CFS 915, LLC v. Unetixs Vascular, Inc.

Syllabus

The defendants, Unetixs Vascular, Inc. (Unetixs) and Criticare Technologies, Inc. (Criticare) (collectively the Tenants), appealed from the Kent County Superior Court's entry of summary judgment in favor of the plaintiff, CFS 915, LLC (CFS). The Tenants leased property located at 125 Commerce Park Road, North Kingstown (the Property) prior to the point in time when the owner of the Property executed a mortgage on the Property. CFS, as the mortgagee, foreclosed on the Property and subsequently purchased it. CFS filed an action in District Court seeking to evict the Tenants on the basis that the Tenants no longer had the right to possess the Property. Following the entry of a consent judgment granting possession to the Tenants, CFS filed an appeal to the Superior Court. The Superior Court granted summary judgment in favor of CFS, holding that the mortgage was superior to the Tenants' unrecorded leases and that, therefore, the leases were extinguished upon foreclosure. The Superior Court also held that no genuine issue of material fact existed as to whether CFS had notice of the unrecorded leases. On appeal, the Tenants argued that the Superior Court erred in concluding that CFS's interest in the Property was superior to the Tenants' interests because the lease agreements were executed prior to the mortgage and CFS had actual notice of the leases. Alternatively, the Tenants argued that summary judgment was inappropriate because a genuine issue of material fact remained as to whether CFS had notice of the leases. The Supreme Court held that, based on the clear and unambiguous language of G.L. 1956 § 34-25-10, the mortgage was superior to the Tenants' unrecorded lease agreements, regardless of whether CFS had notice of the prior leases. Accordingly, the Supreme Court affirmed the Superior Court's grant of summary judgment in favor of CFS.