Home Federal Bank, FSB, of Middlesboro v. First National Bank of Lafollette

OPINION

CHARLES D. SUSANO, JR., J.,

delivered the opinion of the court,

in which HOUSTON M. GODDARD, P.J., and D. MICHAEL SWINEY, J., joined.

In this case of first impression, we are asked to determine the priority between (1) a first deed of trust on 12.58 acres of land in Campbell County — with a so-called dragnet clause — securing a fully-advaneed-at-inception commercial loan of $235,040 and (2) a second deed of trust on the same property. The focus of the parties’ dispute is upon the proceeds remaining from a foreclosure sale under the first deed of trust after all obligations relating to the…