Opinion ID: 1298264
Heading Depth: 4
Heading Rank: 2

Heading: Is Buckhorn's Lien Superior to Nystrom's Deed of Trust?

Text: If it is determined at trial that Buckhorn's lien is valid, the next issue would be whether Buckhorn's mechanics' lien is superior to Nystrom's deed of trust. When a mechanics' lien competes with another encumbrance on the property, such as a deed of trust, the general rule of priority  the interest that is earlier in time will have priority of right  usually governs. Blum, § 7.4, at 253. Alaska Statute 34.35.060(a) embodies the first-in-time priority rule: Except as provided in (c) of this section, an encumbrance which is properly recorded shall be preferred to a lien created under AS 34.35.050-34.35.120 unless the claim of lien under AS 34.35.070 or notice of claim to lien under AS 34.35.064 has been recorded before the encumbrance. The preference granted for a prior mortgage or deed of trust under this section applies without regard to when the sums are disbursed or whether the disbursements are required under the terms of the loan agreement. The exception to the first-in-time rule is found in AS 34.35.060(c), which provides: A lien created by AS 34.35.050-34.35.120 in favor of an individual actually performing labor upon a building or other improvement in its original construction or of a trustee of an employee benefit trust for those individuals is preferred to a prior encumbrance upon the land on which the building or other improvement is constructed. (Emphasis added.) In the instant case, Nystrom recorded his deed of trust in May 1980. Buckhorn's priority date is February 27, 1985  the date Buckhorn recorded its claim of lien. [16] Consequently, unless Buckhorn is an individual [who] actually performed labor ... upon a building in its original construction, Nystrom's prior-recorded deed of trust is superior to Buckhorn's lien.