938 N.W.2d 651
Iowa2020Background:
- In June 2013 the Joneses hired Standard Water to waterproof their basement; Standard Water accidentally cut buried water/sewer lines, left 95% of work complete, and issued a $5,400 invoice (only $600 paid).
- Standard Water posted a mechanic’s lien (July 2013) and sued to foreclose after the Joneses withheld payment and delayed repairs; the district court awarded judgment for the contract balance (reduced to $4,900) and large attorney fees.
- The case produced multiple appeals, an initial sheriff’s sale (set aside), a revised fee award totaling $58,953.69, and a second sheriff’s sale in August 2017, which Standard Water won and the Joneses later redeemed.
- The Joneses first asserted a homestead exemption in August 2017, arguing the homestead could not be sold to satisfy attorney fees (only the principal), while Standard Water relied on Iowa Code § 572.32 authorizing attorney fees in mechanic’s lien actions.
- The Iowa Supreme Court concluded (1) as a matter of statutory interpretation homestead law generally bars foreclosure sale to satisfy a contractor’s attorney fees absent a legislative “special declaration,” but (2) the Joneses forfeited that defense by failing to raise it before the district court foreclosed the lien (res judicata/waiver).
- The court nonetheless held interest and taxable costs may be recovered against a homestead in a mechanic’s lien foreclosure; only attorney fees are barred absent a special statutory declaration.
Issues
| Issue | Plaintiff's Argument (Standard Water) | Defendant's Argument (Joneses) | Held |
|---|---|---|---|
| Whether a mechanic’s lien foreclosure may include attorney fees against a homestead | §572.32 authorizes reasonable attorney fees in mechanic’s lien suits; fees should be recoverable from the property | Homestead statutes (ch. 561) protect the home; attorney fees may not be enforced against a homestead absent a specific statutory exception | Homestead exemption bars recovering attorney fees from sale proceeds absent a legislative "special declaration"; §572.32 does not suffice |
| Whether interest and taxable costs may be recovered from the homestead in a mechanic’s lien foreclosure | Interest and costs are traditional components of lien judgments and should be recoverable | Allowing interest/costs would undermine homestead protection | Interest and taxable costs may be recovered and foreclosed against the homestead |
| Whether the Joneses were precluded from asserting the homestead exemption by waiver/res judicata/judicial estoppel | The foreclosure decrees (Feb 2015; Mar 2017) adjudicated the lien and superior claim to the property; Joneses failed to timely raise homestead | Timing is not dispositive; they may assert homestead protection when sale is being executed | Joneses waived/are precluded from asserting the homestead exemption because they did not raise it before the foreclosure decrees were entered; district court judgment enforcing the lien (including fees) is affirmed |
Key Cases Cited
- Schaffer v. Frank Moyer Constr., Inc., 628 N.W.2d 11 (Iowa 2001) (mechanic’s lien principles and equitable restitution rationale)
- In re Property Seized from Bly, 456 N.W.2d 195 (Iowa 1990) (statute must contain a special declaration to overcome homestead exemption)
- Werner v. Hammill, 257 N.W. 792 (Iowa 1934) (homestead cannot be required to pay lienor’s attorney fees)
- Cox v. Waudby, 433 N.W.2d 716 (Iowa 1988) (homestead not protected where property was purchased with wrongfully obtained funds)
- Francksen v. Miller, 297 N.W.2d 375 (Iowa 1980) (failure to assert homestead defense in foreclosure may bar later claims)
- Chandler v. Hopson, 188 Iowa 281, 175 N.W. 62 (Iowa 1919) (court treated a statutory grant making costs a lien on land as a special declaration sufficient to overcome homestead)