Opinion ID: 1250100
Heading Depth: 1
Heading Rank: 7

Heading: personal liability of the bank

Text: The district court judgment stated that C & R and Depner were entitled to a personal judgment for the residue against the Bank. The Bank asserts that the remedy to enforce a mechanic's lien is to force a sale of the property and that it is not liable for any deficiency if the monies from the sale do not cover the amount of Depner's and C & R's liens. We agree. In Milner Et Al. v. Shuey, 57 Nev. 159, 69 P.2d 771 (1937), this court stated that there must be a contractual relationship regarding the furnishing of labor and materials between the party foreclosing the lien and the party against whom personal liability is sought. This court stated: [S]uch a relation is essential to establish a personal liability against the owner of the property in addition to a judgment foreclosing a lien... . Id. at 179, 69 P.2d at 772. Further, the statutory language regarding deficiencies and personal actions is illuminating here. NRS 108.238 provides: Right to maintain personal action for debt not impaired. Nothing contained in NRS 108.221 to 108.246, inclusive, shall be construed to impair or affect the right of any person to whom any debt may be due for work done or material furnished to maintain a personal action to recover such debt against the person liable therefor. (Emphasis added.) It is unjust to hold the Bank personally liable for a deficiency when it was not a party to the C & R/Benny contract, and because the Bank is not the person liable for the debt under NRS 108.238. C & R and Depner argue that the Bank was unjustly enriched, because the work they performed increased the value of the property, and the Bank should be held personally liable for any deficiency. C & R and Depner contend that the Bank relied on their work to increase the value of the land and therefore the principle of unjust enrichment is applicable. While there was a benefit conferred on the Bank, it does not rise to unjust enrichment. California has considered this question in Kossian v. American Nat. Ins. Co., 254 Cal. App.2d 647, 62 Cal. Rptr. 225 (1967). There, a building was destroyed by fire. Kossian provided services to the owner for debris removal and was never compensated for his services. American National Insurance Company obtained the property when the owner assigned his interest to the insurance company. Kossian sued the insurance company on a theory of unjust enrichment. After noting that there was no privity of contract between Kossian and the insurance company for work performed, the court stated that there was no unjust enrichment even though a benefit had been conferred on the insurance company. Id. at 648-49, 62 Cal. Rptr. 225. Any prudent lender evaluates a loan and hopes that the land will increase in value. There is simply no basis in this case to find that the Bank was unjustly enriched by the work C & R and Depner performed on the ranch, pursuant to their contract with Benny.