Opinion ID: 2155704
Heading Depth: 1
Heading Rank: 4

Heading: Validity of First Sale

Text: O'Malley argues that both the January 3, 1996, sale and the March 12, 1996, sale are invalid for a number of reasons. Although he conceded at oral argument that he received proper notice of the first sale, O'Malley contends that the bank and the trustee improperly refused to give him the opportunity to cure his default and reinstate the loan. He assigns as error the trial court's failure to rule on the disputed fact whether or not appellees offered him the opportunity to reinstate his loan prior to the January 3,1996, foreclosure sale. Appellees argue that O'Malley never expressly raised the issue in his complaint[,] and therefore any factual dispute regarding these issues would be immaterial to a resolution of the issues presented by this appeal. The record reflects that O'Malley raised the validity of the first sale in his memorandum of points and authorities in opposition to the defendants' motion for summary judgment. Specifically, he alleged that Chevy Chase Bank refused to allow reinstatement on the first sale. This was a violation of the terms of Chevy Chase's own deed of trust which allows reinstatement and District of Columbia law. Furthermore, in his statement of material facts in dispute, O'Malley listed whether or not defendants denied ... reinstatement to Plaintiff prior to the January 3, 1996 foreclosure sale. In their reply to plaintiffs opposition to defendants' motion for summary judgment, appellees conceded that: a factual dispute exists regarding whether Chevy Chase Bank, F.S.B. denied reinstatement figures and reinstatement to plaintiffs [sic] prior to the January 3, 1996 foreclosure sale, [however,] this fact is immaterial to the issues raised in plaintiff's Complaint, since the Complaint makes no reference to the January 3, 1996 foreclosure sale, and focuses exclusively on the March 12, 1996 foreclosure sale. The trial court did not address this issue in its order, presumably because, under its reasoning that section 45-715.1(b) precluded O'Malley from curing a default more than once every two years, the bank was not obligated to provide O'Malley with an opportunity to cure his default. As we hold otherwise, we review the record to determine whether there is sufficient evidence to place in genuine dispute the material fact of appellees' denial of O'Malley's contractual right to cure. See Holland, 456 A.2d 807, 814 (D.C.1983) (noting that when this court reviews a trial court's order granting summary judgment, we make an independent review of the record and we review the trial judge's conclusion de novo ). In determining whether there is an issue of material fact, this court must view the record in the light most favorable to the nonmoving party. See Burch v. Amsterdam Corp., 366 A.2d 1079, 1081 & n. 1 (D.C.1976). Even a doubt as to whether a genuine issue [of fact] exists is sufficient to preclude summary judgment. Bason v. Am. Univ., 414 A.2d 522, 525 (D.C.1980). Appellees argue that whether O'Malley was given an opportunity to reinstate his loan before the January sale is immaterial because O'Malley did not expressly raise this issue in his complaint. We view the complaint as having raised the issue. Although articulated in a tenuous manner, construing the complaint in the light most favorable to the pleader, O'Malley raised the issue of the validity of the first sale in his complaint. Cf. Vicki Bagley Realty, Inc. v. Laufer, 482 A.2d 359, 364 (D.C.1984) (noting that in reviewing the dismissal of a complaint, this court construe[s] the complaint in the light most favorable to the plaintiff and assume[s], for the purpose of the motion, that the allegations in the complaint are true); Johnson-El v. District of Columbia, 579 A.2d 163, 166 (D.C.1990) ([A]ny ambiguities or doubts concerning the sufficiency of the claim must be resolved in favor of the pleader. (quoting Doe v. United States Dep't of Justice, 243 U.S.App. D.C. 354, 364, 753 F.2d 1092, 1102 (1985))). In paragraph ten of his complaint, O'Malley pled that On a previous occasion [to the March 12, 1996 sale] Plaintiff had requested his right to cure in a timely manner and Mr. Prensky refused to grant same. Therefore, we conclude that O'Malley raised the invalidity of the first sale in his complaint, making it a material issue in this case. See Cuellar, 639 A.2d at 576 (invalidating a foreclosure sale where a foreclosure notice was deficient because it failed to state the cure amount). Moreover, as this case was disposed of at summary judgment, O'Malley's failure to refer to the invalidity of the January 2, 1996, foreclosure sale in the complaint would not be fatal to his claim if the pleadings and other submissions in the record before the trial court suffice to support it. Here, O'Malley squarely raised the issue in his opposition to the motion for summary judgment, and the bank recognized in its reply to that opposition that, if relevant, the factual issue is disputed. If the bank improperly refused to allow O'Malley to cure prior to the first sale, the sale is invalid. See Purchase Money Deed of Trust ¶ 19; D.C.Code § 45-715(b). In that eventuality, O'Malley's equitable rights in the property would have persisted, along with his contractual right to cure. See infra Part V. Therefore, even if O'Malley's complaint did not challenge the first sale per se, its validity would nonetheless be a material issue with respect to O'Malley's rights at the time of the second sale, which is clearly challenged in the complaint. As the movants for summary judgment, appellees have the burden to show that there was no genuine dispute of fact with respect to O'Malley's claim that they did not allow him to exercise his right to cure. See Super Ct. Civ. R. 56(c) (noting that a motion for summary judgment is proper when the movant shows 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); see also Musa v. Continental Ins. Co., 644 A.2d 999, 1001-02 (D.C.1994) (The moving party's `initial responsibility' consists of informing the [trial] court of the basis for its motion, and identifying those portions of the pleadings, ... together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986))). On appeal, the bank and the trustee argue that O'Malley was not entitled to reinstatement because he failed to offer to cure within five days before the scheduled sale as required by the contract and by section 45-715.1. Moreover, they contend, O'Malley conceded in writing on the day prior to the first sale that he lacked the financial ability to cure the default. The record contains affidavits from David Prensky, the trustee, and O'Malley, showing that there is a genuine dispute of material fact concerning this issue. [10] In his affidavit, the trustee stated: That prior to the January 3, 1996 foreclosure sale, Mr. O'Malley had been afforded the opportunity to cure his default, but failed to do so prior to the sale. [11] In his affidavit, O'Malley averred that although [O'Malley] requested reinstatement figures and reinstatement and was in a position to reinstate prior to the January 3, 1996 foreclosure sale from the Defendant, Mr. Prensky refused them, saying `the Bank will not do that at this time.' Thus, at the time the question was before the trial court, there was a material fact in dispute. Subsequently, the bank and the trustee appended to their brief on appeal a letter from O'Malley to Prensky dated the day before the first sale in which O'Malley acknowledged that he did not have sufficient funds to cure (the cure amount had been set at $11,212.76), but offered $7500.00 in return for a three-week postponement of the sale, which the bank rejected. Although this letter could be dispositive of the issue, it was not presented before the trial court, as conceded at oral argument by appellees' counsel, and is not properly considered part of the record on appeal. Further, O'Malley did not have an opportunity before the trial court to explain the circumstances of the letter or present argument concerning its effect on his right to cure. We have held that failure to timely give the cure amount in a required notice of foreclosure sale, is not overcome by a showing that the mortgagor was financially unable to cure the default before the foreclosure sale. As we remarked in Bank-Fund Staff Federal Credit Union v. Cuellar, 639 A.2d 561 (D.C.1994), if the mortgagors did not receive proper notice, whether they had the funds to cure [by the foreclosure sale] is not the issue. Id. at 575. This is because the main purpose of the notice requirement is to allow a defaulting mortgagor to cure the default. Here, it appears that O'Malley offered two-thirds of the cure amount and requested a short postponement of the foreclosure sale. If so, it is possible that, given proper notice, the mortgagor would have been able to raise the needed funds, and there is a question whether, if the mortgagee bank had been aware that the mortgagor had a right to reinstate, its position regarding the conditions under which it would agree to a further postponement of the foreclosure sale would have remained the same. Id. Accordingly, because the validity of the first sale depends on a disputed issue of material fact, namely, whether O'Malley was allowed to cure his default, we reverse the grant of summary judgment and remand for the trial court's factual determination of this issue. If the trial court were to determine that the bank did not permit O'Malley to cure, it should then address whether O'Malley indicated that he did not have the financial funds to cure and, if so, whether such inability would affect the validity of the first sale notwithstanding the bank's incorrect assumption that O'Malley did not have a right to cure. If the trial court determines that there is a question about the validity of the first sale, the case should proceed to trial on that issue. If the first sale was invalid, the contract for purchase at that sale also was not valid and O'Malley's rights remain as at status quo ante. See D.C.Code § 4-715.1(b) (providing that a residential mortgagor may cure his default and prevent sale or other disposition of the real estate, by tendering the amount or performance specified (emphasis added)). Reversed and remanded.