Sill v. Bill Hart dba Hart Construction

2007 UT 45
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
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Joel Sill, 	Nos. 20060106
Plaintiff and Respondent, 	20060208
v.
F I L E D
Bill Hart dba Hart Construction,
Defendant and Petitioner. 	June 8, 2007
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Third District, Silver Summit
The Honorable Deno Himonas
No. 020500012
Attorneys: 	David B. Thompson, Christina Inge Miller, Park City,
David L. Arrington, Salt Lake City, for plaintiff
Robert J. Dale, P. Bruce Badger, Bradley L. Tilt,
Salt Lake City, for defendant
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On Certiorari to the Utah Court of Appeals
DURHAM, Chief Justice:
BACKGROUND
¶1 	This case involves a dispute between a property owner
and a contractor in the construction of a private residence.
Joel Sill, a residential property owner, entered into an
agreement with Bill Hart, a general contractor, to construct a
custom home in Summit County. 	Construction of the residence
began in June 1999 and continued until December 2001 when the
parties had a falling-out regarding completion of the residence.
Hart stopped work on Sill’s property, leaving the residence
unfinished. 	In response, Sill filed this suit alleging various
claims including breach of contract. 	Hart counterclaimed
alleging breach of contract and unjust enrichment and seeking to
foreclose a mechanics’ lien for work for which Hart had yet to be
paid. 	More than two and a half years after the suit was
initiated, Sill challenged the enforceability of Hart’s
mechanics’ lien for failing to meet the notice requirements of

1 At the time Hart filed the mechanics’ lien, Utah Code
section 38-1-11(4)(a) required a party seeking to execute a lien
against a residence to include with the service of the complaint
upon the owner of the residence “instructions to the owner of the
residence relating to the owner’s rights under” the Residence
Lien Restriction and Lien Recovery Fund Act (LRFA) and “a form
affidavit and motion for summary judgment to enable the owner of
the residence to specify the grounds upon which the owner may
exercise available rights under” LRFA. 	Utah Code Ann. § 38-1-
11(4)(a)(i), (ii) (2001) (amended Supp. 2006).
The Mechanics’ Lien Act, id. §§ 38-1-1 to -29 (2001)
(amended 2005 & Supp. 2006), “provide[s] protection to those who
enhance the value of a property by supplying labor or materials,”
AAA Fencing Co. v. Raintree Dev. & Energy Co., 714 P.2d 289, 291
(Utah 1986); see also Utah Code Ann. § 38-1-3, while LRFA, id.
§§ 38-11-101 to -302 (2001) (amended 2005 & Supp. 2006), provides
a narrow statutory framework for the protection of residential
property owners. 	Id. § 38-11-107. 	LRFA allows owners to avoid
incurring costs associated with litigation due to unwarranted
mechanics’ liens. 	Id.
Nos. 20060106, 20060208 	2
section 38-1-11(4)(a) of the Mechanics’ Lien Act. 1 	The parties
stipulated that all issues concerning the enforceability of the
lien would be preserved until after the jury reached a verdict at
trial. 	Following the trial, the jury awarded Hart $314,500 for
his unjust enrichment and mechanics’ lien claims and included an
award for prejudgment interest, attorney fees, and costs.
¶2 	When Hart sought to reduce the jury verdict to a
judgment, the court considered Sill’s challenge to the validity
of the mechanics’ lien. 	Hart admitted that he did not serve Sill
with any of the required forms or instructions informing the
owner of his LRFA rights as required by section 38-1-11(4)(a)
(2001). 	He argued, however, that the notice requirements did not
apply to this case because (1) Sill, the owner, not Hart, the
contractor, commenced the action; (2) Sill had no rights under
LRFA because Hart was not a subcontractor; and (3) Hart, the
general contractor, had not been paid in full. 	Sill argued that
Hart’s failure to serve him with the notice requirements of
section 38-1-11(4)(a) created a complete jurisdictional bar to
the enforcement of the lien.
¶3 	The trial court concluded that Hart was not required to
comply with the notice requirements of section 38-1-11(4)(a)
because he filed a counterclaim, not a complaint. 	Accordingly,
the court enforced his mechanics’ lien. 	The court of appeals
reversed, concluding that the notice requirements of section 38-
1-11(4)(a) are triggered whenever an action is filed seeking to

3 	Nos. 20060106, 20060208
enforce a lien on a residence, regardless of whether the lien
claimant files a complaint or a counterclaim. 	Sill v. Hart, 2005
UT App 537, ¶ 9, 128 P.3d 1215. 	The court of appeals rejected
Sill’s assertion that failure of a lien claimant to comply with
section 38-1-11(4)(a) is a jurisdictional bar and concluded
instead that the failure constitutes an affirmative defense. 	Id.
¶¶ 14-15.
¶4 	We granted certiorari to determine whether the
requirements of Utah Code section 38-1-11(4)(a) apply to
counterclaims, whether those requirements apply regardless of the
remedies available to a property owner under LRFA, and whether a
failure to comply with section 38-1-11(4)(a) creates a
jurisdictional bar to adjudication of an action to enforce a
lien. 	We have jurisdiction pursuant to Utah Code section 78-2-
2(3)(a), (5) (2002).
STANDARD OF REVIEW
¶5 	“On certiorari, we review the decision of the court of
appeals, not the trial court.” 	Fla. Asset Fin. Corp. v. Utah
Labor Comm’n, 2006 UT 58, ¶ 8, 147 P.3d 1189 (internal quotation
marks omitted). 	This case presents an issue of statutory
interpretation, a question of law that we review for correctness.
Id.
ANALYSIS
¶6 	Hart argues that the court of appeals’ determination
that the notice requirements of section 38-1-11(4)(a) extend to
counterclaims should be reversed. 	He also argues that the notice
requirements do not apply and therefore do not need to be
complied with when an owner has no available rights under LRFA.
Additionally, Hart argues that failure to comply with section 38-
1-11(4)(a) creates an affirmative defense, not a jurisdictional
bar. 	We agree with each of his arguments.
¶7 	“Under our rules of statutory construction, we look
first to the statute’s plain language to determine its meaning.”
Sindt v. Ret. Bd., 2007 UT 16, ¶ 8, 157 P.3d 797 (internal
quotation marks omitted). 	We read “[t]he plain language of a
statute . . . as a whole” and interpret its provisions “in
harmony with other provisions in the same statute and with other
statutes under the same and related chapters.” 	State v.
Schofield, 2002 UT 132, ¶ 8, 63 P.3d 667 (internal quotation
marks omitted). 	We do so because “‘[a] statute is passed as a
whole and not in parts or sections and is animated by one general
purpose and intent. 	Consequently, each part or section should be

Nos. 20060106, 20060208 	4
construed in connection with every other part or section so as to
produce a harmonious whole.’” 	State v. Maestas, 2002 UT 123,
¶ 54, 63 P.3d 621 (quoting Norman J. Singer, 2A Sutherland
Statutory Construction § 96:05 (4th ed. 1984)).
¶8 	The purpose and intent of Utah’s Mechanics’ Lien Act,
Utah Code Ann. §§ 38-1-1 to -29 (2001), “‘manifestly has been to
protect, at all hazards, those who perform the labor and furnish
the materials which enter into the construction of a building or
other improvement.’” 	John Wagner Assocs. v. Hercules, Inc., 797
P.2d 1123, 1125 (Utah Ct. App. 1990) (quoting Rio Grande Lumber
Co. v. Darke, 167 P. 241, 244 (Utah 1917)). 	Lien statutes should
be broadly construed “to effectuate that purpose.” 	Interiors
Contracting v. Navalco, 648 P.2d 1382, 1386 (Utah 1982). 	The
broad remedial powers of the Mechanics’ Lien Act, however, have
been tempered by enactment of LRFA and the legislature’s
recognition of the competing interest of owners of residential
property to keep their credit and title to the property clear of
unwarranted encumbrances.
¶9 	Thus, the Mechanics’ Lien Act requires certain acts by
lien claimants in order to protect owners of residential
property. 	Section 38-1-11(4) (2001) provides:
(a) If a lien claimant files an action to
enforce a lien filed under this chapter
involving a residence . . . the lien claimant
shall include with the service of the
complaint on the owner of the residence:
(i) instructions to the owner of the
residence relating to the owner’s rights
under Title 38, Chapter 11, [LRFA]; and
(ii) a form affidavit and motion for
summary judgment to enable the owner of the
residence to specify the grounds upon which
the owner may exercise available rights under
Title 38, Chapter 11, [LRFA].
. . .
(e) If a lien claimant fails to provide to
the owner of the residence the instructions
and form affidavit required by Subsection
(4)(a), the lien claimant shall be barred

2 Since 2001, section 38-1-11 of the Mechanics’ Lien Act has
been amended so that it no longer requires service of a summary
judgment motion form. 	See Utah Code Ann. § 38-1-11(5)(a) (Supp.
2006).
3 Contrary to Sill’s assertion, the court of appeals did not
(continued...)
5 	Nos. 20060106, 20060208
from maintaining or enforcing the lien upon
the residence. 2
¶10 	The first issue we must resolve is whether the notice
requirements of section 38-1-11(4)(a) apply to counterclaims. 	We
conclude that they do not. 	It has long been established that the
purpose of the Mechanics’ Lien Act is “to provide protection to
those who enhance the value of a property by supplying labor or
materials.” 	AAA Fencing Co. v. Raintree Dev. & Energy Co., 714
P.2d 289, 291 (Utah 1986). 	We have also recognized the “modern
trend” in mechanics’ lien cases “to dispense with arbitrary rules
which have no demonstrable value in a particular fact situation.”
Projects Unlimited, Inc. v. Copper State Thrift & Loan Co., 798
P.2d 738, 744 (Utah 1990) (upholding lien against attack where
deficiencies were technical and did not prejudice the defendant).
It is against this backdrop that we consider the notice
requirements of section 38-1-11(4)(a).
¶11 	The pertinent language of section 38-1-11(4)(a)
provides, “If a lien claimant files an action to enforce a lien
filed under this chapter involving a residence . . . the lien
claimant shall include with the service of the complaint on the
owner of the residence . . .” (emphasis added). 	Looking to the
plain language of the statute, “we assume that each term in the
statute was used advisedly; thus the statutory words are read
literally, unless such a reading is unreasonably confused or
inoperable.” 	State v. Bluff, 2002 UT 66, ¶ 34, 52 P.3d 1210
(internal quotation marks omitted). 	The plain language of
section 38-1-11(4)(a) supports the trial court’s interpretation
that the notice requirements are applicable only at the
initiation of an action through service of a complaint, not a
counterclaim. 	The language is not ambiguous. 	The “fil[ing of]
an action” is qualified by the reference to the “service of the
complaint on the owner of the residence.” 	Thus, a “complaint”
refers to a pleading that is filed by a plaintiff at the
commencement of a lawsuit requiring service, not on an attorney,
but on an individual at his residence. 	The filing of such an
“action” does not include liens enforced by counterclaim where
the action has already been commenced and the service of the lien
is on the residential property owner’s legal counsel. 3

3 (...continued)
decide this question in American Rural Cellular, Inc. v. Systems
Communication Corp., 939 P.2d 185 (Utah Ct. App. 1997). 	In that
case, the court held that the word “action” included complaints
as well as counterclaims. 	Id. at 193. 	However, the particular
portion of the Mechanics’ Lien Act at issue in that case provided
“‘in any action brought to enforce any lien under this chapter
. . . .’” 	Id. (emphasis added)(quoting Utah Code Ann. § 38-1-18
(Supp. 1996)). 	It was not qualified in any manner, unlike the
language at issue in the case before us today where “action” is
qualified as a “complaint” served “on the owner of the
residence.”
Nos. 20060106, 20060208 	6
¶12 	This narrow reading of “action” is also supported by
the overarching purpose of the Mechanics’ Lien Act and the narrow
protection LRFA is intended to provide. 	As noted previously, the
purpose of the Mechanics’ Lien Act is to protect original
contractors, subcontractors, and others who enhance the value of
real property through improvements. 	LRFA also protects
residential property owners against the substantial costs
associated with litigation arising from an unwarranted mechanics’
lien. 	Utah Code Ann. § 38-11-107 (2001). 	Thus, the need for
LRFA protection exists when actions are commenced by a lien
claimant, before litigation costs have been incurred by the
property owner. 	Such actions are commenced when a complaint is
filed and served on a property owner. 	See Utah R. Civ. P. 3(a)
(“A civil action is commenced by (1) filing a complaint . . . or
(2) by service of a summons together with a copy of the complaint
. . . .”). 	The notice requirements of section 38-1-11(4)(a)
simply do not apply to liens sought to be enforced through
counterclaims because any benefit that could be derived from LRFA
protections has been relinquished by the property owner who has
already initiated legal proceedings. 	In this case, because Sill
had already hired an attorney, initiated legal action, and
incurred costs, the protections provided by LRFA would not, and
were not intended to, benefit him. 	Moreover, service of the
counterclaim was required by the Rules of Civil Procedure to be
on Sill’s counsel, not the “owner of the residence.” 	Utah Code
Ann. § 38-1-11(4)(a). 	Any benefit that Sill could have derived
from the notice requirements was clearly moot at that juncture.
Instructions informing him how to defeat the lien without
significant litigation costs were irrelevant because he had
already hired an attorney and engaged in litigation by initiating
this action against the contractor.

4 “A counterclaim is viewed as an original action,
instituted by the defendant against the plaintiff and is tested
by the same tests and rules as a complaint.” 	Harman v. Yeager,
134 P.2d 695, 696-97 (Utah 1943) (concluding that an answer that
did not set out a cause of action did not constitute a
counterclaim).
7 	Nos. 20060106, 20060208
¶13 	While the use of the word “complaint” may be broadly
interpreted to include counterclaims in some situations, 4 a
statutory interpretation construing the language of section 38-1-
11(4)(a) to include liens enforced by counterclaim is too
expansive because such an interpretation runs counter to the
purpose and context of the Mechanics’ Lien Act, the plain
language of section 38-1-11(4)(a), and the narrow scope of
protection LRFA was intended to provide.
¶14 	Next, we must determine whether section 38-1-11(4)(a)
applies regardless of the remedies available to the property
owner under LRFA. 	LRFA protects homeowners from having to pay
twice for the same improvements. 	Id. §§ 38-11-107, 38-11-
204(3)(b) (2001). 	It does so by providing that once the
homeowner has paid the general contractor in full, the homeowner
and the home are then free from claims and liens of
subcontractors who also worked on the home. 	See, e.g., id. § 38-
11-107(1) (providing owners relief only against parties with
agreements “other than directly with the owner”); id. § 38-11-
204(3)(b) (providing owners relief only after the owner “has paid
in full the original contractor”); id. § 38-11-102(14) (defining
“original contractor” as “a person who contracts with the owner
of real property”). 	In such cases, LRFA instructions and the
forms referenced in section 38-1-11(4)(a) allow the owner of a
residence to dispose of the case quickly and easily, without
having to incur the expenses of litigation.
¶15 	Looking to the whole statutory framework of the
Mechanics’ Lien Act and the limited protections LRFA was intended
to provide, we hold that where a lien claimant seeks to enforce a
lien on a property owner with no rights available under LRFA,
compliance with the notice requirements of section 38-1-11(4)(a)
is not required. 	However, a lien claimant who chooses not to
comply with section 38-1-11(4)(a) does so at her own peril and
risks losing her cause of action if mistaken as to the
applicability of the requirements.
¶16 	In this case, however, LRFA does not provide Sill with
a remedy. 	Sill had not paid the original contractor, Hart, in
full. 	Thus, Sill had no right or protection available under
LRFA. 	Had he been served with the notices required by section

Nos. 20060106, 20060208 	8
38-1-11(4)(a), they would have been useless to him as he had no
“available rights” to “exercise” under LRFA. 	Id. § 38-1-
11(4)(a)(i), (ii). 	Furthermore, as explained above, once he
initiated legal action, his need for protection against an
unwarranted mechanics’ lien without incurring the costs of
litigation evaporated. 	Hart therefore was under no obligation to
comply with the notice requirements of section 38-1-11(4)(a).
¶17 	We note that if an owner has rights available to her
under LRFA, the situation will be different. 	If a lien claimant
seeks to enforce a mechanics’ lien on the owner of residential
property even though the improvement has been paid for in full,
she may “be barred from maintaining or enforcing the lien upon
the residence.” 	Id. § 38-1-11(4)(e) (2001). 	If the notice
requirements in fact apply, a contractor would be providing the
owner with an affirmative defense pursuant to section 38-1-
11(4)(e).
¶18 	We agree with the court of appeals’ conclusion in its
review of this case, Sill v. Hart, 2005 UT App 537, ¶ 14, 128
P.3d 1215, and in Pearson v. Lamb, 2005 UT App 383, ¶ 15, 121
P.3d 717, that section 38-1-11(4)(e) does not act as a
jurisdictional bar, but rather provides owners with an
affirmative defense. 	Section 38-1-11(4)(e) (2001) provides that
“[i]f a lien claimant fails to provide to the owner of the
residence the instructions and form affidavit required by
Subsection (4)(a), the lien claimant shall be barred from
maintaining or enforcing the lien upon the residence.” 	In
Pearson, the court of appeals held that “failure to adhere to
section 38-1-11(4)(a) [does] not divest the trial court of
jurisdiction.” 	2005 UT App 383, ¶ 15. 	Similarly, because
failure to comply with section 38-1-11(4)(a) raised a defense
“‘outside or extrinsic to’” Hart’s prima facie mechanics’ lien
claim, the court of appeals recognized that it was an affirmative
defense. 	Sill, 2005 UT App 537, ¶ 15 (quoting Prince v. Bear
River Mut. Ins. Co., 2002 UT 68, ¶ 31, 56 P.3d 524).
¶19 	In determining whether a statutory provision is
jurisdictional, we begin with the presumption that “district
courts retain their grant of constitutional jurisdiction in the
absence of clearly expressed statutory intention to limit
jurisdiction.” 	Labelle v. McKay Dee Hosp. Ctr., 2004 UT 15, ¶ 8,
89 P.3d 113. 	The notice requirements of section 38-1-11(4)(a)
are merely directory in nature rather than mandatory and
jurisdictional. 	A “designation is mandatory . . . if it is ‘of
the essence of the thing to be done.’” 	Pearson, 2005 UT App 383,
¶ 7 (quoting Beaver County v. Utah State Tax Comm’n, 919 P.2d
547, 552 (Utah 1996)). 	Hart’s failure to include the

9 	Nos. 20060106, 20060208
instructions and forms “did not compromise the purpose of the
[Mechanics’ Lien] Act.” 	Pearson, 2005 UT App 383, ¶ 8.
Invalidating Hart’s ability to be paid for his labor solely due
to a procedural error that went unnoticed by Sill for more than
two and a half years would “clearly contravene[] the intended
purpose of the Mechanics’ Lien Act.” 	Id. ¶¶ 8, 14. 	Further, the
notice requirements of section 38-1-11(4)(a) serve “a wholly
informational role,” are a “minor component” of the Mechanics’
Lien Act, and are one of “numerous procedural hurdles to
enforcing a lien.” 	Id. ¶¶ 11, 12 (internal quotation marks
omitted). 	Accordingly, the notice requirements concern only “the
proper, orderly and prompt conduct of the business” and are
therefore directory and not jurisdictional. 	Id. ¶ 12 (internal
quotation marks omitted).
CONCLUSION
¶20 	In sum, we hold that section 38-1-11(4)(a) is not
triggered when a lien claimant seeks to enforce a lien by filing
a counterclaim rather than an initial complaint. 	Further, when a
lien claimant seeks to enforce a lien upon a property owner with
no rights available under LRFA, compliance with the notice
requirements of section 38-1-11(4)(a) is not required; however,
the lien claimant bears the risk of providing an owner with an
affirmative defense by disregarding the notice requirements in
cases where they are applicable. 	We reverse the court of appeals
and remand for further proceedings consistent with this opinion.
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¶21 	Associate Chief Justice Wilkins, Justice Durrant,
Justice Parrish, and Justice Nehring concur in Chief Justice
Durham’s opinion.