2 Ton Plumbing, L.L.C. v. Thorgaard
2015 UT 29
| Utah | 2015Background
- 2 Ton Plumbing supplied labor/materials to Lot 30 in the Hailstone development and recorded an original mechanics’ lien (Jan 30, 2009) claiming $7,470.72 (stated to include interest, costs, attorney fees).
- 2 Ton later filed suit to enforce liens and recorded lis pendens; the property changed hands (BBRP → Thorgaards) and lenders changed (Zions → Washington Federal).
- 2 Ton recorded two amended notices of lien (Aug and June 2010) that increased the claimed lien amount by adding accrued attorney fees and costs, culminating in amended claims of $20,983.42 and $38,714.98.
- Washington Federal (the Thorgaards’ lender) recorded a notice of release of lien and posted cash alternate security within the statutory period but referenced only the original lien amount and the original notice, not the later amended amounts.
- The district court upheld the amended notices, denied the Thorgaards’ motion to dismiss, and ultimately entered judgment awarding 2 Ton principal plus costs and $44,857.70 in attorney fees; on appeal the Utah Supreme Court addressed (1) whether attorney fees and costs may be included in the lien amount, (2) timeliness/validity of the release and substitution of alternate security, and (3) reasonableness and calculation of attorney fees.
Issues
| Issue | Plaintiff's Argument (2 Ton) | Defendant's Argument (Thorgaards/Wash. Fed.) | Held |
|---|---|---|---|
| Whether attorney fees and costs may be included in the amount stated in a mechanics’ lien notice | Attorney fees are part of costs payable from property sale proceeds, so they may be included in the lien amount | Mechanics’ liens are limited to the value of services, labor, or materials; attorney fees are separate statutory awards and cannot be included in the lien amount | Held: Attorneys’ fees and costs cannot be included in the lien claim amount; amended notices that added them are invalid; original notice stands |
| Whether a subsequent owner or lender may timely record a notice of release and substitution of alternate security within 90 days after that owner/lender is served (vs. service on original owner) | Release must be within 90 days of service on original owner to prevent post-transfer reductions of available alternate security | The statute permits “the owner of any interest” (including subsequent owners) to file within 90 days after that owner is served | Held: Statute unambiguously allows any owner served (including subsequent owners/lenders) to file within 90 days after their own service; Washington Federal’s release was timely |
| Validity/timeliness of 2 Ton’s amended notices of lien (alternative argument) | Amended notices reflect increased costs and thus are effective | Amended notices are untimely/invalid and cannot expand lien beyond value of labor/materials | Court determined amended notices invalid due to inclusion of fees/costs; did not reach separately the timeliness argument |
| Reasonableness and allocation of the attorney-fee award | 2 Ton sought full fees incurred; argued award appropriate as prevailing party | Thorgaards argued fee award was unreasonable, should be allocated among multiple defendants/lots and reduced because much work stemmed from improper amended liens | Held: 2 Ton is entitled to reasonable fees as prevailing party, but because district court relied on invalid amended liens the attorney-fee award must be recalculated on remand (court abused discretion by awarding fees without adjusting for errors and defense costs caused by improper amendments) |
Key Cases Cited
- Carter v. Univ. of Utah Med. Ctr., 150 P.3d 467 (Utah 2006) (standard of review for statutory interpretation)
- Hutter v. Dig-It, Inc., 219 P.3d 918 (Utah 2009) (standard of review for statutory interpretation)
- AAA Fencing Co. v. Raintree Dev. & Energy Co., 714 P.2d 289 (Utah 1986) (mechanics’ lien statute requires compliance with statute to obtain benefits)
- Projects Unlimited, Inc. v. Copper State Thrift & Loan Co., 798 P.2d 738 (Utah 1990) (mechanics’ lien purpose: protect those who add value to property)
- Park v. Jameson, 364 P.2d 1 (Utah 1961) (attorney fees can constitute a lien only after judgment awarding them)
- Olsen v. Kidman, 235 P.2d 510 (Utah 1951) (definition and character of liens)