STATE OF WEST VIRGINIA
 

SUPREME COURT OF APPEALS
 

FILED Stjepan Sostaric,
 

Defendant Below, Petitioner November 2, 2017
 

released at 3:00 p.m. 

EDYTHE NASH GAISER, CLERK vs) No. 16-0685 (Morgan County 12-C-160) SUPREME COURT OF APPEALS 

OF WEST VIRGINIA 

Sally Marshall,
 

Plaintiff Below, Respondent
 

MEMORANDUM DECISION 

Petitioner Stjepan Sostaric appeals the June 21, 2016 order of the Circuit Court of 

Morgan County granting Respondent Sally Marshall’s renewed motion for summary 

judgment and awarding Ms. Marshall a deficiency judgment in the amount of $175,407.45, 

attorneys’ fees, court costs, and pre- and post-judgment interest. Both Mr. Sostaric and 

Ms. Marshall appear pro se on appeal. 

Upon consideration of the parties’ briefs, oral argument,1 and the record presented, 

the Court finds no substantial question of law and no prejudicial error. For these reasons, 

in these limited circumstances, a memorandum decision affirming the circuit court’s order 

is appropriate under Rule 21 of the Rules of Appellate Procedure. 

For purposes of the issues before us, we summarize the facts.2 Mr. Sostaric and his 

former wife (collectively, “the Sostarics”)3 owned real property located at 99 Garden 

Drive, Berkeley Springs, West Virginia. The Sostarics used the property as collateral to 

1 This Court filed a memorandum decision in this case on March 24, 2017, which 

was withdrawn for further consideration of the matter which included oral argument on 

October 3, 2017. 

2 We provided a full recitation of the underlying facts in Sostaric v. Marshall, 234 

W.Va. 449, 450-52, 766 S.E.2d 396, 397-99 (2014) (“Sostaric I”). 

3 At the time of the underlying proceedings, Mr. Sostaric and his former wife, 

Nancy McCoy-Sostaric, were in the midst of divorce proceedings. 

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secure a $200,000 loan from Ms. Marshall.4 The Sostarics executed both a promissory 

note and a deed of trust. Subsequently, the Sostarics defaulted and Ms. Marshall directed 

the trustee to foreclose on the property. At the foreclosure sale on October 17, 2012, Ms. 

Marshall purchased the property for $60,000.5 Of this amount, $58,260.75 was distributed 

to Ms. Marshall as the holder of the note that was secured by the deed of trust; the 

remainder was applied to the costs of the sale.6 

Thereafter, Ms. Marshall filed an action against the Sostarics for a deficiency 

judgment in the amount of $175,407.45 and attorneys’ fees in the amount of $1,749.25.7 

Subsequently, Ms. Marshall filed a motion for summary judgment. By order entered on 

January 16, 2014, the circuit court awarded summary judgment to Ms. Marshall based 

upon sworn affidavits. Accordingly, the circuit court awarded Ms. Marshall $175,407.45 

for the deficiency judgment, $1,749.25 for attorneys’ fees, and court costs and pre- and 

post-judgment interest. 

The Sostarics appealed the circuit court’s January 16, 2014 order granting summary 

judgment resulting in our prior decision in Sostaric I. The Sostarics argued that the 

property was sold for less than its fair market value at the foreclosure sale and that, 

accordingly, the amount of the deficiency judgment awarded was too high and should have 

been adjusted to reflect the property’s fair market value at the time of the sale. Id. at 450, 

766 S.E.2d at 398. Following full briefing and argument, we reversed the award of 

summary judgment to Ms. Marshall holding that “[a] trust deed grantor may assert, as a 

defense in a lawsuit seeking a deficiency judgment, that the fair market value of the 

secured real property was not obtained at a trust deed foreclosure sale.” Id. at 450, 766 

S.E.2d at 397, syl. pt. 1 (overruling Syl. Pt. 4, Fayette County National Bank v. Lilly, 199 

W.Va. 349, 350, 484 S.E.2d 232, 233 (1997)). 

4 In Sostaric I, we found that the Sostarics used the property, which they purchased 

in March 2006 for $155,900, as their primary residence. 234 W.Va. at 451 n.3, 766 

S.E.2d at 398 n.3. 

5 In Sostaric I, we found that the foreclosure sale complied with the law and that the 

title to the property was legally conveyed to Ms. Marshall. 234 W.Va. at 452 n.9, 766 

S.E.2d at 399 n.9. 

6 The “Disclosure Form Trustee Report of Sale” indicated that the total secured 

indebtedness at the time of the foreclosure “[was] $231,660.68.” 

7 Ms. Marshall was represented by an attorney at the time she filed her deficiency 

judgment action. 

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Following remand to the circuit court, Ms. Marshall filed a renewed motion for 

summary judgment claiming that the Sostarics failed to provide any evidence that the 

property’s fair market value was greater than the foreclosure sale price. By order entered 

on October 16, 2015, the circuit court held the renewed motion for summary judgment in 

abeyance for thirty days to allow the Sostarics to obtain an expert opinion regarding “the 

fair market value of the property at the time of the [October 17, 2012] foreclosure sale.” 

After the Sostarics filed an appraisal valuing the property at $149,000 as of November 12, 

2015, the circuit court denied Ms. Marshall’s renewed motion for summary judgment by 

order entered on December 15, 2015. 

On December 28, 2015, Ms. Marshall filed a motion for reconsideration of the 

December 15, 2015 order denying her renewed motion for summary judgment. Ms. 

Marshall asserted that the appraisal failed to create a genuine issue of material fact because 

the appraiser failed to value the property as of the date of the foreclosure, as directed by the 

circuit court. By order entered on June 21, 2016, the circuit court granted Ms. Marshall’s 

motion for reconsideration and awarded her summary judgment. The circuit court found 

that the appraisal setting the property’s fair market value as of November 12, 2015 was 

insufficient to show what the fair market value was at the time of the foreclosure sale three 

years earlier. The circuit court again awarded Ms. Marshall a deficiency judgment in the 

amount of $175,407.45, attorneys’ fees in the amount of $1,749.25, and court costs and 

pre- and post-judgment interest. 

Mr. Sostaric8 now appeals the circuit court’s order awarding summary judgment to 

Ms. Marshall.9 “A circuit court’s entry of summary judgment is reviewed de novo.” Syl. 

8 Mr. Sostaric asserts that he is also appealing the circuit court’s June 21, 2016 order 

on his former wife’s behalf. We find that Mr. Sostaric may not represent his former wife 

in this appeal. See Syl. Pt. 3, Shenandoah Sales & Service, Inc. v. Assessor of Jefferson 

County, 228 W.Va. 762, 724 S.E.2d 733 (2012) (holding that non-lawyers may not 

represent others in court proceedings). By scheduling order entered on August 5, 2016, 

we afforded Ms. McCoy-Sostaric the opportunity to join Mr. Sostaric’s appeal by August 

22, 2016. Ms. McCoy-Sostaric did not do so. 

9 We note Mr. Sostaric’s argument that the circuit court erred in granting Ms. 

Marshall’s motion to reconsider its earlier December 15, 2015, order on the ground that 

Ms. Marshall presented no new evidence in asking for reconsideration. Ms. Marshall 

counters that, because the denial of her renewed summary judgment motion was 

interlocutory, the circuit court possessed the inherent procedural power to reconsider its 

December 15, 2015, order for any cause seen by it to be sufficient. See Syl. Pt. 4, Hubbard 

(Continued . . .) 

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Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). Rule 56(c) of the West 

Virginia Rules of Civil Procedure provides that summary judgment shall be granted 

provided that “there is no genuine issue as to any material fact and that the moving party is 

entitled to a judgment as a matter of law.” 

Evolution of the West Virginia Rule Regarding Deficiency Judgments 

“A deficiency judgment is an imposition of personal liability upon a mortgagor for 

an unpaid balance of a secured obligation after foreclosure of the mortgage has failed to 

yield the full amount of the underlying debt.” Sostaric I, 234 W.Va. at 452, 766 S.E.2d at 

399 (quoting Lawrence R. Ahern, III, The Law of Debtors and Creditors, § 8:20 (2014)) 

(internal quotations omitted).10 A majority of jurisdictions permit the sale price of a 

foreclosed property to be challenged in a deficiency judgment action. Sostaric I, 234 

W.Va. at 453, 766 S.E.2d at 400; Lilly, 199 W.Va. at 355, 484 S.E.2d at 238. 

However, in Syllabus Point 4 of Lilly, we declined to adopt the majority rule and 

held that “[a] grantor [of a deed of trust] may not assert, as a defense in a deficiency 

judgment proceeding, that the fair market value of real property was not obtained at a 

trustee foreclosure sale.” 199 W.Va. at 350, 484 S.E.2d at 233. In Sostaric I, we determined 

that Mr. Sostaric’s argument required us to revisit our holding in Lilly. 234 W.Va. at 455, 

766 S.E.2d at 402. We found “good and sufficient cause” to overrule syllabus point 4 of 

Lilly. Id. at 456, 766 S.E.2d at 403. We summarized our reasoning as follows: 

Our ruling herein is consistent with the majority view of other jurisdictions, 

with section 8.4 of the Restatement [(Third) of Property: Mortgages], and 

with prior decisions from this Court that have applied common law 

principles of equity to permit an action to set aside a real property foreclosure 

sale. Our ruling will also prevent a creditor from receiving a windfall and 

being unjustly enriched at the expense of an already financially distressed 

grantor. 

Id. at 458, 766 S.E.2d at 405. We found that it was proper to apply common law principles 

v. State Farm Indemnity Co., 213 W.Va. 542, 584 S.E.2d 176 (2003). We agree with Ms. 

Marshall and find that the circuit court did not err in granting her motion for 

reconsideration. 

10 We explained in Sostaric I that the primary difference between a deed of trust and 

a mortgage is that “the holder of a trust deed does not have to apply to a court in order to 

foreclose, whereas the holder of a mortgage is required to apply to a court in order to 

foreclose.” Sostaric I, 234 W.Va. at 452 n.10, 766 S.E.2d at 399 n.10. 

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of equity to allow a trust deed grantor to raise the defense that the property’s fair market 

value was greater than the foreclosure sale price in the absence of any statutory provision to 

the contrary. Id. at 456, 766 S.E.2d at 403. In dissent, Justice Davis stated that the 

Legislature had the responsibility of changing “requirements and parameters of a trustee 

[foreclosure] sale.” Id. at 463, 766 S.E.2d at 410. 

Following our decision in Sostaric I, the Legislature amended West Virginia Code 

38-1-7 to add subsection (b) which provides as follows: 

A trust deed grantor, the obligor on the debt secured by the deed of trust, 

including any maker, comaker, guarantor, surety or other accommodation 

party, or other defendant in a civil action seeking a deficiency judgment on 

the debt secured by the deed of trust, may not assert as a defense that the fair 

market value of secured real property was not obtained at a trust deed 

foreclosure sale conducted in accordance with this article. 

W.Va. Code § 38-1-7(b) (as enacted by 2015 W.Va. Acts ch. 167). The parties agree that 

the Legislature has abrogated Syllabus Point 1 of Sostaric I. We concur and find that 

Syllabus Point 1 of Sostaric I—holding that a trust deed grantor may, in a deficiency 

judgment action, assert the defense that the property’s fair market value was greater than 

the foreclosure sale price—was abrogated by West Virginia Code 38-1-7(b) as of that 

statute’s effective date on June 11, 2015. However, as noted by Mr. Sostaric, Syllabus 

Point 1 of Sostaric I continues to govern the instant case and cases arising between the 

issuance of our opinion in Sostaric I and the date that West Virginia Code 38-1-7(b) 

became effective. See Findley v. State Farm Mut. Auto. Ins. Co., 213 W.Va. 80, 93, 576 

S.E.2d 807, 820 (2002) (finding that substantive amendments by Legislature that have 

effect of abrogating holdings of this Court apply only prospectively absent clear expression 

of legislative intent that amendments apply retroactively). 

Circuit court’s application of Syllabus Point 1 of Sostaric I on remand 

In Syllabus Point 1 of Sostaric I, we held that “[a] trust deed grantor may assert, as a 

defense in a lawsuit seeking a deficiency judgment, that the fair market value of the 

secured real property was not obtained at a trust deed foreclosure sale.” 234 W.Va. at 450, 

766 S.E.2d at 397. In Syllabus Point 2, we held that the defendant has the affirmative duty 

to raise the defense and that, if the defense is not raised, “the foreclosure sale price, rather 

than the property’s fair market value, will be used to compute the deficiency.” Id.; HSBC 

Bank USA v. Resh, No. 3:12-cv-00668, 2016 WL 525829, at *4 (S.D. W.Va. February 8, 

2016) (same). Given that Mr. Sostaric seeks to benefit from an affirmative defense, he 

bears the burden of establishing it. Grim v. Eastern Electric, LLC, 234 W.Va. 557, 567, 

767 S.E.2d 267, 277 (2014). 

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Within the context of summary judgment, if Mr. Sostaric cannot show that a 

genuine issue of material fact exists as to whether the property’s fair market value was 

greater than the foreclosure sale price, the circuit court properly awarded summary 

judgment to Ms. Marshall. As we held in Syllabus Point 4 of Painter, “[s]ummary 

judgment is appropriate where the record taken as a whole could not lead a rational trier of 

fact to find for the nonmoving party, such as where the nonmoving party has failed to make 

a sufficient showing on an essential element of the case that it has the burden to prove.” 192 

W.Va. at 190, 451 S.E.2d at 756. 

Mr. Sostaric concedes that he must point to evidence in the record tending to show 

the property’s fair market value at the time of the foreclosure sale. See Restatement 

(Third) of Property: Mortgages § 8.4, cmt. b (stating that fair market value is determined at 

time of foreclosure sale). Mr. Sostaric further concedes that the appraisal valued the 

property as of November 12, 2015. However, Mr. Sostaric points to general comments 

made by the appraiser within the appraisal report regarding the depressed or stagnate state 

of the local real estate market “over the past five years.” Mr. Sostaric contends that it can 

be inferred from these comments that the property was also worth approximately $149,000 

at the time of the October 17, 2012, foreclosure sale at which Ms. Marshall purchased the 

property for $60,000. We disagree. 

While we draw permissible inferences from the underlying facts in the light most 

favorable to the non-moving party,11 we find that Mr. Sostaric’s interpretation of the 

appraiser’s general comments regarding the local real estate market is not permissible 

given his specific statements about the appraisal’s purpose and limitations. As an initial 

matter, the appraiser specifically states that the appraisal’s intended use is to aid Mr. 

Sostaric in determining the property’s “current” market value and checks the box on the 

appraisal form indicting that “current” market value is determined as of the date he 

inspected the property (November 12, 2015). Subsequently, regarding the scope of his 

report, the appraiser states that “[t]he Opinion of Value that is the conclusion of this report 

is credible only within the context of . . . the Intended Use[.]” Thus, we find that Mr. 

Sostaric’s appraiser specifically disclaims the use of his report to determine the fair market 

value of the property as of October 17, 2012. Given this disclaimer in the appraisal report, 

we agree with the circuit court’s finding that Mr. Sostaric “ha[s] failed to bring forth any 

evidence of the value of the property at the time of the foreclosure sale.” (emphasis in 

original). Therefore, we find that the record taken as a whole could not lead a rational trier 

of fact to find for Mr. Sostaric on the issue of an affirmative defense that he has the burden 

11 See Painter, 192 W.Va. at 192, 451 S.E.2d at 758. 

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of establishing. Accordingly, we conclude that the circuit court did not err in awarding 

summary judgment to Ms. Marshall. 

For the foregoing reasons, we affirm the circuit court’s June 21, 2016 order 

awarding Ms. Marshall a deficiency judgment in the amount of $175,407.45, attorneys’ 

fees in the amount of $1,749.25, and court costs and pre- and post-judgment interest. 

Affirmed. 

ISSUED: November 2, 2017 

CONCURRED IN BY: 

Chief Justice Allen H. Loughry II 

Justice Robin Jean Davis 

Justice Margaret L. Workman 

Justice Menis E. Ketchum 

Justice Elizabeth D. Walker 

Justice Ketchum, concurring separately in writing: 

The majority opinion correctly affirmed the summary judgment in favor of Sally 

Marshall (the plaintiff). The appraisal expert offered on behalf of Stjepan Sostaric (the 

defendant) did not use the foreclosure date to calculate the fair market value of the 

property. Rather, the expert determined the property’s value on a date three years after the 

date of foreclosure. The expert’s opinion was, therefore, wholly irrelevant and 

inadmissible. 

Nevertheless, I believe there was reversible error – error, unfortunately, that the 

defendant failed to raise. In West Virginia, “our law has long recognized the admissibility 

of a landowner’s opinion concerning the value of his land.”12 The defendant had the right 

to give his opinion about his property’s value on the date of the foreclosure. If he’d done 

so, he would have been entitled to a jury trial. However, our law requires that a party 

resisting a summary judgment must present some evidence there are genuine issues of fact 

in dispute.13 The defendant waived this potential error and his right to testify about the 

12 Gomez v. Kanawha County Commission, 237 W.Va. 451, 471, 787 S.E.2d 904, 924 

(2016). 

13 Williams v. Precision Coil Inc., 194 W.Va. 52, 459 S.E.2d 329 (1985). 

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property’s value because he neither raised nor mentioned this issue to the judge during the 

summary judgment proceedings. He was silent on a landowner’s right to testify as to fair 

market value. That silence left the trial judge, and this Court, no alternative. I am 

authorized to state that Justice Workman joins me in this concurrence. 

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