The Peters couple divorced in 1985. The ex-wife remarried, changed her name to Sheila Weisman, and never again lived in the family house. Marc Peters (defendant), the ex-husband, married Nianne Neergaard, and thereafter he and Neergaard openly occupied the Peters house. The Peters' divorce settlement left record ownership of the house with both Weisman and Peters, as tenants in common. Weisman deeded her interest to Peters in 1986, but the deed had still not been recorded in 1988, when Weisman and her second husband filed for bankruptcy. The bankruptcy trustee, Jerome Robertson (plaintiff), filed a complaint against Peters to avoid the 1986 conveyance. The federal bankruptcy judge ruled for Peters, but the district court reversed for clear error. Peters appealed to the Ninth Circuit Court of Appeals.