Parkwest Homes, LLC v. Barnson

• Decision Date: 18 April 2013
• Docket Number: No. 38919.,38919.
• Citation: 154 Idaho 678,302 P.3d 18
• Court: Idaho Supreme Court
• Parties: PARKWEST HOMES, LLC, an Idaho limited liability company, Plaintiff–Appellant, v. Julie G. BARNSON, an unmarried woman; and Mortgage Electronic Registration Systems, Inc., a Delaware corporation, as nominee for Homecomings Financial, LLC aka Homecomings Financial Network, Inc., Defendants, and Residential Funding Real Estate Holdings, LLC, a Delaware limited liability company, Intervenor–Respondent.

154 Idaho 678

302 P.3d 18

PARKWEST HOMES, LLC, an Idaho limited liability company, Plaintiff–Appellant,

v.Julie G. BARNSON, an unmarried woman; and Mortgage Electronic Registration Systems, Inc., a Delaware corporation, as nominee for Homecomings Financial, LLC aka Homecomings Financial Network, Inc., Defendants,andResidential Funding Real Estate Holdings, LLC, a Delaware limited liability company, Intervenor–Respondent.

No. 38919.

Supreme Court of Idaho Boise, December 2012 Term.

April 18, 2013.

Moffatt Thomas Barrett Rock & Fields, Chtd, Boise, attorneys for Appellant. Robert Burns argued.

Hawley, Troxell, Ennis & Hawley, LLP, Boise, attorneys for Respondent. Geoffrey Wardle argued.

SUBSTITUTE OPINION,

THE COURT'S PRIOR OPINION DATED FEBRUARY 4, 2013 IS HEREBY WITHDRAWN

W. JONES, Justice.

I. NATURE OF THE CASE

This is an appeal from an order granting summary judgment in an action to foreclose a mechanic's lien by ParkWest Homes, LLC ("ParkWest") against Julie Barnson ("Barnson") and Mortgage Electronic Services, Inc. ("MERS"). In ParkWest Homes, LLC v. Barnson, 149 Idaho 603, 238 P.3d 203 (2010) (hereinafter "ParkWest I "), this Court held that ParkWest's lien on the property was valid. After this Court's decision in ParkWest I, property encumbered by ParkWest's lien was conveyed to Residential Funding Real Estate Holdings, LLC ("Residential") via a trustee's sale conducted by First American. Residential intervened in this action and sought summary judgment. The district court dismissed MERS from the action and granted Residential summary judgment. It ruled that Residential took the property free and clear of ParkWest's lien on the property, because neither Residential nor its predecessors-in-interest were named in this action. ParkWest appeals the district court's grant of summary judgment.

II. FACTUAL AND PROCEDURAL BACKGROUND

The facts giving rise to the current action were described by this Court in ParkWest I:

On March 27, 2006, ParkWest Homes LLC and [Julie] Barnson both signed a written contract dated March 15, 2006, under which ParkWest agreed to construct a home on certain real property for $422,000. At the time that the parties negotiated and executed the contract, ParkWest was not registered under the Idaho Contractor Registration Act, Idaho Code §§ 54–5201 to 54–5212 (Contractor Act). On April 7, 2006, Barnson purchased the property upon which the home was to be built.

ParkWest registered under the Contractor Act on May 2, 2006; it commenced construction of the home on May 22, 2006; and it claims to have substantially completed construction on November 1, 2006.

ParkWest and Barnson later had a dispute as to whether she had paid all sums due. On November 28, 2006, ParkWest recorded a mechanic's lien against the property, claiming that the sum of $189,117.99, plus interest, was due for labor and materials it furnished in constructing the home.

On November 14, 2006, two deeds of trust were recorded against the property. Mortgage Electronic Services, Inc., (MERS) is the beneficiary under both deeds of trust.

149 Idaho at 604–05, 238 P.3d at 204–05. In addition to MERS being named the beneficiary under the deed of trust, Transnation Title ("Transnation") was named the trustee. On June 28, 2007, First American was appointed the successor trustee.

On August 7, 2007, ParkWest filed an action to foreclose its lien. It named only Barnson and MERS as party-defendants. It did not name either Transnation, the original trustee, or First American, the successor trustee. On August, 13, 2007, ParkWest recorded a lis pendens with the Canyon County Recorder. On September 13, 2007, ParkWest recorded an amended lis pendens. On September 30, 2008, ParkWest and Barnson filed a Stipulation for Entry of Final Judgment. This stipulation enabled ParkWest to take immediate possession of the property, and in return ParkWest agreed to release Barnson from any personal liability ("Barnson Judgment"); neither MERS nor First American was a party to this stipulation.

On October 2, 2008, MERS filed a motion for summary judgment arguing that ParkWest's mechanic's lien was void because ParkWest failed to comply with I.C. §§ 45–507, 45–525. ParkWest I, 149 Idaho at 605, 238 P.3d at 205. On October 6, 2008, ParkWest filed the Second Amended Complaint to Foreclose its lien. On October 7, 2008, the district court entered judgment against Barnson, which was recorded the same day. The Judgment against Barnson did not name Residential nor any of its predecessors-in-interest.

On January 26, 2009, the district court granted summary judgment in favor of MERS. ParkWest appealed the district court's order to this Court on March 9, 2009. On July 20, 2009, because of Barnson's default, the deed of trust was foreclosed by First American through a trustee's sale. First American conveyed the property to Residential through a Trustee's Deed.

In ParkWest I, decided on June 25, 2010, this Court reversed the district court's grant of summary judgment. ParkWest I, 149 Idaho at 609, 238 P.3d at 209. In that case, this Court decided that ParkWest adequately complied with I.C. § 45–507, and its lien was not lost under the Contractor Act. Id. ("Therefore, [ParkWest] is entitled to a lien on the property").

On September 14, 2010, ParkWest filed a third complaint to foreclose its lien. Again, it named only Barnson and MERS, and did not name Transnation, First American, or Residential. Residential intervened in the action on November 10, 2010. MERS sought to be dismissed by the district court on November 12, 2010. MERS no longer held any interest in the property, because the property was conveyed to Residential during a trustee's sale. The district court dismissed MERS in its decision dated February 16, 2011.

Residential sought summary judgment on November 17, 2010, claiming that ParkWest's lien was not valid against Residential, because ParkWest did not commence an action against Residential's predecessor-in-interest, First American, within six months of filing its lien pursuant to I.C. § 45–510. Because ParkWest failed to commence an action against First American, Residential maintained that it took the property free and clear of ParkWest's lien. The district court granted Residential's motion for summary judgment on February 16, 2011. Final judgment was entered in favor of Residential on March 1, 2011. After the district court disposed of post-judgment orders, ParkWest timely filed its Notice of Appeal on June 21, 2011.

III. ISSUES ON APPEAL

1. Whether the "law of the case" doctrine forecloses additional challenges to the validity of a lien, when the party presently challenging the lien was not a party to the prior appeal.

2. Whether a lienor seeking to enforce a mechanic's lien against property encumbered by a deed of trust must name the trustee of the deed of trust within the period of time required by statute to give the lien effect against subsequent holders of legal title.

3. Whether ParkWest's judgment against Barnson, of which Residential had constructive notice, gives rise to any claim against the property.

IV. STANDARD OF REVIEW

An appeal from summary judgment is reviewed under the same standard a district court uses when granting a motion for summary judgment. A & J Const. Co., Inc. v. Wood, 141 Idaho 682, 684, 116 P.3d 12, 14 (2005). Under Rule 56(c) of the Idaho Rules of Civil Procedure, summary judgment is proper if "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." If the evidence reveals no disputed issues of material fact, then summary judgment should be granted. Smith v. Meridian Joint Sch. Dist. No. 2, 128 Idaho 714, 718–19, 918 P.2d 583, 587–88 (1996). In making this determination, "all disputed facts are liberally construed in favor of the non-moving party." McCoy v. Lyons, 120 Idaho 765, 769, 820 P.2d 360, 364 (1991). Circumstantial evidence can create a genuine issue of material fact. Id. Inferences that can reasonably be made from the record are made in favor of the non-moving party. Id. However, the non-moving party may not rest on a mere scintilla of evidence. Id. If the record raises neither a question of witness credibility nor requires weighing the evidence, then summary judgment should be granted. Merrill v. Duffy Reed Constr. Co., 82 Idaho 410, 414, 353 P.2d 657, 659 (1960). "The moving party is entitled to judgment when the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to that party's case...." Badell v. Beeks, 115 Idaho 101, 102, 765 P.2d 126, 127 (1988).

On review, the interpretation of a statute is an issue of law over which the Supreme Court exercises free review. Idaho Fair Share v. Idaho Public Utilities Comm'n, 113 Idaho 959, 961–62, 751 P.2d 107, 109–110 (1988), overruled on other grounds by J.R. Simplot Co. v. Idaho State Tax Comm'n, 120 Idaho 849, 820 P.2d 1206 (1991). Our primary function when interpreting a statute is to give effect to the legislative intent, which should be derived, where applicable, from the clearly expressed intent of the legislature. Payette River Prop. Owners Ass'n v. Bd. of Comm'rs of Valley Cnty., 132 Idaho 551, 557, 976 P.2d 477, 483 (1999) ; George W. Watkins Family v. Messenger, 118 Idaho 537, 539–40, 797 P.2d 1385, 1387–88 (1990).

V. DISCUSSION

A. The "Law of the Case" Doctrine.

The first issue is whether the "law of the case" doctrine forecloses additional challenges to the validity of a lien, when the party challenging the validity of the lien was not a party to the prior appeal. We hold it does not.

ParkWest argues that the district court erred when it ruled that the "law of the case" doctrine did not foreclose additional challenges to the validity of ParkWest's lien. ParkWest argues that the "law of the case" doctrine precludes any arguments that could have been raised...