M. D. Fleetwood v. Med Center Bank

This is a subrogation case. M.D. Fleetwood, appellant, sued Med Center Bank (Med Center), appellee, seeking a judgment declaring that Fleetwoods leasehold interest in certain commercial property was superior to Med Centers interest in the same property, which it acquired at a non-judicial foreclosure sale. Med Center counterclaimed, also seeking declaratory relief. The trial court granted summary judgment for Med Center, declaring that Med Center had become subrogated to rights under a prior deed of trust (also held by Fleetwood) that was superior to Fleetwoods leasehold interest. The court also declared that the foreclosure sale at which Med Center purchased its interest had extinguished Fleetwoods rights under the lease. Fleetwood perfected this appeal, arguing primarily that subrogation of Med Center to his superior lien position is inequitable because it would prejudice him in his capacity as owner of an interest in the leasehold. We will reverse the judgment of the trial court and remand the cause.