PROPERTY – Equitable subrogation, liens: Roberts v. Mortgage Electronic Registration Systems, Inc. (COA 10/30/2009)

Roberts v. Mortgage Electronic Registration Systems, Inc.
2008-CA-000262 10/30/09 2009 WL 3486594
Opinion by Judge Thompson; Chief Judge Combs concurred; Senior Judge Buckingham dissented by separate opinion.

The Court reversed and remanded an order of the circuit court granting a motion for default and summary judgment. The circuit court applied the doctrine of equitable subrogation and found that appellee’s lien had priority over appellant’s lien in a foreclosure action. The Court held that the trial court erred in applying the doctrine of equitable subrogation in reordering lien priorities to appellant’s detriment and that the liens should have been prioritized in accordance with KRS 382.280. The Court distinguished the narrow holding in Louisville Joint Stock Land Bank v. Bank of Pembroke, 225 Ky. 375, 9 S.W.2d 113 (1928), and held that the facts did not justify the relief sought when appellee lacked diligence in discovering appellant’s lien and appellant’s interest could be entirely or partially defeated if the property was sold for an amount insufficient to repay both appellant and appellee.

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