Diamond Hill Inv. Co. v. Shelden

Decision Date13 January 1989
Docket NumberNo. 88-43,88-43
Citation767 P.2d 1005
PartiesDIAMOND HILL INVESTMENT COMPANY and Sage Capital Corporation, Appellants (Defendants), W.A.S., Inc., a Colorado corporation, (Defendant), v. Thomas A. SHELDEN, d/b/a Atria Architects, Appellee (Plaintiff).
CourtWyoming Supreme Court

Barry G. Williams of Williams, Porter, Day & Neville, P.C., Casper, for appellants.

Todd S. Welch of Bailey, Pickering, Stock & Welch, Cheyenne, for appellee.


MACY, Justice.

This is an appeal from a summary judgment in favor of appellee Thomas A. Shelden, d/b/a Atria Architects, authorizing him to foreclose his contractors' lien and declaring that his lien is superior to the mortgage of appellants Diamond Hill Investment Company and Sage Capital Corporation, thereby effectively foreclosing appellants' interest in the subject property. At issue are the determinations by the district court that, pursuant to provisions of the federal Bankruptcy Code, the petition in bankruptcy filed by the owner of the property stayed any action by appellee to foreclose his lien, including the filing of an amended complaint to include appellants as defendants, and that the Wyoming statute of limitations for commencing a foreclosure action was tolled during the pendency of the bankruptcy proceedings.

We affirm.

The parties agree that the issue is:

Did the Trial Court err in finding that the automatic stay provided by 11 U.S.C. § 362 issued in connection with the bankruptcy case filed by W.A.S., Inc. (landowner/developer), Debtor, stayed an action by Appellee against the non-debtor Appellants (mortgage holders) and therefore the First Amended Complaint to Foreclose Lien filed by Appellee to join the Appellants, after the statute of limitations provided by Wyoming Statutes § 29-2-109 had run, was nonetheless timely filed?

We would add, as a related or sub-issue:

If 11 U.S.C. § 362 (1982 & Supp. IV 1986) effectively stayed the filing of the first amended complaint by appellee, did that section, in conjunction with 11 U.S.C. § 108(c) (1982 & Supp. IV 1986), operate to toll the statute of limitations found in Wyo.Stat. § 29-2-109 (1977) requiring commencement of an action to foreclose a contractors'/materialmen's lien within 180 days after filing the lien statement?

The relevant facts in this case involve its procedural framework, and these facts are not in dispute. Appellee initiated the action by filing a complaint on June 17, 1986, against W.A.S., Inc. (W.A.S.), a Wyoming corporation, George M. Wilson (Wilson), and Thelma Hickman (Hickman) to foreclose a contractors' lien for architectural and engineering services provided pursuant to a contract for the improvement of certain properties owned by the named defendants. Defendants Wilson and Hickman answered, but default was entered against W.A.S. on July 14, 1986. On August 11, 1986, a default judgment and judgment authorizing foreclosure of the lien was entered against W.A.S. Thereafter, on September 8, 1986, W.A.S. filed a motion to stay enforcement of the judgment and a motion for relief from judgment. On that same date, the district court signed an order granting a stay of enforcement pending resolution of the motion for relief from judgment.

All proceedings in the case came to a halt on September 12, 1986, when W.A.S. filed a voluntary petition in the United States Bankruptcy Court for the District of Colorado pursuant to chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 1101-1174 (1982 & Supp. IV 1986). The bankruptcy court dismissed the chapter 11 petition on January 20, 1987. On January 30, 1987, appellee filed a request to amend his complaint to add appellants as defendants pursuant to W.R.C.P. 15. Appellee indicated in this request that, as a result of the preparation of a foreclosure guaranty, he became aware of a mortgage held by appellants against the property owned by W.A.S. An order allowing appellee to file his amended complaint was entered on February 9, 1987 and the amended complaint was filed on that date. In his amended complaint, appellee alleged that his contractors' lien was prior and superior to the mortgage of appellants, and he requested that the district court so declare and order the mortgage of appellants to be forever barred and terminated. After their motion to dismiss was denied, appellants answered the amended complaint.

On April 9, 1987, the district court entered an order dismissing defendants Wilson and Hickman from the suit pursuant to a stipulation among the parties. Appellee then filed a motion for summary judgment against appellants, and appellants renewed their motion to dismiss. After further denials and renewals of the motions, the district court held a hearing on November 23, 1987, on appellee's motion for summary judgment. An order granting summary judgment to appellee was entered on December 31, 1987. The order provided in pertinent part:

IT IS HEREBY ORDERED that Summary Judgment be granted in favor of Plaintiff, Thomas A. Shelden, d/b/a Atria Architects, and against the Defendants, Diamond Hill Investment Company and Sage Capital Corporation;

IT IS FURTHER ORDERED that the Motion to Dismiss and defense of Failure to State a Cause of Action for Which Relief can be Granted of Diamond Hill Investment and Sage Capit[a]l Corporation are hereby denied;

IT IS FURTHER ORDERED that the lien of Thomas A. Shelden, d/b/a Atria Architects, is superior and prior to the mortgage held by Diamond Hill Investment Company and Sage Capital Corporation;

IT IS FURTHER ORDERED that the Plaintiff, Thomas A. Shelden, d/b/a Atria Architects, have judgment on his lien in the amount of $93,816.06 and declaratory relief against Diamond Hill Investment Company and Sage Capital Corporation;

IT IS FURTHER ORDERED that * * * Plaintiff, Thomas A. Shelden, d/b/a Atria Architects, is hereby authorized to foreclos[ ]e his mechanic's lien against the following described property:

[A specific description of the subject property was inserted here.]

IT IS FURTHER ORDERED that the property and all improvements thereon above-described be sold at a public sale by the Sheriff of Laramie County or one of his deputies in accordance with the applicable statutes, with the proceeds used to pay the lien and any excess proceeds applied as provided by law.

In appealing from this order, appellants do not challenge the determination by the district court that the lien of appellee was prior and superior to the mortgage of appellants. Appellants limit their appeal, rather, to the question of whether, despite the intervening bankruptcy proceedings involving the owner of the property, the statute of limitations for commencing a foreclosure action on a contractors' lien had run in relation to the claim against appellants, thereby barring appellee from adding appellants as party defendants and foreclosing appellants' interest in the subject property. 1 This is purely a question of law.

Summary judgment is properly granted only upon the dual findings that there is no genuine issue of material fact and that the prevailing party is entitled to judgment as a matter of law. Farr v. Link, 746 P.2d 431 (Wyo.1987). Where, as in this case, the facts are not in dispute and the issue involves only a question of law, we accord no special deference to, and are not bound by, the decision of the district court. Id. Thus, we must determine whether the district court, in applying the relevant statutes, correctly found that appellee was entitled to judgment as a matter of law.

Wyo.Stat. § 29-1-201(a)(i)(A)(I) (1977) provides that, for purposes of the Wyoming lien statutes, an architect is a contractor. Architects, therefore, are included in the provisions regarding liens of contractors and materialmen. Wyo.Stat. §§ 29-2-101 to -109 (1977). These liens are commonly referred to as mechanics' liens. 2 Appellee properly perfected his lien against the subject property by filing a lien statement with the county clerk in compliance with Wyo.Stat. §§ 29-1-301, 29-2-106, and 29-2-107 (1977). Crucial to the issue in this case is the effect of § 29-2-109, which provides:

All actions to foreclose or enforce a lien under this chapter shall be commenced within one hundred eighty (180) days after the filing of the lien statement. No lien shall continue to exist except by virtue of the provisions of this chapter for more than one hundred eighty (180) days after the lien is filed unless an action to foreclose the lien is instituted.

Appellee filed his lien statement on April 28, 1986. The 180 days within which he had to commence an action to foreclose or enforce his lien expired on October 27, 1986. W.R.C.P. 3(a) provides that an action is commenced by the filing of a complaint with the court, and paragraph (b) of that rule further states in relevant part:

For purposes of statutes of limitation, an action shall be deemed commenced on the date of filing the complaint as to each defendant, if service is made on him or on a co-defendant who is a joint contractor or otherwise united in interest with him, within sixty (60) days after the filing of the complaint.

(Emphasis added.) In Peters v. Dona, 49 Wyo. 306, 324, 54 P.2d 817, 822-23 (1936) (quoting Hiller v. Schulte, 184 Mo.App. 42, 167 S.W. 461, 462 (1913)), we said:

"And it is well settled that, where parties are thus brought in by an amendment, the suit as to them is begun at the time of such amendment making them parties. The amended petition as to them is the filing of a new suit. And, as an action to enforce a mechanic's lien must be brought within 90 days after the filing of the lien, after the lapse of that time new parties cannot be brought in by amendment and be thus affected by the proceeding."

Quoted in Seafirst Mortgage Corporation v. Specialty Concrete Construction, 708 P.2d 1245, 1247 (Wyo.1985).

Appellee timely brought an action to foreclose his lien against the property of defendants...

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