Citifinancial Services Inc. v. Varner
320 Ga. App. 170
| Ga. Ct. App. | 2013Background
- Varner sued Burris for equitable partition and sale; Bank intervened asserting a first-priority lien under equitable subrogation.
- Bank sought summary judgment; trial court denied; appellate review granted under OCGA § 5-6-34 (b).
- Uncontested facts show: 2004 Varner deed to Burris; 2005 Burris to Burrises as joint tenants; 2009 Varner quitclaims back; 2009 Burrises’ deeds recorded after quitclaim.
- 2008 Bank loan to Burris and 2009 refinance with Bank; refinance paid off the original loan; new security deed recorded.
- Varner’s quitclaim deed had not been recorded at the time of the original loan but was recorded before the refinance; Bank had no actual notice of Varner’s 2005 quitclaim, and title issues arose post-refinance.
- Court held that equitable subrogation applies and Bank is entitled to priority as to the lien; trial court’s denial reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Bank entitled to equitable subrogation to the senior lien? | Varner: Bank’s neglect defeats subrogation. | Bank: undisputed facts show entitlement to subrogation. | Yes; Bank entitled to equitable subrogation. |
Key Cases Cited
- Byers v. McGuire Properties, 285 Ga. 530 (2009) (subrogation where advances pay off senior encumbrance; no prejudice to intervening interests)
- Secured Equity Financial v. Washington Mut. Bank, 293 Ga. App. 50 (2008) (subrogation applicable to refinance and similar transactions)
- Baxter v. Bayview Loan Servicing, 301 Ga. App. 577 (2009) (knowledge of intervening encumbrance not fatal to subrogation if no substantial prejudice)
- Chase Manhattan Mtg. Corp. v. Shelton, 290 Ga. 544 (2012) (distinguishes from neglect in denying subrogation where lender had prior knowledge)