338 P.3d 836
Utah Ct. App.2014Background
- In late 2008, the Merritts’ home was flooded after a frozen sprinkler pipe head ruptured and prompted flood-remediation work.
- Total Restoration performed flood-remediation, removed water-damaged materials, dried and cleaned the premises, and arranged a subcontractor to repair the fire-sprinkler system.
- The Merritts did not pay Total Restoration; Total Restoration recorded a mechanics’ lien and sued to foreclose while Total Restoration asserted breach of contract and unjust enrichment claims.
- The Merritts counterclaimed for breach of contract, good-faith-and-fair-dealing, abuse of lien right, and wrongful lien.
- The trial court held the lien was valid, awarded Total Restoration attorney fees, and dismissed the Merritts’ counterclaims to the extent premised on a valid lien.
- On appeal, the Utah Court of Appeals reverses the lien validity and related awards, and remands for reconsideration of the counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Total Restoration’s work is lienable under the mechanics’ lien statute | Merritts: work not lienable | Merritts: lienable as extensive repairs | Lien not lienable; reverse lien validity |
| Whether the attorney-fee award to Total Restoration was proper | Merritts: trial court erred awarding fees | Total Restoration: entitled as prevailing party | Attorney-fee award reversed |
| Whether the dismissal of the Merritts’ lien-related counterclaims was proper | Merritts: dismissal incorrect given lien issue | Court properly dismissed based on lien validity | Dismissal reversed to the extent based on lien validity; remanded for consideration of counterclaims |
Key Cases Cited
- All Clean, Inc. v. Timberline Props., 264 P.3d 244 (Utah Ct. App. 2011) (mitigation/remediation work not lienable; emphasis on affixation and enduring change)
- Daniels v. Deseret Federal Savings & Loan Ass’n, 771 P.2d 1100 (Utah Ct. App. 1989) (inspection/repair of frozen pipes not lienable; not an improvement)
- Advanced Restoration, LLC v. Priskos, 126 P.3d 786 (Utah Ct. App. 2005) (relevance limited; lienability not addressed in detail in that decision)
- Hutter v. Dig-It, Inc., 219 P.3d 918 (Utah 2009) (Wrongful Lien Act limits actions even for statutorily authorized liens)
- Bay Harbor Farm, LC v. Sumsion, 329 P.3d 46 (Utah App. 2014) (lien claimant must have good-faith basis for statutory lien; not automatically immune from wrongful-lien act review)