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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal>Sam,<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Each position has a valid argument. I did find the article I mentioned below. See attached. I hope it helps. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Let us know which way this goes. Sorry I can’t be more helpful.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='color:black'>Nestor Gorfinkel, Attorney at Law<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'>Licensed in Washington & Florida<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'>Florida Civil-Law (International) Notary<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'><o:p> </o:p></span></p><p class=MsoNormal><b><span style='font-size:10.0pt;color:black'>ATTENTION - This e-mail message and any attachment to this e-mail message may contain confidential information that is legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you have received this e-mail in error, please notify us immediately by return e-mail or by telephone at the phone numbers provided herein and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by the sender.<o:p></o:p></span></b></p><p class=MsoNormal><b><span style='font-size:10.0pt;color:black'><o:p> </o:p></span></b></p><p class=MsoNormal><b><span style='font-size:24.0pt;font-family:Webdings;color:#009900'>P</span></b><b><span style='font-size:24.0pt;color:#009900'> </span></b><b><span style='font-size:9.0pt;font-family:"Verdana",sans-serif;color:#009900'>Please consider the environment before printing this e-mail.</span></b><span style='font-family:"Century Schoolbook",serif;color:black'><o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> wsbarp-bounces@lists.wsbarppt.com <wsbarp-bounces@lists.wsbarppt.com> <b>On Behalf Of </b>Samuel M. Meyler<br><b>Sent:</b> Tuesday, February 18, 2020 4:16 PM<br><b>To:</b> 'WSBA Real Property Listserv' <wsbarp@lists.wsbarppt.com><br><b>Subject:</b> Re: [WSBARP] Subrogation Rights of Guarantors?<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Nestor,<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>There is likely a written agreement between borrower and guarantor but I have not been provided with it. There is a corporate resolution of the guarantor authorizing the guaranty and there is obviously the guaranty, but these are for the benefit of the bank rather than the borrower.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>The debt was paid off in full by the guarantor. Equitable subrogation is recognized and followed in Washington in the context of funds from one loan being used to pay off a first position deed of trust. “We adopt § 7.6 of the Restatement (Third) and hold WFB West is equitably subrogated to Washington Mutual's first-priority lien, regardless of either its actual or constructive knowledge of intervening interests.” <b><i>Bank of Am., N.A. v. Prestance Corp.</i></b>, 160 Wash. 2d 560, 582, 160 P.3d 17, 29 (2007). <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>To state the obvious, this is a different situation because the guarantor was ultimately liable for the debt whereas in that case WFB West funded a new loan that was used to pay off the first-priority lien. If the guarantor was already liable for the debt, are they not being unjustly enriched by giving them the benefit leapfrogging the second-position lien holder in order to liquidate the collateral and get paid? <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><div><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'><o:p> </o:p></span></b></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Samuel M. Meyler</span></b><o:p></o:p></p><p class=MsoNormalCxSpMiddle style='margin-bottom:12.0pt;mso-add-space:auto'><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Meyler Legal, PLLC </span></b><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>1700 Westlake Ave. N., Ste. 200<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Seattle, Washington 98109</span><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Tel:</span></b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'> 206.876.7770<o:p></o:p></span></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Fax:</span></b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'> 206.876.7771<o:p></o:p></span></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Email:</span></b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'> </span><a href="mailto:samuel@meylerlegal.com"><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>samuel@meylerlegal.com</span></a><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'> </span><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>NOTICE:</span></b><o:p></o:p></p><p class=MsoNormal><span style='font-size:8.0pt;font-family:"Arial",sans-serif;color:blue'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-size:8.0pt;font-family:"Arial",sans-serif;color:blue'>This electronic message contains information which may be Confidential or Privileged and constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act 18 USC 2510. The information is intended to be for the use of the individual or entity named above. If you are not the intended recipient, please be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you received this transmission in error, please notify the sender and delete the copy you received together with any attachments. Thank you.</span><o:p></o:p></p></div><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>> <b>On Behalf Of </b><a href="mailto:nestor@pplsweb.com">nestor@pplsweb.com</a><br><b>Sent:</b> Tuesday, February 18, 2020 10:39 AM<br><b>To:</b> 'WSBA Real Property Listserv' <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br><b>Subject:</b> Re: [WSBARP] Subrogation Rights of Guarantors?<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Subrogation is typically an insurance concept. However there is the concept of reimbursement or contribution (see Honey v Davis Washington Supreme Court case). There was also an article a couple of years ago in the Real Property, Trust And Estate Law Journal by a Seattle lawyer that discussed this issue. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>In this case, was there a written agreement between guarantor and borrower? In addition, was the debt paid off or did the Guarantor request an assignment of the existing debt and the security interest?<o:p></o:p></p><p class=MsoNormal>Other states have applied the doctrine of “equitable subrogation” to avoid an “unfair” result in a transaction. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='color:black'>Nestor Gorfinkel, Attorney at Law<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'>Licensed in Washington & Florida<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'>Florida Civil-Law (International) Notary<o:p></o:p></span></p><p class=MsoNormal><span style='color:black'><o:p> </o:p></span></p><p class=MsoNormal><b><span style='font-size:10.0pt;color:black'>ATTENTION - This e-mail message and any attachment to this e-mail message may contain confidential information that is legally privileged. If you are not the intended recipient, you must not review, retransmit, convert to hard copy, copy, use or disseminate this e-mail or any attachments to it. If you have received this e-mail in error, please notify us immediately by return e-mail or by telephone at the phone numbers provided herein and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by the sender.<o:p></o:p></span></b></p><p class=MsoNormal><b><span style='font-size:10.0pt;color:black'><o:p> </o:p></span></b></p><p class=MsoNormal><b><span style='font-size:24.0pt;font-family:Webdings;color:#009900'>P</span></b><b><span style='font-size:24.0pt;color:#009900'> </span></b><b><span style='font-size:9.0pt;font-family:"Verdana",sans-serif;color:#009900'>Please consider the environment before printing this e-mail.</span></b><span style='font-family:"Century Schoolbook",serif;color:black'><o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>> <b>On Behalf Of </b>Samuel M. Meyler<br><b>Sent:</b> Tuesday, February 18, 2020 9:34 AM<br><b>To:</b> <a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a><br><b>Subject:</b> [WSBARP] Subrogation Rights of Guarantors?<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Listmates,<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Entity takes out a loan secured by real property and personal property. The loan was personally guaranteed by a sister-company (“Guarantor”) of the borrower. The Guaranty states that the Guarantor, “absolutely and unconditionally jointly and severally guarantees prompt payment of and promises to pay or cause to be paid to the Bank the Obligations… whether or not the Obligations are valid and enforceable against the Borrower, whenever the Obligations become due, whether on demand, at maturity or by reason of acceleration, or at the time the Borrower of the Guarantor shall become the subject of any bankruptcy or insolvency proceeding.”<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Client had a contract for services with a perfected security interest in the personal property. Borrower-entity is dissolved and Guarantor pays off the debt. Guarantor asserts that because it paid off the underlying debt it is subrogated to the lender’s first position security interest in the assets, essentially jumping Client’s security interest.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>The fact that the Guarantor is “absolutely and unconditionally jointly and severally” gives me pause. The logic of a subsequent creditor, the Guarantor, stepping into the shoes of a priority creditor doesn’t seem to fit someone that is already liable for the initial debt. Does the Guarantor get the benefit and preferred treatment of stepping into the lender’s shoes because it paid off the debt when the Guarantor was absolutely and unconditionally jointly and severally liable for the debt already?<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'><o:p> </o:p></span></b></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Samuel M. Meyler</span></b><o:p></o:p></p><p class=MsoNormalCxSpMiddle style='margin-bottom:12.0pt;mso-add-space:auto'><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Meyler Legal, PLLC </span></b><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>1700 Westlake Ave. N., Ste. 200<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Seattle, Washington 98109</span><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Tel:</span></b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'> 206.876.7770<o:p></o:p></span></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Fax:</span></b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'> 206.876.7771<o:p></o:p></span></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>Email:</span></b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'> </span><a href="mailto:samuel@meylerlegal.com"><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>samuel@meylerlegal.com</span></a><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'> </span><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>NOTICE:</span></b><o:p></o:p></p><p class=MsoNormal><span style='font-size:8.0pt;font-family:"Arial",sans-serif;color:blue'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-size:8.0pt;font-family:"Arial",sans-serif;color:blue'>This electronic message contains information which may be Confidential or Privileged and constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act 18 USC 2510. The information is intended to be for the use of the individual or entity named above. If you are not the intended recipient, please be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you received this transmission in error, please notify the sender and delete the copy you received together with any attachments. Thank you.</span><o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>