RECENT DEVELOPMENT IN UTAH LAW: VI. Statutory Interpretation: A. Final Completion: Utah's Triggering Event for the Statute of Repose for Mechanics' Lien Foreclosure Actions

1. Introduction On June 18, 2004, in R.A. McKell Excavating, Inc. v. Wells Fargo Bank, N.A., 1 the Utah Supreme Court held that the statute of repose for mechanics' liens 2 begins to toll when "all obligations contemplated by the initial agreement" are satisfied, not when a project is abandoned. 3 Such a rule confers substantial power on contractors and others eligible to file mechanics' liens, potentially allowing them to "cloud title to non-residential property in perpetuity." 4 But the court justified its decision, explaining that the policy behind the mechanic's lien statute "is to "provide protection to those who enhance the value of a property by supplying labor or materials,' not to safeguard the rights of property owners." 5 2. The Case Plaintiff R.A. McKell Excavating, Inc. ("McKell") entered into a contract with Carter Construction Development, L.L.C. ("Carter") in January 2000 "to perform excavation, grading, surface, and subsurface improvements on a proposed residential subdivision located in Utah County." 6 McKell commenced work on January 3, 2000, and Wells Fargo Bank, N.A. ("Wells Fargo") recorded a trust deed on the real property on January 5, 2000, securing its interest in the loan it made to Carter to fund the purchase of the land. 7 As McKell worked under the contract, Carter was "extremely slow" to pay McKell, and on or about October 5, 2000, after persistent attempts to procure payments, McKell froze its work on the project. 8 McKell continued to negotiate with Carter but ...