SD Deacon Corp. v. Gaston

206 P.3d 689
CourtCourt of Appeals of Washington
DecidedMay 11, 2009
Docket61702-8-I
StatusPublished
Cited by12 cases

This text of 206 P.3d 689 (SD Deacon Corp. v. Gaston) 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
SD Deacon Corp. v. Gaston, 206 P.3d 689 (Wash. Ct. App. 2009).

Opinion

206 P.3d 689 (2009)

S.D. DEACON CORPORATION OF WASHINGTON, a Washington corporation, Respondent,
v.
GASTON BROTHERS EXCAVATING, INC., a Washington corporation, Appellant.

No. 61702-8-I.

Court of Appeals of Washington, Division 1.

May 11, 2009.

*691 Sage Andrew Linn, Linville Law Firm PLLC, Seattle, WA, for Appellant.

John Todd Henry, Peter Noel Ralston, Oles Morrison Rinker & Baker LLP, Seattle, WA, for Respondent.

BECKER, J.

¶ 1 Trial courts should take care not to let the frivolous lien statute be misused to deprive contractors of their right to a trial on a lien claim. The summary release of a lien under RCW 60.04.081 is not to occur unless the lien is so devoid of merit that the claim has no possibility of succeeding. This appeal involves an ordinary contract dispute with factual issues that should not have been decided on affidavits. We reverse and remand for reinstatement of the lien.

¶ 2 A lien is an encumbrance on property to secure payment of a debt. Kinne v. Kinne, 27 Wash.App. 158, 161, 617 P.2d 442 (1980). A contractor has a lien upon an improvement of real property for the contract price of labor and materials furnished:

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.

RCW 60.04.021. The term "contract price" means "the amount agreed upon by the contracting parties, or if no amount is agreed upon, then the customary and reasonable charge therefor." RCW 60.04.011(2).

¶ 3 The lien procedure can be abused by persons who desire to encumber someone else's real property improvement without any real basis for doing so. The legislature has created a summary proceeding to enable courts to remove frivolous liens quickly:

Any owner of real property subject to a recorded claim of lien under this chapter, or contractor ... who believes the claim of lien to be frivolous and made without reasonable cause, or clearly excessive may apply by motion to the superior court ... for an order directing the lien claimant to appear before the court ... and show cause, if any he or she has, why the relief requested should not be granted.

RCW 60.04.081(1). We have held that the legislature intended to allow a resolution of factual disputes in this summary proceeding. W.R.P. Lake Union Ltd. Partnership v. Exterior Services, Inc., 85 Wash.App. 744, 750, 934 P.2d 722 (1997). But the summary resolution of factual disputes must be confined to the limited group of cases where the lien claim is clearly meritless. The summary procedure provided by the statute is not to be used as a substitute for trial where there is a legitimate dispute about the amount of work done and money paid. Williams v. Athletic Field, Inc., 142 Wash.App. 753, 765 n. 5, 139 P.3d 426 (2006). "Nowhere in the statute does the legislature give the trial court authority to expand this summary proceeding into a suit to foreclose the lien or to recover on a contractual theory." Andries v. Covey, 128 Wash.App. 546, 550, 113 P.3d 483 (2005).

¶ 4 The lien claimant bears the ultimate burden of proof when it seeks to enforce the lien. But in a summary proceeding under the frivolous lien statute, the party seeking release of the lien must establish beyond legitimate dispute that the lien was improperly filed. W.R.P., 85 Wash.App. At 752, 934 P.2d 722. Every frivolous lien is invalid, but not every invalid lien is frivolous. Intermountain Elec., Inc. v. G-A-T Bros. Constr., Inc., 115 Wash.App. 384, 394, 62 P.3d 548 (2003).

¶ 5 The lien at issue in this case was recorded by appellant Gaston Brothers Excavating, Inc. against a property in north Seattle because of a debt allegedly owed by general contractor S.D. Deacon Corporation of Washington. Deacon contracted with Gaston to prepare the ground for a fitness center in north Seattle. After Gaston worked for several months, a dispute arose about the contract price.

¶ 6 Gaston submitted a first bid proposal on April 13, 2007. This bid was for $49,000 *692 for work described as "footings for LA Fitness, swimming pool and depressed slabs." Gaston submitted a second bid on April 16 for work described as "Capillary Break", a moisture barrier. This bid set forth three price options: "Pea Gravel" at $78,000, "Type 22 (5/8" crushed)" at $73,000 or "Crushed Glass (5/8") at $63,000.

¶ 7 Deacon sent Gaston a letter on May 18 agreeing to award a subcontract in the amount of $112,000.00. Gaston began work. On June 14, Gaston submitted an application for a progress payment reciting that of the total contract amount of $112,000, 44 percent of the work had been completed. This amounted to a $49,000 charge. After subtracting 10 percent for retention, Gaston requested payment of $44,100. Gaston's invoice for $44,100 bore the notation "1st Phase" and recited that it was for June 1 through June 30 for "Footings For LA Fitness, swimming pool and depressed slabs."

¶ 8 On July 13, 2007, Deacon sent Gaston a lengthy subcontract agreement. The agreement stated that Gaston's bid was for a total of $63,000:

This Subcontractor's proposal includes labor, materials, equipment, insurances and taxes per the following breakdown: (Note: this breakdown is for accounting purposes only)
  Base Bid                                        $49,000.00
  Capillary Break Crushed Glass 5/8"              $14,000.00
                                                  __________
  Total                                           $63,000.00

The agreement also contained an integration clause representing that it was the entire agreement between Deacon and Gaston with respect to the fitness project.

¶ 9 On July 19, Deacon sent Gaston a change order. The order recited that the contract amount of $63,000 was changed by agreement to $63,991.75 to include an additional $991.75 for earthwork and utilities. Gary Gaston signed the change order on July 24.

¶ 10 On August 3, Deacon sent Gaston a check for $44,100 in response to Gaston's June invoice. The check was attached to a statement reciting that the payment was for work done in June. On October 5, Deacon sent Gaston a check for $10,000 attached to a statement reciting that it was for work done in July.

¶ 11 Deacon refused to pay more.

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Bluebook (online)
206 P.3d 689, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sd-deacon-corp-v-gaston-washctapp-2009.