JOHN ILIESCU, JR., INDIVIDUALLY; AND JOHN ILIESCU, JR., AND SONNIA ILIESCU, AS TRUSTEES OF THE JOHN ILIESCU, JR., AND SONNIA ILIESCU 1992 FAMILY TRUST AGREEMENT, Appellants,
MARK B. STEPPAN, Respondent.
from a district court order for foreclosure of a
mechanic's lien and an order denying a motion for NRCP
60(b) relief Second Judicial District Court, Washoe County;
Elliott A. Sattler, Judge.
Albright, Stoddard, Warnick & Albright and D. Chris
Albright and G. Mark Albright, Las Vegas, for Appellants.
Chrissinger Kimmel Vallas, PC, and Michael D. Hoy, Reno, for
THE COURT EN BANC.
108.245(1) requires mechanic's and materialmen's lien
claimants to deliver a written notice of right to lien to the
owner of the property after they first perform work on or
provide material to a project. In Board of Trustees of
the Vacation Trust Carpenters Local No. 1780 v. Durable
Developers, Inc., 102 Nev. 401, 410, 724 P.2d 736, 743
(1986), this court held that "substantial compliance
with the technical requirements of the lien statutes is
sufficient to create a lien on the property where . .. the
owner of the property receives actual notice of the potential
lien claim and is not prejudiced." And we reaffirmed
this holding in Fondren v. KIL Complex Ltd., 106
Nev. 705, 710, 800 P.2d 719, 721-22 (1990) ("The failure
to serve the pre-lien notice does not invalidate a
mechanics' or materialmen's lien where the owner
received actual notice.")- In this appeal, we are asked
to determine whether the actual notice exception should be
extended to offsite work and services performed by an
architect for a prospective buyer of the property. Because we
hold that the actual notice exception does not apply to such
offsite work and services when no onsite work has been
performed on the property, we reverse.
AND PROCEDURAL HISTORY
2005, appellants John Iliescu, Jr., individually, and Sonnia
Iliescu and John Iliescu, Jr., as trustees of the John
Iliescu, Jr., and Sonnia Iliescu 1992 Family Trust Agreement
(collectively, Iliescu) entered into a Land Purchase
Agreement to sell four unimproved parcels in downtown Reno to
Consolidated Pacific Development (CPD) for development of a
high-rise, mixed-use project to be known as Wingfield Towers.
The original agreement was amended several times and, as
finally amended, entitled Iliescu to over $7 million, a
condominium in the development, and several other
escrow, CPD assigned the Land Purchase Agreement to an
affiliate, BSC Investments, LLC (BSC). BSC negotiated with a
California architectural firm, Fisher Friedman Associates, to
design the Wingfield Towers. Respondent Mark Steppan, a
Fisher Friedman employee who is an architect licensed in
Nevada, served as the architect of record for Fisher
October 2005, Steppan sent an initial proposal to BSC that
outlined design services and compensation equal to 5.75
percent of the total construction costs, which were estimated
to be $180 million. In the interest of beginning design work,
Steppan and BSC entered into an initial "stop-gap"
agreement in November 2005 under which Steppan would bill
hourly until an American Institute of Architects (AIA)
agreement could be later signed. The AIA agreement between
Steppan and BSC was signed in April 2006. The parties agreed
that the final design contract would have an effective date
of October 31, 2005, when Steppan began work.
agreement provided for progressive billings based on a
percentage of completion of five phases of the design work,
including 20 percent of the total fee upon completion of the
"schematic design" phase. Steppan completed the
schematic design phase, and Wingfield Towers was able to
secure the required entitlements and project approval from
the Reno Planning Commission and the Reno City Council. BSC
did not pay Steppan for his services under the contract, and
Steppan recorded a mechanic's lien against Iliescu's
property on November 7, 2006. Steppan did not provide Iliescu
with a pre-lien notice.
for the Wingfield Towers project was never obtained, escrow
never closed, and no onsite improvements were ever performed
on the property. When the escrow was canceled, Iliescu's
unimproved property was subject to Steppan's multimillion
dollar lien claim for the unpaid invoices submitted to BSC.
applied to the district court for a release of Steppan's
mechanic's lien, alleging that Steppan had failed to
provide the required pre-lien notice before recording his
lien. Steppan then filed a complaint to foreclose the lien.
The two cases were consolidated, and Iliescu filed a motion
for partial summary judgment on the pre-lien notice issue.
Steppan filed a cross-motion for partial summary judgment,
arguing that, although he failed to give the pre-lien notice
required under NRS 108.245, such notice was not required
under the "actual notice" exception recognized by
this court in Fondren v. K/L Complex Ltd., 106 Nev.
705, 710, 800 P.2d 719, 721-22 (1990). Iliescu argued that he
did not have the notice required under Fondren's
actual notice exception.
district court denied Iliescu's motion but granted
Steppan's motion, finding that no pre-lien notice was
required because Iliescu had viewed the architectural
drawings and attended meetings where the design team
presented the drawings and thus had actual notice of the
claim. The court found that even though Iliescu alleged he
did not know the identity of the architects who were working
on the ...