor as "exertion of the powers of body or mind performed at the site for compensation."[15] "Site" is defined as the real property that is being improved.[16]

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Pacific Industries, Inc. v. Singh, 86 P.3d 778 (Wash. Ct. App. 2003).

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