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Mavco, Inc. v. Eggink

August 29, 2006

MAVCO, INC., D/B/A MAVERICK CONSTRUCTION, APPELLANT,
v.
RODNEY EGGINK, ET AL., RESPONDENTS, VERMILLION STATE BANK, ET AL., DEFENDANTS, WELLS FARGO BANK, N.A., RESPONDENT.



Sherburne County District Court File No. C9-04-1096.

SYLLABUS BY THE COURT

A mortgagee is protected by the statute of limitations in Minn. Stat. § 514.12, subd. 3 (2004), when a mortgage is issued before, but not recorded until after, a mechanic's lien foreclosure action is started.

The opinion of the court was delivered by: Forsberg, Judge

Affirmed

Forsberg, Judge*fn1

Minge, Judge, dissenting

Considered and decided by Minge, Presiding Judge, Halbrooks, Judge, and Forsberg, Judge.

OPINION

On appeal in this mechanic's lien foreclosure action, appellant construction company argues that (1) respondent mortgagee is not protected by the statute of limitations in Minn. Stat. § 514.12, subd. 3 (2004), because the mortgage was issued after appellant's mechanic's lien was filed and the mortgage was not recorded until after appellant's mechanic's lien action was started; and, alternatively, (2) the district court should have allowed appellant to amend its complaint to relate back under Minn. R. Civ. P. 15.03 to give appellant's mechanic's lien priority over the mortgage for purposes of these proceedings. We affirm.

FACTS

Respondents Rodney and Karla Eggink own residential property in Becker, Minnesota. Appellant Mavco, Inc., d/b/a Maverick Construction, provided services, labor, skill, and material in connection with improvements to the Eggink property. The last date that Mavco contributed to the improvement was November 26, 2003.

The Egginks did not pay Mavco for all of its work. On January 23, 2004, Mavco filed a mechanic's lien statement pursuant to Minn. Stat. § 514.08, subd. 2 (2004). Mavco commenced this mechanic's lien foreclosure action on May 18, 2004. On May 19, 2004 Mavco filed a notice of lis pendens with the Sherburne County Recorder.

On May 14, 2004, three days before Mavco commenced this action, the Egginks refinanced their debt on the property and provided respondent Wells Fargo Bank, N.A., with a mortgage against the property. On or about June 30, 2004, in the answer to the complaint, the Egginks informed Mavco of the existence of the Wells Fargo mortgage. The mortgage was recorded with the Sherburne County Recorder's Office on July 28, 2004.

On January 5, 2005, the Egginks and Mavco entered into a mediated settlement agreement under which the Egginks agreed to pay Mavco $100,000. The agreement provided that, if payment was not made by March 5, 2005, a mechanic's lien judgment, plus attorney fees and costs, would be entered. Wells ...


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