Opinion ID: 781254
Heading Depth: 2
Heading Rank: 1

Heading: The Loan and Deed of Trust

Text: 6 This appeal and cross-appeal arise from the bankruptcy proceeding Dyer initiated in 1998, but the story underlying it begins in 1992. In that year, Mr. Lindblade decided to assist his daughter and her husband in buying a house. (Mr. Lindblade's generosity was possible because he was a $22,000,000 jackpot winner in the California lottery.) To implement his parental beneficence, Mr. Lindblade gave approximately $143,000 to Jeanie and her then-husband, Dyer, for a downpayment for the home. 7 As additional financing for the purchase of the home, Dyer and Jeanie also took out a $100,000 mortgage from First Interstate Mortgage Company, secured by a first deed of trust. On the loan application, both Dyer and Jeanie stated under penalty of perjury that they had not borrowed any portion of the down payment for the home. 8 In June 1992, approximately two months after obtaining the First Interstate loan and moving into the home, Jeanie and Dyer executed a promissory note and deed of trust in favor of Mr. Lindblade, stating that they owed Mr. Lindblade $143,000. Although the promissory note does not set a repayment date or interest rate, it gives Mr. Lindblade the right to demand payment in the event Dyer and Jeanie divorce or Jeanie dies. 9 At Mr. Lindblade's insistence, the deed of trust was notarized. For several years, however, the deed remained unrecorded. Mr. Lindblade indicated that he was aware of the recordation requirement but never recorded the deed because he believed that Dyer had done so. 10 In 1995, Mr. Lindblade paid off the balance of Jeanie and Dyer's First Interstate loan, in the amount of $97,782.33. Mr. Lindblade asserts that he intended for this second payment to be a loan with terms identical to those pertaining to the $143,000 loan and contained in the June 1992 deed of trust. No written agreement to that effect was ever executed. 11 Dyer and Jeanie, while married, made no payments on either the $143,000 loan or the $97,782.33 loan. Instead, in 1997, Dyer and Jeanie refinanced the home once again. On their loan application, Dyer and Jeanie represented for a second time that there were no outstanding loans on the property. After the divorce, Jeanie did pay a small amount of money as repayment of the loan (approximately $2,000). 12