Opinion ID: 1395295
Heading Depth: 2
Heading Rank: 4

Heading: Lienholder as Necessary Party

Text: Finally, HKI asserts that the trial court did not have jurisdiction to resolve the issues before it because a necessary party, the holder of a blanket lien on the subdivision property, was not a party to the action. In 1990 High Knob Associates, assignee of HKI's assets, borrowed $1.6 million and executed a three-year renewable Loan and Security Agreement and Purchase Money Deed of Trust in favor of the lender. The listed security for the loan included the unsold lots in the subdivision, the common areas, and other personalty. At trial, HKI asserted that the decision of the court could adversely affect the rights of the lienholder and, therefore, the lienholder was a necessary party. We disagree. Unlike the mechanics' liens enforcement actions relied on by HKI, this is an action seeking only a declaratory judgment. The time for conveyance of the common facilities with or without liens has not yet occurred. In the absence of any conveyance, there is no adverse impact on the present security interests of the lienholder and nothing in this litigation impairs High Knob Associates' obligation to the lienholder. Indeed, the debt may not even exist when the common facilities are ultimately conveyed. Accordingly, the lienholder was not a necessary party under these circumstances.