John Holmes Construction v. R.A. McKell Excavating

2005 UT 83
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
John Holmes Construction, Inc., 	No. 20041048
a Utah corporation, and Coulter &
Smith Ltd., a Nevada corporation,
Plaintiffs and Respondents,
v.
R.A. McKell Excavating, Inc.,
a Utah corporation, and Rick McKell, 	F I L E D
an individual,
Defendants and Petitioners. 	November 22, 2005
---
Third District, Salt Lake
The Honorable William B. Bohling
No. 000909210
Attorneys: 	P. Bruce Badger, Douglas J. Payne, Salt Lake City,
for plaintiffs
Jack W. Reed, James L. Warlaumont, Timothy J. Curtis,
Salt Lake City, for defendants
---
On Certiorari to the Utah Court of Appeals
WILKINS, Associate Chief Justice:
¶1 	R.A. McKell Excavating, Inc. and Rick McKell (McKell)
ask us to review the court of appeals’s decision to affirm the
district court’s grant of partial summary judgment in favor of
John Holmes Construction, Inc., and its successor in interest
Coulter & Smith, Ltd., (collectively, Holmes). 	Holmes sought
relief from a mechanic’s lien that McKell had placed on Holmes’s
property. 	In addition, McKell seeks reversal of the court of
appeals’s decision affirming the district court’s award of
attorney fees to Holmes in the amount of $25,000. 	We reverse.
BACKGROUND
¶2 	Husting Land and Development, Inc. purchased property
in Draper, Utah for the purpose of constructing a residential

No. 20041048 	2
subdivision. 	The property was landlocked and only accessible
through an adjacent platted single family subdivision owned by
Holmes. 	In exchange for access, Husting agreed to complete
certain infrastructure improvements upon both Holmes’s and
Husting’s properties. 	Holmes agreed to reimburse Husting on a
pro rata basis for the construction expenses on the Holmes
parcel.
¶3 	Husting filed for bankruptcy in January of 1997 then
contracted with McKell in April of 1997 to complete the remaining
improvements and to make necessary corrections on defective work
that had already been done. 	McKell installed improvements on
both parcels, but ceased work on the project in November of 1997
due to non-payment. 	In April of 1998, McKell sought payment for
the work they had done under the 1997 contract with Husting by
filing a Motion for Allowance of Administrative Expense with the
bankruptcy court. 	The motion was denied.
¶4 	In September of 1999, the trustee obtained permission
from the bankruptcy court to enter into new contracts for the
development and construction of Husting’s property. 	The trustee
then retained Eagle Pointe Realty and Management, Inc. and Eagle
Pointe Financial (collectively, Eagle Pointe) to complete the
subdivision. 	Eagle Pointe then contracted with McKell to finish
phases I, II, and III, and to complete other associated projects
that included construction of a road and related improvements
through the Holmes parcel.
¶5 	On June 7, 2000, McKell recorded a notice of lien
against Holmes and its subdivision in the amount of $132,824.18.
Holmes filed a complaint which, among other things, sought to
remove the lien. 	Holmes filed a motion for partial summary
judgment which the district court granted. 	Additionally, Holmes
sought attorney fees as the prevailing party, which the district
court awarded pursuant to Utah Code section 38-1-18 (2001).
McKell appealed. 	The court of appeals affirmed, and we granted
certiorari pursuant to Utah Code section 78-2-2(3)(a) (2002).
STANDARD OF REVIEW
¶6 	On certiorari, we review the decision of the court of
appeals, not the trial court. 	Salt Lake County v. Metro W. Ready
Mix, Inc., 2004 UT 23, ¶ 11, 89 P.3d 155 (citing Mitchell v.
Christensen, 2001 UT 80, ¶ 8, 31 P.3d 572). 	The question of
whether or not the work McKell performed constituted an
improvement to a residence for the purposes of Utah Code section
38-1-7(1)(a) is an issue of statutory construction that we review
for correctness, giving no deference to the lower court’s legal

1 The 2004 amendment to Utah Code section 38-1-7 removed the
distinction between residence and non-residence. 	Act of February
10, 2004, ch. 85, § 38, 2004 Utah Laws 321. 	However, the prior
distinction applies to this action.
3 	No. 20041048
conclusions. 	R.A. McKell Excavating, Inc. v. Wells Fargo Bank,
N.A., 2004 UT 48, ¶ 7, 100 P.3d 1159 (citing Stephens v.
Bonneville Travel, Inc., 935 P.2d 518, 519 (Utah 1997)). 	Because
this issue arises in the context of a summary judgment, we “‘view
the facts and all reasonable inferences drawn therefrom in the
light most favorable to the non-moving party,’” McKell in this
case. 	Id. (quoting Hermansen v. Tasulis, 2002 UT 52, ¶ 10, 48
P.3d 235).
¶7 	Whether the court of appeals properly upheld the
district court’s award for attorney fees is a question of law
reviewed for correctness. 	Metro W. Ready Mix, 2004 UT 23, ¶ 11.
ANALYSIS
¶8 	We have agreed to review two issues. 	The first is
whether the infrastructure work performed by McKell constitutes
an improvement to a “residence” for purposes of Utah Code section
38-1-7(1)(a) (2001). 1 	If the work is deemed to have been for a
“residence,” then the limitations period for filing a mechanic’s
lien is set at ninety days from the date “the person last
performed labor or service” by Utah Code section 38-1-7(1)(a) and
McKell’s mechanic’s lien was not timely filed. 	If, on the other
hand, the work was not for a “residence,” subpart (1)(b) of
section 38-1-7 applies. 	Subpart (1)(b) sets the filing deadline
at ninety days from the “completion of the original contract,”
and McKell’s lien filing would be timely.
¶9 	The second issue is whether the court of appeals erred
in upholding the district court’s award for attorney fees. 	We
will review each issue in turn.
I. GENERAL INFRASTRUCTURE WORK IN A SUBDIVISION IS NOT “AN
IMPROVEMENT FOR A RESIDENCE”
¶10 	We first address whether work on a residential
subdivision involving installation of utilities, roadways, and
irrigation systems constitutes an improvement to a residence for
purposes of Utah Code section 38-1-7(1)(a) (2001). 	We conclude
that is does not.
Section 38-1-7(1)(a) states:

2 The definition of “residence” in now found in Utah Code
Ann. § 38-11-102(22) (Supp. 2005).
3 By definition, a residential subdivision would include
more than one residence.
No. 20041048 	4
(1) A person claiming benefits under this
chapter shall file for record with the county
recorder of the county in which the property,
or some part of the property, is situated, a
written notice to hold and claim a lien
within 90 days from the date:
(a) the person last performed labor or
services or last furnished equipment or
material on a project or improvement for a
residence as defined in Section 38-11-102.
Utah Code Ann. § 38-1-7(1)(a) (amended 2004) (emphasis added).
¶11 	McKell argues that the work performed should not and
does not qualify as work done on a project or improvement for a
residence, as “residence” is defined by Utah Code section 38-11-
102(20). 2 	This section defines residence as “real property used
or occupied, to be used or occupied as, or in conjunction with,
a primary or secondary detached single-family dwelling or
multifamily dwelling up to two units, including factory built
housing.” 	Utah Code Ann. § 38-11-102(20).
¶12 	When interpreting statutes, statutes “are to be
construed according to their plain language.” 	LKL Assocs., Inc.
v. Farley, 2004 UT 51, ¶ 7, 94 P.3d 279 (citing Dick Simon
Trucking v. Utah State Tax Comm’n, 2004 UT 11, ¶ 17, 84 P.3d
1197). 	Additionally, we “‘assume that each term . . . was used
advisedly; thus the statutory words are read literally, unless
such a reading is unreasonably confused or inoperable.’” 	R.A.
McKell Excavating, Inc. v. Wells Fargo Bank, N.A., 2004 UT 48,
¶ 8, 100 P.3d 1159 (quoting Johnson v. Redevelopment Agency, 913
P.2d 723, 729 (Utah 1995)). 	Utilizing these rules, we conclude
that work done on a project or improvement for a residence, as
defined in Utah Code section 38-11-102(20), does not include
infrastructure improvements to a residential subdivision. 3
¶13 	This result is in accord with the analysis in our
opinion in LKL, 2004 UT 51. 	In LKL, we interpreted the same
statutes in determining whether a single unit in a ten-unit
condominium fit within the definition of residence. 	We stated
that “[a] single unit of a ten-unit building is neither a

4 As in the LKL case, we again use the word “duplex” to
describe “twin-homes” and other variations of a duplex. 	See LKL
Assocs., Inc. v. Farley, 2004 UT 51, ¶ 8 n.1, 94 P.3d 279.
5 	No. 20041048
detached single-family dwelling, nor a multifamily dwelling of
two or fewer units.” 	Id. ¶ 6. 	“[T]he statutory language clearly
limits the Act’s protections to either the typical single-family
home, or a duplex.” 	Id. ¶ 8.
¶14 	The court of appeals stated in its opinion that “LKL
does not narrow the meaning of ‘residence’ as defined in section
38-11-102(20). 	Rather, it merely holds that we must go no
further than the plain language of the definition.” 	John Holmes
Constr., Inc. v. R.A. McKell, 2004 UT App 392, ¶ 16, 101 P.3d
833. 	The court of appeals misunderstood our intent in LKL. 	We
said in LKL that the term residence, as defined in Utah Code
section 38-11-102(20), means only a typical single family home or
duplex. 4 	Specifically in this case, the term residence simply
does not include infrastructure work done on a residential
subdivision for the benefit of more than one residence.
¶15 	Holmes cites First of Denver Mortgage Investors v.
Zundel, 600 P.2d 521 (Utah 1979), in support of the court of
appeals’s decision. 	Although good law, First of Denver is not
dispositive as to the issue now before us. 	The issue there was
whether the infrastructure work was lienable. 	This is vastly
different from the question of whether infrastructure work for a
residential subdivision qualifies as work for a “residence.” 	The
distinction between residence and non-residence was not added to
the mechanic’s lien statute until 1995, well after First of
Denver was decided. 	See Act of February 28, 1995, ch. 172, § 38,
1995 Utah Laws 548. 	We conclude that work on subdivision
improvements intended to benefit more than one residence is not
work that qualifies under section 38-1-7(1)(a) for the shorter
statute of limitations.
II. ATTORNEY FEES
¶16 	Having determined that work in a residential
subdivision involving installation of utilities, roadways, sewer
lines, and an irrigation system does not constitute a “project or
improvement for a residence” for purposes of Utah Code section
38-1-7(1)(a) (2001), we need not reach the question of the award
of attorney fees to Holmes. 	Holmes is no longer the prevailing
party. 	The issue of attorney fees is reserved to be resolved
with the ultimate resolution of the case in the district court.

No. 20041048 	6
CONCLUSION
¶17 	Work performed on a residential subdivision that
involves installation of utilities, roadways, sewer lines, and
irrigation systems does not constitute a project or improvement
for a residence for purposes of Utah Code section 38-1-7(1)(a) as
applicable to this case. 	We reverse the grant of summary
judgment on this issue. 	Because Holmes is no longer the
prevailing party, we vacate the award of attorney fees. 	We
reverse and remand for proceedings consistent with this opinion.
---
¶18 	Chief Justice Durham, Justice Durrant, Justice Parrish,
and Justice Nehring concur in Associate Chief Justice Wilkins’
opinion.