J.W. Hulme Co. v. Reiling

448 N.W.2d 109, 1989 Minn. App. LEXIS 1249, 1989 WL 141374
CourtCourt of Appeals of Minnesota
DecidedNovember 28, 1989
DocketNo. C9-89-803
StatusPublished

This text of 448 N.W.2d 109 (J.W. Hulme Co. v. Reiling) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J.W. Hulme Co. v. Reiling, 448 N.W.2d 109, 1989 Minn. App. LEXIS 1249, 1989 WL 141374 (Mich. Ct. App. 1989).

Opinion

OPINION

KALITOWSKI, Judge.

Appellant National City Bank of Minneapolis appeals from a judgment granting a mechanics' lien to William Poppenberger & Son, Inc. The trial court exténded the statutory one-year time period for Poppenber-ger to file its answer in order to enforce its lien. We reverse.

FACTS

This action arises from the construction of the Shoreview Plaza Hotel in Ramsey County. National City Bank of Minneapolis (National City Bank) executed a first mortgage on the property on August 29, 1984. This mortgage was recorded at the Ramsey County Recorder’s office on September 12,1984. Construction on the hotel began in the fall of 1984 with William Poppenberger & Son (Poppenberger) performing drywall work. Poppenberger filed a mechanics’ lien statement with the Ramsey County Recorder’s office on January 24, 1986. The statement listed the last day of work as September 30, 1985.

On March 14, 1986, plaintiff J.W. Hulme Co., Inc. foreclosed its mechanics’ lien on the property by filing a complaint in Ramsey County District Court. National City Bank filed its answer on March 25, 1986. Poppenberger apparently served its answer on the plaintiff on or about April 16, 1986. Poppenberger did not file its answer with the court. Poppenberger became aware on or about January 20, 1987, that no answer had been filed. On January 21, 1987, Pop-penberger filed its answer with the clerk of district court. Poppenberger filed an amended mechanics’ lien on January 28, 1987, which changed the last day of work to May 1, 1986.

On February 6, 1987, the trial of the mechanics’ lien actions began. National City Bank moved for the dismissal of Pop-penberger’s claim at trial prior to the receipt of evidence, on the.basis that the lien had not been enforced within the one-year statutory period. Poppenberger was allowed to present its case. At the conclusion of Poppenberger’s evidence, National City Bank renewed its motion for an involuntary dismissal of the claim. The court stated in its findings of fact that appellant had waived the defense by failing to plead it in its answer or to make a motion prior to its answer.

On February 10, 1987, while the trial of the mechanics’ lien claims was in progress, a sheriff’s sale was held to foreclose the mortgage held by National City Bank. National City Bank purchased the property at the sale and no parties exercised their right to redeem. National City Bank sold the property to G.J. Reiling, Inc. on August 12, 1987. In connection with the sale National [111]*111City Bank was required to indemnify the purchaser for any loss which could result from the mechanics’ liens and to defend the purchaser in any actions which might arise relating to these mechanics’ liens.

ISSUES

1. Does National City Bank have standing to bring this appeal through its agreement to defend and indemnify the purchaser of the property?

2. Did National City Bank waive the defense of Poppenberger’s failure to timely enforce its lien by not asserting the defense in its responsive answer?

3. Did Poppenberger have a viable mechanics’ lien on the day in which it filed its answer with the court?

ANALYSIS

1. Standing to appeal.

A party has standing to appeal a final judgment if the party has suffered a real injury. The “injury in fact” standard was articulated by the supreme court in Snyder’s Drug Stores, Inc. v. Minnesota State Board of Pharmacy, 301 Minn. 28, 221 N.W.2d 162 (1974). The rule allowing only a party in interest to bring a claim exists to protect defendants from facing multiple actions on a single claim. Independent School District No. 14 v. Ampro Corp., 361 N.W.2d 138, 144 (Minn.Ct.App.1985), pet. for rev. denied (Minn. Mar. 29, 1985). National City Bank is a party in interest by virtue of its position as an original party to this action. Rule 25.03 of the Minnesota Rules of Civil Procedure allows an original party to pursue the action after a transfer of interest.

In addition, National City Bank has standing to appeal from the judgment because it has agreed to indemnify the purchaser with respect to the Poppenberger lien. The indemnity agreement provides:

* * * * * *
2. Seller shall forever defend, indemnify and hold Purchaser and the Property harmless from and against any and all • loss, claims, or damage arising from or related to the Liens; provided that the mere continued existence of such Liens or any of them as a possible cloud or encumbrance on Purchaser’s title shall not be a ground for invoking any undertaking of Seller hereunder.
* * * * # *

National City Bank has not only agreed to indemnify the purchaser, but by agreeing to defend against any claims arising from the liens it has been subrogated to the rights of the purchaser as fee owner. National City Bank thus acquires all of the rights of the purchaser. See Employers Liability Assurance Corp. v. Morse, 261 Minn. 259, 263, 111 N.W.2d 620, 624 (1961).

2. Waiver

National City Bank asserts that the failure of Poppenberger to file its answer within one year as required by Minn.Stat. § 514.12, subd. 3 (1988) prevents Poppen-berger from enforcing its mechanics’ lien. National City Bank ultimately made three motions challenging the jurisdiction of the trial court to hear Poppenberger’s claim. The trial court’s findings of fact state that National City Bank waived this defense by failing to include it in its answer or in a motion preceding the answer as required by rule 12.02 of the Minnesota Rules of Civil Procedure.

The Minnesota Rules of Civil Procedure do not apply in a mechanics’ lien action where the rules conflict with the mechanics’ lien law. Minn.R.Civ.P. 81.01. We find that rule 12.02 does not apply in this case. At the time National City Bank filed its answer to the complaint there was no claim which could be asserted by either Poppenberger or National City Bank against the other. Thus National City Bank’s defense as to Poppenberger’s untimely answer was not a defense to a claim for relief within the meaning of the rule. In fact, National City Bank had no cognizable defense against Poppenberger which could be asserted at the time of its own answer because the 20-day statutory period for the filing of answers had not yet run. It was only after the time period expired that National City Bank had a cognizable defense. If Poppenberger’s inter[112]*112pretation of rule 12.02 were accepted by this court, no defendant in a mechanics’ lien action could assert the defense of untimely filing and yet be timely itself.

Furthermore, even if rule 12.02 applied to this action, National City Bank would not have waived its defense. Minn.Stat. § 514.11 (1988) 'provides that no answer need be served on other parties in a mechanics’ lien action. National City Bank therefore falls within the exception of rule 12.02 which allows a party to assert any defense in law or fact at trial where no responsive pleading is required.

3. Validity of Poppenberger’s mechanics’ lien.

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Related

Snyder's Drug Stores, Inc. v. Minnesota State Board of Pharmacy
221 N.W.2d 162 (Supreme Court of Minnesota, 1974)
Independent School District No. 14 v. AMPRO Corp.
361 N.W.2d 138 (Court of Appeals of Minnesota, 1985)
Employers Liability Assurance Corp. v. Morse
111 N.W.2d 620 (Supreme Court of Minnesota, 1961)
Bauman v. Metzger
176 N.W. 497 (Supreme Court of Minnesota, 1920)

Cite This Page — Counsel Stack

Bluebook (online)
448 N.W.2d 109, 1989 Minn. App. LEXIS 1249, 1989 WL 141374, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jw-hulme-co-v-reiling-minnctapp-1989.