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Judges reverse ruling mechanic's lien has priority over mortgages

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The Indiana Court of Appeals ruled there was no reason for a trial judge to disregard the state’s priority statutes regarding liens and mortgages and find that a construction company’s mechanic’s lien has priority over previously recorded mortgages.

Eby Construction filed suit to try to collect on a debt for work done on real estate owned by a trust. The loans for the construction came from LaPorte Savings Bank, which were secured by mortgages on the real estate prior to Eby beginning work. Eby and two other contractors had asserted mechanic’s liens, which were consolidated into one action. The trust used proceeds from its third loan with the bank to pay its debt to a third contractor.

The trial court originally entered a decree of foreclosure in favor of LaPorte Savings Bank, but after Eby filed an amended complaint, it granted partial summary judgment to Eby. The trial court concluded that although statute and caselaw clearly provides the bank’s mortgage liens should have priority, public policy dictates that Eby’s lien be given priority in this case. The judge also found the bank came to court with “unclean hands” because the trust had used proceeds from a bank loan to pay a third contractor before paying second contractor Eby.

On interlocutory appeal, the COA concluded this was an error by the judge. Citing Harold McComb & Son v. JP Morgan Chase Bank, 892 N.E.2d 1255 (Ind. Ct. App. 2008), and Indiana Code 32-28-3-5(d), the judges held that LaPorte Savings Bank’s mortgages should have priority over Eby’s mechanic’s lien as the mortgage was recorded first.

The judges also disagreed that the bank came to court with unclean hands. While they don’t condone the decision to pay a subsequent contractor when the trust hadn’t yet paid Eby, that decision isn’t an act of unclean hands on the part of the bank, as it did not and was not under any obligation to control the trust’s decision, wrote Judge Terry Crone in City Savings Bank n/k/a LaPorte Savings Bank v. Eby Construction, LLC, No. 64A03-1012-MF-611.

The trial court attempted to use its equitable powers to achieve what it thought was a more fair and balanced result, but it failed to appreciate the importance of the doctrine “equity follows the law”, the judge continued.

“Because there is nothing in the designated evidentiary material to indicate that substantial justice cannot be accomplished by following the law, and the parties’ actions are clearly governed by our priority statutes, equity must follow the law,” he wrote.

The judges remanded the case for further proceedings consistent with the opinion.

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  1. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  4. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

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