Jesko et al v. Bank of America, NA

Page 1 of 	19
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
PAUL HENRY JESKO and
LYNN GRINNELL JESKO, 	Case No. 12-03-18306-SS
d/b/a Jesko Farms, 	Chapter 12
Debtors.
PAUL HENRY JESKO and
LYNN GRINNELL JESKO,
Plaintiffs, counter-defendants,
v. 	Adversary No. 04-1166 S
BANK OF AMERICA, NA,
Defendant, counter-claimant.
MEMORANDUM AND ORDER DENYING
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
Defendant Bank of America, N.A. (“BOA” or “Defendant”) has
filed its Motion for Summary Judgment (“Motion”) which seeks
dismissal of this complaint to determine the validity, extent and
priority of liens against property of the estate and for
reformation of a mortgage. 	The mortgage in question deals with
two batches of land, one owned by the debtors as individuals
(“Jeskos” or “Debtors”) and one owned by a trust self-settled by
the Jeskos (“Jesko Family Trust” or “Trust”). 	For the purposes
of this adversary proceeding, the Court finds that (1) the
property owned by the Jesko Family Trust is property of the
bankruptcy estate and within this Court’s jurisdiction, (2) the
strong arm provision of the Bankruptcy Code (“Code”), Section
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 1 of 19

1 The wording about the property being “owned” by the Jeskos
and the Trust is a shorthand reference to the status of the
property immediately prior to the filing of the petition. 	That
status of course governs the disposition of the property after
the petition has been filed.
2 The mortgage erroneously states the total acreage as 920.
Ex. F to Jesko deposition, attached to Motion.
Page 2 of 	19
544(a)(3), permits the Jeskos to avoid BOA’s lien on the Trust
land, (3) BOA is not entitled to equitable relief and (4) the
parol evidence rule is not applicable to preserve the lien for
BOA.
This matter is before the Court on Defendant’s Motion (doc
22), the Plaintiffs’ Response (“Response”) (doc 23) and the
Defendant’s Reply (doc 26). 	The mortgage at issue in this case
refers to parcels of land, some owned by the Jeskos and some by
the Jesko Family Trust. 1 	The mortgage secures a promissory note
issued by the Jeskos to BOA’s predecessor in the amount of
$400,000.00 and was executed on July 1, 1999 and recorded in the
real estate records of Union County on July 2, 1999. 	Paul Jesko
and Lynn Jesko signed the mortgage only as individuals. 	The
mortgage identifies the covered tracts of land, a total of 1520
acres 2 located in Union County, State of New Mexico, as follows:
TOWNSHIP TWENTY-THREE (23) NORTH, RANGE THIRTY-SIX (36)
EAST, N.M.P.M.:
SECTION 19: N2
SECTION 22: SE4, N2NW4, NE4
SECTION 23: SW4
SECTION 27: SW4, E2
SECTION 34: NW4
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 2 of 19

3 The Jeskos had mortgaged this same acreage to the Farm
Services Administration in October 1994 and November 1996. 	The
Jeskos assert, and BOA disputes, that the Jeskos and BOA had an
understanding that the Jeskos would not put a “second” mortgage
to BOA on this land. 	That dispute is not addressed in this
memorandum opinion.
4 There is no explanation why the title insurance commitment
does not list the other two parcels. 	It may be that the title
examiner noticed only the single quitclaim deed that conveyed
these three parcels, Exhibit D to Jesko Deposition, and not the
other two quitclaim deeds that were executed and recorded at the
same time, Exhibits B and C to Jesko Deposition.
Page 3 of 	19
In April of 1997, however, the Jeskos had quitclaimed 1120
acres of the above-mentioned land to the Trust 3, as follows:
SECTION 19: N2
SECTION 22: NE4
SECTION 23: SW4
SECTION 27: E2
SECTION 34: NW4
The following 400 acres covered by the mortgage remain titled in
the name of the Jeskos as individuals:
SECTION 22: SE4, N2NW4
SECTION 27: SW4
Although BOA asserts it never knew some portions of land
covered by the mortgage were actually titled in the name of the
Trust, the title insurance commitment (doc 24) listed three of
the tracts of land as so titled:
SECTION 22: NE4
SECTION 27: E2
SECTION 34: NW4 4
The Debtors filed their chapter 12 petition on October 30,
2003.
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 3 of 19

Page 4 of 	19
Summary Judgment Standards
The Bankruptcy Code provides for summary judgment through
Federal Rule of Bankruptcy Procedure 7056, which adopts Federal
Rule of Civil Procedure 56. 	Pursuant to Rule 56(c), the court
should grant summary judgment when after consideration of the
record it determines that “there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law.” 	Fed.R.Civ.P. 56(c). 	“By its very terms,
this standard provides that the mere existence of some alleged
factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment; the requirement
is that there be no genuine issue of material fact.” 	Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
The party moving for summary judgment has the burden of
establishing that summary judgment is appropriate. 	Wolf v.
Prudential Ins. Co. of America, 50 F.3d 793, 793 (10th Cir.
1995). 	However, once the moving party has supported its motion,
then it is incumbent upon the adverse party to show that there
are material facts in dispute. 	Fed.R.Civ.P. 56(e). 	The adverse
party may not rely solely on its pleadings but must “set forth
specific facts showing that there is a genuine issue for trial.”
Id.
Court’s Jurisdiction Over Jesko Family Trust Land
This Court’s jurisdiction extends to all property of the
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 4 of 19

5 Unless otherwise specified, all references to Titles 11
and 28 and to the Federal Rules of Bankruptcy Procedure are to
sections and rules in effect prior to October 17, 2005, when most
of the provisions of the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 became effective.
Page 5 of 	19
debtor as of the commencement of the case as well as all property
of the estate. 	28 U.S.C. § 1334(e) (2005). 5 	The first issue to
be decided is whether the land held in the name of the Trust is
property of the estate and therefore subject to an adjudication
by this Court.
In April 1997, the Jeskos executed the documents that
created the Jesko Family Trust, and then immediately conveyed the
1120 acres at issue to the Trust. 	The Trust identifies the
Jeskos as grantors, trustees and beneficiaries. 	The Trust is
revocable and on the petition date the Trust had not been revoked
and the Jeskos were (and still are) alive. 	The Debtors owned
both the legal and equitable interests in the 1120 acres.
Section 541(a)(1).
For purposes of bankruptcy proceedings, what interest a
debtor (or the estate) has in property is determined by reference
to state law. 	Barnhill v. Johnson, 503 U.S. 393, 398 (1992),
citing Butner v. United States, 440 U.S. 48, 55 (1979) (“Property
interests are created and defined by state law.”). 	Applying this
rule, some courts consider all property of the trust that is
reachable by creditors under state law property of the bankruptcy
estate. 	Shurley v. Texas Commerce Bank-Austin, N.A. (In re
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 5 of 19

Page 6 of 	19
Shurley), 115 F.3d 333, 339 (5th Cir. 1997), cert. denied sub-nom
Texas Commerce Bank – San Angelo v. Shurley, 522 U.S. 982 (1997).
(“Here, the Marfa ranch no longer belongs to Shurley; it is
property of the bankruptcy estate.”) (Interpreting Texas law);
Barash v. Morris (In re Morris), 144 B.R. 401, 406 (Bankr. C.D.
Ill. 1992), aff’d In re Morris, 151 B.R. 900 (C.D. Ill. 1993)
(Corpus of spendthrift trust turned over to bankruptcy trustee.)
(Interpreting Illinois law.) 	Other courts dealing with self-
settled revocable trusts skip this step and simply consider the
corpus as property of the bankruptcy estate. 	Redmond v. Kester
(In re Kester), 339 B.R. 749, 752 (10th Cir. B.A.P. 2006)
(holding that debtors’ beneficial interest in self-settled trust
permits them to exempt property)(interpreting Kansas law); Royal
v. Pancratz (In re Pancratz), 175 B.R. 85, 90 (D. Wyo. 1994)
(same, interpreting Wyoming law).
Section 46A-5-505 N.M.S.A. (2003) states:
A. Whether or not the terms of a trust contain a spendthrift
provision, the following rules apply:
(1) during the lifetime of the settlor, the property of a
revocable trust is subject to claims of the settlor’s
creditors;...
Therefore the Trust land is part of the bankruptcy estate,
subject to adjudication by this Court.
BOA makes four more arguments in support of its Motion: (1)
the Jeskos’ use of section 544(a)(3), the trustee’s “strong arm
power”, is barred because a bona fide purchaser would have
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 6 of 19

Page 7 of 	19
constructive notice of BOA’s lien, (2) the use of section
544(a)(3) is also barred because its application would benefit
only the Jeskos individually and not the estate, contrary to
section 550(a), (3) allowing the Jeskos to avoid the lien on the
Trust land would be inequitable, and (4) the parol evidence rule
bars the Court from reforming the mortgage document. 	Each will
be addressed in turn, after addressing the question of which
section of the Code is applicable.
Section 506(d)
Debtors seem to concede that because the Trust is a
different entity from the Debtors, the land at issue is therefore
not subject to the exercise of the trustee’s strong arm powers.
They then assert that they are not seeking relief under section
544(a)(3), but only a valuation under section 506. 	Plaintiff’s
[sic] Response to Defendant’s Motion for Summary Judgment, at 7-8
(doc 23). 	However, that assertion is not correct. 	Specifically,
Plaintiffs say as part of their material facts that certain
tracts of land were not owned by the Jeskos. 	Id. at 7. 	They
then say that they are trying to “write down” BOA’s secured claim
“based upon (1) the value of the property of the bankruptcy
estate securing the claims (i.e., § 506 issues), and (2) the fact
that Defendant’s mortgage is not valid with respect to some of
the property which it purports to cover.” 	Id. at 8. 	No value
issues have been raised, at least in the sense of dollars per
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 7 of 19

Page 8 of 	19
acre valuations, so it is not even clear that there is a factual
predicate for the application of section 506. 	(Presumably that
litigation will follow.) 	More to the point, the contention that
BOA’s mortgage is not valid as “to some of the property it
purports to cover” is the Debtors’ basis for the application of
section 506. 	Subsection (d) of that section voids a creditor’s
lien against estate property to the extent that the claim is not
an allowed claim against the estate secured by property of the
estate. 	But section 506(d) can only be applied once it is
determined what property belongs to the estate. 	And in this
instance, the function of section 544(a)(3) is in part to
determine what property does belong to the estate and what liens
attach to that property.
BOA has correctly framed the issue (although the Court
disagrees with BOA’s conclusions). 	Plaintiffs have also argued
the issue, albeit minimally. 	Id. 	Since BOA has raised section
544(a)(3) in its Motion and continues to argue it in its Reply
(doc 26), the Court considers that BOA is sufficiently on notice
of the issue for this Court to invoke that section in this
ruling. 	Additionally, were the Court to not consider section
544(a), Plaintiffs would presumably raise it in a request for a
rehearing or at trial, and therefore it makes sense to dispose of
the issue now.
Section 544(a) and constructive notice
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 8 of 19

Page 9 of 	19
BOA’s Motion avers that the Jeskos should not be able to use
section 544(a)(3) to avoid BOA’s lien on the Trust land.
Section 544(a)(1) and (3) provides as follows:
(a) The trustee shall have, as of the commencement of the
case, and without regard to any knowledge of the trustee or
of any creditor, the rights and powers of, or may avoid any
transfer of property of the debtor or any obligation
incurred by the debtor that is voidable by --
(1) a creditor that extends credit to the debtor at the
time of the commencement of the case, and that obtains,
at such time and with respect to such credit, a
judicial lien on all property on which a creditor on a
simple contract could have obtained such a judicial
lien, whether or not such a creditor exists;...
(3) a bona fide purchaser of real property, other than
fixtures, from the debtor, against whom applicable law
permits such transfer to be perfected, that obtains the
status of a bona fide purchaser and has perfected such
transfer at the time of the commencement of the case,
whether or not such a purchaser exists.
BOA first points out that if the Jeskos did not properly
grant the mortgage because the Jeskos (as individuals) were not
in title of the land they should not be able to avoid the lien
during their bankruptcy proceeding because they do not own the
property. 	That would be a correct analysis if the Trust land
were not part of the bankruptcy estate, but, as discussed above,
the land is now within the estate, and therefore within reach of
the avoiding powers of the debtors in possession.
Section 544(a) gives a trustee (or debtor in possession) the
power that a hypothetical bona fide purchaser of a parcel of
property would have as of the commencement of the case to avoid
any liens on the property. 	This power is available regardless of
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 9 of 19

6 Mr. Jesko apparently thought that the only effect of
putting the land in the Trust was to allow it to pass to his
heirs without a probate proceeding. 	However, this fact (if it is
a fact) is not germane to the summary judgment.
Page 10 of 	19
any actual knowledge of the trustee or debtor in possession.
Crowder v. Crowder (In re Crowder), 225 B.R. 794, 796 (Bankr. D.
N.M. 1998). 	Thus it would be irrelevant, for purposes of section
544(a), if Mr. Jesko were to have been fully aware that the five
parcels at issue were titled in the Trust and that he did not
convey that information to BOA 6, or that Mr. Jesko intended to
convey to BOA a valid mortgage on the five parcels.
Constructive Notice - Conveyance Recording
Under New Mexico law, all conveyances of land are required
to be recorded in the office of the clerk of the county or
counties in which the affected real estate is situated. 	N.M.
Stat. Ann. § 14-9-1 (2003 Repl.). 	The three quitclaim deeds
recorded in April 1997 in Union County provided notice to the
world of the transfer of the five parcels from the Debtors
individually to the Trust. 	N.M. Stat. § 14-9-2 (2003 Repl.).
That was the title status of the five parcels in July 1999 and in
October 2003.
Thus BOA was on constructive notice that it could only
obtain a valid mortgage on the five parcels from the Jeskos as
trustees. 	Instead, it obtained a mortgage from the Jeskos only
in their individual capacity. 	N.M. Stat. Ann. § 14-14-8B (2003
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 10 of 19

Page 11 of 	19
Repl.) provides the statutory form for acknowledgment that must
be complied with. 	A valid acknowledgment in a representative
capacity requires a signature by a trustee, as a trustee. 	Id.
While the Supreme Court of New Mexico has accepted as valid an
acknowledgment that substantially complies with the statute, it
has only been in a case where the specific type of acknowledgment
has not been specifically provided for in the statute. 	Byers
Bros. & Co. Live Stock Comm’n Corp. v. McKenzie, 239 P. 525, 526-
27, 30 N.M. 487, 489-90 (1925). 	Section 14-14-8B was enacted in
1993. 	In any event, signing as an individual in lieu of signing
in some representative capacity does not substantially comply
with the statute.
BOA correctly points out that Article IX, Section A of the
Declaration of the Jesko Family Trust instructs that any person
dealing with a trustee with respect to the property “shall be
absolutely protected in relying upon the certificate of any
Trustee...” 	Exhibit A, page 2, to Jesko Deposition. 	But because
the Jeskos did not act in their capacities as trustees but only
as individuals, this part of the Trust document does not help
BOA.
A recording requires valid acknowledgment, and absent that
acknowledgment, the instrument is considered unrecorded. 	N.M.
Stat. Ann. § 14-8-4 (2003 Repl.); N.M. Properties, Inc. v. Lennox
Ind. Inc., 95 N.M. 64, 65, 618 P.2d 1228, 1229 (1980); F&S Co. v.
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 11 of 19

Page 12 of 	19
Gentry, 103 N.M. 54, 55, 702 P.2d 999, 1000 (1985). 	The
signatures and acknowledgment of the Jeskos as individuals does
not comply with Section 14-14-8B for the five parcels, and
therefore the recording does not provide constructive notice to a
subsequent lien holder or purchaser.
BOA also argues that a bona fide purchaser would be on
constructive and inquiry notice of BOA’s lien, and therefore
section 544(a)(3) does not allow for the avoidance of the lien.
This is incorrect; a creditor searching for liens granted by the
Trust would find nothing. 	A creditor examining the title for the
five parcels at issue would find BOA’s lien, but the record would
show that the mortgage was not granted by the Jeskos as trustees
(that is, by the Trust) but by the Jeskos only in their
individual capacities. 	That in turn would not fit into the
recorded chain of title, and therefore would suggest that the
mortgage was not valid.
In Stern v. Continental Assurance Co. (In re Ryan), 851 F.2d
502 (1st Cir. 1988), a mortgage on a condominium was signed by
only one witness, contrary to Vermont state law that required
two. 	The mortgage was nevertheless recorded in the town clerk’s
office, and was on file for any subsequent purchaser. 	The First
Circuit rejected the bankruptcy court’s ruling that the
improperly witnessed conveyances, clearly present in the town’s
records, constituted constructive notice, on the grounds that
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 12 of 19

Page 13 of 	19
such a ruling would ignore Vermont law and policy, id. at 510-11,
saying, “Land recording laws must, by their very nature, employ
technical rules because the ‘substance’ – presumably the fairness
of giving one bona fide purchaser priority over another – yields
no simple answers.” 	Id. at 509. 	One may argue that applying
such rigid, technical rules allows form to succeed over
substance. 	Even though a subsequent purchaser may also be at
fault for not searching the county records, choosing whether
BOA’s or the purchaser’s interest prevails is a matter of state
policy, applied through applicable sections of the state law.
Id. at 510. 	New Mexico state law requires trustees to
acknowledge conveyances of land as trustees; the failure to
comply renders the acknowledgment invalid, the conveyance
constructively unrecorded, and no constructive notice given.
Constructive Notice - Open and Notorious Use of Land
BOA argues that the Jesko’s open and notorious use of the
Jesko Family Trust land should also put a subsequent purchaser on
constructive notice of the Jeskos’ claim to the land. 	New Mexico
law allows “open and notorious use” to constitute constructive
notice of the possessor’s interest in a parcel of land. 	Nelms v.
Miller, 56 N.M. 132, 156, 241 P.2d 333, 349 (1952); Probasco v.
Eads (In re Probasco), 839 F.2d 1352, 1354 (9th Cir. 1988)
(“clear and open possession” under California law). 	In this
instance, the Debtors’ use of the property in their capacity as
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 13 of 19

Page 14 of 	19
fee owners or as beneficiaries of the Trust are
indistinguishable.
Benefit to Estate
BOA argues that the Jeskos should not be a allowed to avoid
the lien because it would do so solely for their own benefit, as
opposed to the benefit of creditors or the bankruptcy estate.
The language of section 550(a) requires that transferred property
may be recovered pursuant to section 544 “for the benefit of the
estate”, and section 551 requires that a transfer avoided
pursuant to section 544 is preserved for the benefit of the
estate. 	To obtain summary judgment, BOA must show that the
estate will not benefit from the avoidance of its lien on the
five parcels. 	It has made no such showing.
The underlying policy for the trustee’s strong arm avoidance
power is to facilitate “the equal distribution of a debtor’s
assets among its general non-priority creditors.” 	5 Alan N.
Resnick et al., Collier on Bankruptcy ¶ 544.01 (15th ed. rev.
2006). 	The general rule enforced by courts, pursuant to this
policy, is that any avoided lien on or transfer of property must
have something more than de minimis benefit to the debtor’s
creditors. 	Greenbelt Coop., Inc. v. Werres Corp. (In re
Greenbelt Coop., Inc.), 124 B.R. 465, 472 (Bankr. D. Md. 1991)
(“the controlling standard is whether there will be some benefit
to creditors from the avoidance.”); In re Chapman, 51 B.R. 663,
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 14 of 19

7 This statement is not intended to constitute a ruling that
the Jeskos need not distribute the extra equity to creditors.
Page 15 of 	19
666 (Bankr. D. D.C. 1985). 	This rule applies even if the
avoidance of the transfer will not benefit the unsecured
creditors directly but will otherwise benefit the estate, such as
by paying administrative expenses or providing assets to increase
the likelihood of a successful reorganization. 	Gonzales v.
Nabisco Division of Kraft Foods, Inc. (In re Furrs Supermarkets,
Inc.), 294 B.R. 763, 772-82 (Bankr. D. N.M. 2003). 	In the
current case, it appears that the unsecured claims are unlikely
to be paid in full and that the Jeskos could use the extra equity
to ensure the success of their reorganization. 7 	In any event,
BOA has not made the requisite showing to the contrary. 	The
Jeskos should therefore be permitted to prove at trial that the
avoidance will benefit the estate.
Equitable Relief
When determining whether to impose a constructive trust on a
parcel of land or fund of money, the bankruptcy court follows
state law. 	Taylor v. Rupp (In re Taylor), 133 F.3d 1336 (10th
Cir.), cert. denied, Rupp v. Taylor, 525 U.S. 873 (1998); Amdura
Nat'l Distrib. Co. v. Amdura Corp. (In re Amdura Corp.), 75 F.3d
1447, 1452 (10th Cir. 1996), cited in Albuquerque Plaza Partners
ex rel. Sholer v. Carmichael (In re PKR, P.C.), 220 B.R. 114, 118
(10th Cir. B.A.P. 1998). 	In In re Estate of Duran, 133 N.M. 553,
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 15 of 19

Page 16 of 	19
66 P.3d 326 (2003), the New Mexico Supreme Court stated that the
circumstances giving rise to a court-ordered constructive trust
were limited to “fraud, constructive fraud, duress, undue
influence, breach of a fiduciary duty, or similar wrongful
conduct.” 133 N.M. at 565, 66 P.3d at 338. 	BOA’s argument that
the Jeskos’ actions reach the level of fraud comes nowhere near
the standard required for summary judgment.
Further, imposing a constructive trust on the Trust land for
the benefit of BOA would make BOA practically speaking a secured
creditor. 	In re PKR, P.C., 220 B.R. at 118. 	Such a remedy is
contrary to the fundamental policy of equality of distribution.
See Begier v. IRS, 496 U.S. 53, 58 (1990) (“Equality of
distribution among similarly situated creditors remains one of
the central policies of bankruptcy law.”). 	Imposing a
constructive trust should be a rare occurrence, and therefore not
done without good cause. 	The facts known at this point do not
point towards such a cause. 	BOA appear to have been given notice
of the Jesko Family Trust before the mortgage closing in the
commitment for title insurance. 	Unjust enrichment, the situation
constructive trusts are imposed to prevent, is not present in
this case.
Parol Evidence Rule
BOA argues in its Motion, but not its Reply, that the parol
evidence rule should bar the Jeskos from asserting the mortgage
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 16 of 19

Page 17 of 	19
on the Trust property is invalid.
In a sense, BOA’s argument proves too much; were it the case
that the mortgage language itself was all that was needed without
reference to a chain of title or any the authority of the grantor
to grant the lien, one could obtain a lien on anything at any
time merely by preparing and executing a mortgage. 	And the same
would presumably be applicable for deeds.
Even applying the parol evidence rule does not get BOA what
it wants. 	The parol evidence rule is considered to be
substantive law, and therefore federal courts apply the state law
version of the rule. 	Blanke v. Alexander, 152 F.3d 1224, 1231
(10th Cir. 1998). 	The New Mexico version of the rule departs
from the standard “four-corners” or “plain-meaning” standard and
instead requires that “in determining whether a term or
expression to which the parties agreed is unclear, a court may
hear evidence of the circumstances surrounding the making of the
contract and of any relevant usage of trade, course of dealing,
and course of performance.” 	C.R. Anthony Co. v. Loretto Mall
Partners. 	112 N.M. 504, 508-09, 817 P.2d 238 (1991). 	This
formulation of the rule makes admissible much if not all of the
Jeskos’ evidence (assuming it is otherwise admissible).
Other
BOA correctly asserts that reformation of a mortgage
requires clear and convincing evidence. 	Franciscan Hotel Co. v.
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 17 of 19

Page 18 of 	19
Albuquerque Hotel Co., 24 P.2d 718 (N.M. 1933), cited in Butler
v. Butler, 80 N.M. 36, 38, 450 P.2d 922, 924 (1969) (quantum of
evidence “must be of the clearest and most satisfactory
character”). 	To succeed in a motion for summary judgment, the
moving party must show “that there be no genuine issue of
material fact.” 	Anderson v. Liberty Lobby, Inc., 477 U.S. at
247-248. 	BOA’s only argument that there is no genuine issue of
material fact is that the Jeskos have a short list of witnesses
and evidentiary documents. 	At this juncture, it would be
inappropriate to grant this motion without giving the Jeskos a
chance to make their case.
Conclusion and Order
For the reasons listed above, the Court finds that it has
jurisdiction of the Jesko Family Trust land and the jurisdiction
to adjudicate claims concerning it. 	The Court also finds that
BOA’s Motion should be denied.
IT IS THEREFORE ORDERED that Bank of America’s Motion for
Summary Judgment (doc 22) is denied.
James S. Starzynski
United States Bankruptcy Judge
COPY TO:
George M Moore
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 18 of 19

Page 19 of 	19
Moore, Berkson & Gandarilla
PO Box 216
Albuquerque, NM 87103-0216
Donald R. Fenstermacher
PO Box 70
Albuquerque, NM 87103-0070
F Scott Flow
PO Box 2673
Amarillo, TX 79105-2673
Case 04-01166-s Doc 27 Filed 09/08/06 Entered 09/08/06 10:40:43 Page 19 of 19