When the Washington Supreme Court delivered its big mechanic’s lien opinion last week in Williams v. Athletics’ Field, I only had a few moments to report it here on the blog (Williams v. Athletics’ Field). However, this decision has significant consequences to mechanic lien jurisprudence in Washington state, and it deserves a blog post or two to explain what the Supreme Court had to say and how it should affect mechanic lien filings.
Summary of Case
If you’re a reader of the Construction Payment Blog, you know we’ve been following this case for more than a year now (read our posts: Williams v. Athletics’ Field tag).
In this case, the lien claimant filed a lien using a form that was provided by the Washington mechanics lien statute. The lien statute says within it that a filing “using substantially the same form shall be valid.” (§60.04.091) However, because of some other wording in the statute, lawyers challenging the lien argued that a separate “acknowledgment” of the lien claimant’s signature was required as an attachment to the statutory provided lien form.
While I think the argument is terrible, and a clear misreading of the statute’s plain language making the provided form acceptable per se, the trial court and the appeals court agreed with the party challenging the lien. This was measurable seismic activity on mechanic lien jurisprudence in Washington state, jeopardizing the validity of thousands and thousands of liens in the state.
The Washington Supreme Court accepted review, and all was made right with the world again. But, the Washington Supreme Court did a lot more with its recent decision than just dismiss this acknowledgement argument. They set law on a growing division between the state’s appeal circuits over whether mechanic lien statutes should be liberally or strictly construed, and this could have far-reaching consequences.
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The Liberal v. Strict Construction Divide in Washington
I don’t want to brag, but I saw this decision coming a mile away. While there was a lot of argument in the trial and circuit courts about the friction between §60.04.091’s acknowledgment requirements and the statutory provided form lacking an acknowledgment, what really mattered in deciding whether the lien was valid or invalid was whether courts were to require strict compliance with §60.04.091 or liberal compliance.
Earlier this year, I wrote about this saying:
Interestingly, the decision does a lot more than just address how a Washington mechanics lien must be signed and notarized. Instead, it addresses a big-picture difference between Division I and Division II of the Washington Courts of Appeals.
The bigger issue is whether lien laws must strictly or liberally construed by courts. Critizing the Williams v. Athletic Field decision and the underlying reasoning of the Division II court, Division I engaged in the debate about whether strict or liberal interpretation must be applied in lien disputes with the following:
“In the lien context…there is a strong statutory directive that “[the lien statutes]…be liberally construed to provide security for all parties intended to be protected by their provisions.” RCW 60.04.900. This directive clearly applies to RCW 60.04.091. See, e.g. Northlake Concrete Prods., Inc. v. Wylie, 34 Wn.App. 810, 818, 663 P.2d 1380 (1983) (explaining the Legislature’s intent that “the lien laws shall be liberally construed with the view to effecting their object” meant that “when it has been determined that persons come within the operation of the act it will be liberally applied to them” (quoting De Gooyer). N. Coast. Elect. Co. v. Ariz. Elec. Serv., 2010 Wash. App. LEXIS 914, fn4 (Wash. Ct. App. Aug 23 2010).”
The strict v. liberal rub is weird in Washington. It seems obvious to me, in reading the case law, when liberal construction applies versus when strict construction applies. However, attorneys making confusing or disingenuous arguments combined with misapplication of jurisprudence by district and appeal court judges, created a long-lasting incorrect application of law that caused big problems to Washington mechanics lien claimants.
The problem arises because both strict and liberal construction of mechanic liens may be required depending on circumstances. If the court is determining whether a particular claimant falls into the class of parties who are protected by lien laws, strict construction should apply. If the party is protected by lien laws, and the question is simply whether the lien is valid or meets statutory requirements, then liberal construction should apply. The strict construction rule comes from jurisprudence (case law), and the liberal construction rule comes straight from statute (§60.040.900).
If you look at the law and jurisprudence, this dichotomy of construction is actually clear. §60.040.900 requires the mechanic lien statutes to be “liberally construed to provide security for all parties intended to be protected by their provisions.” Case law picks up on this, stating that to decide who is “intended to be protected” requires strict construction. Seems simple, yes?
Somehow, however, case law confused the issue. The Supreme Court in Williams pointed to a 1997 Division II case as when mechanic lien jurisprudence went off track:
…more recent cases have expanded the rule of strict construction beyond identifying what services or property the mechanics’ lien statutes protect. In Lumberman’s of Washington, Inc. v. Barnhardt, 89 Wn. App. 283, 286 (1997), the Court of Appeals applied the rule of strict construction in determining whether a lien was valid where the claimant failed to sign a statement swearing it believed the claim of lien to be just.
Williams Decision Restores Liberal Construction
The Supreme Court in Williams recognizes that §60.040.900’s liberal construction has taken a back seat to strict construction since the 1997 Lumberman’s decision. They drew a comparison between the pre-1997 jurisprudence and the post-1997 jurisprudence and held that the old ways of considering mechanic lien questions should prevail:
We agree with Hos [defendant in Williams] that the appropriate way to view the competing canons of strict and liberal construction is found in our early cases. The strict construction rule, at its origin, was invoked to determine whether persons or services came within the statute’s protection. Expanding the rule of strict construction beyond this inquiry effectively nullifies RCW 60.04.900. As Hos explains, “applying a ‘liberal construction’ to RCW 60.04.091 only after a valid lien is deemed to attach would make no sense. At that point – when by definition the claimant has a valid lien – nothing in RCW 60.04.091 would matter to the claimant.” Appellant’s Reply Br. at 3. To the extent Lumberman’s or other cases suggest that the statute’s mandate of liberal construction has been supplanted by a common law rule of strict construction, we disapprove them.
Conclusion – What Does This Mean?
As I see it, having the Supreme Court weigh in on this question was a long time coming. Practicing law in Washington, I can’t count the number of times opposing attorneys have relied on Lumberman’s to argue a lien was invalid. Defense attorneys loved the Lumberman’s precedent, but to me it always just seemed to be a wrong decision. Now, the Supreme Court has addressed the discrepancy, and Lumberman’s is tossed.
This is a big deal for Washington lien claimants. If you’re a party who is intended to be protected by the mechanic lien laws (contractors, subcontractors, suppliers, etc.)….then you’ll have just a bit more leeway in filing your mechanic lien claims. If there is a small mistake in your lien claim, Washington courts should now look at that mistake liberally, allowing you to amend and fix it in most situations.
As lots of little mistakes can be made in filing a mechanic’s lien, this little bit of breathing room can be a huge difference maker.