Marque Plumbing, Inc. v. Barris

• Decision Date: 14 January 1986
• Docket Number: No. C0-85-1295,C0-85-1295
• Citation: 380 N.W.2d 174
• Court: Minnesota Court of Appeals
• Parties: MARQUE PLUMBING, INC., Appellant, v. Marty A. BARRIS, et al., Respondents, Cinnamon Ridge Carriage Homes Association, et al., Defendants.

Page 174

380 N.W.2d 174

MARQUE PLUMBING, INC., Appellant, v. Marty A. BARRIS, et al., Respondents Cinnamon Ridge Carriage Homes Association, et al Defendants.

No. C0-85-1295.

Court of Appeals of Minnesota.

Jan. 14, 1986.

Review Denied March 24, 1986.

Syllabus by the Court

1. Subcontractor's appeal is not moot when, as a result of its failure to post a supersedeas bond at one and one-half times the amount of the lien claim, the trial court discharged its mechanic's lien and lis pendens.

2. The trial court properly granted summary judgment in favor of respondents when the subcontractor failed to perfect its lien by serving the vendor-contractor who had no interest in the property and not serving the legal owner of record.

Kurt M. Anderson, Thomas P. Balyk & Associates, St. Paul, for appellant.

Daniel J. Biersdorf, David R. Mylrea, Estes, Parsinen & Levy P.A., Minneapolis, for respondents.

Heard, considered and decided by HUSPENT, P.J., and FOLEY and FORSBERG, JJ.

OPINION

HUSPENI, Judge.

This is a mechanic's lien foreclosure case initiated by appellant Marque Plumbing, Inc. (Marque) against property owners of the Cinnamon Ridge Carriage Homes development. On June 3, 1985, the trial court granted summary judgment for respondents based on Marque's failure to meet the notice requirements in the mechanic's lien statute, Minn.Stat. Sec. 514.011 (1982). Summary judgment was also entered in favor of twelve other homeowners. Nine of those cases were consolidated in a separate appeal. All encumbrances by the court and the lis pendens were subsequently discharged when Marque failed to post a supersedeas bond. Respondent now claims the appeal is moot. We find that the issues are not moot and affirm the trial court's summary judgment in favor of respondents.

FACTS

In November 1982, respondent Marty Barris entered into a purchase agreement with Zachman Homes Incorporated for construction of a new home in Cinnamon Ridge, a residential development in Eagan. Prior to November 1982, Zachman was the fee owner of the property. On November 28, 1982, Barris completed an option sheet for the purchase of the new home, the subject matter of this particular litigation.

Marque was a subcontractor for Zachman in the Cinnamon Ridge development and provided plumbing services and material pursuant to its contract with Zachman. Marque commenced supplying labor and materials to the property in question on January 25, 1983. Work was completed on February 24, 1983.

Subsequently, Marque requested and received the names of three homeowners as provided under the pre-lien notice statute, Minn.Stat. Sec. 514.011, subd. 3 (1982). Marque served timely pre-lien notice on two of the homeowners on February 3, 1983. Zachman became uncooperative in providing homeowners' names after that time. Barris' name was not included in the homeowner information provided by Zachman. It is undisputed that Barris never received pre-lien notice from Marque. Zachman never paid Marque for its work or materials, and on November 2, 1983, Zachman filed bankruptcy.

On February 16, 1983, Barris executed a warranty deed, a mortgage to respondent David C. Bell Investment Company and an assignment of mortgage to Lumberman's Development Corporation. The deed was recorded in the office of the Dakota County Recorder on March 2, 1983.

Marque then filed a lien statement describing the Barris property and other real estate pursuant to Minn.Stat. Sec. 514.08 (1982). The lien statement, recorded on May 16, 1983, listed Zachman Homes as "owner" of the premises and indicated that it had been served a copy of the statement. Barris never received a copy of this statement.

The trial court determined that Barris was the "owner" of the property since he had acquired an interest in the property prior to Marque's first item of work on January 25, 1983. As such, he was entitled to pre-lien notice within the 45-day period prescribed in Minn.Stat. Sec. 514.011, subd. 2 (1982). Because it was undisputed that Barris never received notice, the trial court determined that summary judgment was proper.

On June 25, 1985, the trial court ordered Marque to post a supersedeas bond at one and one-half times the amount of each lien claim to continue the lis pendens. Marque then moved to either reduce or vacate the bond. On July 30, 1985, this court denied relief. Marque's petition for further review of that decision in the Minnesota Supreme Court was subsequently denied.

Respondents then moved the trial court for an order discharging the mechanic's lien and the lis pendens. On September 26, 1985, the trial court granted respondents' motion but stayed the order until October 7, 1985. On October 9, 1985, this court declined to stay the discharge order. On October 14, 1985, respondents moved to dismiss this appeal as moot. Marque was granted time to respond. On October 23, 1985, this court ordered that decision on respondents' motion to dismiss be deferred and considered with the merits of the appeal.

ISSUES

1. Does the trial court's discharge of the mechanic's lien and the lis pendens due to Marque's failure to post a supersedeas bond make this appeal moot?

2. Did the trial court err in determining as a matter of law that Marque failed to provide a valid pre-lien notice and that service of a post-lien statement on a contractor-vendor is invalid when a deed to the property was recorded by the purchaser more than two months prior to service of the statement?

ANALYSIS

I.

Barris argues that this appeal is moot since the mechanic's lien and the lis pendens were discharged for Marque's failure to post a supersedeas bond. We cannot agree. While we would deem the appeal moot if Barris had transferred the property to a bona fide purchaser, such is not the case here. All parties on appeal are the same parties that appeared in the original proceeding. Under these circumstances, we would effectively deprive a lien holder a right to appeal if we were to declare that appeal moot for failure to file a supersedeas bond.

II.

Summary judgment shall be entered only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to judgment as a matter of law." Minn.R.Civ.P. 56.03. On review, a court must view the evidence most favorably to the party against whom the motion for summary judgment was granted. Grondahl v. Bulluck, 318 N.W.2d 240, 242 (Minn.1982).

The proper statutory framework for this appeal is found in Minn.Stat. Sec. 514.011 which states in part:

Subd. 2 * * * Every person who contributes to the improvement of real property so as to be entitled to a lien pursuant to section 514.01 except a party under direct contract with the owner must, as a necessary prerequisite to the validity of any claim or lien, cause to be given to the owner or his authorized agent, either by personal delivery or by certified mail, not later than 45 days after the lien claimant has first furnished labor, skill or materials for the improvement, a written notice * * *.

* * *

Subd. 5 * * * For the purposes of this section, "owner" means the owner of any legal or equitable interest in real property whose interest in the property (1) is known to one who contributes to the improvement of the real property, or (2) has been recorded or filed for record if registered land, and who enters into a contract for the improvement of the real property.

Minn.Stat. Sec. 514.011, subds. 2 and 5 (1982) (emphasis added). In addition to pre-lien notice, a subcontractor must also perfect the lien. Section 514.08 provides in part:

Subdivision 1. The lien shall cease at the end of 90 days after doing the last of such work, or furnishing the last item of such skill, material, or machinery, unless within such period:

(1) A statement of the claim therefor, be filed for record with the county recorder of the county in which the improved premises are situated, * * * and

(2) A copy of such statement be served personally or by certified mail on the owner or his authorized agent or the person who entered into the contract with the contractor.

Subd. 2. Such statement shall be made by or at the instance of the lien claimant, be verified by the oath of some person shown by such verification to have knowledge of the facts stated, and shall set forth:

* * *

(6) The name of the owner [of the property] at the time of making such statement, according to the best information then had * * *.

Minn.Stat. Sec. 514.08, subds. 1 and 2(6) (1982) (emphasis added). ¹

Pre-Lien Notice

The trial court based its determination regarding pre-lien notice on C.W. Stark Lumber Co. v. Sether, 257 N.W.2d 556 (Minn.1977), Dolder v. Griffin, 323 N.W.2d 773 (Minn.1982), and Mill City Heating & Air Conditioning Co. v. Nelson, 351 N.W.2d 362 (Minn.1984).

In Stark, the supreme court held that a materialman must give pre-lien notice to a vendee under a purchase agreement if the vendee's executory interest was acquired prior to the first delivery of materials. In so holding, the court addressed the difficulty involved when there are two concurrent "owners," the contractor and the buyer under a purchase agreement. The court concluded that the most equitable way to read the notice provisions under the statute was to find that the contractor did not qualify as an "owner." Stark, 257 N.W.2d at 560. The decision was based in part on the 1973 amendments to the mechanic's lien statute which implemented the notice provisions of section 514.011. Amendment of this section stemmed from the frequent problems faced by homeowners who were unaware of mechanic's liens filed against their property. Id. at 560 n.1.

In Dolder, the supreme court held that the homeowners possessed an equitable interest in property when they executed a contract for sale of the property. As such, they were "owners" under the statute and entitled to...