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Friday, August 05, 2011

Ind. Decisions - Court of Appeals issues 1 today (and 2 NFP)

For publication opinions today (1):

In City Savings Bank n/k/a LaPorte Savings Bank v. Eby Construction, LLC, a 13-page opinion, Judge Crone writes:

A construction company filed a complaint to foreclose on a mechanic's lien seeking recovery of the cost of labor and materials it provided during the construction of certain buildings and other facilities on commercial real estate owned by a trust. The bank that had loaned the money to the trust to fund the construction, which loans were secured by mortgages on the real estate, cross-claimed and then moved for summary judgment to foreclose on its mortgages. The trial court granted the bank's motion for summary judgment and entered a judgment of foreclosure with regard to the mortgages on the real estate.

Thereafter, the construction company filed an amended complaint and then moved for partial summary judgment asserting that its mechanic's lien has priority over the mortgages held by the bank. Although concluding that Indiana statutory and case law provides that the mortgages should have priority over the later-recorded mechanic's lien, the trial court granted partial summary judgment in favor of the construction company, ruling that the mechanic's lien has priority over the mortgages pursuant to principles of equity and on public policy grounds.

The bank brings this interlocutory appeal, raising several issues that we consolidate and restate as one dispositive issue: whether the trial court erred when it disregarded clear statutory directives upon equitable and public policy grounds. Finding error, we reverse the trial court's entry of partial summary judgment in favor of the construction company and remand for further proceedings. * * *

Neither the trial court nor Eby has supplied us with a compelling reason to disregard the clear intent of our legislature when it enacted Indiana Code Section 32-28-3-5(d). That intent was to “fill the statutory gap” and expressly address the lien priority between a mortgage executed to raise funds for construction of improvements on property and the mechanic's liens of those who provided the labor and supplies necessary to complete the construction. See Harold McComb, 892 N.E.2d at 1262. In sum, under the circumstances presented, it would eviscerate our decision in Harold McComb and the intent of the legislature in enacting the specific language of Indiana Code Section 32-28-3-5(d) to give priority to Eby's mechanic's lien over LSB's mortgages. Therefore, we conclude that the trial court erred when it granted Eby's motion for partial summary judgment. The mortgages are superior. We reverse the partial summary judgment entered by the trial court and remand for further proceedings consistent with this opinion.

NFP civil opinions today (2):

Guardianship of L.W.; S.M. v. M.W. and S.W. (NFP)

David and Karen Marks v. Northern Indiana Public Service Co. (NFP)

NFP criminal opinions today (0):

Posted by Marcia Oddi on August 5, 2011 10:31 AM
Posted to Ind. App.Ct. Decisions