CFS 915, LLC v. Unetixs Vascualar, Inc.

Before this Court, the tenants contend that the question of CFS's notice of the leases vel non is a genuine issue of material fact and that, therefore, summary judgment was improperly granted. They additionally *127 contend that their unrecorded leases were not extinguished by the recorded mortgage because they contend that CFS had notice of those leases, and they argue that "notice is the key factor and recording is merely one form of notice." In contrast, plaintiff asserts that the hearing justice was correct in granting summary judgment because: (1) the tenants did not establish a genuine issue of material fact that CFS, as assignee of the mortgage, had notice of the unrecorded leases; and (2) notice is irrelevant under the applicable mortgage statutes.

After hearing the arguments of counsel and reviewing the memoranda of the parties, we have concluded that cause has indeed been shown and that this appeal should proceed to full briefing and argument. The parties are directed to brief the issue of the applicability vel non of any relevant Rhode Island statutes (especially G.L. 1956 §§ 34-11-1, 34-25-2, and 34-25-10 ) and such Rhode Island decisional law that they deem to be pertinent; they should also brief any other relevant issues that they may wish to bring to the attention of the Court.

The parties are further directed to provide the Court with discussion of pertinent appellate decisions, if any, from other jurisdictions regarding:

(1) Whether notice to an assignor of a mortgage of the existence of an unrecorded lease on a property is sufficient to constitute notice to the assignee;

(2) Whether any such notice to an assignee is sufficient to overcome a mortgage's priority over unrecorded leases as outlined in statutes that provide that a mortgage has full priority over unrecorded conveyances and which statutes are silent on the issue of notice.

Accordingly, this case is returned to the regular calendar for full argument. Briefing shall be in accordance with Article I, Rule 16 of the Supreme Court Rules of Appellate Procedure. We direct that there be an expedited resolution of this appeal; requests for continuances will be disfavored. The stay of execution of judgment pending appeal that was previously granted shall remain in place.