Robert Neises Construction Corp. v. Grand Innovations, Inc.

938 N.E.2d 1231, 2010 Ind. App. LEXIS 2449, 2010 WL 5177501
CourtIndiana Court of Appeals
DecidedDecember 22, 2010
Docket45A03-1004-PL-238
StatusPublished
Cited by4 cases

This text of 938 N.E.2d 1231 (Robert Neises Construction Corp. v. Grand Innovations, Inc.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robert Neises Construction Corp. v. Grand Innovations, Inc., 938 N.E.2d 1231, 2010 Ind. App. LEXIS 2449, 2010 WL 5177501 (Ind. Ct. App. 2010).

Opinion

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

Robert Neises Construction Corporation ("Neises") appeals the trial court's grant of summary judgment in favor of Kentland Bank ("Kentland") in this foreclosure action. Neises presents the following issues for our review:

1. Whether the trial court erred when it concluded that Kentland's expenditures to protect the subject real estate from damage pending the foreclosure ("preservation expenses") should take priority over Neises' and others' mechanic's liens.
2. Whether the trial court erred when it did not assign Neises' mechanic's lien a higher priority than Kent-land's mortgage lien in the distribution of the proceeds from the sheriff's sale.

We affirm.

FACTS AND PROCEDURAL HISTORY

On May 13, 2008, Grand Innovations, Inc. ("GI") executed and delivered to Kentland a promissory note in the amount of $193,000. To secure repayment of the promissory note, GI executed and delivered to Kentland a mortgage against real estate located in Hobart ("the real estate"). The amount borrowed by GI was to be used to construct a single-family residence on the real estate. Kentlands mortgage was recorded on July 7, 2008. GI had another mortgage on the real es *1233 tate with Centier Bank, which had been recorded in May 2007. -

GI had hired Neises to help construct the residence, and Neises began work on the project in April 2008. On July 14, 2008, Neises filed a mechanic's lien against the real estate in the amount of $22,869. Other contractors then also filed mechanic's liens against the real estate.

On October 21, 2008, Neises filed a complaint to foreclose on its mechanic's lien and named, among others, GI, Centier Bank, and Kentland as defendants. On December 11, 2008, Kentland filed a coun-terelaim, cross-claim and third party claim seeking, in relevant part, to foreclose on its mortgage against the real estate. On December 28, Kentland filed its "Emer-geney Motion for Access to Real Estate to Preserve and Protect Collateral." In that motion, Kentland averred that, pursuant to the terms of its mortgage, it had the "right to preserve and protect the Hobart property when such collateral is in jeopardy of being lost or damaged." Appellant's App. at 136. Kentland stated that GI had stopped construction of the single-family residence on the real estate and had "left the property in jeopardy 'of being destroyed or subject to significant damage due to weather." Id. In particular, the structure had no roof or wrapping around the exposed framing. None of the other parties objected to Kentland's emergency motion, but the trial court never ruled on it. Nevertheless, Kentland paid a contractor $20,188.91 to install the roof and otherwise protect the structure from the elements.

On October 8, 2009, Kentland filed a motion for partial summary judgment seeking to foreclose on its mortgage lien. In that motion, Kentland sought priority over the mechanic's lien holders for recovery of the $20,188.91 that it had spent to protect and preserve the real estate during the course of the foreclosure proceedings. The trial court granted Kentland's motion and ordered that the proceeds from the sheriff's sale of the real estate be distributed as follows:

First, to the costs of the action and payment of any property taxes on the real estate that are due and owing.... Second, to payment of the sums due Centier Bank [which held a first mortgage lien against the real estate] herein; Third, to payment to Kentland Bank in the sum of $20,188.91 as recovery of costs and expenses incurred for preservation of the property;
Fourth, to the payment of the sum of $185,251.07 due and owing Kentland Bank herein and the sums due and owing [Neises] and Schilling Bros. Lumber & Hardware, Inc., pro-rata. ...

Appellant's App. at 20. This appeal ensued.

DISCUSSION AND DECISION

Standard of Review

We review a summary judgment order de novo. Bules v. Marshall County, 920 N.E.2d 247, 250 (Ind.2010). The purpose of summary judgment is to end litigation about which there can be no factual dispute and which may be determined as a matter of law. Shelter Ins. Co. v. Woolems, 759 N.E.2d 1151, 1153 (Ind.Ct.App.2001), trans. denied. We must determine whether the evidence that the parties designated to the trial court presents a genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule 56(C); Bules, 920 N.E.2d at 250. We construe all factual inferences in the nonmoving party's favor and resolve all doubts as to the existence of a material issue against the moving party. Bules, 920 N.E.2d at 250.

Issue One: Priority of Preservation Expenses

Neises first contends that the trial court erred when it gave priority to Kent- *1234 land for the amount it spent to protect the partially-constructed house against damage from weather. Neises maintains that, "IwJhile the court's ruling might make good public policy, ... there is no provision in any statute for such super prioritization." Brief of Appellant at 17-18.

But, as Kentland correctly points out, an action to foreclose on a mortgage is essentially equitable in nature. Deutsche Bank Nat'l Trust Co. v. Mark Dill Plumbing Co., 903 N.E.2d 166, 168 (Ind.Ct.App.2009), clarified on reh'g, 908 N.E.2d 1273 (Ind.Ct.App.2009). Trial courts have "full discretion to fashion equitable remedies that are complete and fair to all parties involved." Id. (quoting Porter v. Bankers Trust Co. of California, N.A., 773 N.E.2d 901, 909 (Ind.Ct.App.2002)). Here, Kent-land sought the trial court's permission to take emergency measures to protect the unfinished structure on the real estate from damage due to weather conditions during the pendency of the foreclosure proceedings. Kentland notified the other parties, and none of them objected to Kentland's motion. While the trial court did not rule on the motion, even Neises acknowledges that Kentlands actions were for the "benefit of all" of the lienholders. Brief of Appellant at 18.

It is undisputed, then, that Kentland paid for the installation of a roof and other protective measures meant to preserve the integrity of the unfinished house, which benefited each of the lienholders. There is no suggestion that the expenses were unreasonable or that the protective measures were otherwise ill-conceived. Indeed, Neises never objected to Kentland's emer-geney motion, so it cannot now complain.

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938 N.E.2d 1231, 2010 Ind. App. LEXIS 2449, 2010 WL 5177501, Counsel Stack Legal Research, https://law.counselstack.com/opinion/robert-neises-construction-corp-v-grand-innovations-inc-indctapp-2010.