Brickman Group, Ltd. v. Compass Bank

Citations: 83 P.3d 1167; 2003 Colo. App. LEXIS 1223; 2003 WL 21756005Docket: No. 02CA1645

Court: Colorado Court of Appeals; July 31, 2003; Colorado; State Appellate Court

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The trial court's judgment dismissing The Brickman Group, Ltd.'s action to foreclose a blanket mechanic’s lien against Compass Bank is reversed and remanded. The Brickman Group served as the landscaping contractor for the common areas of a forty-eight-unit townhouse development. After the developer failed to pay for services rendered, Brickman filed a mechanic’s lien covering the common areas and nine adjacent unsold units, omitting twelve unsold units. At trial, the court ruled the lien invalid, citing the omission of properties benefiting from Brickman’s work. However, the appellate court disagrees, noting that the claimant is entitled to a blanket lien covering all relevant areas, as established in prior case law. The court emphasizes that the statutory framework allows for the division of indebtedness among multiple structures under certain conditions, and that a blanket lien can be enforced against all structures and the land they occupy. The Brickman Group is thus recognized as having the right to assert a blanket lien on the common areas and unsold units.

Claimants recorded liens on property that included both the liened and omitted properties owned by the debtor. In the cases of Perkins and McClure, the supreme court upheld the validity of the liens despite some indebtedness being tied to omitted properties. The court determined that claimants could satisfy the entire debt through foreclosure on the included properties. The blanket lien provision's wording has remained unchanged since the supreme court's decisions, affirming the validity of a lien that omits properties benefiting from the work performed. In the current case, the claimant's lien is valid even though it does not include all properties that benefited from the work, as the developer-debtor owned both unsold units included in the lien statement and those omitted.

The owner’s challenge to the lien enforcement cites Independent Trust Corp. v. Stan Miller, Inc., where the court stated a blanket lien cannot be enforced against fewer than all properties without proper apportionment. However, this reliance is deemed misplaced. In Plateau Supply Co. v. Bison Meadows Corp., the claimant's blanket lien excluded already sold condominium units, yet the claimant released claims against those properties upon receiving partial payments. The court allowed foreclosure on included properties but mandated a debt reduction for the payments received. In Buerger Investment Co. v. B.F. Salzer Lumber Co., the claimant's blanket lien was upheld even after releasing a part of the property, with an equitable reduction for the released portion. The supreme court emphasized that the release of part of a blanket lien does not affect the lien's validity on the remaining properties. In ITC, claimants recorded blanket liens against a large project, but the court found no basis for apportionment when a mortgage holder claimed otherwise, as they failed to prove the liens were improper.

Owner contends that claimant's work cannot be distinctly allocated and seeks to eliminate the lien entirely rather than apportion it. Owner references language from ITC, which states that a blanket mechanics' lien cannot be enforced against fewer properties without proper apportionment. However, this interpretation contradicts previous rulings in Perkins and McClure, as well as the reasoning in Buerger Investment, which established that in cases of a blanket lien, each property is liable for the entire lien even for subsequent purchasers. Since the supreme court in ITC did not address these earlier rulings and the quoted language was not pivotal to the decision, it does not overrule prior holdings. Thus, claimant's lien remains enforceable against the properties listed in the lien statement, pending apportionment.

Regarding apportionment, the court recognizes that the equities favoring mechanic’s lien claimants outweigh the need for absolute fairness among property owners. However, as claimant did not provide materials or perform work on individual townhouse units, apportionment based on the costs associated with each unit is not feasible. Instead, it must be based on equitable factors, noting that the omission of twelve unsold properties from the lien statement effectively releases those properties from the lien, but does not affect those included. The trial court is instructed to equitably apportion the debt among owner’s three units, part of a total of twenty-one units that could have been included in the lien statement, and to order foreclosure for that apportioned amount. The judgment has been reversed and the case remanded for further proceedings. Judges Rothenberg and Vogt concur.