Alliance Mortgage Co. v. Pastine

104 P.3d 405, 33 Kan. App. 2d 442, 2005 Kan. App. LEXIS 64
CourtCourt of Appeals of Kansas
DecidedJanuary 14, 2005
Docket91,929
StatusPublished
Cited by3 cases

This text of 104 P.3d 405 (Alliance Mortgage Co. v. Pastine) is published on Counsel Stack Legal Research, covering Court of Appeals of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alliance Mortgage Co. v. Pastine, 104 P.3d 405, 33 Kan. App. 2d 442, 2005 Kan. App. LEXIS 64 (kanctapp 2005).

Opinions

Green, J.:

In this mortgage foreclosure case, Everett W. Cox, Jr., and Tanya E. Cox were the high bidders in a sheriff s sale. The trial court determined that the sheriff s sale was conducted according to law in all respects. Nevertheless, the trial court extended the statutory period of time for Beneficial Mortgage of Kansas, [444]*444Inc., (Beneficial) a junior mortgagee, to redeem. The Coxes contend that the trial court improperly extended the period of redemption. We agree. Moreover, the Coxes maintain that the trial court should have confirmed the sheriff s sale. Kansas law provides that a sheriff s sale shall be deemed adequate in purchase price if the sale is for the full amount of the judgment, taxes, interest, and costs. K.S.A. 60-2415(b). Does Kansas law allow a trial court to refuse confirmation of a sheriff s sale that is for an adequate purchase price for reasons not supported by law and for reasons not in conformity with equity? Because the answer is no, we reverse and remand to the trial court with directions to confirm the sale where the Coxes were the high bidders, if the Coxes pay the clerk of tire trial court the original foreclosure sales price of $85,001 within 30 days of this court’s mandate.

Alliance Mortgage Company sued to foreclose its first mortgage on real property located at 618 Wheatland Drive in Junction City, Kansas. Alliance also requested a money judgment against Hannelore Leighiy, who had assumed and agreed to pay the debt owed to Alliance.

Beneficial, the second mortgagee, was named as a party defendant and was properly served with a summons. Beneficial answered claiming an interest in the subject property. Beneficial asked the trial court to determine that it held a valid mortgage on the property, to determine the priority of the claims on the property, and to grant “such other and further relief as the Court deems just and equitable.” Beneficial did not cross-petition against die defendant owner to foreclose its mortgage. Moreover, it failed to seek relief on its note and to set out the amount that was due under the note.

In its October 2001 journal entry, the trial court determined that Alliance held a first and prior lien upon the property and ordered that its mortgage be foreclosed. The trial court entered judgment in favor of Alliance and against Leighty for $31,375.17, plus interest and listed expenses. In addition, the trial court determined that Beneficial held a valid lien on the property which was second to that of Alliance.

Within the journal entry, the trial court directed the clerk to issue an order of sale to the Geary County Sheriff if the judgment [445]*445was not paid in 10 days. The trial court further stated that the defendants would be barred from claiming any interest or lien in or to the property “subject only to the right of redemption from the Sheriff s Sale within three months from the date thereof.”

The sheriffs sale on the property was scheduled for July 31, 2003. Notice of the July 2003 sale was published for three consecutive weeks on July 7, July 14, and July 21, 2003, in the Junction City Daily Union. On the day of the sale, 166 bids were received on the subject property. The Coxes were the successful bidders and paid $85,001 to the sheriff s office on the day of the sale. The sheriffs return indicates that $43,290.73 of this amount went towards Alliance’s judgment, interest, insurance, and other expenses, resulting in excess proceeds of $41,710.27.

Beneficial maintained that it did not learn about the sale until after it had occurred on July 31, 2003. That same day, Beneficial moved to set aside the sale or, in the alternative, to allow a substituted bid. Beneficial maintained that Alliance had failed to notify it of the July 2003 sheriff s sale and that had it been notified, it would have bid $117,500 on the property. Beneficial attached to its motion a letter addressed to attorney David Troup. The letter directed Troup to bid $117,500 at an earlier sale, which had been cancelled due to Leighty filing bankruptcy.

Responding to Beneficial’s motion, the Coxes argued that the motion should be denied. The Coxes set the matter for hearing on September 15, 2003. Subsequently, the Coxes continued the hearing to November 7, 2003. There is no indication in the record that Beneficial objected to this continuance.

After the November hearing, the trial court issued a memorandum opinion in December 2003 denying Beneficial’s motion to set aside the sale or to allow a substituted bid. Noting that K.S.A. 60-2410 required notice of the sale only by publication and that due process required that a defendant be given notice of the suit and given the right to defend, the trial court found that Beneficial had been notified of the foreclosure action, that it had filed an answer to the foreclosure action, and that it had adjudicated its lien.

The trial court further determined that Beneficial’s interest in the property could have been secured by a money judgment but [446]*446this was never pursued. In addition, the trial court stated that the property had clearly been “sold for fair market value in a legitimate transaction. Purchasers have no fault in tins matter and Beneficial has not demonstrated why it should be given equity.”

Moreover, tire trial court specifically found that “the Sheriff s sale was conducted according to law in all respects.” Noting that Beneficial had the redemption period allowed to any creditor under K.S.A. 60-2414(b), the trial court stated that Beneficial could exercise its redemption rights any time within the redemption period.

Beneficial moved for a rehearing of its motion to set aside the sheriff s sale or to allow a substituted bid. After conducting a hearing on Beneficial’s motion, the trial court issued a second memorandum opinion during January 2004. The trial court reiterated most of its December 2003 findings but found that Beneficial, by not receiving notice of the sheriff s sale, had been denied the right to bid at the sale and thus had been denied a protected property right. Because tire trial court determined that Beneficial’s due process rights had been violated and because “ ‘equity abhors a forfeiture’ [citations omitted]” it granted Beneficial 10 days to redeem the property. The Coxes appeal from this decision.

On January 22, 2004, Beneficial paid to the Geary County trial court clerk the sum of $117,500 to redeem the subject property. Beneficial moved for an order confirming redemption. Responding to Beneficial’s motion, the Coxes asserted that the trial court should reverse its January 2004 decision.

The trial court confirmed the redemption in April 2004 and ordered that $88,686.50 be disbursed to the Coxes; this amount represented the Coxes’ bid amount, loan costs and interest, insurance costs, and other expenses paid by the Coxes.

Standard of Review

The trial court’s memorandum decision in this case contains factual findings and legal conclusions. The function of an appellate court is to determine whether the trial court’s findings of fact are supported by substantial competent evidence and whether the findings are sufficient to support the trial court’s conclusions of

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Related

Alliance Mortgage Co. v. Pastine
136 P.3d 457 (Supreme Court of Kansas, 2006)
Fidelity Bank v. King
109 P.3d 180 (Court of Appeals of Kansas, 2005)
Alliance Mortgage Co. v. Pastine
104 P.3d 405 (Court of Appeals of Kansas, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
104 P.3d 405, 33 Kan. App. 2d 442, 2005 Kan. App. LEXIS 64, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alliance-mortgage-co-v-pastine-kanctapp-2005.