In re Sanmill Pacific, Inc.

Full title: In re: SANMILL PACIFIC, INC., Debtor(s). v. KENDRA RETALLICK, et al.…

Court: United States Bankruptcy Court, Ninth Circuit

Date published: Aug 28, 2009

05-12757 (B.A.P. 9th Cir. Aug. 28, 2009)

Opinion

In re: SANMILL PACIFIC, INC., Debtor(s). TIMOTHY W. HOFFMAN, Trustee, Plaintiff(s), v. KENDRA RETALLICK, et al., Defendant(s). No. 05-12757 A.P. No. 08-1092. United States Bankruptcy Court, N.D. California. August 28, 2009.

          MEMORANDUM ON JP MORGAN CHASE MOTION FOR SUMMARY JUDGMENT

          ALAN JAROSLOVSKY, Bankruptcy Judge

         The real property which is the subject of this adversary proceeding was conveyed out of the debtor's name by a deed which is both patently and presumptively invalid because it was signed by an attorney in fact when no power attorney was of record and the signer was an interested amanuensis. JP Morgan Chase Bank seeks summary judgment as a bona fide encumbrancer without notice, but the defect in the conveyance is a matter of public record. The Bank accordingly had constructive notice of Retallick's lack of authority to execute the deed, which defeats its claim to be a bona fide encumbrancer without notice. See Leach v. Home Savings & Loan Assn. 185 Cal.App.3d 1295, 1301 (1986)[actual or constructive knowledge defeats claim to bona fide encumbrancer status]. Accordingly, the Bank cannot be a bona fide encumbrancer without notice.

         The court finds its estoppel argument unpersuasive, as there are very different requirements for accepting title and transferring title and the validity of the debtor's acquisition of title is not an issue in this adversary proceeding.

         For the foregoing reasons, the motion of JP Morgan Chase Bank for summary judgment will be denied. Any party may submit an appropriate form of order.