SUPREME COURT UNANIMOUS: STATUTORY LIEN FORM SUFFICIENT TO ESTABLISH CLAIM OF LIEN

Date: September 15th, 2011

Washington’s lien statute provides contractors a sample form to use when recording a lien claim against private property. The statute assures contractors that following the form will be sufficient for establishing a valid lien. In a unanimous decision today, the Washington Supreme Court upheld these statutory provisions and agreed that contractors establish a valid lien by following the statute”s sample form.

Recently, Washington”s court of appeals had keyed off a requirement for the acknowledgement of lien claims and invalidated those liens that simply followed the statutory form. The statutory form does not provide for acknowledgement. The court of appeals effectively held that the statutory form by itself was insufficient to establish a lien, despite the statute assuring contractors that it was.

The Washington Supreme Court disagreed and reversed the lower court. In Williams v. Athletic Field, the Court found that the statute”s acknowledgment requirement created an ambiguity where the sample form made no provisions for acknowledgment. But the Court turned to the requirement that Washington”s lien laws be “liberally construed to provide security for all parties intended to be protected by their provisions.” According to the Court, “A liberal reading . . . requires protecting contractors who relied on the statute”s assurance that claims of lien using the sample form shall be sufficient.”

The Supreme Court decision is significant because the statutory form has been widely used by contractors for nearly two decades. The prior court of appeals decision threatened literally thousands of lien claims that had been prepared using the statute”s sample form. The high court appreciated the inherent unfairness in invalidating these liens, observing that contractors “should not be punished for relying on a sample form that the statute says is sufficient.” The Court concluded by stating in no uncertain terms that “the sample form, standing alone, is sufficient to establish a claim of lien.”

The Washington Supreme Court”s decision is welcome news for contractors. As with all lien disputes, however, the specific facts of the dispute can have a profound effect on the dispute”s outcome.