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STATE OF MINNESOTA IN COURT OF APPEALS A07-0377

Superior Construction Services, Inc., Appellant, vs. Latoria Belton, et al., Defendants, Town & Country Credit Corporation, a foreign corporation, Respondent.

Filed April 29, 2008 Affirmed Lansing, Judge Hennepin County District Court File No. 27-CV-05-013857

Patrick J. Kelly, Skelly & Capistrant, P.A., Suite 100, 1724 Selby Avenue, St. Paul, MN 55104 (for appellant) Gary B. Bodelson, 247 Third Avenue South, Minneapolis, MN 55415 (for respondent)

Considered and decided by Stoneburner, Presiding Judge; Lansing, Judge; and Peterson, Judge. SYLLABUS In a lien-enforcement action to determine whether a mechanics lien relates back to the start of a construction project or terminates because of abandonment of that project, the intent to abandon is determined under an objective standard.

OPINION LANSING, Judge This litigation arises from a priority dispute between a mechanics lien claimant and a mortgagee in a lien-enforcement action. The mortgage was recorded five months before the lien, but thirty-two months after the lien claimant first began work on the property. The lien claimant appeals the district courts conclusion, on cross-motions for summary judgment, that the claimant had abandoned its work on the project, and thus its lien did not relate back to the commencement of work that predated the mortgage filing. Because the evidence, as a matter of law, establishes that the project was abandoned, we affirm. FACTS Superior Construction Services, Inc. contracted in May 2002 to provide repair and restoration services for a fire-damaged Brooklyn Park property owned by Latoria Belton and LaTonya T. Harris. The estimated cost for the project was $40,000. In a workauthorization document, Belton agreed to remit the insurance proceeds to Superior within thirty days after receiving them. Superior completed the bulk of the contracted work over the next six months, and Belton was able to move back into the house in January 2003. The litigants dispute what happened next. Belton claims that she tried to contact Superior several times during 2003, but was "unsuccessful" and consequently assumed that they were abandoning the project. Superior general manager Grant Heino, in an affidavit excluded as untimely for purposes of the district courts summary-judgment decision, stated that the delinquency of a former employee delayed completion of the 2

project but asserted that the project file was "open" through 2003 and 2004. Heino claims that he spoke with Belton in November 2004, and scheduled an appointment on November 22 to go over the status of the project, but Belton failed to show up for the appointment. Belton and Harris executed a mortgage with respondent Town & Country Credit Corporation on December 16, 2004. Town & Country was not aware of any ongoing work by Superior or of any debt owed to Superior for work on the property. When Town & Country conducted a title search, Superior had not yet filed a lien against the property. Town & Country recorded its mortgage in January 2005. It is undisputed that Superior did not invoice Belton for the project during 2003. Belton received insurance proceeds directly from her insurer but did not honor the agreement to remit the proceeds to Superior. It is also undisputed that Superior contacted Belton in February 2005 and scheduled a meeting to determine what work was necessary to complete the project. On March 10, 2005, Belton authorized Superior to complete work on cabinets, counter tops, and heat registers. According to Superior, this work was "within the original scope of work on the project." Superior devoted an additional 8.25 hours of billable labor and $360.41 in materials to complete the project. Superior recorded a mechanics lien on the title to the property on June 22, 2005. On June 24, 2005, Belton signed a statement of completion that was prepared by Superior. In that statement Belton certified that Superior had completed the contracted restoration work, "which work was originally commenced in May of 2002."

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Superior brought this action to enforce the lien and moved for default judgment against Belton and Harris. Superior also moved for partial summary judgment against Town & Country, requesting a judicial determination that its mechanics lien was superior to Town & Countrys mortgage and that it had not waived that superiority. Town & Country moved for summary judgment on its counterclaim, requesting a judicial determination on the priority of its mortgage. The district court granted Superiors motion for default judgment against Belton and Harris but denied its motion for partial summary judgment against Town & Country. The court granted Town & Countrys motion for summary judgment on its counterclaim, based on its determination that Superior had abandoned the construction it began in May 2002, and thus that its lien, filed on June 22, 2005, did not relate back to the beginning of that project. This appeal followed. ISSUE Did the district court err by granting summary judgment determining, as a matter of law, that Town & Countrys mortgage had priority over Superiors mechanics lien? ANALYSIS "On appeal from summary judgment, we determine whether there are any genuine issues of material fact and whether a party is entitled to judgment as a matter of law." Yang v. Voyagaire Houseboats, Inc., 701 N.W.2d 783, 788 (Minn. 2005). In assessing the evidence, we take the view most favorable to the party against whom judgment was granted. Motorsports Racing Plus, Inc. v. Arctic Cat Sales, Inc., 666 N.W.2d 320, 323 n.1 (Minn. 2003). But if the nonmoving party fails to raise a genuine issue of fact on any

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element essential to establishing its case, summary judgment is appropriate. Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995). No genuine issue of material fact exists if the record as a whole "could not lead a rational trier of fact to find for the non-moving party." DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1991). The district court is permitted to act on its determination that "a particular piece of evidence may have no probative value." Id. at 70. When the material facts are not in dispute, we review the district courts application of law de novo. In re Collier, 726 N.W.2d 799, 803 (Minn. 2007). Principles derived from two statutory provisions guide the resolution of this priority dispute. First, a mechanics lien generally attaches to the land "from the time the first item of material or labor is furnished upon the premises for the beginning of the improvement." Minn. Stat.

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