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Contractor's Equipment Supply Co., An Idaho Corporation, D/B/A/ Cesco v. Prizm Group & Construction

November 30, 2011

CONTRACTOR'S EQUIPMENT SUPPLY CO., AN IDAHO CORPORATION, D/B/A/ CESCO, PLAINTIFF,
v.
PRIZM GROUP & CONSTRUCTION, LLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge

ORDER

INTRODUCTION

The Court has before it Multibank's Motion for Summary Judgment (dkt. 50). The Court heard oral argument on the motion on November 30, 2011 and now issues the following decision.

BACKGROUND

On March 6, 2007, T-O Engineering entered into a written agreement to provide professional engineering services for certain real property located in Valley County, Idaho. Russell Aff., ¶ 2, Ex. 1, Dkt. 56-1. T-O began providing professional engineering services for the property on March 7, 2007. Russell Aff., ¶ 3, Dkt. 56-1. On July 2, 2007, Multibank's predecessor in interest to the property, Silver State Bank, recorded a deed of trust upon the property. Landers Aff., Ex. A, Dkt. 54. Silver State Bank also obtained and recorded an assignment of engineering contracts between the developer ant T-O on July 2, 2007. Wishney Aff., Ex. 1, Dkt. 56-2. No physical improvements were done to the property before July 2, 2007.

LEGAL STANDARD

One of the principal purposes of the summary judgment "is to isolate and dispose of factually unsupported claims . . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is "not a disfavored procedural shortcut," but is instead the "principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327. "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

The evidence must be viewed in the light most favorable to the non-moving party, id. at 255, and the Court must not make credibility findings. Id. Direct testimony of the non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir. 1988).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001)(en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the nonmoving party's case. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir.2000). This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57 (1986).

ANALYSIS

Multibank asks for summary judgment declaring that its Deed of Trust is superior to mechanics liens recorded by Contractor's Equipment Supply Co., Prizm Group & Construction LLC, and Counterclaimants T-O and O-K Gravel Works, LLC. Only T-O filed an opposition to the motion.

1. Multibank's Motion for Summary Judgment Against T-O

Two Idaho statutes are at play here. First, Idaho Code § 45-501 states in relevant part that every professional engineer who renders professional service for which he is legally authorized to perform in connection with any land or building development, has a lien upon the land for the professional services provided. Second, Idaho Code § 45-506 states that liens provided for in chapter 45 of the Idaho Code "are preferred to any lien, mortgage or other encumbrance which may have attached subsequent to the time when the building, improvement or structure was commenced, work done, equipment, materials or fixtures were rented or leased, or materials or professional services were commenced to be furnished. . . ." I.C. § 45-506.

Multibank interprets these statutes to state that a construction lender's deed of trust has priority over any mechanics lien, including that of a professional engineer, unless the mechanics lienor performed some visible work on the property before the lender recorded its deed of trust. Multibank therefore contends that its deed of trust is superior ...


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