Lindstrom v. Custom Floor Covering Inc.

• Decision Date: 03 August 2017
• Docket Number: No. 20150510-CA.,20150510-CA.
• Citation: Lindstrom v. Custom Floor Covering Inc., 402 P.3d 171 (Utah App. 2017)
• Parties: Andrea P. LINDSTROM, Appellant, v. CUSTOM FLOOR COVERING INC., Appellee.
• Court: Utah Court of Appeals

402 P.3d 171

Andrea P. LINDSTROM, Appellant,

v.CUSTOM FLOOR COVERING INC., Appellee.

No. 20150510-CA.

Court of Appeals of Utah.

Filed August 3, 2017

Shaun L. Peck and John D. Luthy, Salt Lake City, Attorneys for Appellant.

Mark B. Hancey, Providence, Attorney for Appellee.

Judge David N. Mortensen authored this Opinion, in which Judges Gregory K. Orme and Stephen L. Roth concurred.¹

Opinion

MORTENSEN, Judge:

¶ 1Andrea P. Lindstrom appeals the district court's decision that a lien encumbering her residence was not wrongful under Utah's Wrongful Lien Act (the Act).We affirm.

BACKGROUND

¶ 2 Lindstrom and her ex-husband (Ex-husband) owned a piece of residential property (the Property) as joint tenants.As part of their January 2010 divorce, Lindstrom was awarded the Property.Initially, neither Lindstrom nor Ex-husband recorded the divorce decree or any other document, such as a quitclaim deed, that transferred ownership in the Property.

¶ 3 In February 2011, Ex-husband executed a promissory note payable to Custom Floor Covering Inc.(CFC), in the amount of $14,685.13.The promissory note granted CFC the right to record liens against "all real and personal property currently held, or hereinafter acquired" by Ex-husband.CFC recorded a notice of lien against the Property that same month.

¶ 4 Lindstrom eventually learned of the lien and, through counsel, wrote a letter to CFC indicating that the lien was wrongful and demanding that the lien be released within ten days.In response, CFC recorded a clarified notice of lien against the Property in June 2011, noting that the lien applies "only against the interests of [Ex-husband]."Lindstrom then recorded the divorce decree in July 2011.Thus, at the time CFC recorded the clarified notice of lien, Ex-husband's name remained on the property's title.But see infra¶ 28 note 7.

¶ 5 In February 2014, Lindstrom again demanded that CFC release the lien.When CFC did not release the lien, Lindstrom filed a petition to nullify a wrongful lien, asking the district court, pursuant to the Act, to declare the lien void and also seeking treble damages, attorney fees, and costs.

¶ 6 After a summary hearing,²the district court concluded that the lien was not wrongful under the statute, explaining that its review must be limited "to what the parties knew at the time the liens were filed."Twenty-two days later, Lindstrom filed a motion to alter judgment under rule 59(e) of the Utah Rules of Civil Procedure.The district court declined to alter its judgment and further stated that it "considers the Motion to Alter Judgment to be a motion to reconsider.Even though counsel has styled it as a Motion to Alter Judgment, the same arguments are being presented to the Court."Twenty-eight days after the court's order was entered, Lindstrom filed a notice of appeal.Lindstrom argues that the district court's conclusion that CFC's lien was not wrongful was in error.

ISSUES AND STANDARDS OF REVIEW

¶ 7 There are two issues before us for review.We first must determine whether the district court's characterization of Lindstrom's motion to alter judgment as a motion to reconsider deprives this court of jurisdiction."Whether appellate jurisdiction exists is a question of law."Rosas v. Eyre , 2003 UT App 414, ¶ 9, 82 P.3d 185(citation and internal quotation marks omitted).We review legal conclusions for correctness.SeeDavis v. Davis , 2003 UT App 282, ¶ 7, 76 P.3d 716.

¶ 8 Second, we must determine whether the district court erred in its determination that CFC's lien on the Property was not wrongful."Whether a lien is wrongful [under the Act] is a question of law which we review for correctness, giving no deference to the [district] court's legal conclusions."Pratt v. Pugh , 2010 UT App 219, ¶ 7, 238 P.3d 1073(citation and internal quotation marks omitted).

ANALYSIS

I.The Motion to Alter Judgment Tolled the Time for Appeal

¶ 9We first examine the district court's conclusion that Lindstrom's motion to alter judgment was actually a motion to reconsider.This question is paramount to Lindstrom's appeal because if her motion was a motion to reconsider, it did not toll the time within which she could file her appeal, and this court lacks jurisdiction to consider it.³SeeGillett v. Price , 2006 UT 24, ¶ 7, 135 P.3d 861.

¶ 10 Rule 4 of the Utah Rules of Appellate Procedure states that a notice of appeal "shall be filed ... within 30 days after the date of entry of the judgment or order appealed from."Utah R. App. P. 4(a).Rule 4 also lists specific motions for which the date of final disposition of that motion replaces the date of the entry of judgment when calculating the timeliness of the notice of appeal.Id. R. 4(b).A rule 59 motion to alter or amend judgment extends the time for appeal, id.R. 4(b)(1)(C), but a motion to reconsider—a motion that does not exist under the Utah Rules of Civil Procedure—does not, Gillett , 2006 UT 24, ¶ 6, 135 P.3d 861.

¶ 11 The Utah Supreme Court analyzed this issue in B.A.M. Development, LLC v. Salt Lake County , 2012 UT 26, 282 P.3d 41.There, the court held, " Rule 4(b) is triggered by the filing of a motion that is properly styled as one of the motions enumerated in the rule and that plausibly requests the relevant relief."Id.¶ 13.The court further concluded that "although B.A.M.'s arguments were unconvincing and repetitive, neither rule 4(b) nor rule 59 require that a posttrial motion make winning arguments to be procedurally proper."Id.¶ 14.

¶ 12 Here, it is undisputed that Lindstrom styled her motion to alter judgment as a proper motion under rule 59 of the Utah Rules of Civil Procedure.Lindstrom's motion also plausibly requested relief under that rule—requesting that the district court alter its judgment against her.The district court nevertheless concluded that the motion was a motion to reconsider because Lindstrom made "the same arguments" to the court in the motion that she argued at the hearing.However, just as in B.A.M. , the "repetitive" arguments here do not affect whether the motion is "procedurally proper."Seeid.Because her motion was "properly styled" as a rule 59(e) motion and "plausibly requests the relevant relief,"we conclude that Lindstrom's motion to alter judgment was "procedurally proper."Seeid.¶¶ 13–14.Therefore, the deadline to file a notice of appeal was tolled until that motion was resolved, and this court has jurisdiction to consider the merits of the appeal.

II.CFC's Lien Was Not Wrongful

¶ 13We now turn to the merits of the appeal.Lindstrom contends that the district court erred in its conclusion that CFC's lien was not a wrongful lien under the Act.

¶ 14The Act provides summary relief to those against whom a wrongful lien is recorded.Utah Code Ann. § 38-9-205(1)(LexisNexis 2014).⁴The district court, through the summary proceeding available in accordance with the Act, "may only determine whether a document is a wrongful lien" and "may not determine any other property or legal rights of the parties or restrict other legal remedies of any party."Id.§ 38-9-205(4).

¶ 15 A wrongful lien is:

any document that purports to create a lien, notice of interest, or encumbrance on an owner's interest in certain real property and at the time it is recorded is not:

...

(c) signed by or authorized pursuant to a document signed by the owner of the real property.

Id.§ 38-9-102(12).The Act requires that the wrongfulness of the lien be determined as of "the time it is recorded."Id."Indeed, we have held that this section requires a court to evaluate the validity of a lien ‘based on the facts known at the time it was recorded, not at a later point in time after evaluating the merits.’ "Pratt v. Pugh , 2010 UT App 219, ¶ 10, 238 P.3d 1073(quotingEldridge v. Farnsworth , 2007 UT App 243, ¶ 50, 166 P.3d 639 ).

¶ 16 The heart of Lindstrom's contention on appeal is that evaluating the wrongfulness of a lien should be based on the facts "as they existed" at the time the lien was recorded, as opposed to evaluating the lien based on "the facts known" at the time the lien was recorded.Lindstrom argues that applying the standard as articulated in Pratt and Eldridge to this case adds a knowledge requirement to the analysis that is absent from the language of the statute.Lindstrom essentially equates determining facts "as they existed" with the ultimate validity of the lien.These arguments ignore controlling precedent and misinterpret the Act.

¶ 17 The leading case on the definition of a wrongful lien under the Act is Hutter v. Dig-It, Inc. , 2009 UT 69, 219 P.3d 918.In Hutter , the Utah Supreme Court addressed whether a lien was valid and whether filing a notice of that lien constituted a wrongful lien.Id.¶ 1.First, the Hutter court determined that the mechanic's lien at issue was unenforceable because of a failure to file a preliminary notice required by law.Id.¶ 43.Second, the Hutter court addressed whether the district court correctly nullified the lien under the Act.Id.¶ 44.The Hutter court recognized that because it had already determined that the district court properly ruled the lien unenforceable, the court did not need to reach the issue of whether the district court properly nullified the lien under the Act.Id.¶ 45.However, because of the importance of the issue, the court took the opportunity to clarify the reach of the Act.Id.

¶ 18 After determining the plain text of the Act was ambiguous, the Hutter court thoroughly reviewed the legislative history of the Act.Id.¶¶ 49–50.The court ultimately determined,

This legislative history makes clear that the legislature intended that the definition of "wrongful lien" should encompass only common law liens.Therefore, we conclude that the phrase "not expressly authorized by ... statute" in the Wrongful Lien Act does not include statutorily created liens that ultimately prove unenforceable.Because [the alleged lien holder] filed a mechanic's lien, which is expressly

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