Collins v. Stockwell

Citations: 671 P.2d 394; 137 Ariz. 415Docket: 16471-PR

Court: Arizona Supreme Court; September 20, 1983; Arizona; State Supreme Court

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In 1978, Robert Collins, a licensed subcontractor, performed tile work for Diplomat Homes, which later became insolvent, leading Collins to file a mechanic's lien on the property on September 21, 1978, under A.R.S. 33-993. He served the lien on Diplomat, listed as the property owner, and filed a foreclosure action within the required six-month period as per A.R.S. 33-998, but did not file a notice of lis pendens. In December 1979, Collins supplemented his complaint to include Paul and Arlene Blonsky after discovering they acquired an interest in the property. The Blonskys subsequently sold the property to James Stockwell in March 1980, facilitated by Minnesota Title, which provided a title report that omitted Collins' lien. Collins later joined Stockwell and Minnesota Title as defendants, but the trial court granted their summary judgment motion, ruling that Collins had no enforceable claim against Stockwell due to a lack of notice of the foreclosure action. The Court of Appeals affirmed this decision. The Supreme Court of Arizona is tasked with determining whether a notice of lis pendens is necessary for constructive notice of a mechanic's lien after the six-month foreclosure filing period. Minnesota Title argued that without a lis pendens, they could assume the contractor's claim was settled or extinguished. Collins contended that the recording of the lien itself provided adequate constructive notice under Arizona law, suggesting that Minnesota Title should have conducted further inquiries upon discovering the lien.

Collins' position is upheld, leading to the vacating of the Court of Appeals' decision and the reversal of the trial court's summary judgment favoring defendants Stockwell and Minnesota Title. Mechanic's lien statutes aim to protect the rights of those providing labor and materials that enhance property value, as established in case law. Such liens are considered remedial and should be interpreted broadly to fulfill their purpose. The lien grants preference over other encumbrances without actual or constructive notice, as outlined in A.R.S. 33-992.

To perfect a lien, a notice of claim must be filed with the County Recorder and served to the property owner within a specified timeframe post-construction completion (A.R.S. 33-993). Recording provides constructive notice of the lien (A.R.S. 33-416). Legal action to foreclose the lien must occur within six months of recording the notice (A.R.S. 33-998), and a release of lien is required once satisfied (A.R.S. 33-1006).

Arizona's lis pendens statute (A.R.S. 12-1191) allows parties to file a notice of action affecting property title, which gives constructive notice to purchasers or encumbrancers. The notice must include relevant parties, the action's object, relief sought, and property description. If an action is dismissed without prejudice, the plaintiff must issue a release of the notice within thirty days. Failure to do so incurs penalties under A.R.S. 33-712. The Court of Appeals applied the in pari materia doctrine, interpreting the lis pendens statute alongside mechanic's lien provisions to clarify their relationship.

Statutes that are in pari materia must be interpreted together to give effect to the overall legislative intent, as established in case law. Specifically, the lis pendens statute and the mechanic's lien statute are deemed to be in harmony, meaning that a provision creating a lien on real property is considered an "action affecting title to real property" under the lis pendens statute. The court clarified that the lis pendens statute does not exclude actions to foreclose mechanic's liens, rejecting interpretations that would add exceptions not present in the statute. It affirmed that a lienholder is not required to file a lis pendens to maintain the validity of their lien, paralleling how a grantee does not need to record a deed. However, filing a lis pendens is necessary for imparting constructive notice after the foreclosure complaint filing deadline has passed. The court emphasized that legislative intent is paramount in statutory interpretation, stating that clear statutory language should not be altered by the court to infer additional requirements, such as mandating a notice of lis pendens for mechanic's lien enforceability. The discussion highlighted that the filing of a notice of claim of lien already provides constructive notice to subsequent purchasers, encouraging them to investigate any liens on the property further. Consequently, the court vacated the Court of Appeals' opinion and reversed the trial court's summary judgment favoring the defendants.