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Stonebrook Construction, LLC v. Chase Home Finance

April 26, 2012

STONEBROOK CONSTRUCTION, LLC, PLAINTIFF-APPELLANT,
v.
CHASE HOME FINANCE, LLC,
DEFENDANT-RESPONDENT,
JOSHUA ASHBY AND KATRINA ASHBY, HUSBAND AND WIFE;
ALLIANCE TITLE & ESCROW CORP.
DEFENDANTS.



Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bonneville County. Hon. Joel E. Tingey, District Judge.

The opinion of the court was delivered by: Horton, Justice.

2012 Opinion No. 68

Stephen Kenyon, Clerk and

The district court's grant of summary judgment is affirmed.

This appeal arises from an action brought by Stonebrook Construction, LLC (Stonebrook or "the LLC") against Chase Home Finance, LLC (Chase), seeking to foreclose a mechanic's lien. The district court granted Chase's motion for summary judgment, holding that Stonebrook was precluded from placing a lien against the subject property because it did not properly register under the Idaho Contractor Registration Act (ICRA or "the Act").

Stonebrook appeals, arguing that Chase lacked standing to assert this defense and is not within the class intended to be protected by the ICRA. Alternatively, Stonebrook contends that the good-faith registration of one member of the LLC constituted actual or substantial compliance with the requirements of the ICRA. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2006, Tyler Schwendiman and Brandon Burton began operating a construction contracting business under the assumed business name "Stonebrook Construction." At that time, Schwendiman also applied for and received a registered general contractor license. In 2007, Schwendiman and Burton filed a certificate of organization with the Idaho Secretary of State and continued operating their business as a limited liability company known as Stonebrook Construction, LLC. This entity did not apply for registration under the ICRA; rather, Stonebrook's members believed that Schwendiman's previous registration fulfilled the requirements of the Act.

Stonebrook entered into a contract to build a home on property in Bonneville County owned by Joshua and Katrina Ashby (the Ashbys). Between November of 2007 and June of 2008, the LLC provided labor and materials for the construction work on the Ashbys' home. The Ashbys executed a deed of trust against the property under which Chase is the successor beneficiary. The deed of trust was recorded on June 4, 2008. The Ashbys failed to pay

Stonebrook the amount owed for the work and the LLC recorded a claim of lien against the subject property on August 8, 2008. Stonebrook timely brought an action to foreclose its lien, and Chase moved for summary judgment on the ground that Stonebrook was precluded from placing a lien against the subject property because it failed to comply with the registration requirements of the ICRA. The district court granted Chase's motion and dismissed Stonebrook's claim of lien. Stonebrook appealed and now asks this Court to vacate the district court's judgment and remand for further proceedings.

II. STANDARD OF REVIEW

This Court reviews appeals from an order of summary judgment de novo, and the "standard of review is the same as the standard used by the trial court in ruling on a motion for summary judgment." Curlee v. Kootenai Cnty. Fire & Rescue, 148 Idaho 391, 394, 224 P.3d 458, 461 (2008) (citations omitted). Thus, summary judgment is appropriate if "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). Under this standard, "disputed facts are construed in favor of the non-moving party, and all reasonable inferences that can be drawn from the record are drawn in favor of the non-moving party." Curlee, 148 Idaho at 394, 224 P.3d at 461. Where "the evidence reveals no disputed issues of material fact, then only a question of law remains, over which this Court exercises free review." Lockheed Martin Corp. v. Idaho State Tax Comm'n, 142 Idaho 790, 793, 134 P.3d 641, 644 (2006). This Court exercises "free review over interpreting a statute's meaning and applying the facts to the law." VFP VC v. Dakota Co., 141 Idaho 326, 331, 109 P.3d 714, 719 (2005).

III. ANALYSIS

A. Chase properly raised Stonebrook's ICRA registration ...


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