Velazquez Framing, LLC v. Cascadia Homes, Inc. ( 2024 )

FILE THIS OPINION WAS FILED
FOR RECORD AT 8 A.M. ON
JANUARY 11, 2024
IN CLERK’S OFFICE
SUPREME COURT, STATE OF WASHINGTON
JANUARY 11, 2024
ERIN L. LENNON
SUPREME COURT CLERK
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
)
VELAZQUEZ FRAMING, LLC, ) No. 101591-7
)
Petitioner, )
) En Banc
v. )
)
CASCADIA HOMES, INC., ) Filed: January 11, 2024
)
Respondent. )
_______________________________)
GONZÁLEZ, C.J. — Legislatures have long sought to balance the need to
ensure that those who provide labor, professional services, equipment, or materials
are paid for their work and the need to ensure that property owners have notice and
the ability to avoid paying duplicative liens. In so doing, there is often a
distinction drawn between those who labor and those who provide other things.
Chapter 60.04 RCW strikes this balance. Chapter 60.04 RCW gives contractors
the right to lien property they improve through their labor, professional services,
materials, or equipment. RCW 60.04.021. Chapter 60.04 RCW specifically
requires prelien notice for professional services, materials, or equipment liens.
RCW 60.04.031(1). It does not say prelien notice is required for a labor lien.
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
In this case, a second-tier subcontractor was not paid for the work it did. It
filed a lien for labor and materials without giving prelien notice. We must decide
whether, taken as a whole, chapter 60.04 RCW requires prelien notice for labor
liens. We conclude it does not. Accordingly, we reverse the Court of Appeals and
remand for the trial court to determine the value of labor performed.
FACTS
Cascadia Homes Inc., a general contracting company, purchased real
property in Lakewood, Washington to build a home on. Cascadia had worked with
High End Construction LLC before and asked it to submit a bid for framing the
home. High End successfully bid and then orally contracted with Velazquez
Framing LLC to finish the framing work. High End subcontracted the work to
Velazquez Framing without informing Cascadia.
After Velazquez Framing did that work, High End billed Cascadia.
Cascadia paid High End. High End did not pay Velazquez Framing. Velazquez
Framing contacted Cascadia directly in December 2019 about its unpaid work.
Velazquez Framing was not paid, and the next month, it filed a lien on the
Lakewood property. In its lien, Velazquez Framing asserted that it “furnished
labor, professional services, materials and/or equipment to the subject property . . .
at the request of Cascadia Homes, Inc.” Clerk’s Papers at 56. Velazquez Framing
later explained that it provided labor, a generator, a compressor, and five boxes of
2
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
nails for the project. Velazquez Framing mailed Cascadia a copy of the lien.
Velazquez Framing acknowledges it did not give prelien notice. Appellant’s Reply
Br. at 5-6 (Wash. Ct. App. No. 56513-7-II (2022)).
After Cascadia did not pay, and after waiting several months, Velazquez
Framing sought to foreclose on its lien. Concluding that prelien notice was
required, the trial court dismissed the foreclosure action at summary judgment.
The Court of Appeals affirmed. Velazquez Framing, LLC v. Cascadia Homes,
Inc., 24 Wn. App. 2d 780, 521 P.3d 257 (2022). We granted review.
ANALYSIS
We must first decide whether our lien statutes require prelien notice to lien
for labor. This is a question of statutory interpretation we review de novo. Dep’t
of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002). Our
objective in statutory interpretation is to identify and implement the legislature’s
intent. Id. Our analysis begins with the statutory language and frequently ends
there when its meaning is plain. State v. Gonzalez, 168 Wn.2d 256, 263, 226 P.3d
131 (2010). “In discerning the plain meaning of a provision, we consider the entire
statute in which the provision is found, as well as related statutes or other
provisions in the same act that disclose legislative intent.” State v. Alvarado, 164
Wn.2d 556, 562, 192 P.3d 345 (2008). Whenever possible, we interpret the
statutory language such that “‘no clause, sentence or word shall be superfluous,
3
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
void, or insignificant.’” City of Seattle v. Long, 198 Wn.2d 136, 148, 493 P.3d 94(2021) (internal quotation marks omitted) (quoting Kasper v. City of Edmonds, 69
Wn.2d 799, 804, 420 P.2d 346 (1966)).
Where the statutory language is plain on its face, we give effect to that plain
language and our inquiry ends. Gonzalez, 168 Wn.2d at 263. Where the statutory
language is ambiguous—allowing for more than one reasonable interpretation—we
may turn to legislative history. Jametsky v. Olsen, 179 Wn.2d 756, 762, 317 P.3d
1003 (2014); State v. Evans, 177 Wn.2d 186, 192-93, 298 P.3d 724 (2013).
Velazquez Framing argues that the plain language of RCW 60.04.031
requires that prelien notice be provided for professional services, materials, and
equipment, but not for labor. We agree.
The legislature has given contractors a right to lien to secure payment for
their services. Specifically,
[e]xcept as provided in RCW 60.04.031, any person furnishing labor,
professional services, materials, or equipment for the improvement of
real property shall have a lien upon the improvement for the contract
price of labor, professional services, materials, or equipment furnished
at the instance of the owner, or the agent or construction agent of the
owner.
RCW 60.04.021 (emphasis added). The legislature has also required some
claimants to provide prelien notice:
Except as otherwise provided in this section, every person furnishing
professional services, materials, or equipment for the improvement of
real property shall give the owner or reputed owner notice in writing of
4
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
the right to claim a lien. . . . The notice may be given at any time but
only protects the right to claim a lien for professional services,
materials, or equipment.
RCW 60.04.031(1) (emphasis added). If a claimant required to provide prelien
notice fails to do so, their lien will not be enforced. See RCW 60.04.031(6). But
under the plain language of RCW 60.04.031(1), no prelien notice is required for
labor.
Other portions of the statute bolster this conclusion. The legislature has
provided a sample prelien notice form that claimants must substantially follow in
cases where prelien notice is required. RCW 60.04.031(4). The form is intended,
in part, to tell the owner “who is providing professional services, materials, or
equipment for the improvement of [their] property and to advise [the owner] of the
rights of these persons.” Id. The form gives owners notice that claimants “have or
will be providing professional services, materials, or equipment” and may claim a
lien for such, but the form does not include “labor.” Id.Similarly, RCW 60.04.091 provides a sample claim of lien form. Unlike the
sample prelien notice form, the lien claim form includes language concerning
labor. RCW 60.04.091. Pertinently, this form includes the “first and last date on
which the labor, professional services, materials, or equipment was furnished or
employee benefit contributions were due.” RCW 60.04.091(1)(b) (emphasis
added).
5
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
Taken together, these provisions of chapter 60.04 RCW require prelien
notice for professional services, materials, and equipment, but not for labor. The
presence and absence of “labor” throughout chapter 60.04 RCW is consistent with
no prelien notice for labor being required. Under RCW 60.04.021, a lien claimant
is explicitly entitled to a lien for their labor. However, “labor” is noticeably absent
in the prelien notice requirement statute. RCW 60.04.031(1). The plain language
of RCW 60.04.031(1) instead suggests that the legislature intended to require
prelien notice in a limited set of circumstances: for the provision of professional
services, materials, or equipment. Id.Cascadia urges us to adopt a different interpretation of the statute. Cascadia
argues that unless an exception under RCW 60.04.031(2) applies, a subcontractor
must provide prelien notice. We disagree. Under RCW 60.04.031(2) notice is not
required by
(a) Persons who contract directly with the owner or the owner’s
common law agent;
(b) Laborers whose claim of lien is based solely on performing
labor; or
(c) Subcontractors who contract for the improvement of real
property directly with the prime contractor, except as provided in
subsection (3)(b) of this section.
None of these exceptions apply to the labor done by Velazquez Framing.
Taken together, however, the statutes do not require prelien notice to lien for labor,
either by a subcontractor that provides the labor or by the laborers themselves.
6
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
RCW 60.04.021 entitles everyone, including Velazquez Framing, to lien for their
labor. Cascadia is correct that the general right to lien under RCW 60.04.021 is
subject to the requirements of RCW 60.04.031. However, Cascadia’s proposed
reading of RCW 60.04.031(2), requiring prelien notice in all but three
circumstances, violates the plain language of RCW 60.04.031(1). We hold the
statutes unambiguously did not require Velazquez Framing to give prelien notice
before filing a labor lien.
Even if the plain language of our lien statutes was ambiguous, legislative
history leads to the same conclusion that prelien notice is not required to lien for
labor. Our legislature began seriously considering changes to our lien laws in
1991. See LAWS OF 1991, ch. 281 (codified in RCW 19.27.095 and scattered
sections of Title 60 RCW). The legislative history suggests that consumer
protection concerns motivated these changes. FINAL B. REP. ON SUBSTITUTE S.B.
5497, at 1, 52d Leg., Reg. Sess. (Wash. 1991). The legislature and the attorney
general received reports from homeowners about subcontractors making lien
claims after the homeowners paid the general contractor. Id. The legislation was
proposed, in part, to address this concern.
Although the legislature seemed primarily concerned with consumer
protection, the legislature was responding to other concerns as well. FINAL B. REP.
ON SUBSTITUTE S.B. 5497, at 1. Specifically, “construction lien laws ha[d] not
7
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
been substantially amended or modernized during [the 20th] century” and
“[v]irtually all industry segments ha[d] reported problems with the current [lien]
law[s].” Id. As a result, much of Substitute S.B. 5497 was also “concerned with
simply modernizing the language of the existing law without making substantive
changes” and with addressing industry concerns about the law. S.B. REP. ON
SUBSTITUTE S.B. 5497, at 2, 52d Leg., Reg. Sess. (Wash. 1991).
The enacted language does not require prelien notice for labor. Legislative
history in the house is consistent. A house bill report explains that under current
law, “[a] notice of the right to claim a lien is required to establish a lien for
material and equipment supplied for the project (not labor liens)” and that under
the new notice requirements, “notice of the right to claim a lien is not required for
a person supplying labor.” H.B. REP. ON SUBSTITUTE S.B. 5497, at 2, 3, 52d Leg.,
Reg. Sess. (Wash. 1991).
A legislative memorandum concerning a public hearing on Substitute S.B.
5497 mirrors this intent. The memo provides a comparison between the prelien
notice requirement in then current lien laws and Substitute S.B. 5497. H. COM. &
LAB. COMM., PUB. HR’G MEM. ON SUBSTITUTE S.B. 5497, at 2, 52d Leg., Reg. Sess.
(Wash. 1991). The memo explains that under the lien laws at the time, “pre-lien
notice [was] required for material and equipment liens only (not labor liens).” Id.Under Substitute S.B. 5497, “pre-lien notice is not required for a person supplying
8
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
labor, or for a person providing professional services, materials, or equipment who
contracts directly with the property owner, or for a subcontractor who contracts
directly with the prime contractor.” Id.The robust legislative history concerning our lien laws illuminates the
complexity of the legislature’s intent in enacting the lien granting and prelien
notice requirement statutes. We conclude that this history is consistent with the
plain language of the statutes. The legislature intended to require prelien notice
unless the lien was based on labor.
Because Velazquez Framing did not lien solely for labor, we must next
decide whether a claimant who provides materials and equipment in addition to
labor may lien for their labor despite not having provided prelien notice. We
conclude they may. Although Velazquez Framing will not be able to lien for its
materials and equipment, its labor lien is still enforceable.
Pre-1990s case law1 establishes the practice of lien segregation. These cases
suggest that where a claimant liens for both labor and material without providing
prelien notice, the claimant may enforce that portion relating to labor so long as the
court has an evidentiary basis to segregate the value of the labor from materials.
1
Cascadia argues, and the Court of Appeals agreed, that this body of case law is not relevant or
helpful for determining legislative intent because it predates the legislative amendments
discussed above. See Velazquez Framing, 24 Wn. App. 2d at 790 n.5. We conclude that this case
law interprets earlier lien statutes that are substantially similar in substance and form to our
current lien statutes. Accordingly, this case law is relevant and helpful to the issue of lien
segregation.
9
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
See Hallett v. Phillips, 73 Wash. 457, 464, 132 P. 51 (1913); Culbert v. Lindvall,
73 Wash. 643, 646, 132 P. 729 (1913); Northlake Concrete Prods., Inc. v. Wylie,
34 Wn. App. 810, 818-19, 663 P.2d 1380 (1983). Where a contractor liens for
both labor and equipment without prelien notice, remand to determine the value of
labor is usually appropriate. See Northlake, 34 Wn. App. at 815, 818-19.
A claimant may not maintain a lien for labor where the record does not
allow the value of the labor to be determined. See Hallett, 73 Wash. at 464. In
Hallett, subcontractors liened for their labor and materials without providing
notice. Id. at 459-60, 464. This court determined that the subcontractors could not
maintain a lien for their materials without providing notice. Id. at 464. We
explained that because there was no evidence “showing what proportion of [the]
claims was for material and what proportion was for labor . . . it [was] impossible
to fix or award any amount for which [the subcontractors could] maintain labor
liens.” Id.Conversely, a claimant may maintain its lien for labor where there is
evidence to segregate the value of the labor from that of the materials and
equipment. In Culbert, we concluded that a subcontractor who provided a furnace
and labor could not lien for the furnace without providing notice but could lien for
its labor. 73 Wash. at 645-46. We explained that the evidence “segregates the
10
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
value of the labor that went into the construction of the furnace, and for [that the
subcontractor] is entitled to the foreclosure of its lien.” Id. at 646.
We conclude that Velazquez Framing can lien for its labor so long as it can
establish an evidentiary basis for segregation.
CONCLUSION
The plain language of our lien statutes does not require prelien notice to lien
for labor. Legislative history supports this interpretation. Accordingly, we reverse
the Court of Appeals and remand to the trial court for further proceedings
consistent with this opinion. Velazquez Framing’s RAP 18.1 request for attorney
fees is granted.
11
Velazquez Framing, LLC v. Cascadia Homes, Inc., No. 101591-7
____________________________
WE CONCUR:
_____________________________ ____________________________
_____________________________ ____________________________
_____________________________ ____________________________
_____________________________ ____________________________
12