Today veteran Musher Kelly K. Griffin regained title to her property. In 2009 Ms. Griffin needed to borrow money to payoff other debts. She signed a quit claim deed to a third party and in exchange he signed on the dotted line for the debt. After she paid off the debt the cosigner on the debt refused to give her back the title. She sued to regain the title and the trial court determined an absolute deed is a transfer of title and refused to let her have the title back.
On appeal the Alaska Supreme Court stated an absolute deed may be treated as an equitable mortgage when the evidence is clear and convincing that the parties actually intended the deed to act as a mortgage. The court stated that both parties intended a mortgage if the original transaction was done for security purposes.
An interesting fact was that the deed wasn’t used to transfer title to the party granting the loan. Rather the deed transferred an interest to a consigner. Furthermore, she issued the deed as requested by a lender that failed to fund the loan. The eventual lender wasn’t even the party demanding the title transfer.
Other compelling facts that supported the result were that the beneficiary of the deed provided no value for his interest other than his signature as guarantor. The primary borrower paid all of the loan payments. The loan itself was used to pay a debt between the primary borrower and the beneficiary of the deed.
The ruling itself is not ground breaking in that it affirms prior Alaska in Rizo v. MacBeth, 398 P.2d 209, 211 (Alaska 1965) and the RESTATEMENT (THIRD) OF PROPERTY: MORTGAGES § 3.2 cmts. a, b (1997).
This isn’t the best way to borrow money. Hiring a real property lawyer in the beginning would have saved a superior court trial and supreme court briefing. Furthermore, they sent the case back to the trial court to implement the decision and determine the costs and attorneys fees.
A number of other issues were discussed in the decision. The full decision can be found here: Musher Regains Title.