Dennis Electric, Inc. v. United States Fidelity & Guaranty Co.

In Hutnick v. United States Fidelity & Guaranty Co. (1988) 47 Cal.3d 456 [ 253 Cal.Rptr. 236 , 763 P.2d 1326 ], the Supreme Court held that the statute of limitations governing an action on a mechanic’s lien release bond does not apply where the surety is made a party defendant to a pending lien foreclosure action that was timely filed before the bond was recorded. In the present case, we hold that the statute of limitations also does not apply where, instead of naming the surety as a party defendant in a pending action, the lien claimant first obtains a final judgment in a lien foreclosure action that was filed before the bond was recorded and, thereafter, files a separate action against the surety to recover on the release bond. Accordingly, we reverse the trial court’s orders sustaining the surety’s demurrer to the lien claimant’s second amended complaint without leave to amend and dismissing the action.

Facts

Plaintiff Dennis Electric, Inc., the lien claimant on a mechanic’s lien (Civ. Code, § 3109 et seq.), filed an action against defendant United States Fidelity & Guaranty Company to recover on a release bond. (§ 3143.) Plaintiff’s second amended complaint alleges…