Case Title: MANION, JR. v. CHASE MANHATTAN MORTGAGE CORPORATION

Citation: 

Docket Number: 01-30

State: wyoming

Court: Wyoming Supreme Court

Date: 2002-04-03T00:00:00Z

Document:
MANION, JR. v. CHASE MANHATTAN MORTGAGE CORPORATION2002 WY 4943 P.3d 576Case Number: 01-30Decided: 04/03/2002

April Term, A.D. 2002

 

 

EDWARD 
D. MANION, JR., 

Appellant(Plaintiff) 
,

 

v.

 

CHASE 
MANHATTAN MORTGAGE

CORPORATION, 

Appellee(Defendant) 
.
 

 

The 
Honorable D. Terry Rogers, Judge

 

Representing 
Appellant:

Peter 
F. Moyer, Jackson, WY.

 Representing 
Appellee:

Timothy 
M. Stubson of Brown, Drew & Massey, LLP, Casper, WY.

 

Before 
LEHMAN, C.J., and GOLDEN, HILL, and VOIGT, JJ., and SPANGLER, D.J., 
Ret.

   

LEHMAN, 
Chief Justice. 

[¶1]      In this 
appeal, we are asked to review a claim that a foreclosing mortgagee acted 
unfairly and in bad faith when it purchased the subject property at the 
foreclosure sale.  Because the 
appellant alleged nothing more than inadequacy in the price paid at the 
foreclosure sale, we affirm the district court's dismissal for failure to state 
a claim upon which relief can be granted.

 

 

ISSUES

 

[¶2]      The appellant 
presents his sole issue in this fashion:

 

Under a 
foreclosure sale by notice and sale under W.R.S. Section 34-4-108, is the 
mortgagee entitled to purchase the mortgaged property for the amount of its 
mortgage debt without regard to the actual value of the property, 
notwithstanding the express statutory requirement that the mortgagee act "fairly 
and in good faith?" 

 

 

FACTS

 

[¶3]      In accordance 
with our standard for reviewing dismissed actions, we accept as true all the 
facts alleged in the complaint.  
Duncan v. Afton, Inc., 991 P.2d 739, 742 (Wyo. 1999).  Appellant Edward D. Manion, Jr. (Manion) 
is the mortgagee of a second mortgage on a Teton County property owned by 
Douglas G. Herrick and Melinda Herrick.  
Appellee Chase Manhattan Mortgage Corporation (Chase Manhattan), the 
first mortgagee on the property, foreclosed on the Herricks' property and, by 
notice and sale, arranged for a foreclosure sale.  At a February 2000 foreclosure sale, 
Chase Manhattan, apparently the sole bidder, purchased the property for 
$520,100.86.  Because the entire 
$520,100.86 was applied to repayment of the Chase Manhattan mortgage, no excess 
proceeds were left for the second mortgagee, Manion. 

 

[¶4]      Manion instituted 
this declaratory judgment action in June of 2000, contending Chase Manhattan 
breached a duty of good faith found in Wyo. Stat. Ann. § 34-4-108 (LexisNexis 
2001), which provides:

 

The 
mortgagee, his assigns, or his or their legal representatives may fairly and in 
good faith, purchase the premises sold upon foreclosure of any mortgage by 
advertisement under power of sale or any part thereof, at such sale[.]   

 

[¶5]      Manion's 
complaint alleged that Chase Manhattan breached the duty of good faith because 
it had notice that the property was worth in excess of $650,000 at the time of 
the foreclosure sale.  Thus, Manion 
contends, Chase Manhattan violated the statute by failing to bid fair value at 
the foreclosure sale.  In his prayer 
for relief, Manion asked that the foreclosure sale be set aside.  Pursuant to W.R.C.P. 12(b)(6), the 
district court dismissed the complaint for failure to state a claim upon which 
relief can be granted.  This appeal followed.  

 

 

STANDARD OF 
REVIEW

 

[¶6]      The standard of 
review applicable to this matter is well settled. 

 

            
When claims are dismissed under W.R.C.P. 12(b)(6), this Court accepts the 
facts stated in the complaint as true and views them in the light most favorable 
to the plaintiff.  Such a dismissal 
will be sustained only when it is certain from the face of the complaint that 
the plaintiff cannot assert any facts that would entitle him to relief.  Story v. State, 2001 WY 3, ¶19, 
15 P.3d 1066, ¶19 (Wyo. 2001).  
Dismissal is a drastic remedy and is sparingly granted; nevertheless, we 
will sustain a W.R.C.P. 12(b)(6) dismissal when it is certain from the face of 
the complaint that the plaintiff cannot assert any set of facts that would 
entitle that plaintiff to relief.  
Robinson v. Pacificorp, 10 P.3d 1133, 1135-36 (Wyo. 
2000).

 

Van 
Riper v. Oedekoven, 2001 
WY 58, ¶24, 26 P.3d 325, ¶24 (Wyo. 2001)

 

 

DISCUSSION

 

[¶7]      Although no 
Wyoming case has addressed this area of law, the case law and other authorities 
establish a general rule that "a foreclosure sale free from fraud or 
irregularity will not be held invalid for inadequacy of the price."  Kantack v. Kreuer, 158 N.W.2d 842, 848 (Minn. 1968); Giordano v. Stubbs, 184 S.E.2d 165, 168-69 (Ga. 
1971); West Roxbury Co-op Bank v. Bowser, 87 N.E.2d 113, 115 
(Mass. 1949); Pentad Joint Venture v. First Nat'l Bank of La Grange, 797 S.W.2d 92, 95-96 (Tex.App. 1990).  
Stated another way, 

 

The 
fact that there is some inadequacy in the price at which property was sold is 
not sufficient ground for setting aside a sale under a power in a mortgage or 
trust deed where the sale was lawfully made and rightly conducted, with full 
opportunity for competition in the bidding, and without fraud, partiality, or 
oppression.

 

59A 
C.J.S. Mortgages § 680 (1998) (footnote omitted).  Here, the complaint does not allege that 
the sale was conducted illegally or that there was less than a full and fair 
opportunity for competitive bidding.  
In addition, there is no allegation of fraud, partiality, or 
oppression.  Without such facts 
alleged, we agree that Manion cannot establish bad faith on the part of Chase 
Manhattan.  Manion has thus failed 
to state a claim upon which relief can be granted.  

 

[¶8]      We further note 
that, not only did Manion have the right to go to the foreclosure sale and 
purchase the property to protect his investment, Wyoming law also provides a 
right of redemption following a foreclosure sale.  This right is available to both the 
person whose real property has been sold as well as a mortgagee such as 
Manion.  Wyo. Stat. Ann. § 1-18-103 
and -104 (LexisNexis 2001).    
Generally, "where the right of redemption is not cut off by the sale, the 
courts are more reluctant to set it aside for inadequacy of price than where the 
sale bars the right altogether."  
59A C.J.S. Mortgages § 680.  

 

[¶9]      The decision of 
the district court is affirmed.