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Vision 2007, LLC v. Lexstar Development and Construction Company

May 25, 2011

VISION 2007, LLC, APPELLANT (PETITIONER),
v.
LEXSTAR DEVELOPMENT AND CONSTRUCTION COMPANY, LLC, APPELLEE (RESPONDENT).



Appeal from the District Court of Campbell County The Honorable John R. Perry, Judge

The opinion of the court was delivered by: Golden, Justice.

Before KITE, C.J., and GOLDEN, HILL, VOIGT,*fn2 and BURKE, JJ.

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.

[¶1] Vision 2007, LLC (Vision) entered into a contract with Lexstar Development and Construction Company, LLC (Lexstar) for the construction of a hotel. After seventeen months of work on the project, Vision terminated the contract with Lexstar, and Lexstar subsequently filed a lien against the hotel property for amounts it claimed remained owing. Vision filed a petition to strike the lien pursuant to Wyo. Stat. Ann. § 29-1-311(b), which the district court denied on the ground that Vision failed to prove Lexstar knew, when it filed its claim of lien, that the lien was groundless or contained a material misstatement or false claim. Vision appeals, claiming the district court improperly placed the burden of proof on Vision and that the district court's factual findings were clearly erroneous.

[¶2] Although we agree the burden of proof under Wyo. Stat. Ann. § 29-1-311(b) is on the lien claimant, not on the project owner, we find the district court's ruling was properly based on the evidence presented by the lien claimant, Lexstar, and on the failure of Vision to allege proper grounds for relief under Wyo. Stat. Ann. § 29-1-311(b). We thus affirm.

ISSUES

[¶3] Vision presents the following issues on appeal:

I. Did the district court err in refusing to strike the corrected lien statement filed after the 120-day statutory limit?

II. Did the district court err in refusing to strike the lien statement and corrected lien statement which did not include an itemized list setting forth and describing materials delivered or work performed, as required by Wyo. Stat. Ann. § 29-1-301?

III. Did the district court err in refusing to strike [the] lien statement which was untimely on its face?

IV. Did the district court err in placing the burden of proof under Wyo. Stat. Ann. § 29-1-311 upon the Petitioner?

FACTS

[¶4] On October 2, 2007, Vision contracted with Lexstar for the construction of a hotel in Campbell County, Wyoming. Seventeen months later, on March 5, 2009, Vision served Lexstar with a "Notice of Termination of Contract by Owner for Cause." On July 9, 2009, Lexstar filed a "Lien Statement" with the Campbell County Clerk, claiming a lien in the amount of $430,337.78 against the hotel property. The lien stated, "This amount represents the unpaid balance for goods, material and services furnished in the design, approval, construction oversight and materials on the above-described real property."

[¶5] On August 17, 2009, counsel for Vision contacted counsel for Lexstar and advised that "the lien was filed on the 121st day after March 10, 2009." The following day, August 18, 2009, Lexstar filed a "Corrected Lien Statement." The "Corrected Lien Statement" changed the date when materials were last furnished by the lien claimant from March 10, 2009, to March 19, 2009. An affidavit attached to the "Corrected Lien Statement" and signed by Patrick Davidson, counsel for Lexstar, stated the change to the "Lien Statement" was the correction of a typographical error. The affidavit incorporated an e-mail communication from Lexstar to its counsel, dated prior to the filing of the original "Lien Statement," that indicated the last day work was performed by Lexstar was March 19, 2009.

[¶6] On August 26, 2009, Vision filed a "Petition for Order Striking Lien Statements Pursuant to Wyo. Stat. § 29-1-311." On September 2, 2009, the district court issued an "Order to Show Cause Why Lien Statement and Corrected Lien Statement Should Not Be Stricken Pursuant to Wyo. Stat. § 29-1-311." On September 22, 2009, a hearing was held on the district court's order to show cause, and on October 28, 2009, the district court issued an "Order Denying Petitioner's Motion to Strike Lien Pursuant to Wyo. Stat. Ann. § 29-1-311." In so ordering, the district court reasoned:

Wyo. Stat. Ann. § 29-1-311 contemplates an abbreviated procedure because the described relief is warranted only under very limited circumstances. Pursuant to the statute, Vision 2007 must demonstrate that Lexstar's Lien Statement and Corrected Lien Statement were either forged or that Lexstar knew at the time it filed the lien it was groundless, contained a material misstatement, or was false.

Patrick Davidson, counsel for Lexstar who prepared and filed the statements, testified at the hearing. The Court finds that there is no question that the documents were not forged. Therefore, Vision 2007 must demonstrate that Lexstar knew at the time it filed the statements that ...


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