Bay Harbor Farm v. Sumsion

2014 UT App 133
_________________________________________________________
THE UTAH COURT OF APPEALS
BAY HARBOR FARM, LC,
Plaintiff, Appellee, and Cross-appellant,
v.
STEVEN R. SUMSION,
Defendant, Appellant, and Cross-appellee.
Opinion
No. 20120812-CA
Filed June 12, 2014
Fourth District Court, American Fork Department
The Honorable Thomas Low
No. 120100179
John L. Valentine, Steven R. Sumsion, and
Kevin R. Worthy, Attorneys for Appellant
and Cross-appellee
Stephen W. Geary and Adam M. Kaas, Attorneys
for Appellee and Cross-appellant
JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES
J. FREDERIC VOROS JR. and STEPHEN L. ROTH concurred.
ORME, Judge:
¶1 Steven R. Sumsion appeals a district court order nullifying
his lien under the Wrongful Lien Act. We reverse and direct the
district court to dismiss Bay Harbor Farm’s wrongful lien petition.
BACKGROUND
¶2 Bay Harbor Farm owns property in Utah County on which
it operated a farm. In 2002, a farm worker was injured while

Bay Harbor Farm v. Sumsion
20120812-CA 2 2014 UT App 133
working with a tractor on or near the farm. That worker
subsequently brought a workers’ compensation claim against Bay
Harbor and Donald Proctor, a manager and forty-five-percent
owner of Bay Harbor. Proctor retained Sumsion, an attorney, to
defend him against the workers’ compensation claim. Sumsion
provided Proctor with an engagement letter confirming that
Sumsion would represent Proctor on “numerous matters involving
Bay Harbor Farms and various personal matters.” Proctor signed
the letter twice, once on a line labeled “Donald Proctor,” and again
on a line labeled “Bay Harbor Farms, LLC, Don Proctor, Manager.”
¶3 In 2006, Sumsion recorded a notice of attorney’s lien on Bay
Harbor’s property because he had not been paid for his work on
the workers’ compensation matter. In June 2011, Bay Harbor
demanded that Sumsion release his lien. Sumsion refused and sent
documents to Bay Harbor that he believed supported the validity
of his attorney’s lien. Sumsion also recorded an amended notice of
his lien, in which he maintained that his lien was a valid attorney’s
lien “in accordance with the provisions of Sections 38-2-7 et seq.”
of the Utah Code because Sumsion “was engaged and provided
legal services at the request of and for Bay Harbor” and the
property subject to his lien “was the subject of or connected with
work performed by [Sumsion] for Bay Harbor.”
¶4 Bay Harbor filed a petition in the district court to have
Sumsion’s lien declared wrongful under the Wrongful Lien Act. See
Utah Code Ann. § 38-9-7 (LexisNexis 2010). Bay Harbor also
requested and obtained a hearing in accordance with the Wrongful
Lien Act. See id. § 38-9-7(3)(b).
¶5 The district court granted Bay Harbor’s petition and
nullified Sumsion’s lien. It ruled that Sumsion’s lien was a
wrongful lien under the Wrongful Lien Act because it was not
expressly authorized by statute. See id. § 38-9-1(6)(a) (stating that
liens that are “expressly authorized by this chapter or another state
or federal statute” are not wrongful liens). Sumsion appeals.

Bay Harbor Farm v. Sumsion
20120812-CA 3 2014 UT App 133
ISSUE AND STANDARD OF REVIEW
¶6 Sumsion challenges the district court’s interpretation of the
Wrongful Lien Act. Whether a lien is wrongful under section 38-9-1
of the act is a question of law, and we therefore review the district
court’s determination for correctness. See Pratt v. Pugh, 2010 UT
App 219, ¶ 7, 238 P.3d 1073; Russell v. Thomas, 2000 UT App 82, ¶ 8,
999 P.2d 1244.
ANALYSIS
¶7 The Wrongful Lien Act provides that “[a]ny record interest
holder of real property against which a wrongful lien . . . has been
recorded may petition the district court in the county in which the
document was recorded for summary relief to nullify the lien.”
Utah Code Ann. § 38-9-7(1) (LexisNexis 2010). However, a lien may
be nullified through this type of expedited procedure only if, at the
time the lien was recorded, it was not “expressly authorized by [the
Wrongful Lien Act] or another state or federal statute.” Id. § 38-9-
1(6).
¶8 Sumsion contends on appeal, as he did below, that because
the Utah Code authorizes attorney’s liens, his lien is expressly
authorized by statute and therefore not subject to nullification in an
expedited hearing under the Wrongful Lien Act. The district court,
however, determined that Sumsion’s lien was not authorized by
statute. In reaching this conclusion, the district court analyzed the
enforceability of Sumsion’s lien under the attorney’s lien statute.
Quoting the statute, the district court explained that
[t]he attorney lien statute requires two relevant
elements: first, [Bay Harbor] must have been the
“client” of [Sumsion] for the work performed;
second, that the Property must have been “the
subject of or connected with work performed for the
client.”

Bay Harbor Farm v. Sumsion
1. The district court reserved the question of Bay Harbor’s
“entitlement to costs and reasonable attorney fees, pursuant to
Utah Code § 38-9-7(5)(a), . . . for later decision.”
20120812-CA 4 2014 UT App 133
See Utah Code Ann. § 38-2-7(2) (LexisNexis 2010). The court then
noted that it was “unable, upon this expedited proceeding, to find
whether or not [Bay Harbor] was a client of [Sumsion]” for the
work performed on the workers’ compensation case. But the court
did find that the Bay Harbor property “was not the subject of or
connected with [Sumsion’s] work on the [workers’ compensation]
matter.” The district court then concluded that because Sumsion’s
lien was unenforceable as an attorney’s lien under section 38-2-7,
it was a wrongful lien under the Wrongful Lien Act and “void ab
initio.”1
¶9 The Utah Supreme Court considered this issue under
factually similar circumstances in Hutter v. Dig-It, Inc., 2009 UT 69,
219 P.3d 918. In Hutter, the parties disputed the meaning of the
phrase “expressly authorized by . . . statute” found in the Wrongful
Lien Act. Id. ¶ 46. The lien claimant contended that “because the
right to file a mechanic’s lien is granted by statute, all mechanic’s
liens—even if they ultimately prove unenforceable—are expressly
authorized by statute and therefore are not wrongful liens.” Id. The
property owners, however, argued “that an unenforceable lien
cannot be expressly authorized by statute since the statute only
allows liens to be recorded that comply with the statutory terms.”
Id.
¶10 The Hutter court concluded that the phrase “expressly
authorized by . . . statute” was ambiguous and therefore turned to
the statute’s legislative history for guidance. Id. ¶ 49. The court
then focused on one particular legislative exchange sparked by a
concern that Senator Richard Carling raised about the Wrongful
Lien Act: “‘[I]t appears [to go] to all liens, not just common law
liens’” and “‘somebody might think that they have a valid lien
against somebody, they’re going to file a lien and it might be
determined invalid.’” Id. ¶ 50 (quoting Senate Floor Debate, S.B.

Bay Harbor Farm v. Sumsion
20120812-CA 5 2014 UT App 133
178, 42nd Leg., Gen. Sess. (February 21, 1985) (statement of Senator
Carling)). After recounting several other senators’ responses to
Senator Carling’s misgiving, the Supreme Court held, “This
legislative history makes clear that the legislature intended that the
definition of ‘wrongful lien’ should encompass only common law
liens. Therefore, we conclude that the phrase ‘not expressly
authorized by . . . statute’ in the Wrongful Lien Act does not
include statutorily created liens,” even those “that ultimately prove
unenforceable.” Id. ¶ 52. The Court then concluded that because the
lien claimant “filed a mechanic’s lien, which is expressly authorized
by statute, the lien, though unenforceable . . . , is not wrongful.” Id.
¶11 Closely analogous to the circumstances presented in Hutter,
Sumsion filed an attorney’s lien, which is expressly authorized by
statute, and it is therefore not wrongful. This is true even if it
ultimately proves unenforceable, whether because Bay Harbor was
not Sumsion’s client, because the Bay Harbor property was
unconnected to the workers’ compensation claim, or on some other
basis. But an expedited hearing under the Wrongful Lien Act is not
the right vehicle for analyzing the lien’s enforceability under the
attorney’s lien statute. See Utah Code Ann. § 38-9-7(4) (LexisNexis
2010) (“A summary proceeding under this section is only to
determine whether or not a document is a wrongful lien. The
proceeding shall not determine any other property or legal rights
of the parties nor restrict other legal remedies of any party.”).
¶12 This is not to say that a lien claimant may escape the reach
of the Wrongful Lien Act simply by alleging that his or her lien is
“expressly authorized by statute.” See Hutter, 2009 UT 69, ¶ 52.
Although a court may not, within the context of a summary
proceeding under the Wrongful Lien Act, analyze whether a
statutory lien is ultimately enforceable, it may consider whether a
lien claimant has a good-faith basis for claiming a statutory lien.
The legislative history cited by the Supreme Court in Hutter
supports this conclusion. Senator Carling expressed his concern
about the scope of the Wrongful Lien Act only as it applies to the
lien claimant who rationally believes he has a valid statutory lien

Bay Harbor Farm v. Sumsion
2. It is also a felony for an individual to file a lien while “having no
objectively reasonable basis to believe he has a present and lawful
property interest in the property or a claim on the assets.” Utah
Code Ann. § 76-6-503.5 (LexisNexis 2012).
3. This does not mean that Bay Harbor may not still challenge
Sumsion’s lien as unenforceable under the attorney’s lien statute in
an appropriate proceeding. See Utah Code Ann. § 38-9-7(4)
(LexisNexis 2010) (“A summary proceeding under this section . . .
shall not determine any other property or legal rights of the parties
nor restrict other legal remedies of any party.”) (emphasis added). See
also id. § 38-2-7 (attorney’s lien statute).
20120812-CA 6 2014 UT App 133
but who might have it nonetheless declared wrongful at an
expedited proceeding. See id. ¶ 50. Conversely, if a lien claimant
has no plausible claim to the property that is the subject of the lien,
a court may declare the lien wrongful under the Wrongful Lien Act
even if it purports to be one falling into the category of statutorily
authorized liens. For example, a person who is not an attorney2
could have no plausible basis for recording an attorney’s lien; a
dentist who repaired a patient’s crowns would have no basis for
recording a mechanic’s lien against the patient’s residence.
¶13 We conclude that Sumsion had a sufficiently plausible good-
faith claim that his lien complied with the requirements of the
attorney’s lien statute to insulate it from nullification under the
Wrongful Lien Act. For purposes of a summary proceeding under
the Wrongful Lien Act, Sumsion has a plausible claim that (1) Bay
Harbor was his client and (2) Bay Harbor’s farm property was “the
subject of or connected with work performed for the client.” See id.3
¶14 First, Sumsion apparently understood that he was
performing work for Bay Harbor as well as for Proctor
individually. The record contains an engagement letter from
Sumsion that, with our emphasis, confirms Sumsion’s
representation “on numerous matters involving Bay Harbor Farms
and various personal matters.” Proctor signed the letter in his
individual capacity and also signed on behalf of “Bay Harbor

Bay Harbor Farm v. Sumsion
4. Because we reverse the district court’s order, we need not reach
the remaining issues raised in Sumsion’s appeal or Bay Harbor’s
cross-appeal.
20120812-CA 7 2014 UT App 133
Farms, LLC,” in the stated representative capacity, “Manager.”
While Bay Harbor contends that it is not bound by this letter, its
mere existence is enough to give Sumsion a plausible claim that
Bay Harbor was his client. Whether or not Bay Harbor was actually
Sumsion’s client should be evaluated in a proceeding other than an
expedited wrongful lien hearing, upon consideration of any
relevant evidence the parties may present.
¶15 Second, Sumsion had a plausible claim that the property
subject to his lien was “connected with work performed” in
handling the workers’ compensation matter. The district court
interpreted this language quite narrowly, noting, “Even though
this alleged injury occurred on the land, the state of the land was
not [the] subject of part of the lawsuit.” However, the statute
includes the phrase “connected with” in addition to the phrase “the
subject of,” indicating that the statute was meant to cover more
than those cases where the land is the actual subject of the lawsuit.
See Utah Code Ann. § 38-2-7(2). See also State v. Morrison, 2001 UT
73, ¶ 11, 31 P.3d 547 (noting our fundamental duty to give effect to
every word of a statute, avoiding “any interpretation which
renders parts or words in a statute inoperative or superfluous”)
(citation and internal quotation marks omitted). For example,
although a parcel of real property would not be “the subject of” a
premises liability lawsuit in the same way that it would be in an
action to quiet title to that same parcel of property, the property
where the injury occurred is certainly “connected with” any work
performed on such a case. While the district court could ultimately
find that the workers’ compensation matter here was not
sufficiently “connected with” Bay Harbor’s property and thus find
the lien unenforceable, Sumsion at least had a plausible claim that
his work was connected with Bay Harbor’s land, and therefore the
lien’s creation was expressly authorized by statute for purposes of
the Wrongful Lien Act.4

Bay Harbor Farm v. Sumsion
20120812-CA 8 2014 UT App 133
CONCLUSION
¶16 The phrase “not expressly authorized by statute” in the
Wrongful Lien Act does not include statutorily created liens that
may ultimately prove unenforceable. In the context of an expedited
proceeding under the Wrongful Lien Act, a district court may only
consider whether a statutory lien claimant has a plausible good-
faith basis for claiming that the lien is authorized by statute. In this
case, Sumsion had a plausible good-faith claim for recording his
statutory attorney’s lien. Therefore, we reverse the district court’s
order nullifying Sumsion’s lien. On remand, the district court “shall
dismiss the petition and may award costs and reasonable attorney’s
fees to [Sumsion].” Utah Code Ann. § 38-9-7(5)(c) (LexisNexis
2010).