Hardy Companies, Inc. v. SNMARK, LLC
126 Nev. 528
| Nev. | 2010Background
- O'Neil contracted with Wickes (lessee) to build out a large Wickes store; ECT approved O'Neil as general contractor and funded improvements.
- ECT transferred the center and lease to SNMARK; Mizrachi managed both entities and directed various aspects of the work.
- No pre-lien notices were served on ECT or SNMARK by O'Neil or Hardy before lien recordings; SNMARK knew about and participated in the project.
- O'Neil and Hardy recorded mechanics' liens against SNMARK's property; SNMARK moved to expunge and for summary judgment arguing lack of pre-lien notice.
- The district court granted summary judgment, holding pre-lien notice was required and not satisfied; the issue on appeal is whether substantial compliance or actual knowledge suffices.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did SB 206 (NRS 108.2453) abrogate Fondren and the substantial compliance doctrine? | Fondren and substantial compliance remain valid; 108.2453 does not override them. | 108.2453 mandates strict compliance; substantial compliance is abrogated. | Fondren and substantial compliance remain good law; 108.2453 does not abrogate them. |
| Is substantial compliance with pre-lien notice sufficient to perfect a lien when actual knowledge exists? | Actual knowledge by the owner suffices to uphold lien rights despite imperfect notice. | Strict compliance is required; pre-lien notice must be proper to prevail. | Substantial compliance remains valid; when owner has actual knowledge, lien may be upheld. |
| Did SNMARK have actual knowledge of O'Neil's and Hardy's liens to defeat summary judgment? | SNMARK had actual knowledge via involvement, supervision, and oversight of the project. | Actual knowledge requires knowledge of the identity of the third-party claimant; material facts remain unresolved. | There is a genuine issue of material fact as to whether SNMARK had actual knowledge; summary judgment improper. |
| Did Hardy's pre-lien notice to Wickes/O'Neil suffice to affect SNMARK's interest? | Notice to one owner may bind related interests; substantial compliance should apply with SNMARK due to related interests. | Notice must be to the correct owner; notice to the wrong entity is ineffective and not cured by 108.229(3). | Notice to the correct owner (SNMARK) is required; mere notice to another entity is insufficient. |
Key Cases Cited
- Fondren v. K/L Complex, Ltd., 106 Nev. 705, 800 P.2d 719 (Nev. 1990) (actual knowledge can satisfy pre-lien requirement)
- Durable Developers, 102 Nev. 401, 724 P.2d 736 (Nev. 1986) (substantial compliance permits lien where owner has knowledge and no prejudice)
- Las Vegas Plywood v. D & D Enterprises, 98 Nev. 378, 649 P.2d 1367 (Nev. 1982) (mechanic's liens are remedial; liberal construction favored)
- Schofield v. Copeland Lumber, 101 Nev. 83, 692 P.2d 519 (Nev. 1985) (strict vs. substantial compliance; viability of lien dependent on prejudice)