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COA: Mortgage lien holder has priority

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The Indiana Court of Appeals determined today that two contractors with mechanic's liens did not have priority over the mortgage lien held by the bank in a foreclosure action, discussing a law in a ruling for only the second time since it was enacted in 1999.

At issue in Harold McComb & Son, Inc. and American Renovations of Indiana, Inc. v. JPMorgan Chase Bank, NA, No. 02A04-0802-CV-60, is whether Harold McComb & Son and American Renovations of Indiana, who held mechanic's liens on work they did as general contractors on a property JPMorgan Chase foreclosed on, should have priority over Chase's mortgage lien.

In a consolidated action, the trial court granted partial summary judgment to Chase, finding Harold McComb had no legal standing to challenge Chase's foreclosure action because it wasn't party to the construction loan agreement or the note between Chase and the commercial property owner.

But the general contractors believed the trial court erred in its prioritizing of the liens of the parties, granting Chase priority over the mechanic's liens.

The Court of Appeals examined Indiana Code Section 32-28-3-5(d), which the General Assembly passed in 1999 to fill a statutory gap identified by the Indiana Supreme Court in 1910 regarding mechanic's liens. The appellate court looked to Judge John Sharpnack's dissent in Provident Bank v. Tri-County Southside Asphalt, Inc., 804 N.E.2d 161, 163 (Ind. Ct. App. 2004) - which is the only other time the Court of Appeals has discussed that section of Indiana Code - and determined the judge's discussion of the section was correct, wrote Judge Patricia Riley.

Because the statutes in existence when Ward v. Yarnelle, 173 Ind. 535, 91 N.E. 7 (1910), was decided didn't address the lien priority between a mortgage executed to raise funds for construction of improvements on a property and the mechanic's liens of those who provided the labor and supplies, the General Assembly adopted Section (d) to say that when the funds from the loan secured by the mortgage are for the project that gave rise to the mechanic's lien, then the mortgage lien has priority over the mechanic's liens recorded after the mortgage, wrote Judge Riley citing Judge Sharpnack's dissent.

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  1. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  2. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  3. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  4. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  5. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

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