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First Bank v. East West Bank

October 17, 2011

FIRST BANK, PLAINTIFF AND RESPONDENT,
v.
EAST WEST BANK, DEFENDANT AND APPELLANT.



APPEAL from a judgment of the Superior Court of Los Angeles County, Ernest M. Hiroshige, Judge. (Los Angeles County Super. Ct. No. BC412751)

The opinion of the court was delivered by: Aldrich, J.

CERTIFIED FOR PUBLICATION

Affirmed.

INTRODUCTION

In this case we hold, where two deeds of trust secured by the same real property were simultaneously time-stamped for recording by the Los Angeles County Recorder's Office but were indexed at different times, that the lenders have equal priority. One of the lenders, defendant East West Bank, appeals from the judgment of the trial court declaring that the two trust deeds have equal priority. Defendant contends, as its trust deed was indexed first, that its lien has a prior right. We conclude the other lender, plaintiff First Bank, demonstrated in its summary judgment motion indisputably that, pursuant to its practice, the Los Angeles County Recorder's Office time-stamped both trust deeds at issue at 8:00 a.m. on September 4, 2008. Hence, neither deed of trust was first duly recorded and neither bank was a subsequent purchaser. (Civ. Code, §§ 1107 & 1214.) As a matter of law, therefore, the trust deeds have equal priority. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

In 2008, plaintiff and defendant granted loans to Kyung Ha Chung and secured them with the same real property located in South Gate, California. Chung signed both trust deeds on August 28, 2008, before two different notaries. Both lenders delivered their trust deeds to the recorder's office before business hours on September 4, 2008.*fn1

Kathy Tregg, the person identified as most knowledgeable about practices at the recorder's office, testified that the procedure in the Los Angeles County Recorder's Office, as with most recorders across the state, is to allow title insurance companies to deliver trust deeds to the recorder's office in batches before 8:00 a.m. when the office opens. As is the case for all documents and instruments deposited with the recorder's office, one of the examiners reviews the title insurance companies' trust deeds to determine whether they meet the requirements for recording. The examiner then enters the instruments into the Enterprise Recording Archive system, and sends the documents to a cashier to determine the applicable fees. The recorder stamps them with the date and time of recording. The practice of most of the recorder's offices across the state is to give all instruments deposited before the offices open for business an 8:00 a.m. time stamp. Instruments are indexed roughly two days later.

Following its procedure, the recorder time-stamped both deeds of trust here with the following: "Recorded/Filed in Official Records Recorder's Office, Los Angeles County, California[,] 09/04/08 AT 08:00AM." Tregg testified that the trust deeds were recorded at 8:00 a.m. by the recorder's office. Also on September 4, 2008, the recorder indexed defendant's trust deed at 11:26 a.m. and plaintiff's trust deed at 3:08 p.m.

Plaintiff filed the instant declaratory relief action seeking a determination about the priority of these liens. Once the case was at issue, plaintiff and defendant each moved for summary judgment. Plaintiff argued that all of the trust deeds have equal priority because they were recorded concurrently. By contrast, defendant argued its trust deed has priority because it was indexed first. The trial court granted plaintiff's motion and denied defendant's, holding the deeds of trust were recorded concurrently and neither bank was a subsequent purchaser, with the result the liens have equal priority. Defendant appeals.

DISCUSSION

1. Standard of review

"Summary judgment is granted when a moving party establishes the absence of a triable issue of material fact and the right to entry of judgment as a matter of law. [Citations.] ' " ' "We review the [superior] court's decision to grant . . . summary judgment de novo." [Citation.]' [Citation.]" [Citation.] [If there is] no dispute as to the operative facts here, the question is purely a legal one for us to resolve. [Citation.]' [Citation.]" (Pacific Shore Funding v. Lozo (2006) 138 Cal.App.4th ...


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