(1) ABC contends CLP is not entitled to recover against the bond, because it is not entitled to a mechanic's lien under section 3110. ABC cites Primo Team, Inc. v. Blake Construction Co. (1992) 3 Cal.App.4th 801 [ 4 Cal.Rptr.2d 701] (hereafter, Primo Team) in support of its claim that CLP is not entitled to recover against the bond. Primo Team held that an employment services company which performed personnel and payroll services for a subcontractor on a public project, but was not actually the employer of the workers, was not entitled to recover against a performance bond.
that a person who entered into an agreement with a contractor to order and purchase materials and hire labor, to pay for these from his funds, and to seek reimbursement from the contractor was not a proper bond claimant because his advance to the contractor "was an outright loan and nothing more"); see also Gulf Ins. Co. v. GFA Group, Inc., 251 Ga.App. 539, 554 S.E.2d 746, 748-49 (Ga.Ct.App. 2001) (holding that, in a case involving a statutory bond intended to protect subcontractors and materialmen, an entity that had entered into an agreement with a contractor to "issue payroll checks on its own account, remit the withheld taxes to the appropriate authorities, pay the workers' compensation premiums, and submit its invoice to the [c]ontractor weekly for immediate repayment" was acting, in part, as "a lender rather than a supplier of labor or materials," and as a provider of administrative services "for the benefit of the [c]ontractor," and hence was not a proper claimant on the bond); Primo Team, Inc. v. Blake Constr. Co., 3 Cal.App.4th 801, 4 Cal. Rptr.2d 701, 702-03 (Cal.Ct.App. 1992) (holding that an entity whose principal role was to provide ongoing personnel administration, payroll, and reporting services to a subcontractor, and to advance funds to cover the various payroll and related obligations of the subcontractor was akin to a creditor and hence was not a proper bond claimant). Whether New York law is similar or differs from the law in these jurisdictions is, of course, for the New York Court of Appeals to say, should it accept certification.
The fact that EPCO incurred fees and expenses in connection with its services does not, by itself, mean that EPCO qualifies for a mechanic's lien. See Primo Team, Inc. v. Blake Construction Co., 3 Cal.App.4th 801, 810 (1992) (rejecting lien claimant's argument that it was entitled to reimbursement of funds advanced in connection with a work of improvement). Thus, in the absence of additional evidence establishing that the nature of EPCO's services qualifies it for a mechanic's lien, the evidence showing that EPCO incurred out-of-pocket expenses is not enough.
53 Cal.App.4th 152, 61 Cal.Rptr.2d 715 (1997). 3 Cal.App.4th 801, 4 Cal.Rptr.2d 701 (1992). California's lien statute under which Primo Team and Contractors Labor Pool were decided identified the entities entitled to pursue liens for services or materials provided to a work of improvement as follows:
While Sweet appears to establish a bright-line rule, two more recent cases demonstrate the complexity of its application. In Primo Team, Inc. v. Blake Construction Co. ( 4 Cal.Rptr.2d 701 [Cal Ct App. 1992]), the court rejected a public works payment bond claim made by an employee leasing company that entered into a series of "Labor Services Agreements" with a subcontractor. The court declined to deem the entity a permissible claimant where it did not claim to be the workers' employer, even though the agreement called for the company to supply employees to the contractor and it retained the sole right (not exercised in practice) to hire, discipline and terminate the leased employees.
Tri-State Empl. Servs. v. Mount Batten Surety Co., 2001 U.S. Dist. LEXIS 6279 (May 7, 2001 S.D.N.Y.). 3 Cal.App.4th 801 ( 4 Cal.Rptr.2d 701) (1992). See also Integon Indemnity Corp. v. Bull, 311 Ark. 61 ( 842 S.W.2d 1) (1992) (direct payor of labor and material on behalf of contractor made payor the contractor's lender and not a proper claimant under payment bond).
The statute, being in derogation of common law rights, should be strictly construed. ( Primo Team, Inc. v. Blake Construction Co. (1992) 3 Cal.App.4th 801, 806 [ 4 Cal.Rptr.2d 701].) We therefore find Justice Kennard's argument persuasive and reject defendants' initial contention that section 1775 provides an exclusive remedy for violations of the prevailing wage laws.
On our own motion, we deemed it appropriate to consolidate Burns's and Dixon's appeals, because both matters involve common issues of law and fact. (See Primo Team, Inc. v. Blake Construction Co. (1992) 3 Cal.App.4th 801, 803, fn. 1. [ 4 Cal.Rptr.2d 701]; Sharick v. Galloway (1936) 12 Cal.App.2d 733, 738 [ 55 P.2d 1196].) We therefore dispose of both matters by this single opinion.
Section 3110, which is included in chapter 2, lists the persons entitled to a mechanic's lien, and states that those persons include "all persons and laborers of every class . . . contributing to a work of improvement. . . ." (See Primo Team, Inc. v. Blake Construction Co. (1992) 3 Cal.App.4th 801, 810-811 [ 4 Cal.Rptr.2d 701] review den.) None of these sections distinguishes between residential and commercial buildings for purposes of mechanics' liens.
Where a lien seeks to secure compensation for costs that arise as the result of the rescission, abandonment or breach of a contract, subsection (b) of section 3123 provides "the amount of the lien may not exceed the reasonable value of the labor, services, equipment, and materials furnished by the claimant." In Primo Team, Inc. v. Blake Const. Co., Inc., 3 Cal.App.4th 801 (4th Dist. 1992), the court addressed the scope of persons who are entitled to a mechanic's lien to secure debts on construction projects. In Primo, a company that assembled a workforce for a contractor, advanced payroll funds, and provided training, recruitment and accounting services necessary to pay the employees appealed the denial of its attempt to assert claims against payment bonds issued for such public works projects.