Opinion ID: 2547975
Heading Depth: 1
Heading Rank: 3

Heading: Commonwealth v. Wells Fargo Bank, Minn., N.A., et al.

Text: This case arises from the initial purchase and financing of a home by Joseph A. Clark and Janet M. Clark on or about November 16, 2001 (the Clark Property). Several years before purchasing their home, the Commonwealth filed a general tax lien against Joseph A. Clark on June 14, 1996 in the Bullitt County Clerk's Office, pursuant to KRS 134.420(2). Over five years later, at the time of purchase, the Clarks executed a mortgage in favor of The Provident Bank, which was recorded on November 29, 2001 (the Purchase Money Mortgage). The Provident Bank assigned the Purchase Money Mortgage to Wells Fargo Bank, Minn., N.A. (Wells Fargo), by an assignment recorded on February 14, 2003 (the Assignment). After the Assignment, the Commonwealth filed two additional liens against Mr. Clark, one on August 24, 2004 and another on October 20, 2004. On November 9, 2004, Wells Fargo initiated foreclosure proceedings against the Clark Property. Wells Fargo subsequently moved for summary judgment and an order of sale granting its Purchase Money Mortgage priority over the Commonwealth's KRS 134.420(2) liens. Relying upon Kentucky Legal Systems Corp. v. Dunn, 205 S.W.3d 235 (Ky.App.2006), the Bullitt Circuit Court ruled that a purchase money mortgage takes priority over all other recorded liens and judgments unless otherwise agreed or specified by statute. The Bullitt Circuit Court held that KRS 134.420(2) provides no such exception. The Commonwealth appealed the Bullitt Circuit Court's ruling. The Kentucky Court of Appeals resolved that the Bullitt Circuit Court had erred in reordering the priorities and reversed the judgment.