Ellsworth Paulsen v. 51-SPR-L.L.C.

2008 UT 28
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
Ellsworth Paulsen Construction 	Nos. 20060864
Company, 	20060882
Plaintiff, Petitioner,
and Cross-Respondent,
v.
51-SPR-L.L.C., 	F I L E D
Defendant, Respondent,
and Cross-Petitioner. 	April 8, 2008
---
Fourth District, Provo Dep’t
The Honorable Gary D. Stott
No. 010405059
Attorneys: 	Mark L. Poulsen, Bret W. Reich, Sandy, for plaintiff
R. Stephen Marshall, Erik A. Olson, Salt Lake City,
for defendant
---
On Certiorari to the Utah Court of Appeals
PARRISH, Justice:
INTRODUCTION
¶1 	51-SPR-L.L.C. (“51-SPR”) entered into a development
agreement with Guy Hatch (“Hatch”) and his company, Broadstone
Investments, L.L.C. (“Broadstone”), to develop two commercial
office buildings in American Fork, Utah (the “Northshore
Project”). 	Hatch, without disclosing the involvement of 51-SPR,
entered into two construction contracts with Ellsworth Paulsen
Construction Company (“EPCO”) for the construction of the two
Northshore buildings. 	Toward the end of the project, the
relationship between Hatch and 51-SPR soured, resulting in
Broadstone relinquishing its one-half interest in the Northshore
property to 51-SPR. 	After learning of 51-SPR’s involvement in
the project, EPCO approached 51-SPR regarding unpaid construction

Nos. 20060864, 20060882 	2
invoices. 	51-SPR, viewing itself as a mere investor, disclaimed
any obligation to pay EPCO for the construction costs. 	EPCO then
filed a mechanic’s lien against the two Northshore buildings.
The lien included a $78,000 claim stemming from a prior business
deal between Hatch and EPCO. 	Additionally, EPCO brought a
contractual claim against 51-SPR, claiming that 51-SPR was a
partner or joint venturer with Broadstone and, therefore, was
jointly liable on the construction contracts.
¶2 	The district court granted partial summary judgment to
EPCO, holding that 51-SPR and Broadstone were joint venturers.
Additionally, following a trial, the district court held that
EPCO could not collect the $78,000 claim as part of its lien on
the Northshore property, but that the inclusion of the claim did
not constitute an abusive lien under section 38-1-25 of the Utah
Code. 	The court of appeals reversed the district court’s partial
summary judgment regarding the existence of a joint venture but
upheld the district court’s judgment regarding the lien.
Ellsworth Paulsen Constr. Co. v. 51-SPR-L.L.C., 2006 UT App 353,
144 P.3d 261. 	We affirm the decision of the court of appeals.
BACKGROUND
I. 	FACTUAL BACKGROUND
¶3 	In 2000, Robert Chimento, acting on behalf of 51-SPR,
entered into a development agreement (the “Agreement”) with
Hatch, acting on behalf of Broadstone. 	The Agreement
contemplated the development of two commercial office buildings
(“Building I” and “Building II”) in American Fork, Utah. 	The
Agreement provided, among other things, that 51-SPR would
contribute $2.9 million toward the purchase and development of
the Northshore property, that Broadstone would act as the project
manager, and that 51-SPR and Broadstone would take title to the
property as tenants in common. 	Broadstone then entered into two
construction contracts with EPCO for construction of the two
buildings. 	From the time the construction contracts were entered
through near completion of the project, EPCO had no knowledge of
51-SPR’s involvement in the project because all of EPCO’s
dealings had been exclusively with Hatch.
¶4 	Prior to the Northshore Project, EPCO and Hatch had
collaborated on other construction projects. 	In the first
project (the “Broadstone Project”), EPCO constructed six office
buildings as part of a Hatch development project. 	Toward the end
of the Broadstone Project, Hatch began plans for the development
of more office buildings on land owned by Lloyd Williams (the
“Williams Project”). 	At that time, EPCO loaned $110,000 to

3 	Nos. 20060864, 20060882
Vintage Construction (“Vintage”), the Hatch-related company that
was involved in developing the Broadstone Project and the
Williams Project. 	A portion of the loan, $32,000, was earmarked
for the Broadstone Project, and the remaining $78,000 was
earmarked for the Williams Project. 	Although Hatch never
informed EPCO exactly how the money would be used, EPCO
assumed--based on Hatch’s representations--that the $78,000 would
either be used for engineering design work and other costs for
the Williams Project or be applied to the construction of the
proposed buildings on the Williams property. 	Hatch agreed that
in return for the $78,000 loan, he would give EPCO a change order
on the first building constructed on the Williams property.
However, the Williams Project was never developed; instead, the
office buildings that Hatch had proposed to build on the Williams
property were built on the Northshore property as part of the
Northshore Project. 	By the time Hatch and EPCO were working on
the Northshore Project, Vintage had not repaid the $78,000 to
EPCO. 	In order to pay the $78,000 loan to EPCO, Hatch provided
EPCO with a change order in the amount of $78,000 on Building II
of the Northshore Project so that EPCO could be repaid through
the Northshore Project’s construction loans.
¶5 	Toward the end of the Northshore Project, 51-SPR
accused Hatch of materially breaching the Agreement by
mismanaging the construction funds. 	51-SPR confronted Hatch, and
Hatch agreed to relinquish Broadstone’s one-half interest in the
Northshore Project to 51-SPR. 	Hatch then apparently fled to
Hawaii, leaving EPCO with nowhere to send its final invoices. 	It
was at this point that EPCO discovered 51-SPR’s involvement in
the project and approached 51-SPR directly for payment for the
completed work. 	51-SPR, viewing itself as a mere investor,
disclaimed any obligation to pay EPCO for the construction costs.
II. 	PROCEDURAL BACKGROUND
¶6 	EPCO filed mechanic’s liens against the two Northshore
buildings and commenced an action to foreclose the liens. 	EPCO
included in the lien amount the $78,000 change order on Building
II that Hatch had provided to repay the loan from EPCO. 	EPCO
also asserted breach of contract claims against 51-SPR on the
theory that 51-SPR was in a partnership or joint venture
relationship with Broadstone and therefore jointly liable on the
construction contracts. 	In a separate proceeding, 51-SPR brought
an action to quiet title to the two Northshore buildings. 	51-SPR
also brought a claim against EPCO under Utah’s abusive lien
statute, section 38-1-25 of the Utah Code, for including the
$78,000 claim as part of its lien on the Northshore property.
These proceedings were later consolidated.

Nos. 20060864, 20060882 	4
¶7 	EPCO moved for partial summary judgment on the issue of
51-SPR’s liability as a partner or joint venturer of Broadstone.
51-SPR opposed the motion, arguing that summary judgment was not
appropriate because there was a material issue of fact regarding
one of the elements of a partnership or joint venture: 	whether
51-SPR and Broadstone agreed to share losses. 	Relying on
statements contained in an affidavit of Robert Chimento, 51-SPR
argued that Broadstone had agreed to bear all of the risk of
loss. 	In his affidavit, Chimento stated that “[u]nder the
Agreement, Broadstone and Hatch were solely responsible for all
expenses, costs, losses, and risks associated with the Northshore
project” and that “51-SPR was not liable or responsible for any
losses, liabilities, or responsibilities relating to the
[Northshore] Property, and under its arrangement with Broadstone,
stood to lose only its investment in the Property and nothing
more.” 	The district court, however, held that Chimento’s “bald
assertions” did not create a genuine issue of material fact and
granted EPCO partial summary judgment.
¶8 	Later in the proceedings, after holding a three-day
bench trial, the district court ruled that EPCO could not collect
the $78,000 claim as part of its lien because the $78,000 did not
relate to the development of the Northshore property.
Nevertheless, the court held that the inclusion of the $78,000
claim did not render the lien abusive under section 38-1-25 of
the Utah Code because EPCO did not know, at the time it filed the
lien, how much--if any--of the $78,000 had been applied to the
construction of the Northshore buildings. 	Because EPCO acted in
good faith when it included the $78,000 claim as part of its lien
on the Northshore buildings, the lien was not abusive.
¶9 	Both parties appealed the district court’s rulings.
The court of appeals held that the district court erred by
inferring on summary judgment that the parties intended to share
losses. 	Ellsworth Paulsen Constr. Co. v. 51-SPR-L.L.C., 2006 UT
App 353, ¶ 18, 144 P.3d 261. 	The court concluded that Chimento’s
affidavit created an issue of fact concerning the duty to share
losses. 	Id. ¶¶ 14-18. 	Thus, it held that summary judgment was
inappropriate. 	Id. ¶ 18.
¶10 	In addition, the court of appeals upheld the district
court’s ruling that EPCO could not collect the $78,000 amount
included in the lien because it did not relate to the Northshore
Project. 	Id. ¶¶ 26-29. 	It also upheld the district court’s
ruling that EPCO’s inclusion of the $78,000 amount did not render
the lien abusive under Utah law. 	Id. ¶ 34.

5 	Nos. 20060864, 20060882
¶11 	Both parties petitioned this court for a writ of
certiorari. 	We granted both petitions and have jurisdiction
pursuant to Utah Code section 78A-3-102(3)(a) (2008).
ISSUES AND STANDARD OF REVIEW
¶12 	We granted certiorari on two issues. 	The first issue
is whether summary judgment was appropriate on EPCO’s claim that
51-SPR and Broadstone were involved in a joint venture, thereby
rendering 51-SPR subject to liability arising from the venture.
“‘[S]ummary judgment is appropriate only when there is no genuine
issue as to any material fact and the moving party is entitled to
judgment as a matter of law.’” 	Swan Creek Vill. Homeowners Ass’n
v. Warne, 2006 UT 22, ¶ 16, 134 P.3d 1122 (quoting Norman v.
Arnold, 2002 UT 81, ¶ 15, 57 P.3d 997). 	“On certiorari review,
this court reviews the decision of the court of appeals, not the
decision of the district court.” 	Colosimo v. Roman Catholic
Bishop of Salt Lake City, 2007 UT 25, ¶ 11, 156 P.3d 806. 	The
court of appeals reviewed the district court’s grant of a motion
for summary judgment. 	“Because a summary judgment presents
questions of law, we accord no particular deference to the court
of appeals’ ruling and review it for correctness.” 	Machock v.
Fink, 2006 UT 30, ¶ 8, 137 P.3d 779 (citation and internal
quotation marks omitted). 	Furthermore, we “view the facts and
all reasonable inferences drawn therefrom in the light most
favorable to the non-moving party.” 	Dowling v. Bullen, 2004 UT
50, ¶ 7, 94 P.3d 915.
¶13 	The second issue is whether the court of appeals
correctly construed Utah’s abusive lien statute, Utah Code
section 38-1-25 (2005). 	“We review the court of appeals’
interpretation of the relevant statute for correctness, according
no deference to its conclusions.” 	Regal Ins. Co. v. Canal Ins.
Co., 2004 UT 19, ¶ 5, 93 P.3d 99.
ANALYSIS
I. 	THE COURT OF APPEALS CORRECTLY HELD THAT THE DISTRICT COURT
ERRED IN DETERMINING THE EXISTENCE OF A JOINT VENTURE ON
SUMMARY JUDGMENT BECAUSE THERE EXISTED A MATERIAL ISSUE OF FACT
REGARDING THE SHARING OF LOSSES
¶14 	EPCO petitions for review of the court of appeals’
holding that the district court erroneously granted partial
summary judgment on EPCO’s joint venture claim. 	The court of
appeals concluded that an issue of fact existed as to whether 51-
SPR and Broadstone agreed to share losses and that, because an
issue of fact existed, partial summary judgment was

1 Although the Bassett court originally established these
elements for the purpose of determining the existence of a joint
venture, they have since been used to determine the existence of
partnerships as well. 	See Mardanlou v. Ghaffarian, 2006 UT App
165, ¶ 15 & n.2, 135 P.3d 904 (applying the Bassett elements to a
partnership). 	Thus, although EPCO alleged that Broadstone and
51-SPR were either partners or joint venturers, the distinction
is irrelevant to our analysis.
2 EPCO cites language from the court of appeals’ opinion in
Mardanlou, 2006 UT App 165, ¶ 15, as support for the proposition
that proof of each element is not necessary in each case. 	For
the reasons discussed throughout this opinion, we conclude that
some proof of each element of a joint venture must be presented
when the existence of a joint venture is at issue. 	To the extent
that Mardanlou suggests otherwise, we overrule it.
Nos. 20060864, 20060882 	6
inappropriate. 	Ellsworth Paulsen Constr. Co. v. 51-SPR-L.L.C.,
2006 UT App 353, ¶ 10, 144 P.3d 261. 	We agree with the court of
appeals that “there is a genuine issue of material fact regarding
the key issue of whether [51-SPR] agreed to share losses with
Broadstone,” id., and therefore affirm the court of appeals’
reversal of the district court’s partial summary judgment.
A. 	Elements of a Joint Venture
¶15 	More than thirty years ago, we laid out the essential
elements of a joint venture in Bassett v. Baker, 530 P.2d 1, 2
(Utah 1974).
The parties must combine their property,
money, effects, skill, labor and knowledge.
As a general rule, there must be [1] a
community of interest in the performance of
the common purpose, [2] a joint proprietary
interest in the subject matter, [3] a mutual
right to control, [4] a right to share in the
profits, and [5] unless there is an agreement
to the contrary, a duty to share in any
losses which may be sustained. 1
Id. 	“Whether a joint venture exists is ordinarily a question of
fact.” 	Strand v. Cranney, 607 P.2d 295, 296 (Utah 1980); see
also Rogers v. M.O. Bitner Co., 738 P.2d 1029, 1032 (Utah 1987).
A court must therefore look at the facts of the case and
determine whether there is evidence to support each of the five
elements of a joint venture. 2

7 	Nos. 20060864, 20060882
¶16 	The only element at issue in this appeal is the fifth
element: 	a duty to share in the losses. 	The duty to share
losses is an important element of a joint venture. 	Indeed, loss
sharing is a critical distinction between an investment-type
relationship--in which the first four elements may be present,
but investors have no duty to share in the losses beyond the
amount of their investment--and a joint venture relationship.
For this reason, “a contract not to share losses weighs heavily
against partnership because it is so inconsistent with the
standard partnership form.” 	Bromberg and Ribstein on
Partnership, § 2.07(d)(2) (Supp. 2006); see also McCulley Fine
Arts Gallery, Inc. v. “X” Partners, 860 S.W.2d 473, 479 (Tex. Ct.
App. 1993) (“Generally, the absence of a provision to share
losses indicates the lack of intent to create a partnership.”).
B. 	Meeting the Sharing of Losses Element at Trial
¶17 	Whether there is a duty to share losses is--like the
other four elements--a question of fact. 	See Latiolais v. BFI of
La., Inc., 567 So. 2d 1159, 1162 (La. Ct. App. 1990) (“The issue
as to whether the parties . . . anticipated a sharing of losses
is clearly an issue of fact within the province of the jury.”).
Thus, at trial, the party asserting the existence of a joint
venture must present some evidence of loss sharing. 	The most
obvious way to meet this evidentiary burden is to show that the
agreement between the parties contains a clear and unambiguous
loss-sharing provision. 	See Ellsworth Paulsen Constr. Co., 2006
UT App 353, ¶ 11 (“It goes without saying that a duty to share
losses is present in a relationship where a ‘written agreement
specifically provide[s] for the sharing of losses.’” (quoting
Harline v. Campbell, 728 P.2d 980, 983 (Utah 1986))).
¶18 	It is often the case, however, that the agreement
between the parties does not include a clear statement on the
issue of loss sharing. 	See Cutler v. Bowen, 543 P.2d 1349, 1351
(Utah 1975) (“When parties join in an enterprise, it is usually
in contemplation of success and making profits, and is often
without much concern about who will bear losses.”); Bromberg and
Ribstein on Partnership, § 2.07(d)(2) (noting that the question
of whether a partnership exists in the absence of an express
agreement to share losses “is significant because purported
partners, expecting profits, often do not provide for losses one
way or the other”). 	In this situation, the party asserting the
existence of a joint venture must present other evidence to
satisfy the loss-sharing element. 	For example, the asserting
party may show that the actions of the parties demonstrate an
intent to share losses. 	See Rogers, 738 P.2d at 1032 (“A joint
venture does not always arise pursuant to formal agreement;

3 EPCO also argues that a court may infer a duty to share
losses when one party provides labor and the other party provides
capital. 	We do not agree that such an inference should be
drawn--especially on summary judgment. 	As previously noted, the
sharing of losses is an important distinction between an
investment relationship and a joint venture. 	Many investment
relationships consist of one party providing the labor and the
other party providing the capital. 	Holding that such an
arrangement implies a duty to share losses blurs the line between
investors and joint venturers and could result in situations in
which parties intend to enter into an investment relationship but
are later held to be joint venturers.
Nos. 20060864, 20060882 	8
rather, it is a relationship voluntarily entered by the parties
and may be proven by the actions taken by the parties.”).
Alternatively, the asserting party may show that the agreement,
although lacking a clear statement regarding loss sharing, shows
an intent to share losses. 	See Bassett, 530 P.2d at 2 (“While
the agreement to share losses need not necessarily be stated in
specific terms, the agreement must be such as to permit the court
to infer that the parties intend to share losses as well as
profits.”); see also Latiolais, 567 So. 2d at 1162 (“[A]n
agreement to share losses may be implied if consistent with the
overall terms of the agreement.”). 	The asserting party may also
rely on a profit-sharing provision in the agreement as prima
facie evidence that the parties agreed to share losses. 	See
Bentley v. Brossard, 94 P. 736, 741 (Utah 1908) (“[I]t has been
quite generally held that an agreement to share profits, nothing
being said about losses, amounts prima facie to an agreement to
share losses also.”). 3 	Once the asserting party has presented
some evidence of loss sharing, the finder of fact can then weigh
that evidence against the evidence presented by the opposing
party to determine if the parties intended to share losses.
C. 	Meeting the Sharing of Losses Element on Summary Judgment
¶19 	Although a court may, as part of its fact-finding
function at trial, infer an intent to share losses from the
agreement, from the parties’ actions, or from a profit-sharing
provision, the issue before us is whether it is appropriate for a
court to make such an inference on summary judgment. 	This
question is especially important in a case such as this one, in
which the other four elements of a joint venture are undisputed.
We agree with the court of appeals that such an inference can be
made--thereby making summary judgment appropriate--only if the
opposing party does not present evidence to refute the inference.
See Bassett, 530 P.2d at 2. (“[When the] facts are not in dispute

9 	Nos. 20060864, 20060882
. . . the question of the relationship of the parties is a matter
of law.”).
¶20 	Summary judgment is appropriate only if there is no
genuine issue of material fact and the moving party is entitled
to judgment as a matter of law. 	Utah R. Civ. P. 56(c). 	Here,
there were no factual disputes regarding the first four elements
of a joint venture. 	Both parties conceded that the plain
language of the Agreement between 51-SPR and Broadstone clearly
demonstrated that there was “a community of interest in the
performance of the common purpose, a joint proprietary interest
in the subject matter, a mutual right to control, [and] a right
to share in the profits.” 	Bassett, 530 P.2d at 2.
¶21 	There was, however, a genuine issue of material fact
regarding the loss-sharing element. 	EPCO may have carried its
initial burden of providing evidence of an intent to share losses
by relying on its interpretation of the Agreement, the actions of
the parties, or the prima facie evidence of the profit-sharing
provision, but the inquiry does not end there. 	Under rule 56(e)
of the Utah Rules of Civil Procedure, after a motion for summary
judgment has been made and supported, the nonmoving party may
prevent summary judgment by “set[ting] forth specific facts
showing that there is a genuine issue for trial.” 	Chimento’s
affidavit, which asserts that Hatch and Broadstone were solely
responsible for the losses of the Northshore Project, raised a
different, but plausible, interpretation of the Agreement. 	And
as noted by the court of appeals, Chimento’s interpretation of
the Agreement was not a bald assertion; rather, “when Chimento’s
affidavit testimony is viewed together with the Agreement’s
provisions, several of the provisions . . . lend credence to his
assertions and give rise to reasonable inferences favorable to
[51-SPR’s] position.” 	Ellsworth Paulsen Constr. Co., 2006 UT App
353, ¶ 15. 	“Where, as here, equally plausible contrary
inferences may be drawn, neither party should have been granted
summary judgment.” 	Goodnow v. Sullivan, 2002 UT 21, ¶ 18, 44
P.3d 704 (Wilkins, J., concurring). 	Thus, because 51-SPR raised
a reasonable inference that it had no duty to share in the losses
of the Northshore Project, a genuine issue of material fact
existed and summary judgment was inappropriate.
¶22 	Our holding is consistent with the District of Columbia
Court of Appeals’ holding in Beckman v. Farmer, 579 A.2d 618
(D.C. 1990). 	In Beckman, Farmer brought a claim for breach of
fiduciary duty against two attorneys with whom he practiced law
(collectively, “Beckman”). 	Id. at 625-26. 	In order to assert
this claim, Farmer first had to establish that a partnership
existed between himself and Beckman; accordingly, Farmer filed a

4 The court also found that issues of material fact existed
regarding the right to control element of a partnership.
Beckman, 579 A.2d at 632.
Nos. 20060864, 20060882 	10
motion for summary judgment on the partnership claim. 	Id. at
626. 	There was no partnership agreement with a loss-sharing
provision; thus, in his motion for summary judgment, Farmer
proffered other evidence--such as a lease and promissory notes
securing bank loans--to show that he had agreed to share in the
losses of the firm. 	Id. at 628. 	In rebuttal, Beckman asserted
that he and Farmer had agreed to an employer/employee
relationship in which Farmer was not obligated to share in the
losses of the firm, and Beckman supported this allegation with
specific incidents and events, tax returns, and a profit-sharing
agreement. 	Id. at 630-32. 	The superior court concluded that
Beckman did not overcome Farmer’s “very substantial evidence”;
thus, it held that a partnership existed as a matter of law and
granted Farmer’s motion for summary judgment. 	Id. at 626.
¶23 	The District of Columbia Court of Appeals reversed,
holding that summary judgment was inappropriate on the
partnership claim because Beckman had raised genuine issues of
material fact regarding the duty to share losses. 4 	Id. at 632.
The court reasoned that Beckman’s rebuttal evidence and the
inferences drawn therefrom raised material issues of fact
regarding whether the parties intended to share losses, which in
turn raised questions of fact regarding the ultimate issue of the
existence of a partnership. 	Id. at 629, 632. 	The court noted
that although the inferences drawn from Beckman’s evidence “far
from overwhelmingly” supported Beckman’s contention that Farmer
had no duty to share in the losses, the inferences were
sufficient to raise a genuine issue of material fact, thereby
making the partnership determination inappropriate for summary
judgment. 	Id. at 632.
¶24 	Similarly, in this case, although EPCO’s motion for
summary judgment contained some evidence of an intent to share
losses between 51-SPR and Broadstone, 51-SPR’s rebuttal
evidence--Chimento’s affidavit and the inferences drawn from
it--raised genuine issues of material fact regarding the
loss-sharing element. 	Consequently, an issue of material fact
remained regarding the ultimate question of whether a joint
venture existed, and summary judgment was inappropriate. 	We
therefore uphold the court of appeals’ reversal of the district
court’s grant of partial summary judgment.

11 	Nos. 20060864, 20060882
II. 	THE COURT OF APPEALS CORRECTLY HELD THAT EPCO’S
LIEN WAS NOT ABUSIVE BECAUSE THE LIEN WAS NOT
FILED WITH THE REQUISITE CULPABLE MENTAL STATE
¶25 	In its cross-petition, 51-SPR argues that the court of
appeals erred in ruling that EPCO’s lien was not abusive under
Utah Code section 38-1-25 (2005).
¶26 	51-SPR disputes the appropriateness of EPCO’s inclusion
of the $78,000 change order in the lien. 	The district court
found that EPCO was not entitled to collect the $78,000 as part
of the lien because it did not relate to the Northshore Project
or 51-SPR. 	The court of appeals upheld the district court’s
conclusion. 	Ellsworth Paulsen Constr. Co. v. 51-SPR-L.L.C., 2006
UT App 353, ¶¶ 26-29, 144 P.3d 261. 	Neither party disputes the
court of appeals’ holding on this point. 	Indeed, EPCO concedes
that it cannot collect the $78,000 as part of its lien on the
Northshore buildings.
¶27 	Although the district court held that EPCO could not
collect the $78,000, it concluded that the inclusion of the
$78,000 did not render the lien abusive because EPCO had acted in
good faith when it included the $78,000 in the lien amount. 	The
court of appeals upheld the district court’s ruling, holding that
subsection (1)(b) of the abusive lien statute requires proof of
intent to extract more than is due. 	Id. ¶ 31. 	Based on the
district court’s finding that EPCO had acted in good faith when
it filed the lien, the court of appeals concluded that EPCO did
not file the lien with the requisite culpable mental state; thus,
the lien was not abusive. 	Id. ¶¶ 32-34. 	We agree.
¶28 	Utah’s abusive lien statute is found in Utah Code
section 38-1-25. 	Subsection (1) provides:
Any person entitled to record or file a lien
. . . is guilty of a class B misdemeanor who
intentionally causes a claim of lien against
any property, which contains a greater demand
than the sum due to be recorded or filed:
(a) with the intent to cloud the title;
(b) to exact from the owner or person
liable by means of the excessive claim
of lien more than is due; or
(c) to procure any unjustified advantage
or benefit.

5 The wording of the statute was slightly modified in 2007,
see Utah Code Ann. § 38-1-25 (Supp. 2007), but the changes do not
affect our analysis.
Nos. 20060864, 20060882 	12
Id. § 38-1-25(1). 5 	Subsection (2) of the statute provides that,
in addition to the criminal penalties, a person who files an
abusive lien is liable to the owner of the property upon which
the lien was filed for the greater of actual damages or “twice
the amount by which the wrongful lien exceeds the amount actually
due.” 	Id. § 38-1-25(2).
¶29 	51-SPR argues that because subsection (1)(a)
specifically mentions intent but subsections (1)(b) and (1)(c) do
not, there is no intent requirement under the latter two
subsections. 	Subsection (1)(a) provides that a lien is abusive
if a person files the lien “with the intent to cloud title,”
whereas subsections (1)(b) and (1)(c) provide that a lien is
abusive if a person files the lien “to exact . . . more than is
due” or “to procure any unjustified advantage or benefit.” 	Id.
§ 38-1-25(1) (emphasis added). 	51-SPR thus argues that the
absence of an intent requirement in subsections (1)(b) and (1)(c)
renders them akin to strict liability statutes. 	Because 51-SPR
claims that the lien is abusive under subsection (1)(b), 51-SPR
asserts that EPCO’s good faith is immaterial and, consequently,
that the district court erred in holding that the lien was not
abusive.
¶29a 	As noted by the court of appeals, any potential
confusion about an intent requirement is cured by referencing
Utah Code section 76-2-102 (2003), which provides:
Every offense not involving strict liability
shall require a culpable mental state, and
when the definition of the offense does not
specify a culpable mental state and the
offense does not involve strict liability,
intent, knowledge, or recklessness shall
suffice to establish criminal responsibility.
An offense shall involve strict liability if
the statute defining the offense clearly
indicates a legislative purpose to impose
criminal responsibility for commission of the
conduct prohibited by the statute without
requiring proof of any culpable mental state.
¶30 	The abusive lien statute is a criminal statute and does
not “clearly indicate[] a legislative purpose” to impose strict
liability on a lien claimant who fails to collect the entire

13 	Nos. 20060864, 20060882
amount of the originally filed lien. 	Id. 	Thus, although
subsections (1)(b) and (1)(c) do not specify the required mental
state necessary to establish criminal responsibility, the default
culpable mental states of “intent, knowledge, or recklessness”
apply. 	Id.
¶31 	The district court’s holding that EPCO acted in good
faith was based on its finding that, when EPCO filed its lien on
the Northshore buildings, it did not know exactly how Hatch had
used the $78,000 it had loaned to him. 	All EPCO had was a change
order for $78,000 on one of the Northshore buildings; EPCO did
not yet know how much, if any, of the $78,000 had actually been
used or applied to the construction of the Northshore buildings.
The court of appeals concluded that these findings were not
clearly erroneous, Ellsworth Paulsen Const. Co., 2006 UT App 353,
¶¶ 33-34, and we conclude likewise. 	Based on the district
court’s findings, we hold that EPCO acted in good faith and did
not intentionally, knowingly, or recklessly include the $78,000
in order to exact more than was due; thus, EPCO’s lien was not
abusive.
¶32 	In sum, we conclude that the court of appeals correctly
interpreted Utah Code section 38-1-25 by incorporating the
default mental state from Utah Code section 76-2-102. 	We further
conclude that EPCO did not file the lien with the requisite
culpable mental state. 	Therefore, we affirm the court of
appeals’ holding that the lien was not abusive.
CONCLUSION
¶33 	Because 51-SPR raised a genuine issue of material fact
on the question of whether 51-SPR and Broadstone agreed to share
losses, the court of appeals correctly concluded that it was
inappropriate for the district court to find a joint venture on
summary judgment. 	Additionally, the court of appeals correctly
interpreted the abusive lien statute by incorporating the default
mental state from Utah Code section 76-2-102 (2003). 	We
accordingly affirm.
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¶34 	Chief Justice Durham, Associate Chief Justice Wilkins,
Justice Durrant, and Justice Nehring concur in Justice Parrish’s
opinion.