Priority in Mechanic's Liens, and the Courts.
Construction Law Today posted a story about a priority case. The facts of the case appear to favor the bank, but as always it is difficult to know exactly what happened. The case is LaSalle Bank v. Cypress Creek 1. Priority cases in mechanic's lien cases are not uncommon, but usually the facts are clear enough to ascertain who has the priority. The interesting cases occur when the bank has not filed it's interest before the contractors file the mechanic's liens. The race to file does not seem to be the issue here.
Construction Law Today has published two posts on the case so far. The first post describes how priority works (until this case that is.) The second post gives some more detail.
However, the courts decision is what makes this remarkable. The court essentially said both the bank and the contractor had priority. If this makes you scratch your head, your not alone. The parties are appealing.
I will be interested to see how this plays out.
