SIMMONS SELF-STORAGE PARTNERS, LLC, A NEVADA LIMITED LIABILITY COMPANY; ANTHEM MINI-STORAGE, LLC, A NEVADA LIMITED LIABILITY COMPANY; HORIZON MINI-STORAGE, LLC, A NEVADA LIMITED LIABILITY COMPANY; MONTECITO MINI-STORAGE PARTNERS, LLC, A NEVADA LIMITED LIABILITY COMPANY; COLONIAL BANK, A SUBSIDIARY OF THE COLONIAL BANCGROUP, INC., A DELAWARE CORPORATION; WESTAR DEVELOPMENT CORPORATION D/B/A WESTAR CONSTRUCTION, A NEVADA CORPORATION; CONTINENTAL CASUALTY COMPANY, A DELAWARE CORPORATION; WESTERN SURETY COMPANY; LAKE MEAD PROPERTY; SILVER CREEK I, LLC; SAFECO INSURANCE COMPANY OF AMERICA; STARR STORAGE SYSTEMS, LLC; AND TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA; Appellants,
RIB ROOF, INC., A CALIFORNIA CORPORATION, Respondent
Appeal from a final judgment in a mechanic's lien action. Eighth Judicial District Court, Clark County; Susan Johnson, Judge.
Affirmed in part, reversed in part, and remanded.
Shumway Van & Hansen and Scott A. Knight and Michael Van, Las Vegas, for Appellants.
Snell & Wilmer, LLP, and Leon F. Mead, II, and Kelly H. Dove, Las Vegas, for Respondent.
BEFORE HARDESTY, DOUGLAS and CHERRY, JJ.
This opinion addresses a dispute regarding the validity of materialmen's liens under NRS Chapter 108 against six properties and the effect of surety bonds posted to release the liens on four of those properties. Specifically, we consider whether, to establish a lien on a property or improvements thereon under NRS 108.222, a materialman must prove merely that materials were delivered for use on or incorporation into the property or improvements thereon; or, instead, must demonstrate that the materials were actually used for the property or improvements thereon. We conclude that a materialman has a lien upon a property and any improvements thereon for which he supplied materials, in the amount of the unpaid balance due for those materials. Because the district court's finding that respondent supplied the steel at issue for the six properties is supported by substantial evidence, we hold that respondent established a materialman's lien
on each of those properties for the unpaid balance due on the steel delivered.
As to the judgment and surety bonds posted for four of the properties, we conclude that the district court erred by ordering the sale of all six properties. A mechanic's lien is directed at a specific property, requiring the district court to determine the total appropriate charge attributable to that property before ordering its sale. Moreover, because a surety bond replaces a property as security for the lien, the property cannot be sold where a surety bond was posted; instead, the lien judgment should be satisfied from the surety bond. Accordingly, we affirm in part and reverse in part the district court's order, and we remand this matter for further proceedings consistent with this opinion.
FACTS AND PROCEDURAL HISTORY
Respondent Rib Roof, Inc., a manufacturer and supplier of steel products, supplied steel for projects on the Anthem, Horizon, Lake Mead, Montecito, Silver Creek, and Simmons properties. Appellant Westar Construction, the general contractor for all six projects, subcontracted with Southwest Steel to furnish and install steel products for the projects. Southwest then contracted with respondent to meet its obligations to Westar.
Before delivery, respondent provided notices of intent to furnish materials to Southwest, Westar, each project's owners, and other related parties. The notice for the Lake Mead property contained a provision indicating that the person signing that notice, respondent's bookkeeper Trish Cartwright, could bind respondent in future instruments relating to respondent's right of lien. That notice lacked an authorizing signature from one of respondent's officers. Respondent then shipped the steel products to the particular job sites using bills of lading. Each bill of lading contained three copies: the first copy was signed by the shipping manager after he loaded the steel onto the truck for shipment; the second copy was signed by the truck driver; and the third copy was signed by the consignee upon delivery. Nineteen of the eighty bills of lading at issue lacked consignee signatures. Verne Moser, respondent's CFO and corporate secretary, acknowledged that where consignee signatures were missing, he was not certain that the materials were delivered to the bill of lading's destination address. Appellants did not question respondent's notices of intent to furnish materials or delivery of steel before the liens were recorded, and they presented no evidence that the steel used in the six projects came from another supplier.
Southwest made no payment for the steel furnished for the Lake Mead property but partially paid respondent for the steel furnished for the other five properties. Southwest officer Tom Carroll acknowledged that respondent was owed approximately $1,000,000. Despite only partially paying respondent, Carroll sent Moser an email requesting several lien releases. Moser directed Cartwright to prepare the requested lien release forms. Cartwright's job duties included accounting, bookkeeping, evaluating lien release requests, and preparing lien release forms. Cartwright knew that she lacked authority to sign the lien releases; respondent's company policy granted that authority only to officers. Nevertheless, on December 15, 2004, Cartwright signed unconditional waiver and lien release forms for the Lake Mead and Silver Creek properties.
Respondent subsequently perfected its mechanics' liens on the six properties, providing the required statutory notices and recording its liens. During that process, appellants did not seek a district court determination that, under NRS 108.2275, the liens noticed were frivolous, made without reasonable cause, or excessive in amount. Respondent then filed a complaint for foreclosure against each property and, pursuant to NRS 108.239(1)-(2), filed notices of lis pendens and published notices of foreclosure. Thereafter, surety bonds totaling 1.5 times the value of respondent's mechanics' liens for the Lake Mead, Silver Creek, Anthem, and Horizon properties
were posted and recorded in compliance with NRS 108.2415(1). As a result, respondent amended its complaint to dismiss its lien foreclosure claims against those four properties, replacing them with claims against the ...