Mountain West Bank, N.A. v. Cherrad, LLC
2013 MT 99
| Mont. | 2013Background
- Lakeside Village condominiums project in Lewis and Clark County; Cherrad, LLC (dev), CK Design (Kinnaman’s firm) and Hale interests engaged in construction financed by Mountain West Bank (MWB).
- AIA construction contracts governed two components: buildings and infrastructure/marina, with CK Design to be paid from unit closings and to release liens with each invoice.
- CK Design was paid via unit closings (e.g., units 1 and 2), but the project faced delays and CK Design was not paid per invoiced amounts; liens and subcontractor claims followed.
- May 2007 subordination agreement: CK Design subordinates its lien and interest to MWB in exchange for financing protections.
- In 2007–2008, CK Design left the project; a September 2007 Agreement Regarding Outstanding Debts set priority for paying subcontractors and CK Design from sale proceeds.
- November 29, 2007, Nancy Kinnaman (Estate rep.) filed a $3.3 million construction lien; MWB sued to foreclose and to subordinate lien interests; lien was later declared invalid.
- Trial court found CK Design’s invoices generally supported the lien but credibility undermined by the contract price, party conduct, delays, and CK Design’s failure to finish; damages awarded to Estate were 10% of sale prices for units 3, 5, and 6, totaling $76,278.
- Estate appeals the summary judgment on validity of the lien and the damages award; Hale interests seek appellate attorney fees under § 71-3-124(1), MCA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Estate’s construction lien moot? | Estate | Hale/MWB | Moot; third-party bona fide purchasers render relief impracticable |
| Was the damages award proper for CK Design’s work on units 3, 5, 6? | Estate | Hale | 10% of sale prices; not the asserted $3.3 million; affirmed |
Key Cases Cited
- Gateway Open Cut Mining Action Group v. Bd. of County Comm'rs., 2011 MT 198 (Mont. 2011) (mootness and justiciability precedents)
- Plan Helena, Inc. v. Helena Reg'l Airport Auth. Bd., 2010 MT 26 (Mont. 2010) (jurisdiction and mootness thresholds)
- In re Marriage of Haberkern, 2004 MT 29 (Mont. 2004) (appellate review and credibility determinations)
- Trad Indus., Ltd. v. Brogan, 246 Mont. 439 (Mont. 1991) (substantial credible evidence standard)
- Lewistown Miller Constr. Co. v. Martin, 2011 MT 325 (Mont. 2011) (damages factual review; substantial evidence standard)
- Wohl v. City of Missoula, 2013 MT 46 (Mont. 2013) (district court damages award reviewed for abuse of discretion)
- Dubiel v. Mont. DOT, 2012 MT 35 (Mont. 2012) (summary judgment de novo standard)