Lennar Northeast Partners v. Buice

Tahoe Vista Inn and Marina (Tahoe Vista) borrowed money from Bank of America in exchange for a promissory note secured by a deed of trust on real property. Tahoe Vista then borrowed additional money from Chase Bank of Maryland (Chase), also in exchange for a promissory note secured by a deed of trust on the property. Chase’s deed stipulated that Chase’s deed was subordinate to Bank of America’s deed. Later, Bank of America and Chase jointly agreed to modify the terms of their loans with Tahoe Vista. The interest rates and due dates were altered on both notes, and the altered notes included terms maintaining Bank of America’s priority over Chase. One year later, in 1993, Bank of America again altered the terms of its loan with Tahoe Vista. Bank of America extended the due date, increased the interest rate, and increased the principal. Bank of America assigned its interest to the Buice Revocable Living Trust (Buice) (defendant), and Chase sold its interest to Lennar Northeast Partners (Lennar) (plaintiff). Chase brought a foreclosure action on its note, naming Buice as one of the defendants. Lennar, succeeding to Chase’s interest, argued that, because of the 1993 modifications to Bank of America’s note, Lennar’s lien took priority over Buice’s. The trial court ruled in favor of Lennar, holding that the entirety of Buice’s interest was subordinate to Lennar’s interest because of the 1993 modifications. Buice appealed.