Allstate Utility Construction, LLC v. Towne Bank of Arizona – 10/25/2011
Arizona Court of Appeals Division One Holds that Construction Lien Is Valid Despite Technical Deficiencies in Preliminary 20-Day Notice.
Contractor recorded a construction lien against property on which it performed work. Contractor later filed a complaint to foreclose the lien. Among the defendants was Bank, which had made a construction loan secured by a deed of trust on the property. Following cross-motions for summary judgment, the trial court entered judgment in favor of Bank. Contractor appealed.
The Court of Appeals reversed. Contractor’s construction lien was valid despite several alleged technical deficiencies. Although Contractor’s 20-day preliminary notice lacked a handwritten signature, Contractor had sufficiently marked the document with an intention to authenticate it, thus satisfying the “signature” requirement of A.R.S. § 33-992.01(D). Any failure to provide an acknowledgment of receipt form with the 20-day notice was immaterial because proof of service was satisfied by recording an affidavit of service. Finally, the affidavit of service was effective despite that it did not state the time of day that the notice was served by mail.
Because Contractor showed “substantial compliance” with the requirements of the lien statute, its lien was valid. The Court of Appeals, therefore, reversed a judgment in favor of Bank, granted Contractor its costs and fees on appeal, and remanded with instructions to the trial court to enter judgment in favor of Contractor.
Presiding Judge Johnsen authored the opinion; Judges Orozco and Kessler concurred.