Credit Bureau of Lewiston-Clarkston, Inc. v. Idaho First National Bank

784 P.2d 885, 117 Idaho 29, 1989 Ida. LEXIS 161

• Court: Idaho Supreme Court
• Decided: December 26, 1989
• Docket: 17894
• Status: Published

Opinions

BAKES, Chief Justice.

Credit Bureau of Lewiston/Clarkston (CBLC) has appealed from the district court’s ruling that, due to their failure to file a lis pendens in connection with their action to foreclose a mechanic’s lien, respondent Idaho First National Bank (IFNB) did not have constructive notice of the lien or the foreclosure action, and that IFNB’s subsequently recorded deed of trust has priority. We affirm.

I

On April 2, 1984, Joe H. Dimke filed a mechanic’s lien for services rendered to S. of K.G. Enterprises. On May 2, 1984, Dimke filed a second claim of lien alleging that the owners of the property against whom the lien was sought were S. of K.G. Enterprises, Stiison Meats, Inc., or Dan Stiison and his wife. The district court found this lien to be valid, and that validity is not questioned on appeal.

On August 30, 1984, CBLC took an assignment of the Dimke claim. On October 2, 1984, a timely action to foreclose the lien was filed by CBLC in Dimke’s name and on February 14, 1985, an amended complaint was filed substituting CBLC for Dimke. CBLC did not file a lis pendens in connection with the foreclosure action.

On January 16, 1985, more than six months after the Dimke lien was filed, IFNB loaned Stiison Meats $100,000.¹ The loan was secured by a deed of trust which applied to the same real property as CBLC’s mechanic’s lien. Prior to making the loan, IFNB obtained a preliminary title report on the property which failed to disclose the claim of lien or the pending foreclosure action. The loan went into default, and on October 23, 1987, IFNB filed an action to foreclose the deed of trust. By this time IFNB had become aware of the mechanic’s lien, and CBLC was named as a defendant. CBLC filed an answer and counterclaim and sought a determination that its mechanic’s lien on the property was prior in time and superior in right to IFNB’s interest.

Both IFNB and CBLC moved for summary judgment on their respective claims, and the district court concluded that IFNB had neither actual nor constructive notice owing to CBLC’s failure to file a lis pendens. The court granted IFNB’s motion for summary judgment and denied CBLC’s.

On May 5, 1988, the district court entered an order on CBLC’s motion for reconsideration, stating that IFNB did not have constructive notice of the mechanic’s lien, but further held that genuine issues of material fact remained as to whether IFNB had actual notice. A trial was then held on the issue of actual notice, and on November 16, 1988, the district court filed findings of fact and conclusions of law holding that IFNB did not have actual notice of CBLC’s mechanic’s lien. Given the prior ruling on constructive notice, the district court concluded that IFNB’s lien was prior in time and superior in right to CBLC’s mechanic’s lien.

On appeal CBLC concedes that IFNB did not have actual notice and appeals only the district court ruling that IFNB did not have constructive notice because of CBLC’s failure to file a lis pendens.

II

The sole issue on appeal is whether it is necessary to file a lis pendens in connection with an action to foreclose a mechanic’s lien in order to give constructive notice of the foreclosure of the lien beyond the six-month period required for commencing such action. We have not ruled on this precise issue in any prior case.

Determination of this issue rests primarily upon an examination of the interrelationship between those provisions of the Idaho Code that govern mechanic’s liens and the lis pendens statute. I.C. § 5-505 (the lis pendens statute) reads as follows:

5-505. Lis pendens. — In an action affecting the title or the right of possession of real property, the plaintiff at the time of filing the complaint, and the defendant at the time of filing his answer, when affirmative relief is claimed in such an answer, or at any time afterward, may file for record with the recorder of the county in which the property or some part thereof is situated, a notice of the pendency of the action____ From the time of filing such notice for record only shall a purchaser or incumbrancer of the property affected thereby be deemed to have constructive notice of the pendency of the action____

I.C. § 45-510 provides in pertinent part:

45-510. Duration of lien. — No lien provided for in this chapter binds any building, mining claim, improvement or structure for a longer period than six (6) months after the claim has been filed, unless proceedings be commenced in a proper court within that time to enforce such lien____

I.C. § 45-516 states:

45-516. Rules of practice and appeals. —Except as otherwise provided in this chapter, the provisions of this code relating to civil actions, new trials and appeals are applicable to, and constitute the rules of practice in, the proceedings mentioned in this chapter: provided, that the district courts shall have jurisdiction of all actions brought under this chapter.

CBLC asserts that under I.C. § 45-510 a properly filed mechanic’s lien will bind the property if an action to foreclose the lien is filed within six months; that no qualifications or limitations can be found in relation to this rule; and that it is superfluous to require the filing of a lis pendens to give notice of an already recorded interest. CBLC also maintains that I.C. § 5-505 does nothing more than alter the common law rule that a suit itself is constructive notice of another’s interest in real property. Conversely, IFNB argues that since an action to foreclose a mechanic’s lien is an action “affecting the title to real property” within the meaning of I.C. § 5-505, there is no constructive notice of an action to foreclose a mechanic’s lien unless a lis pendens is filed, and that the lis pendens statute applies to actions to foreclose mechanic’s liens by virtue of the referral statute, I.C. § 45-516. The district court agreed with IFNB and found that “a party must file a lis pendens in order to secure a mechanic’s lien if the action to enforce the mechanic’s lien extends beyond the six months durational period provided by I.C. 45-510.” We agree.

The language contained in I.C. § 45-516 is straightforward: “Except as otherwise provided in this chapter, the provisions of this code relating to civil actions, new trials and appeals are applicable to ... the proceedings mentioned in this chapter____” (Emphasis added.) Where the meaning of a statute is clear, we are confined to follow that meaning and neither add to nor take away by judicial construction. St. Benedict’s Hospital v. County of Twin Falls, 107 Idaho 143, 686 P.2d 88 (Ct.App.1984).

I.C. § 5-505, a “provision of the Idaho Code relating to civil actions,” states that in actions affecting the title or right to the possession of real property, such as an action to foreclose a mechanic’s lien, the plaintiff may file a notice of the pendency of such action, but a subsequent purchaser or encumbrancer will not be put on constructive notice unless a lis pendens is filed.

We therefore affirm the district court. Costs to respondent. No attorney fees awarded.

JOHNSON and BOYLE, JJ„ and TOWLES, J. Pro Tern., concur.

1 . In 1986, Lewiston Meats, Inc., acquired the assets and assumed the obligations of Stiison Meats, Inc., including the obligation owed to IFNB. On December 12, 1986, the IFNB loan was re-documented to substitute Lewiston Meats, Inc., for Stiison Meats, Inc.