Utah Supreme Court
Can attorney fees be included in a mechanics' lien amount? 2 Ton v. Thorgaard Explained
Summary
2 Ton Plumbing recorded three notices of mechanics’ lien against property, with the latter two improperly including attorney fees and costs in the lien amount. The Thorgaards purchased the property and posted alternate security to release the lien, but only posted security for the original lien amount, not the amended amounts.
Analysis
Background and Facts
2 Ton Plumbing contracted to provide plumbing services to properties in a Heber City development but was not paid for work on Lot 30. The company recorded an original mechanics’ lien for $7,470.72 for “furnishing plumbing, materials and installation,” plus interest, costs, and attorney fees. As litigation proceeded, 2 Ton recorded two amended notices that increased the lien amount to include accumulated attorney fees and costs, ultimately claiming $38,714.98. The Thorgaards purchased Lot 30 and posted alternate security under Utah Code § 38-1-28 to release the property from the lien, but only posted security for the original lien amount.
Key Legal Issues
The case presented three issues: (1) whether attorney fees and costs may be included in the value of a mechanics’ lien under Utah Code § 38-1-3; (2) whether the Thorgaards’ notice of release of lien and substitution of alternate security was timely filed; and (3) whether the district court’s attorney fee award was reasonable.
Court’s Analysis and Holding
The Utah Supreme Court held that mechanics’ liens are limited to “the value of the service rendered, labor performed, or materials or equipment furnished or rented” under Utah Code § 38-1-3. The court noted that attorney fees are notably absent from the statutory language defining what may be attached in a lien claim. The legislature created a separate mechanism for awarding attorney fees through Utah Code § 38-1-18, which conditions such awards on successful prosecution of the lien enforcement action. Including attorney fees in the original lien amount would create a “moving target” for parties seeking to post alternate security, as the required security amount would increase as litigation costs accumulated.
Practice Implications
This decision clarifies that practitioners must carefully distinguish between the base lien amount and recoverable costs. When recording mechanics’ liens, include only the value of actual services, labor, and materials. When calculating alternate security amounts under § 38-1-28, use the base lien amount—attorney fees will be addressed separately if the lien claimant prevails. The court remanded for recalculation of attorney fees, emphasizing that awards must consider the impact of improper lien amendments on both parties’ litigation costs.
Case Details
Case Name
2 Ton v. Thorgaard
Citation
2015 UT 29
Court
Utah Supreme Court
Case Number
No. 20120390
Date Decided
January 30, 2015
Outcome
Affirmed in part and Reversed in part
Holding
Attorney fees and costs may not be included in the amount of a mechanics’ lien claim under Utah’s Mechanics’ Liens statute.
Standard of Review
Correctness for statutory interpretation; abuse of discretion for attorney fee awards
Practice Tip
When calculating alternate security amounts under Utah Code § 38-1-28, use only the base lien amount for services, labor, and materials—never include attorney fees or costs in the lien claim amount.
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