Hidden Meadows Development Co. v. Mills

590 P.2d 1244, 1979 Utah LEXIS 785
CourtUtah Supreme Court
DecidedJanuary 2, 1979
Docket15027, 15157, and 15188
StatusPublished
Cited by29 cases

This text of 590 P.2d 1244 (Hidden Meadows Development Co. v. Mills) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hidden Meadows Development Co. v. Mills, 590 P.2d 1244, 1979 Utah LEXIS 785 (Utah 1979).

Opinions

HALL, Justice:

This is an action in equity seeking specific performance of an option to purchase realty-

Defendants, Dee Mills and Evelyn I. Mills (hereinafter “Mills”), granted the option in question in favor of plaintiff’s predecessor in interest. Subsequently, Mills granted a similar option to defendant, Milton C. Christensen (hereinafter “Christensen”). Mills refused to honor plaintiff’s option which resulted in the filing of the initial complaint and the recording of a Lis Pendens in the office of the county recorder. Thereafter, Mills conveyed various interests in the land in question to defendants, Paradise Valley Estates, Inc., (hereinafter “Paradise”) Lake Hills Company, a limited partnership, (hereinafter “Lake”) Carole Lee Davis, Environmental Resources, Inc., and International Environmental Sciences, a limited partnership (hereinafter “International”). Those conveyances were apparently with the consent of Christensen as he was president of Paradise, the principal of Lake and became the husband of Carole Lee Davis (a partner in International).

The initial trial of the specific performance action resulted in a judgment of dismissal declaring the option void and an appeal was filed to this Court. Supersedeas bond was fixed in the sum of $50,000, however, none was ever furnished. This Court reversed and directed the granting of specific performance of the option.1 On remand, the trial court on August 28, 1973 ordered Mills to transfer the property to plaintiff for the sum of $86,200. In the interim between the entry of the initial judgment and the order of August 28,1973, Lake and Paradise conveyed the land in question to defendant, International, which proceeded to make certain improvements on the land and also made certain conveyances of various portions thereof. When plaintiff was unable to enforce the judgment against Mills due to the interim conveyances, it filed a supplemental complaint and joined as additional parties defendant those persons who had acquired any interest in the subject land subsequent to the entry of the initial judgment of the trial court.

After a trial on the issues raised by the supplemental complaint, the trial court specifically found that all defendants had actual knowledge of the appeal pending in this Court prior to their acquisition of any purported interest in the land and, since the Lis [1247]*1247Pendens remained unreleased, they had constructive notice of plaintiff’s interest as well. The trial court further found that International had made improvements upon the land consisting of land leveling and clearing, installation of culverts, grading of roads, installation of ditches and remodeling and addition to a house situated thereon, all of which had a value of $35,000. The trial court also found that International had undertaken certain planning, platting and rezoning activities with respect to the use of the land, but declined to place any value thereon as an improvement. Accordingly, judgment of specific performance was entered in favor of plaintiff, subject to International’s entitlement to compensation in the amount of $35,000 for improvement made as an occupying claimant.2

Mills, Christensen and International filed separate appeals which have been previously consolidated.3 The basic issue raised by each appeal bears upon the propriety of the trial court’s determination that the recordation of a Lis Pendens precludes the conveyance of a marketable title to lands that are the subject of a pending appeal. Both International and Mills raise additional issues which bear upon their respective positions as occupying claimants, the former contending it is entitled to a further award for expenditures attributable to its efforts to rezone the land, and the latter contending that the trial court erred in refusing to receive proffered evidence of improvements they made to the land.

Plaintiff cross-appeals, challenging the award to International as an occupying claimant on the ground that the improvements were not made in good faith.

First addressing the Lis Pendens issue, we note that appellants simply urge that Lis Pendens has no effect or duration after judgment and pending appeal. A review of the basic doctrine of Lis Pendens, our statutory enactment pertaining thereto, and the prior pronouncements of this Court, fail to sustain their contentions.

Literally, the term “lis pendens” signifies pending litigation and the so-called “doctrine of lis pendens” confirms the power of the courts over property during the pendency of legal proceedings. It charges the public with notice of outstanding claims and causes one who deals with property involved in pending litigation to do so at his peril.4

U.C.A., 1953, 78-40-2 provides as follows:

78-40-2. Lis pendens. — In any action effecting the title to, or the right of possession of, real property the plaintiff at the time of filing the complaint or thereafter, and the defendant at the time of filing his answer when affirmative relief is claimed in such 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, containing the names of the parties, the object of the action or defense, and a description of the property in that county affected thereby. From the time of filing such notice for record only shall a purchaser encumbrancer of the property affected thereby be deemed to have constructive notice of the pendency of the action, and only of its pendency against parties designated by their real names. [Emphasis added.]

The fact that the foregoing statutory provision allows the recordation of a Lis Pendens at any time clearly preserves its integrity after judgment and pending appeal.

Consistent with said statutory provision, this Court long ago recognized the on-going potency and effectiveness of a recorded lis pendens after judgment. In Larsen v. Gas-[1248]*1248berg5 it was held that where real property was levied upon under an execution as the property of the judgment debtor, the filing of a lis pendens notice of a suit by the grantor of the judgment debtor one day before the execution sale imparted notice to the purchaser at such execution sale of all plaintiff’s right, title and interest. Consequently, the deed executed under such circumstances was held to be null and void and was cancelled for want of a bona fide or innocent purchaser.

The sole purpose of recording a lis pendens is to give constructive notice of the pendency of proceedings which may be derogatory to an owner’s title or right to possession.6 One who takes with full knowledge that the property taken is the subject of on-going litigation acquires only the grantor’s interest therein, subject to whatever disposition the court might make of it.7

The rule is well settled that, where a judgment is reversed and remanded with specific instruction or directions, the case stands in the lower court precisely as it did before a trial was had in the first instance.8 Hence, that very situation existed in the instant case as a result of our reversal and remand with directions to grant specific performance.9

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Bluebook (online)
590 P.2d 1244, 1979 Utah LEXIS 785, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hidden-meadows-development-co-v-mills-utah-1979.