Section 412. Additional Statutory Provisions
(b) Duty of Contractor to Defend Action and Reimburse Owner
The burden of proof as to whether or not a building is an owned/occupied dwelling rests with the lien claimant. Guarriello v. Sunstate Equip. Corp., Inc., 187 Ariz. 596, 598, 931 P.2d 1106, 1108 (App. 1996). A.R.S. § 33-420(A) provides a penalty of $5,000 or triple the actual damages, whichever is greater, plus attorneys' fees and costs, for filing a false lien. A.R.S. § 33-420(C) provides a $1,000 penalty, or triple the actual damages, whichever is greater, plus attorneys' fees, for refusing to remove a false lien after requested to do so. The penalties may both be applied in the same case. Guarriello, 187 Ariz. at 598, 931 P.2d at 1108.
(e) Inapplicability of Liens to Owner-Occupied Dwellings
In Williamson v. PVOrbit, Inc., 228 Ariz. 69, 263 P.3d 77 (2011), the court held that trustees are natural persons holding legal title under A.R.S. § 33-1002, which protects owner-occupants from mechanic's liens. The statute requires that an "Owner-Occupant" be a "natural person." Id. The court held that in a trust, the trustees, rather than the trust, hold legal title and the beneficiaries hold equitable title, citing Dunlap Investors Ltd. v. Hogan, 133 Ariz. 130 (1982). The court therefore found that the Williamsons, as sole beneficiaries and trustees, qualified as a "natural person" under the statute and thus qualified for the exemption against liens provided in A.R.S. § 33-1002.
In Ariz. Tile, LLC v. Berger, 223 Ariz. 491, 224 P.3d 988 (2010), Arizona Tile supplied materials on an open account to defendants, a corporation and its officers who fabricated and installed countertops to homeowners who shopped at certain retail stores. Defendants failed to pay on their account. The court found that the defendant corporation was a contractor under A.R.S. § 32-1101(A)(3), and that its activities were subject to the provisions of A.R.S. § 33-1005, creating a trust obligation upon the corporation in favor of Arizona Tile. Id. at 495, 224 P.3d at 992. The court held that the corporation breached its trust obligations to Arizona Tile by failing to hold the funds for the benefit of its supplier, and in failing to pay those funds over to the supplier when due. Id. at 498, 224 P.3d at 995. Because the owners of the corporation, who were corporate officers and the only directors of the corporation, authorized these actions, they were held personally liable for the corporation's breach of trust. Id.
(h) Releases
A.R.S...
