On April 7, 2010, Division II of the Washington Court of Appeals entered its ruling in Williams v. Athletic Field, Inc., which ruling called into question the validity of the form of notary acknowledgment utilized on thousands of liens in Washington State that appeared to otherwise follow the statutory safe harbor form for lien claims set forth in RCW 60.04.091. This decision was discussed on the Ahlers & Cressman PLLC construction law blog here.
In response to the decision in Williams, House Bill 1708 was introduced in the Washington House of Representatives this year. The bill provided that RCW 60.04.091 would be amended so that a lien may be signed by “a corporate representative, attorney, lien filing agent, or other individual authorized to act on the claimant’s behalf.” The bill also eliminated reference to more stringent technical notary requirements set forth elsewhere in Washington law, which were relied upon by the Williams Court in invalidating the claim of lien at issue in that opinion. The Engrossed Substitute House Bill passed through the House of Representatives on March 4, 2011 by a vote of 97-0. On March 24, 2011, the Bill exited the Senate Labor, Commerce & Consumer Protection Committee and appeared to be headed towards a vote on the Senate floor, but it failed to meet the April 12 deadline for a Senate vote.
If enacted, the Bill would have curbed the numerous legal challenges to the technical sufficiency of claims of lien recorded in Washington which have occurred since the Williams decision. Over the past year, I have been directly involved with, or been asked to render an opinion on, numerous lawsuits which sought to invalidate liens based on the Court’s interpretation of the lien statute in Williams. Court rulings have been wildly inconsistent in enforcing the Williams interpretation of the requirements for lien claims. The passage of the Bill would have provided certainty and predictability in filing construction liens, and prevented challenges to lien claims which followed the new statutory form. Quite ironically, the Senate committee report on the Bill indicates that testimony was presented against the Bill, in an effort to discourage the legislature from passing it, on the basis that the Bill would “result in more litigation and more uncertainty.” I am uncertain how the opponents of the Bill could candidly present such testimony to the Legislature.
The Washington Supreme Court is expected to issue a ruling on the appeal of Williams. If the appellate decision is reversed (or at least clarified or expressly limited to the unique facts of Williams), then it becomes much less urgent to amend the lien statute. If not, I would expect to see similar legislation proposed in the 2012 legislative session.