Summary
The Supreme Court of Nevada held that visible, on-site construction is required for a mechanic's lien to obtain priority over a deed of trust under NRS 108.225 and NRS 108.22112. The court ruled that this visibility requirement applies to lienable preconstruction services, is not waived by a lender's actual knowledge, and is not satisfied by placing signs or removing power lines. The court affirmed summary judgment for Corus Bank, concluding that Dunn's mechanic's lien was junior to the bank's deed of trust.
Topics
Practice areas
Questions Presented
- Whether NRS 108.22112 requires work performed, as well as materials or equipment furnished, to be visible from a reasonable inspection of the site before a mechanic's lien can obtain priority over a deed of trust.
- Whether the 2003 amendments expanding lienable work to include preconstruction services eliminated or altered the visibility requirement for lien priority.
- Whether a lender's actual knowledge of lienable but nonvisible preconstruction services waives the statutory visibility requirement.
- Whether placement of signs and removal of power lines constituted visible commencement of construction.
- Whether the district court abused its discretion by refusing Dunn additional discovery before granting summary judgment.
Holdings
- NRS 108.22112 plainly requires work performed, including preconstruction services, to be visible from a reasonable inspection of the site for a mechanic's lien to obtain priority over a deed of trust.
- The 2003 amendments to NRS Chapter 108, including the expansion of lienable work to preconstruction services, did not eliminate the long-standing visibility requirement for obtaining priority over a deed of trust.
- The statutory visibility requirement is not waivable by a lender's actual knowledge of lienable preconstruction services.
- The placement of business signs and removal of power lines did not constitute actual on-site construction or visible work sufficient to establish mechanic's-lien priority.
- The district court did not abuse its discretion by refusing Dunn additional discovery because the proposed discovery concerned Corus Bank's knowledge and understanding, which could not create a genuine issue of material fact on the visibility requirement.
Key quotations
“Thus, visibility is the linchpin of priority, and nothing in the legislative history suggests that the Legislature intended to change that requirement for any services, including preconstruction work.” (507)
“Without such a provision, NRS 108.225 expressly requires commencement of construction alone for priority and "actual, constructive or recorded notice" cannot be substituted for notice through commencement of construction.” (508)
“Therefore, we conclude that installing business signs and removing power lines do not constitute "actual on-site construction" because such activities are preparatory and are not part of the visible construction project itself.” (509)
Factual background
Dunn performed more than $1 million in preconstruction services for the One Las Vegas condominium project, including scheduling, coordination, document review, and planning. Corus Bank recorded a deed of trust on March 17, 2006, before Dunn commenced on-site construction and before visible construction activity appeared on the property; signs were on an adjacent parcel and power lines had been removed. Dunn later recorded a mechanic's lien for unpaid services and claimed that the lien had priority based on Corus Bank's knowledge of the preconstruction work.
Procedural history
Dunn filed a district court action seeking a declaration that its mechanic's lien had priority over Corus Bank's deed of trust. The district court denied Dunn's motion for summary judgment, later granted Corus Bank's renewed motion for summary judgment, and declined to allow additional discovery under NRCP 56(f). Dunn appealed, and the Nevada Supreme Court affirmed.