The long and complicated road of the Williams v. Athletic Field decision continues to wind in Washington. Last month, a bill floating around the Washington legislature that would potentially offset the controversial Division II Court of Appeals decision died, as it failed to go up for vote before the session’s deadline.
To catch you up on the decision, its effects and the bill, here are some cliff notes:
In Washington state, mechanic liens must be notarized and verified by the lien claimant. The lien statutes require that the claim be notarized pursuant to the state’s notarization statutes, which has different methods for notarizing an individual signature and a corporate signature. However, the lien statutes themselves provide a lien form that can be used by claimants, and that form has the notarization language required for individuals. The issue in Williams v. Athletic Field is whether the statutory lien form could be used for corporate claimants…or if the corporate notary language was required.
— August 2006 – Washington Court of Appeals Division II Finds the Lien, relying on the statutory form, is valid.
— March 2010 – Sua Sponte, Washington Court of Appeals reconsiders its decision, withdraws it and reverses, invaliding the lien. See blog post: Washington Appeals Case Confirms Lien Requirements Are Technical.
— November 2010: Washington Supreme Court Accepts Case for Review (blog post)
— January 2011: House Bill 1475 introduced in Washington Legislature to offset the impact of the controversial decision. Bill passes the house unanimously. (blog post)
— April 2011: House Bill 1475 dies, as it does not reach a vote in the Washington Senate before the session April 12, 2011 deadline.
Unfortunately, now that the mechanic lien legislation has died in the 2011 legislature, the Washington lien laws remain up in the air. I have been involved in a few cases in Washington where the effect of the Williams v. Athletic Field decision is squarely at issue. Interestingly, the decision does a lot more than just address how a Washington mechanic’s lien must be signed and notarized. Instead, it addresses a big-picture difference between Division I and Division II of the Washington Courts of Appeals.
The bigger issue is whether lien laws must strictly or liberally construed by courts. Critizing the Williams v. Athletic Field decision and the underlying reasoning of the Division II court, Division I engaged in the debate about whether strict or liberal interpretation must be applied in lien disputes with the following:
In the lien context…there is a strong statutory directive that “[the lien statutes]…be liberally construed to provide security for all parties intended to be protected by their provisions.” RCW 60.04.900. This directive clearly applies to RCW 60.04.091. See, e.g. Northlake Concrete Prods., Inc. v. Wylie, 34 Wn.App. 810, 818, 663 P.2d 1380 (1983) (explaining the Legislature’s intent that “the lien laws shall be liberally construed with the view to effecting their object” meant that “when it has been determined that persons come within the operation of the act it will be liberally applied to them” (quoting De Gooyer). N. Coast. Elect. Co. v. Ariz. Elec. Serv., 2010 Wash. App. LEXIS 914, fn4 (Wash. Ct. App. Aug 23 2010).
Now that House Bill 1475 is history, the importance of the Washington Supreme Court decision is more pronounced. However, it was always going to be important.
Now, the construction industry must collectively hold their breath, as we all wait and see how this ends, and whether Division I’s liberal construction, or Division II’s strict construction will prevail.