J.I. Kislak Mortgage Corporation v. William Matthews Builder, Inc.

J.I. Kislak Mortgage Corporation (Kislak) (plaintiff) entered a construction-loan agreement with William Matthews Builder, Incorporated (Matthews) (defendant), releasing funds in phases upon its agent's inspection and confirmation that subcontractors had been paid; unknown to Kislak, its agent fraudulently authorized payments for incomplete work, leaving several subcontractors unpaid. After Kislak sued to foreclose on the mortgage, unpaid subcontractor Bachman and Wood (Bachman) filed mechanics' liens and intervened, arguing its liens had priority over progress payments Kislak made to Matthews after Bachman began work; Kislak countered that its mortgage, recorded before Bachman began work, had priority, and Bachman moved for summary judgment.