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GHB Construction and Development Co., Inc. v. West Alabama Bank and Trust

Supreme Court of Alabama

March 29, 2019

GHB CONSTRUCTION AND DEVELOPMENT COMPANY, INC.,
v.
WEST ALABAMA BANK AND TRUST.

         Rehearing Denied May 17, 2019.

Page 794

[Copyrighted Material Omitted]

Page 795

          Appeal from Walker Circuit Court (CV-17-900006)

          Judson B. Allen, Jasper, for appellant.

          William J. Long and E. Travis Ramey of Burr & Forman LLP, Birmingham.

          R. Bernard Harwood, Jr., of Rosen & Harwood, P.A., Tuscaloosa, for amici curiae Alabama Bankers Association, Alabama Land Title Association, League of Southeastern Credit Unions & Affiliates, Mortgage Bankers Association of Alabama, Inc. and Credit Union Coalition of Alabama, in support of appellee's application for rehearing.

         On Application for Rehearing

         SELLERS, Justice.

         This Court's opinion of September 21, 2018, is withdrawn, and the following is substituted therefor.

         GHB Construction and Development Company, Inc. ("GHB"), appeals from an order of the Walker Circuit Court ("the trial court") dismissing GHB's action against West Alabama Bank and Trust ("WABT") seeking a judgment declaring that its materialman's lien against property owned by Penny Guin is superior to WABT's mortgage lien secured by the same property. We affirm.

         Facts and Procedural History

         On April 8, 2015, Guin purchased an unimproved lot of real property located in Walker County. That same day, Guin executed a promissory note in the amount of $410,870 secured by a future-advance mortgage[1] in favor of WABT on the purchased property and any improvements. WABT did not advance Guin any money on the date the note and mortgage were executed, and there were no prior-existing advances. The promissory note states, in pertinent part, that "[t]he conditions for future advances are at the request of [Guin] and the approval of the loan officer."

         On April 9, 2015, Guin contracted with GHB to construct a house on the property. At some time after the contract was executed, GHB "commenced with the construction of Guin's home on the property and contributed various materials and labor that were used, consumed, and otherwise incorporated into the property." Notably, GHB's complaint does not indicate the specific date on which GHB first delivered materials to the property or commenced construction of the house.

         On April 10, 2015, WABT recorded the mortgage in the Walker Probate Court ("the probate court"). On October 16, 2015, WABT issued the first principal advance under the promissory note in the amount of $105,000 to Guin.[2]

         GHB's complaint alleges that, in May 2016, it met with WABT and Guin prior to completing construction of the house and presented them "with a description of the items to complete the construction ... and an estimated cost of completion of construction." GHB's complaint further alleges that, following the meeting, it completed construction of the house pursuant to Guin's authorization and, after having completed construction of the house, submitted

Page 796

to Guin its final bill for the work completed. GHB's complaint alleges that Guin failed to pay the final amount owed. On December 20, 2016, GHB filed a "verified statement of lien" in the probate court against Guin's property claiming "to secure an indebtedness in the amount of $106,556.16, with interest, from August 2, 2016."

         On January 6, 2017, GHB filed its complaint against WABT, Guin, and multiple fictitiously named parties. Most of the claims asserted by GHB in its complaint were asserted against Guin in an effort to collect the outstanding balance of the construction contract. In regard to WABT, GHB sought a judgment declaring that its ...


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