Montgomery v. Kirkwood Development, Inc.

MEMORANDUM **

Charles Montgomery and Kirkwood Development, Inc., appeal the Bankruptcy Appellate Panel’s decision which, for the most part, affirmed the bankruptcy court’s determination that a purchase money deed of trust in favor of United International Mortgage and Investment, Inc., had priority over their judgment liens. They also appeal various other issues. We agree with the BAP and affirm the bankruptcy court in part, but vacate in part on account of mootness.

(1) The bankruptcy court did not err when it determined that United had priority. Under California law, purchase money deeds of trust have priority over general judgment liens previously filed against a debtor. See Cal. Civ.Code § 2898(a); Van Loben Sels v. Bunnell, 120 Cal. 680, 683-84 , 53 P. 266, 267 (1898); Walley v. P.M.C. Inv. Co., Inc., 262 Cal. App.2d 218, 220 , 68 Cal.Rptr. 711 , 712—13 (1968); Mercantile Collection Bureau v. Roach, 195 Cal.App.2d 355, 357-58 , 15 Cal. Rptr. 710, 711-12 (1961). It is apparent that United was a purchase money lender. 1 Even if there is a “good faith” requirement before a purchase money lien has priority, that is satisfied when, as here, the lender did advance the money and…