Eastern Savings Bank, FSB v. CACH, LLC

Summary

The Delaware Supreme Court held that CACH, LLC's judgment lien had priority over Eastern Savings Bank's later-recorded mortgage under Delaware's pure race recording statute. The court declined to apply equitable subrogation to a mortgage refinancing absent a separate equitable basis and affirmed the Superior Court's judgment.

Holdings

1. Under Delaware's pure race recording statute, competing mortgages and mortgage-like liens have priority according to the time of recording. Because CACH recorded its judgment lien eight days before Eastern Savings recorded its mortgage, CACH had priority.
2. Delaware does not permit a refinancing lender to use equitable subrogation to move ahead of an intervening judgment lien solely because the lender used its funds to pay preexisting mortgages and judgments.
3. CACH would not receive an unearned windfall by retaining its statutory priority because it did not agree to subordinate its judgment lien to Eastern Savings's later-recorded mortgage.

Questions Presented

1. Whether Delaware's pure race recording statute gave CACH priority over Eastern Savings because CACH recorded its judgment lien before Eastern Savings recorded its mortgage.
2. Whether equitable subrogation permitted Eastern Savings, a refinancing lender, to assume the priority of the preexisting liens that its loan proceeds satisfied.
3. Whether equitable subrogation should be applied absent a reasonable mistake, unjust enrichment, or another equitable basis, where the lender's title insurer or settlement agent failed to discover or address the intervening lien.

Disposition

affirmed