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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Krister Evertson f/k/a Kris Eriksson v. Lillian Eriksson Sibley f/k/a Lillian K. Eriksson-Hebdon and Lillian K. Hebdon; Lillian K. Hebdon Living Trust; First National Bank Alaska; and Mat-Su Title Agency, LLC (11/18/2022) sp-7632

Krister Evertson f/k/a Kris Eriksson v. Lillian Eriksson Sibley f/k/a Lillian K. Eriksson-Hebdon and Lillian K. Hebdon; Lillian K. Hebdon Living Trust; First National Bank Alaska; and Mat-Su Title Agency, LLC (11/18/2022) sp-7632

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          corrections@akcourts.gov.  



                    THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  



KRISTER  EVERTSON,  f/k/a  Kris                          )  

Eriksson,                                                )    Supreme Court No. S-17791  

                                                                                            

                                                         )  

                            Appellant,                   )    Superior  Court  No.  3PA-18-02570  CI  

                                                         )  

         v.                                                                     

                                                         )    O  P I N I O N  

                                                         )  

                                                 

LILLIAN ERIKSSON SIBLEY, f/k/a                                                                       

                                                         )    No. 7632 - November  18, 2022  

                                                

Lillian K. Eriksson-Hebdon and Lillia n )  

                                      

K. Hebdon; LILLIAN K. HEBDON                             )  

                                      

LIVING TRUST; FIRST NATIONA L  )  

                                   

BANK ALASKA; and MAT-SU                                  )  

                            

TITLE AGENCY LLC,                                        )  

                                                         )  

                            Appellees.                   )  

                                                         )  



                                                                                                  

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

                                                                                           

                   Judicial District, Palmer, Jonathan A. Woodman, Judge.  



                                                                                                          

                   Appearances:  Krister Evertson, pro se, Wasilla, Appellant.  

                                                                                             

                   Anna  C.  Crary  and  Bruce  A.  Moore,  Landye  Bennett  

                                                                  

                   Blumstein LLP, Anchorage, for Appellees.  



                                                                                            

                   Before:          Winfree,        Chief      Justice,     Maassen,         Carney,  

                                                             

                   Borghesan, and Henderson, Justices.  



                                       

                   MAASSEN, Justice.  



I.        INTRODUCTION  



                                                                                                                         

                   A mother, son, and daughter conveyed real property among themselves by  


----------------------- Page 2-----------------------

competing  deeds.   The  daughter  used  the  property  as  security  for two bank  loans  and  



defaulted  on  the  second  one;  when  the  bank  attempted  foreclosure,  the  son,  claiming  to  



be  the  property's owner,  brought suit against the  bank  on  a  constructive  notice  theory,  



also  alleging that t  he  daughter's  deed  to  the  property  was v     oid  because  of  fraud.   The  



superior  court  found  that  the  bank  lacked  notice  of  the  son's  alleged  adverse  interest  and  



granted  it  summary  judgment  as  a  bona  fide  lender.   The  court  also  dismissed  the  fraud  



claim.  



                The  son  appeals.   We  affirm  the  grant  of  summary  judgment  on  the  bank's  



bona   fide   lender   status,   but   we   remand for a   determination   of   whether   the   daughter  



acquired  her  deed  as  a  result  of  fraud  in  the  factum,  which,  if  proven,  would  render  her  



title  and  the  bank's  mortgage  interest  void.  



II.     FACTS  AND  PROCEEDINGS  



        A.      Facts  



                This appeal concerns  competing  claims to  a tract of real property in  Wasilla.   



In  January  2004  the  owner,  Krister  Evertson,  conveyed  the  property  to  his  mother,  Karin  



Eriksson,   by   a   quitclaim   deed   he   recorded   in   June.    In   August   Karin   conveyed   the  

property   back   to   Krister,1  

                                   but   the   deed   memorializing   this   reconveyance   was  not  



recorded  until  October  2011,  over  seven  years  later.    



                In  the  meantime,   in  April   2008,  Karin   executed   another   quitclaim   deed  



conveying  the  same  property  to  her  daughter  Lillian  Sibley,  Krister's  sister.   The  dispute  



here  is   focused   in  part   on  the   circumstances   of  that conveyance.   Krister   asserts  that  



"Lillian   obtained   title   through   fraud"   because   she   "exercised   undue   influence   and  



fraudulently  caused  Karin  to  sign  [the]  Quitclaim  Deed."   He  asserts  that  Karin  had  been  



        1       Given  the   different   surnames  by  which  Krister   and  his sister  have  been  



known,  we  use  the  family  members'  first  names  for  the   sake  of  clarity;  we  intend  no  

disrespect.  



                                                   -2-                                              7632
  


----------------------- Page 3-----------------------

diagnosed  with  dementia  and  was  "incapable  of  comprehending  the  nature  or  impact  of  



the  document"  she  was  signing.    



                   The  quitclaim  deed  from  Karin  to  Lillian  was  recorded  one  day  after  it  was  



signed.   A  little  over  a  week  later,  on  April  30,  2008,  Lillian  pledged  the  property  to  First  



National  Bank  of  Alaska  (FNBA)  as  collateral  to  secure  a  $120,000  loan.   The  deed  of  



trust  was  recorded  on  May   1.    



                   On  May  8  Krister  signed  another  quitclaim  deed  to  the  property.   This  deed  



purported  to  transfer  the  property  from  himself  and  Karin  to  "Denali Trust."   Krister  



admits  that  no trust  with  that  name  was  actually  created,  and  that  Denali  Trust  was  a  



fictional   entity  he   "envisioned   .   .   .   as   a  way  to  help  protect   [his]  mother   . . . against  



fraud."   He  nonetheless  recorded  the  deed  to  Denali  Trust  on  May  20,  2008.   



                   Lillian  paid  off  her  first  FNBA  loan  in  2010  and  a  few  months  later  entered  



into  another  loan  agreement  with  FNBA  for  $200,000,  again  secured  by  a  deed  of  trust  



on the  property.   This  deed  of  trust  was  recorded  in  October  2010.   In  October  2011  



Krister  recorded  the  2004  deed  reflecting  Karin's  conveyance  of  the  property  to  him.    



                   Sometime  around  April  2018,  Lillian  defaulted  on  her  second  FNBA  loan,  



and  the  bank  prepared  for  a  non-judicial  foreclosure  sale.   Krister asserts  that  he  was  



living  on  the  property  and  taking  care  of  Karin  at  the  time.    



          B.       Proceedings  



                   In  September  2018  the  Alaska  Office  of  Elder  Fraud  and  Assistance  filed  



a  complaint  against  Lillian alleging that she had "committed  Elder  Fraud  as  defined  in  



                                  [  ]  

AS  44.21.415(g)(1)(C) 2             by causing [Karin] to sign a Quitclaim Deed," had failed to  

                                                                                                                          



tender  consideration  for  the  deed,  and  had  breached  a  duty  of  good  faith  and  fair  

                                                                                                                       



          2        AS  44.21.415(g)(1)(C)  defines  fraud  as  "exploitation  of  another  person  or  



another person's resources for personal profit  or advantage with no  significant benefit  

accruing  to  the  person  who  is  exploited."  



                                                            -3-                                                      7632
  


----------------------- Page 4-----------------------

            3  

dealing.   Two  months  later  Krister  recorded  a  lis  pendens  against  the  property  and  filed  



his own complaint against Lillian and FNBA,  alleging that he had title to the property  



                                            4  

through   adverse   possession.    FNBA   moved   for   summary  judgment;   it   argued   that  



Krister's   adverse   possession   claim   failed   because   his   attempted   conveyance   to   the  



admittedly  fictional  Denali  Trust  precluded  him from asserting  a  good  faith  claim  to  title.   



                    Krister   moved   for   leave   to   file   an   amended   complaint   containing   three  



claims:     (1)   that   Lillian   had   committed   "fraud   in   the   factum,"   a   type   of   fraud   that  



                                                                                                    5  

generally  involves  obtaining  a  person's  signature  through  trickery;  (2)  that  FNBA  had  



actual  and  constructive notice  of  Krister's  2008  deed  to  Denali  Trust  when  it  made  its  



second   loan   to   Lillian;   and,   again,   (3)   that he   had   adversely  possessed   the  property.  



FNBA  did  not  oppose  Krister's  addition  of  a  fraud  in  the  factum  claim,  but  it  asked  that  



Krister's  second  and  third  claims  be  denied  because  they  were  "identical  to  the  original  



Complaint and  should be resolved as a matter  of  law" on  FNBA's pending motion for  



summary  judgment.    



                    FNBA  then  filed  another  summary  judgment  motion,  asserting  that  it  was  

                           6  with no notice of Krister's adverse claim to the property or Lillian's  

a  bona  fide  lender                                                                                                 



          3         FNBA   asserts   that   this complaint   came   "on   the   eve   of   the   non-judicial  



foreclosure  sale,"  which  it  then  agreed  to  postpone,  and  that  the  sale  still  "remains  to  be  

held."    



          4         The  court  initially  consolidated Krister's  case with  the  Office of Elder  

                                                                                                                          

Fraud and Assistance's case against Lillian, but it decoupled the two cases again a year  

                                                                                                                             

later.  The state agency was not involved in the proceedings giving rise to this appeal.  

                                                                                                                       



          5         See Kight  v. Miller, 94 N.E.3d  60, 70  (Ohio App.  2017); Ackerman  v.  

                                                                                                                                

Ackerman , 993 N.Y.S.2d 53, 55 (N.Y. App. Div. 2014).  

                                                                            



          6         Generally  speaking,  a bona  fide  lender  is  one who  acquires  a  security  

                                                                                                                      

interest in property without actual or constructive notice of others' potentially adverse  

             

                                                                                                              (continued...)  



                                                               -4-                                                        7632
  


----------------------- Page 5-----------------------

alleged   fraud   in   obtaining   title.     In   opposition   Krister   contended   that   FNBA   had  



constructive  notice  of  his  2008  deed  to  Denali  Trust  because  it would  have  discovered  



the  deed  had  it  conducted  a  "No  Plat  Subdivision  Search"  on  the  Department  of  Natural  



Resources'  website.   He  also  argued  that  FNBA  had  inquiry  notice  of  possible  fraud  in  



Lillian's  acquisition  of  title  given  multiple  indicia  of  fraud  associated  with  her  2010  loan  



application.    



                   The court granted  Krister's motion  for leave to amend his complaint, but  



at the same time it granted  FNBA  summary judgment  on Krister's adverse possession  



claim.   A  month  later  it  granted  FNBA  summary  judgment  on  the  bona  fide  lender  issue  



as  well,  concluding  that  FNBA  lacked  actual  or constructive notice of  any claims  with  



priority  over  Lillian's  interest  in  the  property.   Krister  then  filed  his  amended  complaint,  



now  limited   to  an  assertion  that  Lillian  had  acquired  her  deed  from  Karin  as  a  result  of  



fraud  and  that  Lillian's  deed  and  conveyance  to  FNBA  were  therefore  void.   



                    FNBA  moved  for  the  entry  of  final  judgment,  asserting  that  all  of  Krister's  



claims  had  been  resolved  by  the   court's  two   summary  judgment   orders.   FNBA   also  



answered   Krister's   amended   complaint,   asserting   that   it  was  barred  by   the   summary  



judgment  orders  and  failed  to  assert  a  claim  entitling  him  to  relief.   Krister  opposed  the  



entry   of   final  judgment,  arguing   that   his   fraud   in   the   factum   claim   remained   to   be  



litigated.    



                   The  superior  court  entered  final  judgment  in  favor  of  FNBA,  invalidated  



and  expunged  Krister's  lis  pendens,  and  dismissed  Krister's  amended  complaint  with  



prejudice.   Krister  moved  for  reconsideration,  which  the  superior  court  denied.    



                   Krister  appeals, arguing  that  the  superior  court  erred  by  deciding  FNBA  



          6        (...continued)  



                                                                                                              

interests in the same property.  See James v. McCombs, 936 P.2d 520, 525 n.9 (Alaska  

                          

 1997); infra note  12.  



                                                          -5-                                                    7632
  


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

was  a  bona  fide  lender  and  by  dismissing  his  amended  complaint.  



III.	 	  STANDARD  OF  REVIEW  



                    "We   review   a   grant   of   summary  judgment   de   novo   and   will   affirm   the  



judgment   if   there   are  no   contested issues   of   material   fact   and   if   the   moving  party   is  



                                                             7  

entitled to  judgment  as  a  matter  of  law."                                                                                  

                                                                Whether someone is a bona fide lender is a  



                                                     8  

                                                                                                                     

                                                       "We apply our independent judgment to questions  

question of law we review de novo. 



                                                                                                                             

of law,  adopting  'the rule  of law most persuasive  in  light  of precedent, reason,  and  



               9  

                                                                                                                          

                   "We review trial  court decisions regarding motions  to  dismiss de novo,  

policy.'  " 



                                                                                 10  

                                                                  

deeming all facts in the complaint true and provable."                                



IV.	 	  DISCUSSION  



                                                                                                                            

          A.	 	     It Was Not Error To Decide On Summary Judgment That FNBA Was  

                                          

                    A Bona Fide Lender.  



                                                                                                                 

                    The superior court concluded that FNBA had neither actual nor constructive  



                                                                                                                            

notice of an adverse interest in the property and therefore was a bona fide lender with  



                                                                                                                             

priority over any claim of Krister's.  "A bona fide purchaser is one who 'acquired title  



                                                                                                                           

without notice, actual or constructive, of another's rights and also must have paid value  



          7         Dunleavy   v.   Alaska   Legis.  Council,   498   P.3d   608,   612   (Alaska   2021)  



(quoting  Alaskans  for  a   Common  Language,  Inc.  v.  Kritz,   170  P.3d 183,   189  (Alaska  

2007)).  



          8         See Watega v. Watega, 143 P.3d 658, 664-65 (Alaska 2006)  (holding that  

                                                                                                                             

whether buyers "qualify as [bona fide purchasers] is a question of law to which we apply  

                                                                                                                           

a de novo standard of review").  

                                   



          9         Jacob v. State, Dep't of Health & Soc. Servs., Off. of Child.'s Servs., 177  

                                                                                                                  

P.3d 1181, 1184 (Alaska 2008) (quoting Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska  

                                                                                                                       

 1979)).  



          10        Cath. Bishop of N. Alaska v. Does 1-6, 141 P.3d 719, 722 (Alaska 2006)  

                                                                                       

(internal citations omitted).  

                             



                                                               -6-	 	                                                     7632
  


----------------------- Page 7-----------------------

                       11  

for   the   same'   ";     the  rules   applicable   to  bona   fide  purchaser   status   apply   equally   to  



           12  

lenders.       Krister  argues  that  FNBA  had  constructive  notice  of  his  2008  deed  to  Denali  



Trust and inquiry notice of Lillian's potential fraud, and  therefore  it  was error to grant  



summary  judgment   on   this   issue   to   FNBA.    But   we   agree   with   the   superior   court's  



conclusion  that  FNBA  was  a  bona  fide  lender.  



                   1.       FNBA  had  no  notice  of  Krister's  2008  deed  to  Denali  Trust.  



                   Krister  did  not  dispute  the  basic  facts  underlying  the  court's decision  of  



FNBA's  bona  fide  lender  status  on  summary  judgment:   FNBA's  first  loan  to  Lillian,  in  



April  2008,  preceded  Krister's  purported  conveyance  of  the  property  to  Denali  Trust  in  



May  of  that  year,  and  when  FNBA  conducted  a  title  search  before  making  its  second  loan  



to  Lillian  in  2010,  it  did  not  discover  Krister's  deed  to  Denali  Trust  because  the  deed  was  



outside  the  chain  of  title.   Nor  did  Krister  dispute  that  FNBA's  inquiry  included  not  only  



a  search  for  conveyances  in  the  chain  of  title  using  Lillian's  name,  but  also  a  tract  search  



to locate  all  documents  referencing  the  subdivision  plat  number  since   1976.   FNBA's  



          11       James  v.  McCombs,  936  P.2d 520,  525  n.9  (Alaska   1997)  (quoting  State  



v.  18,018  Square  Feet,  More  or  Less,  621  P.2d  887,  890  n.5  (Alaska   1980)).   



          12       See,  e.g.,  S  &  H  Packing  &  Sales  Co.,  Inc.  v.  Tanimura  Distrib.,  Inc.,  883  



F.3d 797 816 n.5 (9th Cir.  2018) (Ikuta, J., dissenting) (observing that "[a]lthough  the  

Second  Restatement  [of  Trusts]  uses  the  term  'bona  fide  purchaser,'  the  term  also  applies  

when the  trustee 'creates a  legal  interest'  in  trust  property,  §  284(1), such as  by giving  

'a  legal  mortgage  or  pledge  .  .  .  upon  the  trust  property,'  id.  §  284  cmt.  g");   Wash.  Mut.  

Bank   v.  Homan,   974   A.2d   376,   390   (Md.   Spec.   App.   2009)   ("Maryland   cases   have  

treated  lenders  who  secure  their  interests  with  a  mortgage  or  deed  of  trust  as  entitled  to  

the  protections   available  to  bona   fide  purchasers   for  value,  where   such   lenders  were  

without  notice  of  the  mortgagor's  fraudulent  conduct.");  see  also  AS  40.17.080(b)  ("A  

conveyance   of  real  property in  the   state   .   .   .  is  void   as   against   a   subsequent  innocent  

purchaser  in  good  faith  for  valuable  consideration  of  the  property  .  .  .  whose  conveyance  

is first recorded. . . .  In this subsection, "purchaser"  includes a holder of a consensual  

interest  in  real  property  that  secures  payment  or  performance  of  an  obligation.").  



                                                           -7-                                                     7632
  


----------------------- Page 8-----------------------

inquiry   did  not  reveal   Krister's   2008   deed   to   Denali   Trust  because   the   deed   did  not  



contain  the  property's  subdivision  plat  number.   



                    A  "buyer  is  only  charged  with  'constructive  notice  of  all  the  facts  which  [it]  



                                                                                                     13  

might   have   learned   by   means   of   a   due   and   reasonable   inquiry.'   "                     Alaska   Statute  



40.17.080(a)  provides  that  "from  the time  a  document  is  recorded  in  the  records  of  the  



recording   district   in   which   land   affected  by it   is   located,   the   recorded   document   is  



constructive  notice  of  the  contents  of  the  document  to  subsequent  purchasers  and  holders  



of  a  security  interest  in  the  .  .  .  property."   We  held  in  Sabo  v.  Horvath,  however,  that  a  



deed  "recorded   outside   the   chain   of   title[]   does   not   give   constructive   notice   to   [a  

purchaser]  and  is  not  'duly  recorded'  under  the  Alaskan  Recording  Act."14  



                    Krister asserts that FNBA was nonetheless on constructive notice of the  

                                                                                                                            



Denali  Trust  deed  because  a  reasonable  inquiry  would  have  included  a  "no  plat  

                                                                                                                           



subdivision name" search of the Alaska Department of Natural Resources' searchable  

                                                                                                                 



database, which according to Krister would have revealed the deed.  He contends that  

                                                                                                                           



Sabo should not be controlling because it "was issued before any computerized record  

                                                                                                                       



searches were available" and when "[s]earches were done by hand."  And he argues that  

                                                                                                                           



given today's ease of electronic search, parties should be on constructive notice of deeds  

                                                                                                                         



that can be found on the internet even if outside the chain of title.  

                                                                                                    



                    We will overrule a prior decision only if we are "clearly convinced that the  

                                                                                                                             



precedent is erroneous or no longer sound because of changed conditions, and that more  

                                                                                                                         



          13        Gottstein  v.  Kraft,  274  P.3d  469,  477  (Alaska  2012)  (quoting  Methonen  v.  



Stone,  941  P.2d   1248,   1252  n.5  (Alaska   1997)).  



          14        559  P.2d   1038,   1044  (Alaska   1976).   



                                                              -8-                                                        7632
  


----------------------- Page 9-----------------------

good than harm would result from overturning the  case."15  While  ease of information  



access  has  certainly  improved  since  1976  when  we  decided  Sabo,  Krister  has  not  shown  



that  more  good  than  harm  would  result  from  overruling  the  case.   In  Sabo  we  recognized  



that  in  circumstances  of  a  double  conveyance,  "one  or  the  other  party  .  .  .  must  suffer  an  



                           16  

undeserved   loss."              But   we   noted   the   importance   of   "promot[ing]   simplicity   and  



                                              17  

certainty   in title   transactions."              We   recognized   that   although   the   equities   between  



purchasers   and   recorders   outside   the   chain   of   title   were   "closely   balanced,"   we  



                                                                                                                            18  

nonetheless  were  required  to  "delineate  the  requirements  of  Alaska's  recording  laws."                                 



Promoting   simplicity   and   certainty is   still   a   sound  rationale   for  ranking  the  rights   of  



purchasers  over  those  who  record  outside  the  chain  of  title.   We  are  not  convinced  that  



more   good   than   harm   would   result   from   requiring   that   purchasers   be   on   notice   of  



everything  they  could  uncover  if  they  conducted  every  conceivable  online  search  of  state  



records.   Sabo  remains  good  law,  and  a  deed  recorded  outside  the  chain  of  title  does  not  



put  a  purchaser  on  constructive  notice.  



                   Krister does not argue that   FNBA, if lacking constructive notice, had actual  

                                                                                   19   We agree with the superior  

notice  or  inquiry  notice  of  his  2008  deed  to  Denali  Trust.                                               



court's conclusion that FNBA had no notice of the deed that would affect FNBA's bona  

                                                                                                                        



fide purchaser status.  

                       



          15       Kinegak  v.  State,  Dep't  of  Corr.,   129  P.3d  887,  889-90  (Alaska  2006).  



          16        559  P.2d  at   1044.  



          17       Id.  



          18       Id.  



          19       See  Rosenberg  v.  Smidt,  727  P.2d  778,  784  (Alaska  1986)  (noting  that  cases  



generally  interpret the phrase "[bona fide purchasers]  without  notice"  "to  apply  to  one  

who  lacks  actual,  constructive  (i.e.,  from  the  land  records)  or  inquiry  notice").  



                                                             -9-                                                       7632
  


----------------------- Page 10-----------------------

                   2.        FNBA  was  not  on  notice  of  Lillian's  potential  fraud.  



                   The   superior  court   also   found   that   FNBA   "had   no   reason   to   suspect  



[Lillian] had obtained title  to the property by  fraud"  and that Krister's "claims that  the  



bank  should  have  been  on  notice  [of]  fraud  based  on  other  details  in  the  application  is  not  



probative  as  to  whether  or  not  the  bank  was  on  constructive  notice."   Krister  asserts  that  



FNBA   was   on   inquiry   notice   of   Lillian's   potential   fraud   and   the   superior   court  



erroneously  limited  its  consideration  to  constructive  notice.    



                   Krister  may  be  correct  that  the  superior  court  should  have  analyzed  issues  



of  inquiry  notice,  but  any  error  is  harmless.   "[W]e  must  disregard  harmless  errors  that  



                                                                                                                  20  

have  no  substantial  effect  on  the  rights  of  parties  or  on  the  outcome  of  the  case."                    And  



"[w]e  may  affirm the  superior  court on  any  basis  supported  by  the  record,  even  if  that  

basis  was  not  considered  by  the  court  below  or  advanced  by  any  party."21  



                   The  doctrine  of inquiry notice provides that in "circumstances .  . . which  



suggest  outstanding  equities  in  third  parties,"  there  is  "a  duty  upon  the  purchaser  to  make  



                                                                                     22  

a   reasonable   investigation   into   the   existence   of   a   claim."                "[A]   purchaser   will   be  



charged  with  notice  of  an  interest  adverse  to his  title  when  he  is a   ware  of  facts  which  



would   lead   a  reasonably  prudent  person  to   a   course   of  investigation  which,  properly  



                                                                            23  

executed,  would  lead  to  knowledge  of  the  servitude."                     And  "[l]ack  of  diligence  in  the  



prosecution   of   a  required   inquiry   creates   a   conclusive  presumption   of  knowledge   of  



          20       Pedersen  v.  Blythe,  292  P.3d  182,  184  (Alaska  2012);  Alaska  R.  Civ.  P.  61.  



          21       Leahy  v. Conant, 436 P.3d   1039,   1043  (Alaska  2019)  (quoting  Brandner  



v.  Pease,  361  P.3d  915,  920  (Alaska  2015)).  



          22       Modrok  v.  Marshall,  523  P.2d   172,   174  (Alaska   1974).  



          23       Methonen  v.  Stone,  941  P.2d   1248,   1252  (Alaska   1997).  



                                                           -10-                                                      7632
  


----------------------- Page 11-----------------------

those  facts  which  reasonable  inquiry  would  have  revealed."24  



                   In  opposition  to  summary  judgment,  Krister  listed  seven  indicia  of  fraud  



he believed  should  have prompted  FNBA to  investigate whether  Lillian had  obtained  title  



fraudulently.  Several of  the  indicia stem  from two lease agreements Lillian submitted  



to   FNBA   in  support   of   her   2010   loan   application,   which   according   to   Krister  



misrepresented  that  the  property  was b             eing  rented.   Both  of  the  lease  agreements  lack  



lessee  contact  information  and  are  filled  out  in  similar  handwriting,  though  purportedly  



by  two  different  people.   Although  the  lease  agreements  specify  that  utilities  will  be  paid  



by   the   tenants,  Lillian  included   "rental   utility   costs"   for   the   two   units   in   her   loan  



application,  and  the  costs  were  represented  to  be  nearly  identical.   Finally,  one  of  the  two  



lease  agreements  is  dated  January  2008  even  though  Lillian  did  not  acquire  her  quitclaim  



deed  until  April  of  that  year.  As  additional  indicia  of  fraud  Krister  notes  that  Lillian  



listed the property as  an  asset  acquired  in  2002  although  her deed was  from  2008; that  



Lillian  wrongly   listed  herself   as  unmarried;  that   a   credit  report   obtained  by  the  bank  



noted  a  "fraud  alert";  and  that  the  credit  report  listed  13  aliases  for  Lillian,  one  of  which  



was  Karin  Eriksson,  her  mother's  name.    



                   Krister  argued  that  following  up  on  these  indicia  should  have  "led  FNBA  



to the   duly  recorded   quitclaim   deed   for   Denali   Trust,"   and   then,   "[b]eing   on  notice,  



FNBA  could have  stopped  the  loan  and   [done]  further  inquiry."   But  Krister  does  not  



explain   why   the   alleged   irregularities  in  the   loan   application   "suggest   outstanding  



                                                                                                                        25  

equities  in  third  parties"  such  that  a  duty  to  reasonably  investigate  would  be  triggered.                      



We  conclude  that  the  chain  connecting  Lillian's  loan  application  to  Krister's  own  deed,  



outside   the   chain   of   title,   is   too   tenuous   to   support   the   imposition   of   a   duty   on   a  



         24        Id.  



         25        Modrok,  523  P.2d  at   174.  



                                                          -11-                                                        7632  


----------------------- Page 12-----------------------

reasonably  prudent  lender  to  inquire  further  about  the  existence  of  third-party  claims.   



The  superior  court  did  not  err  by  granting  FNBA  summary  judgment  on  this  issue.  



          B.	 	    It  Was  Error  To  Dismiss T             he  First  Amended  Complaint's  Claim  Of  

                   Fraud  In  The  Factum.  



                   The  superior  court  dismissed  Krister's  first  amended  complaint,  including  



its   claim   for   fraud   in   the   factum,   after   granting   summary  judgment   on   his   adverse  



possession   and   bona   fide   lender   claims.    The   court   did   not address the   fraud   claim  



explicitly,   presumably   accepting   FNBA's   argument   that   its   bona   fide   lender   status  

resolved  all  of  Krister's  claims  in  the  bank's  favor.26  

                                                                           Although  we  agree  that  FNBA  was  



entitled  to  bona  fide  lender  status,  as  explained  above,  this  holding  does  not  dispose  of  



Krister's  allegation  of  fraud  in  the  factum,  and  it  was  error  to  dismiss  it.  



                   1.	 	     Property   conveyances   resulting   from   fraud  in  the   factum   are  

                             void.  



                   Fraud  in  the  factum  -  also known  as  fraud  in  the  execution  -  "occurs  



when 'the  promisor is deceived as to the nature of  his act, and actually does not know  

what he is signing, or does  not intend to enter into a contract at all.'  "27  It "most often  



                                                                                                                           

arises where some limitation - such as blindness, illness, or illiteracy - prevents a  



          26       See  SMJ  Gen. Constr.,  Inc.  v.  Jet  Com.  Constr.,  LLC,  440  P.3d  210,  213  



(Alaska   2019)   (noting   that   where   superior   court   failed   to   explain  its   reasoning   for  

granting   motion   to  dismiss,   "we   assume   the   court   adopted   [the   moving   party's]  

arguments  for  dismissal").  



          27       Munoz  v. Patel, 297  Cal. Rptr.  3d 574,  585 (Cal. App.  2022)  (quoting  

                                                                                                                

Rosenthal v. Great W. Fin. Sec. Corp., 926 P.2d 1061, 1073 (Cal. 1996)); Kight v. Miller,  

                                                                                                                   

94 N.E.3d 60, 70 (Ohio App. 2017) (explaining that fraud in the factum "exists where  

                                                                                               

the charging party engaged in some trick or device to procure the signature of the party  

                                                                                                                      

to be charged on an instrument which she did not intend to give, such as where there is  

                                                                                                                           

a surreptitious substitution of one paper for another at signing," or "misreading a contract  

                                                                                                                  

to an illiterate party or obtaining a signature from a party under anesthesia").  

                                                                                             



                                                           -12-	 	                                                   7632
  


----------------------- Page 13-----------------------

                                                                                                         28  

party  from  reading  or  understanding  a  contract  he  or  she  is  about  to  sign."                     Fraud  in  the  



factum   differs   from   the   more   common   fraud   in   the   inducement.    While   fraud   in   the  



inducement  generally  refers  to  a  misrepresentation  of  the  transaction's  "risks,  duties,  or  



obligations,"  fraud  in  the  factum  generally  refers  to  a  misrepresentation  of  the  "essential  

nature"  of  the  document  being  signed.29  



                    The  common  law  uniformly  treats  conveyances  resulting  from  fraud  in  the  



factum   differently from   those  resulting   from   fraud   in  the   inducement.    "[W]here  the  



grantor  knowingly   executes  the  very  instrument   intended,  but  is  induced  to  do   so  by  



some  fraud  in  the  treaty  or  by  some  fraudulent  representation  or  pretense, the  deed  is  



                          30  

merely  voidable."            "However,  where  there  is  fraud  in  the  factum,  as  where  the  grantor  



intends to execute one instrument but another is surreptitiously substituted  in its place  



and  the  grantor  is  fraudulently  made  to  sign,  seal,  and  deliver  an  instrument  different  

from   that   intended,   such   fraud   in   the   factum   renders the   deed   void."31                   Voidness  is  

                                                                                                                            



          28       Munoz,   297   Cal.   Rptr.   3d at 585; see   also  Ackerman   v.  Ackerman ,   993  



N.Y.S.2d  53,  55  (N.Y.  App.  Div.  2014)  ("[G]enerally  such  a  cause  of  action  only  arises  

if  the  signor  is  illiterate,  blind,  or  not  a  speaker  of  the  language  in  which  the  document  

is  written.").  



          29       Suliveres v  Commonwealth, 865 N.E.2d  1086, 1090 (Mass. 2007) (first  

                                                                                                                        

quoting Frederico v. Brockton Credit Union, 653 N.E.2d 607, 611 (Mass. App. 1995);  

                                                                                                                     

and then quoting BLACK'S  LAW  DICTIONARY  686  (8th  ed.  2004)).  

                           



          30        26A  C.J.S.  Deeds  §  153  (2022)  (citing  Schiavon  v.  Arnaudo  Brothers,  100  



Cal. Rptr. 2d 801 (Cal. App. 2000);  Lanier v.  John L.  Roper Lumber Co., 98 S.E. 593  

(N.C.   1919)).  



          31       Id. (citing Erickson v. Bohne, 279 P.2d 619 (Cal. Dist. App. 1955); Perfect  

                                                                                                                     

Place, LLC v. Semler, 426 P.3d 325 (Colo. 2018); Delsas ex rel. Delsas v. Centex Home  

                                                                                                                      

Equity Co., LLC, 186 P.3d 141 (Colo. App. 2008); Hancock v. Kulana Partners, LLC,  

                                                                                                                        

452 P.3d 371 (Haw. 2019); Strother v. Shain, 78 N.E.2d 495 (Mass. 1948); Bank of Am.,  

                                                                                                                         

N.A. v. Adolphus , 112 N.Y.S.3d 726 (N.Y. App. Div. 2019)).  

                                                                                



                                                            -13-                                                       7632
  


----------------------- Page 14-----------------------

deemed the appropriate  consequence because "[i]f a  misrepresentation  as  to  the character  



or  essential terms  of a  proposed  contract  induces  .  .  .  assent  by  one  who  neither  knows  



nor   has  reasonable   opportunity   to   know   of   the   character   or   essential   terms   of   the  

proposed  contract,  [that  person's  assent]  is  not  effective,"  and  no  contract  is  formed.32  



                   Whether  a  conveyance  is  voidable  or  void  is  particularly  important  in  the  



bona   fide   purchaser   context.     "[A]   good  faith   purchaser   may   acquire   good   title   to  



property  if  he  takes  it  from  one  who  obtained  voidable  title  by  misrepresentation  but  not  

if  he  takes  it  from  one  who  obtained  'void  title'  by  misrepresentation."33  

                                                                                                           "A  void  deed  



is  a  nullity,  and  cannot  be  made  the  foundation  of  a  good  title  even  under  the  equitable  



                                               34  

doctrine  of  bona  fide  purchase."                



                   We have held in other contexts that void transfers implicate the rights of  

                                                                                                                            



bona fide purchasers.  In Watega v. Watega we explained that "if a [bona fide purchaser]  

                                                                                                                



purchases property at a voidable foreclosure sale, the trustor cannot later set aside the  

                                                                                                                          



sale.  If, by contrast, the sale was void rather than voidable, [bona fide purchaser] status  

                                                                                                                       



                                                    35  

is unavailable to confer protection."                    

                                    



          32        RESTATEMENT  (SECOND) OF  CONTRACTS   §   163  (AM.  L.  INST .,   1981).  



          33       Id.  cmt.  c.  



          34        26A  C.J.S.  Deeds   §   151 (2022) (internal  citation  omitted)  (citing  Perfect  



Place,  426  P.3d  325;  CitiMortgage,  Inc.  v.  Pantoja,  111  N.Y.S.3d  584  (N.Y.  App.  Div.  

2019);  Poag  v.  Flories,   317   S.W.3d   820   (Tex. App. 2010);  Anadarko  Land   Corp.  v.  

Fam.  Tree  Corp.,  389  P.3d  1218  (Wyo.  2017);  In  re  Shelton,  593  B.R.  755  (Bankr.  N.D.  

Ohio  2018)  (applying  Alabama  law);  Bryce  v.  O'Brien,  55  P.2d  488  (Cal.  1936);  Cornell  

 Univ.  v.  Howard,  228  P.2d  680  (Kan.  1951);  Hoffer  v.  Crawford,  65  N.W.2d  625  (N.D.  

 1954)).  



          35        143 P.3d 658, 665 (Alaska 2006) (internal citation omitted).  

                                                                                               



                                                            -14-                                                       7632
  


----------------------- Page 15-----------------------

                                                                                      36  

                     Citing  our  opinion  in  Modrok  v.  Marshall,   FNBA  asserts,  "Alaska  law  



clearly establishes  that  when  a  prudent  inquiry  does  not  reveal  facts that would charge  



a  lender  with  notice  of  a  possible  claim  of  fraud  implicating  the  propriety  of  its  loan,  that  



lender is entitled to protection from subsequent claims of fraud as a bona  fide lender."   



In  Modrok  a  divorced  husband  executed  a  quitclaim  deed  conveying  the  interest  in  the  



                                                                                                                                  37  

marital  home  to  his   ex-wife   in  the   event  he   failed  to   sell  the  home  within   30   days.                             



When  there  was  no  timely   sale,  the   ex-wife   executed   a  warranty   deed   conveying the  



                                 38  

home  to  a  third  party.           The  divorced  husband  claimed  that  his  ex-wife  acquired  title  to  



                                                                                                                  39  

the  marital  property  through  fraud  and  thus  title  to  the  property  was  at  issue.                           We  noted  



that  we  had  "difficulty  discerning  the  substance  of  th[e]  fraud"  because  "[t]he  record  .  .  .  



[was]  unambiguous  that  [the  divorced  husband]  agreed  to  sell  the  property  or  relinquish  

                                                                                                         40  Apparently, the  

all  claim  of  title  in  favor  of  his  former  wife  at  the  end  of  thirty  days."                                        



divorced husband's claim was not that he had not meant to sign the quitclaim deed, but  

                                                                                                                                 



that  his  wife  had  used  the  deed  to  claim title  when  he  thought  she held  it  only  as  

                                                                                                                                  



             41  

security.         



          36         523  P.2d   172,   174-75  (Alaska   1974).
  



          37        Id.  at   173.
  



          38        Id.
  



          39        Id.  at   174.  



          40        Id.  at   175  n.5.  



          41        Id.  



                                                               -15-                                                          7632
  


----------------------- Page 16-----------------------

                    Because  we  concluded  that  the  divorced  husband  understood  the  nature  of  



                                                   42  

the  quitclaim  deed  he  freely  signed,              we  had  no  occasion  to  explain  the  concept  of  fraud  



in  the  factum  and  its  different  consequences.   And  because  the  third  party  "[was]  not  



chargeable  with  notice  of  a  possible  claim  of  fraud,"  its  status  as  bona  fide  purchaser  

protected  it  from  the  divorced  husband's  claim.43  

                                                                          We  explained  that  if  the  ex-wife  had  



"obtained   [the  deed]   'as  a  result  of  fraud  and  misrepresentation,'  "  as  the  ex-husband  



                                                                                                          44  

alleged,  he  was  required  to  bring  his  claim  against  her,  not  the  third  party.                    Our  holding  



in  Modrok  is  thus  consistent  with  the  principle  that  a  bona  fide  purchaser  is  protected  by  



a  voidable  deed,  and  the  opinion  does  not  address  void  deeds  because  the  facts  did  not  



require  us  to  make  the  distinction.  



                    Consistent  with  the  generally  followed  common  law  rule,  we  now  hold  that  



deeds conveyed as a result of  fraud in the factum  are  void  and confer no protection on  



even  a  bona  fide  purchaser  or  lender.   Thus  if  Karin  conveyed  the  property  to  Lillian  in  



2008  as  a  result  of  fraud  in  the  factum,  as  Krister  alleges,  the  deed  is  void,  and  FNBA's  



status  as  a  bona  fide  lender  does  not  protect  its  mortgage  interest  in  the  property.  



                    2.	 	    Krister's   allegations   of   fraud  in  the   factum  were   sufficient  to  

                              survive  dismissal.  



                    When  reviewing  an  order  of  dismissal,  we  deem  all  facts  in  the  complaint  



                                     45  

to  be  "true  and  provable."           Although  Krister  needed  to  allege  facts  consistent  with  some  



cause   of   action   to   survive   a   dismissal   motion,   his   first   amended   complaint   could   be  



dismissed   only  if  it   appeared  beyond   a   doubt that he  could  prove  no   set   of   facts  that  



          42	 	    Id.  



          43 	     Id.  at   174-75. 
  



          44 	     Id.  at   175. 
  



          45        Cath.  Bishop  of  N.  Alaska  v.  Does  1-6,   141  P.3d  719,  722  (Alaska  2006). 
  



                                                             -16-	                                                      7632
  


----------------------- Page 17-----------------------

would  entitle  him  to  relief.46  



                  Krister  alleged that  Karin  had  been  diagnosed  with  "early  dementia,  and  



found  to  be  experiencing  confusion,  delusions,  and  paranoia,"  that  her  native  language  



was  Swedish,  and  that  she  "never  became  proficient  in  reading  English."   He  alleged  that  



"Lillian  exercised  undue  influence  and  fraudulently  caused  Karin  to  sign  [the  quitclaim  



deed to Lillian]," accomplishing it "by using  her position  of trust as a daughter" while  



knowing  that  "Karin  could  not  read  the  quitclaim  deed  because  Karin  did  not  have  her  



reading  glasses  and  was  unable  to  read  without  them,"  "could  not  .  .  .  understand  the  true  



nature of the instrument in front of her because of her limited  ability to read English,"  



and  "was  incapable  of  comprehending  the  nature  or  impact  of  the  document"  "because  



of  her  diminished  mental  capacity."    



                  These  facts,  if  proven,  are  consistent  with  a  claim  that  Lillian  obtained  her  



quitclaim  deed  from  Karin  as  a  result  of  fraud  in  the  factum  -  that i  s,  that K          arin  was  



unaware  of  the  essential  nature  of  the  document  she  was  signing.   The  superior  court's  



dismissal  of  Krister's  claim  of  fraud  in  the  factum  implied  that  FNBA's  status  as  a  bona  



fide  lender  protected  it  from  that  claim.   But  because  a  conveyance  resulting  from  fraud  



in   the   factum   is   not  merely  voidable   but   void,   FNBA's   bona   fide   lender   status   is  



irrelevant  to  its  defense  against  that  claim.   The  dismissal  of  the  fraud  in  the  factum  claim  

was  therefore  error.47  



         46       Id.  



         47       Krister   also   argues,   "After   Mat-Su   Title   LLC   Insurance   disclaimed   any  



present  or  future  interest  in   [the]  property,  the  true  owner  of  the  property  remains  an  

unresolved  material  question  of  fact."   Because  we  reverse  on  other  grounds,  and  Krister  

failed  to  raise  this  argument  before the  superior  court, we  do  not  address  it.   Adkins  v.  

Collens,  444  P.3d  187,  195  (Alaska  2019)  ("Arguments  raised  for  the  first  time  on  appeal  

are  generally  waived.").  



                                                       -17-                                                  7632
  


----------------------- Page 18-----------------------

V.     CONCLUSION  



               We   AFFIRM   the   superior   court's   grant   of   summary  judgment   finding  



FNBA  to  be  a  bona  fide  lender.   We  REVERSE  the  dismissal  of  Krister's  first  amended  



complaint  and  REMAND  for  further  proceedings  consistent  with  this  opinion.  



                                               -18-                                        7632
 
  

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