Saving for a rainy day
On Feb. 16, 2006, Gregory Allen Rains, a Mammoth Lakes resident, passed away at age 46. He had moved to the Eastern Sierra in 1999 with his wife, Eileen Rains. They bought a house on Canyon Boulevard and Gregory began an accounting firm titled Gregory Rains & Co. His death was completely unexpected, especially at such a young age. The worst part came later though, when Eileen discovered that Gregory had accrued quite a bit of debt.
June 5, 2013 marked the beginning of a local court trial in which Eileen was the plaintiff and Gregory’s mother, Virginia Ann Rains, the defendant. Gregory’s mother traveled from Michigan just to settle this issue.
After the death of her husband, Eileen was told that he had actually borrowed $70,000 more from his mother than she was originally led to believe. Virginia requested payment of the additional funds and when Eileen refused, she initiated a foreclosure on Eileen’s Mammoth Lakes residence.
Gregory and Eileen had purchased a $300,000 home in Mammoth Lakes in 1999 and since they didn’t have all the money, planned to borrow $150,000 from Gregory’s mother to make the jump to the mountains. (Gregory had bad credit, so a private loan was the only option.) Escrow on the house closed on June 21, 1999. Eileen was led to believe that she and her husband had borrowed $150,000 from his mother, but according to Virginia, $220,000 was loaned to the duo.
“I don’t know what he did with it, but the money didn’t go into the house,” Eileen said.
Even though Gregory was the one who needed the money to pay his half of the house, both he and Eileen signed the loan, leaving Eileen responsible to pay off the loan if Gregory couldn’t come up with the money (even though he was making “more than twice as much” as Eileen at the time, according to her).
Eileen said that she had signed a blank paper and let Gregory do the rest, since he was a CPA and was well versed in the matters. Recovered documents revealed that the handwriting for the amount requested in the loan was indeed Gregory’s, complicating the case.
The only plausible need for the money, according to both parties, was to make improvements on Gregory’s Los Angeles home so that it could be sold. This was estimated to be at least $50,000, which would account for most of the additional funds he requested.
Both sides are expected to present further evidence in briefs next month, followed by the Judge’s decision.
