Appellate Law NJ Blog
  • Home
  • Bruce Greenberg

A Mortgage Priority Dispute Between Banks: Equitable Subrogation

Posted by Bruce D. Greenberg on Mar 12, 2012 in Appellate Division, Chancery issues, Constitutional law, Judges, Summary judgment | 0 comments

Investors Savings Bank v. Keybank Nat’l Ass’n, 424 N.J. Super. 439  (App. Div. 2012).  It is not often that a suit between two banks results in a published opinion.  This case, in which Judge Skillman wrote for the panel, involved a dispute as to which of two mortgages had priority.  Plaintiff bank refinanced a loan that had preceded defendant’s loan in time.  After defendant obtained a judgment against the borrower, plaintiff brought a declaratory judgment action and sought priority for its mortgage, under the doctrine of equitable subrogation.  On cross-motions for summary judgment, the Chancery Divsion ruled for plaintiff.  Judge Skillman agreed that since the loan that plaintiff had refinanced would have had priority, plaintiff’s loan succeeded to that priority.

Equitable subrogation would not have been applicable, however, if plaintiff had actual knowledge of defendant’s mortgate.  Judge Skillman found that there was no evidence to suggest actual knowledge, and the borrower had lied about not having other mortgages or judgments, so plaintiff could not have learned about defendant’s mortgage from the borrower.  Defendant contended that plaintiff had been grossly negligent in not finding out about defendant’s mortgage, in that plaintiff did not perform a continuation search.  But Judge Skillman determined that even such a search might not have discovered defendant’s judgment, which was recorded only three days before the closing between plaintiff and the borrower.

Finally, defendant contended that subordinating its mortgage to that of plaintiff was an unconstitutional taking of its property.  Judge Skillman noted that this argument had not been raised below.  Moreover, it was plainly without merit.  A taking can occur “if a judicial decision articulates a new rule of law that alters a clearly established right of private property.”  Here, New Jersey courts have applied equitable subrogation in “similar circumstances for nearly a century.”  The Chancery Division’s decision was therefore affirmed.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

About the Author

Bruce D. Greenberg, a partner of Lite DePalma Greenberg & Afanador, LLC, has more than 35 years of appellate experience.  He has argued dozens of cases in New Jersey’s Appellate Division, and he has handled oral arguments in the Supreme Court of New Jersey and the Third Circuit Court of Appeals as well.  Mr. Greenberg’s appellate cases have ranged from . . more

 

Subscribe

  • reader reader
  • Subscribe to Appellate Law NJ Blog by Email

Archives

Links

  • An Appeal to Reason – California Appellate blog
  • Class Action Blawg
  • De Novo- Virginia Appellate Law blog
  • Florida Appellate Review
  • How Appealing
  • Maine Appeals Blog
  • New York Appellate Law blog
  • NJ Judiciary
  • On Brief – Iowa Appellate Law Blog
  • Third Circuit Blog
  • Third Circuit Court of Appeals

Categories

  • Administrative agency actions
  • Administrative matters
  • Appellate Division
  • Attorneys fees
  • Case management
  • Chancery issues
  • Class actions
  • Constitutional law
  • Consumer protection
  • Contract interpretation
  • Criminal law
  • Discovery
  • Effect of decisions by other courts
  • Judges
  • Jury issues
  • Municipal land use
  • Notable opinion writing
  • Pleadings
  • Practice Pointers
  • Standards of review
  • Statutory interpretation
  • Summary judgment
  • Supreme Court of New Jersey
  • Third Circuit Court of Appeals
  • Uncategorized
  • United States Supreme Court

Tags

Administrative agency actions Appendix Arbitration Briefs Chief Justice Stuart Rabner Court Rules Family Part interlocutory vs. final decisions Judge Allison Accurso Judge Anthony Parrillo Judge Carmen Alvarez Judge Carmen Messano Judge Clarkson Fisher Judge D. Brooks Smith Judge Douglas Fasciale Judge Ellen Koblitz Judge Heidi Willis Currier Judge Jack Sabatino Judge Jose Fuentes Judge Julio Fuentes Judge Marianne Espinosa Judge Marie Lihotz Judge Mary Catherine Cuff Judge Mitchel Ostrer Judge Patty Shwartz Judge Stephen Skillman Judge Susan Reisner Judge Thomas Ambro Judge Thomas Hardiman Judge Victor Ashrafi Justice Anne Patterson Justice Barry Albin Justice Faustino Fernandez-Vina Justice Helen Hoens Justice Jaynee LaVecchia Justice Lee Solomon Justice Roberto Rivera-Soto Justice Walter Timpone Law of the case Makeup of court Notice of appeal Prerogative writ appeals Standing Statute of limitations Waiver

Designed by Elegant Themes | Powered by Wordpress