Opinion
No. 81879-1-I
07-19-2021
LENNAR MULTIFAMILY BUILDERS, LLC f/k/a LMC Construction, LLC, Respondent, v. SAXUM STONE, LLC, Appellant.
John Anthony Mcintosh, Thomas Scott Linde, Schweet Linde & Coulson, PLLC, 575 S Michigan St., Seattle, WA, 98108-3316, for Appellant. David Clark Groff Jr., Groff Murphy PLLC, Christian Daniel Ant Ferrin, Attorney at Law, 300 E Pine St., Seattle, WA, 98122-2029, for Respondent.
John Anthony Mcintosh, Thomas Scott Linde, Schweet Linde & Coulson, PLLC, 575 S Michigan St., Seattle, WA, 98108-3316, for Appellant.
David Clark Groff Jr., Groff Murphy PLLC, Christian Daniel Ant Ferrin, Attorney at Law, 300 E Pine St., Seattle, WA, 98122-2029, for Respondent.
OPINION PUBLISHED IN PART
Dwyer, J.
¶ 1 Saxum Stone, LLC appeals from the superior court's order releasing its construction lien and awarding attorney fees to Lennar Multifamily Builders, LLC. The order was entered pursuant to a proceeding initiated by Lennar to release Saxum's lien as being frivolous. Saxum asserts that the superior court erred by (1) failing to enter findings of fact demonstrating that the lien was frivolous, (2) releasing the lien as being frivolous, and (3) awarding attorney fees to Lennar. Because Saxum's lien was not frivolous, we reverse the superior court's orders releasing the lien and awarding attorney fees and costs to Lennar. Additionally, we hold that Saxum is entitled to an award of attorney fees and costs for defending this action both in the superior court and on appeal pursuant to RCW 60.04.081(4).
In the unpublished portion of the opinion, we address an argument advanced by Lennar that was not adequately briefed on appeal. In that section, we also provide guidance to the superior court should this issue arise on remand.
I
¶ 2 Lennar Multifamily Builders, LLC was the general contractor for the construction of Totem Lake Apartments, a construction project located in Kirkland, Washington. On February 7, 2019, Lennar subcontracted with Wall to Wall Tile & Stone, LLC to build and install quartz countertops for the project. The total amount that Lennar agreed to pay Wall to Wall under the subcontract was $480,494.
¶ 3 On July 16, 2019, Wall to Wall filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Oregon. The record is not clear as to whether Wall to Wall commenced work on the Totem Lake Apartments project prior to filing for bankruptcy protection. According to a declaration filed by one of Lennar's members, Wall to Wall "began its work on the Project on or about February 7, 2019." However, according to a declaration filed by one of Saxum Stone, LLC's members, Wall to Wall "started to perform labor on the Project on December 3, 2019 by fabricating, transferring, and installing quartz countertops on units on the 6th floor of the Project."
¶ 4 It is clear, however, that after Wall to Wall commenced the bankruptcy proceeding, Wall to Wall performed work on the Totem Lake Apartments project pursuant to the existing subcontract. It did so as a debtor in possession. Wall to Wall continued to fabricate and install the quartz countertops until March 24, 2020, at which point Wall to Wall ceased to engage in any further work on the project.
¶ 5 On April 6, 2020, Wall to Wall's chapter 11 bankruptcy proceeding was converted to a chapter 7 proceeding. At that point, according to a declaration filed by one of Lennar's members, Lennar had paid Wall to Wall for all of the quartz material that was needed to complete the subcontract, even though Wall to Wall had not finished installing the countertops. The remaining uninstalled quartz material was stored in Wall to Wall's warehouse in Kent.
¶ 6 As of March 24, 2020, according to a declaration filed by one of Saxum's members, Wall to Wall held an outstanding account receivable for Lennar in the amount of $73,102.83. This account receivable regarded labor performed and materials supplied under the subcontract. Lennar does not dispute the existence of this account receivable.
¶ 7 On May 1, 2020, Saxum entered into an agreement with the trustee of Wall to Wall's bankruptcy estate to purchase substantially all of the estate's assets for a price of $4,364,519. That same day, Lennar received notice from the trustee of the trustee's intent to sell substantially all of the assets possessed by Wall to Wall's bankruptcy estate to Saxum.
¶ 8 The agreement entered into by the trustee and Saxum, entitled "Agreement for Sale and Purchase of Business Assets" (asset purchase agreement), stated, in part:
Seller hereby sells to Buyer and Buyer hereby purchases from Seller all of the Assets of the Estate useful in the Business, including, but not limited to accounts receivable, equipment, inventory, supplies, the real property leases listed in Schedule 1.2, software, licenses, Intellectual Property, books and records, tools, vehicles listed on Schedule 1.1, all claims, if any, against Buyer, its members, agents, attorneys, officers, and directors ("Buyer Claims " ).
(First emphasis added.)
¶ 9 The agreement also excluded certain specified assets:
[T]he purchased assets do not include: a) cash; b) vehicle leases with Enterprise Fleet Management, Inc. ("Enterprise " ); c) claims and causes of action, if any, against present or former insiders or otherwise listed in paragraphs 4 and 8 of the Conversion Declaration filed on April 20, 2020 as Lead Case Docket No. 356 (the "Conversion Declaration " )[ ] (other than claims against Buyer and Buyer's members) or arising under or pursuant to [various sections] of the Bankruptcy Code, other than the Buyer Claims; d) Benefit Plans of the Seller; e) any vehicles not listed on Schedule 1.1 and any other items listed in paragraphs 3(i)-(j) of the Conversion Declaration; and f) claims pursuant to any insurance policy insuring the Debtors’ for general liability or for acts of officers and owners of Debtors, other than the Buyer Claim (the "Assets " ), free and clear of all mortgages, pledges, liens, security interests, options, claims (including but not limited to any claim for successor liability), charges, other encumbrances, interests, or restrictions of any kind (collectively, "Liens " ).
The referenced Conversion Declaration is not in the record on appeal.
¶ 10 The parties agree that, pursuant to the asset purchase agreement, Saxum was not assigned the subcontract concerning the Totem Lake Apartments project.
In its opening brief, Saxum states that "[t]his case does not involve an assignment or assumption of future contractual performance." Br. of Appellant at 17. Likewise, in its response brief, Lennar states that the asset purchase agreement "did not assign the ... Subcontract to Saxum." Br. of Resp't at 4.
¶ 11 On May 14, 2020, the bankruptcy court entered an order approving the asset purchase agreement. This order stated that "[o]nly one response was filed – a limited objection by Baffco Enterprises, LLC." This order also provided that "[t]he Trustee may sell the assets free and clear of all liens, claims, and encumbrances ... because, in each case, one or more of the standards set forth in 11 U.S.C. § 363(f)(1)-(5) has been established." Additionally, the order stated that "[t]he terms and conditions of the [asset purchase agreement] are approved."
¶ 12 That same day, the trustee executed a bill of sale, which assigned the assets referenced in the asset purchase agreement to Saxum.
¶ 13 On June 12, 2020, an attorney representing Saxum sent an attorney representing Lennar a letter demanding payment of the outstanding account receivable. On June 15, Lennar's attorney responded by informing Saxum's attorney that Lennar would not pay any amount due on the account receivable.
¶ 14 On June 22, 2020, Saxum recorded a lien on the Totem Lake Apartments property in the amount of $73,149.90. Consistent with the language for claim of lien forms recommended by RCW 60.04.091(2), the claim of lien filed declared: "If the claimant is the assignee of this claim state so here: Claimant is the assignee of Wall to Wall Tile & Stone."
¶ 15 On July 28, 2020, Lennar filed a motion in the King County Superior Court pursuant to RCW 60.04.081, a statute providing a mechanism for a party to challenge a frivolous construction lien. In the motion, Lennar asserted that Saxum's lien was frivolous and requested that the trial court release the lien and award attorney fees and costs to Lennar. Lennar claimed that Saxum's lien was frivolous because (1) Saxum did not perform any lienable work on the Totem Lake Apartments project, (2) Saxum was not assigned the subcontract, and (3) Wall to Wall did not record a lien. Also in this motion, Lennar requested that the superior court order Saxum to show cause.
¶ 16 On August 5, 2020, a commissioner of the King County Superior Court granted the motion to show cause. On August 20, the superior court held a show cause hearing. During the hearing on Lennar's motion to release Saxum's lien, the superior court opined that Saxum was not assigned the lien because (1) Saxum was not assigned the subcontract, and (2) Wall to Wall did not record the lien:
[SAXUM'S COUNSEL]: ... And it's -- the key point for this Materialmen's Lien statute is that it's the debt and the cause of action that was clearly assigned; there's a Bill of Sale from the Chapter 7 trustee.
Wall To Wall, it's undisputable that they fall under the statute. There's no --
THE COURT: Oh, they definitely fall under it. I mean they did the work. They would fall under it.
The question is, because you didn't buy the sub -- because you didn't get the subcontract, I mean the question is, and they didn't file a lien, whether you fall under it.
¶ 17 On August 21, 2020, the superior court entered an order releasing the lien and awarding attorney fees and costs to Lennar. The order did not contain written findings of fact demonstrating that Saxum's claim of lien was frivolous.
¶ 18 Saxum appeals.
II
¶ 19 As an initial matter, Saxum contends that the superior court erred by not entering findings of fact demonstrating that Saxum's lien was frivolous. We disagree.
¶ 20 RCW 60.04.081 "creates a summary proceeding in which a property owner may quickly obtain the release of a lien that is frivolous and made without reasonable cause." W.R.P. Lake Union Ltd. P'ship v. Exterior Servs., Inc., 85 Wash. App. 744, 749, 934 P.2d 722 (1997). This "statutory procedure is ... in the nature of a trial by affidavit." W.R.P. Lake Union Ltd. P'ship, 85 Wash. App. at 750, 934 P.2d 722.
RCW 60.04.081 provides:
(1) Any owner of real property subject to a recorded claim of lien under this chapter, or contractor, subcontractor, lender, or lien claimant who believes the claim of lien to be frivolous and made without reasonable cause, or clearly excessive may apply by motion to the superior court for the county where the property, or some part thereof is located, for an order directing the lien claimant to appear before the court at a time no earlier than six nor later than fifteen days following the date of service of the application and order on the lien claimant, and show cause, if any he or she has, why the relief requested should not be granted. The motion shall state the grounds upon which relief is asked, and shall be supported by the affidavit of the applicant or his or her attorney setting forth a concise statement of the facts upon which the motion is based.
(2) The order shall clearly state that if the lien claimant fails to appear at the time and place noted the lien shall be released, with prejudice, and that the lien claimant shall be ordered to pay the costs requested by the applicant including reasonable attorneys’ fees.
(3) If no action to foreclose the lien claim has been filed, the clerk of the court shall assign a cause number to the application and obtain from the applicant a filing fee pursuant to RCW 36.18.016. If an action has been filed to foreclose the lien claim, the application shall be made a part of that action.
(4) If, following a hearing on the matter, the court determines that the lien is frivolous and made without reasonable cause, or clearly excessive, the court shall issue an order releasing the lien if frivolous and made without reasonable cause, or reducing the lien if clearly excessive, and awarding costs and reasonable attorneys’ fees to the applicant to be paid by the lien claimant. If the court determines that the lien is not frivolous and was made with reasonable cause, and is not clearly excessive, the court shall issue an order so stating and awarding costs and reasonable attorneys’ fees to the lien claimant to be paid by the applicant.
(5) Proceedings under this section shall not affect other rights and remedies available to the parties under this chapter or otherwise.
¶ 21 We have previously noted that motions filed pursuant to RCW 60.04.081 initiate a "special proceeding." Andries v. Covey, 128 Wash. App. 546, 550, 113 P.3d 483 (2005). In such a special proceeding, strict compliance with the CR 52 mandate concerning the entry and content of findings of fact is not required. CR 81(a). Indeed, we have previously explained that RCW 60.04.081 "contains no requirement for entry of findings of fact and conclusions of law." W.R.P. Lake Union Ltd. P'ship, 85 Wash. App. at 750, 934 P.2d 722. However, "[a]t a minimum, the trial court's reasoning for entering the order should be clearly set out in the order itself." W.R.P. Lake Union Ltd. P'ship, 85 Wash. App. at 750, 934 P.2d 722.
¶ 22 Nevertheless, Saxum contends that our opinion in S.D. Deacon Corp. of Washington v. Gaston Bros. Excavating, Inc., 150 Wash. App. 87, 206 P.3d 689 (2009), required the superior court to enter findings of fact demonstrating that Saxum's lien was frivolous in order to release the lien. Not so. In that case, the parties disputed facts that were material to the superior court's determination of whether a construction lien was frivolous. S.D. Deacon Corp., 150 Wash. App. at 95, 206 P.3d 689. Because there was a material factual dispute as to the validity of the lien, we explained that "the court must make specific findings establishing that the lien is so meritless as to justify depriving the claimant of the opportunity to present live testimony and cross-examine witnesses." S.D. Deacon Corp., 150 Wash. App. at 96, 206 P.3d 689.
¶ 23 Here, however, the material facts were not in dispute. Moreover, the superior court's reasoning for releasing the lien is apparent from the record and the order. During the hearing on Lennar's motion to release Saxum's lien, the following exchange occurred between Saxum's counsel and the superior court:
[SAXUM'S COUNSEL]: ... And it's -- the key point for this Materialmen's Lien statute is that it's the debt and the cause of action that was clearly assigned; there's a Bill of Sale from the Chapter 7 trustee.
Wall To Wall, it's undisputable that they fall under the statute. There's no --
THE COURT: Oh, they definitely fall under it. I mean they did the work. They would fall under it.
The question is, because you didn't buy the sub -- because you didn't get the subcontract, I mean the question is, and they didn't file a lien, whether you fall under it.
¶ 24 The day after the hearing, the superior court entered its order granting Lennar's motion. This order was entitled, "ORDER TO RELEASE FRIVOLOUS LIEN AND FOR AWARD OF ATTORNEY FEES PURSUANT TO RCW 60.04.081." Based on this record, the superior court's reasoning for releasing Saxum's lien is apparent.
¶ 25 Accordingly, Saxum's assignment of error fails.
III
¶ 26 Saxum next contends that the superior court erred by releasing Saxum's lien as being frivolous. Because the lien was assigned to Saxum pursuant to the asset purchase agreement, which was approved by a bankruptcy court order, we agree.
A
¶ 27 We review a superior court's interpretation of chapter 60.04 RCW de novo. Intermountain Elec., Inc. v. G-A-T Bros. Constr., Inc., 115 Wash. App. 384, 390, 62 P.3d 548 (2003). "Mechanics’ and materialmen's liens are creatures of statute, in derogation of common law, and therefore must be strictly construed to determine whether a lien attaches." Estate of Haselwood v. Bremerton Ice Arena, Inc., 166 Wash.2d 489, 498, 210 P.3d 308 (2009). "But if it is determined a party's lien is covered by chapter 60.04 RCW, the statute is to be liberally construed to provide security for all parties intended to be protected by its provisions." Estate of Haselwood, 166 Wash.2d at 498, 210 P.3d 308 (citing RCW 60.04.900). ¶ 28 A court's fundamental objective when determining the meaning of a statute "is to ascertain and carry out the Legislature's intent." Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wash.2d 1, 9, 43 P.3d 4 (2002). "Where a ‘statute's meaning is plain on its face, then the court must give effect to that plain meaning as an expression of legislative intent.’ " Inland Empire Dry Wall Supply Co. v. W. Sur. Co., 189 Wash.2d 840, 843, 408 P.3d 691 (2018) (quoting Campbell & Gwinn, LLC, 146 Wash.2d at 9-10, 43 P.3d 4 ). A statute's plain meaning "is discerned from all that the Legislature has said in the statute and related statutes which disclose legislative intent about the provision in question." Campbell & Gwinn, LLC, 146 Wash.2d at 11, 43 P.3d 4.
¶ 29 "To be frivolous, a lien must be improperly filed beyond legitimate dispute." Pac. Indus., Inc. v. Singh, 120 Wash. App. 1, 5, 86 P.3d 778 (2003) (citing W.R.P. Lake Union Ltd. P'ship, 85 Wash. App. at 752, 934 P.2d 722 ). A lien "is frivolous ‘only if it presents no debatable issues and is so devoid of merit that it had no possibility of succeeding.’ " Pac. Indus., Inc., 120 Wash. App. at 6, 86 P.3d 778 (quoting Intermountain Elec., Inc., 115 Wash. App at 394, 62 P.3d 548 ). "Every frivolous lien is invalid, but not every invalid lien is frivolous." Pac. Indus., Inc., 120 Wash. App. at 6, 86 P.3d 778.
B
¶ 30 It is well established in Washington that "[a] lien, like a mortgage, is a chose in action." Mueller v. Rupp, 52 Wash. App. 445, 450, 761 P.2d 62 (1988) (citing In re Estate of Adler, 116 Wash. 484, 489, 199 P. 762 (1921) ; Congregational Church Bldg. Soc'y v. Scandinavian Free Church of Tacoma, 24 Wash. 433, 436-37, 64 P. 750 (1901) ). "A chose in action is personal property." Mueller, 52 Wash. App. at 450-51, 761 P.2d 62 (citing In re Estate of Plasterer, 49 Wash.2d 339, 341, 301 P.2d 539 (1956) ; Ennis v. Ring, 49 Wash.2d 284, 289, 300 P.2d 773 (1956) ).
¶ 31 The relevant statute provides that, subject to certain notice requirements,
any person furnishing labor, professional services, materials, or equipment for the improvement of real property shall have a lien upon the improvement for the contract price of labor, professional services, materials, or equipment furnished at the instance of the owner, or the agent or construction agent of the owner.
¶ 32 Under this statute, a construction lien "arises and attaches upon the performing of labor or furnishing of materials." A.A.R. Testing Lab., Inc. v. New Hope Baptist Church, 112 Wash. App. 442, 448, 50 P.3d 650 (2002) (citing RCW 60.04.021 ). This interpretation of RCW 60.04.021 is consistent with the statutory language of RCW 60.04.061, which addresses the priority of liens:
"In 1991, Washington's comprehensive mechanics’ and materialmen's lien statute was repealed and replaced with a revised and recodified law." Diversified Wood Recycling, Inc. v. Johnson, 161 Wash. App. 891, 902 n.14, 251 P.3d 908 (2011) (citing Laws of 1991, ch. 281; ch. 60.04 RCW). " ‘The title "mechanics’ and materialmen's lien" is still used in the RCW, but the liens are called by the more inclusive title, "construction liens," in this subchapter.’ " Diversified Wood Recycling, Inc., 161 Wash. App. at 902 n.14, 251 P.3d 908 (quoting 27 Marjorie Dick Rambauer, Washington Practice: Creditors’ Remedies—Debtors’ Relief § 4.51, at 347 (1998)).
The claim of lien created by this chapter upon any lot or parcel of land shall be prior to any lien, mortgage, deed of trust, or other encumbrance which attached to the land after or was unrecorded at the time of commencement of labor or professional services or first delivery of materials or equipment by the lien claimant.
(Emphasis added.)
¶ 33 Construction liens "are a class of ‘off-the-record’ interests that may be senior to interests actually recorded prior to the recording of the ... lien but after commencement of work on the project." A.A.R. Testing Lab., Inc., 112 Wash. App. at 448, 50 P.3d 650. "During the period of time between commencement of work and actual recording of the claim of lien, a [construction] lien has an ‘off-record’ priority." A.A.R. Testing Lab., Inc., 112 Wash. App. at 448-49, 50 P.3d 650. Construction liens attach to the "lot, tract, or parcel of land which is improved." RCW 60.04.051.
¶ 34 Notably, under chapter 60.04 RCW, construction liens are assignable. RCW 60.04.121 provides: "Any lien or right of lien created by this chapter and the right of action to recover therefor, shall be assignable so as to vest in the assignee all rights and remedies of the assignor." The statutory scheme of chapter 60.04 RCW demonstrates that a construction lien is assignable regardless of whether that lien has been recorded. Indeed, the language that is recommended, by statute, to be used on forms for recording construction liens, provides, in pertinent part: "IF THE CLAIMANT IS THE ASSIGNEE OF THIS CLAIM SO STATE HERE." RCW 60.04.091(2).
C
¶ 35 Wall to Wall's bankruptcy estate possessed a construction lien right on the land on which the Totem Lakes Apartments project was situated. On July 16, 2019, Wall to Wall filed for chapter 11 bankruptcy. Although the record is not clear as to whether Wall to Wall had commenced work prior to commencing the bankruptcy proceeding, Wall to Wall continued to fabricate and install quartz countertops on the Totem Lake Apartments project through March 2020.
¶ 36 Once Wall to Wall provided and installed quartz material on the Totem Lake Apartments project, a construction lien arose and attached to the land on which the Totem Lake Apartments project was located. See RCW 60.04.021 ; A.A.R. Testing Lab., Inc., 112 Wash. App. at 448, 50 P.3d 650.
11 U.S.C. § 541 explains what assets are part of the bankruptcy estate after a party files for bankruptcy:
(a) The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held:
(1) Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.
....
(7) Any interest in property that the estate acquires after the commencement of the case.
The exceptions provided in 11 U.S.C. § 541(b) and (c)(2) do not apply to the construction lien in dispute. Accordingly, regardless of whether Wall to Wall commenced work on the Totem Lake Apartments project prior to filing for bankruptcy, the bankruptcy estate clearly possessed the construction lien at the time the sale was approved by the bankruptcy court.
¶ 37 The construction lien that arose and attached when Wall to Wall commenced lienable work on the Totem Lake Apartments project was assigned to Saxum pursuant to the bill of sale and asset purchase agreement, which was approved by a bankruptcy court order. The asset purchase agreement stated, in part:
Seller hereby sells to Buyer and Buyer hereby purchases from Seller all of the Assets of the Estate useful in the Business, including, but not limited to accounts receivable, equipment, inventory, supplies, the real property leases listed in Schedule 1.2, software, licenses, Intellectual Property, books and records, tools, vehicles listed on Schedule 1.1, all claims, if any, against Buyer, its members, agents, attorneys, officers, and directors ("Buyer Claims " ).
(First emphasis added.)
¶ 38 In other words, the assets that were encompassed by the asset purchase agreement were not limited to those assets that were specifically listed in the writing. Although the asset purchase agreement excluded certain assets, the construction lien in dispute was not listed as an excluded asset. Accordingly, the construction lien was assigned to Saxum pursuant to the asset purchase agreement, as approved by the bankruptcy court.
¶ 39 Lennar asserts that Saxum was not assigned the construction lien. This is so, according to Lennar, because "the cause of action did not exist at any time during the pendency of the [Wall to Wall] bankruptcy or at the time of the bankruptcy sale." We disagree. As previously explained, a construction lien "arises and attaches upon the performing of labor or furnishing of materials." A.A.R. Testing Lab., Inc., 112 Wash. App. at 448, 50 P.3d 650. As such, the cause of action arose when Wall to Wall fabricated and installed the quartz material in the Totem Lake Apartments project.
Br. of Resp't at 23.
¶ 40 Lennar also contends that Saxum does not fall within the class of persons contemplated by chapter 60.04 RCW as entitled to claim a construction lien. According to Lennar, " RCW 60.04.021 is explicit regarding those who come under the statute's terms and quantifies this group as ‘any person furnishing labor, professional services, materials, or equipment for the improvement of real property.’ " But this argument is off the mark. To be clear, RCW 60.04.121 provides: "Any lien or right of lien created by this chapter and the right of action to recover therefor, shall be assignable so as to vest in the assignee all rights and remedies of the assignor ." (Emphasis added.) Therefore, Saxum—as assignee of the construction lien possessed by Wall to Wall's bankruptcy estate—is entitled to enforce the construction lien.
Br. of Resp't at 9-10.
¶ 41 Lennar next asserts that chapter 60.04 RCW requires that only the entity who performed lienable work can record a construction lien even if the right of lien is assigned. We disagree. In Lennar's view of the law, that entity must record the lien prior to assignment and, if it does not, the assignee engages in a frivolous frolic by attempting enforcement. The basis for Lennar's assertion lies in RCW 60.04.091, which states:
Every person claiming a lien under RCW 60.04.021 shall file for recording ... a notice of claim of lien not later than ninety days after the person has ceased to furnish labor, professional services, materials, or equipment or the last date on which employee benefit contributions were due.
¶ 42 Lennar claims that this language requires that only the entity who performed lienable work can record the lien—to the exclusion of assignees. The folly of this contention, however, is made plain by a provision of the recommended claim of lien form in this same section. This form states: "IF THE CLAIMANT IS THE ASSIGNEE OF THIS CLAIM SO STATE HERE." RCW 60.04.091(2).
¶ 43 Lennar asserts that the quoted language in RCW 60.04.091(2) must be interpreted to apply only to notice of claim forms that are filed to amend an already-filed notice of claim of lien. To the contrary, RCW 60.04.121 provides: "Any lien or right of lien created by this chapter and the right of action to recover therefor, shall be assignable so as to vest in the assignee all rights and remedies of the assignor." (Emphasis added.) This broad and inclusive language clearly authorizes the assignment of a construction lien regardless of whether that lien has already been recorded. Additionally, because an assignee is vested with all of the rights of the assignor, an assignee is plainly entitled to file a notice of claim of lien under RCW 60.04.091.
RCW 60.04.091(2) authorizes parties to amend a notice of claim of lien under certain circumstances: "Where an action to foreclose the lien has been commenced such notice of claim of lien may be amended as pleadings may be by order of the court insofar as the interests of third parties are not adversely affected by such amendment."
¶ 44 Finally, Lennar avers that RCW 60.04.191 prevented the construction lien that was possessed by Wall to Wall's bankruptcy estate from being assigned to Saxum by means of the asset purchase agreement. The cited statute provides:
Nothing in this chapter shall be construed to impair or affect the right of any person to whom any debt may be due for the furnishing of labor, professional services, material, or equipment to maintain a personal action to recover the debt against any person liable therefor.
¶ 45 According to Lennar, "it is impossible to reconcile that [Wall to Wall]’s rights could be transferred free and clear through bankruptcy when RCW 60.04 itself prevents [Wall to Wall]’s rights from being impaired." But again, RCW 60.04.121 expressly authorizes the assignment of construction liens. And, in any event, Wall to Wall forfeited any right that it may have otherwise had in the lien to the bankruptcy estate when it filed for bankruptcy. See 11 U.S.C. § 541. We decline to hold that RCW 60.04.191 prevented the construction lien from being assigned to Saxum pursuant to the bill of sale, asset purchase agreement, and bankruptcy court order.
Br. of Resp't at 18.
¶ 46 In sum, chapter 60.04 RCW authorizes the assignment of a construction lien regardless of whether that lien has already been recorded. Saxum was assigned the construction lien pursuant to the bill of sale and asset purchase agreement, which was approved by the bankruptcy court.
¶ 47 Accordingly, the trial court erred by releasing Saxum's lien.
Saxum also asserts that it was assigned the construction lien merely by purchasing the account receivable from the bankruptcy trustee. According to Saxum, "it is the assignment of the debt alone that confers Saxum's rights as a lien claimant under RCW 60.04." Br. of Appellant at 17. Because Saxum was assigned the construction lien under the plain terms of the asset purchase agreement, we need not address this argument.
IV
¶ 48 Saxum asserts that, because its lien was not frivolous, the superior court erred by awarding attorney fees and costs to Lennar. We agree.
¶ 49 In a summary frivolous lien proceeding, the prevailing party is statutorily entitled to an award of attorney fees:
If, following a hearing on the matter, the court determines that the lien is frivolous and made without reasonable cause, or clearly excessive, the court shall issue an order releasing the lien if frivolous and made without reasonable cause, or reducing the lien if clearly excessive, and awarding costs and reasonable attorneys’ fees to the applicant to be paid by the lien claimant . If the court determines that the lien is not frivolous and was made with reasonable cause, and is not clearly excessive, the court shall issue an order so stating and awarding costs and reasonable attorneys’ fees to the lien claimant to be paid by the applicant .
RCW 60.04.081(4) (emphasis added); accord W.R.P. Lake Union Ltd. P'ship, 85 Wash. App. at 753, 934 P.2d 722 ("Attorney fees are mandatory for the prevailing party under RCW 60.04.081(4).").
¶ 50 Additionally, we have interpreted RCW 60.04.081(4) to encompass attorney fees incurred by the prevailing party on appeal. See, e.g., W.R.P. Lake Union Ltd. P'ship, 85 Wash. App. at 753, 934 P.2d 722 ; Intermountain Elec., Inc., 115 Wash. App. at 395-96, 62 P.3d 548.
¶ 51 Because Saxum's lien is not frivolous, the award of attorney fees to Lennar is reversed. On remand, Saxum is entitled to an award of attorney fees and costs for defending this action in both the superior court and on appeal.
¶ 52 The remainder of this opinion has no precedential value. Therefore, it will be filed for public record in accordance with the rules governing unpublished opinions. See RCW 2.06.040.
WE CONCUR:
Smith, J.
Verellen, J.