Overson Lumber Company, Inc., d/b/a Wabasso Building Center, Respondent, vs. William F. Guetter, d/b/a Northern States Elevator Construction, Defendant, Kevin L. Kremin, Appellant.

Overson Lumber Company, Inc., d/b/a Wabasso Building Center, Respondent, vs. William F. Guetter, d/b/a Northern States Elevator Construction, Defendant, Kevin L. Kremin, Appellant. A05-128, Court of Appeals Unpublished, November 22, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-128

 

Overson Lumber Company, Inc., d/b/a Wabasso Building Center,
Respondent,
 
vs.
 
William F. Guetter, d/b/a Northern States Elevator Construction,
Defendant,
 
Kevin L. Kremin,
Appellant.

 

Filed November 22, 2005

Affirmed

Stoneburner, Judge

 

Redwood County District Court

File No. C3030638

 

Brian L. White, White Law Office, Box 39, Wabasso, MN 56293 (for respondent)

 

David R. Von Holtum, Von Holtum, Malters & Shepherd, 607 Tenth Street, Box 517, Worthington, MN 56187-0517 (for appellant)

 

            Considered and decided by Klaphake, Presiding Judge; Stoneburner, Judge; and Wright, Judge.

U N P U B L I S H E D  O P I N I O N

 

STONEBURNER, Judge

 

            Appellant challenges the district court's enforcement of a mechanic's lien based on its determination that for purposes of prelien notice, appellant was not an "owner" of property to which respondent delivered construction supplies.  Because the district court's findings of fact are not clearly erroneous and the district court did not err in its application of the law, we affirm.

FACTS

 

            Robert Butler worked for respondent Overson Lumber Company, Inc., d/b/a Wabasso Building Center (WBC).  Butler knew that defendant William F. Guetter owned property in Milroy and that WBC had delivered building materials to that property in the past.  On September 10, 2002, Guetter contacted Butler about materials for improvements to the Milroy property.  Guetter told Butler that he was not sure what was going to happen, but that he would probably be selling the property and thought he should fix it up. 

            On October 16, 2002, appellant Kevin L. Kremin entered into a purchase agreement with Guetter to purchase the Milroy property for $1,000.  At Guetter's request, WBC began delivering materials to the Milroy property on October 21.  Guetter gave Kremin a warranty deed to the property on October 28, but Kremin did not take possession of the property until the end of December, and did not record the deed until February 7, 2003. 

            On December 12, 2002, WBC completed deliveries to the property.  Kremin paid Guetter for the materials on December 20, 2002, but Guetter did not pay WBC for the materials.  WBC filed and served a mechanic's lien statement on Guetter and Kremin on April 4, 2003, and later sued for a money judgment on the mechanic's lien.  Appellant answered, asserting that WBC's failure to provide him with prelien notice precluded enforcement of the mechanic's lien against him.

            At a bench trial, there was testimony that during the improvement project, Guetter, at Kremin's request, directed WBC to include a reference to "Kremin Welding" on the invoices that were sent to Guetter.  Kremin testified that he demanded such a notation on all invoices for supplies for the building because he knew that Guetter was involved in other projects at the same time, and he wanted to be able to track supplies used on this project.  Butler testified that contractors customarily ask WBC to add such references to invoices so contractors could track which jobs the invoices belonged to. 

            Guetter testified that, at some point, he told Butler that he would probably be selling the property, and everything should be changed over into Kremin Welding.  Butler testified that neither Guetter nor Kremin ever informed him that the property was transferred.

            The district court held that Kremin was not an "owner" for prelien notice purposes during the time that WBC delivered materials to the property, therefore WBC was not required to give Kremin prelien notice, and WBC was entitled to enforce the mechanic's lien.

D E C I S I O N

 

            When reviewing the result of a bench trial, appellate courts are limited to determining whether the district court's findings are "clearly erroneous, either without substantial evidentiary support or induced by an erroneous view of the law."  Reserve Mining Co. v. State, 310 N.W.2d 487, 490 (Minn. 1981).  It is well settled that judging the credibility of witnesses and the weight given to their testimony rests within the province of the finder of fact.  Novack v. Nw. Airlines, Inc., 525 N.W.2d 592, 598 (Minn. App. 1995).  This court "view[s] the record in the light most favorable to the judgment of the district court."  Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999).  "If there is reasonable evidence to support the district court's findings, we will not disturb them."  Id.

            Minn. Stat. § 514.011 (2004) states in relevant part:

Subd. 2.  Subcontractor to give notice.  (a) Every person who contributes to the improvement of real property so as to be entitled to a lien pursuant to section 514.01, except a party under direct contract with the owner must, as a necessary prerequisite to the validity of any claim or lien, cause to be given to the owner . . . not later than 45 days after the lien claimant has first furnished labor, skill or materials for the improvement, a written notice . . . .

 

. . . .

 

Subd. 5. Owner defined. For the purposes of this section, "owner" means the owner of any legal or equitable interest in real property whose interest in the property (1) is known to one who contributes to the improvement of the real property, or (2) has been recorded or filed for record if registered land, and who enters into a contract for the improvement of the real property.

 

This statute "was intended to protect homeowners and small businessmen who out of ignorance might be forced to pay first the contractor and then the subcontractor."  Master Asphalt Co. v. Voss Constr. Co., Inc., of Minneapolis, 535 N.W.2d 349, 354 (Minn. 1995) (quotation omitted).  Courts construe mechanic's lien statutes liberally to effectuate their purpose of protecting subcontractors' rights, but courts must strictly construe the statutes as to prelien notice to protect unsuspecting owners from unfair foreclosures.  See Dolder v. Griffin, 323 N.W.2d 773, 779-80 (Minn. 1982).  "[N]otice is properly given and is required to be given to the owner at the time the contract was made, or the work commenced or the materials are furnished; and notice to a subsequent owner is not required."  Id.at 777 (quotation omitted).  "The fact that buildings are in the process of erection on premises charges every one with notice of the rights of the parties doing the work."  Id. (quotation omitted).

In this case, because Kremin failed to record the deed to the property until after WBC's final delivery, the issue is whether WBC had knowledge of Kremin's ownership interest in the property.  Minn. Stat. § 514.011, subd. 5(1), requires "actual, not constructive, notice."  Marque Plumbing, Inc. v. Barris, 380 N.W.2d 174, 178 (Minn. App. 1986), review denied (Minn. Mar. 24, 1986).  Actual notice is generally defined as "[n]otice given directly to, or received personally by, a party."  Black's Law Dictionary, 1087 (7th ed. 1999).  This court has stated that actual notice "requires conveying knowledge of a signed, enforceable agreement."  Comstock & Davis, Inc. v. G.D.S. & Assocs., 481 N.W.2d 82, 85 (Minn. App. 1992).  There is no actual notice where a conversation gives notice that a document might exist, but not that it actually exists.  See Levine v. Bradley Real Estate Trust, 457 N.W.2d 237, 240 (Minn. App. 1990) (holding, in the context of actual notice of the existence of an easement, that because a conversation that put respondent on notice that a document might be signed did not convey knowledge of a signed, enforceable easement, the trial court correctly concluded respondent did not have actual notice of the easement), review denied (Minn. Aug. 7, 1990). 

Kremin relies on Guetter's testimony that he informed Butler of the sale to Kremin and asserts that the district court disregarded this testimony to determine that WBC did not have actual notice of Kremin's ownership interest.  Guetter testified as follows at his deposition:

Q:        Did you tell [WBC] that you were talking to Kevin Kremin about selling the property?

A:        Yep.

Q:        You did?  You specifically remember that?

A:        I am sure I did as far as my recollection goes.

Q:        Okay.  So what what exactly did you tell them?  Did you tell

A:        I am not really sure.

Q:        Did you tell them that Kevin bought the building?

A:        I don't know what we all talked about yet at that time.

Q:        Or did you just tell them that you might be selling the building and Kevin might be one of the purchasers?

A:        I said I am probably going to be selling it because I really don't need it.

Q:        All right.  You told that to Bob Butler?

A:        I think so.

Q:        You think so, but you don't specifically remember?

A:        Well, I am not sure how everything all went.  I can't

Q:        Well, I am trying to determine whether at the time you talked to the Building Center about a bid for the materials whether you had sold the building or not.

A:        I can't remember if I had it sold already or not.

 

And, at trial, Guetter testified as follows:

Q:        Did you ever tell Bob Butler that the property had been sold?

A:        I think that one day I went over and told him that I would probably be selling it, and everything should be changed over into Kremin Welding.

Q:        You think, do you remember specifically?

A:        Well, I'm sure I did.

 

. . .

 

Q:        But when you first contacted Bob Butler you didn't know whether you were going to sell the building or not, did you?

A:        I wasn't sure what I was going to do.

 

. . .

 

Q:        Mr. Guetter, I have just a few.  As I understand it, you are sure you told Mr. Butler that Kevin Kremin had bought the property?

A:        I'm positive I did it

 

Guetter, however, was not able to recall when he told Butler that Kremin bought the property.

            "The finder of fact is not required to accept even uncontradicted testimony if the surrounding facts and circumstances afford reasonable grounds for doubting its credibility."  Varner v. Varner, 400 N.W.2d 117, 121 (Minn. App. 1987).  Guetter admitted at trial that he remembered "[s]ome, not too much" of the facts of the case.  He testified in his deposition that he suffered a memory-impairing stroke, and has a hard time "remembering what I did yesterday."  Guetter was unable to answer many questions during his deposition and trial testimony due to his memory loss. 

            Butler testified that neither Guetter nor Kremin informed him of the actual property transfer.  Kremin partly corroborated Butler's testimony by testifying that he (Kremin) had no contact with Butler or WBC during the project.  The district court noted Guetter's uncertainty about what he told WBC.  In a memorandum attached to the district court's findings of fact, conclusions of law, and order, the district court found that "WBC was never given the type of ‘actual notice' contemplated by [case law] . . . ."  This finding is supported by the evidence and is not clearly erroneous.

Kremin argues that WBC was sufficiently aware of his interest in the property and that WBC had a duty to inquire and could not "put on blinders" and still be protected by the actual knowledge requirement in the statute.  See Custom Design Studio v. Chloe, Inc., 584 N.W.2d 430, 433 (Minn. App. 1998) (holding that a contractor who knew when it agreed to improve property that a contract vendor held title to the property was obligated to inquire about the identity of the contract vendor for purposes of giving prelien notice; citing Mill City Heating & Air Conditioning Co. v. Nelson, 351 N.W.2d 362, 365 (Minn. 1984), in which the supreme court remanded a case involving Torrens property for a determination of a subcontractor's actual knowledge of purchaser's interest in registered land, stating that if there was actual notice "it would be unfair and unreasonable for the law to allow the subcontractor to wear blinders and look only to the certificate of title"), review denied (Minn. Nov. 24, 1998). 

            Kremin argues that the discussions between Guetter and Butler about a possible sale together with Guetter's request that WBC's invoices reference "Kremin Welding" gave rise to an obligation on WBC to inquire about Kremin's interest in the property.  But the district court found that under the facts of this case, WBC was not "putting on blinders" to the fact that Kremin was the actual owner.  The finding is based, in part, on evidence that WBC had a long-standing relationship with Guetter and had delivered building supply materials to the property in the past for Guetter, that WBC was not told that Guetter sold the property to Kremin, and that the notation on the reference section of the invoices was commonly used by contractors for their own accounting.  The district court's findings that there is no evidence of actual notice and no circumstances that compelled further inquiry by WBC are supported by the record.

            Affirmed.