Disaster Clean Up Case

Total Restoration v. Merritt

We recently concluded a trial in a case in Summit County involving a lien foreclosure for a disaster clean-up service.  Our client was required to dry out a residence after a fire sprinkler system froze and flooded the basement of the home.  In addition to drying out the home, our client was required to remove sheetrock, baseboard, crown moldings, saturated insulation, and various incidental items in the house.

In defending against the claim, the owner argued that the opinion of the Utah Court of Appeals in All Clean vs. Timberline Properties, 264 P.3d 244 (Utah App. 2011)  precluded our client from being able to enforce a lien against the property.  In All Clean, a disaster clean-up company was denied lien rights where the only work they did was a “dry-out”, i.e. extraction of water, drying of carpet, spreading of anti-microbial agent, and blocking of furniture.  Conversely, we argued that in addition to a “dry-out” our client also the removed the sheetrock and the other items so we  fit squarely within the intent and purpose of the lien statute. 

At the conclusion of the trial, the Court ruled that because of the extensive nature of the flood and the amount of work which had to be done to clean it up, particularly the work which involved physical components of the home such as the sheetrock, baseboard, insulation, and so forth, that our client’s work was lienable.   In making this decision the Court relied in part on the decision of the Court of Appeals in Advanced Restoration vs. Priskos, 126 P.3d 786 (Utah  App. 2005).  In Advanced Restoration, the lien was allowed where ceiling tile and other various physical components of the building were removed and replaced.

The lesson from these three cases as stated in All Clean, is that a “dry-out”, standing alone,  is not lienable because it is a “minor repair”, but a “dry-out” with removal of  physical components of the building is a “major repair” and is therefore lienable.

One thing to keep in mind is that the lien law changed in 2011.  In that session, the language of this statute was changed to include the term “repair of an improvement”.  However, I don’t believe that this change to the code alters the application of these cases, because in All-Clean, the Court of Appeals noted that while minor repairs were not lienable, major repairs are.  Thus, it is unlikely that the inclusion of  “repair” in the code would change the outcome of the Park City case or All-Clean.