Opinion ID: 494670
Heading Depth: 3
Heading Rank: 1

Heading: issues

Text: 10 The district court found that the Fox investors held ownership interests in their notes and trust deeds, whereas the Bear investors merely held security interests in their note and trust deed. The district court further found that because the Bear investors did not have physical possession of the contested note and trust deed, they failed to perfect their security interests according to Division 9 of the California Commercial Code; therefore, the court viewed the Bear investors as general unsecured creditors of Golden Plan. 11 The Bear investors contend on appeal that: 1) the district court's finding of fact (that neither Golden Plan nor the Bear investors intended sales transactions of the note and trust deed) is unsupported by the record, 1 and 2) the district court erred in applying Division 9 of the California Commercial Code to the transactions at issue. 12 Both contentions hinge on the proper characterization of the transactions between Golden Plan and the Bear investors. The parties in the instant case correctly agree that Division 9 does not apply to an assignment intended to be a sale of a note or trust deed. 2 Consequently, the only issue on appeal is how to characterize the transactions between Golden Plan and the Bear investors: did the parties intend outright sales of the note and trust deed or did they intend loans for security? 13 We reverse as clearly erroneous the district court's determination that the transactions at issue were loans from the Bear investors to Golden Plan. See Semel v. Dill (In re Dill), 731 F.2d 629, 631 (9th Cir.1984).