Case Title: MARY LOU KOTTCAMP v. FLEET REAL ESTATE FUNDING CORPORATION

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1989-11-28T00:00:00Z

Document:
MARY LOU KOTTCAMP v. FLEET REAL ESTATE FUNDING CORPORATION1989 WY 211783 P.2d 170Case Number: 89-66Decided: 11/28/1989Supreme Court of Wyoming
MARY LOU KOTTCAMP, 
APPELLANT (PLAINTIFF),

v.

FLEET REAL ESTATE FUNDING 
CORPORATION, APPELLEE (DEFENDANT).

Appeal from the District 
Court, FremontCounty, Elizabeth A. Kail, 
J.

Sky D. Phifer of 
Phifer Law Office, Lander, for 
appellant.

Richard L. 
Williams of Williams, Porter, Day & Neville, Casper, Don H. Meinhold and 
Elizabeth A. Bassler of Shapiro & Meinhold, Colorado Springs, Colo., for appellee.

Before CARDINE, C.J., THOMAS and MACY, JJ., RAPER, 
Ret. J., and WOLFE, D.J.

RAPER, Justice, 
Retired.

[¶1.]     This appeal involves 
the applicability of 42 U.S.C. § 1983 (1983)1 to a mortgage foreclosure sale 
where the county sheriff handles the sale. The district judge held that the 
participation by the sheriff was not significant enough to constitute State 
action under the Fourteenth Amendment and therefore plaintiff (appellant) was 
not deprived of due process secured by the Fourteenth 
Amendment.

[¶2.]     We will affirm the 
district court.

[¶3.]     The facts are not in 
dispute. Appellant brought this action against the appellee which had begun a 
foreclosure by advertisement and sale. No opportunity was afforded by appellee 
for a hearing by which appellant could present available defenses to the 
foreclosure proceeding. The specific defense claimed by appellant was that 
appellant and appellee as mortgagee had reached an agreement whereby appellant 
would be permitted to deed over to appellee the mortgage in lieu of foreclosure 
in full satisfaction of all claims under the mortgage. The sheriff of FremontCounty was to conduct the foreclosure 
sale.

[¶4.]     The parties made and 
filed a stipulation providing for acceptance of a deed by appellee in lieu of 
foreclosure along with payment of attorney fees and costs and appellant agreed 
to dismiss its claims except that filed pursuant to § 1983 of the federal 
code.

[¶5.]     Appellant relies 
heavily on Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 102 S. Ct. 2744, 73 L. Ed. 2d 482 (1982) which concerns the relationship between the requirement of 
"State action" to establish a violation of the Fourteenth Amendment and the 
requirement of action "under color of state law" to establish a right to recover 
under § 1983. In that case, suit on a debt was filed and prejudgment attachment 
of the debtor's property was sought. The court held that attachment procedures 
ex parte in character violate due process. Lugar, 457 U.S.  at 939 n. 21, 102 S. Ct.  at 2755 n. 21 confines Lugar to prejudgment attachment and does not hold 
that a private party's mere invocation of state legal procedures constitutes 
"joint participation" as a conspiracy with state officials satisfying the § 1983 
requirement of "action under color of law." 

[¶6.]     We readily understand 
the Supreme Court's narrowing Lugar to prejudgment attachment and requiring an 
opportunity to hear any defenses the debtor may have to the seizure of his 
property at that early stage of litigation. On the other hand, when a mortgage 
foreclosure is involved, the parties have by the provisions of their contract 
agreed upon a procedure to be followed. In this case, appellant agreed that 
foreclosure could be by advertisement and sale according to Wyoming statutes 
governing mortgage foreclosures. W.S. 34-4-106 provides that the sale shall be 
"by the person appointed for that purpose in the mortgage or by the sheriff or 
deputy sheriff of the county, to the highest bidder." No one was named in the 
mortgage here to handle the sale, so by contract that duty fell upon the 
sheriff, all by consent and agreement of appellant.

[¶7.]     A number of federal 
cases involving mortgage foreclosure hold that the power of sale contained in 
the mortgage creates the authority of the sheriff to conduct the sale, not the 
state. There is no direct state involvement and thus no significant state 
action. The power of the state is invoked by the private contractual agreement 
between the parties which is the driving force. The term "nexus" is used to 
identify a connection with the state. In the facts before us, there was no such 
nexus. Charmicor v. Deaner, 572 F.2d 694 (9th Cir. 1978); Northrip v. FNMA, 527 F.2d 23 (6th Cir. 1975); Barrera v. SecurityBuilding and Investment Corporation, 519 F.2d 1166 
(5th Cir. 1975); Bryant v. Jefferson Federal 
Savings and Loan Association, 509 F.2d 511 (D.C. Cir. 1974). The one mortgage 
foreclosure case relied on by appellant, Dieffenbach v. Attorney General of 
Vermont, 604 F.2d 187 (2nd Cir. 1979) is inapplicable in that the mortgage 
implicated there contained no power of sale provision.

[¶8.]     In a recent § 1983 
case, the Wyoming Supreme Court held that the mere presence of state officers 
and employees on a governing board of an agency does not amount to state action. 
Chasson v. Community Action of Laramie County, Inc., 768 P.2d 572 (Wyo. 1989). The 
foreclosure picture is similar.

[¶9.]     Since we find no state 
action here, the district court is affirmed.

THOMAS, J., filed a specially 
concurring opinion.

FOOTNOTES

1 42 U.S.C. § 1983 (1983) 
reads:

Every person who, under 
color of any statute, ordinance, regulation, custom, or usage, of any State or 
Territory * * *, subjects, or causes to be subjected, any citizen of the United 
States or other person within the jurisdiction thereof to the deprivation of any 
rights, privileges, or immunities secured by the Constitution and laws, shall be 
liable to the party injured in an action at law, suit in equity, or the proper 
proceeding for redress.

[¶10.]  , Justice, specially 
concurring.

[¶11.]  I concur in the result reached by the 
majority opinion in this case, and I agree with the rationale that is 
articulated. I have another concern with respect to Mary Lou Kottcamp's 
contentions.

[¶12.]  The invocation of a cause of action under 
42 U.S.C. § 1983 depends upon the "deprivation of any rights, privileges, or 
immunities secured by the Constitution and laws, * * *." I am not aware of any 
precedent standing for the proposition that a statutory provision authorizing 
foreclosure of a real estate mortgage pursuant to a power of sale results in the 
deprivation of "any rights, privileges, or immunities secured by the 
Constitution and laws." Kottcamp has failed to present any such authority in her 
brief or argument. The essence of Kottcamp's position is that she was deprived 
of due process by virtue of the foreclosure sale, and I cannot agree that there 
occurred any invasion of her constitutional rights.

[¶13.]  The thrust of her position simply is that 
foreclosure pursuant to the power of sale, which was consummated by the sale of 
the property, resulted in a breach of an agreement by Fleet Real Estate Funding 
Corporation to accept a deed in full satisfaction of its claims against her. If 
such a breach of contract did occur, Kottcamp is not left without any remedy for 
that breach, and her concerns in that regard simply carry no constitutional 
implications.

[¶14.]  I would not reach the question of whether 
the participation by the sheriff of FremontCounty in the foreclosure sale could be 
equated with action "under color of state law" because there first must occur an 
invasion of the claimant's constitutional rights. None occurred here.