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Saturday, August 06, 2011
Ind. Decisions - "Foreclosure case sparks judge rebuke"
Yesterday's COA opinion in the case of City Savings Bank n/k/a LaPorte Savings Bank v. Eby Construction, LLC (ILB summary here) is the subject of this story today in the NWI Times, reported by Dan Carden, that concludes:
After a partial payment by the trust, the construction company was still owed $308,746.95. It filed a mechanic's lien on the property and sued to foreclose.LaPorte Savings Bank then also filed for foreclosure and argued to Judge William Alexa that state law required him to find the bank's mortgage foreclosure takes priority over Eby's mechanic's lien.
But the judge said because the bank had issued another loan to the trust that was used to pay another contractor while Eby went unpaid, the bank had "unclean hands" and said "public policy" demanded Eby's lien take priority over the bank's mortgage in this case.
In a 3-0 decision, the appeals court strongly disagreed, noting "the trial court acknowledged the clear import of our statutory and case law, yet opted to reach a different result under the guise of equity and public policy."
"The mortgages are superior," the appeals court said.
Posted by Marcia Oddi on August 6, 2011 08:46 AM
Posted to Ind. App.Ct. Decisions