FI L ED U.S. COURT OF A P P E A LS E LE V E N T H C IR C U IT J ULY 27, 2007 THOMAS K. KAH

N CL ERK [ P U B L I S H ] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 04- 1589 1

____ ____ ____ ____ ____ ____ D. C. Docket N o. 04-01189 -CV -RW S-1 & 01-65356 BKC-P W IN RE: R ICHARD J ON COX, D e b t o r .

____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ __ R. DENN IS C HRI ST OP HE R, Pl ai nti ff -Appe llant, v e r s u s RICHAR D JON COX, De fendant-Appellee.

____ ____ ____ ____ ____ ____ __ Appea l from

the United State s District Court fo r the N orthe rnD istri ct

of G eo rg ia

____ ____ ____ ____ ____ ____ _ (J ul y 27 , 200 7)Honora ble Stephen N. L imbaug h, United States District J udg e for the Easter

n District of * Missouri, sit ting by

desig nation. The loan w as made by

Ag South Farm Cre dit, ACA’s prede cessor , West Georg ia Fa rm 1 Credit, ACA; we re fer

to both as “Ag South.” 2 Before TJO FL AT and KRA VI TC H, Circuit Judges, and LI MBA UG H, District * Ju dg e. PE R CU RIA M: T he que sti on this appe al pr es en ts i s w he the r the bankr upt cy c ourt e rr ed

in de te rm ini ng tha t the c ont em por an eo us e xe cu tio n of

aw ar ranty de ed to a tr ac t of l a n da n dac o n t r a c tg i v i n g t h e g r a n t e e a n o p t i o n t o p u r c h a s e t h e l a n dw i t h i n at i me ce rt ai n c re at ed

am ortga ge in w hic h th e gr an te e be cam e the m ortga gor a nd the gr an tor the m ortga ge e. T he dis tr ic t c ourt f ound no e rr or a nd u phe ld the b a n kr up t c y c o u rt ’s r

u l i n g . We a f

f i rm. I. A. In198 4, Ri ch ar d Jo n C ox b ec am e the ow ne r of the Bar C R an ch( the

“ Ranc h” ), a450 -a cr e tr ac t of land o n th e out ski rt s of

the Ci ty of Co vin gto n, G eo rg ia . I n 19 94, Co x so ld a ha lf int er es t i n th e Ranc h to L am ar Banks. A gS outh Farm Cr ed it, A CAf

inanc ed part of Banks’ s purc ha se by

loanin g hi m

$77 5, 000. 1 A m ortga ge on the Ranc h, e xe cu te d by Banks an d C ox a s te nants -i n- co m m on, se cure d th e loan. S oon af te r Banks ac qui re d hi s in te re st i n th e Ranc h, he a nd C oxThe a g ree ment set a floor value on the pr operty

as a whole of 1.5 million. 2 Un de r t he buy -s e ll a g re e me nt, the of fe re e ha d 3 0 d ay s to e xer c ise his op tio n to purc ha se 3 the prope rty . I f he did not do so, the off eror had 90 day s to close the tra nsaction. Ba nks was tre atingthe prope rty as a whole as wor

th $1.75 mill ion. 4 Cox w a ite d mo re tha

n th e 30 da

y s a llo tte d h im und e r t

he a g re e me nt t o e xer c ise his 5 option to purchase the proper ty . See note 3, supra . The re cord is silent as to why Ba nks did not consider Cox’s November 16 e x erc ise of the option a nullity . All we know is that he tre ated C o x ’ s e x e r c i s e a s t i m e l y. Th e se fi gur e s are a

pp ro ximatio ns . T he e xac t amou nts are no t mate ri a l f

or our p ur po se s. 6 3 en te re d in to a

buy -s el l a gr ee m en t, w he re by e ith er c oul d of fe r to p ur ch as e the o t h e r ’s i n t e r e s ti n t h e R a n c h f o r $ 7 5 0 , 0 0 0 o r

mo r e . Th e p a rt y re c e i v i n g t h e b u y-

2 out offer w ouldhave the option to purchase the offer or’ s interest for the price indicated in th e buy -out offer. 3 O n O ct obe r 6, 199 9, Banks of fe re d to pur ch as e Co x’ s in te re st f or $875 ,000. A s Cox was considering the offer, the property wa s being app raised at 4 $2, 445, 700. O n N ove m

be r 16, a ft er

the appr ai sa l ha d be enc om ple te d, Co x ex er ci se d hi s op tio n to pur ch as e Banks’ s in te re st f or the sam e pr ic e, $87 5, 000. 5 U nde r the buy -s el l a gr ee m en t, Co x ha d ni ne ty day s to c los e. T o c los e the tr an sa ct ion , Co x w oul d ne ed m or e than $1 . 2 m ill ion : $7 00, 000 to p ay of f the A gS outh m ortga ge a nd m or e than $5 00, 000 fo r Banks’ s in te re st ( af te r de duc tin g Banks’ s share, $300 ,000, of the balance due on the AgSouth m ortgage). 6 Co x so ught

aloan f ro m the Ma in S tr ee t B an k, in Co vin gto n, to fi nanc e the4

buy -o ut. T he bank a gr ee d to m ak e the loan pr ovi de d th at som eo ne a cc ep ta

ble to th e b an k g ua ran te edth e lo an . Cox tu rn edto R. Denn is Ch ris to ph er fo r he lp . Christoph er w as his insu rance agent and a long-tim e fr iend; he was also an ex pe ri en ce d r ea l e state inv es tor . C hr ist ophe r ag re ed to guarante e the loan, a nd s o not if ie d th e bank. T he bank, m eanw hil e, r ec onsi de re d th e m atte r; if aloan w as to be m ad e, it

w oul d be m ad e to C hr ist ophe r al one . C hr ist ophe r w as not int er es te d, how ev er ; he w as not

goi ng t o si gn a

not e fo r $1. 225 m ill ion . H e w as w ill ing to help Cox ou t, but not that way . Christoph er had an alter native plan in m ind, which he proceeded to execute. Rathe r than bo rr ow ing $1. 225 m ill ionto pay of f the A gS outh m ortga ge a nd Banks’ s in te re st i n th e Ranc h, he w oul d ob ta in A gS outh’ s c onse nt t o hi s assum ption of the m ortgage. I f A gSouth consented, all he w ouldhave to advance at the c los ing w oul d be the f unds suf fi ci en t t o pay

Banks – f

unds he e ith er

ha d on hand o r re ad ily

a cc es sib le – and the c los ing c ost s. A gS outh a gr ee d to Ch ri sto phe r’ s a ssu m pti on o f the m ortga ge , a nd the closing we nt forward on February 16, 2000. A t the closing , C hristop her assum ed the AgSouth m ortgage and paid Banks for his equi ty in the property . His out-ofpoc ke t ou tlay

tot al ed appr oxi m at el y

$54 5, 000. Se ve ra l do cu m en ts w er e ex ec ute d a t the c los ing . T w o are pe rt ine nt h er e: aThe c onsideration cited in the w arr anty deed w as “te n dollars and other g ood and 7 valuable c onsideration.” T he conside ration cited in the option contra ct was “ one dollar.” The option contra ct did not state, but the parties none theless agree d, that if Cox 8 exercised his option, he would g rant Christopher, a s his real e state ag ent, a non- exclusivelist ing for a 5% commission. 5 warranty deed executed by

Cox, as grantor, in favor of C hristop her, as grantee, an d an op tio n c ontra ct . T he c ontra ct gave Co x th e opt ionto pur ch as e the 7 pr ope rty w ith in 3 65 d ay s. T he pur ch as e pr ic e w oul d am ount to the sum

of the following, w ith interest at the rate of 9.25% per annum : the costs Christop her inc ur re d inc onne ct ionw iththe F eb ru ar y 16 c los ing ; the a m ount

he pa id t o B an ks; his m ortga ge paym en ts t o A gS outh; any e xpe ndi tur es he m ay

have m ad e to m ai nta in the Ranc h; and a $10 0, 000 “ kic ke r. ” U nle ss C ox e xe rc ise d th e opt ion , how ev er , he w oul d ow e Ch ri sto phe r nothin g. 8 Ch ri sto phe r did

not take pos se ssi on o f the Ranc h a ft er the c los ing . I nst ea d, Co x c ont inu ed

to re sid e the re r en t- fr ee , pa id the pr ope rty ta xe s, a nd k ep t the property insured. A nd Cox imm ediately set about the task of findin g a purchaser fo r the Ranc h – at a

pr ic e suf fi ci en t t o a de qua te ly

c om pe nsa te him

f or his e qui ty

in th e far m an d c ov er wh atCh ris to ph er wo ul d b e due un de r th e o pt io n c on tra ct . S e v e r a l r e s i d e n t i a l d e v e l o p e r s e x p r e s s e dan i n t e r e s ti n t h e p r o p e rt y; s o me ex te nde d of

fe rs to pur ch as e it. T he of fe rs c am e to n au ght , how ev er . O n M ar ch5, 20 01 , aft er t wo ex te ns io ns , Cox ’s op ti on to pu rch as e th e p ro pe rty exp ire d.6 B. A ft er Co x’ s op tio n e xpi re d, a n a sso ci at e of Ch ri sto phe r’ s, a ct ing on Christoph er’ s behalf, c ontacted, D wayne Ke y , a rea ltor who ear lier had m ade an of fe r (t o C ox) f

or the pr ope rty

that f el l thr ough . O ve r the ne xt thr ee m onths, be tw ee n M ar cha nd June 200 1, K ey , in tur n, loc at ed tw o po te nti al buy er s f

or the la nd . Meanw hile, on April 20, 2001 , C ox petiti oned the United States Bankruptcy Co urt f or the N orthe rnD istri ct

of G eo rg iaf

or Ch ap te r 11 r el ie f. S hortly the re af te r, a s de bto r- in- poss es sio n, Co x c om m en ce d an a dve rs ar

y pr oc ee din g ag ai nst Ch ri sto phe r to d et er

m ine the e xte nt o f the bankr upt cy e state ’ s in te re st i n the Ranc h. C hr ist ophe r an sw er ed the c om pla int , a lle gin g th at

he ow ne d th e pr ope rty by vir tue of the w ar ranty de ed Co x ha d gi ve n to him

on F eb ru ar

y 16, 2000 . C hr ist ophe r al so f ile d ac ount er cl ai m , in ana tte m pt t o r ec ove r re nt f

or Co x’s o ccupa nc y

of t he Ran ch aft er h is op ti on ex pi red . Pursuant to an order issued bythe bankruptcy court, the property

wa s soldat au ct io n o n J ul y

18 , 20 01 for$2 .8 m il li on . The s al e cl os edth e fo ll owi ng m on th . T he pr oc ee ds o f the sa le w er e use d to ( 1) sa tis fy the ba lanc e due on the A gS outh m ortga ge , ( 2) r ei m

bur se Ch ri sto phe r fo r the m oni es he ha d pa id A gS outh and Banks, and (3) pay

Christopher the $10 0,000 “ kicker,” interest (at 9. 25% perL ike the district cour t, we re view the ba

nkruptcy court’s f indings of f

act f or cle ar e rror 9 and the c ourt’s conc lusions of law and mix ed questions of lawand fa ct de novo. See In re Calvert, 907 F .2d 1069, 1071 (11th Cir. 1990). 7 an nu m ) on th e fu nd s h e h adad va nc ed , and hi s at to rn ey ’s fees . On O ctober 9, 2003, the bankruptcy court held a bench trial in the adversary pr oc ee din g. A ft er

c onsi de ri ng wha t C ox and C hr ist ophe r ha d to say , the te sti m ony of the ir w itn es se s, a nd the doc um en tary e vid en ce pr es en te d, the c ourt r en de re d it s decision on Oc tober 20, 2003. T he court found that, under the circum stances le ad ing up t o and s ur

ro undi ng the part ie s’ de al ing s, the part ie s in te nde d th at the warranty deed and the optio n contract cre ate a m ortgage. C ox’s e state wa s the re fo re e nti tle d to the ba lanc e of the $2. 8 m ill ionthat ha d be enpa id f or the Ran ch . Ch ri sto phe r ap pe al ed

the de ci sio n to the dis tr ic t c our t. C onc lud ing that the b an kru p t cy co u rt ’s fi n d i n g s o f f ac twe re n o tcl ea rl y erro n eo u s an dt h at t h e c o u rt ’s application o f G eorgia lawto thos e findings was corre ct, the district court af fi rm ed . T his appe al f

oll ow ed . 9 II. T he pr opos iti on tha t a

tr an sa ct ionthat i s, on i ts f ac e, a n a bsol ute co nve y an ce of

ti tle , m ay , in ac tua lity , c onve y ti tle onl y a s se curi ty

f or aloan isTh is i s d on e be c a us e le nd e rs of

te n s e e k to dis guis e mor

tg a g e s a s c onve y anc e s to avo id 10 the pro-mor

tga g or re g ime of law. See Restatement (Thir d) of Prop.: Mortg ag es § 3.2 cmt. a (1997). Not all conditional sales may automatically

be dee med mortg ag es. On oc casion, a 11 repur chase option may

be truly intended by

the par ties, and if so, those conve y ance s are not deeme d mortg ag es. See Conwa y ’s Ex’rs and Devise es, 11 U.S. (7 Cranc h) 218 at 236– 37.

8 bla ck le tte r law . S ee Re state m en t ( T hir d) of P ro p. : M ortga ge s § 3 . 2 ( 1997 ). I t i s ne ce ssary to loo k be y ond the f

our c or ne rs of som e co nve y an ce s – t o c onsi de r paro l ev ide nc e – to de te rm ine , in lig ht o f al l the c ir cu m stanc es , w he the r the part ie s to the transaction intend ed to transfer title or create to create a m ortgage. See 10 Ru s s el l v . S o u t h ar d , 5 3 U.S . ( 1 2 Ho w.) 1 3 9 , 1 5 2 , 1 3 L.E d . 9 2 7 (1 8 5 1 ); Co n wa y’ s E x’ rs a nd D ev ise es v. A le xande r, 11 U . S. ( 7 C ranc h) 218 , 237 , 3 L . E d. 321 (1812); Spence v. S teadm an, 49 G a. 133, 138 (Ga. 1873 ). 11 G eo rg ialawha s lo ng r ec ogni ze d th at the de te rm inativ e fa ct or

in di st in gu is hi ng a m or tg ag e fro m an ab so lu te co nv ey an ce i s t he in te nt of t he pa rti es . See Monroe v. Foster, 49 Ga. 514, 519 (Ga. 1873 ) (“ [I] f . . . it a ppear that the loan of m one y a nd s ec ur ity

f or it s r ep ay m en t w as , in tr

uth , the pur

pose a nd i nte nt o f the part ie s, it w ill be tr eate d a s su ch , notw ith standi ng v er y str ong langua ge m ay

be use d a t the ti m e to g ive it adif fe re nt a ppe ar an ce . ”) ; se e al so R es ta te m en t ( T hir d) of P ro p. : M ortga ge s § 3 . 2 ( 1997 ). T he int en t of the part ie s inagiv ensc en ar io i s a que sti on o f fa ct . S pe nc e, 49 G a. a t 13 9 ( “ T he que sti on o f int en tio n is one of f ac t,9

to be de ci de d fr om

all th e ci rcu m st an ces .”). Ch ri sto phe r co nte nds that, und er G eo rg ialaw , atr an sa ct ionc an not be de em ed am ortga ge unl es s it

c re at es ac re dit or -d eb tor r el at ion shi p be tw ee n th e part ie s – tha t a

bse nt a r igh t t o r ec our se by

the pur porte d le nde r ag ai nst

the pu rp or te d d eb to r, th e co nv ey an ce i s wh atitis on it s fa ce, a co nd it io na l s al e. Historically , the e xplicit creation of a cre ditor-debtor relationsh ip, w hile an im portant factor to be considered, has not been dispos itive. Se e Conway ’ s Ex’ rs an d D ev ise es , 11 U . S. ( 7 C ranc h) a t 23 7. C hr ist ophe r ar gue s th at the G eo rg ia Su pr em e Co urt i de nti fi ed

the e xpl ic it cr eatio n of

suc h ar el at ion shi p a s a re qui re m en t f

or ac onve y an ce to be c onstru ed a s am ortga ge in H ai re v. Co ok, 229 S.E.2d43 6 (Ga . 19 76 ), an d Ti ng le v. Tin gl e, 17 9 S .E.2d51 (Ga. 19 71 ). It is true that both Haire, and Tingle place gre at w eight on the purported le nde r’ s la ck

of r ec our se a ga ins t the pur

porte d de bto r, a nd b othc as es c ont ai n langua ge that su

ppor ts C hr ist ophe r’ s c ont en tio n. S ee H ai re , 229 S . E . 2d at 43 9 (“ [T ] he re is no e vid en ce that the gr an te e ha d th e ri ght to de m an d r ep ay

m en t and no e vid en ce that e ith er

pla int if f ag re ed to be obl igate d to r ep ay

the de bt. . . . T hus the de ed c an not be c onsi de re d to be am ortga ge . ”) ; T ing le , 179 S . E . 2d at 55 ( “ Fo r a se curi ty tr an sa ct ionto ex ist

the re m ust be the r el at ion shi p of

de bto r an d creditor. ”) W e agre e, however, with the distinctio ns poi nted out by the district10

co urt i n a ff

irm ing the bankr

upt cy c ourt’ s de ci sio n. I n ne ith er T ing le nor

H ai re did the sup re m e co urt f

ull y c onsi de r al l the c ir cu m stanc es sur ro undi ng the tr an sa ct ion , as r equir ed

by S pe nc e. I nst ea d, both c ourts l ooke d on ly to the f ac e of the co nve y an ce s and f

ind ing no i ndi catio n of

a n in te nt t o c re at e a m ortga ge the re , the courts concluded th at the transactions in qu estion were sales. Also, in both Hair e an d T ing le , the re w as not , a s th er e is h er e, agr eat di spari ty be tw ee n th e co ns id erat io n p ai d fo r th e p ro pe rty andth e p ro pe rty’ s v al ue . A s th e bankr

upt cy c ourt no te d, “ re lianc e on [ a re co ur se obl igatio n] a s a defining elem ent of a loan transaction overlooks the fac t that num erous secured real e state loan transactions are nonrecourse loans[.] ” E xpress creation of a re co ur se obl igatio n – o r the abse nc e the re of – i s un doub te dly

a n im portant f ac tor to c onsi de r, but

it c an not not the de te rm inativ e fa ct or . I nst ea d, ac ourt m ust loo k at the int en t of

the part ie s inli ght

of a ll the c ir cu m stanc es sur ro undi ng the tr an sa ct ion . S pe nc e, 49 G a. a t 13 9. W e conclude that the bankrupt cy court properly

held, and the district court pr ope rl y a ff irm ed , that part ie s m ay

c re at e a m ortga ge a lth oughthe ins tr um en ts th ey us e su gg es t t ha t a c on ve y an ce o f ti tl e rat he r th an th e cre at io n o f a l ie n. A li en m ay be crea te d e ve n wh en th ere i s n o p ro vi si on forth e p aym en t o f th e d eb t. Having rea ched this conclu sion, we now consider whether the bankrupt cy court11

clear ly err ed in finding that Christoph er and Cox in tended a m ortgage. III . Whe the r Co x and C hr ist ophe r int en de d to c re at e a m ortga ge is a que sti on o f f a c t . S p e n c e v . S t e a d man , 4 9 Ga . 1 3 3 , 1 3 9 ( G a . 1 8 7 3 ) . I n f i n d i n g t h a tt h e y int en de d th e tr an sa ct ionto cr eate am ortga ge , the bankr upt cy c ourt r el ie d on num er ous subs idi ar

y f ac ts e sta bli she d a t the a dve rs ar ia l he ar ing . P er ha ps the m ost pow er fu l am ong the se w as the va lue of the Co x tr ac t a t the ti m e of the Fe br uary 16, 200 0 c los ing a s c om pare d to the va lue of

the c onsi de ratio n pa id b y Ch ri s t o p h er . Att h e c l o s i n g , C h ri s t o p h erre ce i v ed t i t l e –s ub je ct t o Co x ’s re pur ch as e opt ion– t o atr ac t tha t ha d be enva lue d th re e m onths e ar lie r at ne ar ly $2.5 m illion . Christoph er a ssum ed the outstan ding AgSouth m ortgage, which had anunp ai d pr inc ipa l ba lanc e of a ro und $700 , 000, a nd p ai d B an ks $ 500, 000 fo r Banks’ s sh ar e of

the pr ope rty ’ s e qui ty . C hr ist ophe r did not m ak e an y

paym en t t o Co x f or his share of

that e qui ty . I n othe r w or ds, Ch ri sto phe r re ce ive d ti tle to the Co x tr ac t i n e xc hange f

or c onsi de ratio n e qua l t o a

bout ha lf the pr ope rty ’ s va lue : $1 .2 v ers us $2 .5 m il li on . A gr oss dis pari ty

be tw ee n th e sa le pr ic e an d th e ac tua l va lue of the land i s evidence of the parties’ intent to create a security interest – a m ortgage – rather than asa le . S ee Ru sse ll v. S outhard , 53 U . S. ( 12 H ow . ) 139, 147 –48, 13 L . E d.12

927 (1 851) ( hol din g th at

e xtr an eo us e vid en ce is adm iss ibl e to i nf orm c ourts o f al l m at er ia l f ac ts s ur ro undi ng the de liv er

y of the de ed , a nd c onc lud ing that “ it is o f great im portance to inqu ire w hether the consideration was adequate to induce a sa le ”) ; C onw ay ’ s E x’ rs a nd D ev ise es , 11 U . S. a t 24 1 ( “ A c ondi tio na l sa le . . . a t a pr ic e be ar ing no p ro portio n to the va lue of the pr ope rty

w oul d br ing sus pic ionon the w hol e tr an sa ct ion . T he e xc es siv e ina de qua cy of pr ic e w oul d, in its el f, in the opi nio n of

som e of the j udge s, f

ur nis h ir re sis tib le pr oof

that a sa le c oul d no t have be enint en de d. ”) ; M onr oe v. F ost er , 49 G a. 514 , 519 ( G a. 187 3) . I n R uss el l, f or ex am ple , the S upr em e Co urt f

ound that the c onsi de ratio n pa id a s part of the ab sol ute de ed

tr an sa ct ion– l es s th an$5, 000 fo r land v al ue d a t se ve ra l thous an d dol lars m or e – w as “ gr oss ly ina de qua te ” in tha t “ the re w as no r ea l pr opor tio n betwee n the alleged price and the value of the property said to have been sold .” Ru sse ll, 53 U . S. a t 14 9. S im ilarl y , in thi s c as e the c onsi de ratio n pa id f or the Ranc h – sc ar ce ly

ha lf it s a ct ua l va lue – w as gr oss ly

ina de qua te , ind ic at ing that a sa le w as not

r ea lly int en de d. T he abse nc e of

pr opor tio na lity be tw ee n th e pr ope rty ’ s va lue a nd the co nsi de ratio n C hr ist ophe r pa id i s no t the onl y f ac tor the bankr

upt cy c ourt r el ie d on to find that th e parties intended to create a m ortgage. T he court also noted th at Christoph er and Cox di d not n egotiate the value of the property . The pric e w as set13

by the am ou nt Co x re qu ire d u nd er h is bu y -s el l ag reem en t wi th Ban ks . Ch ri sto phe r pa id the e xa ct a m ount Co x ne ed ed

to av oid be ing c om

pe lle d to se ll the Ranc h. T he abse nc e of ne got ia tio ns, c oupl ed

w iththe c ongr

ue nc e be tw ee n th e price paid and the am ount Cox needed to rem ain on the Ranch, indicate that Ch ri sto phe r int en de d th e m one y he pr ovi de d a s aloan to Co x and n ot a s th e pur ch as e pr ic e fo r the tr ac t. Likew ise, the ter

m s of the repurchase option ind icate that the parties intended th e transaction to create a m ortgage. T o exercise his option to repurchase the tract, Cox had to pay Christopher a $100,000 “ kicker” and interest at 9 .2 5 % o n Ch ri s t o p h er ’s t o t al i n i t i al o u t l ay. Th es e t er m s , i n t h e b an kru p t cy co u rt ’s vie w , ind ic at ed

that C hr ist ophe r vie w ed

the tr an sa ct iona s an in ve stm en t oppo rt uni ty – aloan. In its order af

firm ing th e bankruptcy

court’ s decision, the district court not ed a n a ddi tio na l f

ac tor sup portin g th e fi ndi ng tha t C hr ist ophe r an d C ox int en de d to c re at e a m ortga ge . F oll ow ing the c los ing , Co x c ont inu ed to oc cu py the Ranc h – and p ay

the r ea l e state ta xe s and the ins ur an ce pr em ium s onthe pol ic ie s c ove ri ng the pr ope rty – w ith out

pay ing Ch ri sto phe r an y

r en t. T hus, Ch ris to ph er an d C ox co nt in ue d t o a ctas t ho ug h C ox own edth e p ro pe rty. In light of the foregoing fac ts, the bankruptcy court’ s finding that14

Ch ri sto phe r an d C ox i nte nde d to c re at e a m ortga ge w as not c le ar ly e rr one ous. T he dis tr ic t c ourt’ s de ci sio n up hol din g th e bankr upt cy c ourt’ s de te rm inatio n is therefore AFFIRMED.