R.A. McKell Excavating, Inc. v. Wells Fargo Bank, N.A.

2004 UT 48, 100 P.3d 1159, 502 Utah Adv. Rep. 9, 2004 Utah LEXIS 114, 2004 WL 1367203
CourtUtah Supreme Court
DecidedJune 18, 2004
Docket20020716, 20020855
StatusPublished
Cited by11 cases

This text of 2004 UT 48 (R.A. McKell Excavating, Inc. v. Wells Fargo Bank, N.A.) 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
R.A. McKell Excavating, Inc. v. Wells Fargo Bank, N.A., 2004 UT 48, 100 P.3d 1159, 502 Utah Adv. Rep. 9, 2004 Utah LEXIS 114, 2004 WL 1367203 (Utah 2004).

Opinion

WILKINS, Associate Chief Justice:

¶ 1 Plaintiff R.A. McKell Excavating, Inc. (“McKell”) appeals the district court’s grant of summary judgment to defendant Wells Fargo Bank, N.A. (“Wells Fargo” or the “Bank”). In granting the Bank’s motion, the district court concluded that McKell failed to timely file its mechanic’s lien foreclosure action pursuant to Utah Code section 38 — 1— ll(l)(a). We reverse.

FACTUAL AND PROCEDURAL HISTORY

¶ 2 In January 2000, Carter Construction Development, L.L.C. (“Carter”) hired McKell to perform excavation, grading, surface, and subsurface improvements on a proposed residential subdivision located in Utah County. The total contract price was approximately $204,000 and the scope of the project consisted of sewer line, water line, storm drain, sidewalk, and site work. On or about January 3, 2000, McKell commenced work under the contract. Two days later, on January 5, Wells Fargo recorded a trust deed on the real property to secure a $780,000 loan made to Carter for the purpose of funding the purchase of the subdivision lots. 1

¶ 3 As McKell’s work proceeded, Carter was extremely slow in making payments. After repeated attempts to procure progress payments, as contemplated by the contact, McKell suspended operations on or about October 5, 2000. At that time, Carter owed McKell nearly $29,000 for already-completed work. McKell then entered into negotiations *1161 ■with Carter, in hopes of receiving remuneration for all services rendered prior to October 5, 2000. However, when it became clear that Carter was unable, or unwilling, to satisfy its obligations, McKell recorded a mechanic’s lien on the real property on November 2, 2000. In accordance with Utah Code section 38-l-7(2)(c), McKell indicated on the lien notice that it last furnished labor, services, equipment or material to the project on or about October 5, 2000. Subsequently, McKell filed a complaint to foreclose its lien on November 21, 2001, one year and nineteen days after it was recorded. Wells Fargo counterclaimed, arguing that its trust deed had priority over the mechanic’s lien due to McKell’s failure to comply with the applicable statute of repose set forth in Utah Code section 38-l-ll(l)(a).

¶4 Section 38-l-ll(l)(a) requires a nonresidential property lien claimant to initiate an enforcement action within “12 months from the date of final completion of the original contract.” Utah Code Ann. § 38-1-ll(l)(a) (2001). Citing the lien notice, the Bank contended that “final completion of the original contract” occurred on October 5, 2000 — the last date McKell provided labor, services, equipment, or material to Carter. Because McKell did not file its complaint until November 21, 2001, over one year later, Wells Fargo asserted that the foreclosure action was untimely and, therefore, the mechanic’s lien was invalid.

¶ 5 In response, McKell emphasized that a portion of the original contract remained unfinished and, notwithstanding its earlier suspension of work, expressed an intent to fulfill its outstanding obligations to Carter if adequate progress payments were made for services rendered prior to October 5, 2000. According to McKell, “final completion” — and the attendant triggering of the statute of repose — did not occur until November 2001, when Carter’s breach became apparent. Thus, McKell argued that its complaint was timely filed.

¶ 6 Following Wells Fargo’s motion for judgment on the pleadings, which was treated as a summary judgment motion, the district court ruled in favor of the Bank. Specifically, the district court interpreted section 38-l-ll(l)(a) and determined that “final completion of the original contract” does not require a mechanic’s lien claimant to finish all work anticipated by the contract before commencing an enforcement action. Instead, it concluded that “cessation” or “abandonment” of work also constitutes “final completion” and found, sua sponte, that McKell terminated the project on October 5, 2000— the last day McKell furnished labor, services, equipment, or material to Carter, as evidenced by the lien notice. As such, the district court reasoned that the statute of repose began to run on October 6, 2000, and expired on October 5, 2001, forty-six days before McKell filed its complaint. Alternatively, the district court also noted that, even if it were to accept the recording date of the mechanic’s lien — November 2, 2000 — as the triggering event, McKell was still late. Thus, the district court awarded summary judgment to Wells Fargo. After having the order certified as a final judgment, McKell now appeals.

STANDARD OF REVIEW

¶ 7 We review questions of statutory interpretation for correctness, affording no deference to the district court’s legal conclusions. Stephens v. Bonneville Travel, Inc., 935 P.2d 518, 519 (Utah 1997). In the context of a summary judgment motion, we likewise employ a correctness standard and “view the facts and all reasonable inferences drawn therefrom in the light most favorable to the non-moving party.” Hermansen v. Tasulis, 2002 UT 52, ¶ 10, 48 P.3d 235 (internal quotation omitted).

ANALYSIS

¶ 8 The central issue presented in this appeal is whether, properly interpreted, Utah Code section 38-l-ll(l)(a) bars McKell’s mechanic’s lien foreclosure action. Pursuant to general principles of statutory interpretation, “we ... look first to the ... plain language,” recognizing that “our primary goal is to give effect to the legislature’s intent in light of the purpose the statute was meant to achieve.” Evans v. State, 963 P.2d 177, 184 (Utah 1998). In doing so, we “assume that each term ... was used advisedly; *1162 thus the statutory words are read literally, unless such a reading is unreasonably confused or inoperable.” Johnson v. Redevelopment Agency, 913 P.2d 723, 727 (Utah 1995) (internal quotation omitted).

¶ 9 Here, McKell contends that the plain language of section 38-l-ll(l)(a) mandates that “final completion of the original contract” occur before the statute of repose begins to run. See Utah Code Ann. § 38-1-ll(l)(a) (2001). Referencing previous versions of this provision, McKell argues that the legislature was aware of alternative triggering events for the statute of repose, but specifically chose “final completion” to apply to non-residential property lien claimants. For example, McKell notes that prior to May 2, 1994, section 38-1-11 required enforcement actions to be initiated within “twelve months after the completion of the original contract, or the suspension of work thereunder for a period of thirty days.” Id. § 38-1-11 (1988) (emphasis added).

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2004 UT 48, 100 P.3d 1159, 502 Utah Adv. Rep. 9, 2004 Utah LEXIS 114, 2004 WL 1367203, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ra-mckell-excavating-inc-v-wells-fargo-bank-na-utah-2004.