Lane Meyers Construction, LLC v National City Bank

Meyers sued bank seeking to foreclose a mechanic’s lien on a home Bank provided the construction loan and issued draws on certain requests from Meyers. The district court granted summary judgment to bank ruling the assertion in the draw requests that there were no liens on the home under construction substantially complier with Utah Code 38-1-39 constituted a waiver of all lien rights. The Court of Appeals reversed holding all waivers under 38-1-39 had to include the same elements as the safe harbor forms set out in subsection 4. The Court, with three concurrences, reversed. All five justices agreed that the safe harbor provisions in subsection 4 only apply in restrictive endorsement cases. Two justices argued that the legislature adopted the common law meaning of “waiver’ in 38-1-39 and thus the party seeking to avoid a lien must prove that the claimant knew of its right to lien and knowingly forfeited that right. The case was remanded to determine if Myers actually waived its lien rights through the draws. Chief Justice Durrant argued that 38-1-39 actually adopted a different rule of waiver and that the illustrations provided in subsection 4 are the standard to measure purported waivers against. Because it was factually unclear whether Meyers waived as a factual matter, he concurred in result. Justice Durham concurred in result, but, argued that waiver is an issue of law when based on written instrument as here. She argue that because all Meyers did was factually assert there were no liens was not a waiver as it did not sate lien rights were being waived. Justice Nehring concurred in result agreeing the subsection example forms are relevant and that waiver is an issue of law and the requests here were not waivers.