Kenneth R. Borries v. Goshen Mortgage, LLC
219 So. 3d 593
| Miss. Ct. App. | 2017Background
- In 2005 the Rogerses executed multiple deeds of trust on an 8.9‑acre tract; one was a $20,000 deed of trust recorded without a named beneficiary (the "Blank Beneficiary Deed of Trust").
- In March 2007 the Rogerses refinanced and executed a $243,695 deed of trust to First Choice Funding (assignee later Goshen), recorded April 30, 2007; the Coastal and SBA liens were paid off at closing.
- The Blank Beneficiary Deed of Trust was corrected and re‑recorded on April 9, 2008 naming Kenneth Borries as beneficiary; Borries later foreclosed and acquired a 2.17‑acre portion.
- Goshen sued for a declaratory judgment that its April 30, 2007 deed of trust had first priority over Borries’s later‑corrected deed of trust; Goshen moved for summary judgment arguing the 2005 blank beneficiary recording could not impart notice under Miss. Code Ann. § 89‑5‑37.
- The chancery court granted summary judgment for Goshen; the court of appeals affirmed, holding the blank beneficiary filing did not impart notice and Goshen’s title examiner’s affidavit showed lack of actual notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an un‑beneficiary‑identified deed of trust imparts notice | Goshen: §89‑5‑37 prevents such a deed from imparting notice, so Goshen’s earlier recorded deed is prior | Borries: even if defective, actual notice exception may apply; factual dispute exists about actual notice | Court: §89‑5‑37 bars constructive notice; Goshen produced evidence negating actual notice; no genuine factual dispute — Goshen has priority |
| Burden at summary judgment to disprove actual notice | Goshen: moving party may show lack of record/actual notice (title search affidavit) to shift burden | Borries: Goshen bore the burden to prove lack of actual notice and failed to do so | Court: Favret affidavit sufficiently showed lack of actual notice to shift rebuttal burden to Borries, who offered no contrary evidence |
| Whether a deed of trust without a named beneficiary is void | Goshen: such instruments are void or unenforceable as to notice and priority | Borries: the instrument should nonetheless provide notice if seen (actual notice) | Court: Not void between parties; §89‑5‑37 only prevents notice (constructive); instrument still valid between parties but cannot impart constructive notice |
| Whether summary judgment was appropriate given record evidence | Goshen: title search and affidavit show no notice; summary judgment warranted | Borries: factual issues about actual notice preclude summary judgment | Court: Summary judgment affirmed — no genuine issue of material fact about actual notice |
Key Cases Cited
- Life Ins. Co. of Va. v. Page, 172 So. 873 (Miss. 1937) (defective beneficiary designation prevented constructive notice and left deed subordinate where no actual notice existed)
- Bass v. Estill, 50 Miss. 300 (Miss. 1874) (physical presence and knowledge of filing can constitute actual notice, making an improperly recorded deed effective as to the party with actual notice)
- Metro. Nat’l Bank v. United States, 901 F.2d 1297 (5th Cir. 1990) (applying Mississippi law: defective recordings do not impart constructive notice but may provide actual notice if proven)