Collateral Estoppel

D.C.: Enforcement of Equitably Subrogated Lien Upheld; Collateral Estoppel Barred Challenge that Enforcement was Precluded by Actual Knowledge of Title Defect

D.C.: Enforcement of Equitably Subrogated Lien Upheld; Collateral Estoppel Barred Challenge that Enforcement was Precluded by Actual Knowledge of Title Defect

The D.C. Court of Appeals affirmed the grant of summary judgment to the Lender in its judicial foreclosure action, which sought to enforce and relied on a prior federal court adjudication of its right, under the common law doctrine of equitable subrogation, “to stand in the shoes of a prior lender” (“Prior Lender”), whose lien had been paid off by Lender.  The Court rejected challenges to equitable subrogation or enforcement of the lien under the doctrine of collateral estoppel. Thus, the Court held that Lender could enforce the prior loan, including interest, by way of foreclosure under the Prior Lender’s deed of trust.