Owners Insurance Company v. McDaniel et al

Filing 62

MEMORANDUM OPINION. Signed by Judge James H Hancock on 4/7/2014. (JLC)

FILED
2014 Apr-07 AM 10:12
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
OWNERS INSURANCE COMPANY, )
PLAINTIFF,

)

VS.

)

MICHAEL D. McDANIEL, et. al.,

)

DEFENDANT.

2:13-cv-882-JHH

)
MEMORANDUM OPINION

The court has before it Cross Claim Plaintiff’s Motion (Doc. #47) for Summary
Judgment Pursuant to Rule 56 of the Federal Rules of Civil Procedure filed on
December 19, 2013. Pursuant to the court’s orders of December 30, 2013 (Doc. #49)
and January 27, 2014 (Doc. #55), the Motion (Doc. #47) has been fully briefed (see
Docs. #47-1, 60) and is properly before the court for review.
Summary judgment is proper "if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled
to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The party asking for summary judgment always bears the initial responsibility of
informing the court of the basis for its motion and identifying those portions of the
pleadings or filings which it believes demonstrate the absence of a genuine issue of
material fact. See id. at 323. Once the moving party has met her burden, Rule 56(e)

requires the non-moving party to go beyond the pleadings and by her own affidavits,
or by the depositions, answers to interrogatories, and admissions on file, designate
specific facts showing that there is a genuine issue for trial. See id. at 324.
The facts as pertinent to the pending Motion (Doc. #47) are brief and
undisputed. On May 10, 2013, Plaintiff Owners Insurance Company, a wholly-owned
subsidiary of Auto-Owners Insurance Company, filed a Complaint in Interpleader in
this court to determine the relative priority of liens. (See Doc. #1). The funds subject
to the Interpleader1 are insurance proceeds in the amount of Fifty Thousand Dollars
($50,000.00) arising from a fire casualty loss to a building owned by the decedent,
Michael McDaniel, located at 2037 Old Sylacauga Highway, Sylacauga, Alabama.
Cross Claim Plaintiff Southern States Bank presents to the court a recorded
note and security agreement (see Doc. #47, Exh. A) on the subject property, filed
September 24, 2007, with a current balance owed of Twenty Four Thousand Nine
Hundred Forty Eight Dollars and 16/100 ($24,948.16) as of December 19, 2013.
(See Doc. #47-1 at 1-2). As such, Southern States Bank holds a first-priority lien over
judgment liens and tax liens based on Alabama’s recording statute, Alabama Code
§35-4-90(a):
All conveyances of real property, deeds, mortgages, deeds of trust
or instruments in the nature of mortgages to secure any debts are
1

On February 10, 2014, the court entered an order dismissing Plaintiff Owners Insuarnce
Company (“Owners”) from this case. (See Doc. #59). Owners has paid into the court its policy
limits of $50,000. (See Doc. #58).
2

inoperative and void as to purchasers for valuable consideration,
mortgagees and judgment creditors without notice, unless the
same have been recorded before the accrual of the right of such
purchasers, mortgagees or jugdment creditors.
See also In re Hass, 31 F.3d 1081 (11th Cir. 1994) (“The filing requirement is
critical: even a holder of a security interest who has actual knowledge of an unfiled
tax lien will prevail over the government.”). No party argues that Southern States
Bank lacks the first-priority lien over the $50,000. (See Doc. #60 at 1-2) (“The Bank
claims a first-priority lien of approximately $25,000 against the interpleaded funds.
The United States does not dispute that claim . . .”).
The Cross Claim Plaintiff’s Motion (Doc. #47) for Summary Judgment is due
to be granted in its entirety because Southern States Bank has a superior lien to all
other claimants for the balance of the mortgage note in the amount of Twenty Four
Thousand Eight Hundred Forty-four Dollars and 43/100 ($24,844.43) plus interest
in a per diem rate of Four Dollars and 51/100 ($4.51). A separate order will be
entered.

DONE this the 7th

day of April, 2014.

SENIOR UNITED STATES DISTRICT JUDGE

3