Opinion ID: 884321
Heading Depth: 2
Heading Rank: 1

Heading: Impairment of Security

Text: In dismissing the complaint, the District Court was unwilling to accept Turner's impairment of security theory holding that the relationship between Turner and Kerin was too remote to impose liability for the damage, if any, that Kerin may have inflicted on the Property in 1986 before Turner acquired the three mortgages. The District Court held, [n]either party has cited authority whereby either the Montana Supreme Court or the Montana legislature has adopted the `impairment of security' theory. Only California has applied the `impairment of security' theory to the acts of construction professionals. In order to resolve the issues presented in this case, we need to engage in a three-step analysis: First, we must determine whether Montana recognizes a mortgagee's right to state a claim for impairment of security. Secondly, assuming we do recognize a claim for impairment of security, may such a claim be asserted by a mortgagee against a third-party not in possession of the property? Finally, may such a claim be asserted by a mortgagee who purchases mortgages at a foreclosure sale subsequent to the time at which the damage was inflicted on the security?