Cooley Equipment v.
Filed 1/29/13 Cooley Equipment v. Rimrock CA CA4/1
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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publication or ordered published for purposes of rule 8.1115
COURT
OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION
ONE
STATE
OF CALIFORNIA
COOLEY EQUIPMENT CORP.,
Plaintiff and Appellant,
v.
RIMROCK CA, LLC et al.,
Defendants and Respondents.
D059493
(Super. Ct.
No.
37-2008-00103466-CU-CO-SC)
APPEAL from
judgments of the Superior Court
of
County, William S. Cannon, Judge. Affirmed.
Plaintiff
Cooley Equipment Corp. (Cooley) appeals judgments entered after the trial court
granted summary judgment for defendants Otay Valley Quarry LLC (OVQ), JJJ&K
Investments, LP, OV Three One LLC, and JJJ&K Investments Two, LLC (together
JJJ&K), concluding there were no triable issues of material fact on
Cooley's causes of action to enforce mechanic's and mining liens and that OVQ
and JJJ&K were entitled to judgment as a
erred because there are triable issues of material fact regarding whether: (1)
Cooley properly served the statutorily-required 20-day preliminary notice of
lien on the owner or reputed owner of the Chula Vista quarry property on which
its leased equipment was located; (2) Cooley could have a mechanic's lien for
its leased equipment used by the lessee on the quarry property; and (3) Cooley
could have a mining lien for its leased equipment used by the lessee on the
quarry property. As we explain below,
the trial court properly granted OVQ's and JJJ&K's motions for summary
judgment.
FACTUAL
AND PROCEDURAL BACKGROUND
In October
2007, OVQ purchased from RR Quarry, LLC (RR Quarry), in a sale/leaseback
transaction, real property (Property) located in Chula
Vista on which a hard-rock quarry (Quarry) was
located. From March 2007 through April
2009, Rimrock CA,
LLC (Rimrock), operated the Quarry. Rock
was removed from the Quarry by drilling holes in the hard rock, placing
explosives in the holes, and blasting rock from the ground. The blasted rock was then collected from the
ground's surface, loaded onto large trucks, and transported to an on-site
rock-crushing facility. In March 2007,
Rimrock contracted with Sukut Construction, Inc. (Sukut) to haul the blasted
rock from the Quarry to the on-site rock-crushing facility. In 2008, Rimrock contracted with Lubanko
Brothers, Inc. (Lubanko) to operate the rock-crushing facility. That facility crushed the large rocks into
rock aggregate, which Rimrock sold for use in construction (e.g., road base,
asphalt, concrete, and pipe bedding).
In April
2008, Cooley entered into five written lease agreements pursuant to which
Cooley leased certain rock-crushing and related equipment to Lubanko for use at
Lubanko's rock-crushing facility at the Property. In June 2008, Cooley entered into a joint
payment agreement (JPA) with Rimrock and Lubanko to ensure Cooley would receive
the lease payments in the event Lubanko defaulted.
On October
3, 2008, after apparently first serving JJJ&K with a preliminary notice of
lien on the Property, Cooley recorded a mechanic's lien against the Property in
the amount of $44,150.93 for rent due for the rock-crushing equipment it leased
to Lubanko.
title="">[1] That lien stated JJJ&K Investments, LP
was the owner or reputed owner of the Property.
On or about December 23, Cooley recorded an amended mechanic's lien
against the Property in the amount of $71,463.06 for the rent due for
rock-crushing equipment it leased to Lubanko.
That amended lien again stated JJJ&K Investments, LP was the owner
or reputed owner of the Property.
In June
2009, apparently after Lubanko did not pay Cooley rent in full for the
equipment it leased, Cooley filed a first amended complaint against Lubanko,
JJJ&K, Rimrock and other defendants, alleging causes of action for breach
of written contract and to enforce its mechanic's and mining liens.
complaint to add OVQ as a defendant.
OVQ filed a
motion for summary judgment on the two causes of action alleged against it,
arguing Cooley did not serve a valid 20-day preliminary notice of its lien,
Cooley's equipment did not contribute to a work of improvement, and the Quarry
was not a mine subject to a mining lien.
JJJ&K also filed a motion for summary judgment on the three causes
of action alleged against it, arguing it did not have a contractual
relationship with Cooley and it did not have any ownership interest in the
Property. OVQ and JJJ&K each
submitted separate statements of undisputed material facts, declarations, and
other papers in support of their motions.
Cooley
opposed both motions for summary judgment, arguing there were triable issues of
material fact regarding whether JJJ&K was the owner or reputed owner of the
Property, whether Cooley's equipment was used in a work of improvement, and
whether the Quarry was a mine. In
support of its opposition, Cooley submitted separate statements of disputed and
undisputed material facts, declarations, and other papers.
On January 14, 2011, the trial court
issued a minute order granting OVQ's motion for summary judgment. The court concluded Cooley's "leased
equipment was not used in a work of improvement within the meaning of [former
Civil Code] section 3106." It
further concluded "[t]here is no competent evidence to support [James]
Gasparo's conclusory statement that [Cooley] reasonably believed in good faith
that JJJ&K Investments was the owner of the [P]roperty when it served the
preliminary notice." The court also
concluded the Quarry was not a mine for purposes of a mining lien because
minerals were not extracted from it.
On January 14, 2011, the trial court also
issued a minute order granting JJJ&K's motion for summary judgment. The court concluded JJJ&K was not a party
to the JPA and was not the owner of the Property.
The trial
court entered separate judgments for OVQ and JJJ&K. Cooley timely filed
DISCUSSION
I
"On
appeal after a motion for summary judgment has been granted, we review the
record de novo, considering all the evidence set forth in the moving and opposition
papers except that to which objections have been made and sustained." (Guz v.
Bechtel National, Inc. (2000) 24 Cal.4th 317, 334; see Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.) "The purpose of the law of summary
judgment is to provide courts with a mechanism to cut through the parties'
pleadings in order to determine whether, despite their allegations, trial is in
fact necessary to resolve their dispute."
(Aguilar v. Atlantic Richfield Co.
(2001) 25 Cal.4th 826, 843 (Aguilar).)
Aguilar clarified the standards
that apply to summary judgment motions under section 437c.
supra, 25 Cal.4th at pp.
843-857.) Generally, if all the papers
submitted by the parties show there is no triable issue of material fact and
the " 'moving party is entitled to a judgment as a matter of
law,' " the court must grant the motion for summary judgment. (Aguilar,
at p. 843, quoting § 437c, subd. (c).)
Section 437c, subdivision (p)(2), states:
"A defendant . . . has met his or her
burden of showing that a cause of action has no merit if that party has shown
that one or more elements of the cause of action, even if not separately
pleaded, cannot be established, or that there is a complete defense to that
cause of action. Once the defendant
. . . has met that burden, the burden shifts to the plaintiff
. . . to show that a triable issue of one or more material facts
exists as to that cause of action or a defense thereto. The plaintiff . . . may not rely
upon the mere allegations or denials of its pleadings to show that a triable
issue of material fact exists but, instead, shall set forth the specific facts
showing that a triable issue of material fact exists as to that cause of action
or a defense thereto."
Aguilar made the
following observations:
"First, and generally, from commencement to
conclusion, the party moving for summary judgment bears the burden of
persuasion that there is no triable issue of material fact and that he is
entitled to judgment as a matter of law. . . . There is a
triable issue of material fact if, and only if, the evidence would allow a
reasonable trier of fact to find the underlying fact in favor of the party
opposing the motion in accordance with the applicable standard of
proof. . . .
"Second, and generally, the party moving for
summary judgment bears an initial burden of production to make a prima facie
showing of the nonexistence of any triable issue of material fact; if he
carries his burden of production, he causes a shift, and the opposing party is
then subjected to a burden of production of his own to make a prima facie
showing of the existence of a triable issue of material
fact. . . . A prima facie showing is one that is sufficient to
support the position of the party in question. . . .
"Third, and generally, how the parties moving for,
and opposing, summary judgment may each carry their burden of persuasion and/or
production depends on which would
bear what burden of proof at
trial. . . . [I]f a defendant moves for summary judgment against
. . . a plaintiff [who would bear the burden of proof by a
preponderance of the evidence at trial], [the defendant] must present evidence
that would require a reasonable trier of fact not to find any underlying material fact more likely than
not--otherwise, he would not be entitled
to judgment as a matter of law, but
would have to present his evidence to
a trier of fact." (
Aguilar stated:
"To speak broadly, all of the foregoing discussion
of summary judgment law in this state, like that of its federal counterpart,
may be reduced to, and justified by, a single proposition: If a
party moving for summary judgment in any action . . . would prevail
at trial without submission of any issue of material fact to a trier of fact
for determination, then he should prevail on summary judgment. In such a case, . . . the 'court
should grant' the motion 'and avoid a . . . trial' rendered 'useless'
by nonsuit or directed verdict or similar device." (Aguilar,
supra, 25 Cal.4th at p. 855, italics
added.)
"[E]ven
though the court may not weigh the plaintiff's evidence or inferences against
the defendants' as though it were sitting as the trier of fact, it must
nevertheless determine what any evidence or inference could show or imply to a reasonable trier of fact. . . . In so doing, it does not decide on any
finding of its own, but simply decides what finding such a trier of fact could
make for itself." (
"[I]f the court determines that all of the evidence presented by
the plaintiff, and all of the inferences drawn therefrom, show and imply [the
ultimate fact] only as likely as
[not] or even less likely, it must
then grant the defendants' motion for summary judgment, even apart from any
evidence presented by the defendants or any inferences drawn therefrom, because
a reasonable trier of fact could not find for the plaintiff. Under such circumstances, the [factual] issue
is not triable--that is, it may not be submitted to a trier of fact for
determination in favor of either the plaintiff or the defendants, but must be
taken from the trier of fact and resolved by the court itself in the
defendants' favor and against the plaintiff." (Id.
at p. 857, fn. omitted.)
"On
appeal, we exercise 'an independent assessment of the correctness of the trial
court's ruling, applying the same legal standard as the trial court in
determining whether there are any genuine issues of material fact or whether
the moving party is entitled to judgment as a matter of law.' [Citation.]
'The appellate court must examine only papers before the trial court
when it considered the motion, and not documents filed later. [Citation.]
Moreover, we construe the moving party's affidavits strictly, construe
the opponent's affidavits liberally, and resolve doubts about the propriety of
granting the motion in favor of the party opposing it.' " (Seo v. All-Makes Overhead Doors
(2002) 97 Cal.App.4th 1193, 1201-1202.)
II
Cooley
contends the trial court erred by concluding it did not properly serve the
statutorily-required 20-day preliminary notice of lien on the owner or reputed
owner of the Property and therefore its purported mechanic's and mining liens
were invalid or not perfected. Cooley
argues there is a triable issue of material fact whether it had a reasonable
and good faith belief that JJJ&K was the owner of the Property, thereby
precluding summary judgment.
A
After
apparently first serving JJJ&K with a preliminary notice of lien on the
Property, Cooley recorded a mechanic's lien against the Property in the amount
of $44,150.93 for rent for the rock-crushing equipment it leased to
Lubanko. That lien stated JJJ&K
Investments, LP was the owner or reputed owner of the Property. Cooley subsequently recorded an amended
mechanic's lien against the Property in the amount of $71,463.06 for rent for
the rock-crushing equipment it leased to Lubanko. That amended lien again stated JJJ&K
Investments, LP was the owner or reputed owner of the Property.
In moving for
summary judgment, OVQ argued that although it owned the Property since October
2007, Cooley did not serve it with a 20-day preliminary notice of lien
regarding its (Cooley's) 2008 lease of equipment to Lubanko. In support of its motion, OVQ submitted a
separate statement of undisputed material facts asserting it had been the owner
of the Property since October 2007 and Cooley did not serve a 20-day
preliminary notice on it. In support of
its separate statement, OVQ submitted a declaration of Kriston Qualls, the
Secretary of OVQ's sole member (Moller Investment Group, Inc.), stating OVQ
purchased the Property in October 2007 and attached a copy of the grant deed
for the Property. Qualls further stated
OVQ was not involved in the operation of the Quarry. Qualls was OVQ's representative who was
primarily responsible for monitoring all legal matters regarding the Property,
including any filing or service of preliminary notices of mechanic's liens and
other legal notices recorded or filed against the Property. Qualls stated: "In 2008, I was not
aware, nor did I receive any notice (including, without limitation, a
preliminary 20-day notice pursuant to [former] Civil Code section 3097) that
[Cooley] had leased equipment to [Lubanko] in connection with its operation of
the rock crushing facility."
In moving
for summary judgment, JJJ&K argued it was never the owner or reputed owner
of the Property and had never represented itself as the owner or reputed owner
of the Property. In support of its
motion, JJJ&K submitted a separate statement of undisputed material facts
asserting it never had any ownership interest in the Property. In support of its separate statement,
JJJ&K submitted the declaration of Ronald Therrien, its chief financial
officer, stating JJJ&K had never owned the Property, and attached a copy of
a grant deed showing OVQ had owned the Property since October 2007.
In
opposition to OVQ's motion for summary judgment, Cooley argued it had served a
valid 20-day preliminary notice of lien because it served that notice on
JJJ&K, which it reasonably and in good faith believed to be the owner of
the Property. Cooley argued there was a
triable issue of fact regarding whether its belief was reasonable and in good
faith. In support of its opposition,
Cooley submitted a separate statement of disputed and undisputed material
facts, admitting OVQ had been the owner of the Property since October
2007. However, Cooley asserted:
"While Cooley did not serve a preliminary 20-day notice on [OVQ], Cooley
did serve a valid preliminary 20-day notice on [JJJ&K] with a good faith
and reasonable belief that [JJJ&K] was the proper owner of the
[P]roperty. In support of that
statement, Cooley submitted the declaration of James Gasparo, stating he was
"an Owner" of Cooley and that Cooley "served a Preliminary
20-day Notice on the reputed owner of the [P]roperty, JJJ&K Investments,
[LP]." Gasparo further stated:
"[Cooley] reasonably believed, in good faith, that JJJ&K Investments,
[LP] was the owner of the [P]roperty at the time, and that [Cooley] was validly
complying with the statutory requirements by serving JJJ&K Investments,
[LP] with a valid Preliminary 20-day Notice."
In further
support of its opposition, Cooley submitted a separate statement of additional
undisputed material facts, asserting: "When serving the reputed owner of
the [P]roperty JJJ&K Investments, [LP] with a valid 20-day Preliminary
Notice, [Cooley] reasonably believed that [it was,] in fact, the owner of the
[P]roperty at the time." In support
of that asserted fact, Cooley cited Gasparo's declaration, quoted above, and
Exhibit C to the declaration of Patrick Hartnett, Cooley's attorney, who stated
Exhibit C was a true and accurate copy of Cooley's summons and complaint filed
on December 24, 2008. The attached
Exhibit C consists of a summons and unverified
complaint filed by Cooley against Lubanko, JJJ&K, and other
defendants. That complaint alleged
Cooley "is informed and believes . . . that at all times
mentioned [JJJ&K] and Defendants 1 to 500 . . . were the owners
or reputed owners of [the Property]."
The complaint further alleged "[Cooley] duly gave [JJJ&K], the
reputed owner(s), a written preliminary notice as prescribed by and in
accordance with the requirements of [former] section 3097 of the Civil Code
. . . ."
In
opposition to JJJ&K's motion for summary judgment, Cooley argued JJJ&K
did not provide conclusive proof that it was not the owner of the
Property. Cooley argued the grant deed
submitted by JJJ&K transferred property identified by parcel numbers and
legal descriptions and all but one of those parcel numbers "are no longer
'good' parcel numbers."
Furthermore, Cooley argued the street address on its mechanic's and
mining liens did not "match up" with any of the parcel numbers
identified in the grant deed. Therefore,
Cooley argued the grant deed was insufficient to support JJJ&K's assertion
it did not have any ownership interest in the Property. In support of its opposition, Cooley
submitted a separate statement of disputed and undisputed material facts,
asserting: "There is no conclusive evidence to support the fact that
[JJJ&K did] not have any ownership interest in the [P]roperty. The Grant Deed does not purport to transfer
the same parcels . . . included in [Cooley's] Mechanic's Lien, and
Mining Lien." In support of that
assertion, Cooley cited the declarations of its attorneys, Hartnett, Jessica
Jasper, and Meghan George. Exhibits A
through C to Hartnett's declaration consist of copies of the grant deed
transferring real property from RR Quarry to OVQ, Cooley's amended mechanic's
lien, and Cooley's original mechanic's lien.
Jasper's
declaration stated she spoke with an unnamed employee of the San Diego County
Assessor's Office who informed her that all but one of the parcel numbers
identified on OVQ's grant deed were no longer "good" parcels and that
the remaining "good" parcel number identified a parcel consisting of
136 acres on Otay Valley Road, but it did not have a particular street address. That employee informed Jasper that the parcel
did not have the address of 2041 Heritage Road, Chula Vista (the address on
Cooley's amended mechanic's lien).
George stated she witnessed Jasper's conversation with the unnamed
employee of the Assessor's Office and confirmed Jasper's description of that
conversation, as discussed above. George
further stated that when she asked another employee the reason why the parcel
number did not have a street address, the employee informed her that if no
buildings were placed on the land, the parcel is not given a particular street
address. The employee could not
determine whether the address of 2041 Heritage Road fell within the grant
deed's parcel number. In further support
of its opposition, Cooley submitted a separate statement of additional undisputed
material facts essentially asserting the same facts described above, including
that it cannot be determined whether the address of 2041 Heritage Road (as
included in Cooley's mechanic's liens) falls within the only remaining valid
parcel number identified in OVQ's grant deed.
In reply to
Cooley's opposition to its motion, JJJ&K argued Cooley's evidence did not
refute the fact that the grant deed clearly and unambiguously conveyed the
Property from RR Quarry to OVQ, and JJJ&K never had any ownership of the
Property. In reply to Cooley's
opposition to its motion, OVQ argued Cooley admitted it had not served OVQ with
the required 20-day preliminary notice.
OVQ further argued Cooley had not provided any evidence to support its assertion it had a reasonable and good
faith belief that JJJ&K was the reputed owner of the Property. It argued Gasparo's conclusory statement in
his declaration to that effect was an improper legal conclusion lacking any
factual foundation and therefore did not satisfy Cooley's burden of production
of evidence sufficient to make a prima facie showing of the existence of a
triable issue of material fact.
In granting
OVQ's motion for summary judgment, the trial court stated regarding Cooley's
mechanic's lien claim:
"[Cooley]
was required to give a written preliminary notice to the owner or reputed owner
as a prerequisite to enforcing a lien.
([Former Civ. Code, § 3097.])
[Cooley] admittedly did not provide notice to the owner, [OVQ], but to
another entity [JJJ&K] that it contends is a reputed owner. Whether such notice is sufficient turns on
whether a reasonable person, given [Cooley's] information, would have been led
to believe in good faith that the reputed owner was the actual owner[.] [Citation.]
There is no competent evidence to support Gasparo's conclusory statement
that [Cooley] reasonably believed in good faith that [JJJ&K] was the owner
of the [P]roperty when it served the preliminary notice. For example, there is no evidence who, if
anyone, told Gasparo that [JJJ&K] owned the [P]roperty or that [Cooley]
consulted public records which indicated [JJJ&K] owned the
[P]roperty."
Regarding Cooley's mining lien claim, the court likewise
concluded: "[F]or the reasons given above[,] [Cooley] failed to serve a
preliminary notice on [OVQ]."
In granting
JJJ&K's motion for summary judgment, the trial court stated:
"The
parties agree that the mechanic's and mining lien claims can only be alleged
against the owner of the [P]roperty.
([Civ. Code,] §§ 3059, 3060.)
The liens were for rock crushing rental equipment provided for work at
2041 Heritage Road, Chula Vista. There
is no evidence from which a trier of fact could conclude JJJ&K owned the
[Property]. Therrien's declaration
states JJJ&K never had any ownership interest in the [Property]. Moreover, a grant deed recorded on October
23, 2007[,] conveys to [OVQ] a quarry and extended quarry. The declarations of Jasper and George relate
conversations with the [A]ssessor's [O]ffice which state that the address of
2041 Heritage Road is not associated with a parcel number. However, the [A]ssessor's [O]ffice explained
that an address would not be associated with a parcel number if there are no
buildings on the land. This would
explain why the deed lists parcel numbers rather than a property address."
Accordingly, the court entered judgments for OVQ and
JJJ&K.
B
"The
California mechanics' lien derives from article XIV, section 3 of the
California Constitution. The liens of
mechanics, artisans, and materialmen are favored in California law '
". . . because those parties have, at least in part, created the
very property upon which the lien attaches . . . ." ' [Citations.]
Under the statutory scheme enacted to implement the enforcement of
mechanics' liens ([former] chs. 1 and 2 of tit. 15, pt. 4, div. 3 of the Civ.
Code), persons who furnish labor or materials on a work of improvement are
entitled to file a mechanic's lien on the property where the improvement is
located. The materialman is required to
file a preliminary notice with the owner, the general contractor, and the
construction lender within 20 days of furnishing materials for improvement
([former Civ. Code,] §§ 3097, 3114.)
It must record its claim of lien within 90 days of completing the
improvement ([former Civ. Code,] § 3116), and once recorded the mechanics'
lien constitutes a direct lien on the improvement and the real property
([former Civ. Code,] §§ 3128, 3129.)"
Fire Protection Systems Co. v. American Sav. & Loan Assn. (1986) 183
Cal.App.3d 352, 355.)
"A claimant
may enforce a lien only if the claimant has given preliminary notice to the
extent required by Chapter 2 (commencing with Section 8200) and made proof of
notice." (Civ. Code, § 8410.) Except as otherwise provided by statute,
before recording a lien claim a claimant must give preliminary notice to the
"owner or reputed owner" of the property on which a lien will be
claimed for work performed or materials used.
(Civ. Code, § 8200, subd. (a)(1).)
If preliminary notice is not given to the owner or reputed owner, the
lien claim is not valid. (Civ. Code,
§ 8200, subd. (c) [preliminary notice is "a necessary prerequisite to
the validity of a lien claim"].) A
preliminary notice must include the name and address of the owner or reputed
owner, a description of the site sufficient for identification, the name and
address of the person giving the notice, a general description of the work
provided, an estimate of the total price of the work provided and to be
provided, and other required information.
(Civ. Code, §§ 8102, subd. (a), 8202, subd. (a).) "A preliminary notice shall be given not
later than 20 days after the claimant has first furnished work on the work of
improvement." (Civ. Code,
§ 8204, subd. (a).) Strict
compliance with Civil Code section 8200 et seq. is required. (Kim v.
JF Enterprises (1996) 42 Cal.App.4th 849, 854-855; Truestone, Inc. v. Simi West Industrial Park II (1984) 163
Cal.App.3d 715, 721.)
The
statutory requirements for preliminary notice of a mechanic's lien claim also
apply to mining lien claims. Mining
liens provided for by Civil Code section 3060 "shall be enforced in the
same manner as those provided for by Part 6 (commencing with Section 8000) of
Division 4." (Civ. Code,
§ 3060, subd. (b).)
C
Cooley
argues there is a triable issue of material fact whether it complied with the
statutory requirements for preliminary notice of mechanic's and mining lien
claims by serving JJJ&K, and not OVQ, with a preliminary notice.
A
preliminary notice must be served on the "owner or reputed owner" of
the property on which the claimant's work is performed or materials are
used. (Civ. Code, § 8200, subd.
(a)(1).) A "reputed" owner is
"a person or entity reasonably and in good faith believed by the claimant
to be the actual [owner]." (Cf.
185 Cal.App.3d 75, 87 (Kodiak)
[regarding reputed construction lenders]; see also Brown Co. v. Appellate Department (1983) 148 Cal.App.3d 891, 900 (
Brown and Kodiak "set forth similar tests for analyzing whether a
claimant held a good faith belief that the reputed [owner] was the actual
[owner], i.e., would a reasonable person, given the claimant's information,
have been led to believe in good faith that the reputed [owner] was the actual
[owner]?" (Force Framing, Inc. v. Chinatrust Bank (U.S.A.) (2010) 187
Cal.App.4th 1368, 1374 (Force Framing).) Brown
held a claimant was not required to check county records to show it held a good
faith belief the reputed lender was the actual lender, but rather could prove
that belief with evidence the claimant relied on information supplied by the
general contractor. (
materialman has reasonably relied on an owner's and/or general contractor's
statements identifying a lender [or owner], then the laborer or materialman
does not need to check county records to prove he had a good faith belief that
the lender [or owner] was the actual lender [or owner]." (Force
Framing, at p. 1376.) Nevertheless,
on which a reasonable claimant should rely must be cloaked with
as statements from the owner, general contractor, or lender itself or their
agents--so as to distinguish this information from a mere guess or some
ill-founded conjecture." (
Based on
the parties' summary judgment papers, we conclude there is no triable issue of
material fact on the question whether Cooley properly served JJJ&K, as the
reputed owner of the Property, with a 20-day preliminary notice. In support of its motion for summary
judgment, OVQ's separate statement of undisputed material facts asserted it had
been the owner of the Property since October 2007 and it had not been served
with a 20-day preliminary notice. OVQ
submitted Quall's declaration stating OVQ purchased the Property in October
2007 and attaching a copy of the grant deed.
Qualls also stated: "In 2008, I was not aware, nor did I receive
any notice (including, without limitation, a preliminary 20-day notice pursuant
to [former] Civil Code section 3097) that [Cooley] had leased equipment to
[Lubanko] in connection with its operation of the rock crushing facility." Based thereon, we conclude OVQ met its
prima facie showing of the nonexistence of any triable issue of material fact
on the issue of whether Cooley served the statutorily-required preliminary
notice on the owner or reputed owner of the Property. (§ 437c, subd. (p)(2);
Because OVQ
carried its initial burden of production, it caused a shift in the burden of
production, subjecting Cooley to a burden of production of its own to make a
prima facie showing of the existence of a triable issue of material fact on the
issue of whether it properly served a preliminary notice on an owner or reputed
owner of the Property. (
Based on our review of the record, we conclude Cooley did
show a triable issue of fact existed on that question. In opposing OVQ's motion, Cooley submitted
Gasparo's declaration in which he stated: "[Cooley] reasonably believed,
in good faith, that JJJ&K Investments, [LP] was the owner of the [P]roperty
at the time . . . ."
Cooley also submitted Exhibit C to Hartnett's declaration, which is the
December 2008 summons and unverified
complaint filed by Cooley against Lubanko, JJJ&K, and other defendants. That complaint alleged Cooley "is
informed and believes . . . that at all times mentioned [JJJ&K]
and Defendants 1 to 500 . . . were the owners or reputed owners of
[the Property]."
Contrary to
Cooley's assertion on appeal, neither Gasparo's declaration nor its unverified
complaint was sufficient to make a prima facie showing there is a triable issue
regarding whether Cooley properly served a preliminary notice on an owner or
reputed owner of the Property. (
Rather than citing specific information that purportedly caused Cooley
to believe JJJ&K was the owner of the Property, Gasparo's declaration and
Cooley's complaint merely "parroted" the legal standard for a reputed
owner (i.e., a reasonable and good faith belief that the person served was the
actual owner of the property). As the
trial court concluded, Gasparo's statement--that Cooley "reasonably
believed, in good faith," JJJ&K was the owner of the Property--was
conclusory and insufficient to show there is a triable issue of fact on the
question of whether JJJ&K was the reputed owner of the Property for
purposes of service of its 20-day preliminary notice. Gasparo's conclusory statement did not
reveal, in specific or even general terms, what information Cooley purportedly
received and relied on in forming its belief, thereby providing no evidence on
which a trier of fact could find Cooley had a reasonable and good faith belief
that JJJ&K was the owner of the Property.
Furthermore,
Cooley did not cite any information that potentially had sufficient indicia of
reliability and therefore could have supported a reasonable and good faith
belief that JJJ&K was the owner of the Property. As we noted above, Kodiak concluded "the information on which a reasonable
claimant should rely must be cloaked with sufficient
indicia of reliability--such as statements from the owner, general
contractor, or lender itself or their agents--so as to distinguish this
information from a mere guess or some ill-founded conjecture." (Kodiak,
supra, 185 Cal.App.3d at p. 87,
italics added.) In opposing OVQ's motion
for summary judgment, Cooley did not
submit any evidence showing it had
received and relied on statements from OVQ, JJJ&K, Rimrock, Lubanko, or any
other party associated with the Property that arguably caused it to reasonably
and in good faith believe JJJ&K was the owner of the Property. Likewise, there is no evidence showing Cooley
searched public records (e.g., deeds recorded at the County Recorder's Office)
and obtained information causing it to believe, reasonably and in good faith,
that JJJ&K was the owner of the Property.
Cooley did not meet its burden of production to make a prima facie
showing there is a triable issue of fact whether JJJ&K was the reputed owner
of the Property. (§ 437c, subd.
(p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851.)
Because OVQ
met its initial burden of production, the burden shifted to Cooley to make a
prima facie showing there is a triable issue of material fact. However, Cooley, in effect, merely relied on
its allegations that JJJ&K was
the reputed owner of the Property and failed to "set forth the specific
facts showing that a triable issue of material fact exists" regarding
whether it reasonably and in good faith believed JJJ&K was the owner of the
Property. (§ 437c, subd. (p)(2),
italics added.) Because "all of the
evidence presented by [Cooley], and all of the inferences drawn therefrom, show
and imply [that JJJ&K was the reputed owner of the Property]
court correctly granted OVQ's motion for summary judgment. (Aguilar,
supra, 25 Cal.4th at p. 857.) Absent
Cooley's service of a 20-day preliminary notice on the owner or reputed owner
of the Property, Cooley cannot establish it had a valid statutory mechanic's or
mining lien on the Property. (Civ. Code,
§§ 8200, subds. (a)(1), (c); 8410; 3060, subd. (b).) The record shows OVQ was the actual owner of
the Property, but was not served with a preliminary notice, and JJJ&K,
which was served with a preliminary notice, was not the reputed owner of the
Property. Because all the summary
judgment papers submitted by OVQ and Cooley show there is no triable issue of
material fact on one element of Cooley's mechanic's lien and mining lien claims
(i.e., that Cooley served a 20-day preliminary notice on the owner or reputed
owner of the Property) and OVQ is entitled to judgment as a matter of law, the
trial court correctly granted OVQ's motion for summary judgment. (§ 437c, subds. (c), (p)(2).)
D
We further
conclude the trial court correctly granted JJJ&K's motion for summary
judgment.
not serve a 20-day preliminary notice on the owner or reputed owner of the
Property, it did not satisfy the statutory prerequisites for foreclosing on its
purported mechanic's and mining liens.
(Civ. Code, §§ 8200, subds. (a)(1), (c); 8410; 3060, subd. (b).)
Furthermore,
because the parties' summary judgment papers show there is no triable issue of
material fact on the question of whether JJJ&K was the owner of the
Property, JJJ&K cannot be subject to a mechanic's or mining lien. In support of its motion, JJJ&K submitted
Therrien's declaration in which he stated JJJ&K had never owned the
Property and to which he attached a copy of a grant deed showing title to the
Property was transferred to OVQ in October 2007. In opposing JJJ&K's motion, Cooley argued
JJJ&K did not provide conclusive proof it was not the owner of the
Property. Cooley submitted Jasper's declaration
in which she stated she spoke with an employee of the San Diego County
Assessor's Office who informed her that all but one of the parcel numbers
identified on OVQ's grant deed were no longer "good" parcels and the
remaining "good" parcel number identified a parcel consisting of 136
acres on Otay Valley Road, but it did not have a particular street address.
make a prima facie showing that JJJ&K owned, or had an ownership interest
in, the Property. Rather, it showed, at
most, there was a possible inconsistency between the street address Cooley
included in its preliminary notice and the legal description contained in
of production to show there was no triable issue of fact regarding its
nonownership of the Property, and Cooley did not carry its burden to present
evidence showing such a triable issue existed, the trial court correctly
concluded JJJ&K did not own the Property and granted it summary
adjudication on Cooley's mechanic's lien and mining lien causes of action. Absent JJJ&K's ownership of or other
interest in the Property, mechanic's and mining lien causes of action cannot be
maintained against JJJ&K.
Mechanic's
liens and mining liens encumber property (e.g., the Property) and any work of
improvement on it, and do not "encumber" an entity (e.g., JJJ&K)
or make it personally or directly liable.
(See generally Civ. Code, § 8440; Connolly Development, Inc. v. Superior Court (1976) 17 Cal.3d 803,
808; Iknoian v. Winter (1928) 94
Cal.App. 223, 225-226.) Absent a
contractual relationship, any action to foreclose a mechanic's or mining lien
on the Property is against the Property and any work of improvement on it,
requiring a plaintiff to name as defendants the Property's owner (OVQ) and any
lenders or other parties with an interest in the Property, and
above) has no ownership or other interest in the Property. (R.D.
Reeder Lathing Co. v. Allen (1967) 66 Cal.2d 373, 376; cf.
American Sav. & Loan Assn., supra, 183 Cal.App.3d at pp. 357-358;
385-386 (dis. opn. of Preston, J.).)
Therefore, the trial court properly granted JJJ&K's motion for
summary judgment.
III
Additional
Grounds for Summary Adjudication
of Mechanic's
Lien Cause of Action
Because of
our conclusions above we need not address the parties' remaining
contentions. We nevertheless conclude
there are additional grounds that support the trial court's grant of summary
adjudication of Cooley's cause of action to enforce its purported mechanic's
lien. We note Cooley's rock-crushing
equipment was not used on a "work of improvement" on the Property
that would support a statutory mechanic's lien.
A person
who provides work for a work of improvement has a mechanic's lien on that work
of improvement and the real property on which that work of improvement is
situated. (Civ. Code, §§ 8400,
8440.) Civil Code section 8050 provides:
"(a) 'Work of improvement' includes, but is not
limited to:
"(1) Construction, alteration, repair, demolition,
or removal, in whole or in part, of, or addition to, a building, wharf, bridge,
ditch, flume, aqueduct, well, tunnel, fence, machinery, railroad, or road.
[¶] . . . [¶]
"(3) Filling, leveling, or grading of real
property.
"(b) 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."
"Work is authorized for a work of improvement or for a
site improvement [if] . . . [¶] (a)
[i]t is provided at the request of or agreed to by the owner[; or] [¶]
(b) [i]t is provided or authorized by a direct contractor, subcontractor,
architect, project manager, or other person having charge of all or part of the
work of improvement or site improvement."
(Civ. Code, § 8404.)
In the
circumstances in this case, as shown by the undisputed evidence submitted by
the parties, we conclude there was no "work of improvement" occurring
on the Property in 2008 and, even assuming there was, Cooley's rock-crushing
equipment did not add or contribute to that work of improvement. The record shows rock was removed from the
Quarry by drilling holes in the hard rock, placing explosives in the holes, and
blasting rock from the ground. The
blasted rock was then collected from the ground's surface, loaded onto large
trucks, and transported to an on-site rock-crushing facility. That facility crushed the large rocks into
rock aggregate, which was sold for use in construction (e.g., road base,
asphalt, concrete, and pipe bedding).
Those activities do not constitute a "work of improvement" as
defined by Civil Code section 8050. The
removal of rock from the Quarry's ground surface, which rock was then crushed
and sold to third parties, did not involve the "[c]onstruction,
. . . demolition, or removal . . . of . . . a
building, . . . ditch [or] flume." (Civ. Code, § 8050, subd. (a).) In fact, there is no evidence showing those
quarry operations added value to or otherwise improved the Property. Instead, the evidence shows those operations
resulted in the removal of valuable matter (i.e., hard rock) from the Quarry
for no other purpose than to sell it for profit, thereby presumably causing a
Property. (Cf. United Rentals Northwest, Inc. v. Snider Lumber Products, Inc.
(2009) 174 Cal.App.4th 1479, 1484-1486 [leased equipment used to remove
buildings, which removal benefited the real property, contributed to a work of
improvement].) Cooley did not submit any
evidence below that could support a reasonable inference to the contrary. There was no work of improvement on or to the
Property that could support a statutory mechanic's lien.
Assuming
arguendo the blasting and removal of rock improved the Property and constituted
a work of improvement, we nevertheless would conclude the operations of the
separate rock-crushing facility was not work that contributed to that work of
improvement. Crushing of rock for the
sale of rock aggregate to third parties presumably is an activity that could be
performed either on-site or off-site. In
this case, the blasted rock was loaded onto large trucks and hauled to the
on-site rock-crushing facility. However,
trucks presumably could have, instead, hauled the blasted rock off-site for
crushing. Accordingly, the rock-crushing
operations performed by Lubanko with Cooley's leased equipment was not work
that improved or benefited the Property and therefore Cooley could not have any
mechanic's lien on the Property for its leased rock-crushing equipment.
IV
Additional
Grounds for Summary Adjudication
of Mining Lien
Cause of Action
Because of
our conclusions in part II above we need not address the parties' remaining
contentions regarding Cooley's purported mining lien. We nevertheless conclude there are additional
grounds that support the trial court's grant of summary adjudication of
Cooley's cause of action to enforce its purported mining lien.
3060, subdivision (b), provided in pertinent part: "Any person who
as a mine, either in the development thereof or in working thereon by the
subtractive process, or furnishes
materials to be used or consumed therein, has a lien upon the same and the
works owned and used by the owners for milling or reducing the ores from the
same, for the value of the work or labor done or materials furnished by each
. . . ."
name="_ftnref9" title="">[9] (Italics added.) Assuming arguendo the Quarry is a
"mine" under Civil Code section 3060, based on the undisputed
evidence presented below, Cooley did not perform any labor or furnish any
material used or consumed in that mine.
Rather, Cooley only leased equipment to Lubanko, which, in turn, used
that equipment to crush rock removed from the Quarry and hauled to its
rock-crushing facility. Unlike Civil
Code section 8400, which expressly provides for mechanic's liens for lessors
that lease equipment used in a work of improvement, Civil Code section 3060
does not contain that express
provision for mining liens. Accordingly,
we should not imply Civil Code section 3060 provides a mining lien for
equipment lessors when it expressly included liens for equipment lessors in
Civil Code section 8400 and excluded any reference to equipment lessors in
Civil Code section 3060. (See generally
(1994) 23 Cal.App.4th 1, 10-11; Ford
Motor Co. v. County of Tulare (1983) 145 Cal.App.3d 688, 691.)
In any
event, assuming arguendo equipment lessors may have mining liens under Civil
Code section 3060, we nevertheless conclude, as a matter of law based on the
undisputed evidence in this case, neither Lubanko nor Cooley performed any
labor or furnished any material "used or consumed" in the mine on the
Property. (Civ. Code, § 3060, subd.
(b).) As discussed above, crushing of
rock for the sale of rock aggregate to third parties presumably is an activity
that could be performed either on-site or off-site. In this case, the blasted rock was loaded
onto large trucks and hauled to the on-site rock-crushing facility. However, trucks presumably could have,
instead, hauled the blasted rock off-site for crushing. Accordingly, the rock-crushing operation
performed by Lubanko with Cooley's leased equipment was not labor performed or materials used or consumed in the
the drilling of holes, blasting of rock with explosives, and hauling blasted
rock away). Therefore, Cooley could not
have any mining lien on the Property for its leased rock-crushing equipment.
DISPOSITION
The
judgments are affirmed. Respondents are
entitled to costs on appeal.
McDONALD,
J.
WE CONCUR:
McCONNELL,
P. J.
HALLER, J.
name="_ftn1" title="">[1] The parties do not cite to any document in the record on
appeal as constituting the purported 20-day preliminary notice. However, because the parties apparently do
not dispute that Cooley served a preliminary notice on JJJ&K, for purposes
of this appeal we presume JJJ&K was timely served with that notice.
name="_ftn2" title="">[2] Cooley apparently filed its original complaint in December
2008. According to Cooley's
representation on appeal, Lubanko filed for bankruptcy in February 2009.
