Thursday, May 31, 2012

Summary 2012 WY 76

Summary of Decision May 31, 2012

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Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court

Case Name:  Michael’s Constr. v. Am. Nat’l Bank

Citation:  2012 WY 76

Docket Number: S-11-0209; S-11-0210

Appeal from the District Court of Campbell County, The Honorable Michael N. Deegan, Judge

Representing Appellant Michael’s Construction: (Plaintiff/Defendant):  James L. Edwards of Stevens, Edwards, Hallock, Carpenter & Phillips, P.C., Gillette, Wyoming.

Representing Appellee American National Bank (Defendant /Plaintiff):  Clint A. Langer of Davis & Cannon, LLP, Sheridan, Wyoming.

Date of Decision: May 31, 2012

Facts:  After the owner of a construction project in Campbell County defaulted on its obligations to various creditors, mortgage holder Pinnacle Bank foreclosed on the real property securing its mortgage.  Junior mortgage holder American National Bank (ANB) and construction lienholder Michael’s Construction, Inc. (Michael’s) both sought payment from the surplus funds resulting from the foreclosure proceeding.  The district court declared that ANB’s mortgage was superior to Michael’s lien, but denied ANB’s request for contractual interest from the date of foreclosure through the date of final judgment.  Both parties appealed.

Issue (S-11-0209): Whether the district court properly determined that ANB’s mortgage had priority over Michael’s lien.
Issue (S-11-0210): Whether the district court erred in denying ANB the recovery of interest at the contractual rate.

Holdings:  The Court held that W.S. § 29-1-305 clearly gave ANB’s mortgage priority over Michael’s lien.  On the issue of recovery of interest, the Court found the terms of the promissory note included payment of interest through the time of judgment.  ANB’s right to interest was as important a contractual provision as its right to collect the principal.  The Court therefore concluded that the district court did not have the discretion to limit ANB’s recovery by denying it interest at the contractual rate from the time of foreclosure through final judgment. 

Affirmed in part, and reversed and remanded in part.  

C.J. Kite delivered the opinion for the court.

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