Climate Control Co. v. Bergsieker R

No. 81-81 IN THE SUPREME COURT OF THE STATE OF MONTANA 1982

CLIMATE CONTROL COMPANY, INC., a Corporation, Plaintiff and Appellant,

BERGSIEKER REFRIGERATION INC ., et al., Defendant, Respondent and Third- Party Plaintiffs.

Appeal from: District Court of the Eleventh Judicial District, In and for the County of Flathead Honorable James M. Salansky, Judge presiding. Counsel of Record: For Appellant: S. Y. Larrick, Kalispell, Montana For Respondent: Hash, Jellison, OIBrien and Bartlett, Kalispell, Montana Murphy, Robinson, Heckathorn and Phillips, Kalispell, Montana

Submitted on briefs: October 9, 1982 Decided: February 1, 1982 Filed: - FE5 I 1982

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Mr. Justice Fred J. Weber delivered the Opinion of the Court.

Climate Control brought an action for debt and for foreclosure of a mechanic's lien. Following a motion for

summary judgment, Climate Control presented an extensive written offer of proof with proposed exhibits. The District

Court of Flathead County awarded summary judgment to Arrow- head, Inc., holding that Climate Control did not create or have a valid mechanic's lien, and Arrowhead, Inc., was awarded reasonable attorney's fees and costs of suit to be determined by the District Court. We affirm the holding

that a valid mechanic's lien was not created. The key issue which determines the case is whether the District Court erred in holding that the claimed mechanic's lien was invalid because the affidavit in the claim of lien was not legally sufficient. We will briefly refer to the other issues which are not controlling. Climate Control is a distributor of airconditioning

equipment. Bergsieker is a dealer in airconditioning equip-

ment. Climate Control entered into an agreement with Bergsieker for the sale of various airconditioning equipment

to be installed by Bergsieker in the Outlaw Inn owned by

third party defendant, Arrowhead, Inc. Climate Control contends it received no payment from

Bergsieker for such equipment furnished to the Outlaw Inn, and contends there is in excess of $30,000.00 owing. On November 6, 1974, Climate Control filed a claim of lien and statement of account in the office of the Flathead County Clerk and Recorder. In pertinent part, the claim of lien and statement of account said:

" T h a t C l i m a t e C o n t r o l , Co., I n c . , a Washington corporation duly authorized t o t r a n s a c t business w i t h i n t h e S t a t e of Montana, d i d , between S e p t - ember, 1973 and t h e 7 t h day of August, 1974, f u r n i s h c e r t a i n c o o l i n g and h e a t i n g equipment and s u p p l i e s and r e l a t e d and a s s o c i a t e d m a t e r i a l s ... T h a t t h e r e i s d u e , owing and unpaid t o t h i s c l a i m a n t t h e sum of $29,868.00 on a c c o u n t of t h e equipment, s u p p l i e s and m a t e r i a l s s o furnished. . . " T h a t a s t a t e m e n t of a c c o u n t of s a i d equipment, s u p p l i e s and m a t e r i a l s i s h e r e t o annexed a s e x h i b i t ' A ' and by t h i s r e f e r e n c e made a p a r t hereof. .. " T h a t t h e sum of $29,868.00, t o g e t h e r w i t h i n t e r e s t a t t h e l e g a l r a t e i s now j u s t l y due and owing t o t h i s c l a i m a n t a f t e r a l l o w i n g a l l o f f s e t s and c r e d i t s . .. ( a d e s c r i p t i o n of r e a l properties included)."

The v e r i f i c a t i o n by a f f i d a v i t s t a t e d i n p e r t i n e n t p a r t :

" S t a t e of Montana ) 1 SS. "County of F l a t h e a d )

"Donald J. L a P l a n t e , b e i n g f i r s t d u l y sworn d e p o s e s and s a y s : T h a t he i s t h e T r e a s u r e r of C l i m a t e C o n t r o l Company, I n c . , t h e c l a i m a n t named i n t h e f o r e g o i n g c l a i m of l i e n and s t a t e - ment of a c c o u n t s ; t h a t s a i d a c c o u n t c o n t a i n s a j u s t and t r u e a c c o u n t of t h e amount due s a i d c l a i m a n t f o r equipment, s u p p l i e s and m a t e r i a l s f u r n i s h e d , a f t e r a l l o w i n g a l l c r e d i t s and o f f s e t s ; t h a t s a i d claimant's statement contains a c o r r e c t d e s c r i p t i o n of t h e p r o p e r t y t o be c h a r g e d w i t h s a i d l i e n ; and - -l- - f a c t s s t a t e d i n t h a t - a l o f pt h e s a i d c l a i m and s t a t e m e n t -e- - - - e b e s t - - - - -- - - - -- ar true t o th of -s knowledge, i n f o r m a t i o n and b e l i e f . " - hi ( U n d e r s c o r i n g added. )

A t t a c h e d t o t h e c l a i m a r e c o p i e s of i n v o i c e s from C l i m a t e Control. From t h e i n v o i c e s it a p p e a r s t h a t v a r i o u s d e s c r i b e d equipment was f u r n i s h e d between September, 1973 and August 7 , 1974. The f i l i n g d a t e of November 6 , 1974, i s t h e 9 1 s t d a y f o l l o w i n g t h e s t a t e d f i n a l d a t e f o r f u r n i s h i n g of a i r -c o n d i t i o n i n g equipment. S e c t i o n 71-3-511, MCA, requires t h a t a m e c h a n i c ' s l i e n be f i l e d w i t h i n 90 d a y s a f t e r t h e m a t e r i a l s have been f u r n i s h e d .

I n r u l i n g on t h e motion f o r summary judgment by d e f e n d a n t , Arrowhead, t h e D i s t r i c t C o u r t concluded t h a t summary judgment s h o u l d be e n t e r e d inasmuch a s C l i m a t e C o n t r o l ' s n o t i c e of l i e n was n o t f i l e d w i t h i n 90 d a y s of t h e end of t h e p e r i o d i n which t h e n o t i c e a s s e r t s t h a t t h e m a t e r i a l s were f u r n i s h e d , t h a t t h e n o t i c e was n o t amended w i t h i n t h e t i m e p e r i o d d u r i n g which a l i e n c o u l d b e f i l e d , and t h a t t h e a f f i d a v i t incorporated i n such l i e n i s n o t l e g a l l y s u f f i c i e n t , and, t h e r e f o r e , s t a t e d i n i t s judgment:

" 1 . T h a t Arrowhead i s awarded summary judgment t h a t p l a i n t i f f (Climate Control) d i d n o t c r e a t e a v a l i d l i e n and does n o t have a l i e n a g a i n s t t h e described r e a l property.

" 3 . Arrowhead i s e n t i t l e d t o r e a s o n a b l e a t t o r - n e y ' s f e e s and i t s c o s t s of s u i t t o be p a i d by p l a i n t i f f C l i m a t e C o n t r o l and c o u r t r e s e r v e s j u r i s d i c t i o n t o conduct a hearing t o determine such f e e s . "

The i s s u e a s t o t h e s u f f i c i e n c y of t h e a f f i d a v i t a t t a c h e d t o t h e m e c h a n i c ' s l i e n c l a i m i s d e t e r m i n e d by Saunders Cash-Way, e t c . v. H e r r i c k ( 1 9 7 8 ) , 179 Mont. 233, 587 P . 2d 947. C l i m a t e C o n t r o l a t t e m p t s t o d i s t i n g u i s h Saunders by a r g u i n g t h a t t h e a f f i a n t d i d p o s i t i v e l y s t a t e t h a t t h e account c o n t a i n s a j u s t and t r u e a c c o u n t of t h e amount due and t h a t i t a l s o c o n t a i n s a c o r r e c t d e s c r i p t i o n of t h e p r o p e r t y , which a r e t h e e s s e n t i a l r e q u i r e m e n t s under s e c t i o n 71-3-511, MCA. A c a r e f u l r e a d i n g of t h e v e r i f i c a t i o n answers t h i s contention. It is true t h a t the a f f i a n t s t a t e s t h a t the a c c o u n t c o n t a i n s a j u s t and t r u e a c c o u n t and t h a t t h e s t a t e m e n t c o n t a i n s a c o r r e c t d e s c r i p t i o n of t h e p r o p e r t y . However, t h o s e p o s i t i v e s t a t e m e n t s a r e q u a l i f i e d by t h e l a s t p o r t i o n

of t h e v e r i f i c a t i o n i n which t h e a f f i a n t s t a t e d : ". . . - and

-a- - - t h e f a c t s s t a t e d - -i d c l a i m and s t a t e m e n t a r e t h t a l l of in sa

- -t-t- - - of h i s knowledge, i n f o r m a t i o n and b e l i e f . " true o he best

That q u a l i f y i n g statement c l e a r l y l i m i t s t h e preceding " p o s i t i v e " s t a t e m e n t s s o t h a t we must d e t e r m i n e t h e s u f f i c i e n c y of a v e r i f i c a t i o n which s t a t e s t h a t t h e f a c t s a r e t r u e t o t h e b e s t of an a f f i a n t ' s knowledge, i n f o r m a t i o n and b e l i e f .

Saunders i s d i r e c t l y comparable t o t h e p r e s e n t c a s e . The v e r i f i c a t i o n i n S a u n d e r s , which was d e t e r m i n e d by t h i s C o u r t t o be i n s u f f i c i e n t , s t a t e d i n p e r t i n e n t p a r t :

". . . t h a t t h e m a t t e r s and t h i n g s t h e r e i n s e t f o r t h a r e t r u e ( t o t h e b e s t ) of h i s knowledge, ( i n f o r m a t i o n and b e l i e f ) . "

With t h e e x c e p t i o n of t h e u s e of p a r e n t h e s i s , which i s n o t s i g n i f i c a n t , t h e wording i s a l m o s t i d e n t i c a l t o t h e v e r i f i c a t i o n i n t h e p r e s e n t case.

I n e x p l a i n i n g why a p o s i t i v e a f f i d a v i t i s e s s e n t i a l , t h i s C o u r t i n S a u n d e r s , 179 Mont. a t 236, 587 P.2d a t 949, stated:

"Such a r e q u i r e m e n t i s n e c e s s a r y b e c a u s e of t h e e x t r a o r d i n a r y r i g h t imposed by t h e m e c h a n i c ' s l i e n . Once t h e l i e n i s p e r f e c t e d , it h a s p r i o r - i t y o v e r any p r i o r l i e n , encumbrance o r mortgage upon t h e l a n d . S e c t i o n 45-506, R.C.M. 1947. [Now 71-3-502 ( 3 ) , MCA. ] T h i s e x t r a o r d i n a r y c l a i m s h o u l d n o t be p l a c e d on t h e p r o p e r t y of a n o t h e r u n l e s s t h e f a c t s o u t of which t h e l i e n a r i s e s a r e vouched f o r on o a t h by some p e r s o n who knows them t o e x i s t . Globe I r o n Roofing & C o r r u g a t i n g C o . v . T h a t c h e r ( 1 8 8 9 ) , 87 Ala. 458, 6 So. 366, 367. The s a n c t i o n of p e r j u r y i n s u r e s t h e v e r a c i t y of t h e s t a t e m e n t s made by t h e p e r - son w i t h knowledge. Thus a t e s t of t h e s u f f i - c i e n c y of t h e a f f i d a v i t t o a m e c h a n i c ' s l i e n i s whether p e r j u r y i s a s s i g n a b l e upon t h e v e r i - f i c a t i o n t o i t . Gregg v . S i g u r d s o n (19231, 67 Mont. 272, 215 P . 662, 663."

I n p o i n t i n g o u t t h a t t h e v e r i f i c a t i o n s t a t e m e n t was n o t e q u i v a l e n t t o a d e c l a r a t i o n under o a t h t h a t t h e m a t t e r i s t r u e , t h i s C o u r t i n S a u n d e r s , 179 Mont. a t 237, 587 P.2d a t 949, stated:

"This Court has s t a t e d ' t h a t an a f f i d a v i t s o worded i s i n no s e n s e e q u i v a l e n t t o a de- c l a r a t i o n under o a t h t h a t t h e m a t t e r c o n t a i n - ed t h e r e i n i s t r u e . ' Rogers-Templeton Lumber Co. v . Welch ( 1 9 1 9 ) , 56 Mont. 321, 184 P. 838, 840. I f t h e items contained i n t h e statement w e r e i n f a c t f a l s e , R. A. S a u n d e r s c o u l d n o t be c h a r g e d w i t h p e r j u r y based on t h e v e r i f i c a - t i o n as i t i s worded."

This Court in Saunders further emphasized that a verification must also be considered from the standpoint of the rules of evidence to determine if it meets such standards. The Court stated at 179 Mont. at 237-238, 587 P.2d at 949-950: "The verification is insufficient in another respect. When a lienor asks the Court to en- force a mechanic's lien and foreclosure, the lienor is asking the Court to impose an extra- ordinary right upon the property involved. The lienor asks the Court to take such action based upon the complaint and accompanying affidavit as proof of the existence of the lien. Thus the complaint and affidavit in this situation 'must be considered from the standpoint of evidence and tested by the rules of evidence, rather than those of plead- ing and practice.' Benepe-Owenhouse Co. v. Scheidegger (1905), 32 Mont. 424, 80 P. 1024, 1026. See, Fisk Co. v. Lanstrum (1934), 96 Mont. 279, 30

"This consideration is particularly relevant in the present situation where the parties submitted stipulated facts to the District Court, including the notice of the lien and supporting affidavit, and upon this proof asked for a decision. If the allegations contained in the notice and affidavit are made positively and sworn to as of the affiant's own knowledge, there is no appar- ent reason why they may not convince a court of their truth. Benepe-Owenhouse Co. v. Scheidegger, supra. 'If the allegations, however positively made, are sworn to only upon information furnished to the affiant by some third person, then they are merely hearsay, and ought not to have been given any evidentiary value, for the evidence nec- essary to move the [court] must be legal evi- dence.' Benepe-Owenhouse Co. v. Scheidegger, supra. I' As in Saunders, it cannot be ascertained here from the affidavit of Mr. LaPlante what portion of the facts is declared upon his own knowledge, what portion upon information furnished from other sources and what sources those might be, what portion is upon his mere belief, and what portion may be a deduction from facts and circumstances as they appeared to him. Such an affidavit is insufficient and will

not support a claim for a mechanic's lien.

C l i m a t e C o n t r o l s u b m i t t e d an e x t e n s i v e o f f e r of proof which i n c l u d e d f a c t s c l a i m e d t o s u p p o r t t h e i r c o n t e n t i o n t h a t equipment had been f u r n i s h e d w i t h i n t h e 9 0 d a y s p r i o r t o t h e f i l i n g of t h e claim of l i e n s o t h a t t h e e r r o r i n d a t e c o n t a i n e d i n t h e l i e n c l a i m s h o u l d n o t be e n f o r c e d a g a i n s t them. While t h e f a c t s and t h e law might j u s t i f y a c o u r t i n d i s r e g a r d i n g such a n e r r o r i n d a t e , b e c a u s e of o u r h o l d i n g on t h e v e r i f i c a t i o n q u e s t i o n , t h i s m a t t e r w i l l n o t be c o n s i d e r e d .

W e a f f i r m t h e summary judgment f o r t h e d e f e n d a n t , Arrowhead, I n c . W e Concur: