Hoffman v. Retallick et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
SANMILL PACIFIC, INC., 	No. 05-12757
Debtor(s).
______________________________________/
TIMOTHY W. HOFFMAN, Trustee,
Plaintiff(s),
v. 	A.P. No. 08-1092
KENDRA RETALLICK, et al.,
Defendant(s).
_______________________________________/
Memorandum on JP Morgan Chase Motion for Summary Judgment
_________________
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
Entered on Docket
August 31, 2009
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 08-01092 Doc# 137 Filed: 08/28/09 Entered: 08/31/09 11:44:41 Page 1 of
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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.
Dated: August 28, 2009
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 08-01092 Doc# 137 Filed: 08/28/09 Entered: 08/31/09 11:44:41 Page 2 of
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