Pentalon Construction, Inc. v. Rymark Properties, LLC

2015 UT App 29, 344 P.3d 180, 779 Utah Adv. Rep. 182, 2015 Utah App. LEXIS 27
CourtCourt of Appeals of Utah
DecidedFebruary 5, 2015
Docket20130973-CA
StatusPublished
Cited by6 cases

This text of 2015 UT App 29 (Pentalon Construction, Inc. v. Rymark Properties, LLC) 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
Pentalon Construction, Inc. v. Rymark Properties, LLC, 2015 UT App 29, 344 P.3d 180, 779 Utah Adv. Rep. 182, 2015 Utah App. LEXIS 27 (Utah Ct. App. 2015).

Opinions

Opinion

VOROS, Judge:

T1 This case concerns whether the near-complete excavation for a building's foundation constitutes commencement of work under a now-repealed provision of the Utah Mechanic's Lien Act (the Act). Under the Act, a mechanic's lien relates back to the date work commenced onsite. Therefore, if other legal requirements are met, the mechanic's lien enjoys priority over any encumbrance that attaches after the commencement of work. In this case, Pentalon Construction, Inc., had nearly completed the excavation for a building's foundation when Barnes Bank-Federal Deposit Insurance Corporation's predecessor in interest-recorded a trust deed on the property. When a dispute over priority arose, the district court ruled that Pentalon's near-complete excavation work did not constitute "commencement to do work" under the statute and therefore that FDIC's trust deed had priority. - Pentalon, Granite Construction Company, and Wimmer Electric, Inc., (collectively, Claimants) appeal. We reverse and remand for further proceedings.

BACKGROUND

2 Rymark Properties, LLC, owned property in Ogden, Utah. It hired Pentalon as its general contractor to build an auto plaza on the property. On May 5, 2008, Pentalon filed a notice of commencement in the state construction registry. On May 8, 2008, Pentalon [183]*183and its subcontractors began excavating the property. Photographs taken May 27, 2008, show geotextile fabric lining trenches that cut across the property, along with heavy machinery and mounds of dirt seattered throughout. See infra Exhibits A, B, & C. The day after these photographs were taken, Barnes Bank recorded its trust deed on the property. - FDIC succeeded to Barnes Bank's interest.

T3 Pentalon later sought to foreclose its mechanic's lien against Rymark, FDIC, and others (collectively, FDIC). Pentalon moved for partial summary judgment, asking the district court to rule that Pentalon's partial excavation of the property-the work it had completed before FDIC recorded its trust deed-constituted commencement to do work for purposes of the Act, and, therefore, that its lien enjoyed priority over FDIC's trust deed. The court denied Pentalon's motion. Referencing photographs of the property, the court ruled that "there is no real question of fact here" and concluded that Pentalon's excavation "is not legal commencement." FDIC then filed its own motion for summary judgment. FDIC's motion argued that because Pentalon's exeavation did not constitute commencement as a matter of law, "Claimants cannot establish an essential element of their mechanies' lien foreclosure claims-ie., that their mechanies' Hens have priority over FDIC's trust deed." The district court agreed that no genuine issue of material fact existed and that FDIC was entitled to judgment as a matter of law.

ISSUES ON APPEAL

T4 Claimants first contend that, contrary to the district court's ruling, Pentalon's nearly completed exeavation either constituted commencement to do work under the Act as a matter of law or, in the alternative, created a genuine issue of material fact as to whether Pentalon had commenced work for purposes of the Act.

T 5 Claimants also contend that the district court erred in striking affidavits submitted with its memorandum in opposition to FDIC's motion for summary judgment and in striking its motion for reconsideration.

T6 FDIC responds that, even assuming the exeavation constitutes the commencement of work for purposes of the Act, this court should affirm the ruling of the district court on alternative grounds.

ANALYSIS

I. Pentalon's Exeavation Constitutes "Commencement to Do Work."

T7 Claimants contend that the district court erred in ruling as a matter of law that Pentalon's exeavation did not constitute commencement to do work under the Act, with the result that Pentalon's lien does not enjoy priority. Claimants argue that they provided "evidence sufficient to establish commencement of work as a matter of law." FDIC responds that Pentalon's excavation does not "amount to commencement" under the Act, because the work does not "put a reasonable observer on notice that lienable work was underway."

18 On appeal, we review a district court's "legal conclusions and ultimate grant or denial of summary judgment for correctness." - Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citation and internal quotation marks omitted).

19 Utah Code section 38-1-5 provides the guidelines for determining the priority of liens in this case. See Utah Code Ann. § 38-1-5 (LexisNexis 2005).1 That seetion provides that mechanies' liens generally date back to the commencement of work:

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 subsequently to the time when the building, improvement or structure was commenced, [or] work begun....

[184]*184Id. The Act "is remedial in nature and seeks to provide protection to laborers and materi-almen who have added directly to the value of the property of another by their materials or labor." Calder Bros. Co. v. Anderson, 652 P.2d 922, 924 (Utah 1982). As a result, we construe the phrase "commencement to do work" in favor of lien claimants. Id. "Mate-rialmen's and mechanies' liens resulting from materials furnished or labor performed relate back to and attach as of the date of the commencement of the first work on the improvement or structure involved." Id.

110 To constitute commencement of work under the Act, the work must be of the type "'that a person using reasonable diligence in examining the property would be able to see it and be on notice that lienable work was underway.'" EDSA/Cloward, LLC v. Klibanoff (Klibanoff I ), 2005 UT App 367, ¶ 22, 122 P.3d 646 (quoting EW. Allen & Assocs., Inc. v. FDIC, 776 F.Supp. 1504, 1509 (D.Utah 1991)). The work must be visible because "visible evidence of work performed provides notice to any interested party that work has commenced." Anderson, 652 P.2d at 924 n. 1; accord Ketchum, Konkel, Barrett, Nickel & Austin v. Heritage Mountain Dev. Co., 784 P.2d 1217, 1221 (Utah Ct.App.1989). When considering on-site visible work, we consider whether "all the work together ... may contribute to putting a reasonable observer ... on notice that [liena-ble] work was underway." EDSA/Cloward, LLC v. Klibanoff (Klibanoff II), 2008 UT App 284, ¶ 11, 192 P.3d 296 (alteration and omissions in original) (citation and internal quotation marks omitted).

111 In general, site preparation does not constitute commencement, because it may not put a person using reasonable dili-genee on notice that lienable work is underway. For example, in Ketchum, Konkel, Barrett, Nickel & Austin v. Heritage Mountain Development Co., 784 P.2d 1217, 1221 (Utah Ct.App.1989), we held that "surveying, staking, and soil testing" do not constitute commencement, because they "do not constitute a visible on-site improvement." Id. at 1228. There, the workers performed architectural, engineering, surveying, consulting, and planning services for a ski resort. Id. at 1219.

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Pentalon Construction, Inc. v. Rymark Properties, LLC
2015 UT App 29 (Court of Appeals of Utah, 2015)

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Bluebook (online)
2015 UT App 29, 344 P.3d 180, 779 Utah Adv. Rep. 182, 2015 Utah App. LEXIS 27, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pentalon-construction-inc-v-rymark-properties-llc-utahctapp-2015.