Mata Hardscape Designs v. Georgetown West Townhouse Owners Assoc. ( 2014 )


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  •                               Based on alleged increased costs associated with work delays,
    Mata tendered a 15-day notice of intent to lien to Georgetown, indicating
    an outstanding balance of $20,197.02. 1 Georgetown has never disputed
    that it owed the $16,197.02 balance due under the contract. Mata
    recorded a notice of intent to lien, again in the amount of $20,197.02,
    naming Georgetown as the owner of the property. Subsequently, Mata
    recorded a notice of lien in the amount of $20,197.02; however, this notice
    of lien named 150 individual homeowners as the owners of the property.
    Mata recorded an amended notice of lien and a second amended notice of
    lien in the amount of $93,724.64, indicating that each homeowner was
    responsible for $624.83 of this amount.
    In response to the second amended notice of lien, Georgetown
    filed a complaint in district court, along with a motion for an order to show
    cause why a reduction or a release of the mechanic's lien should not issue.
    Georgetown argued that NRS 108.245 required Mata to provide a notice of
    right to lien to the individual homeowners upon entering into the contract.
    Alternatively, Georgetown cited NRS 108.2275 and argued that even if the
    lien was procedurally valid, it was excessive due to Mata's inclusion of the
    $77,527.62 that was not supported, authorized, and approved by a
    properly executed change order.
    In opposition, Mata argued both the merits of its lien and that
    Georgetown invoked NRS 108.2275 incorrectly. Specifically, Mata argued
    that (1) Georgetown should not have obtained a hearing date for its
    motion, but rather should have first sought an order to show cause via an
    1 It
    appears that this dollar amount was derived from the contractual
    amount owed, plus $4,000 for root damage repairs.
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    ex parte motion; (2) Mata was not required to serve a notice of right to lien
    to the individual homeowners because it "contracted directly with the
    owner of the property" since each homeowner is a member of Georgetown
    and Georgetown acts on behalf of the individual owners; and (3) its lien
    was not excessive, as evidenced by payroll records and rental cost
    documents that were attached to the opposition.
    After a hearing, the district court granted Georgetown's
    motion, expunging the lien. The district court found that the common
    area was owned by the individual homeowners, and that Georgetown had
    not executed any change orders for the additional $77,527.62 claimed by
    Mata. As a result, it ruled that the lien was invalid because NRS 108.245
    required Mata to provide the individual homeowners—the owners of the
    common area—with a notice of right to lien, and the lien was excessive as
    the contract provided for a specific amount. Mata now appeals.
    The district court did not violate NRS 108.2275 or Mata's due process
    rights by ruling on the validity of the mechanic's lien at the initial hearing
    On appeal, Mata argues that the district court erred in
    expunging its lien at the initial hearing requesting an order to show cause,
    in violation of NRS 108.2275 and in violation of its due process rights.
    Mata argues that it only filed a "limited" opposition that "was mainly
    based on procedural issues. . . not a substantive opposition to the claims
    against the mechanic's lien itself." Thus, Mata argues that without the
    show cause hearing, it "was not given the opportunity to present evidence
    in the form of affidavits or testimony, and was allowed very little legal
    argument." We do not agree.
    The parties disagree regarding how this court's prior decision
    in J.D. Construction, Inc. v. IBEX International Group, LLC, 126 Nev. ,
    
    240 P.3d 1033
     (2010), influences this case. In J.D. Construction, this court
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    concluded that due process does not require a district court "to hold a full
    evidentiary hearing, but instead [the district court] may base its decision
    on affidavits and documentary evidence submitted by the parties." 126
    Nev. at , 
    240 P.3d at 1036
    . This court held that a summary proceeding
    did not violate the lien claimant's due process rights because (1) the risk of
    an erroneous deprivation was low, and (2) both parties were afforded
    sufficient opportunity to present their case through affidavits and
    supporting documents. 
    Id.
     at , 
    240 P.3d at 1041
     (analyzing the three
    due process factors enumerated in Mathews v. Eldridge, 
    424 U.S. 319
    , 335
    (1976)). Thus, while J.D. Construction provides some guidance regarding
    the procedural due process analysis under NRS 108.2275, it merely
    addresses whether factual disputes must be reserved for trial, not whether
    a district court may rule on a motion to expunge a lien at the initial
    hearing.
    Based on our review of the record, we conclude that Mata was
    afforded adequate due process. While Mata did not receive a second
    hearing and the limited discovery afforded the lien claimant in           J.D.
    Construction, "[d]ue process, unlike some legal rules, is not a technical
    conception with a fixed content unrelated to time, place and
    circumstances." Mathews, 
    424 U.S. at 334
     (alteration in original) (internal
    quotations omitted). Rather, it "is flexible and calls for such procedural
    protections as the particular situation demands."    
    Id.
     (internal quotations
    omitted).
    Here, the primary issues before the district court were issues
    of law, which did not require extensive discovery to resolve. Additionally,
    Mata argued the merits of its lien in its opposition to Georgetown's motion
    and submitted documentary evidence in support of its lien. We are
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    therefore not persuaded by its argument that it was not given the
    opportunity to present evidence to the district court. Thus, given the
    primarily legal issues before the court and the fact that Mata's opposition
    was filed with documentary evidence attached, we conclude that Mata was
    given "the opportunity to be heard at a meaningful time and in a
    meaningful manner."       Mathews, 
    424 U.S. at 333
     (internal quotations
    omitted). Therefore, the district court did not err in expunging the motion
    at the initial hearing.
    The district court erred in ruling that the individual owners were entitled
    to service of a notice of right to lien under NRS 108.245 because Maki
    contracted with their agent
    Mata argues that it was not required to serve a notice of right
    to lien on the individual owners because it contracted with them through
    Georgetown, their agent.    See Hardy Companies, Inc. v. SNMARK,       LLC,
    126 Nev. „ 
    245 P.3d 1149
    , 1157 (2010) ("Actual knowledge by the
    property owner's agent is imputed to the property owner."). Mata argues
    that Georgetown controlled the project as the agent for the individual
    owners pursuant to the CC&Rs. Thus, Mata argues that its service of pre-
    lien notice on the homeowners' agent renders pre-lien notice on the
    homeowners themselves unnecessary. We agree.
    Under NRS 108.245(5), a contractor who contracts directly
    with an owner is not required to give pre-lien notice. Thus, pre-lien notice
    is only required when a potential lien claimant contracts with a third
    party, rather than the owner.     See Hardy, 126 Nev. at 245 P.3d at
    1157; cf. NRS 108.245(5). However, this court has concluded that a lien
    claimant is not required to provide pre-lien notice when the owner has
    actual knowledge of the potential lien claims via regular progress updates
    from an agent who inspected the premises.      Hardy, 126 Nev. at 245
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    P.3d at 1157. In that situation, this court determined that "[d]elivery of
    any pre-lien notice would. . . accomplish[ ] little or nothing and, therefore,
    [is] not required." Id. (internal quotations omitted).
    Here, the record shows that Georgetown regularly
    communicated with Mata regarding the progress of the project and
    payments made. Thus, this situation is similar to Hardy in that the
    owners' agent contracted with the lien claimant and kept abreast of
    construction progress on behalf of the owners. We therefore conclude that
    the district court erred in finding that the mechanic's lien was invalid
    based on a lack of pre-lien notice. See Hardy, 126 Nev. at , 
    245 P.3d at 1157
     ("An owner who witnesses the construction, either firsthand or
    through an agent, cannot later claim a lack of knowledge regarding future
    lien claims."). However, as discussed below, the district court properly
    found the lien to be excessive.
    The district court did not err in finding that the lien was excessive because
    the contract provided for the total payment amount and Mata failed to
    provide change orders or other evidence supporting its unilateral
    $77,527.62 increase in price
    In analyzing evidence presented regarding the validity of a
    mechanic's lien, "the district court must apply a preponderance-of-the-
    evidence standard to determine whether a lien is excessive." J.D. Constr.,
    126 Nev. at 240 P.3d at 1043. "This court will not disturb the district
    court's factual determinations if substantial evidence supports those
    determinations." Id. at , 
    240 P.3d at 1043
    . "Substantial evidence is
    that [evidence] which a reasonable mind might accept as adequate to
    support a conclusion." 
    Id.
     at , 
    240 P.3d at 1043
     (alteration in original)
    (internal quotations omitted). "Therefore, this court will only set aside
    findings that are clearly erroneous." 
    Id.
     at 
    240 P.3d at 1043
    .
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    Georgetown argues that NRS 108.222(1)(a) controls in
    situations where the parties have entered into a contract stating a specific
    price or a method of determining a specific price.' Georgetown argues that
    Math, in instituting its $93,724.64 lien, ignored the statutory cap on the
    legally lienable amount, which is "the unpaid balance of the price agreed
    upon" by contract, or the $16,197.02 Georgetown admits it owes. NRS
    108.222(1)(a). Thus, Georgetown argues that even if Mata were entitled to
    a lien against the homeowners' property, the district court correctly ruled
    that the $77,527.62 was excessive because the allowable lien amount is set
    by the contract and by statute at the remaining balance of the agreed-
    upon price: $16,197.02. We agree.
    2 NRS   108.222 states:
    1. Except as otherwise provided in
    subsection 2, a lien claimant has a lien upon the
    property, any improvements for which the work,
    materials and equipment were furnished or to be
    furnished, and any construction disbursement
    account established pursuant to NRS 108.2403,
    for:
    (a) If the parties agreed, by contract or
    otherwise, upon a specific price or method for
    determining a specific price for some or all of the
    work, material and equipment furnished or to be
    furnished by or through the lien claimant, the
    unpaid balance of the price agreed upon for such
    work, material or equipment, as the case may be,
    whether performed, furnished or to be performed
    or furnished at the instance of the owner or the
    owner's agent . . . .
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    The contract between the parties provided for the amount to
    be paid, and required any change orders to be agreed to in writing. Mata
    has not provided any evidence in district court or on appeal indicating it
    was legally entitled to any amount over $16,197.02. Therefore, we
    conclude that the district court did not err in finding that Mata's lien was
    excessive in the amount of $77,527.62.
    Accordingly, we ORDER the judgment of the district court
    AFFIRMED IN PART AND REVERSED IN PART AND REMAND this
    matter to the district court for further proceedings consistent with this
    order.
    Hardesty
    cc: Hon. Douglas W. Herndon, District Judge
    Pezzillo Lloyd
    Flangas McMillan Law Group, Inc.
    Leo P. Flangas
    Eighth District Court Clerk
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