Litigation Counsel Ronald Z. Ahrens and Litigation Partner Michael R. O’Donnell co-authored the article “'Deely' Expands Lender's Use of Equitable Subrogation to Protect Priority Status” for the April 26, 2021 issue of the New Jersey Law Journal based on the new published Deely case on equitable subrogation. The doctrine of equitable subrogation is frequently relied on by lenders to protect the priority of their liens, including in situations where prior liens that were satisfied with the lenders’ loan funds were to be discharged, but were not. For years, many New Jersey Courts have interpreted the doctrine of equitable subrogation to be inapplicable in situations where the lender seeking to invoke the doctrine had knowledge of prior liens at the time it made its loan. In New York Mortgage Trust 2005-3 Mortgage-Backed Notes v. Deely, the Appellate Division squarely held for the first time that a lender’s knowledge of prior liens is not an absolute bar to the application of the doctrine of equitable subrogation. Click here for the complete article.
