Moffatt Thomas Scores a Victory for the Title and Banking Industry

American Bank v. Wadsworth Golf, 307 P.3d 1212 (Idaho 2013).

Moffatt Thomas lawyer Clay Gill was able to convince the Idaho Supreme Court that his client properly bonded off a $2.5 million mechanic’s lien.  The contractor that recorded the mechanic’s lien was claiming that its lien was superior to American Bank’s mortgage.  Because the mechanic’s lien was hindering American Bank’s ability to do anything with the property securing its loan, American Bank chose to bond off the mechanic’s lien and replace the contractor’s security for its mechanic’s lien with a lien bond rather than the property.  The trial court held that by posting the lien bond, American Bank waived its right to claim priority over the contractor’s mechanic’s lien.  As a result, at trial, American Bank was limited to contesting the validity and amount of the contractor’s lien.  Even so, American Bank’s trial team, Randy Peterman, Clay Gill and Leni Patton, were able to reduce the amount of the contractor’s lien by almost $500,000 and convince the trial court that the mechanic’s lien was subordinated to American Bank’s mortgage because of certain lien waivers signed by the contactor.  Following the trial, American Bank appealed the trial court’s legal finding that American Bank waived its lien priority defense by posting the lien bond.  The Idaho Supreme Court agreed with American Bank and directed the lower court to enter judgment in favor of American Bank, resulting in a complete reversal of the $2 million judgment that the trial court had entered against American Bank.