Opinion ID: 1865635
Heading Depth: 1
Heading Rank: 1

Heading: mortgage foreclosure

Text: The Bank sought foreclosure of its mortgage on Halversons' 1,280 acre farm for a balance due of over $532,000. Answering the Bank's complaint, Halversons admitted the note, mortgage and default, but asserted affirmative defenses: First, Halversons claimed a right to alternative loan servicing arrangements with the Bank under federal law. Second, Halversons pled that, since the amount of the debt is less than the value of the property sought to be foreclosed, foreclosure will have the effect of depriving them of their home and confiscating [their] property. This defense sought appropriate relief under § 28-29-05, N.D.C.C. Third, Halversons pled that, since the price of farm products produced in this state is not equal to the cost of production in comparison with the price of other commodities in general entering into the business of agriculture[,] [f]oreclosure ... will confiscate or tend to confiscate their property. This defense sought appropriate relief under § 28-29-04, N.D.C.C. Halversons' prayer for relief included a request for appropriate relief under Section 28-29-04 and 28-29-05 of the North Dakota Century Code, including but not limited to d[el]ay of the entry of judgment or the issuance of execution, the deferral of the signing of any order for judgment, deferring the signing of order for judgment except upon particular conditions, or the delaying of any signing of any order of foreclosure to such time as the Court shall deem it equitable and just [to] enter the same. The Bank moved for summary judgment. A supporting affidavit by Mr. Bullinger, manager of its Devils Lake branch, outlined the circumstances of Halversons' default and negotiations with the Halversons about repayment, both from the Bank's viewpoint. It recited that Halversons' repayment record has been good until March of 1984, and that from April 1984 until December 1984 Halversons had made payments of $5,000 each month on an annual mortgage payment of $58,261.55 past due since March 1984. The affidavit declared: ... the loan of the Defendants with the Plaintiff was placed on non-accrual on or about January 10, 1985, and on that date, an amount of the loan was charged off, for the reason that the Plaintiff feels its collateral position was jeopardized, and those steps were necessary to guard against a loss, because of the increasing debt owed by the Defendants to t[h]e Plaintiff, and the value of the property. Donald G. Halverson's Affidavit in Opposition to the Motion For Summary Judgment outlined borrowing from the Bank starting in 1979 when three owned quarters were mortgaged to buy another quarter of land and to build a home. (When the other four mortgaged quarters were purchased and mortgaged was not explained.) Poor crop years in 1980 (too wet at harvest), 1981 (hailed out), 1982 (early frost), 1983 (drought), and 1984 (drought) were described. Discussions with Bank representatives and payments to the Bank were set out from the Halversons' viewpoint, including: 16. That Mr. Bullinger at no time informed me of my rights regarding an extension, reamortization or deferment of the loan in question as required by federal regulation, nor did he offer me any alternative loan servicing arrangement regarding the Federal Land Bank loan. The affidavit also stated: 20. That the land in question which is under foreclosure is approximately 1,280 acres. Of that 1,280 acres, 1,030 acres approximately is crop land. In addition, on the property is a home which was built in 1979, a quonset shed and shop, approximately 45,000 bushels of grain storage bins, as well as the crop land. That in the opinion of your affiant the value of the property in question well exceeds the total indebtedness to the Federal Land Bank and therefore the Federal Land Bank is not under-secured. That your affiant's home is on the property in question and that should the foreclosure proceeding go forward at this time it would have the effect of depriving your affiant of his home and confiscating his property. The Bank argued that the confiscatory-price defense statutes, which include § 28-29-04 and § 28-29-05, N.D.C.C., were no longer in effect and were unconstitutional. The Bank recognized that the Farm Credit Administration regulations called for consideration of alternative loan servicing arrangements but claimed that Halversons did not qualify. Without explaining its reasons, the trial court granted summary judgment foreclosing the mortgage. The order for judgment said only that there are no issues of fact presented in this case. Halversons appeal, arguing that material issues of fact needed to be decided to properly consider their forbearance defenses. The Bank responds that the confiscatory-price defense statutes no longer apply and, in any event, are unconstitutional. Alternatively, the Bank argues that the trial court exercised its discretion to not grant forbearance under the confiscatory-price defenses, which the Bank also claims have been preempted by federal law. The Bank urges that the affidavits demonstrated that there were no material issues of fact about Halversons qualifying for forbearance under the federal regulation.