Copper Hills Custom Homes v. Griffin ( 2024 )

2024 UT App 110THE UTAH COURT OF APPEALS
COPPER HILLS CUSTOM HOMES, LLC,
Appellant,
v.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., ET AL., 1
Appellees.
Opinion
No. 20220873-CA
Filed 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
1. The parties on appeal are not limited to those listed but also
include other parties whose names appear on the notice of appeal
or who have otherwise entered appearances in this appeal.
Copper Hills v. MERS
JUDGE GREGORY K. ORME authored this Opinion, in which
JUDGES RYAN M. HARRIS and JOHN D. LUTHY concurred.
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.
2. Copper Hills recorded its mechanics’ liens in 2007. Since that
time, the relevant statute has been amended and renumbered, and
the types of liens at issue in this appeal are now denominated
“construction liens”—not “mechanics’ liens.” See Utah Code Ann.
§ 38-1a-701 (LexisNexis 2023); id. § 38-1a-102(8), (11). But we retain
the 2007 nomenclature in this opinion because the version of the
Utah Code in effect in 2007 governs this appeal, and all citations
to the relevant provisions of the mechanics’ lien statute in this
opinion are to the version in effect in 2007. Cf. Uhrhahn Constr.
& Design, Inc. v. Hopkins, 2008 UT App 41, ¶ 6 n.5, 179 P.3d 808(“At trial, the court and parties appropriately relied on the version
of the mechanics’ lien statute then in effect, and we do the same.”).
20220873-CA 2 2024 UT App 110Copper Hills v. MERS
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),
3. Countrywide was dismissed from this appeal with prejudice
based on the parties’ settlement agreement. Additionally, several
parties that participated in the district court proceedings have
since been substituted on appeal by their successors in interest.
20220873-CA 3 2024 UT App 110Copper Hills v. 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
4. The action relevant to the property in which Countrywide and
MERS had an interest was filed on February 6, 2008—exactly 180
days after Copper Hills filed its notice of claim against that
property.
5. When Copper Hills filed its first enforcement action in 2007, the
Savings Statute was codified at section 78-12-40. The statutory
provision was renumbered in 2008, but no changes were made to
the text of the statute. Compare Utah Code Ann. § 78-12-40(LexisNexis Supp. 2007), with id. § 78B-2-111 (2012).
20220873-CA 4 2024 UT App 110Copper Hills v. MERS
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)
20220873-CA 5 2024 UT App 110Copper Hills v. MERS
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
20220873-CA 6 2024 UT App 110Copper Hills v. MERS
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
6. Not all defendants named in the 2015 lawsuit are appellees in
this matter. After the district court entered the July 13, 2016 order,
the claims against the remaining defendants were dismissed as
the case wound its way through the district court. But the only
order attached to Copper Hills’ principal brief is the district
court’s July 13, 2016 order. According to Copper Hills, however,
it “is challenging numerous orders, but every order is based on
the district court’s same interpretation of section 38-1-11(4) of the
Utah Code.” Even if we accept the validity of that assertion, it has
no effect on our jurisdiction to hear this appeal.
7. “Rule 3(d) does not require that an appellant indicate that the
appeal also concerns intermediate orders or events that have led
to [the] final judgment.” Speros v. Fricke, 2004 UT 69, ¶ 16, 98 P.3d
28 (quotation simplified). Here, Copper Hills designated the final
judgment and “all subsidiary rulings and orders leading to final
judgment.” Thus, Copper Hills’ notice of appeal was actually
more detailed than the rule requires.
20220873-CA 7 2024 UT App 110Copper Hills v. MERS
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 13, 2016
order did not dispose of the entire action and, thus, was not
appealable absent a compliant rule 54(b) certification).
Accordingly, we have jurisdiction to review the issue Copper
Hills has raised on appeal.
II. The Mechanics’ Lien Statute
¶12 In Utah, mechanics’ liens exist solely by reason of statute.
See AAA Fencing Co. v. Raintree Dev. & Energy Co., 714 P.2d 289,
291 (Utah 1986) (“Mechanics’ liens are statutory creatures
unknown to the common law.”). Accordingly, adherence to the
statutory requirements is necessary to obtain and enforce a
mechanics’ lien. Id. at 292 (“The vitality of a lien created solely by
statute depends on the terms of the statute[.]”). The parties offer
two competing interpretations of the mechanics’ lien statute.
Under Copper Hills’ reading, the 2015 lawsuit is timely; under
Appellees’ reading, the lawsuit must be dismissed for lack of
jurisdiction.
¶13 “The first step of statutory interpretation is to evaluate the
best evidence of legislative intent: the plain language of the statute
itself.” In re Z.C., 2007 UT 54, ¶ 6, 165 P.3d 1206 (quotation
simplified). “When examining the statutory language we assume
the legislature used each term advisedly and in accordance with
its ordinary meaning.” Id. (quotation simplified). We also “seek to
render all parts of the statute relevant and meaningful, and we
accordingly avoid interpretations that will render portions of a
statute superfluous or inoperative.” Williamson v. MGS by Design,
Inc., 2022 UT 40, ¶ 23, 521 P.3d 866 (quotation simplified).
¶14 The statutory provisions at issue here control the
timeliness of an action to enforce a mechanics’ lien and enumerate
20220873-CA 8 2024 UT App 110Copper Hills v. MERS
the consequences of filing an untimely action. See Utah Code Ann.
§ 38-1-11(2), (4) (LexisNexis Supp. 2007). Section 38-1-11(2)
requires a “lien claimant” to “file an action to enforce the lien . . .
within 180 days from the day on which the lien claimant filed a
notice of claim.” Section 38-1-11(4)(a) provides that a mechanics’
lien “is automatically and immediately void if an action to enforce
the lien is not filed within” the 180-day period. And section
38-1-11(4)(b) states, “Notwithstanding [the Savings Statute], a
court has no subject matter jurisdiction to adjudicate a lien that
becomes void under Subsection (4)(a).” Read together, these
statutory provisions require a mechanics’ lien claimant to file an
action to enforce its lien within 180 days after filing the notice of
claim, and they strip the courts of jurisdiction to adjudicate any
enforcement action filed beyond the 180-day period, regardless of
whether the Savings Statute would otherwise provide an avenue
to bring the action. Put more simply, if an enforcement action is
not brought within the statutory limitations period of 180 days,
the lien is void, an action to enforce it cannot be filed under the
Savings Statute, and no court has jurisdiction to adjudicate it.
¶15 Here, we assume—for purposes of our analysis—that
Copper Hills filed timely notices of claim in 2007. We also assume
that Copper Hills thereafter filed eight actions to enforce the liens
within 180 days. And the record shows that after those actions
were consolidated and eventually dismissed, Copper Hills
attempted to enforce the liens a second time by invoking the
Savings Statute and filing an entirely new action—the 2015
lawsuit. Appellees promptly moved to dismiss the 2015 lawsuit,
arguing that Copper Hills could not use the Savings Statute to
bring the 2015 lawsuit because the suit was not filed within the
180-day statutory period and thus the liens were void. The district
court agreed with Appellees.
¶16 Copper Hills challenges the dismissal of the 2015 lawsuit
by raising a superficially tenable interpretation of the mechanics’
lien statute. Pursuant to section 38-1-11(4)(a), a lien is void only
“if an action to enforce the lien is not filed within” the 180-day
statutory period. According to Copper Hills, its liens are not void
20220873-CA 9 2024 UT App 110Copper Hills v. MERS
because it did file “an action” to enforce them within the 180-day
period, i.e., the first enforcement action. And, it continues,
because the liens are not void given that timely filing, section
38-1-11(4)(b) does not foreclose the use of the Savings Statute to
file a subsequent enforcement action. In other words, Copper
Hills reads the mechanics’ lien statute to protect a lien from
becoming void under section 38-1-11(4)(a) as long as the lien
claimant has filed at least one action to enforce the lien within the
180-day statutory limitations period.
¶17 The flaw in Copper Hills’ interpretation, however,
becomes apparent when the mechanics’ lien statute is read in
conjunction with the Savings Statute. The Savings Statute
provides as follows:
If any action is timely filed and the judgment for the
plaintiff is reversed, or if the plaintiff fails in the
action or upon a cause of action otherwise than
upon the merits, and the time limited either by law
or contract for commencing the action has expired,
the plaintiff . . . may commence a new action within
one year after the reversal or failure.
Id. § 78B-2-111(1) (2012). The Savings Statute thus gives a litigant
an additional opportunity to pursue a claim only if three
requirements are satisfied: (1) the original action was filed within
the statute of limitations, (2) the original action was dismissed
other than on the merits, and (3) the applicable statute of
limitations has expired. Ewing v. Department of Transp., 2010 UT
App 158, ¶ 7, 235 P.3d 776, cert. denied, 241 P.3d 771 (Utah 2010).
Thus, the Savings Statute is only applicable when a prior timely
action has been filed by a party.
¶18 But if—as Copper Hills reads the mechanics’ lien statute—
filing any action within the 180-day period forever protects a
mechanics’ lien from becoming void under section 38-1-11(4)(a),
then section 38-1-11(4)(b) is entirely superfluous. This is so
because every lien claimant invoking the Savings Statute to file a
20220873-CA 10 2024 UT App 110Copper Hills v. MERS
second action could not do so unless it necessarily filed a first
timely action. Thus, under Copper Hills’ interpretation of the
statute, no second lien enforcement action brought under the
Savings Statute can ever involve a void lien because the first
timely action shielded the lien from becoming void in perpetuity.
And because section 38-1-11(4)(b) only prohibits use of the
Savings Statute to bring a second enforcement action if the lien is
void, that statutory provision could have no operative effect or
function.
¶19 Recognizing that this court must not read a statute in a way
that renders portions of it superfluous, Copper Hills offers a
scenario that purportedly gives effect to section 38-1-11(4)(b) as it
interprets the provision. It argues that a lien claimant who seeks
to use the Savings Statute to add an omitted defendant to a lien
enforcement action would be prohibited by section 38-1-11(4)(b)
from adding claims against the omitted defendant because no
timely initial action was ever filed against the omitted defendant. 8
Even if we accept the accuracy of this hypothetical, Copper Hills
admits that the scenario it describes is “a rather unlikely
situation,” and we agree that it involves an exceedingly remote
possibility. But because this single, exceedingly remote possibility
is the only scenario Copper Hills has offered that possibly gives
any effect to section 38-1-11(4)(b), Copper Hills’ reading of the
statute is unreasonable.
¶20 We read the mechanics’ lien statute in the way advocated
by Appellees because it is the only reasonable interpretation that
8. Copper Hills’ hypothetical is actually a bit more elaborate. For
example, it explains that the omitted defendant must also be a
tenant-in-common with the included defendant because “tenants
in common have an identity of interest.” Otherwise, according to
Copper Hills, the lien claimant cannot satisfy the relation-back
test of rule 15(c) of the Utah Rules of Civil Procedure.
20220873-CA 11 2024 UT App 110Copper Hills v. MERS
gives effect to all the statute’s provisions. 9 If the particular action
brought by the lien claimant to enforce its lien is filed after the
180-day statutory period has expired, the lien is void, and section
38-1-11(4)(b) strips the courts of subject matter jurisdiction. And
this is true regardless of whether the lien claimant previously filed
a timely enforcement action that was dismissed other than on the
merits.
CONCLUSION
¶21 Copper Hills’ 2015 lawsuit was filed well beyond the
180-day statutory limitations period. And the mechanics’ lien
statute does not allow Copper Hills to take advantage of the
Savings Statute. Because the 2015 lawsuit was untimely, the
mechanics’ liens it was attempting to enforce are void, and the
district court lacked subject matter jurisdiction to adjudicate those
liens.
¶22 Affirmed.
9. For the first time in its reply brief, Copper Hills argues that the
mandate rule requires us to read our prior opinion as holding that
the Savings Statute applies to the 2015 lawsuit, otherwise the
distinction between a dismissal with or without prejudice “would
not matter” and the prior opinion would be “merely advisory.”
See Morningside Devs., LLC v. Copper Hills Custom Homes, LLC, 2015
UT App 99, ¶ 12, 348 P.3d 726 (holding Copper Hills’ first
enforcement action was properly dismissed without prejudice).
There are any number of reasons to reject this argument: the issue
is not preserved, see State v. Johnson, 2017 UT 76, ¶ 15, 416 P.3d
443; the argument is raised for the first time in the reply brief, see
State v. Lisenbee, 2022 UT App 19, ¶ 18 n.5, 505 P.3d 523; and the
issue of whether Copper Hills could file a second action was not
discussed in our prior opinion, leaving that question undecided
for purposes of the mandate rule, see Department of Transp. v. Ivers,
2009 UT 56, ¶ 12, 218 P.3d 583.
20220873-CA 12 2024 UT App 110