BARCLAY PULLMAN CORPORATION, an Illinois Corporation , Plaintiff , vs. HAU HING POON, individually, WEI MIN ZHAO, individually, CAI QIANG, individually, and RIVERSTONE GROUP, INC., an Illinois corporation, and SCHIMBERG, INC., an Iowa corporation, and M ATTHEW HOWARD d/b/a EIFS SERVICES , and RENTAL SERVICE CORPORATION, an Iow a corporation, and CONTINENTAL FIRE SPRINKLER CO., a Delaware corporation , and SUPERIOR PLUMBING, INC., an Iowa corporation, and CROELL REDI MIX, INC. , an Iowa corporation, and KELLEY & SONS BULLDOZING & EXCAVATING, INC., an Illinois corporation, and ANDERSON COMMERCIAL CONCRETE, INC., an Iowa corporation , CONSTRUCTION PARTNERS , INC., an Illinois corporation, and DELFS LANDSCAPE AND IRRIGATION and THE HEIGHTS BANK, Defen dants. THE HEIGHTS BANK, Third - Party Plaintiff - Appellee,
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IN THE COURT OF APPEALS OF IOWA
No. 8-861 / 07-1022
Filed November 26, 2008
BARCLAY PULLMAN CORPORATION,
an Illinois Corporation,
Plaintiff,
vs.
HAU HING POON, individually, WEI MIN ZHAO,
individually, CAI QIANG, individually, and
RIVERSTONE GROUP, INC., an Illinois
corporation, and SCHIMBERG, INC.,
an Iowa corporation, and MATTHEW HOWARD
d/b/a EIFS SERVICES, and RENTAL SERVICE
CORPORATION, an Iowa corporation, and
CONTINENTAL FIRE SPRINKLER CO.,
a Delaware corporation, and SUPERIOR
PLUMBING, INC., an Iowa corporation, and
CROELL REDI MIX, INC., an Iowa corporation, and
KELLEY & SONS BULLDOZING & EXCAVATING, INC.,
an Illinois corporation, and ANDERSON COMMERCIAL
CONCRETE, INC., an Iowa corporation,
CONSTRUCTION PARTNERS, INC.,
an Illinois corporation, and
DELFS LANDSCAPE AND IRRIGATION
and THE HEIGHTS BANK,
Defendants.
THE HEIGHTS BANK,
Third-Party Plaintiff-Appellee,
vs.
BLACKHAWK TITLE COMPANY,
Third-Party Defendant-Appellant.
HAU HING POON, WEI MIN ZHAO, and CAI QUIANG,
Third-Party Plaintiffs-Appellees,
vs.
BLACKHAWK TITLE COMPANY,
Third-Party Defendant-Appellant.
________________________________________________________________
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Appeal from the Iowa District Court for Scott County, J. Hobart Darbyshire,
Judge.
A third-party defendant argues that the claims against it were not subject
to joinder with the plaintiff’s action to foreclose a mechanic’s lien. AFFIRMED.
Stephen Hardy of Grefe & Sidney, P.L.C., Des Moines, for appellant
Blackhawk Title Company.
Ian Russell of Lane & Waterman, LLP, Davenport, and George Goebel of
Goebel Law Office, Davenport, for appellee The Heights Bank.
Roni N. Halabi for appellee Hau Hing Poon.
Considered by Vaitheswaran, P.J., and Potterfield, J. and Robinson, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2007).
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VAITHESWARAN, P.J.
A third-party defendant argues that the claims against it were not subject to
joinder with the plaintiff’s action to foreclose a mechanic’s lien.
I.
Background Proceedings
Barclay Pullman Corporation sued several defendants alleging in pertinent
part that (1) it was not paid in full for a construction project, (2) it had a
mechanic’s lien on the property, (3) its lien was superior to the rights of other
named defendants including the Heights Bank, which held the mortgage on the
property, and (4) it was entitled to judgment of foreclosure on its mechanic’s lien.
The Heights Bank filed a third-party petition against a previously unnamed
defendant, Blackhawk Title Company. The bank alleged Blackhawk acted as the
closing agent, title company, and construction loan escrow agent on the project
and, in that capacity, failed to obtain lien waivers as required by contract. The
bank sought a money judgment in the amount of the outstanding mechanics’
liens and indemnification for all claims that were paid without lien waivers. 1
Blackhawk moved to strike and dismiss the bank’s third-party petition on the
ground that Iowa Code section 572.26 (2005) disallows the joinder of mechanic’s
lien foreclosure actions with other actions. The district court denied the motion.
The court reasoned that “the third-party petition [was] not a joinder of another
1
Other defendants filed similar claims against Blackhawk. These claims were also
attacked by Blackhawk in the district court. The court heard the arguments for all of the
motions to strike and dismiss at the same time and issued one ruling concerning the
motions. To avoid confusion, we will refer only to the Heights Bank as the
defendant/third-party plaintiff, although our opinion applies to all third-party plaintiffs and
all motions to strike and dismiss in this action.
4
cause of action so as to be barred by statute.”
Blackhawk’s request for
interlocutory appeal was granted.
II.
Analysis
The sole issue on appeal is whether the district court correctly denied
Blackhawk’s motion to strike and dismiss. Both parties agree that our review is
for errors of law. See North Iowa Steel Co. v. Staley, 253 Iowa 355, 112 N.W.2d
364 (1961).
Iowa Code section 572.26 states, “An action to enforce a mechanic’s lien
shall be by equitable proceedings, and no other cause of action shall be joined
therewith.” Id. Resolution of this appeal turns on the meaning of “joined.”
As construed by our courts, joinder is “the statement of more than one
cause of action in a declaration.” North Iowa Steel, 253 Iowa at 358, 112 N.W.2d
at 366. Under this definition, section 572.26 prohibits a plaintiff from joining in its
original action an equity count to foreclose a mechanic’s lien with a law count for
money judgment. See Capitol City Drywall Corp. v. C.G. Smith Constr. Co., 270
N.W.2d 608, 610–11 (Iowa 1978); Gilcrest/Jewett Lumber Co. v. Moyer, 448
N.W.2d 711, 711 (Iowa Ct. App. 1989).
Joinder is not “a separate cause of action set up in a separate
declaration.” North Iowa Steel, 253 Iowa at 358, 112 N.W.2d at 366. Section
572.26, therefore, does not prohibit a plaintiff from separately pleading an
independent cause of action in response to a defendant’s pleading of set-off or
counterclaim. Capitol City Drywall, 270 N.W.2d at 611. Section 572.26 also
does not prohibit a named defendant from asserting a counterclaim against the
plaintiff. North Iowa Steel, 253 Iowa at 358, 112 N.W.2d at 366.
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Blackhawk seeks to apply section 572.26 to a third-party petition filed by a
named defendant in the original mechanic’s lien foreclosure action. The cited
precedent does not permit such an expansive application of the statute.
Therefore, the district court did not err in concluding that the section 572.26 bar
was inapplicable to the bank’s third-party petition against Blackhawk.
We turn to Blackhawk’s assertion that it will suffer prejudice because its
“constitutional right to trial by jury could be foreclosed or effectively foreclosed.”
As the bank points out, courts faced with a combination of mechanic’s lien
foreclosure actions and law issues have simply tried the equitable foreclosure
action to the court and the law issues to the jury.
See Moore’s Builder &
Contractor, Inc. v. Hoffman, 409 N.W.2d 191, 193 (Iowa Ct. App. 1987). This
procedure preserves a party’s right to a jury trial.
We affirm the district court’s ruling on Blackhawk’s motion to strike and
dismiss.
AFFIRMED.
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