In re Jeffrey Shawn REGAN and Kerrie Marie Regan, Debtors. Fowler & Peth, Inc., a Wyoming corporation, Plaintiff-Appellant, v. Jeffrey Shawn Regan and Kerrie Marie Regan, Defendants-Appellees.
No. 06SA286.
Supreme Court of Colorado, En Banc.
Feb. 5, 2007.
As Modified on Denial of Rehearing Feb. 26, 2007.*
151 P.3d 1281
* Justice Rice, Justice Coats and Justice Eid would have granted the petition.
V.
Because the minimum term of the indeterminate sentence imposed in this case exceeded twice the presumptive sentence for a class four felony, the sentence was illegal. The judgment of the court of appeals is therefore reversed and the case is remanded with directions to return it for resentencing consistent with this opinion.
Justice EID does not participate.
Law Offices of Stephen Berken, Stephen E. Berken, Jennifer O. Pielsticker, Denver, Colorado, Attorneys for Jeffrey Shawn Regan and Kerrie Marie Regan.
Lichtenfels, Pansing & Miller, P.C., Robert H. Miller, David B. Law, W. Andrew Figel, Denver, Colorado, Attorneys for Amici Curiae Crescent Electric Supply Company; Hercules Industries, Inc.; K & W Metal Fabricators, Inc., d/b/a Weather Guard Building Products, Inc.; Shelter Products, Inc.; and White Cap Construction Supply, Inc.
Preeo, Silverman, Green & Egle, P.C., Gilbert R. Egle, Denver, Colorado, Attorneys for Amici Curiae American Subcontractors Association, Inc.; and American Subcontractors Association of Colorado.
Justice MARTINEZ delivered the Opinion of the Court.
We agreed to answer a certified question from the Tenth Circuit Court of Appeals determining whether a claimant must have a properly perfected lien or still be able to file such a lien under the time limitations provid
The General Mechanics’ Lien laws1 provide three methods to protect persons who add value to property. One method of statutory protection is to allow claims against a trust fund, held by contractors, for the benefit of subcontractors, laborers, or material suppliers under the Trust Fund Statute.2 Another method created by the General Assembly to ensure payment to contractors, laborers, or material suppliers is through the process of attaching and perfecting a lien against the property they have improved. Finally, the General Assembly created a process through which a contractor can post a bond against which claims can be made.
These three separate methods achieve one overall purpose; they ensure that laborers and material suppliers are paid for the value they add to property. We therefore construe the plain meaning of the Trust Fund Statute in a manner consistent with the statutory scheme of the General Mechanics’ Lien laws. We conclude that the Trust Fund Statute protects subcontractors, laborers, and material suppliers who add value to property but are unable to recover monies owed to them through the lien claim process.
I. Facts and Procedural History
According to the findings of the Bankruptcy Court and the District Court, Jeffrey and Kerrie Regan were the sole owners and principals of Eagle Roofing Systems, Inc. (“Eagle“). Eagle installed and repaired roofs for several home developers in the Denver metro area. Fowler & Peth, Inc. (“Fowler“) supplied roofing materials to Eagle according to the terms of a credit agreement between the parties. Fowler‘s materials were incorporated into various separate properties (at issue in the bankruptcy proceeding), giving Fowler the potential right to file mechanics’ liens against those properties. Fowler chose not to file any liens, though it was not fully paid by Eagle for those materials. Eagle, however, was fully paid by the owner or builder of each of the properties.
During its relationship with Fowler, Eagle began to experience financial difficulties. To improve cash flow, rather than pay Fowler‘s invoices with the money received from each project, Eagle began to pay their oldest invoices first. In addition, Eagle did not maintain separate records of account for each project. Finally, the Regans, as sole owners and principals, caused Eagle to pay some of their own personal expenses from monies received by Eagle in payment for completed roofing projects. As a result, Eagle was fully compensated for all the construction projects it worked on, but Fowler was not. The Regans then filed for Chapter 7 bankruptcy relief in the United States Bankruptcy Court for the District of Colorado. As of the date of the bankruptcy petition, the Regans owed Fowler $48,185.03.
The bankruptcy court judge held that the debt owed to Fowler was nondischargeable because the Regans failed to hold project funds in trust under Colorado‘s Mechanics’ Lien Trust Fund Statute. In re Regan, 311 B.R. 271 (Bankr. D. Colo. 2004). On appeal, the United States District Court for the District of Colorado reversed, ruling that, because Fowler had not actually filed or perfected any liens against each of the various properties in which its materials were incorporated by Eagle, it was not entitled to the protection of the Trust Fund Statute. In re Regan, 326 B.R. 175, 178-79 (D. Colo. 2005). The District Court, relying principally on an Oklahoma case, held that in order to invoke the protection of the Trust Fund Statute, a material supplier must have a perfected lien, or presently be able to perfect a lien. Id. Because the time limitations placed by Colorado law on lien claims had expired, Fowler had no present ability to perfect liens against
II. Analysis
We look to the plain language of a statute to effectuate the chosen statutory scheme as intended by the General Assembly. Denver Pub. Co. v. Bd. of County Comm‘rs of County of Arapahoe, 121 P.3d 190, 195 (Colo. 2005) (citing Sooper Credit Union v. Sholar Group Architects, P.C., 113 P.3d 768, 771 (Colo. 2005)). The intent of the General Assembly, as expressed in the language of the statute, is effectuated by considering the statutory scheme as a whole and giving a consistent, harmonious, and sensible effect to each individual section. See Zab, Inc. v. Berenergy Corp., 136 P.3d 252, 255 (Colo. 2006) (citing Charnes v. Boom, 766 P.2d 665, 667 (Colo. 1988)). When determining the intent of a statute, we must presume that “[a] just and reasonable result is intended.”
The Trust Fund Statute, by its plain language, offers a separate method of protection from contractors who are paid by homeowners, but do not fully compensate their creditor subcontractors, laborers, and material suppliers. However, if lien claim procedures were imported into trust fund claims, homeowners would face a flurry of liens encumbering their property from subcontractors, laborers, and material suppliers waiting to be paid by principal contractors. Importantly, those same subcontractors, laborers, and material suppliers would, under certain 3 common circumstances, be left without any remedy under the mechanics’ lien laws to recover the value they have added to property. Finally, the Regans, as well as many other contractors, would be unjustly enriched by their own malfeasance. We therefore conclude that the plain language of the Trust Fund Statute and the General Mechanics’ Lien statutory scheme prevent lien claim procedures from being imported into trust fund claims.
In reaching our conclusion, we first examine the General Mechanics’ Lien laws. Next, we examine the Trust Fund Statute in particular. Third, we explain how our holding is consistent with the entire statutory scheme. Finally, we will briefly address the Oklahoma case law on which the District Court based its decision. This examination reveals that, in order to give effect to the language and intent of the General Mechanics’ Lien laws, trust fund claims must be separate from, though related to, lien claims.
A. The General Mechanics’ Lien Laws
A mechanics’ lien is a statutorily-created right to file a claim against property, available to a broad category of persons who furnish labor or materials adding value to that property.
[E]very person who furnishes or supplies laborers ... materialmen, contractors, subcontractors, builders ... shall have a lien upon the property upon which they have furnished laborers or supplied machinery, tools, or equipment or rendered service ... for the value of such laborers, machinery, tools, or equipment supplied ...
The General Assembly has, by this language, defined a lien and identified who may have a lien. A lien is a security interest
A lien created at the commencement of work preexists the claim that is made to enforce the lien. See
We have long construed our mechanics’ lien laws liberally, according to equitable principles. Compass Bank v. Brickman Group, Ltd., 107 P.3d 955, 958 (Colo. 2005) (citing Buerger Inv. Co. v. B.F. Salzer Lumber Co., 77 Colo. 401, 406-07, 237 P. 162, 164-65 (1925) and Darien v. Hudson, 134 Colo. 213, 302 P.2d 519 (1956)). The mechanics’ lien laws are liberally construed because they were designed to prevent the unjust enrichment of property owners. Compass Bank, 107 P.3d at 958. Consistent with these equitable principles and the General Assembly‘s purpose, we avoid needless and inequitable losses of a mechanic‘s or material supplier‘s security interest. Id.
The General Mechanics’ Lien statutes created the lien claim process over one hundred years ago. See Williams v. Uncompahgre Canal Co., 13 Colo. 469, 22 P. 806 (1889). In 1975, two additional claims were created to protect subcontractors, laborers, or material suppliers: (1) claims may be made against a trust fund created by section 38-22-127, C.R.S. (2006) — the Trust Fund Statute; and (2) a contractor can post a bond and a subcontractor, laborer, or material supplier can either claim against the lien or the bond pursuant to section 38-22-129(2), C.R.S. (2006). 1975 Colo. Sess. Laws 1420, 1420-26.
All three alternatives allow subcontractors, laborers, or material suppliers to satisfy legitimate claims for compensation and are merely separate methods for satisfying those claims. First Commercial Corp. v. First Nat‘l Bancorp., 572 F.Supp. 1430, 1434 (D. Colo. 1983); Lafarge West, Inc. v. Riley (In re Riley), No. 02-29529, 2004 WL 2300460, at *11 (Bankr. D. Colo. 2004); Michael E. Romero, The Mechanics’ Lien Trust Fund Statute: An Underused Tool in Civil Litigation and Bankruptcy Cases, 31 Colo. Law. 55, 57 (2002). Unlike lien claims, which are asserted against property, these newer trust fund and bond claims are made against contractors. In this way, the mechanics’ lien laws form three separate methods for achieving one overall purpose: ensuring that laborers and material suppliers are paid for their 4
B. Trust Fund Statute
We turn now to the language of the Trust Fund Statute. The Trust Fund Statute contains five subsections, each addressing different aspects and obligations of claimants and contractors. At issue before us today is subsection one.5 Subsection one defines who is entitled to the protection of the statute. Trust fund claims, according to the plain language of the statute, can be made by two groups: subcontractors, laborers, or material suppliers who either (1) have a lien or may have a lien against property or (2) claim or may claim against a principal or surety.
The similarity of the language used in the Trust Fund Statute in subsection one and the language in section 38-22-101(1) indicates that the General Assembly meant for these two sections to be read together. In other words, those who have a “lien” under section 38-22-127(1) are defined by section 38-22-101(1): an interest laborers and material suppliers have in a property to which they added value at the request of the owner or the owner‘s agent, such as the contractor. This is distinct from those who have a “perfected lien” as defined by sections 38-22-109 and 110: those who have met the timing requirements necessary to enforce a lien.
By its plain language, the Trust Fund Statute allows subcontractors, laborers, and material suppliers to assert claims directly against contractors if they have a “lien” (i.e., added value to a property). In contrast, a “perfected lien” (a lien secured by following lien claim procedures) secures payment to subcontractors only indirectly, by encumbering the property and forcing the property owner to either pressure the contractor to pay the subcontractor, or make a double payment to the lien holder. The Trust Fund Statute is in this way both related to and separate from the lien claim statutes.
Trust fund claims are separate from lien claims in part because of the different rights that property owners have under each procedure. A property owner cannot file a lien claim against his or her own property. Damrell v. Creagar, 42 Colo. App. 281, 599 P.2d 262 (1979). However, property owners are direct beneficiaries of the Trust Fund Statute to prevent the possibility of having to make double payments. In re Walker, 325 B.R. 598, 602 (D. Colo. 2005). When an owner pays a contractor and then a subcontractor places a lien on the owner‘s property, the owner is faced with the possibility of having to also pay the subcontractor to clear the lien cloud from the property. Id.
In contrast, the Trust Fund Statute assures property owners that they will not have to pay a second time to satisfy the subcontractor. In fact, the primary concern of the legislature, at the time the Trust Fund Statute was passed, was the protection of property owners against unscrupulous contractors. Transcript of Audio Tape: Hearing on H.B. 1510 Before the H. Bus. Affairs Comm., 1975 Leg., 50th Gen. Assem., 1st Reg. Sess. (Colo. Apr. 9-10, 1975) (on file with Colorado State Archives). As beneficiaries, property owners are able to enforce the Trust Fund Statute against a contractor separate from the lien claim laws. Id.; see People v. Collie, 682 P.2d 1208, 1210 (Colo. App. 1983) (noting that the purpose of the Trust Fund Statute “is to protect homeowners, laborers, and materialmen from dishonest or profligate contractors“) (emphasis added); First Commercial Corp., 572 F.Supp. at 1434 (noting that the statute creates a separate form of protection because any other interpretation would render either lien claims or trust fund claims superfluous).
To further understand why lien claim procedures are not part of trust fund claims, we look to the third alternative provided by the mechanics’ lien laws—bond claims. The General Assembly wrote the bond claim statutes at the same time as the Trust Fund
When a bond or undertaking is filed ... the person filing the original mechanic‘s [sic] lien may bring an action upon the said bond or undertaking. Such action shall be commenced within the time allowed for the commencement of an action upon foreclosure of the lien, and the statute of limitations applicable to a lien foreclosure shall apply to the action upon the bond or undertaking as it would had no bond or undertaking been filed.
Although the Trust Fund Statute could be read narrowly, as the district court did, such a reading cannot be reconciled with the General Assembly‘s intent to protect subcontractors, laborers, material suppliers, and homeowners from unscrupulous contractors. Further, the technical phrase “have a lien or may have a lien” must be read according to the technical meaning given by the mechanics’ lien laws.
C. Harmonious Reading of the Statute
Our holding here ensures that the Trust Fund Statute is both internally consistent and consistent with the General Mechanics’ Lien laws. Contrary to the Regan‘s arguments to the Tenth Circuit, the Trust Fund Statute, because it is separate from lien claims, does not thereby keep lien claims alive for an indefinite period. For example, the agreement between the contractor and the subcontractor, laborer, or material supplier controls the timelines for the disbursement of funds. See Chicago Lumber Co. v. Newcomb, 19 Colo. App. 265, 275, 74 P. 786, 789 (1903) (holding that the contract controls the payment burdens imposed). Although the time limitations on the perfection of a lien, set forth in sections 38-22-109 and 110, C.R.S. (2006), do not apply to the Trust Fund Statute, trust fund claims are nonetheless limited by the applicable statute of limitations just as lien claims are limited by sections 38-22-109 and 110.6
D. Case Law
The District Court relied on In re Tefertiller, 772 P.2d 396, 398 (Okla. 1989), an Oklahoma case interpreting Oklahoma‘s trust fund statute, in support of its conclusion that under Colorado‘s statute, only a perfected lien entitles a subcontractor to assert claims against trust funds. In re Regan, 326 B.R. at 178-79. In In re Tefertiller, a federal Oklahoma bankruptcy court sent a certified question to the Oklahoma Supreme Court asking it to interpret the meaning of “lienable claims” in Oklahoma‘s trust fund statute, also located within its general mechanics’ lien laws. 772 P.2d at 398. The Oklahoma Supreme Court determined that “lienable claims” meant that a lien must be perfected before a claimant could access trust funds. Id. at 399.
The differences between Colorado‘s and Oklahoma‘s statutes are significant. Most importantly, unlike the Colorado statute, Oklahoma specifically requires a “lienable claim.” Okla. Stat. tit. 42, § 153 (1989) (emphasis added). Colorado‘s statute does not require a “lien claim,” only a “lien” (against property) or a “claim” (against a principle). See
Further, as the subsequent history of that case reveals, federal Oklahoma bankruptcy courts have limited Tefertiller in the bankruptcy context to hold that the fiduciary duty of a trustee-contractor is not eliminated by the failure of the beneficiary-subcontractor to perfect a lien. See In re Manley, 135 B.R. 137, 141 (Bankr. N.D. Okla. 1992) (citing In re Turner, 134 B.R. 646, 656-57 (Bankr. N.D. Okla. 1991)) (noting that “[w]hether the liens ultimately proved enforceable or not is beside the point: trust funds were still received, they were still misapplied, and such misapplication still caused damage“).
The Oklahoma bankruptcy courts have separated a contractor‘s fiduciary duty from a subcontractor‘s lien claim. The court in In re Turner held that even when a lien creditor fails to perfect a lien, the contractor-trustee may not breach his own fiduciary duty to hold trust funds so that no liens need be created at all. 134 B.R. at 656-57. The Turner court noted that a trustee‘s duty
III. Conclusion
Because the plain language of the Trust Fund Statute and we are unwilling to import such a requirement, we answer the Tenth Circuit‘s question in the negative: a trust fund claimant is not required to have a properly perfected lien, or still be able to perfect a lien to seek access to money held in trust under
Justice RICE dissents, and Justice COATS and Justice EID join in the dissent.
Justice RICE, dissenting.
In an opinion that relies primarily on policy concerns rather than statutory analysis, the majority holds that any person who so much as pounds a nail or delivers a brick to a construction project has an inchoate right to a “lien” and therefore can bring a statutory claim at any time in the future against a contractor under Colorado‘s Trust Fund Statute. Because I think this holding is overbroad and without statutory support, I respectfully dissent.
I would answer the Tenth Circuit‘s question in the affirmative and hold that the language “may have a lien” in Colorado‘s Trust Fund Statute refers only to a claimant who is still able to file a lien under the time limitations provided by the Colorado Mechanics’ Lien Statute. While I agree with the majority that the Trust Fund Statute provides an additional remedy to aggrieved subcontractors, laborers, and suppliers, the language of the Trust Fund Statute only makes sense if it is limited by the terms of the Colorado Mechanics’ Lien Statute.
The majority‘s opinion is flawed in three fundamental ways. First, the majority broadly defines the word “lien” as simply meaning an inchoate right given to any person who adds value to property. This definition relies on a simplistic and incomplete analysis of the Mechanics’ Lien Statute.
Second, the majority‘s opinion fails in its attempt to construe the language of the Trust Fund Statute. The majority‘s opinion does not make sense unless the critical phrase at issue here—“may have a lien“—is completely read out of the Trust Fund Statute. It is improper for courts to add or subtract words in a way that makes statutory language superfluous.
Finally, the majority‘s opinion effectively eliminates any incentive for subcontractors, laborers, or material suppliers to file liens under the Mechanics’ Lien Statute. Had the General Assembly intended to create such a disincentive to the use of the Mechanics’ Lien Statute in favor of an action under the Trust Fund Statute, it would have done so explicitly.
I. Definition of Lien
The majority looks to the language in
First, subparagraph (1) of
The word “lien” is in fact defined by the entirety of its enabling legislative scheme. A lien requires more than just a claim of work done or materials provided. Rather, a mechanics’ lien is a creature of statute and is defined by the statutory requirements put forth by the General Assembly. See Indep. Trust Corp. v. Stan Miller, Inc., 796 P.2d 483, 487 (Colo. 1990). Throughout our state statutes, the General Assembly has created eleven different statutory articles defining various types of property liens. See Title 38, Articles 20-27, C.R.S. (2006). For mechanics’ liens, the General Assembly adopted 34 different statutory sections defining various aspects of a mechanics’ lien.
“Words and phrases that have acquired a technical or particular meaning, whether by legislative definition or otherwise, shall be construed accordingly.”
In essence, a person who works on a project or provides materials to a project is only “eligible to claim a mechanics’ lien under the statute.” Jack Greenwald & Gilbert Egle, Colorado Liens and Claims Handbook § 2.1.1 (4th ed. 2006); see also Cathy Stricklin Krendl & James R. Krendl, 1C Colo. Prac., Methods of Practice § 48.3 (5th ed.) (“[E]very person who performs labor or furnishes material ... is entitled to claim a mechanics’ lien under the statute.“).
By broadening the statutory definition of a lien in the Trust Fund Statute, the majority is attempting to provide protection to those like Fowler & Peth who have claims that would go unsecured in the bankruptcy of a disreputable contractor. The majority forecasts other potential evils that may occur if the Trust Fund Statute is read too narrowly, i.e., flurry of liens on homeowners, no full remedy for providers of value to property, and unjust enrichment of bad actors. Maj. op. at 1284. However, a court cannot mend a statutory problem by judicial fiat. Common Sense Alliance v. Davidson, 995 P.2d 748, 755 (Colo. 2000) (“We, therefore, must resist the temptation to change the statutory language, and rather must leave any repair to the General Assembly or the electorate.“).
In any event, the Mechanics’ Lien Statute already provides several opportunities for aggrieved subcontractors, laborers, or suppliers to seek redress. For example, Fowler & Peth could have timely filed for a mechanics’ lien or they could have required security on the credit sale of supplies. In addition, they could have timely filed a Trust Fund claim while they still had time to file a mechanics’ lien. However, they made a business decision not to take advantage of any of these remedies. It is not now the job of this court to expand the technical meaning of the Trust Fund Statute to create an additional new and unrestrained remedy for subcontractors, laborers, and suppliers in Fowler & Peth‘s position.
II. Statutory Language Must Retain Some Meaning
It is improper in statutory construction for courts to add or subtract words that contravene legislative intent. People v. Cross, 127 P.3d 71, 73 (Colo. 2006). We should reject interpretations that cause parts of a statute to be superfluous, and should attempt to
On the other hand, the narrower interpretation that I would adopt harmonizes the language “may have a lien” with an interpretation of the Mechanics’ Lien Statute that is espoused by many commentators. See Greenwald & Egle, supra at § 2.1.1; Krendl & Krendl, supra at § 48.3 (that one is only “entitled” or “eligible” to claim a lien but does not have a lien yet if one only does work on or provides supplies for property).
III. Disincentive to Use Mechanics’ Liens
Under today‘s construction of the Trust Fund Statute, the majority creates a Trust Fund claim that can be filed by any claimant at any time in the future. This effectively turns the mechanics’ lien statutory scheme on its head by allowing individuals to sit on their rights and simply rely on an expansive reading of the Trust Fund Statute. Furthermore, this holding could cause chaos in the construction industry by creating a judicial disincentive for an historic legal tool for property owners, contractors, subcontractors, laborers, and suppliers.
The majority‘s interpretation of the Trust Fund Statute creates a statutory claim that has no time limitation. The Trust Fund Statute itself contains no internal statute of limitations for Trust Fund claims. However, the majority opinion speculates that under its broad interpretation, Trust Fund claims may face a three-year statute of limitations or maybe a six-year statute of limitations or possibly an even longer statute of limitations given tolling doctrines. Maj. op. at 1287 n. 6. Such conjecture is completely improper statutory interpretation. This court should never assume that the legislature intended to create a claim that does not have a definite statute of limitations. See Campbell v. City of Haverhill, 155 U.S. 610, 616, 15 S. Ct. 217, 219-20, 39 L. Ed. 280 (1895). (“[W]e have the anomaly of a distinct class of actions subject to no limitation whatever, a class of privileged plaintiffs who, in this particular, are outside the pale of the law, and subject to no limitation of time in which they may institute their actions. This cannot have been within the contemplation of the legislative power.“).
In contrast to such an openended time limit, there exists a definite time limit for Trust Fund claims if we read the Mechanics’ Lien Statute and the Trust Fund Statute together. Courts must construe statutes “to give effect to the General Assembly‘s intent and chosen legislative scheme.” Denver Pub. Co. v. Bd. of County Comm‘rs of County of Arapahoe, 121 P.3d 190, 195 (Colo. 2005) (citations omitted). In construing a statute, the court reads the statute as a whole, giving sensible effect to all of its parts whenever possible. CLPF-Parkridge One, L.P. v. Harwell Invs., Inc., 105 P.3d 658, 660 (Colo. 2005).
Under the Mechanics’ Lien Statute, a supplier must serve a Notice of Intent to File a Lien upon the property owner and contractor
By incorporating these time limits into the Trust Fund Statute, an internal time limit is created for Trust Fund claims. Under this time limit, a general contractor would be required to hold funds in trust while all subcontractors, laborers, or suppliers can still file mechanics’ liens,2 until all filed liens have expired,3 or until a foreclosure action is concluded on any perfected liens. The majority dismisses this overall mechanics’ lien legislative scheme and instead holds that it should not be utilized for Trust Fund claims. Maj. op. at 1283-84. However, the majority‘s holding creates an indefinite constructive trust imposed on general contractors and gives subcontractors, laborers, and suppliers a Trust Fund claim without limit. Such a radical change to the construction industry
An additional consequence of the majority‘s opinion is that it would allow multiple causes of action on the same dispute and could lead to inconsistent judgments. “Though a supplier who has foreclosed on a perfected lien and obtained a judgment may no longer have a lien, they nonetheless qualify for protection under the Trust Fund Statute.” Maj. op. at 1288. Thus, a supplier who failed to meet his burdens in a foreclosure action has another opportunity to bring a Trust Fund claim. In addition, a general contractor can fully satisfy a mechanics’ lien in the course of a lien foreclosure proceeding, but then still be liable under the Trust Fund Statute and face possible criminal penalties.4
The most dire consequence of the majority‘s interpretation of the Trust Fund Statute is that it would create a disincentive for the use of the Mechanics’ Lien Statute by judicial fiat. Under the majority‘s opinion, the Trust Fund Statute would be easier and less expensive to comply with than the Mechanics’ Lien Statute. This would make compliance with the Mechanics’ Lien Statute irrational. No subcontractor, laborer, or supplier would undertake all the steps of the Mechanics’ Lien Statute to gain the protection of a mechanics’ lien when they could simply sit on their rights and rely on the Trust Fund Statute to protect them indefinitely. Such a result would no longer make the Trust Fund “separate from, though related to” the Mechanics’ Lien Statute as claimed by the majority. Maj. op. at 1284. Rather it would supplant the whole legislative scheme for mechanics’ liens.
Likewise, such an interpretation cannot be correct, given the placement of the Trust Fund Statute within the Mechanics’ Lien Statute. “[P]lacement of a statute within other statutory provisions provides an indication of subject matter and legislative intent.” Fabec v. Beck, 922 P.2d 330, 337 (Colo. 1996) (citing with approval Ass‘n of Nat‘l Advertisers, Inc. v. Lungren, 44 F.3d 726, 729 (9th Cir. 1994)). The General Assembly would not have placed the Trust Fund Statute within the Mechanics’ Lien Statute if it intended for the Trust Fund Statute to supersede the mechanics’ lien statutory scheme.
Mechanics’ liens have been part of Colorado‘s statutory history for over a hundred years and have legally developed over the years to balance the interests of property owners, contractors, subcontractors, laborers, and suppliers. However, by its overly broad definition of the word “lien,” the majority has adopted an interpretation of the Trust Fund Statute that would eliminate any need for the mechanics’ lien process by subcontractors, laborers, or suppliers and could ultimately render the Mechanics’ Lien Statute superfluous.
IV. Conclusion
For the reasons set forth above, I believe that Colorado‘s Construction Trust Fund Statute applies only to claimants who have a current mechanics’ lien on property or who are still able to file such a lien within the time limitations provided by the Colorado Mechanics’ Lien Statute. Therefore, I dissent from the majority‘s answer to the Tenth Circuit‘s Certified Question and instead would answer the question in the affirmative.
I am authorized to state that Justice COATS and Justice EID join in this dissent.