Court Supports Pro Landscape USA Lien Claims on Appeal

A Utah Court of Appeals decided in the case of Zion Village Resort LLC v. Pro Curb U.S.A. LLC that the order in which information is presented on a preliminary notice is not as important as having all of the necessary information.

Pro Landscape had filed its preliminary notices for the Zion Village condominium project through the Utah State Construction Registry (SCR), as required by state law. Notices such as these in Utah must contain the following information: name, address, telephone number and email of the person providing construction work.

When Pro Landscape filed its notices, it listed "Chad Hansen" under the section titled "Person Furnishing Labor, Service, Equipment or Material." In the comments section, the company added "services [were] provided by Pro Curb USA LLC DBA Pro Landscape USA."

After performing work on the development, Pro Landscape ended up filing liens on various parts. When Zion Village searched the databank, the preliminary notices filed by Pro Landscape did not appear because they were filed under Chad Hansen's name. As a result, Zion Village filed a petition to nullify the liens because the developer claimed the contractor failed to file proper preliminary notices.

A district court sided with Zion Village, stating that because the notices were filed under Chad Hansen, not Pro Landscape, the lien claimant "neglected to include such basic information as the identity of the actual lien claimant."

The appeals court, however, reversed that decision. Under this ruling, the court concluded that Pro Landscape met the legal requirements for a valid preliminary notice because the state's construction lien statute mandates the application of a "substantial compliance" standard, not a "strict compliance" standard. All of the necessary information was included in the preliminary notice despite the order in which it was presented.

"While Pro Landscape may have set forth the required information in an unconventional sequence, the preliminary notices it filed contained all statutorily required information," the court stated.

"So, if there are some inaccuracies in your lien … it may be okay," said attorney Jason Robinson, founding shareholder and director of Babcock Scott & Babcock P.C., in a recent STS NACM webinar on Utah's lien laws. As long as your notice documents contain all the required information, you can make a case for this decree, Robinson added. However, there is a large gray area surrounding this rule, which many attorneys may take advantage of, he noted. "There is no definition of what substantial compliance means." 

-Bryan Mason, editorial associate

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Wednesday, 22 September 2021

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