Can a mechanics' lien survive without proper notice of lis pendens? Victor Plastering v. Swanson Building Materials Explained

Background and Facts

Victor Plastering recorded a mechanics’ lien on a Utah County property in January 2004 and filed a foreclosure action in April 2004. However, Victor failed to record a notice of lis pendens and did not initially name Swanson Building Materials as a defendant, despite Swanson also having performed work on the property. Swanson had recorded its own mechanics’ lien in January 2004, but that lien expired by operation of law in July 2004 when Swanson failed to file an enforcement action within 180 days. In February 2006, Victor amended its complaint to include Swanson, seeking to establish lien priority.

Key Legal Issues

The court addressed two primary issues: (1) whether Swanson had standing to contest Victor’s lien despite disclaiming any interest in the property, and (2) whether Victor’s failure to comply with Utah Code section 38-1-11(3)‘s lis pendens requirement rendered its lien void against Swanson. The court also considered whether the lis pendens requirement constituted a waivable statute of limitations defense.

Court’s Analysis and Holding

The Utah Court of Appeals affirmed summary judgment for Swanson on both issues. Regarding standing, the court held that a named defendant has standing to defend against claims regardless of whether it disclaims interest in the subject matter. More significantly, the court determined that Utah Code section 38-1-11(3) creates a substantive, non-waivable defense. When a lien claimant fails to record notice of lis pendens, the lien “is rendered void as to everyone except those named in the action and those with actual knowledge of the action.”

Practice Implications

This decision emphasizes the critical importance of strict compliance with mechanics’ lien procedural requirements. The lis pendens requirement is not merely procedural but substantive, meaning it cannot be waived even if not pleaded as a defense. Practitioners must ensure immediate recording of lis pendens notices when filing lien foreclosure actions to preserve lien validity against all potential parties. The decision also clarifies that defendants maintain standing to raise statutory defenses regardless of their claimed interest in the property.