VCS, Inc. v. La Salle Development, LLC

2012 UT 89, 293 P.3d 290, 723 Utah Adv. Rep. 93, 2012 Utah LEXIS 181, 2012 WL 6131065
CourtUtah Supreme Court
DecidedDecember 11, 2012
DocketNo. 20110062
StatusPublished
Cited by24 cases

This text of 2012 UT 89 (VCS, Inc. v. La Salle Development, LLC) 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
VCS, Inc. v. La Salle Development, LLC, 2012 UT 89, 293 P.3d 290, 723 Utah Adv. Rep. 93, 2012 Utah LEXIS 181, 2012 WL 6131065 (Utah 2012).

Opinion

Justice LEE,

opinion of the Court:

T1 VCS, Inc. claims it acquired a valid mechanic's lien on an Ogden subdivision by performing work as a general contractor. Utah Community Bank (UCB) claims an interest in the same Ogden subdivision, an interest it acquired by extending a construction loan-secured by a deed of trust-to the subdivision's owner.

12 This case involves a dispute over the validity of VCS's mechanic's lien as against UCB. VCS brought suit against UCB to vindicate VCS's allegedly superior interest in the subdivision property. UCB responded by asserting that VCS's mechanic's lien was not valid as against UCB's interest in the property because VCS had failed to record a timely lis pendens, as required under our mechanic's lien statutes. VCS claimed that its lien was valid as against UCB despite VCS's failure to record a timely lis pendens. VCS further claimed that even if its lien was invalid, it was entitled to equitable relief under the doctrine of unjust enrichment because UCB had aequired ownership of a number of the subdivision lots pursuant to a trustee's sale on its deed of trust.

T3 VCS and UCB filed cross-motions for summary judgment. The district court denied VCS's motion and granted UCB's, concluding that (a) VCS's mechanic's lien was void and unenforceable as against UCB because VCS had failed to record a timely iis pendens, (b) VCS was not entitled to unjust enrichment relief, and (c) UCB was entitled to recover attorney fees. VCS appealed.

T4 We affirm. VCS's failure to record a timely lis pendens rendered its mechanic's lien void and unenforceable as against UCB. And because VCS failed to appropriately exhaust its legal remedies, VOS is not entitled to equitable relief under the doctrine of unjust enrichment. Consequently, we also affirm the district court's award of attorney fees to UCB under Utah Code section 38-1-18 and likewise conclude that UCB is entitled to its reasonable attorney fees incurred on appeal (in an amount to be determined on remand).

I

T5 Appellant VCS, Inc. was hired by La Salle Development, LLC in 2006 as the general contractor for the Northpark Meadows residential subdivision in Ogden, Utah. Although VCS and La Salle did not enter into a formal agreement until February 22, 2007, VCS began working on Northpark Meadows during the first week of November 2006.

T6 Appellee Utah Community Bank (UCB) acquired its initial interest in North-park Meadows soon thereafter when it extended a construction loan to La Salle, secured by a deed of trust. The deed of trust was dated January 9, 2007 and recorded January 12, 2007.

T7 After VCS began working on North-park Meadows, VCS took several steps designed to perfect its mechanic's lien. First, VCS filed a Notice of Commencement with the State Construction Registry on April 17, 2007. Later, after VCS was terminated by La Salle in September 2007,1 VCS also recorded a Notice of Mechanic's Lien on January 29, 2008.

18 VCS attempted to inform La Salle (but not UCB) that it had recorded this Notice of Mechanic's Lien. VCS also brought suit against La Salle (but not UCB), on March 12, 2008, but it did not record a lis pendens until April 24, 2009. This was 452 days after it first recorded its notice of mechanic's lien. VCS obtained a default judgment against La [293]*293Salle on June 6, 2008. VCS filed a notice of judgment lien with the county recorder on September 24, 2008. VCS informed UCB of this judgment lien in a letter written on October 16, 2008, a letter in which VCS asked UCB to stipulate that VCS's lien had priority over any claimed UCB interest in Northpark Meadows.2

19 On January 26, 2009, La Salle filed a motion to set aside the default judgment that had been entered against it.3 Thereafter, on April 21, 2009, VCS amended its complaint to add claims against UCB (including claims for mechanic's lien foreclosure, declaratory judgment [relating to lien priority], and unjust enrichment)4 Just a few days after VCS amended its complaint, on April 27, 2009, the district court set aside VCS's default judgment against La Salle, concluding that service on La Salle's registered against had been deficient. Then, in December 2009, UCB became the owner of a number of Northpark Meadows lots pursuant to a trustee's sale on its deed of trust.

T10 VCS moved for sammary judgment against UCB in April 2010, alleging that VCS had a mechanic's lien that was valid against UCB-such that the trustee's sale in favor of UCB should be set aside. Alternatively, VCS asserted that it was entitled to compensation because it had unjustly enriched UCB5 UCB filed a eross-motion for summary judgment, seeking a determination that VCS's mechanic's lien was void and unenforceable as against UCB, a determination that VCS's unjust enrichment claim was barred by its failure to exhaust its legal remedies, and an award of attorney fees under Utah Code section 38-1-18 (2010). The district court denied VCS's motion for summary judgment and granted UCB's cross-motion. VCS appealed.

II

T11 VCS asserts four grounds for challenging the district court's decision granting summary judgment for UCB: (1) VCS was not required by the mechanic's lien statute to record a lis pendens within 180 days of the Notice of Mechanic's Lien because UCB was eventually made a party to VCS's lien foreclosure suit; (2) VCS's suit against La Salle satisfied any statutory requirement for VCS to make UCB a party to the lien foreclosure action within 180 days; (8) VCS satisfied the substantial compliance provision of the statute; and (4) VCS is entitled to equitable relief under the doctrine of unjust enrichment.6

112 We find no merit in any of these grounds. We accordingly affirm, under the de novo standard of review for summary Judgment. See L.C. Canyon Partners, L.L.C. v. Salt Lake Cnty., 2011 UT 68, ¶ 8, 266 P.3d 797.

A

118 VCS's first argument rests on its proposed construction of Utah Code section [294]*29438-1-11(8)(a) (2010).7 This section provides, in relevant part:

Within the time period provided for filing [a foreclosure action set forth] in Subsection (2) [i.e. within 180 days after the day on which the lien claimant files its Notice of Mechanic's Lien] the lien claimant shall file for record with the county recorder of each county in which the lien is recorded a notice of the pendency of the [foreclosure] action, in the manner provided in actions affecting the title or right to possession of real property, or the lien shall be void, except as to persons who have been made parties to the action and persons having actual knowledge of the commencement of the action.

Utax § 38-1-11(8)(a).

{14 VCS characterizes this provision as consisting of a general rule and two exceptions. The general rule is that a lis pendens must be recorded within the 180-day window afforded for filing a mechanic's lien foreclosure action (i.e., within 180 days of the filing of the Notice of Mechanic's Lien). The exceptions apply where a person either (@a) is made a party to the foreclosure action, or (b) has actual knowledge of the commencement of that action. VCS's position rests on the notion that the 180-day time period applies to the general rule and not to the exceptions.

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Bluebook (online)
2012 UT 89, 293 P.3d 290, 723 Utah Adv. Rep. 93, 2012 Utah LEXIS 181, 2012 WL 6131065, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vcs-inc-v-la-salle-development-llc-utah-2012.