Jordan Const v. Fed Nat Mort
2017 UT 28
| Utah | 2017Background
- Jordan Construction (JC) built a home for its employee Scott Bell. Bell executed a trust deed in January 2008 and later defaulted on the mortgage; FNMA bought the property at a nonjudicial foreclosure sale.
- JC recorded an initial mechanic’s lien for $126,956.92 in December 2008 and a lis pendens; after discovery showed unpaid subcontractor amounts it amended the lien in July 2009 to $232,976.81.
- JC obtained partial summary judgment against Bell on counterclaims; the court’s early orders omitted explicit disposition of the mechanic’s lien claim until later modification.
- JC applied for a writ of execution and scheduled a sheriff’s sale, but FNMA (not originally named) moved to quash the writ and halt the sale; the district court granted that relief and FNMA was later added as a third-party defendant.
- The district court held (1) FNMA was not bound by the interlocutory summary-judgment rulings against Bell (lis pendens/res judicata), (2) JC’s amended lien was untimely, (3) prejudgment interest was not available under the 2008 lien statute, and (4) FNMA was the “successful” party for purposes of fee shifting; the Supreme Court affirmed and awarded FNMA appellate fees.
Issues
| Issue | Plaintiff's Argument (Jordan Constr.) | Defendant's Argument (FNMA) | Held |
|---|---|---|---|
| District court’s quashing of writ of execution and halting sheriff’s sale | FNMA waived challenge by failing to file a timely reply/request for hearing under Rule 64E | Court retained discretion under Rule 54(b) to revisit interlocutory writs; writ was procedurally deficient because no final judgment existed | Affirmed — court did not abuse discretion in quashing the writ and halting sale |
| Whether FNMA is bound by interlocutory partial summary judgment against Bell (lis pendens / res judicata) | Purchaser (FNMA) is successor-in-interest and, having notice (lis pendens), should take property subject to the earlier rulings; res judicata should bar relitigation | Interlocutory orders are not final; lis pendens and res judicata bind purchasers only as to final judgments; court may revisit interlocutory rulings | Affirmed — FNMA not bound because prior order was interlocutory (not final) |
| Timeliness of JC’s second amended notice of mechanic’s lien (filed July 2009) | Admission as to occupancy date should be withdrawn (new 2011 certificate); relation-back or equitable tolling should render the amendment timely | JC’s admission stands; equitable tolling unpreserved; relation-back does not apply to statutory lien deadlines | Affirmed — amendment untimely; court properly denied withdrawal (prejudice), equitable tolling unpreserved, relation-back not applicable |
| Availability of prejudgment interest on mechanic’s lien claims under 2008 statute | Prejudgment interest available where loss is fixed and calculable; general common-law rule applies | Mechanic’s liens are statutory creatures; legislature omitted prejudgment interest in 2008 statute, so it’s not recoverable | Affirmed — prejudgment interest unavailable under 2008 mechanic’s lien statute |
| Who is the “successful” party for attorney fees under Utah Code § 38‑1‑18(1) | JC recovered amount listed on original lien, so it was successful | FNMA prevailed on nearly all dispositive motions, materially reduced JC’s recovery from $336k to $126k, and is the comparative victor | Affirmed — district court did not abuse discretion in finding FNMA the successful party; FNMA entitled to fees, including on appeal |
Key Cases Cited
- IHC Health Servs., Inc. v. D & K Mgmt., Inc., 196 P.3d 588 (Utah 2008) (district court may revisit interlocutory rulings before final judgment)
- Iron Head Constr., Inc. v. Gurney, 207 P.3d 1231 (Utah 2009) (discussion of prejudgment interest principle and mechanic’s lien context)
- 2 Ton Plumbing, L.L.C. v. Thorgaard, 345 P.3d 675 (Utah 2015) (mechanic’s liens are statutory creatures; items not provided by statute cannot be recovered)
- A.K. & R. Whipple Plumbing & Heating v. Guy, 94 P.3d 270 (Utah 2004) (use common sense in determining the successful party for fee shifting under the lien statute)
- Timm v. Dewsnup, 921 P.2d 1381 (Utah 1996) (recording a lis pendens provides constructive notice and purchaser takes subject to litigation outcome)