Tag Archives: Equitable Subrogation

The diminishing value of equitable subrogation Court of Appeals decision latest rejection of lender’s remedy (access required)

Lenders who plead the remedy of equitable subrogation are scratching their heads after the Court of Appeals’ latest rejection of its use in an Aug. 16 unpublished opinion in Countrywide Home Loans Servicing, LP v. States Resources Corp. Equitable subrogation allows a lender to leapfrog ahead of an intervening lien holder to assume the position of first lien holder. The leading North Carolina case, the state Supreme Court’s 1931 decision in Wallace v. Benner, is still good law, but whether equitable subrogation remains a remedy to lenders is another question.

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Insurance – Health – Equitable Subrogation — Tort/Negligence – Conversion – Settlement Funds – Insureds’ Auto Accident (access required)

Group Health Plan for Employees of Barnhill Contracting Co. v. Integon National Insurance Co. The plaintiff-health plan had a lien on settlement proceeds; nevertheless, defendant paid the full settlement proceeds to plaintiff’s insureds. Although the doctrine of equitable subrogation would allow plaintiff to make any claims available to its insureds, equitable subrogation is not a claim in itself, and the only claim asserted by plaintiff - conversion - is not one that belonged to its insureds, nor is it supported by our case law. We affirm summary judgment for defendant.

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Real Property – Equitable Subrogation – Mortgages – Liens – Foreclosure (access required)

Countrywide Home Loans Servicing, LP v. States Resources Corp. A lender seeking equitable subrogation was not excusably ignorant, since a title search would have revealed the intervening lien. Equitable subrogation is not available as a remedy in these circumstances. The trial court did not err by granting a judgment on the pleadings to an intervening lien holder.

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