DAYSIDE INC..A NEVADA CORPORATION
v. THE FIRST JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR
CARSON CITY, AND THE
HOHNORABLE WILLIAM A. MADDOX, DISTRICT JUDGE, RESPONDENTS,
AND PARKWAY MANOR INC., A
NEVADA CORPORATION, REAL PARTY IN INTEREST.
August 29, 2003
75 P.3d 384
Original petition for a writ of mandamus or certiorari
challenging a district court order that granted partial summary judgment
and dismissed petitioner's mechanic's lien.
General contractor brought action against property owner to foreclose
mechanic's lien despite contractual waiver of lien rights. The district
court granted partial summary judg):llent dismissing the lien. Contractor
filed petition for writ of mandamus or certiorari.
The supreme court held that: (1) as a matter of first impression, the
waiver did not violate public policy; and (2) consideration supported
Richard G. Hill, Reno, for Petitioner.
Hale Lane Peek Dennison & Howard and Jerry M. Snyder, Reno,
for Real Party in Interest.
A writ of mandamus is available to compel the performance of an act that
the law requires as a duty resulting from an office, trust, or station
or to remedy a manifest abuse of discretion. NRS 34.160.
2. ADMINISTRATIVE LAW AND PROCEDURE; CERTIORARI.
A writ of certiorari serves to remedy jurisdictional excesses committed
by an inferior tribunal, board, or officer, exercising judicial functions.
3. CERTIORARI; MANDAMUS.
Writs of mandamus and certiorari are extraordinary remedies generally
unavailable if the petitioner has a plain, speedy and adequate legal remedy,
such as an appeal from a final judgment. NRS 34.020(2), 34.160.
4. CERTIORARI; MANDAMUS.
Even when an appeal is an adequate remedy, the supreme court may nevertheless
exercise its discretion to consider issuing a writ of mandamus or certiorari
if an important issue of law needs clarification, and public policy will
be served by court's invocation of its original jurisdiction.
5. MECHANICS' LIENS.
General contractor's waiver of rights to mechanic's lien or materialman's
lien did not violate public policy where legislature was silent on validity
6. MECHANICS' LIENS.
Absent a prohibitive legislative proclamation, a waiver of mechanic's
lien rights is not contrary to public policy.
7. MECHANICS' LIENS.
Property owner's failure to make the final payments was not a failure
of consideration and did not make general contractor's waiver of mechanic's
lien rights unenforceable.
8. MECHANICS' LIENS.
Property owner's alleged breach of contract by failing to pay for work
performed had no effect on validity of general contractor's waiver' of
mechanic's lien rights.
9. MECHANICS' LIENS.
A mechanic's lien, once waived, cannot be revived by the owner's failure
to abide by other independent covenants in the contract.
A project owner's inadequate payment to a general contractor is an event
anticipated by the parties to the contract, rather than a failure of consideration.
11. MECHANICS' LIENS.
Mutual promises of general contractor and property owner regarding construction
of building and payment were consideration supporting contractor's waiver
of its mechanic's lien rights.
12. MECHANICS' LIENS.
The real consideration which moves a contractor to waive its lien rights
is the expectation that the property owner will be put in funds out of
which the contractor hopes to be paid.
Before ROSE, MAUPIN and GIBBONS, JJ.
This original petition for a writ of mandamus or certiorari challenges
a district court order that granted the real party in interest partial
summary judgment on petitioner's mechanic's lien foreclosure claim for
relief and dismissed the accompanying lien. The district court ruled that
a construction contract executed by petitioner and the real party in interest
contained an enforceable mechanic's lien waiver provision. Petitioner
now seeks a writ of mandamus or certiorari directing the district court
to reverse the partial summary judgment and restore the mechanic's lien.
We conclude that contractual lien waiver provisions do not violate public
policy, that the waiver present in this case was sup ported by the contract's
terms, and that the voluntariness of petitioner's waiver is beyond our
review. Therefore, we deny the petition, as the district court did not
abuse its discretion in entering partial summary judgment and dismissing
In May 1999, petitioner Dayside Inc. and real party in interest Parkway
Manor Inc. executed a pre-printed form contract requiring Dayside to construct
an apartment building on Parkway's real property. Parkway agreed to pay
Dayside a total of $9,165,226 in monthly installments, and Dayside agreed,
among other things, that it would not file a mechanic's or materialman's
lien or maintain any claim against [Parkway's] real estate or improvements.
. . on account of any work done, labor performed or materials furnished
under this Contract. . . .
The parties crossed out language imposing the lien waiver on subcontractors,
and then wrote that Dayside's waiver of lien rights was valid "to
the extent such waiver is in accordance with Nevada law."
According to Dayside, after "Parkway refused to pay Dayside large
sums of money owed," Dayside recorded a mechanic's lien and later
joined a subcontractor in litigation already underway against Parkway.
Dayside apparently pleaded various contract and tort claims for relief
against Parkway, including one seeking to foreclose the mechanic's lien.
In June 2002, the district court granted Parkway partial summary judgment,
ruling that the contract's lien-waiver provision was clear and not contrary
to Nevada law. The district court then ordered Dayside's mechanic's lien
dismissed. In December 2002, Dayside filed in this court the instant petition
for a writ of mandamus or certiorari, challenging the partial summary
judgment and dismissal.
A writ of mandamus is available to compel the performance of an act that
the law requires as a duty resulting from an office, trust or station,2
or to remedy a manifest abuse of discretion.3 A
writ of certiorari, on the other hand, serves to remedy jurisdictional
excesses committed by an inferior tribunal, board, or officer, exercising
judicial functions.4 Writs of mandamus and certiorari
are extraordinary . remedies generally unavailable if the petitioner has
a plain, speedy and adequate legal remedy, such as an appeal from a final
judgment.5 Here, Dayside could challenge the partial
summary judgment and the dismissal of its mechanic's lien following the
entry of a final judgment that resolves all of the parties' claims for
relief.6 But even when an appeal is an adequate
remedy, this court may nevertheless exercise its discretion to consider
issuing a writ of mandamus or certiorari if an important issue of law
needs clarification, and public policy will be served by this court's
invocation of its original jurisdiction. 7
Dayside argues that this court should consider the instant writ petition
because whether a contractor may waive its mechanic's lien rights is an
issue of first impression in Nevada. Dayside elaborates that the issue'
'involves an important public policy of this state, specifically, the
protection of materialmen and laborers." Because this petition raises
an issue of first impression involving the public policy of this state,
we shall exercise our discretion to consider the petition.
Dayside does not complain that the district court lacked jurisdiction
to dismiss its lien by partial summary judgment. Thus, we review the dismissal
for a manifest abuse of discretion.8
[Headnotes 5, 6]
The district court dismissed Dayside's lien based on the lienwaiver provision
contained in its construction contract with Parkway, Dayside argues that
any provision in a contract waiving a contractor's mechanic's lien rights
is void as against public policy. It is well settled in other states,
though, that "a clear and unambiguous provision in a contract whereby
a contractor waives his rights to a mechanic's lien or agrees not to file
a lien is valid and binding and will preclude the contractor from asserting
a right to a lien."9 Some state legislatures
have declared a lien waiver to be against public policy.10
But other state legislatures have expressly permitted waivers11
Nevada's legislative enactments are silent on the subject.12
Absent a prohibitive legislative proclamation, a waiver of mechanic's
lien rights is not contrary to public policy13
Dayside further argues that the waiver here is unenforceable because there
was a failure of consideration when Parkway failed to make the fmal payments.
But even if Parkway breached the contract in regard to payment for work
performed, that has no effect on the lien-waiver provision because "a
mechanic's lien, once waived, cannot be revived by the owner's failure
to abide by other independent covenants in the contract."14
A waiver provision merely limits the avenues available to a contractor
to collect for expended materials or labor in the event the owner fails
to pay. 15 Thus, an owner's inadequate payment is
an event anticipated by the parties to the contract, rather than a failure
of consideration. 16
[Headnotes 11, 12]
Additionally, Dayside seems to contend that there was no consideration
to support the waiver in the first place. But the contract between Dayside
and Parkway involved promises by both partiesDayside promised to construct
the apartment building and Parkway promised to pay for that construction-and
mutual promises have long been held sufficient consideration to support
a contract. 17 The waiver provision was a bargained
for part of that contract. 18 And, as explained
by the Connecticut Supreme Court, "the real consideration which moves"
a contractor to waive its lien rights "is the expectation that [the
property owner] will be put in funds out of which [the contractor] hopes
to be paid." 19 Thus, consideration supported
Dayside's waiver of its mechanic's lien rights.
Dayside finally argues that its waiver of lien rights was involuntary
because the resulting risk was' 'unknown, unquantified and. . . potentially
the price of the entire job." But the waiver provision appears clear
in its prohibition against mechanic's liens for "any" labor
or materials expended on the project. Further, the parties acknowledged
the lien waiver when they wrote into the preprinted form contract that
the waiver is valid to the extent permitted by Nevada law. In any event,
Dayside did not make its argument to the district court, and did not proffer
any testimony from Dayside's president, who signed the contract, regarding
his understanding of the waiver provision. This court is ill-equipped
to determine in the first instance whether the waiver was knowingly and
voluntarily granted. 20
Dayside has not demonstrated that the partial summary judgment dismissing
its mechanic's lien was an extra-jurisdictional act or a manifest abuse
of discretion warranting extraordinary relief. Accordingly, we deny Dayside's
petition for a writ of mandamus or certiorari.
1In January 2003, we resolved this case in an unpublished
order denying writ relief. Subsequently, petitioner Dayside Inc. moved
to publish the decision as an opinion. We grant the unopposed motion and
issue this opinion in place of our unpublished order. ' '
3See Round Hill Gen. Imp. Dist. v. Newman, 97 Nev.
601, 637 P.2d 534
5'NRS 34.020(2); NRS 34.170; State of Nevada v.
Dist. Ct. (Ducharm) , 118
Nev. 609, 614, 55 P.3d 420, 423 (2002) (mandamus); Dangberg Holdings v.
Douglas Co., 115 Nev. 129, 137-38, 978 P.2d 311, 316 (1999) (certiorari);
Knrow v. Mitchell, 110 Nev. 958, 962, 878 P.2d 978, 981 (1994) (denying
a petition for a writ of mandamus or prohibition because the petitioner
had taken an appeal from the challenged order).
6See Consolidated Generator v. Cummins Engine, 114
Nev. 1304, 1312,971
P.2d 1251, 1256 (1998).
7See Diaz v. Dist. Ct., 116 Nev. 88, 93, 993 P.2d
50, 54 (2000).
8Dangberg Holdings, 115 Nev. at 138, 978 P.2d at
316 (observing that, on
a petition for writ of certiorari, if the challenged act was within the
tribunal's jurisdiction, this court's review ends even if the act was
erroneous); Round Hill, 97 Nev. at 603-04, 637 P.2d at 536 (stating that
mandamus relief is not available absent a manifest abuse of discretion).
9J. A. Bock, Annotation, Validity and Effect of
Provision in Contract Against Mechanic's Lien, 76 A.L.R.2d 1087, 1089
(1961); see, e.g., Durant Const., Inc. v. Gourley, 336 N.w.2d 856 (Mich.
Ct. App. 1983); see also Landvatter Ready Mix, Inc. v. Buckey, 963 S.w.2d
298, 301 (Mo. Ct. App. 1997) (recognizing that "[i]t has long been
the rule that a mechanic's lien claim may be waived").
10See, e.g., 770111. Compo Stat. Ann. 60/1.1 (West
2001) ("An agreement to waive any right to enforce or claim any lien
under this Act where the agreement is in anticipation of and in consideration
for the awarding of a contract or subcontract, either express or implied,
to perform work or supply materials for an improvement upon real property
is against public policy and unenforceable.") .
11See, e.g., 49 Pa. Cons. Stat. Ann. § 1401
(West 2001) ("A contractor or subcontractor may waive his right to
file a claim by a written instrument signed by him or by any conduct which
operates equitably to estop such contractor or subcontractor from filing
a claim."). r
12Senate Bill 206 was enacted on June 10, 2003,
and strictly circumscribes attempts to waive or impair the lien rights
of a contractor, subcontractor or supplier. See S.B. 206, § 26, 72d
Leg. (Nev. 2003). This provision applies, however, only to agreements
consummated on or after October 1, 2003. Id. § 59.
1353 Am. Jur. 2d Mechanics' Liens § 331 (1996);
see, e.g., Port City Construction CO. V. Adams & Douglass, Inc., 273
A.2d 121, 122 (Md. 1971).
14Bock, supra note 9, at 1089; see also 56 C.J.S.
Mechanics' Liens § 254, at 291 (1992) (stating that "where the
right to a mechanic's lien is absolutely waived by the contract, the binding
effect of such waiver is not defeated by the owner's failure to comply
with his own independent covenants and agreements").
15Pero Bldg. Co., Inc. v. Smith, 504 A.2d 524, 527
(Conn. App. Ct. 1986); see also 56 C.J.S. Mechanic's Liens § 252,
at 288 (1992) ("When a contractor waives his right to a lien, he
agrees not to rely on the statutory remedy, but to rely only on his common-law
remedies against the owner" of the property.").
16See Pero, 504 A.2d at 527.
17See Pink v. Busch, 100 Nev. 684, 688, 691 P.2d
456, 459 (1984).
18See G. R. Sponaugle & Sons, Inc. v. McKnight
Canst. Co., 304 A.2d 339,
344 (Del. Super. Ct. 1973) (observing that the consideration underlying
a provision waiving lien rights in a construction contract is the same
consideration supporting the entire contract, and stating that "[n]o
single clause of the contract should be tested separately to detennine
whether an item of consideration can be identified specially with that
clause"); Torres v. Meyer Paving Co., 423 N.E.2d 692,696 (Ind. Ct.
App. 1981) (finding a no-lien agreement supported by the consideration
underlying the parties' contemporaneous construction contract).
19Bialowans v. Minor, 550 A.2d 637,639 (Conn. 1988)
(quotation and em
20See Round Hill, 97 Nev. at 604, 637 P.2d at 536
(stating that an appellate
court is not an appropriate forum in which to resolve factual issues).
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