“Easy Pass” for the Negligent vs. Windfall for the Undeserving? MN S. Ct. Goes for Windfall

As discussed back on Minnesota Litigator in December, 2009, the Minnesota Supreme Court had to decide a case pitting an arguably negligent secured lender against a wholly undeserving entity whose loan should have been junior in priority, but for a delay in recording the earlier mortgage loan.  Over dissents by Justices Page and Anderson (Paul), the Supreme Court ruled against “the negligent.” As the dissent put it:

The court’s decision rests on the notion that ‘equity aids the vigilant, and not the negligent,’ and therefore Citizens’ failure to act for 38 days in resubmitting the mortgage registration tax does not warrant equitable subrogation.  However, in our over-century-long application of equitable subrogation we have faced far more egregious conduct and have never found a mistake so unjustifiable or so inexcusable that equitable subrogation should not apply….