New Mechanic's Lien Decision from the Idaho Supreme Court
The Idaho Supreme Court recently issued another mechanic's lien decision in a case styled ACI Northwest Inc. v. Monument Heights, LLC – Docket No. 41269 [January 21, 2015]. A link to the full decision is here: http://www.isc.idaho.gov/opinions/41269.pdf
In a case arising out of Kootenai County, where ACI Northwest Inc. (ACI) sought judicial foreclosure of its two mechanic’s liens on property encumbered by two deeds of trust. The district court determined that ACI’s liens were lost and unenforceable against the property because ACI failed to name or join the trustees in its action within the six-month statute of limitations in Idaho Code section 45-510. Thus, the district court granted summary judgment to Monument Heights LLC, Dan Jacobson, Sage Holdings LLC, Steven Lazar, the Mitchell A. Martin and Karen C. Martin Family Trust dated August 9, 2005, Devon Chapman, HLT Real Estate LLC, Anthony St. Louis, Andrea Stevens, and Lilly Properties Inc. ACI appealed to the Idaho Supreme Court.
The Idaho Supreme Court reaffirmed its holding in ParkWest Homes, LLC v. Barnson (ParkWest II), 154 Idaho 678, 302 P.3d 18 (2013), that an action to enforce a mechanic’s lien on property encumbered by a deed of trust must name the trustee, who hold legal title to the property, within the statutory time limitation in Idaho Code section 45-510. Failure to name the trustee within the prescribed time limitation results in the mechanic’s lien being lost against legal title, the trustee’s interest in the property. This Court determined that the district court properly applied ParkWest II and therefore affirmed the district court’s decision.
The lesson for those with potential mechanic's lien claims is to make sure you name or join the trustee to your cause of action within the six-month deadline. Failure to do so will result in a loss of mechanic's lien rights.