Monterey S.P. Partnership v. W.L. Bangham, Inc.

W.L. Bangham, Inc. (Bangham) (defendant) performed $44,310 worth of work on property owned by Oak Knoll Partnership (Oak Knoll). Oak Knoll failed to pay for the work, and Bangham recorded a mechanic’s lien against the property. The primary lien position was occupied by a deed of trust that, at the time Bangham filed its mechanic’s lien, had 252 beneficiaries and named Western Mutual Corporation (Western) as trustee. Bangham filed suit to foreclose on the mechanic’s lien, naming both Western and the beneficiaries as defendants. Bangham served Western with summons and complaint but did not serve the beneficiaries. In the meantime, Oak Knoll had defaulted on the loan secured by the deed of trust, and one day after Western was served with Bangham’s summons and complaint, Western conducted a trustee’s sale at which the beneficiaries purchased the property. Monterey S.P. Partnership (Monterey) (plaintiff) later acquired title to the property by a quitclaim deed. Bangham subsequently received a default judgment against Western in the mechanic’s-lien lawsuit. Pursuant to the default judgment, the property was sold at a sheriff’s sale, and Bangham bought the property. Monterey sued Bangham for a judgment quieting title to the property and declaring that the sheriff’s deed did not affect Monterey’s interest. The trial court granted Monterey’s motion for summary judgment. The court of appeal reversed, holding that California law allowed Bangham to foreclose on the mechanic’s lien against Western without joining the beneficiaries. Monterey appealed.