## Facts

- A condominium declaration for the Foxtail Condominium Project was recorded in 1981, creating the Foxtail Owners Association and authorizing common-expense assessments against unit owners.
- The declaration included provisions addressing lien priority and subordination relating to obligations and liens arising from unpaid assessments.
- In 1984, unit owners Edward and Clara Meier executed a note and mortgage to American Holidays, Inc. for a unit in the project.
- The mortgage documents stated they were “subject to” the condominium declaration’s terms and conditions.
- American Holidays recorded its mortgage in 1985.
- The Meiers later defaulted on the mortgage and stopped paying association assessments.
- In 1989, the association recorded lien notices for unpaid assessments and, in 1990, sued to foreclose those liens, naming the Meiers and American Holidays.
- The trial court granted summary judgment for the association, ruling the association’s assessment lien had priority over American Holidays’ mortgage; American Holidays appealed.

## Issues

1. Whether a mortgagee whose mortgage was recorded before the association recorded specific assessment lien notices nevertheless holds a subordinate interest when the mortgage is expressly “subject to” a previously recorded condominium declaration that provides for subordination and assessment-lien priority.
2. Whether, on undisputed documents, summary judgment was proper on lien priority in favor of the owners association.

## Decision

- The Wyoming Supreme Court affirmed the summary judgment of foreclosure for the association.
- The court held American Holidays’ mortgage was subordinate to the association’s lien for unpaid assessments under the declaration’s priority scheme.
- The court rejected the mortgagee’s reliance on general recording-act “first in time” priority because the recorded declaration and the mortgage’s “subject to” language controlled the parties’ priority relationship.
- Because the operative documents and defaults were undisputed, there was no genuine issue of material fact precluding summary judgment.

## Legal Principles

- A recorded condominium declaration may establish enforceable covenants governing assessments and lien priority for units within the project.
- A mortgage that expressly provides it is “subject to” a recorded condominium declaration incorporates and binds the mortgagee to the declaration’s priority and subordination provisions.
- Recording-act default priorities may yield where a mortgagee has record notice of, and contractually accepts, a different priority scheme created by a recorded instrument governing the property.
- When lien priority turns on interpretation of undisputed recorded instruments and undisputed nonpayment, summary judgment is appropriate.

## Conclusion

The court enforced the condominium declaration’s recorded priority and subordination provisions against a mortgagee whose mortgage was expressly made subject to the declaration, giving the owners association’s assessment lien priority in foreclosure notwithstanding the earlier recordation of the mortgage.


American Holidays, Inc. v. Foxtail Owners Ass'n, 821 P.2d 577 (Wyo. 1991)