Lindstrom v. Custom Floor Covering Inc.
402 P.3d 171
Utah Ct. App.2017Background
- Lindstrom was awarded a residential property in a 2010 divorce but the decree (or a quitclaim) was not recorded immediately; title still showed her ex-husband as a joint tenant.
- In Feb. 2011 the ex-husband signed a promissory note to Custom Floor Covering, Inc. (CFC) that authorized liens against his real property; CFC recorded a notice of lien against the Property the same month.
- Lindstrom demanded release of the lien; CFC recorded a clarified notice in June 2011 stating the lien applied only to the ex-husband’s interest; Lindstrom recorded the divorce decree in July 2011.
- After further demand in 2014 and no release, Lindstrom filed a petition under Utah’s Wrongful Lien Act to nullify the lien and sought damages, treble damages, and fees.
- The district court held the lien was not wrongful, reasoning the Act requires assessing wrongfulness based on facts known when the lien was recorded; Lindstrom appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lindstrom's Rule 59(e) motion tolled the appeal period | Lindstrom styled and filed a motion to alter judgment under Rule 59(e), which should toll appeal time | Cited district court characterization of motion as a non-existent "motion to reconsider," which would not toll appeal time | The motion was properly styled and plausibly sought Rule 59 relief; it tolled the appeal deadline, so appellate jurisdiction exists (motion was procedurally proper). |
| Whether CFC's lien was a "wrongful lien" under the Wrongful Lien Act | Lindstrom: lien was wrongful because, as of evaluation, the ex-husband no longer owned the property; wrongfulness should be assessed by facts "as they existed," not just facts known when recorded | CFC: lien was plausibly authorized at time of recording because ex-husband was of record owner and had signed the note; wrongfulness is assessed based on facts known at recording | The Act requires assessing wrongfulness as of the time the lien was recorded; because CFC had a plausible good-faith basis at filing, the lien was not wrongful under the Act. |
Key Cases Cited
- Hutter v. Dig-It, Inc., 219 P.3d 918 (Utah 2009) (legislative history and holding that statutory liens authorized by statute are not "wrongful" under the Wrongful Lien Act even if later unenforceable)
- Bay Harbor Farm, LC v. Sumsion, 329 P.3d 46 (Utah Ct. App. 2014) (a lien authorized by statute or otherwise may withstand a summary wrongful-lien challenge if the claimant had a plausible good-faith basis at time of filing)
- B.A.M. Dev., LLC v. Salt Lake County, 282 P.3d 41 (Utah 2012) (Rule 4(b) is triggered by a motion properly styled under the rule that plausibly requests the relief, regardless of the motion's merits)
- Gillett v. Price, 135 P.3d 861 (Utah 2006) (distinguishes motions that toll appeal periods from non-existent procedural vehicles like "motions to reconsider")
- Pratt v. Pugh, 238 P.3d 1073 (Utah Ct. App. 2010) (wrongfulness under the Act is evaluated based on facts known at the time the lien was recorded)