Review Case: entitled Old Republic National Title Insurance Company v. Fifth Third Bank. Using IRAC, determine who you think should have prevailed in this case.
CASE 23.1 STATE COURT CASE Mortgages and Liens Old Republic National Title Insurance Company v. Fifth Third Bank Web 2008 Ohio App. Lexis 4423 (2008) Court of Appeals of Ohio "The recording statute sets forth the general rule that . March 24-The law firm of Santen and Hughes the first mortgage recorded shall have preference over recorded a lien judgment on Mccarthy's house for subsequently recorded mortgages." failure to pay for legal services. -Dinkelacker, Judge . April 1-Mccarthy closed on the Centex loan. Centex was not informed that Mccarthy had previously Facts obtained a loan from Fifth Third. Centex did not James and Heather Mccarthy (Mccarthy) owned a house conduct a new title search, so it was not aware of the in Cincinnati, Ohio. The house was purchased with a law firm's recorded lien. The proceeds from Centex's mortgage loan from Countrywide Home Loans, which loan were used to pay off Countrywide's mortgage. recorded its mortgage in the appropriate county recorder's Centex notified its agent, Buckeye Title Company office. Subsequently, the following events occurred: (Buckeye), to record Centex's mortgage within 24 hours. Buckeye failed to record Centex's mortgage. . March 10-Mccarthy borrowed money from Fifth . April 15-Fifth Third recorded its mortgage. Third Bank and gave the bank a mortgage on their . May 2-Centex recorded its mortgage. house. Fifth Third Bank did not record the mortgage. . March 10-Mccarthy went to Centex Home Equity When Santen and Hughes commenced a foreclosure Company to refinance the original mortgage loan from action against Mccarthy's house, Fifth Third and Centex Countrywide. were brought into the suit. The trial court held that the . March 19-Centex's title search revealed Santen and Hughes' lien had first priority. As to the mort- Countrywide's loan but did not reveal Fifth Third's gages, the court applied the doctrine of equity and ruled unrecorded mortgage. that Centex's first-in-time but later recorded mortgagehad priority over Fifth Third's later made but previously lien has first priority, the Fifth Third mortgage has second recorded mortgage. Fifth Third appealed. priority, and the Centex mortgage has third priority. Issue Decision What is the priority of the lien and two mortgages on The court of appeals reversed the decision of the trial Mccarthy's house? court and ruled that the priority of the security interests on Mccarthy's house were by the recording date: first, Santen Language of the Court and Hughes, second, Fifth Third, and third, Centex. Under Ohio law, lien priority is determined by the time of filing. The recording statute sets forth the general rule Ethics Questions that the first mortgage recorded shall have preference over Was it ethical for Centex to argue that its unrecorded subsequently recorded mortgages. Lien priority in this case mortgage should take priority over Fifth Third's prior re- is hereby established as follows: the Santen and Hughes corded mortgage
