Lane Myers v. National City Bank, 2014 UT 58, -P.3d- (Dec. 19, 2014)
Dec 19, 2014
Property owners secured a construction loan through defendant, which they used to make periodic draws to pay a contractor for the development of two residential properties. Defendant required plaintiff to hand write lien waivers on the requests for draws. Upon the owners’ default, contractor attempted to enforce the lien against the defendant. Defendant asserted the contractor waived his liens. The contractor challenged the handwritten waivers as insufficient to effect a release under the Utah Mechanic’s Lien Act. The trial court held the waivers constituted substantial compliance, but the Court of Appeals reversed, holding the language was missing essential elements set out in the Act. The Supreme Court held that the statute is a safe-harbor, not a requirement, and the handwritten terms alone were not sufficient to effect a lien release. For an effective lien release, the defendant must demonstrate both a knowledge of a right in a lien, and the intentional relinquishment of that right.