Michael's Construction, Inc. v. American National Bank
278 P.3d 701
Wyo.2012Background
- Foreclosure sale by Pinnacle Bank on owner’s day-care project in Campbell County leaves surplus funds.
- Junior lienholder Michael's Construction, Inc. (Michael's) and senior mortgagee American National Bank (ANB) claim priority to surplus funds.
- District court held ANB's mortgage superior to Michael's lien and allowed contractual interest only from default to foreclosure.
- Michael's challenged lien priority; ANB challenged interest award on appeal.
- Wyoming Supreme Court affirms priority ruling but reverses on interest, remanding for calculation of post-foreclosure contractual interest.
- Key dates: mortgage ANB July 3, 2006; construction commenced Oct 2006; foreclosure Aug 21, 2007; sale proceeds insufficient to satisfy both liens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Lien priority between ANB and Michael's | Michael's: priority dates to preconstruction start. | ANB: priority dates from pre-construction perfection and statute 29-1-305(c). | ANB's mortgage priority over Michael's lien. |
| Whether ANB may recover interest at contractual rate from foreclosure through judgment | District court may limit interest for equity. | Contractual interest must be paid in full to satisfy lien contract. | Court erred in limiting interest; remanded to determine full contractual interest through final judgment. |
Key Cases Cited
- Thatcher & Sons, Inc. v. Norwest Bank Casper, N.A., 750 P.2d 1324 (Wy. 1988) (relates lien priority to commencement of construction; preconstruction services discussed)
- American Buildings Co. v. Wheelers Stores, 585 P.2d 845 (Wyo. 1978) (statutory lien laws must be strictly construed)
- Countrywide Home Loans, Inc. v. First National Bank of Steamboat Springs, N.A., 2006 WY 132, 144 P.3d 1224 (Wy. 2006) (limits equitable subrogation in priority disputes)
- McNeill Family Trust v. Centura Bank, 2003 WY 2, 60 P.3d 1277 (Wy. 2003) (foreclosure equity principles limited in applying contract terms)
- J. & T. Properties, LLC v. Gallagher, 256 P.3d 522 (Wy. 2011) (de novo review of lien priority statutes)