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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Griffin v. Weber (3/22/2013) sp-6760

Griffin v. Weber (3/22/2013) sp-6760

        Notice: This opinion is subject to correction before publication in the PACIFIC  REPORTER . 

        Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 

        303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  


KELLEY K. GRIFFIN,                              ) 

                                                )       Supreme Court No. S-14594 

                  Appellant,                    ) 

                                                )       Superior Court No. 3PA-10-02678 CI 

        v.                                      ) 

                                                )      O P I N I O N 

MICHAEL A. WEBER,                               ) 

                                                )      No. 6760 – March 22, 2013 

                  Appellee.                     ) 


                Appeal from the Superior Court of the State of Alaska, Third 

                Judicial District, Palmer, Kari Kristiansen, Judge. 

                Appearances:       Richard     Deuser,    Law    Office   of   Richard 

                Deuser, Wasilla, for Appellant.  No appearance by Appellee. 

                Before: Fabe, Chief Justice, Carpeneti, and Stowers, Justices, 

                and    Matthews,     Senior    Justice.*   [Winfree,      Justice,  not 


                MATTHEWS, Senior Justice. 


                The main question presented is whether a deed that was absolute on its face 

should have been reformed into a security agreement.               We conclude that reformation 

        *       Sitting   by   assignment   made   under   article   IV,   section   11   of   the   Alaska 

Constitution and Alaska Administrative Rule 23(a). 

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should have been granted because both parties to the transaction testified that the deed 

was executed for security purposes. 

II.     FACTS 

                Kelley Griffin owns 25 acres of land near Wasilla.           The land is improved 

with a house and a cabin.   Griffin lives in the house.  Weber lived in the cabin from 2005 

until sometime after he filed suit against Griffin in September 2010.  Griffin and Weber 

were romantically involved in 2003, but that aspect of their relationship had ended by 


                Beginning in 2005 Weber paid Griffin rent of $400 per month for the cabin. 

 In 2009 he bought a used truck equipped to carry a dog team for Griffin and made 

payments on the truck loan of $400 per month in lieu of rent.             The truck loan was paid 

off in June 2010.  Griffin is a professional dog musher and a distributor of dog food. In 

2008 she was indebted to Blackwood, a dog food manufacturer, and Blackwood had 

brought suit against her.       She was also indebted to Weber for a series of small loans 

separate from the truck loan.        Griffin planned to refinance her property in order to pay 

off these debts.    When it became apparent that she could not personally qualify for the 

refinancing, she asked Weber to cosign the refinancing note.              He agreed to do so. 

                In January 2009 Griffin and Weber submitted a loan application to Key 

Bank.    Key Bank responded with a commitment letter for a loan, conditioned on the 

property being titled to both Griffin and Weber.          The appraisal obtained in connection 

with the commitment estimated the value of the property to be $325,000. On January 27, 

2009, Weber granted Griffin a power of attorney concerning the property.                 He worked 

on   the   North   Slope   for   long   periods   of   time,   and   the   parties   believed   the   power   of 

attorney might be useful in expediting the refinancing.              Key Bank, as it turned out, 

decided not to refinance the property.   Griffin and Weber then applied for a similar loan 

                                                 -2-                                            6760

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from the Matanuska Valley Federal Credit Union.  The credit union agreed to make the 


               On September 22, 2009, Griffin signed a quitclaim deed of her property, 

granting it to herself and Weber.     On the same day the credit union loaned Griffin and 

Weber $150,000 in exchange for a promissory note signed by them both, secured by a 

deed of trust on the property. Griffin used the proceeds of the loan to pay off the existing 

loan on the property, about $53,000, her debt to Blackwood, and her debt to Weber, 

which at that point was $22,905. 

               Monthly payments on the note were $1,200. Griffin made all the payments, 

with the exception of $400 paid by Weber in July 2010.  In an affidavit Weber described 

this payment as “rent . . . paid in the form of a direct payment on the mortgage on the 

property.”  Griffin also paid the taxes and insurance premiums concerning the property. 

               In July 2010 Griffin sought to refinance the property with her fiancé, Ed 

Grube.   The credit union approved, conditioned on Weber relinquishing his interest in 

the property.  When Weber refused, Griffin signed a quitclaim deed conveying Weber’s 

interest to herself.  The deed and an attachment to it indicated that Griffin was signing 

Weber’s name under the power of attorney granted in January 2009.              The credit union 

refused to proceed with the new refinancing based on this deed. 


               On September 14, 2010, Weber filed a complaint against Griffin in the 

superior court in Palmer.     He claimed that Griffin’s act of signing the quitclaim deed 

under the January 2009 power of attorney was fraudulent, a breach of Griffin’s fiduciary 

duty    and  her  duty  of  good   faith  and  fair  dealing,   and  a  conversion.  He    sought 

compensatory and punitive damages, a declaration that the deed signed by Griffin was 

void, and partition of the property as a one-half owner.   Griffin answered, denying that 

the execution of the deed under the power of attorney was wrongful, and counterclaimed 

                                               -3-                                          6760

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for, among other things, reformation of the September 22, 2009 deed into a security 

instrument and an award of back rent. 

                 After   some   discovery   was   conducted   both   parties   moved   for   summary 

judgment.  Their motions were denied and a trial to the court was conducted beginning 

August 30, 2011. 

        A.       Weber’s Testimony 

                 At the trial Weber testified that the refinancing was presented to him by 

Griffin as a good way for him to receive the money that Griffin owed him.  In particular, 

he stated that the purpose of the September 2009 quitclaim deed “was to secure my 

interest in the loan should something happen to her.”   He also stated that Griffin told him 

that   the   fact   that   he   appeared   on   the   deed   would   improve   his   credit   rating. Weber 

confirmed   that   the   debt   Griffin   owed   him   was   paid   off   by   the   proceeds   from   the 

September 2009 refinancing transaction, except for the dog truck transaction. 

                 Weber also testified that Griffin agreed to convey ten acres of the property 

to   him   for   $40,000   and   that   he   could   pay   the   $40,000   by   making   payments   on   the 

refinancing loan.  When Weber testified to the agreement to convey ten acres, Griffin’s 

attorney   objected   on   the   ground   that   this   evidence   had   not   been   disclosed   until   the 

morning of trial.      Weber’s counsel replied that Weber was not seeking to enforce the 

agreement regarding the ten acres, but that the agreement was one reason why Weber 

had refused to deed over his interest in the property when Griffin sought to refinance the 

property with Grube in July 2010.  Weber subsequently confirmed this in his testimony. 

         B.      Griffin’s Testimony 

                 Griffin testified that her agreement with Weber as to the refinancing of her 

property was that in exchange for his cosigning the note, part of the proceeds would be 

used to pay off the loans that he had extended to her.   She testified that she promised to 

pay off the cosigned note as quickly as possible “to let him out from underneath it.”  She 

                                                    -4-                                              6760

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also   indicated   that   it   was   discussed   that   his   participation   in   the   transaction   would 

establish a credit rating for him.  Griffin testified that Key Bank had required that Weber 

be added to the title as a condition of refinancing.  She stated that Weber would thereby 

“be secured against any default that I would have making loan payments on this loan.” 

When the credit union took the place of Key Bank in the proposed transaction, she 

assumed that the credit union would likewise want Weber on the title.                     Based on this 

assumption, she executed the September 2009 quitclaim deed. 

                 Griffin testified that Weber suggested that he be allowed to purchase ten 

acres.   She responded that the costs of subdividing her 25-acre parcel and the type of 

road that would be required in connection with the subdivision would be prohibitively 

expensive   —   he   could   buy   ten   acres   somewhere   else   for   less   than   it   would   cost   to 

subdivide   her   parcel.    She   testified   that   she   gave   a   negative   answer   to   his   ten-acre 

proposal because of this. 

                 Griffin testified that she attempted the 2010 refinancing with her fiancé in 

order to completely pay off the 2009 note with Weber as quickly as possible, as she had 

promised.     She stated that she discussed with Weber several times the need for him to 

deed his interest in the property back to her in order for the transaction to go through. 

When Weber refused, Griffin stated that she decided to use the power of attorney he had 

granted in January 2009 to execute a deed on his behalf; but the credit union would not 

accept it.  Griffin also testified that as of the time of trial, Weber continued to occupy the 

cabin and had not paid rent since August 2010. 

        C.       The Superior Court’s Decision 

                 At the conclusion   of the trial the court announced findings of fact and 

conclusions of law.  The court found that Griffin breached her fiduciary duty to Weber 

by using the power of attorney to sign the quitclaim deed of July 2010 for Weber and 

ruled   that   the   deed   was   invalid. The   court   also   found   that   there   was   not   clear   and 

                                                    -5-                                              6760

----------------------- Page 6-----------------------

convincing evidence that the parties intended the September 2009 deed to be a security 

device rather than a conveyance under which they would equally share a one-half interest 

in the property. The court found that Weber did not owe back rent because he was a one- 

half   owner,   there   was   no   evidence   that   would   support   a   compensatory   or   punitive 

damage award, and there was insufficient evidence on which to base a partition remedy. 

The court also noted that there was not sufficient evidence to support finding that there 

was an agreement to sell Weber ten acres.  Upon an inquiry by counsel for Griffin as to 

whether Weber had an obligation to pay the mortgage, the court’s answer was:                    “He is 

on the mortgage.   So you’ll have to move forward under that just like you would if you 

had property that you would have to divide and you have to figure out how to move 


                Griffin moved for reconsideration of the court’s rulings but her motion was 

denied   and   the   superior   court   entered   a   final   judgment. The   judgment   adopts   by 

reference the court’s oral findings and conclusions and awards an equal interest in the 

property to the parties as tenants in common. 

                From this judgment, Griffin appeals.         She seeks reversal of the judgment 

and    directions    to   the  superior    court   on   remand     to   order   reformation     of   the 

September 2009 deed and to adjudicate rent arrearages. Weber has not filed an opposing 



                Griffin’s primary argument on appeal is that the court erred in refusing to 

reform   the   September   2009   deed.     She   argues   that   the   court   committed   clear   error 

because     both   parties   agreed  that   the  purpose   of   the  deed  was   to  secure   Griffin’s 

obligations to Weber rather than to serve as an absolute conveyance. 

                                                  -6-                                            6760

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                The question whether the deed was intended as a security instrument is a 

question of fact.1   On appeal, findings of fact by a trial court may not be disturbed unless 

they are clearly erroneous.2      Deeds absolute on their face can be reformed into security 

agreements based on clear and convincing evidence that a security was intended.3 

                Both parties testified in this case that the purpose of the September 2009 

deed was to secure Griffin’s obligations to Weber.  Griffin testified that the deed was to 

secure her obligation to pay the whole of the note that Griffin cosigned.  Weber testified 

that the purpose of the deed “was to secure my interest in the loan” and suggested that 

it also was to secure Griffin’s promise to sell ten acres to him.  But since enforcement of 

any such obligation was not sought, it was waived.                Thus, as matters stand, the only 

obligation that the deed secures is Griffin’s obligation to pay the note to the credit union. 

                Because both parties testified that the deed was for security purposes, the 

evidence to that effect was clear and convincing.            Thus reformation of the deed should 

have been ordered.   Further, based on the same testimony, we conclude that the superior 

court’s failure to find that the deed was for security was clearly erroneous.  Therefore the 

standard   of   review   for   a   fact-based   judgment   has   been   satisfied,   and   the   judgment 

entered in this case should be reversed.4 

        1       Rizo v. MacBeth , 398 P.2d 209, 211 (Alaska 1965). 

        2       In re Protective Proceedings of W.A. , 193 P.3d 743, 748 (Alaska 2008) 

(quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). 

        3       Rizo ,   398   P.2d   at   211; see   also  RESTATEMENT     (THIRD)  OF    PROPERTY : 

MORTGAGES  § 3.2 cmts. a, b (1997). 

        4       We have listed a number of   circumstances that courts may consider in 

deciding whether a deed was intended as a security instrument. 

                        The majority rule is that a deed absolute on its face 


                                                  -7-                                             6760

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                 may be declared to be a security agreement. . . .

                          To   determine   whether   an   instrument   is   a   deed   or   a 

                  security instrument, the court must look to the intention of the 

                 parties at the time of execution. In the absence of any writing 

                 the intention is to be determined from all of the facts and 

                  circumstances        of  the   transaction     in  which    the   deed    was 

                  executed, in connection with the conduct of the parties after 

                  its execution. 

                          Some       of   the  various     circumstances       that   may     be 

                  considered are: The adequacy or inadequacy of consideration 

                  as   compared   to   the   value   of   the   property,   which   is   often 

                  stated   to   be   the   single   most   important   fact.    Retention   or 

                 nonretention of possession. The conduct of the parties before 

                  and   after   the   execution   of   the   instrument.      The   financial 

                  condition      of   grantor     at  the   time    of   execution      of   the 

                  instrument.       The     overall    relationship     of   the   parties   — 

                  financial, business, debtor-creditor, etc. Whether the grantor 

                  or grantee paid the taxes.   The construction of improvements 

                  after the execution of the deed. . . . 

                  . . . . 

                          The majority rule is that before a deed absolute on its 

                  face can   be   declared to be a security instrument the court 

                 must have found that it was the mutual intent of the parties 

                 that the instrument have that effect. 

Rizo , 398 P.2d at 211-12 (footnotes omitted). 

                  It   is   not   necessary   to   rely   on   these   factors   in   this   case   because   of   the 

testimony of the parties as to the purpose of the deed.  But it is worth noting that to the 

extent that these   factors   apply   to   the   circumstances   of this   case   they   indicate   that   a 

security rather than a permanent title transfer was intended.                     As to the consideration 

factor, for his contingent liability as a cosigner of the $150,000 note, Weber would 

receive a one-half interest in property valued at $325,000, even if he was never required 

to pay anything on the note.            As to the possession factor, no change in the retention of 


                                                       -8-                                                 6760

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                Our conclusion that the September 2009 deed should be reformed so that 

it is a security instrument makes it unnecessary to decide Griffin’s argument that the 

court erred in finding that Griffin breached her fiduciary duty with respect to the power 

of attorney.    The only consequence of that finding was that it supported the superior 

court’s determination that the July 2010 deed was invalid.               Without questioning the 

correctness of this determination, it is moot in light of the reformation of the 2009 deed. 

Our conclusion concerning the reformation of the 2009 deed also means that Weber may 

owe Griffin some amount in back rent. 

                On remand the court should conduct supplemental proceedings as necessary 

to   determine    the  form   and   terms   of  the  security   instrument   that   results  from   the 

reformation of the 2009 deed and the amount of rent, if any, owed by Weber.                    Weber 

also should be instructed to cooperate with any refinancing effort by Griffin that will 

result in the elimination of his contingent obligation on the note that he cosigned. 


                The superior court’s decision is REVERSED and REMANDED for further 

proceedings consistent with this opinion. 


possession occurred.  As to conduct, Weber continued to pay rent in the form of the truck 

loan.    This   is   not   a   strong   factor   in   Griffin’s   favor,   because   Weber   had   personally 

incurred the obligation on the truck loan before the deed was executed.  But the fact that 

Weber made a $400 payment after the truck loan was paid off that he characterized as 

rent, points to his continuing status as a tenant.  Griffin’s financial condition at the time 

of the transaction was that she needed a loan because she was being sued by a creditor 

and had other debts.       The overall relationship between Griffin and Weber in 2009 was 

that he was an accommodating friend, as well as a creditor and tenant, but he was not a 

person, such as a lover or family member, who might be expected to be the recipient of 

a permanent transfer of a part of Griffin’s property. Finally, Griffin paid all the taxes and 

insurance on the property after the deed was executed. 

                                                  -9-                                              6760 

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