Norwest Mortgage’s first deed of trust, on Rabbit Hill.4 After Pamela Ver Bryeke, John’s sister, contributed $200,000 towards the total $750,000 purchase price, John and Lisa conveyed the one acre parcel containing the guest house to her. As a result, with the Ver Bryckes’ $200,000 gift and after borrowing $300,000 from Norwest Mortgage and contributing $50,000 of their own funds, John and Lisa acquired Rabbit Hill, consisting of the main house and two acres after Pamela’s one-acre parcel conveyance, for $550,000.
John and Lisa never moved into Rabbit Hill, although, after the settlement, John and Lisa did begin renovating Rabbit Hill. John believed it was not habitable, so they lived with the Ver Bryckes, until the summer of 1993, when John and Lisa moved to the parents’ summer cottage in Sherwood Forest, which is also located in Anne Arundel County.
While John and Lisa worked on Rabbit Hill, the Ver Bryckes followed Holden’s advice and cancelled the $10,000 notes in 1993 and 1994, totaling $80,000. The Ver Bryckes wrote “cancelled” on the bottom of the notes and signed their names. They kept all of the notes, both cancelled and otherwise, in their safety deposit box.
In 1994, John and Lisa borrowed an additional $100,000 from Norwest Mortgage to pay for renovations at Rabbit Hill. Instead of using the money for Rabbit Hill, however, John and Lisa used it to renovate the Ver Bryckes’ cottage in Sherwood Forest.
In 1995, Rabbit Hill remained uninhabitable. Lisa maintained, however, that she continued to want to live there. Meanwhile, the Sherwood Forest renovations were completed. The parents did not cancel the notes for 1995 and 1996.
In 1997, John and Lisa separated. Divorce proceedings began in January 1998. In July 1998, the Ver Bryckes recorded the deed of trust executed on September 30, 1992, as security for the $200,000.
4
Holden had recommended they have one promissory note for $160,000 drawn up.