Case Name: Mission City Construction, Inc. v. Olivier Brzozowski, et al.

Case No.: 17CV319418

Demurrer to the Second Cause of Action for Mechanics Lien Foreclosure in the Second Amended Complaint

Factual and Procedural Background

This is a breach of contract action brought by plaintiff Mission City Construction, Inc. (“Plaintiff”) against defendants Olivier and Beatrice Brzozowski (“Defendants”).

According to the second amended complaint (“SAC”), Plaintiff and Defendants entered into a written agreement (“Contract”) by which Defendants agreed to pay Plaintiff for labor, services, equipment, and materials for improvements to their real property located at 775 Anderson Drive in the City of Los Altos (“the Property”). (SAC, ¶¶4 – 5.) From January 1, 2016 through November 17, 2016, Plaintiff furnished labor, services, and materials intended to be used and actually used to improve the Property. (SAC, ¶6.) The reasonable value of Plaintiff’s work was $24,878.49, but Defendants only paid a portion of the amount owed, leaving an unpaid balance of $15,050.59. (SAC, ¶¶6 and 8 – 9.)

The ongoing work of improvement continued through the final date of inspection by the City of Los Altos on or about October 6, 2017. (SAC, ¶13.) On August 24, 2017, prior to the completion of the work of improvement, Plaintiff duly recorded a verified Mechanics’ Lien claim. (SAC, ¶14.)

On November 20, 2017, Plaintiff filed a complaint against Defendants asserting causes of action for (1) breach of contract; and (2) mechanics lien foreclosure.

On May 2, 2018, Plaintiff filed a first amended complaint (“FAC”) which added causes of action for (3) common count – book account; and (4) common count – account stated.

On July 6, 2018, Defendants filed a demurrer to Plaintiff’s FAC. On August 7, 2018, the court sustained Defendant’s demurrer to the second cause of action, but otherwise overruled Defendants’ demurrer to the FAC.

On August 16, 2018, Plaintiff filed the operative SAC which asserts causes of action against Defendants for:

(1) Breach of Contract
(2) Mechanics Lien Foreclosure
(3) Common Count – Book Account
(4) Common Count – Account Stated

On September 20, 2018, Defendants filed the motion now before the court, a demurrer to the second cause of action of Plaintiff’s SAC.

I. Defendants’ demurrer to the second cause of action [mechanics lien foreclosure] in the SAC is OVERRULED.

As previously argued in demurring to the FAC, Defendants now again argue that Plaintiff’s lien is unenforceable because Plaintiff failed to file it within 90 days of completing the subject work as required by Civil Code section 8412 which states: “A direct contractor may not enforce a lien unless the contractor records a claim of lien after the contractor completes the direct contract, and before the earlier of the following times: (a) Ninety days after completion of the work of improvement. (b) Sixty days after the owner records a notice of completion or cessation.” Civil Code section 8414 similarly provides for an outer 90-day deadline relative to claimants other than direct contractors.

Plaintiff alleges in the SAC that, “On August 24, 2017, prior to completion of the Work of Improvement, Plaintiff duly recorded a verified Mechanics’ Lien Claim.” (SAC, ¶14; emphasis original.) On its face, Plaintiff alleges timely recording of a mechanics lien in compliance with Civil Code sections 8412 or 8414. Defendants, however, maintain this allegation is inconsistent with Plaintiff’s earlier allegation in the original complaint that it furnished services to Defendants “During the period of January 1, 2016 through November 17, 2016.” This allegation appears not just in the original complaint but also appears in the present SAC at paragraph 6.

Defendants apparently interpret Civil Code section 8412/8414, subdivision (a) to require Plaintiff to record a mechanics lien within 90 days of completion of Plaintiff’s work. The court does not adopt Defendants’ interpretation of the statute. The plain language of the statute requires a contractor to record a claim of lien within “Ninety days after completion of the work of improvement.” “ ‘Work of improvement’ is a term of art and must be construed according to its technical definition.” (United Rentals Northwest, Inc. v. Snider Lumber Products, Inc. (2009) 174 Cal.App.4th 1479, 1485 (United).) Civil Code section 8050 provides relevant guidance. “Except as otherwise provided in this part, ‘work of improvement’ means the entire structure or scheme of improvement as a whole, and includes site improvement.” (Emphasis added.)

the sentence does not mean a claimant is entitled to a lien only if the claimant carried out the entire work, since section 3110 says activity “contributing to” a work of improvement is what gives rise to a lien. Were it otherwise, no contractor on a job involving multiple contractors would ever have a mechanic’s lien. The significance of the sentence has to do with the extent of the property the lien attaches to, not with whether it attaches in the first place.

(United, supra, 174 Cal.App.4th at p. 1486.)

This authority also supports Plaintiff’s position and this court’s understanding that the work of improvement is not complete simply because Plaintiff finished his contribution to the work of improvement. Plaintiff adequately explains in the SAC that although it finished its work on or about November 17, 2016, the whole work of improvement was not complete until the final inspection by the City of Los Altos on or about October 6, 2017.

Accordingly, Defendants’ demurrer to the second cause of action in Plaintiff’s SAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for mechanics lien foreclosure is OVERRULED.