Eastern Savings Bank, FSB v. Cach, LLC

This case centered on a question of priority between two lien creditors: who was entitled to be paid first from the proceeds of a mortgage foreclosure sale, the creditor who recorded its lien against the property first, or a second creditor who recorded later, but did so as part of a refinancing in which it discharged preexisting mortgages and judgment liens on the same property. Eastern Savings Bank, FSB, the second creditor to record its lien, argued that the doctrine of equitable subrogation protected its right to receive the proceeds of the foreclosure sale first, even though it recorded its mortgage after the first creditor, CACH, LLC recorded its judgment. The Court of Common Pleas and the Superior Court both disagreed, and held that CACH was entitled to be paid before Eastern Savings under Delaware's pure race recording statute. Eastern Savings appealed. Eastern Savings argued that the Superior Court erred by failing to apply the doctrine of equitable subrogation to place the priority of its mortgage above CACH's lien. After review, the Supreme Court disagreed and found that the doctrine of equitable subrogation as inapplicable to the facts of this case. Thus, the parties' priorities are governed by Delaware's race recording statute, and the judgment of the Superior Court was affirmed. View "Eastern Savings Bank, FSB v. Cach, LLC" on Justia Law