Judge Stephen I. Goorvitch, Case 20STCV30224 2023-02-14 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 20STCV30224, Date: 2023-02-14 Tentative Ruling

Case Number: 20STCV30224 Hearing Date: February 14, 2023 Dept: 39

Labor Commissioner v. Brian Rabbani, et al.

Case No. 20STCV30224

[Tentative] Ruling on Trial Issues

INTRODUCTION

The Labor Commissioner of the State of California (the “Labor Commissioner”) filed this action against 5121 Ascot Ave LLC (“Ascot”), among others, seeking to foreclose on a mechanic’s lien based upon Ascot’s failure to pay regular and overtime wages, and failure to provide meal periods and rest breaks. The Court previously held that the Labor Commissioner may recover overtime wages, as well as payments for missed meal periods and rest breaks, through a mechanic’s lien. Now, the Court addresses two issues: (1) Is this action timely; and (2) Does the Court consider the reasonable value of the work or the reasonable value added to the property in assessing the value of the liens?

FACTUAL BACKGROUND

The Labor Commissioner alleges as follows: In or around December 2019, Defendants Angel Campos (“Defendant Campos”) and Brian Rabbani (“Defendant Rabbani”) agreed to perform construction work on a property owned by Ascot. (First Amended Complaint, ¶ 1.) They did so under a construction license held by P&A Remodeling Consulting, Inc. (“Defendant P&A”). (Ibid.) Defendant Campos hired six workers to perform construction work between December 2019 and February 2020. (Id., ¶ 20.) However, Defendant Campos did not pay the workers’ wages for over one week’s work. (Ibid.) Nor did Defendant Campos pay the workers overtime wages. (Id., ¶ 21.) Finally, the workers did not receive all required meal and rest breaks. (Id., ¶ 30.)

PROCEDURAL HISTORY

The workers recorded mechanic’s liens against the Ascot property, and the Labor Commissioner took assignment of the claims. The original liens were filed on May 11, 2020. An action to enforce a lien must be filed within 90 days. (Civ. Code, § 8460.) This date was August 9, 2020, but because this date fell on a Sunday, the deadline to file an action was August 10, 2020. The complaint was filed on that date and therefore was timely. However, the complaint did not name Ascot as a defendant. Rather, the complaint named only Brian Rabbani and Angel Campos, who are the contractors who hired the six workers.

The Labor Commissioner then amended these six liens. The Labor Commissioner filed five amended liens on September 21, 2020, and one amended lien on February 11, 2021. However, The Labor Commissioner did not name Ascot as a defendant until it filed the first amended complaint, on March 18, 2021.

Because the relevant facts are undisputed, the Court bifurcated the trial. The Court ordered that the first phase would be a stipulated facts trial to address two issues: (1) Is this action timely; and (2) Does the Court consider the reasonable value of the work or the reasonable value added to the property in assessing the value of the liens?

DISCUSSION

A. Timeliness of this Action

An action to enforce a lien must be filed within 90 days. (Civ. Code, § 8460.) However, this deadline impacts only the enforceability of the particular lien and does not operate as a statute of limitations with respect to the money owed. “[T]he tangible lien created by the timely recordation of a claim of lien becomes null and void if no foreclosure action is commented within 90 after recordation, and the substantive right to foreclose on that particular lien is terminated. However, if the period for recording a lien is still open . . . a subsequent lien for the same work may be recorded.” (Koudmani v. Ogle Enterprises, Inc. (1996) 47 Cal.App.4th 1650, 1657-1658, citing Coast Central Credit Union v. Superior Court (1989) 209 Cal.App.3d 703, 708.) By filing a new or amended lien, a claimant can restart the 90-day clock. Although this precedent is based upon the predecessor statute to Civil Code section 8460, which was Civil Code section 3144, the Court adopts its reasoning because the statutes are substantively identical and laws on mechanics’ liens are remedial and should be “liberally construed for the protection of laborers and materialmen.” (Coast Central Credit Union, supra, 209 Cal.App.3d at 708.) “Generally, doubts concerning the meaning of the mechanics’ liens statutes are resolved in favor of the claimant.” (Ibid.)

The original liens were filed on May 11, 2020, and the Labor Commissioner filed its complaint against Brian Rabbani, alleging that he was the owner of the property, on August 10, 2020. The amended liens were filed on September 21, 2020, and February 11, 2021, and the first amended complaint, alleging that Ascot owned the property, was filed on March 18, 2021. The Court rules as follows:

1. The action to enforce the amended liens, recorded on September 21, 2020, is untimely because the first amended complaint was filed over 90 days after those liens were recorded.

2. The action to enforce the amended lien, recorded on February 11, 2021, is timely because the first amended complaint was filed less than 90 days after that lien was recorded.

3. Based upon this record, the Court cannot determine whether the action to enforce the original liens, recorded on May 11, 2020, was timely. Resolution of this issue will depend upon whether the Labor Commissioner knew, or should have known, that Ascot rather than Rabbani was the owner of the property for purposes of relating the first amended complaint back to the original complaint. (See Hazel v. Hewett (1988) 201 Cal.App.3d 1458, 1464.) If the amended complaint relates back to the original complaint, the action is timely, as this action was ongoing when the amended liens were recorded. If the amended complaint does not relate back to the original complaint, then the amended complaint is a new action to enforce the liens, and it was filed over 90 days after the liens were recorded, meaning that it was untimely.

4. Even if the Labor Commissioner’s action to enforce the original liens is untimely, the Labor Commissioner may cure this issue if the period for recording liens is still open by recording new liens and filing an amended complaint based upon those liens.

B. Valuing the Lien

The amount of the lien is based upon the lesser of the following amounts: (1) The reasonable value of the work provided by the claimant; and (2) The price agreed to by the claimant and the person that contracted for the work. (Civ. Code, § 8430.) The Court interprets the statute as meaning that the lien is based upon the amount of the lien is based upon the going rate for that type of work, or the rate agreed to by the parties, whichever is less. The Court reaches this decision for several reasons. First, as discussed, laws on mechanics’ liens should be liberally construed for the protection of laborers, and ambiguities should be resolved in favor of the claimant. Second, the Court’s interpretation is logical given the wording of the statute, which suggests that the Legislature intended the value of the lien to be based upon the actual “price” or the “reasonable” price. Finally, the Court previously held that the Labor Commissioner may enforce a mechanics’ lien to recover workers’ unpaid wages. For this reason, it is logical to interpret the statute as relating to reasonable wages, and not the value added to the property.

CONCLUSION AND ORDER

The Court finds and orders as follows:

1. The action to enforce the amended liens, recorded on September 21, 2020, is untimely because the first amended complaint was filed over 90 days after those liens were recorded.

2. The action to enforce the amended lien, recorded on February 11, 2021, is timely because the first amended complaint was filed less than 90 days after that lien was recorded.

3. Based upon this record, the Court cannot determine whether the action to enforce the original liens, recorded on May 11, 2020, was timely.

4. This order is without prejudice to the Labor Commissioner recording new liens and then filing an amended complaint, assuming the time to record new liens has not expired.

5. The amount of the liens shall be the lesser of the going rate for the workers’ services or the hourly wage paid to the workers.

6. The Court continues the trial to _________, 2023, at _____.

7. The Labor Commissioner’s counsel shall provide notice.