In October of 1984, Lawrence (H) acquired a house. H assumed an existing mortgage and also executed a purchase money mortgage. The following year, H joined by W, executed another mortgage on the house in which the existence of the prior mortgages was acknowledged. H and W lived in the house for several years. In March of 1988, H borrowed $1,200,000 from P and secured the debt with a mortgage on the house. Despite its knowledge that H and W were then engaged in dissolution proceedings, the bank permitted H to obtain W's signature on the mortgage without requiring her to sign the document in the bank's presence. H forged W's signature on the mortgage. Approximately $930,000 of the loan proceeds was applied directly to the payment of the three existing mortgages and taxes on the property. The remaining sum was used by H. In August of 1988, H and W entered into a property settlement agreement, which provided that H would buy W a $275,000 home and pay her $225,000, and that she would give up any interest in the Palm Beach house. As collateral for his promises, H gave W a quitclaim deed conveying the Palm Beach house to H and W. He represented that the house was free and clear of liens except those claimed by his mother and sister. W moved out of the house, and the parties were divorced. H failed to buy the new house or to pay her the promised money. The mortgage on the Palm Beach house went into default, and P commenced foreclosure proceedings. W moved back into the Palm Beach house, and H went to jail. The judge in the dissolution proceeding set aside the property settlement agreement for fraud in the procurement and awarded W the Palm Beach house nunc pro tunc. In the foreclosure proceeding, the judge ruled that W had not abandoned her homestead interest in the house and that the mortgage could not be foreclosed against the house. The judge gave P an equitable lien on the house to the extent that its funds were used to satisfy the preexisting mortgages and taxes. The judge stayed any foreclosure sale on the equitable lien for six months to permit W to try to make a private sale of the house. P appealed, and the court held that the house was not subject to foreclosure by P. It then reversed the imposition of the equitable lien because W was innocent of wrongdoing. The court reasoned that equitable liens may only be imposed against homestead real property where the beneficiary of the homestead protection is guilty of fraudulent or otherwise egregious conduct. P appealed. P argues that because its loan proceeds were used to satisfy the prior liens, it stands in the shoes of the prior lienors under the doctrine of equitable subrogation.

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