PUBLISHED OPINION
Case No.: 94-2413
Complete Title
of Case:
RIVERWOOD PARK, INC.,
a Wisconsin corporation,
and LAKE PARK DEVELOPMENT
CORPORATION, a Wisconsin
corporation,
Plaintiffs-Appellants,
v.
CENTRAL READY-MIXED
CONCRETE, INC., a
Wisconsin corporation,
Defendant-Respondent.
Submitted on Briefs: March 10, 1995
COURT COURT OF APPEALS OF WISCONSIN
Opinion Released: July 12, 1995
Opinion Filed: July
12, 1995
Source of APPEAL Appeal from a judgment
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Waukesha
(If
"Special", JUDGE: Roger P. Murphy
so indicate)
JUDGES: Brown, Nettesheim and Snyder, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSOn behalf of the plaintiffs-appellants, the cause was
submitted on the brief of Michael M. Krill of Wauwatosa.
Respondent
ATTORNEYSOn behalf of the defendant-respondent, the cause was
submitted on the brief of James L. Dunlap of Schmidt, Darling &
Erwin of Milwaukee.
COURT OF APPEALS DECISION DATED AND RELEASED July
12, 1995 |
NOTICE |
A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals.
See § 808.10 and Rule
809.62, Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 94-2413
STATE OF WISCONSIN IN
COURT OF APPEALS
RIVERWOOD
PARK, INC.,
a
Wisconsin corporation,
and
LAKE PARK DEVELOPMENT
CORPORATION,
a Wisconsin
corporation,
Plaintiffs-Appellants,
v.
CENTRAL
READY-MIXED
CONCRETE,
INC., a Wisconsin
corporation,
Defendant-Respondent.
APPEAL
from a judgment of the circuit court for Waukesha County: ROGER P. MURPHY,
Judge. Affirmed.
Before
Brown, Nettesheim and Snyder, JJ.
SNYDER,
J. Riverwood
Park, Inc. and Lake Park Development Corporation (collectively, Riverwood Park)
appeal from the circuit court's grant of summary judgment in favor of Central
Ready-Mixed Concrete, Inc. (Central).
The sole issue is the validity of construction liens filed by Central
against property owned by Riverwood Park.
Riverwood Park argues that the liens are invalid because Central failed
to comply with the sixty-day lien notice requirement under § 779.02(2)(b),
Stats. We conclude that Central was exempt from the sixty-day notice
requirement by virtue of § 779.02(1)(c).
Accordingly, we affirm.
The
facts are undisputed. Riverwood Park
and Lake Park Development Corporation are the developers and owners of two
single-family residential subdivisions located in the Village of Pewaukee: Lake Park, containing 137 lots and Riverwood
Park, containing 104 lots. Riverwood
Park hired Earl A. Eichline Enterprises, Inc. as the general contractor
responsible for infrastructure subdivision improvements, including sewer and
water utilities. Eichline hired Central
as a subcontractor to provide concrete for construction of the
improvements.
Riverwood
Park paid Eichline in full for its work, but Eichline failed to pay Central
$19,292.44. Eichline subsequently filed
for bankruptcy. Central timely served
thirty-day notices of intent to file claims for liens pursuant to
§ 779.06(2), Stats., and
timely filed claims for liens against both subdivisions pursuant to
§ 779.06(1) and (3). However,
Central did not initially serve Riverwood Park with a sixty-day notice of lien
rights pursuant to § 779.02(2), Stats.
Riverwood
Park filed a complaint for declaratory relief requesting that the claims for
liens filed by Central be released based on Central's failure to provide a
sixty-day notice pursuant to § 779.02(2), Stats. Central
subsequently filed a motion for summary judgment, arguing that it was exempt
from the sixty-day notice requirement by virtue of § 779.02(1)(c). The trial court granted Central's summary
judgment motion, holding that Central met the exception under § 779.02(1)(c)
to the sixty-day notice requirement “in that [Central] furnished labor or
materials for improvements in each case where more than four family units are
to be provided or added by such work or improvement: i.e. 137 lots in Lake Park
and 104 lots in Riverwood Park.”
Riverwood Park appeals.
We
review decisions on summary judgment de novo, applying the same methodology as
the trial court. Armstrong v.
Milwaukee Mut. Ins. Co., 191 Wis.2d 563, 569, 530 N.W.2d 12, 15 (Ct.
App. 1995). That methodology, set forth
in § 802.08(2), Stats., has
been recited often and we need not repeat it here. See Armstrong, 191 Wis.2d at 569, 530 N.W.2d
at 15. Whether Central was excepted
from the sixty-day notice requirement requires the interpretation of
§ 779.02(1)(c), Stats. See Torke/Wirth/Pujara, Ltd. v.
Lakeshore Towers, 192 Wis.2d 481, 493, 531 N.W.2d 419, 423 (Ct. App.
1995). This is a question of law which
we review independently of the trial court's determination. Id.
We
begin with the relevant statutes.
Section 779.02(2)(b), Stats.,
states in part:
Every person other than a prime contractor who furnishes
labor or materials for an improvement shall have the lien and remedy under this
subchapter only if within 60 days after furnishing the first labor or materials
the person gives notice in writing, in 2 signed copies, to the owner ....
However, exceptions to this sixty-day notice requirement
are set forth in § 779.02(1):
Exceptions to notice requirement. The notice
required to be given by lien claimants under sub. (2) shall not be required to
be given in the following cases only:
....
(c) By any
lien claimant furnishing labor or materials for an improvement in any case
where more than 4 family living units are to be provided or added by such work
of improvement, if the improvement is wholly residential in character, or in
any case where more than 10,000 total usable square feet of floor space is to
be provided or added by such work of improvement, if the improvement is partly
or wholly nonresidential in character.
Because it is undisputed that the project was wholly
residential in nature, resolution of the appellate issue depends on the
interpretation of the first clause of the exception—whether Central supplied
material or labor for “an improvement in any case where more than 4 family
living units are to be provided or added by such work of improvement.” Id.
Our
primary purpose when interpreting a statute is to give effect to the
legislature's intent. Graziano v.
Town of Long Lake, 191 Wis.2d 813, 818, 530 N.W.2d 55, 57 (Ct. App.
1995). In order to do so, we must first
look to the language of the statute itself.
Id. If the
language is clear and unambiguous on its face, we must construe the statute in
accordance with its ordinary meaning and may not resort to extrinsic aids. Id. If a statute is ambiguous, however, we may look to its content,
subject matter, scope, purpose and history to ascertain its reasonable
meaning. Id. at 822, 530
N.W.2d at 58. A statute is ambiguous if
it is capable of being interpreted by reasonably well-informed persons to have
two or more distinct meanings. Id.
Accordingly,
we must first turn to the statutory language itself. A lien claimant is exempt from the sixty-day notice requirement
if it furnished “labor or materials for an improvement in any case where more
than 4 family living units are to be provided or added by such work of
improvement.” Section 779.02(1)(c), Stats.
Riverwood Park argues that the statute is unambiguous and its plain
meaning requires that the work of improvement actually manifests more than four
family living units. According to
Riverwood Park, because the construction of utility laterals does not add or
provide any residential family living units, the exception does not apply.
Central
argues that such an interpretation creates an arbitrary distinction between
work that adds to the square footage of a residence and work that is equally
essential to the creation of the residence but does not add to the actual
square footage. Central contends that
because the term “improvement” is clearly defined in § 779.01(2)(a), Stats., as including activities which
do not add to square footage, such as excavation and landscaping, Riverwood
Park's interpretation is unreasonable.
Further, the reference in § 779.02(1)(c), Stats., to improvements where four family living units are
to be provided suggests that improvements that facilitate the provision or
addition of more than four units in the future may be included.
We
conclude that § 779.02(1)(c), Stats.,
is ambiguous because both of the above interpretations are equally
reasonable. See Graziano,
191 Wis.2d at 822, 530 N.W.2d at 58.
Therefore, we resort to extrinsic aids in an effort to interpret the
statute in accordance with the legislature's intent. See id.
In doing so, we are mindful that lien laws are remedial in nature and
are to be liberally construed in order “to effectuate the legislative intent to
protect the claims of tradesmen, laborers and materialmen for work or materials
provided in the improvement of real property.”
R. Frederick Redi-Mix, Inc. v. Thomson, 96 Wis.2d 715,
726, 292 N.W.2d 648, 653, modified, 96 Wis.2d 729a, 293 N.W.2d 528
(1980).
We
first address whether the utility laterals constitute an improvement and
consequently whether the concrete furnished by Central constitutes “materials
for an improvement.” See
§ 779.02(1)(c), Stats. According to § 779.01(2)(a), Stats., an improvement includes:
any building, structure, erection, fixture, demolition,
alteration, excavation, filling, grading, tiling, planting, clearing or
landscaping which is built, erected, made or done on or to land for its
permanent benefit. This enumeration is
intended as an extension rather than a limitation of the normal meaning and
scope of ... “improvement.”
Based on this definition, we conclude that the
construction of sewer and water laterals constitutes an improvement because
they are fixtures made on the land for its permanent benefit. Accordingly, the concrete supplied by
Central for the laterals furnished “materials for an improvement.” See § 779.02(1)(c).
The
next question we address is whether the improvement involved four or more
family units. Central points out an
additional ambiguity with regard to this issue: whether the materials provided by Central to each subdivision
constitute one improvement, or whether each individual family unit within the
subdivisions constitutes an improvement.
If the latter is the case, the requirement of more than four family
units would not be met.
Our
supreme court previously addressed an analogous situation in Cline-Hanson,
Inc. v. Esselman, 107 Wis.2d 381, 319 N.W.2d 829 (1982). In that case, Esselman owned three adjoining
platted lots and entered into a contract with a builder to construct an apartment
building on each lot. One of the
buildings consisted of two apartments and the other two buildings consisted of
three apartments, for a total of eight separate apartments. Construction work took place simultaneously
on all three buildings, and materials were supplied indiscriminately for all
three buildings. Id. at
382, 319 N.W.2d at 829.
Cline-Hanson
was hired as a subcontractor by the builder to install floor coverings in all
of the apartments. When Cline-Hanson
was not paid for its labor and materials, it claimed a single lien covering all
three lots. Cline-Hanson previously did
not give Esselman the sixty-day notice pursuant to § 779.02(2), Stats. (then § 289.02(2), Stats., 1977).[1] Cline-Hanson, 107 Wis.2d at
382, 319 N.W.2d at 829‑30. The
issue on appeal was whether the construction project was three separate
improvements or one overall improvement.
Id. at 386, 319 N.W.2d at 831. If each building constituted a separate improvement, there would
be fewer than four family living units and the exception to the notice
requirement would not apply. Id. at 387, 319 N.W.2d at 832.
The
supreme court held that it was more logical to treat the entire project as a
single improvement because Esselman entered into a single contract with the
builder to construct all three buildings and all the materials were used
indiscriminately among the three buildings.
Id. at 387-88, 319 N.W.2d at 832. Another factor the court deemed important in
applying this so-called “single contract” concept was the fact that the
buildings were located on contiguous lots.
Id. at 390, 319 N.W.2d at 833.
Applying
the same rationale here, it is clear that each subdivision constitutes a single
“improvement” under § 779.02(1)(c), Stats.,
and meets the criteria that more than four family living units are included in
the improvement. The materials for each
subdivision were ordered pursuant to Central's single contract with Eichline
and were delivered indiscriminately within the subdivisions. No attempt was made to separate the project
into individual residential units; the materials were attributed to the entire
project. See Cline-Hanson,
107 Wis.2d at 388, 319 N.W.2d at 832.
Further, the work was done for residential units located on contiguous
lots.
We
have thus far established that Central furnished materials for an improvement
involving more than four family living units.
We are left to determine whether the residential living units “are to be
provided or added” by Central's work of improvement. Riverwood Park relies on McQuay-Perfex, Inc. v. Wisconsin
Tel. Co., 128 Wis.2d 231, 381 N.W.2d 586 (Ct. App. 1985), to support
its argument that the improvement must actually provide or add more than four
residential family units. In McQuay-Perfex,
the court concluded that a major renovation and replacement of an air
conditioning system in a commercial building did not fall under
§ 779.02(1)(c), Stats.,
because the work did not provide or add more than 10,000 square feet of floor
space. McQuay-Perfex, 128
Wis.2d at 235, 381 N.W.2d at 589.
Likewise, Riverwood Park contends that the construction of sewer and
water laterals does not provide any residential family living units.
We
disagree with Riverwood Park's interpretation of § 779.02(1)(c), Stats., that the improvement alone must
provide or add the dwellings. First, McQuay-Perfex
is distinguishable from this case. In McQuay-Perfex,
the court interpreted the second clause of the exception which applies where
the improvement is partly or wholly nonresidential in character. This case involves an improvement wholly
residential in character.
Second,
under Riverwood Park's reading of the statute, virtually no improvement would
be exempt from the lien notice requirement.
For example, neither the creation of a basement foundation nor the
installation of a roof in and of itself provides or adds any residential family
units. However, these are clearly the
types of lienable improvements contemplated by the exception, provided that
more than four family living units are involved. When interpreting a statute, we must do so in a way as to avoid
such unreasonable results. See Voss
v. City of Middleton, 162 Wis.2d 737, 749‑50, 470 N.W.2d 625, 629‑30
(1991). Accordingly, we conclude that
the concrete supplied by Central for the improvements in this case falls within
the exception under § 779.02(1)(c), Stats.
Our
interpretation is further bolstered when considering related sections. We agree with Central that the definition of
“improvement” in § 779.01(2)(a), Stats.,
clearly suggests that the legislature intended liens to be available for work
besides the physical improvement of a residential building. It follows that the exception to the lien
notice requirement also encompasses improvements beyond the physical
improvement of a building.
Last,
we note that the legislative history surrounding the statute supports our
interpretation. As the court noted in Cline-Hanson,
“[t]he exception is clearly meant to eliminate the notice requirement for all
but relatively small projects.” Cline-Hanson,
107 Wis.2d at 392, 319 N.W.2d at 834.
[Section 779.02, Stats.,]
eliminates any notice requirement ... for other than relatively small
construction. The purpose is to work
toward earlier and more realistic notice on those smaller jobs where the owner
may be inexperienced, unaware of the construction lien laws, and hence in
possible danger of having to pay twice or lose his property. On larger construction, such unawareness
will not be a factor, and lenders and owners can set up their own machinery for
ascertaining who the potential lien claimants are.
Cline-Hanson, 107 Wis.2d at 391, 319 N.W.2d at 834 (quoted source omitted). It is clear that this was a large
construction project, given that each subdivision contained over 100 lots. Therefore, unawareness of potential liens
would not be a factor, and the rationale behind the exception in
§ 779.02(1)(c) applies in this case.
Based
on the above and considering the liberal construction given to lien statutes
generally, we conclude that Central was exempt from the lien notice requirement
pursuant to § 779.02(1)(c), Stats. Accordingly, we affirm the trial court's
summary judgment in favor of Central.
By
the Court.—Judgment affirmed.