Summary 2011 WY 84

Summary of Decision May 25, 2011

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Case Name: VISION 2007, LLC v. LEXSTAR DVELOPMENT AND CONSTRUCTION COMPANY, INC.

Citation: 2011 WY 84

Docket Number: S-10-0020

URL: http://wyomcases.courts.state.wy.us/applications/oscn/DeliverDocument.asp?CiteID=462298

Appeal from the District Court of Campbell County, the Honorable John R. Perry, Judge.

Representing Appellant (Petitioner): Douglas Fowler of Fowler Associates, Cheyenne, Wyoming; Stephen H. Kline of Kline Law Office, P.C., Cheyenne, Wyoming; and John W. Burke of Thomas Braun Bernard & Burke, LLP, Rapid City, South Dakota. Argument by Mr. Burke.

Representing Appellee (Respondent): Ryan Schwartz of Williams, Porter, Day & Neville, P.C., Casper, Wyoming

Date of Decision: May 25, 2011

Facts: Appellant entered into a contract with Appellee for the construction of a hotel. After seventeen months of work on the project, Appellant terminated the contract with Lexstar, and Lexstar subsequently filed a lien against the hotel property for amounts it claimed remained owing. Appellant filed a petition to strike the lien pursuant to Wyo. Stat. Ann. § 29-1-311(b), which the district court denied on the ground that Appellant failed to prove Lexstar knew, when it filed its claim of lien, that the lien was groundless or contained a material misstatement or false claim. Appellant claims the district court improperly placed the burden of proof on them and that the district court’s factual findings were clearly erroneous.

Issues: Whether the district court erred in refusing to strike the corrected lien statement filed after the 120-day statutory limit. Whether the district court erred in refusing to strike the lien statement and corrected lien statement which did not include an itemized list setting forth and describing materials delivered or work performed, as required by Wyo. Stat. Ann. § 29-1-301. Whether the district court erred in refusing to strike [the] lien statement which was untimely on its face. Whether the district court erred in placing the burden of proof under Wyo. Stat. Ann. § 29-1-311 upon the Appellant.

Holdings: Appellee did not knowingly specify March 10 as opposed to March 19 as the last date on which work was performed, and it thus did not knowingly file a groundless lien statement. Questions as to the accuracy or adequacy of the information included in a lien statement are properly resolved in a lien foreclosure proceeding, not in the expedited and limited proceeding authorized by § 29-1-311(b). Therefore, if issues of fact remain as to the last date on which work or materials were provided in this matter, those issues are questions for the lien foreclosure proceeding.

The Court did not hold that the question whether the date error may be corrected, through evidence at the foreclosure proceeding or through the “Corrected Lien Statement,” was resolved. Whether the date error was misleading or prejudicial is a question for the lien foreclosure proceeding, not for a subsection 311(b) proceeding.

Appellant argues as an additional basis for striking both the original and corrected lien statements that neither contained a sufficiently detailed itemization of the amounts allegedly owed to Appellee. The district court did not expressly address this ground other than to generally deny the relief requested and defer the issues raised by Appellant to a future lien foreclosure proceeding. We agree that the issue of itemization is properly addressed in the foreclosure proceeding, and that adequacy of itemization is not a basis for a subsection 311(b) petition.

Under Wyo. Stat. Ann. § 29-1-311(b) the burden of proof is on the lien claimant, not on the project owner. The Court found the district court’s ruling was properly based on the evidence presented by the lien claimant, Appellee, and on the failure of Appellant to allege proper grounds for relief under Wyo. Stat. Ann. § 29-1-311(b). Affirmed.

Justice Golden delivered the opinion for the court.