CASE STUDY: SECURITY DEPOSIT REFUND
Parties
Client is a residential real property owner and Defendant in a lawsuit filed in the San Diego Superior Court by Plaintiff, a multinational investment bank and financial services holding company.
Background Facts
The lawsuit involves a dispute regarding the alleged wrongful reconveyance of a deed of trust from a residential property in San Diego County. Defendant is the current owner of the property. Plaintiff is the previous beneficiary under the subject deed of trust. Plaintiff filed the lawsuit contending the deed of trust was fraudulently reconveyed and seeks a court order cancelling the reconveyances.
By way of background, in 1990 Plaintiff made two loans to Defendant’s parents - both now deceased, who were the owners of the property at that time. The first loan of $100,000 was a mortgage loan and the second was a $100,000 home equity line of credit. Both loans were secured by deeds of trust. In 1991, Defendant’s parents drew $40,000 on the home equity line, which was their only draw ever. In 2019, reconveyances were recorded in San Diego showing that the deeds of trust associated with both the mortgage loan and the home equity line of credit had been reconveyed from title. In 2020, Defendant’s mother transferred the property to Defendant via a grant deed. Almost immediately after the transfer, Plaintiff recorded notices of rescission of the reconveyances of the home equity line deed of trust and filed a lawsuit to quiet title. Defendant’s mother passed away early 2021. Before she passed, Defendant’s mother contended that Plaintiff’s loans had been paid off in full and she provided extensive records regarding her communications with Plaintiff over the years in this regard. She contended she had no knowledge of the recording of the reconveyances. Defendant has limited knowledge of his mother’s dealings with Plaintiff, but contended that when the property was transferred to him, it was free and clear of the Plaintiff’s deeds of trust. Defendant even obtained a $120,000 loan from a federally insured local financial institution at the time of transfer that was secured by a first position deed of trust.
On the other hand, Plaintiff contends that the home equity line was never been paid off and approximately $42,987.46 was still owed. Moreover, Plaintiff contended that the signatories on the reconveyances were unauthorized to sign any reconveyances on its behalf.
Issue Presented
Through investigation and discovery, Defendants were able to locate numerous bank records supporting their position that the loans were paid off. However, the parties were unable to track down the signatories on the reconeyances and determine whether or not the signatures were fraudulent.
Solution
Blake Law Firm assisted the Client in all aspects of the lawsuit, including but not limited to discovery, mediation, and the negotiation of the terms of the settlement agreement. The Blake Law Firm worked in conjunction with the expert forensic accountant and private investigator to analyze the disposition of Client’s defense.
Outcome & Impact
The Client entered into settlement agreement with Plaintiff which cleared Defendant’s title of the outstanding Deeds of Trust and confirmed full satisfaction of the loans. As a result, the lawsuit was dismissed and Defendants’ objectives were met.
The information provided above does not, and is not intended to, constitute legal advice. All information, content, and materials are for general informational purposes only and do not create an attorney-client relationship. The experienced and knowledgeable attorneys at Blake Law Firm are available to answer your questions and help you navigate your real property issues.