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Berkeley County named in bank's lawsuit over deeds

June 26, 2008|By MATTHEW UMSTEAD

A bank is claiming a record-keeping error by the Berkeley County Clerk's office led it to loan two people $346,500 for property that had been used to secure a second promissory note in October and November 2006, according to a complaint filed in Berkeley County Circuit Court.

Centra Bank, trustee Kathy M. Santa Barbara, the Berkeley County Commission and County Clerk John W. Small Jr. were named as defendants in a complaint filed earlier this month by an attorney representing U.S. Bank.

County legal counsel Norwood Bentley III said U.S. Bank and Centra Bank reached an agreement in a court hearing Tuesday to dismiss a motion for the preliminary injunction filed with the complaint, but the suit still was pending against the county.

"Whether or not John Small's office made a mistake, I'm not sure," Bentley said. "I'll be investigating that."

The alleged error involves the indexing of deeds of trust in the county clerk's office, and the complaint by Charleston, W.Va., attorney Stephen L. Thompson specifies that it involved real estate at 272 Adrian Drive in Mountain Vistas subdivision.

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County indexing records did not list George N. Stephens Jr. and Shannon R. Stephens as grantors in a Centra Bank deed of trust recorded in October 2006 involving a $250,000 promissory note and four parcels, according to Thompson's complaint.

If U.S. Bank was aware of the lien, then it would not have agreed to loan the Stephenses $346,500 in November 2006, according to the complaint.

Bentley said the county might have to pay a deductible for the insurance policy held by the county for the handling of the litigation, but didn't expect the county would be burdened with paying a judgment.

Santa Barbara said Wednesday the issues between U.S. Bank, Centra Bank and herself as trustee were resolved by agreement and anticipates she and the locally controlled bank will be dismissed as parties to the ci­vil action.

"Whether U.S. Bank chooses to continue that civil action ... against the County Clerk and the County Commission is up to U.S. Bank," Santa Barbara said.

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