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Hap Taylor & Sons, Inc. v. Summerwind Partners, LLC

Supreme Court of Idaho

November 13, 2014

HAP TAYLOR & SONS, INC., d/b/a KNIFE RIVER, an Oregon corporation, Plaintiff-Cross Respondent,
v.
SUMMERWIND PARTNERS, LLC, a Nevada limited liability corporation, Defendant-Cross Appellant,
v.
IDAHO GOLF PARTNERS, INC., Intervenor-Respondent-Cross Appellant. CONGER MANAGEMENT GROUP, INC., an Idaho corporation, Plaintiff-Counterdefendant-Cross Defendant-Respondent,
v.
STANLEY CONSULTANTS, INC., Defendant-Counterclaimant-Cross Claimant-Appellant, and INTEGRATED FINANCIAL ASSOCIATES, INC., a Nevada corporation, Defendant-Counterdefendant-Cross Defendant-Respondent-Cross Appellant, and GENEVA EQUITIES, LLC, an Idaho limited liability company; and RIVERSIDE, INC., an Idaho corporation, Defendants-Counterdefendants-Cross Defendants-Respondents, and IDAHO GOLF PARTNERS, INC., Intervenor-Respondent-Cross Appellant, and AMERICAN COUNCIL OF ENGINEERING COMPANIES OF IDAHO, Intervenor-Appellant

2014 Opinion No. 119.

As Corrected November 17, 2014.

Page 1205

Appeal from the District Court of the Third Judicial District, State of Idaho, Canyon County. Hon. Juneal C. Kerrick, District Judge.

District court judgments are vacated and the case is remanded.

Givens, Pursley, LLP, Boise, for appellant, Stanley Consultants, Inc. Thomas E. Dvorak argued.

Fisher Rainey Hudson, Boise, for Summerwind Partners, LLC, Integrated Financial Associates, Inc., and Geneva Equities. Rebecca A. Rainey argued.

Moffatt, Thomas, Barrett, Rock and Fields, Chtd., Boise, for Geneva Equities.

Eberle, Berlin, Kading, Turnbow & McKlveen, Boise, for Conger Management Group.

Eismann Law Offices, Caldwell, for Riverside, Inc.

Fisher, Pusch & Krueck, LLP, Boise, for Hap Taylor & Sons, Inc. David T. Krueck argued.

Mark D. Perison, PA, Boise, for Idaho Golf Partners, Inc. Mark D. Perison argued.

Clark Feeney, Lewiston, for American Council of Engineering Co. of Idaho.

BURDICK, Chief Justice. Justices J. JONES, TROUT, J., Pro tem, SCHROEDER, J., Pro tem and KIDWELL, J., Pro tem, CONCUR.

OPINION

Page 1206

[157 Idaho 602] BURDICK, Chief Justice

This case consolidated several individual cases dealing with common claims for nonpayment against the developer of the Summer Wind at Orchard Hills residential and golf course development in Canyon County, Idaho. There are essentially two distinct cases on appeal. First, Stanley Consulting, Inc. (" Stanley" ) appeals the district court's decision as to the priority date for Stanley's engineer's lien pursuant to Idaho Code section 45-506. Second, Integrated Financial Associates, Inc. (" IFA" ) cross-appeals the district court's decision granting Knife River's summary judgment motion based on the court's decision that Knife River had a valid priority lien for paving work it did on roadways and golf cart paths without having to designate the lien between the two projects. We vacate the district court's judgments and remand for further proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

This case involves the infrastructure development of a residential subdivision and golf course located near Greenleaf, Idaho. The name of the project was Summer Wind at Orchard Hills (" Summer Wind Development" ), and the owner and developer was Union Land Company (" Union Land" ).[1] Summer Wind Development was a multi-use development made up of approximately 91 residential building lots and a golf course and involved two phases. Union Land contracted to begin work in the summer of 2006, later recording the plats for Phases I and II on February 2, 2007.

Union Land contracted with Extreme Line Logistics, Inc. (" ELL" ) for portions of the project and ELL then sought a subcontractor for paving work required throughout Summer Wind Development. Hap Taylor & Sons, Inc. d/b/a Knife River (" Knife River" ) submitted a proposal (" Knife River Proposal" ) to furnish, place, and compact approximately 6,020 tons of asphalt at the rate of $64.50 per ton, and ELL subsequently accepted

Page 1207

[157 Idaho 603] that Proposal. Knife River began work on the project on August 22, 2006. Knife River began paving sections of the dedicated roadways in the residential portions of the Summer Wind Development in November 2006. Almost a year later, on August 16, 2007, ELL requested that Knife River prepare a change order estimating its cost for supplying asphalt for and paving golf cart paths for the Summer Wind Development. Knife River subsequently prepared a Small Job Worksheet reflecting the additional paving work.

On June 18, 2007, Stanley entered into a Professional Services Agreement with Union Land to provide engineering services for Summer Wind Development. That contract included creating a topographical map sufficient to design the golf clubhouse, parking lot and drainage facilities, as well as designing and preparing a grading and drainage plan for the clubhouse and parking facilities, and then project administration services. On June 26, 2007, Stanley employee Steven Arnold recorded 1.5 hours of time for a project described as the " Summer Wind Club House" under the task number for " project administration."

Union Land sought financing from IFA, which IFA provided and secured by recording deeds of trust against the Summer Wind Development in the amount of $9,500,000 on July 13, 2007. While Stanley recorded work done on project administration before IFA recorded its deed of trust, it first performed work constituting on-site physical improvements to Summer Wind Development on July 19, 2007.

Knife River discontinued its work on the Summer Wind Development due to ELL's nonpayment for Knife River's work furnishing, placing, and compacting asphalt through August 29, 2007. On October 25, 2007, Knife River recorded liens against Phases I and II of the Summer Wind Development for $217,385.82.

IFA foreclosed its deeds of trust against the Summer Wind Development on January 29, 2009, and March 17, 2009. Summer Wind Partners obtained title to the Summer Wind Development property through a series of trustee's deeds, and on February 15, 2011, recorded a Special Warranty Deed to its golf course lots to Idaho Golf Partners (" IGP" ).

On April 22, 2008, Knife River filed a complaint seeking to foreclose its materialmen's liens. IFA, along with certain other named defendants, answered Knife River's complaint on July 7, 2008. Stanley's lien on this project is on land related to a clubhouse on a common area lot within the subdivision, and thus overlaps with Knife River's lien claims. Consequently, on July 17, 2008, Stanley filed an answer, counterclaim and cross-claim to Knife River's complaint. Stanley's counterclaims and cross-claims sought to validate and establish the priority date of Stanley's lien against all interested parties. These cases were consolidated on March 2, 2009.

Knife River filed a summary judgment motion on December 9, 2009, seeking to foreclose its materialmen's lien claims. IFA also filed a summary judgment motion on the same day seeking to invalidate Knife River's lien claims. Stanley then filed a summary judgment motion on December 10, 2009, seeking an order of priority, validity, and amount of its lien.

Following a hearing on the summary judgment motions, the district court entered its decision on April 13, 2010. With regard to the priority date of Stanley's lien claim, the district court denied Stanley's summary judgment motion, holding Idaho Code section 45-506's language allowed an engineer's claim of lien to relate back only to the first date actual physical work was conducted on the property at issue. As to Knife River's lien claims, the district court entered summary judgment in favor of Knife River, holding Knife River's liens were valid and superior to IFA's deed of trust. IFA subsequently challenged the district court's decision granting Knife River summary judgment. Following several subsequent motions and pleadings to that end, the district court entered a Judgment and Decree of Foreclosure related to Knife River's lien claims on October 26, 2012.

In the meantime, Stanley, Knife River, IFA, and others had executed a Stipulation for Reconsideration and Entry of Certified

Page 1208

[157 Idaho 604] Judgment on September 26, 2012 (" Stipulation" ) as to the judgment on Stanley's lien claim. Among other things, the Stipulation requested that the district court enter a final, certified appealable judgment denying Stanley's summary judgment motion based on the district court's decision that the priority date for an engineer's lien is the date actual physical work was performed on-site.

Based on the Stipulation, the district court entered a certified judgment on Stanley's summary judgment motion on October 16, 2012. On November 26, 2012, Stanley filed its Notice of Appeal from the certified judgment, challenging the district court's decision as to the priority date for its engineer's lien. Then, on December 6, 2012, IFA filed its Notice of Appeal, challenging the district court's decision granting Knife River's summary judgment motion.

The Idaho Supreme Court remanded Stanley's appeal to the district court because the October 16, 2012 Certified Judgment did not qualify as a final judgment. On remand, the district court entered an Order Clarifying Determination on Reconsideration after Remand (" Reconsideration Order" ), and a Judgment, on March 15, 2013. Stanley subsequently filed a motion for reconsideration of that Order and Judgment, believing the Order and Judgment's language contradicted the parties' Stipulation and requesting the court to reconsider and enter judgment including language that would preserve Stanley's right to appeal.

Following a hearing on August 8, 2013, the district court entered its final judgment as the parties requested. On August 16, 2013, Stanley filed its First Amended Notice of Appeal challenging the August 8, 2013 Judgment. On appeal, Stanley challenges the district court's decision that the priority of an engineer's lien under Idaho Code section 45-506 relates back only to the first date actual physical work was performed on-site. On cross-appeal, IFA challenges the district court's decision granting Knife River summary judgment. IFA claims the district court erred twice: first, by allowing Knife River to tack two separate projects together thereby reviving an expired lien on the roadway; and second, by concluding that Idaho Code section 45-508 did not require Knife River to designate on its claims of lien the amounts due for the roadways and the cart paths. Alternatively, IFA argues that the district court erred by entering a judgment and decree of foreclosure without first taking evidence regarding the amount of land necessary for the convenient use and occupation of the liened res.

II. ISSUES ON APPEAL

1. Whether the district court erred when it determined the priority of an engineer's lien under Idaho Code section 45-506 relates back only to the first date physical work was performed on-site.
2. Whether Knife River was required to file two separate liens for the work it did on roadways and golf cart paths.
3. Whether the district court erred when it determined Knife River was not required to designate its lien amounts on the roadways and cart paths under Idaho Code section 45-508.
4. Whether the district court erred by entering a judgment and decree of foreclosure in favor of Knife River without first taking evidence regarding the amount of land necessary for the convenient use and occupation of the liened res pursuant to Idaho Code section 45-505.

III. STANDARD OF REVIEW

This Court reviews a motion for summary judgment pursuant to the same standards as the district court. Mackay v. Four Rivers Packing Co., 145 Idaho 408, 410, 179 P.3d 1064, 1066 (2008). Summary judgment is appropriate where " 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 judgment as a matter of law." I.R.C.P. 56(c). " [A]ll reasonable inferences that can be drawn from the record are to be drawn in favor of the ...


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