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United Rentals Northwest, Inc. v. Snider Lumber Products

June 18, 2009


APPEAL from a judgment of the Superior Court of Tuolumne County. James A. Boscoe, Judge. (Super. Ct. No. CV52760).

The opinion of the court was delivered by: Wiseman, Acting P.J.



In this action to foreclose on a mechanic‟s lien on land, the trial court granted the landowner‟s motion to remove the lien, holding that the work done did not constitute a "work of improvement" and therefore did not give rise to a lien under the mechanic‟s lien statutes. The work, however, was a removal of buildings, which is included in the statutory definition of a "work of improvement." We reverse the judgment and publish due to the lack of case law applying the statutes to removals of buildings.


Defendants Snider Lumber Products, Inc., and Sierra Pacific Industries (Snider and Sierra) owned a sawmill at Chinese Camp in Tuolumne County. In 2006, the sawmill was retooled and some of its facilities became unnecessary, including 10 lumber drying kilns.

The 10 kilns were divided into two groups, called upper and lower. The upper kilns were each 68 feet long and 20 feet high. Each was 16 feet wide and they stood side by side-a total width of 80 feet-on a concrete slab to which they were bolted. They were constructed with steel frames and aluminum walls with foam insulation. Railroad tracks were set into the concrete foundation so that lumber could be moved into the kilns on carts.

Each kiln had four large doors for the lumber to roll in through and four small doors for workers. The kilns were each supplied with electricity to power fan motors and lights. Each also was supplied with sprinklers. Four feet from the kilns was a control room 10 feet long, seven feet wide, and 40 feet high, made of wood. This was also supplied with electricity and housed a computer from which an operator controlled the kilns. It had windows and doors. Running the 80-foot width of the five kilns was a valve room, 12 feet wide and nine feet high, made of wood and steel. It also had windows and doors. The valves in the valve room controlled the supply of steam to the kilns. The control room and valve room, like the kilns, were attached to the concrete slab. Stairs and catwalks provided workers with access to various parts of the structure. The five lower kilns were similar to the upper kilns, except that they were 120 feet long instead of 68 feet. They also had a control room and a valve room.

When the kilns were installed, they were deemed improvements on the land for property tax purposes. The upper kilns were erected in 1985. Four of the lower kilns were erected in 1996 and the fifth in 1998.

Snider and Sierra hired a company called Midway United to remove the kilns and oversee their sale to a group of buyers. Midway United subcontracted the job of removing the kilns to a firm called John Stuart Mechanical. The scope of work, for which John Stuart Mechanical was to be paid $270,600, included dismantling the structures and breaking down their usable parts into pieces small enough to be packed into shipping containers for transportation to the buyer. John Stuart Mechanical entered into a series of agreements with plaintiff United Rentals Northwest, Inc. (United Rentals), to rent equipment for use in removing the kilns. Using the United Rentals equipment, John Stuart Mechanical carried out some of the dismantling of the kilns and control houses. A dispute then developed between Midway United and John Stuart Mechanical, and John Stuart Mechanical either was fired by Midway United or abandoned the job. The United Rentals equipment was removed and a new subcontractor was hired to finish the job using its own equipment.

United Rentals was never paid for the rentals. On February 12, 2007, it recorded a mechanic‟s lien against Snider and Sierra‟s land in the amount of $60,602.99. Civil Code section 3110 provides that "lessors of equipment . leasing equipment to be used . in . contributing to a work of improvement shall have a lien upon the property upon which they have . leased equipment . for the value of the use of such . equipment . whether . furnished at the instance of the owner or of any person acting by his authority or under him as contractor or otherwise."*fn1 The following month, United Rentals filed its complaint in this case, asserting contractual claims against John Stuart Mechanical and John Stuart individually and seeking to foreclose on the mechanic‟s lien against Snider and Sierra. A default judgment was later entered against John Stuart Mechanical and John Stuart.

Snider and Sierra filed a motion to remove the mechanic‟s lien. Despite section 3106-which provides that ""[w]ork of improvement‟ includes . the demolition of buildings, and the removal of buildings"-defendants argued that removal of the kilns was not a work of improvement. They contended that the structures removed were personal property, not buildings, and that in any event their removal was not an improvement because it did not benefit the property.

The trial court granted the motion and ordered the lien removed, stating in its written order that "the dismantling of the drying kiln is not a work of improvement within the meaning of Civil Code §3106." It did not issue a detailed statement of its reasoning, but at the hearing it said:

"For me-the question for me was whether or not this is really a-a demolition of a building. Certainly the dismantling of a building for purposes of resale. And that‟s where I ...

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