Galiant Homes, LLC v. Herlik.
2025 COA 3. No. 23CA1649. Creditors and Debtors—Breach of Contract—Unjust Enrichment—Mechanic’s Liens—Lien Statement—New or Amended Statements.
January 16, 2025
Galiant Homes, LLC (Galiant) is a custom homebuilder. Galiant contracted with the Herliks to build them a home in early 2018, but in December of that year the Herliks terminated the contract. In January 2019, Galiant sent the Herliks a final invoice for $74,900.21, and two months later it filed a mechanic’s lien against their property for the same amount. Galiant then sued the Herliks for breach of contract and unjust enrichment, and to foreclose on the lien. Galiant later amended its lien and the invoice by removing certain items after it learned the Herliks had paid some vendors directly. The parties engaged in arbitration, and the arbitrator determined that the Herliks breached the contract. The arbitrator awarded Galiant damages, attorney fees, and costs. The arbitrator left issues regarding the mechanic’s lien’s filing, validity, enforceability, and defenses to the district court, which confirmed the arbitration award and found in favor of Galiant on the mechanic’s lien issues. The Herliks then filed two CRCP 59 motions for a new trial, arguing that the district court improperly limited the trial on the mechanic’s lien issues to a half day and misapplied the mechanic’s lien law. The district court denied both motions.
On appeal, the Herliks contended that the district court erred by excluding evidence concerning change orders. They maintained that this evidence was necessary to support their argument that the mechanic’s lien was excessive. However, the court did not entirely preclude this evidence; and its decision to exclude some of this evidence was proper because the proffered evidence related to issues determined during arbitration.
The Herliks also argued that the district court erred in finding that the original mechanic’s lien was not excessive. Here, record evidence supports the court’s finding, including Galiant’s lien amendment when it learned new information of which it was unaware when it filed the original lien. And Galiant did not purposely fail to submit a change order to deceive or charge more than what was due, nor did the fact that Galiant had not yet paid for some costs included in its original lien make the lien excessive.
The Herliks further asserted that Galiant’s amendments to its original lien, which reduced the amount owed, were untimely under § 38-22-109(5)–(6) and invalidated the original lien. The court of appeals concluded that the statutory mechanic’s lien scheme and the time limits for amending liens were designed to protect against excessive liens, not prohibit amendments that reduce a lien. Thus, a mechanic’s lien claimant may amend its original lien after the statutory deadline governing mechanic’s lien amendments in § 38-22-109(6) to reduce the amount claimed when the claimant obtains new information after filing the original lien. Accordingly, the district court did not err by concluding that Galiant’s amendments reducing the amount claimed based on new information were not invalid as untimely.
The Herliks additionally argued that limiting the trial to a half day denied them due process because it prevented them from fully developing Mrs. Herlik’s testimony and from calling two bankers as witnesses. However, given the limited issues and short witness list, the trial time was not insufficient at the outset. And the fact that trial was originally set for a full day did not cause unfair surprise, where the district court revised the trial length nearly three weeks before trial and adequately communicated the remaining time. Further, the Herliks’ counsel chose to spend more than two-thirds of his time on issues that had been decided in arbitration or that were otherwise largely irrelevant.
The judgment approving the foreclosure of Galiant’s mechanic’s lien was affirmed, and the case was remanded for the district court to determine Galiant’s reasonable attorney fees incurred on appeal.