First Fidelity Thrift & Loan Ass'n v. ALLIANCE BK.

—This case concerns a question of priority between two deeds of trust held by different lenders. Both deeds of trust encumber the same parcel of commercial real property. The deed of trust that was first in time was recorded, but was later mistakenly reconveyed. The deed of trust that was second in time was also recorded, but not until after the first had been reconveyed. The deed of trust that was second in time thus became first of record. The party that recorded the second deed of trust had knowledge that the first deed of trust had been recorded and also that it had been reconveyed, but no knowledge that the reconveyance was an error. The question is whether the party that recorded the second deed of trust should have investigated more than it did. We will find that the investigation undertaken in this case was adequate. We will therefore hold that the deed that is first of record, even though second in time, has priority.

Factual and Procedural Summary

This case was decided by summary judgment. The respective separate statements filed by the parties together with the supporting evidence show no dispute over the determinative facts. The two lenders are First…