Robert Neises Construction Corp. v. Grand Innovations, Inc.
2010 Ind. App. LEXIS 2449
| Ind. Ct. App. | 2010Background
- GI borrowed $193,000 and gave Kentland a mortgage recorded July 7, 2008; Centier Bank held a prior mortgage recorded May 2007.
- GI hired Neises to construct the residence; Neises filed a mechanic's lien July 14, 2008.
- Other contractors also filed mechanic's liens against the property.
- Neises and others foreclosed on liens; Kentland asserted a mortgage foreclosure and sought preservation of the collateral as it remained unfinished.
- Kentland paid $20,188.91 to install a roof and protect the unfinished structure during foreclosure proceedings.
- The trial court ordered distribution of sheriff's sale proceeds with preservation expenses prioritized over liens, a result the court of appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preservation expenses priority over liens | Neises argues no statutory basis for super priority | Kentland contends equity allows protection expenses for all lienholders | Yes; preservation costs have priority |
| Priority of Neises lien vs mortgage in proceeds | Neises claims backdated relation to April 2008 gives priority | Mortgage priority over later-recorded liens under statute | No; mortgage and other liens have priority over Neises under IC 32-28-3-5 |
Key Cases Cited
- Deutsche Bank Nat'l Trust Co. v. Mark Dill Plumbing Co., 903 N.E.2d 166 (Ind.Ct.App. 2009) (equitable control in foreclosure and preservation matters)
- Lincoln Bank v. Conwell, 911 N.E.2d 45 (Ind.Ct.App. 2009) (construction mortgage has same priority as mechanic's lien in common enterprise)
- Ward v. Yarnelle, 91 N.E. 7 (1910) (mortgage for construction of a house priority considerations)
- Porter v. Bankers Trust Co. of California, N.A., 773 N.E.2d 901 (Ind.Ct.App. 2002) (equitable remedies in foreclosure context)