Feitler v. Springfield Enterprises, Inc.

978 N.E.2d 1160, 2012 Ind. App. LEXIS 555, 2012 WL 5420413
CourtIndiana Court of Appeals
DecidedNovember 7, 2012
DocketNo. 17A04-1206-PL-297
StatusPublished
Cited by1 cases

This text of 978 N.E.2d 1160 (Feitler v. Springfield Enterprises, Inc.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Feitler v. Springfield Enterprises, Inc., 978 N.E.2d 1160, 2012 Ind. App. LEXIS 555, 2012 WL 5420413 (Ind. Ct. App. 2012).

Opinion

OPINION

BRADFORD, Judge.

At some point in mid-2010, Fred and Mary Anna Feitler, who were the sole beneficiaries of a land trust that owned real estate in DeKalb County, contracted with Cedar Creek Homes (“CCH”) to build a house on the property. Among other things, the Feitlers and CCH agreed that no mechanic’s lien could attach to the property in the event of nonpayment. CCH engaged several subcontractors, including Springfield Enterprises, J. Laurie Commercial Floors, LLC, and JM Woodworking Company, to work on the house. In February of 2011, before the house was completed, CCH informed all concerned that it was ceasing operations and would not be completing the house. When the dust settled, it appears that all subcontractors except Springfield, J. Laurie, and JM were paid off, and all three ultimately became involved in litigation against the Feitlers and the land trust. J. Laurie and JM argued that they should be able to hold mechanic’s liens against the property in question, while all three former subcon[1163]*1163tractors contended that they should be able to secure money judgments against the Feitlers. The trial court agreed with all of these arguments and entered summary judgment in favor of all three subcontractors on each of these claims.

On appeal, the Feitlers and the land trust contend that neither J. Laurie nor JM should be able to hold a mechanic’s lien against the real estate and also that the trial court erred in entering summary judgment in favor of the subcontractors on the question of personal liability. We agree that neither J. Laurie nor JM can hold a mechanic’s lien against the real estate and also conclude that the question of the Feitlers’ personal liability to the subcontractors should go to trial.

FACTS AND PROCEDURAL

HISTORY

A. Facts

The Feitlers reside in and created the Feitler Family Trust (“the Trust”) in De-Kalb County, which is also where the real estate that is the subject of this litigation (“the Property”) is located. Mary Anna and Fred Feitler are the sole co-trustees and sole beneficiaries of the Trust, which was created on November 1, 2007. In November of 2007, the Property was transferred from Mary Anna to the Trust. On July 7, 2009, the Feitlers entered into a no-hen agreement (“the Agreement”) with CCH, a contractor hired to build a home on the Property for a contract price of $478,225.00. The Agreement listed the Feitlers as the owners of the Property. On July 9, 2009, the Agreement was recorded in DeKalb County. On July 31, 2009, the Trust conveyed the Property back to the Feitlers via a trustee’s deed. Also on July 31, 2009, the Feitlers executed a mortgage on the Property in favor of Three Rivers Federal Credit Union as security for a $350,000.00 loan. The mortgage and trustee’s deed were recorded on August 7, 2009. On December 23, 2009, the Feitlers conveyed the Property back to the Trust, and the quit-claim deed was recorded on December 30, 2009. On or about February 2, 2010, CCH notified Ap-pellees and the Feitlers that it was ceasing business operations, would not complete work on the Property, and would make no further payments to Appellees. In response to a later interrogatory, Three Rivers indicated that it had issued four draws of $91,645.00 each to CCH as of February 2, 2010, for a total of $366,580.00.

Between January 7 and 29, 2010, J. Laurie, a subcontractor to CCH, provided certain labor and materials to the Property, specifically flooring, some of which was in place as of February 2, 2010. On February 11, 2010, J. Laurie executed a pre-lien notice of intention to preserve mechanic’s lien rights, which notice was recorded the next day. Also on February 11, 2010, J. Laurie sent a notice of personal liability pursuant to Indiana’s personal liability notice statute (“the PLN statute”) to the Feitlers and the Trust. On March 5, 2010, J. Laurie executed a notice of mechanic’s lien, which was recorded three days later. The trial court found that the value of materials and services J. Laurie provided was $21,318.30. On April 7, 2010, the Feit-lers caused Three Rivers to pay J. Laurie $4213.62 for flooring materials on the property but not installed as of February 2, 2010.

Springfield subcontracted with CCH to install siding, soffits, and gutters on the Property, providing what the trial court found to be $27,103.36 of materials and services before February 2, 2010. On February 2, 2010, Springfield sent the Feitlers a letter notifying them that failure to pay for work performed might result in the assertion of mechanic’s lien rights. On February 3, 2010, Springfield executed a [1164]*1164notice of mechanic’s lien, which was recorded on February 5. On February 10, 2010, Springfield sent the Feitlers a notice of personal liability pursuant to the PLN statute.

JM subcontracted with CCH to install cabinets on the Property, which were partially installed by February 2, 2010, ultimately providing what the trial court, found to be $21,318.30 in materials and services. On or about February 2, 2010, JM owner John Lengacher discussed the matter with the Feitlers, and Fred guaranteed payment for the cabinets. The Feit-lers made assurances that they would specifically contract with JM to complete the cabinet installation. The cabinet installation was soon completed, and the Feitlers gave Lengacher further assurances that JM would be paid for its work. On February 5, 2010, Lengacher issued an invoice to the Feitlers in the amount of $22,774.95. Fred eventually notified JM that it would not be paid. On February 22, 2010, JM sent the Feitlers a notice of personal liability pursuant to the PLN statute. On February 26, 2010, JM executed a notice of mechanic’s lien, which was recorded the same day.

B. Procedural History 5

On March 4, 2010, Springfield filed a complaint to foreclose its mechanic’s lien and for damages, naming the Feitlers, the Trust, CCH, and Three Rivers as defendants. On April 30, 2010, the Feitlers and the Trust filed a cross-claim against Three Rivers. On June 14, 2010, J. Laurie moved to intervene, and, on July 28, 2010, filed a cross-claim against the Feitlers, the Trust, CCH, and Three Rivers; a counterclaim against Springfield; and a third-party complaint against JM and the DeKalb County Treasurer. On September 10, 2010, JM intervened and filed cross-claims against CCH, the Trust, Three Rivers, the Feitlers, Springfield, J. Laurie, and the DeKalb County Treasurer.

On April 13, 2011, J. Laurie filed for partial summary judgment, seeking to foreclose on its mechanic’s lien and judgment against the Feitlers pursuant to the PLN statute. On May 20, 2011, Springfield filed for partial summary judgment, seeking judgment against the Feitlers pursuant to the PLN statute. On June 1, 2011, JM filed for partial summary judgment, seeking to foreclose on its mechanic’s lien and judgment against the Feitlers pursuant to the PLN statute. On May 14, 2012, the trial court entered partial summary judgment in favor of J. Laurie, Springfield, and JM, ruling that (1) J. Laurie’s and JM’s mechanic’s liens were valid, (2) the Feitlers were personally liable to J. Laurie for $19,756.46 plus pre- and post-judgment interest, (3) the Feitlers were personally liable to Springfield for $31,053.46, and (4) the Feitlers were personally liable to JM for $22,774.95 plus pre- and post-judgment interest.

DISCUSSION AND DECISION

Summary Judgment Standard . of Review

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978 N.E.2d 1160, 2012 Ind. App. LEXIS 555, 2012 WL 5420413, Counsel Stack Legal Research, https://law.counselstack.com/opinion/feitler-v-springfield-enterprises-inc-indctapp-2012.