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The Utah Court of Appeals recently issued a decision regarding what constitutes lienable work for purposes of Utah’s mechanic’s lien statute. The case is All Clean, Inc. dba The Flood Co., v. Timberline Properties, 2011 UT App. 370 and the issue was whether the work done by the lien claimant fell within the mechanic’s lien statute in order to allow an award of attorneys’ fees. All Clean was hired by Timberline to perform clean up of several offices in one of Timberline’s buildings that had been flooded as a result of a broken pipe. All Clean’s work included “extracting water, padding the furniture to prevent additional damage, drying the premises, cleaning and deodorizing carpets, and applying a microbial agent to prevent mold.” Id. at P2. This work was done by All Clean, however it did not receive full payment for its work. Accordingly, All Clean recorded a mechanic’s lien for its work and subsequently filed suit to foreclose the lien.

The trial court rejected All Clean’s lien claim because the court determined that “the work done by [All Clean] is not of the type which entitles [All Clean] to have a lien upon the property of [Timberline].” Id. at P4. Because the court found that All Clean did not have a mechanic’s lien it also denied All Clean’s claim for attorneys’ fees under the lien statute. On appeal, All Clean contended that the work it performed fell within the scope of the mechanic’s lien statute and as such, it was entitled to an award of attorneys’ fees. Utah law, at the time All Clean performed its work, states that:

[C]ontractors, subcontractors, and all persons performing any services or furnishing or renting any materials or equipment used in the construction, alteration, or improvement of any building or structure or improvement to any premises in any manner . . . shall have a lien upon the property upon or concerning which they have rendered service, performed labor, or furnished or rented materials or equipment.

Id. at P11 citing Utah Code Ann. §38-1-3 (2005).

In addressing whether All Clean’s work was lienable, the Court of Appeals determined that the term “improvement” in the statute meant more than just making a repair – it meant that there had to be some addition, affixation, or enduring change to the property. Even though the work by All Clean returned the property to its pre-flood condition, the Court determined that the work did not amount to any “physical affixation” or “alteration of the structure” in order for it to be lienable work. Because All Clean’s work was not an “improvement of any building or structure or an improvement to any premises” it did not fall within the mechanic’s lien statute. Accordingly, All Clean was not awarded its attorneys’ fees.

In light of this recent decision by the Court of Appeals, contractors providing flood or other restoration, cleanup or repair work will need to take special care in determining whether they can lien for the work they provide. The Court suggested that more extensive repair work might be lienable. However, it appears that this would depend on whether changes or replacements were made to fixtures or other structural components of the property. Unfortunately, the Court did not discuss the point at which repair work goes from nonlienable to lienable and left that issue unresolved.

Kevin v2
Kevin Bischoff
801.365.1018

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