Opinion ID: 4171199
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: ¶ 1 This case concerns a general contractor’s attempt to recover on a mechanic’s lien. Scott Bell, an employee of Jordan Construction, Inc., hired Jordan Construction as the general contractor to build a new home on property that he owned (the Property). Several months after the start of construction, Mr. Bell secured long-term financing and executed a trust deed on the Property. Mr. Bell then failed to pay Jordan Construction the full amount due for its work. When the home was nearly finished, Jordan Construction discovered that Mr. JORDAN CONSTR. v. FNMA Opinion of the Court Bell had been misusing company funds and terminated him. Mr. Bell responded by suing Jordan Construction. Jordan Construction in turn recorded a mechanic’s lien and lis pendens on the Property and counterclaimed for breach of contract, embezzlement, and foreclosure of the mechanic’s lien. Jordan Construction chose not to name the holder of the trust deed at that time. ¶ 2 While the suit was pending, Jordan Construction discovered that some subcontractors had not been paid for their work on the Property. Nearly nine months after the completion of construction, Jordan Construction filed an amendment to its notice of mechanic’s lien to include the additional amounts owed to the subcontractors. Jordan Construction then obtained summary judgment on its counterclaims against Mr. Bell, applied for a writ of execution, and took steps to initiate a sheriff’s sale of the Property. ¶ 3 Meanwhile, Mr. Bell had defaulted on his mortgage. The trust deed holder conducted a non-judicial foreclosure sale, and Federal National Mortgage Association (FNMA)1 purchased the trustee’s deed. FNMA then filed a motion asking the district court to quash the writ of execution and halt the sheriff’s sale because neither it, nor its predecessor in interest, had been named in this action. Over Jordan Construction’s objection, the district court quashed the writ and halted the sale. Jordan Construction then filed a third-party complaint against FNMA, asserting that its mechanic’s lien had priority over FNMA’s trustee’s deed. ¶ 4 Having been brought in as a party to this action, FNMA then prevailed on a series of motions before the district court. Jordan Construction asserts on appeal that the district court erred in those decisions. First, the district court concluded that FNMA is not bound by the judgment rendered against Mr. Bell earlier in the case under either the lis pendens or the doctrine of res judicata. Second, the court ruled that Jordan Construction’s amended notice of lien—which nearly doubled the amount claimed—was untimely. Third, it ruled that, under the 2008 Utah Code, Jordan Construction was not entitled to recover prejudgment interest on its mechanic’s lien claim. In all, FNMA, by obtaining these rulings, whittled down the amount that Jordan Construction had sought in its third-party complaint— $336,568.66—to $126,956.92, the amount listed on the face of the _____________________________________________________________ 1 At some point during the proceedings below, Bank of American Fork was substituted for FNMA. We refer to FNMA for convenience, as the parties have done in their briefs. 2 Cite as: 2017 UT 28 Opinion of the Court original lien. FNMA then stipulated to the payment of $126,956.92. The district court concluded that FNMA was the successful party and awarded it attorney fees under the mechanic’s lien statute, a decision which Jordan Construction also challenges on appeal. ¶ 5 We affirm the district court’s ruling as to each issue.