U.S. Bank Nat. Assn. v. Lane
In “All the President’s Men,†Deep Throat advises investigative reporter Bob Woodward to “follow the money.†We do so in this case to resolve a labyrinthine subprime loan scheme from the pre-2008 recession era.
U.S. Bank sued to collect a debt of $1 million after the property that was collateral for the loan was sold free and clear of a lien. Due to an error in the legal description of the property in the deed of trust, the lien had been erroneously recorded on a different property. A jury found for U.S. Bank, and the debtors, coconservators of the Estate that owned the property, appeal. They argue the undisputed evidence shows (1) the loan was made to the prior conservator, in her individual capacity, and (2) U.S. Bank was not a holder in due course. They also argue the “one form of action rule†of Code of Civil Procedure section 726 barred the action against them.
We find substantial evidence to support the jury’s findings that U.S. Bank’s predecessor in interest entered into a contract with the prior conservator, in her representative capacity, for a mortgage loan on an estate property. We also find substantial evidence to support the jury’s finding that U.S. Bank was a holder in due course. Finally, we find the trial court properly denied defendants’ motion for judgment notwithstanding the verdict, because substantial evidence supports the conclusion that the exception to Code of Civil Procedure section 726’s one form of action rule applied here. Therefore, we will affirm the judgment.
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