Argent Mortgage Co., LLC v. Wachovia Bank, NA

On August 31, 2004, Gene M. Burkes and Ann Burkes entered a mortgage agreement with Olympus Mortgage Company (Olympus), to borrow $90,000 to purchase property in Florida. On December 10, 2004, the Burkes signed a second mortgage agreement with Argent Mortgage Company, LLC (Argent) (defendant) to borrow $65,000 against the same property. The Olympus mortgage was recorded on January 5, 2005, and was assigned to Wachovia Bank National Association (Wachovia) (plaintiff). The Argent mortgage was recorded on January 31, 2005. The Burkes defaulted on both mortgages, and Wachovia and Argent each brought actions to foreclose on their respective mortgages. In connection with the foreclosures, Argent and Wachovia individually moved the trial court for summary judgment. Both Argent and Wachovia claimed that their respective mortgages should be given priority. The trial court granted summary judgment to Wachovia. The court held that the Wachovia mortgage had priority over the Argent mortgage under Florida’s race-notice scheme. In other words, because Wachovia recorded its mortgage before Argent (meaning Wachovia won the race), the Wachovia mortgage took priority over Argent’s later-recorded mortgage. It was irrelevant that Argent entered the mortgage agreement with the Burkes without notice of the Wachovia mortgage, which had not yet been recorded. Argent appealed, contending that Florida did not use a race-notice system, but rather used a notice system that would give priority to the Argent mortgage.