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STATE OF MINNESOTA IN SUPREME COURT A08-1560 Court of Appeals Anderson, G. Barry, J. Dissenting, Page and Anderson, Paul H., JJ. Took no part, Stras, J.

Citizens State Bank, Appellant, vs. Raven Trading Partners, Inc., et al., Respondents. ________________________ Michael L. Brutlag, Matthew R. Doherty, Brutlag, Hartmann & Trucke, P.A., Minneapolis, Minnesota, for appellant. Daniel W. Stauner, Plymouth, Minnesota, for respondents. Bradley N. Beisel, Kevin J. Dunlevy, Michael E. Kreun, Beisel & Dunlevy, P.A., Minneapolis, Minnesota, for amicus curiae Minnesota Land Title Association. ________________________ SYLLABUS An unexplained 38-day delay in resubmitting a mortgage to the county recorders office for recording after the mortgage was returned by the county recorders office unrecorded is not a justifiable or excusable mistake of fact that warrants applying equitable subrogation. Affirmed and remanded. Filed: July 22, 2010 Office of Appellate Courts

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OPINION ANDERSON, G. Barry, Justice. This appeal involves a dispute about the priority of two mortgages on the same property. At issue is whether appellant Citizens State Bank should be equitably

subrogated to the position of two prior mortgagees and a mortgage held by Citizens given priority over a mortgage held by respondent Raven Trading Partners, LLC. Citizens brought an action in district court seeking an order declaring that, based on equitable subrogation, the Citizens mortgage recorded on May 9, 2005, has priority over a mortgage held by Raven that was recorded on April 29, 2005. The district court applied equitable subrogation and gave the Citizens mortgage priority over the Raven mortgage. Raven appealed, and the court of appeals reversed and remanded. Because we conclude that Citizens negligence in waiting 38 days to resubmit the mortgage to the county recorders office for recording was not an excusable or justifiable mistake of fact that warrants applying equitable subrogation, we affirm and remand. On February 16, 2005, Feyereisen Enterprises, Inc., entered into a loan agreement with Citizens to borrow $165,000, and Feyereisen gave Citizens a mortgage on real property located in Hennepin County as security for the loan. The loan proceeds were applied to the balance due on two prior mortgages on the property. On February 21, 2005, Land Title, Inc., acting on behalf of Citizens, sent the Citizens mortgage to the county recorders office to be recorded. But on March 14, 2005, the county recorders office returned the mortgage to Land Title, Inc., unrecorded because the check for the mortgage registration tax was not for the proper amount.

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On April 7, 2005, Feyereisen executed a mortgage on the property in favor of Raven, and the mortgage referenced the two prior mortgages on the property that had been satisfied by the loan from Citizens.1 The Raven mortgage was recorded on April 29, 2005. On April 20, however, the Citizens mortgage was returned to the county recorders office for recording. On May 9, 2005, subsequent to the recording of Ravens mortgage, the Citizens mortgage was recorded. Two years later, Citizens filed a complaint in district court seeking declaratory judgment. Citizens argued that it should be equitably subrogated to the positions of the two prior mortgagees, because the Citizens loan was used to satisfy the prior mortgages, and thus the Citizens mortgage should be given priority over the Raven mortgage. The district court granted Citizens motion for summary judgment and denied Ravens crossmotion for summary judgment. The district court noted that Ravens mortgage was recorded prior to the Citizens mortgage and would normally take priority based on Minn. Stat.

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