Harper v. Haertl Constructors, Inc. (In re Hutchings & Harper Enterprises, Inc.)

OPINION FRYE, District Judge: The matter before the court is an appeal by plaintiffs, James P. Harper and Hutch-ings & Harper Enterprises, Inc. (collectively, Harper), from an order of the United States Bankruptcy Court granting partial summary judgment in favor of defendants Atlantic Richfield Company (Arco) and Partners Preferred Yield (Partners). The bankruptcy court denied foreclosure of the construction lien which was filed by Harper against the property of Arco and Partners in King County, Washington. For the reasons stated below, this court affirms the decision of the bankruptcy court granting partial summary judgment in favor of Arco and Partners. UNDISPUTED FACTS On July 7, 1988, Harper filed a notice of claim of construction lien for work performed on the Pacific Highway Mini Storage located in King County, Washington. L & M Development/National Self Storage was the owner of the subject property when Harper filed the notice of lien. On July 15, 1988, Partners became a partial owner of the subject property through a statutory warranty deed. On November 3, 1988, Arco became a partial owner of the subject property, also through a statutory warranty deed. Both Arco and Partners acquired interests in the subject property after Harper filed its lien. On August 5, 1988, Hutchings and Harper Enterprises, Inc. filed a petition for relief under Chapter 11 of the Bankruptcy Code. On March 2, 1989, Harper filed a complaint in the bankruptcy court to foreclose upon the lien. This complaint was filed four days before the lien expired. The complaint does not name Arco or Partners as defendants. James P. Harper claims that he did not know that Arco and Partners acquired interests in the subject property until August 17, 1989. Counsel [787] for Harper claims that it was not possible to obtain a title report before the lien expired. Upon receiving the title report and learning that Arco and Partners were owners of the property, Harper filed an amended complaint naming Arco and Partners as defendants. On August 22, 1989, Harper served the amended complaint on Arco and Partners. The amended complaint was untimely filed. CONTENTIONS OF THE PARTIES Harper argues that the bankruptcy court erred by finding that under either Fed.R. Civ.P. 15(e) or under Superior Court Civil Rule 15(c) of the State of Washington, the filing date of the amended complaint against Arco and Partners does not relate back to the filing date of the original complaint. Harper also argues that Arco and Partners had constructive notice of the lien. Arco and Partners argue that whether they had constructive notice of the notice of lien is irrelevant because the notice of lien does not commence the foreclosure action, and they did not have actual notice of the filing date of the original complaint. ANALYSIS AND RULING The court reviews de novo a grant of summary judgment based on the doctrine of relation back. Lamothe v. Atlantic Recording Corp., 847 F.2d 1403, 1404 (9th Cir.1988). Superior Court Civil Rule 15(c) of the State of Washington is substantively similar to Rule 15(c) of the Federal Rules of Civil Procedure. Washington courts look to federal law to determine if an amended complaint relates back to the filing of the original complaint. Harding v. Will, 81 Wash.2d 132, 500 P.2d 91, 95 n. 2 (1972). Under the law of the State of Washington, a construction lien expires eight months after the filing of the lien unless an action has been commenced. R.C.W. 60.-04.100. The owner of the property must be joined as a defendant in order to properly commence a foreclosure action. A construction lien will expire if the complaint is not perfected by service of process on all necessary parties within ninety days of the filing of the complaint. Hasek v. Terrence Excavators, Inc., 44 Wash.App. 554, 723 P.2d 1153, 1155-56 (1986); R.C.W. 60.04.-100. Here, Arco and Partners were not joined as defendants in the foreclosure action within eight months after the filing of the notice of lien or within ninety days after commencement of the action in the bankruptcy court. Therefore, Harper can join Arco and Partners as defendants only if the amended complaint relates back to the original complaint. In Schiavone v. Fortune, 477 U.S. 21, 106 S.Ct. 2379, 91 L.Ed.2d 18 (1986), the Court established a four-part test to determine if an amended complaint which adds a defendant relates back to the original complaint under Fed.R.Civ.P. 15(c). Relation back is dependent upon four factors, all of which must be satisfied: (1) the basic claim must have arisen out of the conduct set forth in the original pleading; (2) the party to be brought in must have received such notice that it will not be prejudiced in maintaining its defense; (3) that party must or should have known that, but for a mistake concerning identity, the action would have been brought against it; and (4) the second and third requirements must have been fulfilled within the prescribed limitations period. 477 U.S. at 29, 106 S.Ct. at 2384. There is no dispute that the first factor is satisfied in this case. However, as to the second factor, Harper may not join Arco and Partners in the amended complaint unless they should have had notice that Harper would bring a lawsuit against them in the bankruptcy court to enforce the construction lien. Craig v. United States, 413 F.2d 854, 857 (9th Cir.), cert. denied, 396 U.S. 987, 90 S.Ct. 483, 24 L.Ed.2d 451 (1969). Harper asserts that the notice of construction lien filed in King County, Washington should have given Arco and Partners notice of the complaint filed in the bankruptcy court. The notice of construction lien, however, gave Arco and Partners notice only that they bought the property [788] subject to a lien. The notice of construction lien would not give them notice that Harper would file for bankruptcy and that a complaint to foreclose the construction lien would be filed. “ ‘[Ajction/ as used in Rule 15(c), means a lawsuit, and not the incident giving rise to a lawsuit.” Craig, 413 F.2d at 858. The court finds that the filing of the amended complaint does not relate back to the filing of the original complaint. CONCLUSION The decision of the bankruptcy court granting partial summary judgment in favor of Arco and Partners is affirmed.