Mortgage lien holder has priority

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Appellants-Mechanic’s Lienholders, Harold McComb & Son, Inc. (McComb) and American Renovations of Indiana, Inc. (ARI) (collectively, Lienholders), appeal the trial court’s grant of Appellee-Mortgagee’s, JPMorgan Chase Bank, NA (Chase), motion for partial summary judgment in these consolidated actions against Indian Village Apartments, LLC (Indian Village) for foreclosure of the Lienholders’ mechanic’s liens and Chase’s mortgage. The Lienholders present two issues for our review, which we restate as: (1) Whether the Lienholders have standing to challenge Chase’s foreclosure action against Indian Village; and (2) Whether the trial court properly prioritized the liens of the parties.

Conclusion (slip op. at 17): We conclude that the trial court did not err in finding that McComb lacks standing to challenge Chase’s mortgage foreclosure action or in prioritizing the respective liens. Therefore, we affirm the trial court’s grant of Chase’s motion for partial summary judgment.

Key Analysis (slip op. at 7, 14-15): Even if we assume that McComb is correct that Chase breached the Construction Loan Agreement and the Note and was the first to do so, McComb has no legal standing to complain. Only the parties to a contract, those in privity with the parties, and intended third-party beneficiaries under the contract may seek to enforce the contract . . . [T]here is no dispute that Chase’s mortgages were recorded before the Lienholders’ mechanic’s liens or that the property in question is commercial in nature. The trial court was correct that Indiana Code subsection 32-28-3-5(d) controls [over 32-28-3-2] and that Chase’s mortgages have priority over the mechanic’s liens.

About Bose McKinney & Evans LLP

Bose McKinney & Evans LLP is a business law firm, headquartered in Indianapolis, Indiana, serving both publicly held and privately held businesses, governmental entities and high-growth industries. Our clients include Fortune 100 companies, international manufacturers, national and regional financial institutions, agribusinesses, sports teams, university-incubated start-ups, media, utilities, cities and schools, to name a few. We strive to build strong relationships with our clients as key business advisors, to exceed expectations in the quality of our work, to be knowledgeable about our clients’ businesses and sectors, to be responsive to service needs and to continually seek to improve the delivery of client services. Our ultimate focus is on our clients.
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