Copper Hills Custom Homes, LLC v. Mortg. Elec. Registration Sys.

1

2024 UT App 110

Copper Hills Custom Homes, LLC, Appellant, v. Mortgage Electronic Registration Systems, Inc., et al.,^[1] Appellees.

No. 20220873-CA

Court of Appeals of Utah

August 8, 2024

Third District Court, Salt Lake Department The Honorable Patrick Corum The Honorable Heather Brereton No. 150907425

Troy L. Booher, Beth E. Kennedy, Erin B. Hull, Nate D. Ashcraft and Caroline A. Olsen, Attorneys for Appellant.

Bradley L. Tilt, Alan M. Hurst, Chandler P. Thompson, Brett N. Anderson, and Robert Scott, Attorneys for Appellees First Colony Mortgage Corporation; Intercap Lending Inc.; NewRez LLC; United Wholesale Mortgage, LLC; and University First Federal Credit Union.

Alan M. Hurst and Chandler P. Thompson, Attorneys for Appellee Mortgage Electronic Registration Systems, Inc.

Brett N. Anderson, Attorney for Appellees Primelending and Jason P Turner.

Judge Gregory K. Orme authored this Opinion, in which Judges Ryan M. Harris and John D. Luthy concurred.

OPINION

GREGORY K. ORME, JUDGE.

¶1 The alleged failure of Morningside Developers, LLC (Morningside) to pay Copper Hills Custom Homes, LLC (Copper Hills) for materials and services benefitting real property has triggered a spate of liens, lawsuits, and appeals stretching back to 2007. In this most recent appeal, we have been asked to decide whether the mechanics' lien statute applicable at the relevant time^[2] permitted Copper Hills to maintain a second enforcement action against the defendants solely because its first action was filed within 180 days of when its mechanics' liens were recorded. But Copper Hills' second enforcement action was filed well past the 180-day statutory limitations period, and no court has subject matter jurisdiction over an action filed more than 180 days after a mechanics' lien is recorded. Thus, we affirm the dismissal of the second enforcement action for lack of jurisdiction.

BACKGROUND

¶2 The genesis of the parties' dispute was cogently set out by this court in Morningside Developers, LLC v. Copper Hills Custom Homes, LLC, 2015 UT App 99, 348 P.3d 726:

Copper Hills provided construction contracting services to [Morningside] on eight separate parcels of real property in 2006. After Morningside failed to pay Copper Hills for its work, Copper Hills recorded mechanics' liens against each of the parcels and ultimately filed eight separate lien foreclosure actions. In October 2007, Morningside filed suit against Copper Hills for breach of contract, fraud, and related claims. In October 2009, Morningside's claims and Copper Hills' foreclosure claims were consolidated into a single action.

Id. ¶ 2. The district court eventually dismissed the consolidated action without prejudice, and that ruling was affirmed by this court. Id. ¶ 12. A few months after our decision, Copper Hills filed a new action seeking to enforce the mechanics' liens (the 2015 lawsuit), naming numerous entities and individuals as defendants. The complaint in the 2015 lawsuit was filed on October 19, 2015, more than eight years after the mechanics' liens were recorded, albeit only 179 days after this court ruled that the first enforcement action was properly dismissed without prejudice.

¶3 Two defendants, Countrywide Bank, FSB (Countrywide)^[3]and Mortgage Electronic Registration Systems, Inc. (MERS), moved to dismiss the 2015 lawsuit, relying on a provision of Utah law stating that a recorded mechanics' lien "is automatically and immediately void if an action to enforce the lien" is not filed within 180 days. Utah Code Ann. § 38-1-11(2), (4)(a) (LexisNexis Supp. 2007). Copper Hills countered that its liens were not void because it had filed an action within the 180-day period, to wit, the first enforcement action that had been dismissed without prejudice.^[4] Copper Hills further asserted that the 2015 lawsuit was timely under Utah's savings statute (the Savings Statute), which permits a party to commence an action within one year after a timely filed initial action is dismissed on grounds other than the merits.^[5] See id. § 78B-2-111(1) (2012). In their reply memorandum, Countrywide and MERS argued that Copper Hills could "not piggy-back off of its first case to bring a second case eight years later."

¶4 Other defendants thereafter moved to dismiss the 2015 lawsuit and joined in the motion and memoranda filed by Countrywide and MERS. In a separate reply memorandum, several defendants argued that the mechanics' lien statute specifically prohibits application of the Savings Statute to otherwise untimely mechanics' lien enforcement actions and, therefore, Copper Hills could not rely on the Savings Statute for the timeliness of the 2015 lawsuit. See id. § 38-1-11(4)(b) (Supp. 2007) ("Notwithstanding [the Savings Statute], a court has no subject matter jurisdiction to adjudicate a lien that becomes void under Subsection 4(a)."). The district court heard argument from the parties on the motions to dismiss and took the matter under advisement.

¶5 In a written order dated July 13, 2016, the district court declared Copper Hills' mechanics' liens void and granted the pending motions to dismiss. The court's ruling was premised on the inapplicability of the Savings Statute to the 2015 lawsuit. The court summarized Copper Hills' argument as follows:

Plaintiff's argument that [the 2015 lawsuit] is a permissible and timely action to foreclose upon and enforce the Void Liens was premised expressly, and exclusively, upon its single argument that the Savings Statute applies to Utah Code § 38-1-11(2) (2007) and extends the 180-day filing deadline applicable to mechanics' lien claims. Specifically, Plaintiff argues that because it had previously filed actions to enforce the now Void Liens, because those previously-filed actions were presumed to have been timely filed (for purposes of the Motions to Dismiss only), and because Plaintiff's previously-filed actions were dismissed otherwise than upon the merits, then the Savings Statute allowed Plaintiff to commence this new above-captioned action within one year after Plaintiff's previously-filed actions were dismissed (and specifically within one year after the Utah Court of Appeals ruled that the dismissal of the previously-filed actions was without prejudice).

The court then rejected this argument, ruling that "the Savings Statute cannot be applied to mechanics' liens" given the clear language of the mechanics' lien statute.

¶6 The district court certified its order as final pursuant to rule 54(b) of the Utah Rules of Civil Procedure, and Copper Hills filed an appeal. But our Supreme Court concluded the 54(b) certification was "flawed" and dismissed the appeal for lack of appellate jurisdiction. Copper Hills Custom Homes, LLC v. Countrywide Bank, 2018 UT 56, ¶ 1, 428 P.3d 1133. The district court thereafter denied Copper Hills' second request for 54(b) certification.

¶7 After all the remaining claims asserted by Copper Hills in the 2015 lawsuit were adjudicated or dismissed, the district court entered a final judgment, and this appeal followed. The sole district court decision we have been asked to review is the ruling that Copper Hills cannot take advantage of the Savings Statute to bring the 2015 lawsuit.

ISSUES AND STANDARDS OF REVIEW

¶8 As an initial matter, Appellee First Colony Mortgage Corporation (First Colony) challenges this court's jurisdiction to adjudicate this appeal, pointing to a perceived flaw in Copper Hills' notice of appeal. Whether a court has jurisdiction is a matter of law reviewed for correctness. In re adoption of B.B., 2017 UT 59, ¶ 16, 417 P.3d 1.

¶9 In its appeal, Copper Hills challenges the district court's interpretation of the mechanics' lien statute, arguing that the court erroneously determined that the statute forecloses its reliance on the Savings Statute to bring the 2015 lawsuit. "We review questions of statutory interpretation for correctness, affording no deference to the district court's legal conclusions." Marion Energy, Inc. v. KFJ Ranch P'ship, 2011 UT 50, ¶ 12, 267 P.3d 863 (quotation simplified).

ANALYSIS

I. Appellate Jurisdiction

¶10 In its notice of appeal, Copper Hills described this appeal as encompassing the district court's September 26, 2022 final judgment and "all subsidiary rulings and orders leading to final judgment." In its principal brief, however, Copper Hills raised a single issue: "Whether the district court erred in dismissing, under section 38-1-11(4)(b), Copper Hills's action to enforce its liens on the ground that the liens are void by operation of subsection (4)(a)." The genesis of this issue is the district court's order dated July 13, 2016, in which the court ruled that Copper Hills could not use the Savings Statute to bring the 2015 lawsuit because the liens are void.^[6] According to First Colony, Copper Hills' notice of appeal is insufficient to vest this court with jurisdiction to review the district court's ruling because the July 13, 2016 order was not specifically identified in the notice of appeal and Copper Hills' reference to "all subsidiary rulings and orders leading to final judgment" is "cryptic."

¶11 Rule 3(d)(2) of the Utah Rules of Appellate Procedure requires a notice of appeal to "designate the judgment order, or part thereof being appealed."^[7] Our Supreme Court has made it clear that "the relevant inquiry is whether the prior orders not named in [the] notice of appeal were intermediate orders that led to a final, appealable order." Speros v. Fricke, 2004 UT 69, ¶ 16, 98 P.3d 28 (quotation simplified). We have no trouble concluding that the July 13, 2016 order was such a prior intermediate order. See Copper Hills Custom Homes, LLC v. Countrywide Bank, 2018 UT 56, ¶¶ 15, 26 & n.12, 428 P.3d 1133 (holding that the July...