Weyerhaeuser Co. v. Walters

707 P.2d 733, 1985 Wyo. LEXIS 585

• Court: Wyoming Supreme Court
• Decided: October 15, 1985
• Docket: 84-41, 84-42
• Status: Published

Opinions

BROWN, Justice.

This appeal raises questions concerning Wyoming’s construction lien statutes, §§ 29-1-201 through 29-2-109, W.S.1977 (June 1981 Replacement). The appeal concerns two lawsuits initiated by Union Manufacturing and Supply Company, Inc. (Union), a dissolved subsidiary of appellant Weyerhaeuser Company, to enforce construction liens on certain real property and associated improvements. The district court concluded that our statutes required Union, as a supplier of building materials under a contract with the property owner, to perfect its liens within the 90-day period allotted to materialmen rather than within the 120-day period prescribed for contractors. Since Union had filed its lien statements after the expiration of the filing time for materialmen, the court entered summary judgments against appellant.

We will affirm.

The material facts in this ease are undisputed. Before its dissolution in December, 1982, Union was wholly owned by appellant Weyerhaeuser, and authorized to transact business in Wyoming. In each of the two cases involved in this appeal, Union entered into a contract with Baird Homes, Inc. (Baird), the record owner of real property in Natrona County, Wyoming, to furnish lumber and other materials for Baird’s construction of a new home on such property. Union acted as a supplier only, installing no materials into the new homes. On October 12, 1982, Union supplied the last materials to one homesite which, that same day, Baird conveyed by warranty deed to appel-lees Gordon and Beverly Valasek. Union furnished the last materials on October 27, 1982, to the second homesite, and Baird conveyed the property two days later by warranty deed to appellees Henry and Reva Walters.

Baird failed to pay for any of the materials furnished by Union. On December 22, 1982, Union notified Baird, by certified mail, of its intent to file a lien on the Valasek property. Union sent Baird a similar notice with respect to the Walters property on December 30, 1982. No notice of intent to file a lien was given to either the Walters or the Valaseks, the record owners of the properties at the times of notification.

Union filed its lien statement concerning the Walters property with the county clerk on January 27, 1983, 92 days after furnishing the last materials to the property. The lien statement describing the Valasek property was filed February 8, 1983, 119 days after Union supplied the last materials.

Union initiated separate actions to enforce the liens in July, 1983, naming as defendants the Valaseks in one case and the Walters in the other case, their respective mortgagees, and other lien claimants of record. The district court subsequently granted, in each case, Union’s motion to substitute as the real plaintiff in interest, appellant Weyerhaeuser Company, the successor corporation to Union.

Appellees, the property owners and mortgagees, moved the district court for summary judgments based on Union’s failure to timely file its lien statements and failure to notify the owners of its intent to file liens. Following a hearing, the court found as a matter of law that Union had acted as a materialman in performing its contracts with Baird. The court, therefore, entered summary judgments against appellant on the ground that Union had not filed its lien statements with the county clerk within the 90-day period prescribed for materialmen by statute. Section 29-2-106, infra. Wey-erhaeuser’s appeals from these judgments have been consolidated to expedite review.

Appellant Weyerhaeuser Company raises a single issue for our consideration:

“Whether, under the present construction lien statutes of Wyoming, W.S. § 29-1-201 (1981) et seq., the Appellant is a 'contractor’, entitled to one hundred twenty (120) days in which to file its lien statement, where the Appellant furnished building materials only to certain real property pursuant to a contract with the then owner of such property, who incorporated such materials into permanent changes therein?”

Appellees, the Walters, Valaseks, and mortgagees, restate the issue raised by appellant and present three alternative grounds for affirming the summary judgment:

“A. DID APPELLANT FILE ITS LIEN STATEMENTS WITHIN THE TIME LIMITED BY STATUTE?

“1. Was Appellant a ‘contractor’ entitled to one hundred twenty (120) days or a ‘materialman’ entitled to ninety (90) days within which to file its lien statements.

“B. CAN SUMMARY JUDGMENT OF THE DISTRICT COURT BE AFFIRMED ON ANY OTHER LEGAL GROUND APPEARING IN THE RECORD?

“1. Did Appellant give adequate pre-lien notice?

“2. Was Appellant’s pre-lien notice also defective because it did not state from whom the claim was due?

“3. Are Appellant’s liens invalid because they were filed in the name of a nonexistent company and suit to foreclose was brought in the name of a nonexistent company?”

I

It is necessary for the disposition of this case to determine whether appellant was a contractor or a materialman. Several sections of our lien law have application. Any person who contributes to the permanent improvement of real property in this state is entitled to a lien upon that improvement and upon the land.¹ To enforce his lien-, a claimant must perfect it by timely filing an appropriate statement with the county clerk.² Section 29-2-106(a) prescribes a longer filing period for a “contractor” than for “every other person” seeking to perfect a lien:

“(a) Every contractor shall file his lien statement within one hundred twenty (120) days and every other person shall file within ninety (90) days:

“(i) After the last day when work was performed or materials furnished under contract; or

“(ii) From the date the work was substantially completed or substantial completion of the contract to furnish materials, whichever is earlier; or

“(iii) With respect to an employee or subcontractor, after the lasti day he performed work at the direction of his employer or contractor.”

Section 29-l-201(a) defines “contractor” and related terms:

“(a) Except as otherwise provided, as used in this title:

“(i) ‘Contractor’ means:

“(A) A person employed by and contracting with an owner to improve an owner’s property * * ⅜.

* ⅜: * * * *

“(iii) ‘Improve or improvement’ means:

‡ $ $ $ * *

“(B) Any work performed or material furnished for the permanent change of any real property; * * *

* * * * * *

“(v) ‘Owner’ as used in this act means:

“(A) With respect to construction liens: any person with a legal or equitable interest in the property to be changed, altered or improved, for whose use or benefit any improvement shall be made or any materials furnished * *

One who improves real property but does not satisfy the definition of a contractor is a subcontractor or materialman under § 29-l-201(a)(vi):

“(vi) ‘Subcontractor’ or ‘materialman’ means a person other than a contractor performing work or furnishing materials to an owner or a contractor under contract ⅜ *

Appellant contends that a lien claimant who furnishes materials to the owner of the property being improved, pursuant to a contract, is a contractor and entitled to 120 days from the last date of delivery of materials in which to file a lien.

Appellant fashions its own definition of contractor as a “person employed by and contracting with an owner to improve an owner’s property, by performing work or furnishing materials.” Appellant, in effect, paraphrases the statutory definition of improvement, § 29-l-201(a)(iii)(B), underlined above, and adds it to the statutory definition of contractors. § 29-l-201(a)(i). Appellant’s definition is misleading and improper. The fact that “improvement” is defined in the disjunctive, to include “work performed or material furnished” for the improvement of real property, does not relate to or affect the definitions of “contractor,” “subcontractor,” or “materialman.”

The statutory language is plain and unambiguous. A “contractor” is a person “employed by and contracting with” an owner. § 29-l-201(a)(i)(A). A “material-man” is a person “other than a contractor * * * furnishing materials to an owner or contractor under contract.” Appellant does not fit the statutory definition of a contractor here in that it was not “employed by” the owner, even if we assume it contracted with the owner.

In American Buildings Company v. Wheelers Stores, Wyo., 585 P.2d 845, 847 (1978), we said:

“ * * * [W]hen a contract concerns the construction of improvements to real property, ‘contractor’ has a specialized meaning related to the building trades; and it is in this sense that ‘contractor’ is connected to the law of mechanics’ liens, as is a ‘subcontractor’ and one who supplied materials. The latter has come to be known as a ‘materialman’. Statutory terms must be construed in connection with the subject matter with which they are used. Morrison-Knudson Co. v. State Board of Equalization, 1943, 58 Wyo. 500, 135 P.2d 927.

* ⅜ 5⅜ * # #

“The authority is overwhelming that one who merely furnishes materials to the owner or a contractor is a materialman, and not a contractor or subcontractor, within the meaning of the mechanics’ lien laws. Anno., short-titled ‘Mechanic’s Lien — Who Is Materialman,’ 141 A.L.R. 321. See also, A.L.R. Bluebooks of Later Decisions. As concluded by the same annotation, one who not only furnishes materials, but installs them, is a contractor or a subcontractor, and not a materi-alman, within the meaning of mechanics’ lien laws. * * * ”

Appellant distinguishes the case before us from the American Buildings Company case because the lien statute applicable in the case here included definitions while the lien statute applicable in that case did not. We do not believe the amendment overruled the American Buildings case. A supplier of materials cannot be converted into a contractor, as appellant has tried to do, by expanding the statutory definition of contractor.

We hold that appellant was a material-man and did not file its lien statement within the time provided by statute.

II

The judgment of the trial court can be affirmed for the additional reason that appellant did not give proper notice of a lien to the owners of the property. We have held that a district court judgment may be affirmed on any legal ground appearing in the record. Mentock v. Mentock, Wyo., 638 P.2d 156 (1981); and Skinner v. Skinner, Wyo., 601 P.2d 543 (1979). Other issues were presented by appellees to the district court which could have been the basis of a summary judgment:

1) Did appellant give adequate pre-lien notice?

2) Was appellant’s pre-lien notice defective because it did not state from whom the claim was due?

3) Are appellant’s liens invalid because they were filed in the name of a nonexistent company and suit to foreclose was brought in the name of a nonexistent company?

Section 29-l-201(a)(v)(A) defines owner to include “any person with a legal or equitable interest in the property.” Appel-lees Walters and Valaseks filed their deeds to the property on October 12 and 29,1982. The notices of intent to file a lien were not sent to Baird until December 22 and December 30, 1982. Appellees Walters and Valaseks had legal title to the property about two months before notice was sent, and appellants are presumed to have knowledge of such from the recordings. Appellees Walters and Valaseks should have been included among those to whom the notice was sent. We so held in Davis v. Big Horn Lumber Co., 14 Wyo. 517, 85 P. 980 (1906). Appellant distinguishes Davis and the case before us on the basis that the statute at the time of Davis required the lien to specify “the name of the owner or owners,” whereas the present statute requires the lien statement to contain the “name and address of the person against whose property the lien is filed.” This is a distinction without a difference. Obviously, the “name * * * of the person against whose property the lien was filed” in this case was the Walters in one instance and the Valaseks in the other. Any effort to turn this language into a direction to give the notice only to the owner of the property at the time of contract is contrary to the purpose of giving notice.

The statutory direction is clear:

“Before filing a lien pursuant to this chapter every person shall give ten (10) days notice to the owner or his agent in writing of any claim against a building or an improvement or for materials furnished stating the amount of any claim and from whom it is due.” (Emphasis added.) Section 29-2-107.

The notice must go to the “owner or his agent.” Common sense would make this so. In this case, for example, why should Baird care if a lien is placed on the property of appellees Walters or Valaseks. Ap-pellees Walters and Valaseks do care. If they had timely notice of the lien, they might have been in a position to withhold some payments to Baird or otherwise assure payment by Baird. The fact that the owner may be other than the one owing the claim is recognized in § 29 — 1—301(b)(iii) and (v), wherein the lien statement is required to contain both the “name and address of the person against whose property the lien is filed” and the “name of the person against whom the lien claim is made.”

The purpose of our recording statutes is to give constructive notice. They are designed to prevent fraud. Cheyenne National Bank v. Citizens Savings Bank, Wyo., 391 P.2d 933 (1964); Torgeson v. Connelly, Wyo., 348 P.2d 63 (1960); Boswell v. First National Bank, 16 Wyo. 161, 92 P. 624 (1907).

Inasmuch as appellant failed to comply with the requirement of the lien statute in not giving proper notice to the owners of the property, i.e., appellees Walters and Valaseks, the lien is ineffective. We can affirm the trial court in its summary judgment because 1) appellant was a material-man rather than a contractor and did not file notice of intent to file a lien within the time required by statute, and 2) proper notice of intent to file a lien was not given.

Affirmed.

1 . Section 29-2-101, W.S.1977 (June 1981 Replacement), provides:

"(a) Every person performing any work on or furnishing any materials or plans for any building or any improvement upon land shall have for his work done or plans or materials furnished a lien upon the building or improvements, and upon the land of the owner on which they are situated to the extent of one (1) acre. If the improvements cover more than one (1) acre the lien shall extend to all the additional land covered thereby.

"(b) To have a lien the work or materials shall be furnished under a contract.

“(c) Notwithstanding subsection (a) of this section if the land subject to a lien is located in any city, town or subdivision the lien shall extend to the entire lot upon which the building or improvement is located."

2 . Section 29-l-301(a), W.S.1977 (June 1981 Replacement), requires:

“(a) In order to have a perfected lien pursuant to this title, a lien claimant shall file with the county clerk a lien statement sworn to before a notary public. The county clerk shall file the statement and index by date, name of claimant and property owner, and legal description.”