Lewiston Bottled Gas Company v. Key Bank Of Maine

601 A.2d 91 (1992)

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Nature of the Case

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Facts

In July 1986, D loaned $2,580,000 to DiBiase secured by a mortgage on the real estate owned by DiBiase. The mortgage, which covered after-acquired fixtures, was properly recorded. DiBiase incorporated Grand Beach Inn, Inc. (Grand Beach) for the purpose of constructing and operating an Inn on the property. Grand Beach contracted to purchase ninety heating and air-conditioning units from P. The contract provided that the units would remain the personal property of Grand Beach notwithstanding their attachment to the real property. Grand Beach granted P a purchase money security interest in the ninety units. P filed financing statements identifying the debtor as 'Grand Beach Inn, Inc., William J. DiBiase, Jr., President' and describing the real estate upon which the units were located as 'Grand Beach Inn, East Grand Avenue, Old Orchard Beach, ME 04064.' They were indexed under the name 'Grand Beach Inn, Inc.' Nothing was indexed under DiBiase's name. D made a second loan to DiBiase secured by a second mortgage on the same property, also covering after-acquired fixtures and also properly recorded. The title search failed to disclose the financing statement and the existence of P's security interest in the units because P's financing statement was indexed under the name 'Grand Beach' even though DiBiase was the record owner of the property at the time. D foreclosed on both its mortgages. P was not joined as a party-in-interest because D was unaware of P's interest in the units until after the foreclosure was commenced. D was the successful bidder at the foreclosure sale. P then sued D seeking a declaratory judgment that its purchase money security interest in the units had priority over the interest of D. The Court granted summary judgment to D in that the heating and air-conditioning units were fixtures and that D's properly recorded mortgages had priority over P's unperfected security interest. P appealed.