Gevorgian
Citizens Business Bank v. Gevorgian
Opinion
Opinion
Epstein, J.
This case involves competing claims of lien priority between the seller of real property, which took back a security interest on property sold to a developer, and the bank which financed development of the project through a construction loan. The issue is whether the seller’s agreement to subordinate its security interest to that of the bank is enforceable where the developer and the bank entered into a side agreement between themselves, to which the seller did not consent, about which it knew nothing, and which substantially impaired its security. We conclude that it is not. (Gluskin v. Atlantic Savings & Loan Assn. (1973) 32 Cal.App.3d 307, 314 [ 108 Cal.Rptr. 318 ] (Gluskin).) The trial court so held. We shall affirm.
FACTUAL AND PROCEDURAL SUMMARY
We take our factual summary from the evidence presented at trial and the trial court’s final statement of decision.
A. Background
Alexis M. Gevorgian is trustee of the AMG & Associates Retirement Trust (AMG). In April 2005, AMG entered into purchase agreements to buy three contiguous lots in the San Fernando Valley, each of which was improved with a detached single-family house. AMG planned to obtain the necessary…