They never read page six of their mortgage. Have you read yours?
A single clause buried in mortgage boilerplate cost a Wyoming family their commercial property and home equity – and the court said that was perfectly fine.
On March 6, 2026, the Wyoming Supreme Court handed down a ruling that every mortgage professional should probably read twice. Not because it breaks new ground, but because it is a sharp reminder of how much weight the fine print carries – and how little sympathy courts have for people who did not read it.
Here is what happened.
Richard and Kelly Adams, a married couple from Casper, Wyoming, had founded a well-testing company called Cobra Well Testers, which they sold to their daughter and son-in-law, Nick and Yavette Bailey, in 2014 for approximately $4 million. To help finance the purchase, the Baileys turned to ANB Bank, which issued a $1.5 million loan secured by Cobra's equipment. Cobra also obtained a revolving credit line from ANB that eventually reached $450,000.
Then oil prices crashed. By early 2017, Cobra was struggling to make payroll. The Baileys needed another $235,000 fast. ANB agreed to lend it, but only if Adams & Bailey, LLC – the family's commercial real estate entity – put up their Salt Creek Highway property as collateral.
The Adams family signed the mortgage on March 17, 2017. Section 3 of the document listed the $235,000 loan as the secured debt. What the family says they missed was Section 23(B), sitting quietly on page six, which said the mortgage also covered an entirely separate $1.49 million consolidated loan belonging to the Baileys.
When the $235,000 loan was fully repaid in October 2017, the Adams family expected the mortgage on their commercial property to be released. ANB said no – the bigger loan was still outstanding, and as far as the bank was concerned, the same mortgage secured both debts.
That refusal set off a chain of events that eventually cost the family their commercial property and a significant chunk of the equity in their personal home.
The Adams family sued, arguing the clause was hidden, that bank officers had told them verbally the mortgage only covered the $235,000 loan, and that no reasonable person reading the document would expect to find contradictory language buried six pages deep. They also argued the clause was a so-called dragnet provision – the kind of sweeping language that quietly nets far more debt than a borrower realizes – and that it should not be enforceable.
The court was unmoved. Reading the mortgage as a whole, the justices found the document clear and unambiguous. Section 23(B) specifically identified the larger loan by its promissory note number and date – and that, the court said, was enough. It did not matter that the clause failed to name the borrower or spell out the loan amount. It did not matter that the family claimed they never noticed it. Wyoming law is plain on this point: you cannot walk away from a contract simply because you did not read what you signed.
The family's fraud and misrepresentation claims fared no better. Even if bank officers had told them verbally that the mortgage only covered the smaller loan, the court said the written contract directly contradicted those assurances – and that kills any claim of justifiable reliance. If the document says one thing and someone told you another, the document wins.
The court also rejected the argument that a May 2019 settlement agreement reached during Cobra's bankruptcy proceedings required ANB's subsidiary, Capital Management Resources, to immediately record a quitclaim deed for the commercial property at the end of a 90-day sale window. The Adams family had hoped that recording the deed first would have triggered the release of the residential mortgage on their home before the house was sold, saving them $167,068.79 that instead went to the bank. The court said the settlement agreement allowed the subsidiary to record the deed – but did not require it to do so on any particular timeline. One word made all the difference: "authorized" is not the same as "shall."
The one win for the Adams family came on the question of attorney fees. The lower court had found that filing the lawsuit itself was a breach of the settlement agreement, and ordered the family to pay the banks $200,963.19 in legal costs. The Supreme Court reversed that, finding that bringing a lawsuit to interpret a contract is not the same as breaching it.
For mortgage professionals, the takeaway is straightforward. Dragnet clauses are real, they are enforceable, and courts will hold signers to every page of a mortgage document – including the parts no one told them about. If your documents contain cross-collateralization provisions or clauses that sweep in prior debts, make sure your borrowers actually understand what they are agreeing to. Not because the law requires it – but because this case shows exactly what happens when they do not.
