Halbert's Lumber, Inc. v. Lucky Stores, Inc.

Introduction

This case presents a real doozy of a puzzle in mechanic’s lien law. What is the scope of the “conditional waiver release” of mechanic’s lien rights prescribed by Civil Code section 3262, subdivision (d)(1)? This statute specifies the language and format of a release of mechanic’s lien rights in return for a progress payment. The parties here used a release form following the statutory language virtually verbatim.

Two questions confront us. The first is the meaning of the word “furnished” as used in the release form. Does “furnished” mean delivery of materials to a construction site, or does it mean the actual use or incorporation of those materials into the structure?

This is the less difficult of the two questions. The ordinary meaning of “furnished” is delivery to the jobsite.

The second question is the extent of the mechanic’s lien rights that are being released. Does the release extend only to the materials for which the supplier has actually been compensated, or does it extend to all materials furnished through the date of the progress payment? Both the statutory language and legislative history on this point are ambiguous; they shine like a dim…