Case Conclusion Date: 01.01.2003
Practice Area: Real Estate
Outcome: Judgement for client to hold foreclosure
Description: This case involved a commercial property on Indian trust land on which John's client held a deed of trust that it was foreclosing. The deed of trust was recorded both in the county and with the Bureau of Indian Affairs (BIA). The Indian owner defaulted and John's client foreclosed. His client then attempted to evict a billboard tenant in tribal court. The lease was entered into by the owner after John's client obtained the deed of trust. The tenant filed for bankruptcy and claimed that its lease had priority over the deed of trust because, although neither the lease nor a memorandum of lease was recorded in the county records, it was recorded with the BIA before the deed of trust was. In the Bankruptcy Court, John obtained relief from stay to proceed with the eviction and the court's determination that the deed of trust had priority over the lease that was not recorded in the county. The case was subsequently appealed to the U.S. Court of Appeals for the Ninth Circuit. The Ninth Circuit held that for purposes of determining priority, a lender perfects its lien over Indian trust land and establishes its priority over subsequent interest holders when the lender records its deed of trust in the real property records of the county in which the property is located, in accordance with state law, regardless of whether it is also recorded in the BIA Title Plant.