Warren Supply Co. v. Duerr, Pliley, Thorsheim Development, Inc., 14425

• Decision Date: 03 October 1984
• Docket Number: No. 14425,14425
• Citation: 355 N.W.2d 838
• Parties: WARREN SUPPLY COMPANY, Plaintiff, and River View Apartments Partnership, Intervenor and Appellee, v. DUERR, PLILEY, THORSHEIM DEVELOPMENT, INC., A South Dakota Corporation, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 838

355 N.W.2d 838

WARREN SUPPLY COMPANY, Plaintiff and River View Apartments Partnership, Intervenor and Appellee, v. DUERR, PLILEY, THORSHEIM DEVELOPMENT, INC., A South Dakota Corporation, Defendant and Appellant.

No. 14425.

Supreme Court of South Dakota.

Oct. 3, 1984.

R. James Krueger, Jr. and Frank Driscoll, Legal Intern of DeVany & Krueger, Vermillion, for intervenor and appellee.

Jerry L. Pollard of Light Law Offices, Yankton, for defendant and appellant.

WOLLMAN, Justice.

This is an appeal by Duerr, Pliley, Thorsheim Development, Inc. (DPT), from a summary judgment entered in favor of River View Apartments Partnership, intervenor (Partnership), and denying DPT's motion for summary judgment. We affirm.

DPT began construction of two twelve-plex apartment houses in Vermillion in 1979. In April of 1980, one of DPT's suppliers commenced a mechanics lien foreclosure action against the apartment houses. This action named as parties Home Trust Savings and Loan Association of Vermillion (Home Trust), mortgagee in the two, one-hundred-eighty-day redemption mortgages executed by DPT, together with certain other lienholders. Additional lien claimants subsequently intervened in the action. The trial court entered an order appointing a receiver on August 5, 1981. DPT thereafter filed a Chapter 11 bankruptcy petition, which made no separate reference to the items of property discussed below, together with a plan of reorganization to convert the apartments to condominiums. This plan was denied by the bankruptcy court. Following the dismissal of the bankruptcy petition, Home Trust moved for summary judgment on the issue of the priority of liens. On February 1, 1983, all of the parties entered into a stipulation regarding their respective claims. Counsel for DPT dictated a stipulation into the record, a portion of which reads as follows:

[T]he mortgagor, the mortgagee, and the respective mechanics lien claimants have arrived at a basis upon which this matter can be settled without further trial. The settlement will occur in segments whereby the respective claimants will stipulate as to the positions they now take and have been allocated by the other parties. The mortgagor, Duerr, Pliley, Thorsheim Development, Inc., will stipulate and agree to the following: That the real estate mortgages held by Home Trust Savings and Loan shall be foreclosed according to South Dakota law. And it is conceded by mortgagor that those mortgages are one hundred and eighty day redemption mortgages. The mortgagee and the respective mechanics lien claimants will advise the court as to the full amount of their claims, which will include interest to the date of this trial. And those sums and amounts will also be stipulated to by mortgagor. The real estate, which consists of two tracts, will be offered for sale and sold pursuant to South Dakota law, and the mechanics lien claimants will as individuals or as a partnership or other business entity, bid in the parcels for the total amount of the outstanding balance on the real estate mortgages, plus the total amount of the mechanics liens represented by participants in such business entity. And that there will be no deficiencies against mortgagor.

The provisions of the stipulation were incorporated into a judgment entered on February 5, 1983. The judgment decreed that Home Trust was entitled to a sale of the apartment complexes and that the proceeds of the sale be applied first to the payment of the sums due on the mortgages and then to satisfy the mechanics liens. The judgment further provided that Home Trust and the lienholders, by arrangement between them, would appear at the foreclosure sale and bid a sum equal to the total unpaid balance of the mortgage and the liens, together with accrued interest, in the total amount of $490,250.26, with the result that no deficiency judgment would be taken by any of the parties to the action against DPT. Further, the judgment provided that DPT should have the possession of and rents from the premises during the period of redemption.

With respect to the claims of the several lien claimants, the judgment provided as follows:

(4) That each of the following named mechanics lien claimants has a valid lien upon both said Lots 3 and 4 of Block 6 of Ridgecrest Seventh Addition to the City of Vermillion, Clay County, South Dakota in the amount set forth after its name, as follows:

                Skogen-Petersen, Inc.             $6,357.00
                O'Neill & O'Heren Drywall         15,138.00
                Rosebud Manufacturing, Inc.       14,059.00
                Warren Supply Company             28,255.00
                Muth Electric                     20,436.00
                Honest John's Morton Interiors    57,807.00
                Vermillion Construction Co.       15,985.00
                Turner Plumbing and Heating       20,888.00
                Ken's Sheet Metal and Heating      6,520.00
                                                -----------
                TOTAL                           $185,445.00
                

which are junior only to the above described mortgages of Home Trust Savings and Loan Association[.]

Pursuant to this judgment, the property was sold at foreclosure sale on February 18, 1983, for $485,570.04 to Partnership, which had been formed by the several lienholders following the February 1, 1983, stipulation for the purpose of purchasing the apartment complexes at the foreclosure sale.

Following the foreclosure sale, DPT...