Frontier Rock and Sand, Inc. recorded a lien against Lot 1, Block 60, Dead Horse Airport for labor and materials furnished to that property at the request of A & P Griswold Expediters, Inc. Griswold held a lease on the property from the State of Alaska when the work was done, but the state had terminated the lease before the lien was recorded. The question in this case is whether Frontier can recover the value of its work from the state, or from the subsequent lessees of the same property from the state.
There is little dispute over facts. The State of Alaska, Department of Public Works, Division of Aviation, leased property at the Dead Horse Airport to Griswold. The lease agreement required that Griswold construct employee living quarters and a freight warehouse on the site. Frontier Rock and Sand was hired by Griswold to provide the gravel and excavation work required. It completed its work on or before August 27, 1975, but Griswold failed to pay as promised.
Griswold had also failed to comply with a lease requirement that it obtain liability insurance to cover the site. In five letters sent over a four month period, the state notified Griswold of this failure and warned that it would result in cancellation of the lease. Finally, and with ample notice to Griswold, the state terminated the lease as of January 19, 1976. On April 5, 1976, Frontier recorded its claim of lien pursuant to AS 34.35.070.
Frontier filed suit to recover against the state, Coor, and Heritage Ventures. After Frontier's motion for partial summary judgment on the issue of liability was denied, the parties stipulated to judgment in favor of the defendants and that Frontier would be entitled to damages of $53,136 if it prevailed on appeal. The superior court approved this stipulation and this appeal followed.
Three basic issues have been raised. Frontier maintains that it had a valid lien against the Griswold leasehold. It contends that this lien was not extinguished by the state's termination of the Griswold lease, and that the new lease is therefore subject to the lien. Alternatively Frontier argues that cancellation of Griswold's lease without notification to Frontier deprived it of the lien and therefore of a property right without due process of law. And finally Frontier argues that it should be able to recover on a theory of quasi-contract to prevent unjust enrichment of the state.
The defendants' first contention is that Frontier filed its lien too late. Resolution of this question requires a discussion of the terms of AS 34.35.070 as it existed in 1975 and 1976. Frontier's lien was filed more than ninety days after it completed its contract and therefore was too late under part (b) of the statute. However, no notice of completion was recorded by the lessee, who is the "owner" for the purpose of subsection (d).
Parts (d) through (f) of AS 34.35.070 were added to our lien law by chapter 89 of the 1974 session laws. Frontier contends that the language of subsection (d) augments and expands the time period provided in subsection (b) and that, if the provisions are contradictory, subsection (d) impliedly repealed inconsistent portions of subsection (b). The appellees, on the other hand, contend that the only consistent reading of subsections (b) and (d) is that (d) only applies where a notice of completion has been recorded within ten days after completion of an improvement.
We agree with the appellees' interpretation. Reading subsection (d) as Frontier suggests would result essentially in an unlimited time, or a time limited only by statutes of limitations or laches, within which a materialman's or mechanic's lien might be filed where the owner has neglected to record a notice of completion. Such a result would clearly be inconsistent with the strict deadlines which the legislature has seen fit to observe elsewhere in the lien foreclosure statute. Thus, in addition to the ninety day deadline provided by AS 34.35.070(b) for filing a lien, a lien, once it is filed, is not binding for more than six months unless suit is commenced or unless one six month extension is recorded within the initial six month period.
Further, under Frontier's interpretation, subsection (d) would have to be read as applying a ninety day deadline to an event which might never occur. This strikes us as an unnatural use of the language. Beyond that, we observe that part (d) requires the owner in mandatory language to record a notice of completion within ten days after completion. Part (f) provides for what shall happen when the owner fails to do this. He is placed in the "position of guarantor regarding another person who suffers damages which are proximately caused" by his failure.
We observe finally that the legislature amended subsection (d) in 1977 to provide as follows:
In 1978 subsection (d), along with subsection (e), was repealed entirely. While it is always debatable whether a legislative change is a clarification or a change in substantive law, see Laborers and Hod Carriers Local 341 v. Groothuis, 494 P.2d 808, 811 (Alaska 1972), these changes are consistent with the philosophy of requiring definite deadlines in connection with materialmen and laborers' lien laws.
Having concluded that Frontier lost any lien rights it may have had by failing to timely file a lien, we now turn to Frontier's claim of unjust enrichment. We think that the court correctly decided that Frontier could not collect from the state under that theory. The general rule is clear: in the absence of anything to show that the landlord ordered or authorized the work, ratified the work after it was done, or was in such a close relationship to the tenant that it can be said that the contract was executed for the landlord's benefit, a plaintiff cannot collect from the landlord under a claim of unjust enrichment, even where the landlord knowingly acquiesced in and ultimately benefits from the work performed.
Arguably, the state falls within the exception for interested parties under the general rule, as the lease between the state and Griswold specifically required construction of living quarters and a freight warehouse and the laying down of gravel fill. Moreover, the state admits that the gravel fill would be essential to any construction at the site. If the benefit had not been conferred by Frontier, the gravel would still have to be purchased by someone before use could be made of the site. However, it seems clear from the context of the lease provisions that the state was not seeking to have living quarters and a freight warehouse placed on the property when it inserted the building provision in the lease. Rather, it inserted the provision to prevent speculation in state lands. The state was not actively seeking the construction work required by the lease. It was merely willing to lease the property to anyone who could make responsible, productive use of it. The state was not so closely related to the project that it could be considered an intended beneficiary of the contract between Griswold and Frontier.
The judgment is AFFIRMED.
CONNOR, Justice, with whom BOOCHEVER, Justice, joins, dissenting.
I disagree with the result.
I think that the state did benefit from the placement of gravel on the premises, and that the state has a sufficient relation to the project that unjust enrichment will occur if Frontier's claim is disallowed in its entirety.
It appears that the provision calling for construction of employee living quarters and gravel fill was beneficial to the state.
Moreover, the work that was actually done, gravel and excavation work, was specifically required for the benefit of the state. The lease provides that the lessee must "place at least five (5) feet of gravel fill on the leased premises without disturbing the existing surface cover of the land ... and fine grade shall be subject to the approval of the Lessor." The state admits that the gravel fill would be essential to any construction at the site, and so if the benefit had not been conferred by Frontier Rock the gravel would still have to be purchased by someone before the use could be made of the site. Thus, it appears that the purpose of this lease provision was not only to benefit the lessee, but also to improve the lessor's existing land.
In conclusion, I believe this is the type of situation that was intended to fall within the interested party exception applied by some courts and referred to by Professor Dawson in his article The Self-Serving Intermeddler, 87 Harv.L.Rev. 1409, 1455-56 (1974). The work was ordered, authorized and ratified by the state in such a manner that it can fairly be said that the contract was executed for the benefit of the landlord as well as the lessee.
Given the record, I think we should reverse and direct the entry of judgment for the plaintiff.
Ch. 89, § 1, SLA 1974.
See First Nat'l Bank v. Hilliboe, 17 N.D. 76, 114 N.W. 1085, 1087 (1908).
Although lien statutes have generally withstood constitutional attacks based on the claim that the lien deprives an owner of a property right without due process of law, courts have frequently recognized the heavy burden a lien may place on the owner's title. See, e.g., Connolly Dev., Inc. v. Superior Court, 17 Cal.3d 803, 132 Cal.Rptr. 477, 553 P.2d 637, 642-44 (1976); Borchers Bros. v. Buckeye Incubator Co., 59 Cal.2d 234, 28 Cal.Rptr. 697, 379 P.2d 1, 4 (1963). In Connolly, the California Supreme Court, in holding that filing of a mechanics' lien was a significant deprivation of a property right, stated:
Id. 132 Cal. Rptr. at 483, 553 P.2d at 643 (footnote omitted).
Although the court in Connolly found a taking of a significant property interest, it upheld the lien statute, finding that, in light of statutory safeguards, and when weighed against the interests of lien claimants and the state, the statute complied with the requirements of due process. 132 Cal. Rptr. at 493-494, 553 P.2d at 653-54.