The appellants invested in a limited partnership tax shelter, borrowing funds and providing promissory notes and guarantees secured by collateral mortgages.
Upon default, the lender obtained default judgments, transferred the mortgaged properties to its insurer under power of sale, and assigned the judgments to the insurer.
The appellants sought to declare the judgments void, alleging improvident sale, merger, de facto foreclosure, and release of guarantees.
The Court of Appeal upheld the application judge's dismissal, finding the guarantees were independent obligations and the insurer's actions did not constitute a de facto foreclosure.
