Mass. Appeals Court Rebuffs Mortgagee’s Novel Bid For Equitable Subrogation
In its decision yesterday in Wells Fargo Bank v. Comeau (pdf), the Massachusetts Appeals Court rejected the plaintiff mortgagee’s attempt to use the doctrine of equitable subrogation in a novel way: to impose on a surviving wife the obligation to pay a note signed by her late husband where the wife had not signed either the note or the mortgage.
The boiled down facts are as follows. Husband and wife owned a home as tenants by the entirety. In 2003 the property was mortgaged to a local bank. Husband alone signed the note; husband and wife signed the mortgage. In 2005 husband refinanced with a different bank. This time husband alone signed both the note and mortgage. In 2008 husband died, leaving a balance due on the note. Wells Fargo, successor of the refinancing bank, did not assert a claim against husband’s estate before the statute of limitations expired. Instead Wells Fargo sued wife, claiming its mortgage should be equitably subrogated to the position