Imperial Developers, Inc. v. Calhoun Development, LLC
2010 Minn. LEXIS 657
Minn.2010Background
- This is a foreclosure priority dispute involving a mortgagee (BankFirst) and two mechanic’s lienholders (Southview and Scherer Brothers) on Torrens property (Lot 4 in Edenvale Highlands, Eden Prairie).
- BankFirst filed its mortgage on June 28, 2005; the Registrar stamped and assigned a document number but did not memorialize the mortgage on the Torrens certificate for Lot 4 at that time.
- The Torrens certificate for Lot 4 was later memorialized to reflect BankFirst’s mortgage on September 20, 2006, showing a Date of Registration of June 28, 2005.
- Mechanic’s liens attached before memorialization, with Southview and Scherer Brothers filing their liens in October 2006.
- The district court held BankFirst’s mortgage was superior because it was filed (before liens attached) rather than memorialized; the court of appeals reversed.
- The Supreme Court held that, for Torrens property, a mortgage is ‘of record’ when filed, date/time stamped, and assigned a document number, not when memorialized on the Torrens certificate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BankFirst’s mortgage was ‘of record’ before liens attached | BankFirst: filing the mortgage constitutes ‘of record’ | Southview/Scherer: ‘of record’ equals memorialized on the certificate | Yes; mortgage was ‘of record’ when filed, priority to liens |
Key Cases Cited
- Imperial Developers, Inc. v. Calhoun Dev., LLC, 775 N.W.2d 895 (Minn.App.2009) (addressed ‘of record’ priority in Torrens context)
- Reuben E. Johnson Co. v. Phelps, 279 Minn. 107 (Minn.1968) (recording concepts in abstract property context)
- Suburban Exteriors, Inc. v. Emerald Homes, Inc., 508 N.W.2d 811 (Minn.App.1993) (policy considerations in lien priority context)