Opinion ID: 2089638
Heading Depth: 2
Heading Rank: 3

Heading: GMH's Cross Claim

Text: Having determined that Ryan did not serve JAG and that the district court had no personal jurisdiction over JAG in Ryan's lien action, we are left with the question of whether GMH's cross-claim against JAG survives. Because the court of appeals concluded that the district court did have personal jurisdiction over JAG in Ryan's lien action, it did not reach this issue. [8] Under the mechanics' lien statutes, once a lien action is filed other possible lienholder-claimants with claims arising from the same improvements cannot initiate their own action but must intervene in the original action by answer. Minn.Stat. § 514.12, subd. 2. [9] GMH originally was named as a defendant in Ryan's complaint and asserted its own lien action against JAG in its answer. GMH's lien listed its last day of work as June 6, 1998. GMH mailed its answer, which included the cross-claim against JAG, to JAG's attorney on December 28, 1998. JAG argues that the district court never had personal jurisdiction over JAG and that the court's lack of jurisdiction extends to the cross-claim because GMH did not personally serve JAG within one year of its last day of work. JAG further argues that, if the district court never had personal jurisdiction over JAG in Ryan's lien action, then GMH's cross-claim must stand on independent jurisdictional grounds in order to survive JAG's motion to dismiss. GMH does not disagree, but contends that independent jurisdictional grounds do support its cross-claim because it satisfied the service requirements set forth in Minn. R. Civ. P. 5.02 by mailing its answer to JAG's attorney in December 1998. JAG responds that it was not a party at the time GMH mailed its answer and that rule 5.02 is not applicable to non-parties. JAG argues that GMH was thus required to satisfy the personal service requirements as set forth in Minn. R. Civ. P. 4.03 and, because GMH failed to do so, its lien action against JAG must be dismissed. Generally, personal service is governed by Minn. R. Civ. P. 4.03. [10] As noted above, however, the mechanics' lien statutes govern the requirements for initiating and maintaining a lien action. See Minn. Stat. § 514.11 (The action may be commenced by any lienholder who has filed a lien statement for record and served a copy thereof on the owner pursuant to section 514.08, and all other such lienholders shall be made defendants therein.). Nonetheless, the rules of civil procedure apply to lien actions unless the mechanics' lien statutes are inconsistent or in conflict with the rules of civil procedure. Minn. R. Civ. P. 81.01(a) & App. A. Here, section 514.11 does not specify how a summons should be served in order to commence a lien action and therefore the Minnesota Rules of Civil Procedure, specifically rule 4.03, apply and govern service in a lien action. [11] Until served pursuant to rule 4.03, one is not made a party to an action. Thompson Yards, 161 Minn. at 146-47, 201 N.W. at 302 (holding that one is not a party to an action until one is in a position to be bound by the judgment, and one cannot be bound by a judgment until the court acquires jurisdiction over that individual), see generally Minn. R. Civ. P. 3-5. If a person is not made a party to a lien action within the one-year time limit of section 514.12, subd. 3, that person is not bound by any judgment resulting from the action; in effect, the lien is terminated as to that person. Minn.Stat. § 514.12, subd. 3; see Bauman, 145 Minn. at 140, 176 N.W. at 500. GMH does not argue that it personally served JAG pursuant to rule 4.03, but rather contends that it met the service requirements set forth in Minn. R. Civ. P. 5.02 and thereby made JAG a party to the lien action. Rule 5.02 permits service by mailing an answer to a party's attorney. [12] GMH argues that when JAG filed its answer to Ryan's complaint, notwithstanding the fact that JAG had not been served by Ryan, JAG made an appearance under Minn. R. Civ. P. 5.01 [13] and therefore GMH was permitted to serve JAG pursuant to rule 5.02. We agree that, by answering, JAG took the type of action that constitutes making an appearance pursuant to rule 5.01. However, rule 5.01 states that [a] party appears when that party serves or files any paper in the proceeding, and rule 5.02 permits service by mail upon a  party  or the party's attorney. Minn. R. Civ. P. 5.01, 5.02 (emphasis added). Both rules clearly govern service on one who is already a party. Thus, JAG had to be a party to the action before GMH could avail itself of the more lenient service requirements of rule 5.02. Because Ryan never served JAG, JAG was not a party to the lien action. [14] Under these circumstances, GMH could have made JAG a party only by personally serving its answer on JAG pursuant to Minn. R. Civ. P. 4.03 on or before June 6, 1999. Because GMH failed to do so, GMH's cross-claim was not supported by independent jurisdictional grounds and thus the district court had no personal jurisdiction over JAG in GMH's mechanics' lien foreclosure action. We recognize that because Ryan initiated this lien action, GMH was bound by Minn.Stat. § 514.12, subd. 2, to intervene by answer in the original proceeding and could not commence its own lien action. However, the survival of a cross-claim in a lien action is not dependent on whether the initial plaintiff, here Ryan, effectively serves all defendants. To assure the survival of its cross-claim despite Ryan's faulty service on JAG, GMH could have personally served its answer on JAG pursuant to Minn. R. Civ. P. 4.03. This requirement is consistent with the practice already encouraged for lienholders. E.g., Stephen A. Melcher, Foreclosing Mechanic's Liens And Suing Out Payment Bond Claims, in Minnesota Institute of Legal Education, Mechanic's Liens & Payment Bonds § VII, p. 5 (1999) (Any lien claimant which asserts its claim by answer ought to consider serving process and filing its own notice of lis pendens to avoid problems in the event that plaintiff's service or filing was defective.); John G. Patterson, Enforcing a Mechanics' Lien, in Minnesota State Bar Ass'n Continuing Legal Educ., A Comprehensive Guide to Mechanics' Liens in Minnesota § VII, p. 9 (1999) (If the plaintiff has failed to comply with any of the requirements of commencing foreclosure of its lien, such noncompliance could be fatal not only to the plaintiff but to the defendant lien claimants as well. The answering lien claimant must verify that the plaintiff has joined all interested parties in the action   . If an interested or responsible party was not joined, the answering lien claimant should join that party so complete relief can be awarded to the answering lien claimant.). Further, as noted above, [w]e have not treated service of process as a mere technicality, Patterson, 608 N.W.2d at 867, and we have always required parties to adhere strictly to the service requirements, see, e.g., Tullis, 570 N.W.2d at 311 (Service of process in a manner not authorized by the rule is ineffective service.); Berryhill, 106 Minn. at 459, 119 N.W. at 404 ([S]ervice must accord strictly with statutory requirements.). Service rules should be clear; parties should not be left to guess what, under different factual scenarios, will be an acceptable method of service. Requiring strict compliance achieves this result. In summary, we hold that the district court did not have personal jurisdiction over JAG in either Ryan's or GMH's lien action. We therefore reverse the court of appeals' decision and grant JAG's motion for summary judgment. Reversed.