Karbank Hold., LLC v. Reg. Evangel. Alliance of Churches, Inc., et al. , Docket No. 124,892 (Kan. App. Sept. 29, 2023).
Sep 29, 2023OUTCOME: The Kansas Court of Appeals reversed a portion of the damages awarded, with one member of the panel submitting a scathing dissent. The Kansas Supreme Court accepted the case for further appeal, which is currently pending.
Mr. Kraft represented a local church, who defaulted on its purchase-money mortgage. The mortgagee allowed the church time to market and sell the property, so that the church could potentially recover a ... portion of its equity. Absent a sale after that time, the mortgagee accepted a deed-in-lieu of foreclosure from the church. Subsequent to the purchase-money mortgage, the church granted the plaintiff a right of first refusal to purchase the property if the church received an offer to purchase from a third party. Plaintiff sued on theories of the church's breach of contract and the mortgagee's tortious interference with its right-to-purchase agreement. The Kansas District Court determined that the church's deed-in-lieu and workout agreement with the mortgagee triggered the "sale" clause in the right of first refusal agreement and that the plaintiff had the right to purchase the property on the same terms as the mortgagee. The court then equitably subordinated the purchase money mortgage to the right of first refusal and held that the church breached the right of first refusal contract and the mortgagee tortiously interfered with the same contract by exercising its rights under the mortgage to the detriment of the plaintiff.
