Wholesale Specialties, Inc. v. Village Homes, Ltd.

820 P.2d 1170, 15 Brief Times Rptr. 1386, 1991 Colo. App. LEXIS 293, 1991 WL 190686
CourtColorado Court of Appeals
DecidedSeptember 26, 1991
Docket90CA1567
StatusPublished
Cited by6 cases

This text of 820 P.2d 1170 (Wholesale Specialties, Inc. v. Village Homes, Ltd.) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wholesale Specialties, Inc. v. Village Homes, Ltd., 820 P.2d 1170, 15 Brief Times Rptr. 1386, 1991 Colo. App. LEXIS 293, 1991 WL 190686 (Colo. Ct. App. 1991).

Opinion

Opinion by

Judge DAVIDSON.

In this action to foreclose certain mechanics’ liens, plaintiff, Wholesale Specialties, Inc. (Wholesale), appeals from a judgment entered after a bench trial in favor of defendants Village Homes, Ltd. (Village), Andrew J. Stofan, Barbara Stofan, Max E. Myers, Linda Myers, Scott J. Dorsey, Kelly A. Dorsey, Bice S. Cannon, Cynthia L. Cannon, Joel Scott Frederickson, Valerie Susan Frederickson, Ronald Keith Tilton, Susan K. Tilton (homeowners) and defendants Calumet Federal Savings and Loan, Knut-son Mortgage, and Maryland National Mortgage. The trial court determined that the liens were unenforceable because homeowners had proven the affirmative defense of payment as provided by § 38-22-102(3.5), C.R.S. (1990 Cum.Supp). Homeowners cross-appeal from the denial of their request for attorney fees. We affirm.

The facts as found by the trial court are not in dispute. Defendant Village, developer and principal contractor, hired a subcontractor to install plumbing in certain residential homes under construction. In 1985, the plumbing subcontractor began incorporating into the homes materials and fixtures obtained from Wholesale, a plumbing supply company.

Village paid the plumbing subcontractor in full for its work on the homes, but the plumbing contractor failed to pay Wholesale. Village subsequently sold six of the homes to homeowners who paid full purchase price for their homes. Because Wholesale was not paid for the materials and fixtures, it filed mechanics’ liens on January 9, 1989, against the six separate properties.

At trial, homeowners asserted the affirmative defense of payment pursuant to § 38-22-102(3.5), C.R.S. (1990 Cum.Supp.). That statute states in relevant part:

“[I]t shall be an affirmative defense in any action to enforce a lien pursuant to this article that the owner or some person acting on his behalf has paid an amount sufficient to satisfy the contractual and legal obligations of the owner, including the initial purchase price or contract amount ... to the principal contractor or any subcontractor for the purpose of payment to the subcontractors or suppliers of materials or services to the job, when,
(c) The property is a single family, owner-occupied dwelling unit, including a residence constructed and sold for occupancy as a primary residence.”

The trial court found that this affirmative defense applies to Wholesale’s liens and that homeowners proved all elements of the statute. This appeal followed.

I.

As a threshold matter, we first address Wholesale’s argument that § 38-22-102(3.5) does not apply to its liens becausé the statute was enacted after the liens came into existence.

Section 38-22-102(3.5) became effective May 25, 1987, and applies to all liens “arising on or after such date.” Colo. Sess.Laws 1987, ch. 276, § 38-22-102 at 1336. Wholesale contends that its liens *1173 “arose” in 1985 when it began providing materials to the homes in question. Homeowners, on the other hand, argue that the liens “arose” on January 9, 1989, when Wholesale perfected its liens. We agree with homeowners.

The mechanics’ liens statutes, §§ 38-22-101, et seq., C.R.S. (1982 Repl. Vol. 16A), are designed to benefit and protect subcontractors, materialmen, and laborers who are hired to improve or construct structures on the land of another. Trustees of Mortgage Trust v. District Court, 621 P.2d 310 (Colo.1980). To be entitled to a lien upon the owner’s property, however, the claimant must perfect his lien by filing a lien statement and otherwise complying with § 38-22-109, C.R.S. (1982 Repl.Vol. 16A). Richter Plumbing & Heating, Inc. v. Rademacher, 729 P.2d 1009 (Colo.App.1986). Until these statutory steps are taken, the rights the lien claimant has are merely inchoate. Schradsky v. Dunklee, 9 Colo.App. 394, 48 P. 666 (1897). Accordingly, a lien does not ripen until it has been perfected. Schradsky, supra.

Wholesale argues, however, that its liens did “arise” in 1985 because they relate back pursuant to § 38-22-106(1), C.R.S. (1982 Repl.Vol. 16A), which states that all “liens established by virtue of this article shall relate back to the time of the commencement of work.” Wholesale’s reliance on this statute is misplaced for two reasons.

First, for there to be relation back there must be an established lien. An established lien is one that is perfected. See In re Cantrup, 38 B.R. 148 (Bankr.D.Colo.1984); Orman v. Crystal River Ry. Co., 5 Colo.App. 493, 39 P. 434 (1895).

Second, § 38-22-106(1) applies only when there is a priority dispute. A priority dispute occurs when different lien claimants and creditors have interests in the same property. See Orman v. Crystal River Ry. Co., supra. As to those claiming priority of liens, once perfected, a mechanic’s lien relates back in time to the commencement of work, thus gaining a preference over other liens and interests in the land which may have been recorded prior to the actual filing of the mechanic’s lien. Trustees of Mortgage Trust v. District Court, supra. Because we are not concerned with issues of priority here, § 38-22-106(1) is irrelevant.

II.

Wholesale next contends that the evidence was insufficient to establish the affirmative defense of payment. Specifically, Wholesale argues that § 38-22-102(3.5) requires proof of a specific intent on the part of the homeowners that the purchase price paid for the homes be “for the purpose of payment to the subcontractors and suppliers” and that homeowners presented no evidence of such intent. Again, we disagree.

A statute must be given effect according to the intent of the General Assembly. Danielson v. Castle Meadows, Inc., 791 P.2d 1106 (Colo.1990). If the legislative intent is clear from the plain language of the statute, the courts must give effect to the statute according to its plain language, but if the statutory language is ambiguous, a court must construe the statute according to the legislative intent underlying the statute. Danielson v. Castle Meadows, supra.

Statutory language is ambiguous if it is reasonably susceptible to more than one meaning. Danielson v. Castle Meadows, Inc., supra.

Here, it is unclear whether the phrase “for the purpose of payment to the subcontractors and suppliers” requires that the amount paid by the owner be sufficient to enable the principal contractor to pay the subcontractor or requires that the homeowner specifically intend that result. Applying the foregoing principles of statutory construction, we agree with the trial court that the latter interpretation is completely contrary to legislative intent.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Crissey Fowler Lumber Co. v. First Community Industrial Bank
8 P.3d 536 (Colorado Court of Appeals, 2000)
Flooring Design Associates, Inc. v. Novick
923 P.2d 216 (Colorado Court of Appeals, 1995)
Anderson Boneless Beef, Inc. v. Sunshine Health Care Center, Inc.
878 P.2d 98 (Colorado Court of Appeals, 1994)
ANDERSON BONELESS BEEF v. Sunshine
878 P.2d 98 (Colorado Court of Appeals, 1994)
Koch Plumbing and Heating, Inc. v. Brown
835 P.2d 610 (Colorado Court of Appeals, 1992)

Cite This Page — Counsel Stack

Bluebook (online)
820 P.2d 1170, 15 Brief Times Rptr. 1386, 1991 Colo. App. LEXIS 293, 1991 WL 190686, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wholesale-specialties-inc-v-village-homes-ltd-coloctapp-1991.