Opinion ID: 1670070
Heading Depth: 1
Heading Rank: 2

Heading: standard of review

Text: [¶ 8.] Circuit courts have broad equitable powers . . . to set aside a sale if equities require. Federal Land Bank of Omaha v. Fenske, 67 SD 236, 291 NW 596, 598 (1940); see also Kirby v. Ramsey, 9 SD 197, 68 NW 328, 329 (1896) (noting a sale under a decree of foreclosure should be governed by equitable rules). Therefore, we review a circuit court's order vacating a foreclosure sale under the abuse of discretion standard. Fenske , 67 SD 236, 291 NW at 600 . An abuse of discretion occurs when `discretion [is] exercised to an end or purpose not justified by, and clearly against, reason and evidence.' State ex rel . White v. Brandt, 2008 SD 33, ¶11, 748 NW2d 766, 770 (additional citations omitted). We do not determine if we would have arrived at the same result, but rather whether we believe a judicial mind, in view of the law and the circumstances, could reasonably have reached that conclusion. Id. [¶ 9.] Whether the circuit court abused its discretion by vacating the sheriff's sale and certificate of sale. [¶ 10.] Trust argues that the circuit court abused its discretion when it vacated the sheriff's sale because the situation was created by Bank's inexcusable negligence not excusable neglect and the price of $10,000 was not wholly inadequate. Trust also alleges that fraud or unfairness should be present before a sale can be set aside. Finally, it claims that the only party that will be harmed if the circuit court's order is affirmed is Trust. [¶ 11.] While . . . mere inadequacy of consideration is not a ground for setting aside a foreclosure sale, this rule has been rather carefully circumscribed by the court. Fenske , 67 SD 236, 291 NW at 599. This rule: Must be strictly confined to cases where there is absolutely no fact appearing , except that the price is inadequate. Whenever other facts appear , such as mistake, misapprehension, or inadvertence on the part of the interested parties or of intending bidders, as a result of which it seems to the court the failure to obtain a fair and adequate price for the property was due in whole or in part to such mistake, misapprehension, or inadvertence, the court will readily refuse to approve the sale . Id. (emphasis added). Therefore, if the circumstances surrounding the sale indicate mistake, misapprehension or inadvertence by a party or interested bidder and the sale failed to obtain a fair and adequate price for the property, the court may exercise its discretion and vacate the sale. Id. Contrary to Trust's claim, fraud is not necessary in order to vacate the sale. See id. at 599-600. [¶ 12.] Fredericks was the only witness to testify at the hearing. She also submitted an affidavit in support of the motion to vacate the sheriff's sale and certificate of sale. Within the affidavit, she testified she had knee surgery on May 16, 2007, and was still recovering, so on the morning of the sale she could not run or hurry to the sale. During the hearing, she testified that for the last twelve years she had attended the judicial sales for CorTrust, attending an average of twenty-five to thirty a year. She testified that she always left her office at the same time and always stopped at the Argus Leader on her way to the sale and had never been late prior to this occasion. This time, she was stuck behind a fire truck for a couple blocks, construction forced her to park father away than usual, and her knee surgery made her unable to quickly get to the sale. [¶ 13.] Additionally, Trust received the property for only $10,000. Since there was no deficiency judgment, SD Housing would have to accept $10,000 in satisfaction of a debt near $100,000. While Trust argues that there is no evidence this is an inadequate price, SD Housing was willing to bid the judgment price and the original loan was for $95,247. The facts of this case indicate the price was inadequate. [¶ 14.] Our case law discusses inadequate prices. In State ex rel. Kunz v. Campbell , 5 SD 636, 60 NW 32 (1894), our Court affirmed the lower court's decision to vacate the sale when the attorney for mortgagee intended to bid $1,500, but the real estate was sold for $800 at sale. 5 SD 636, 60 NW at 35-36 overruled in part on other grounds by, Langeberg v. Perry, 62 SD 286, 252 NW 882, 884 (1934) (finding a confirmation hearing only examined the regularity of the proceedings; not addressing a motion to set aside a sale). Additionally, in Stacy v. Smith , 9 SD 137, 68 NW 198 (1896), our Court noted that a bid of $10.60 was inadequate on property valued at $600. Id. at 200. [¶ 15.] The Arizona Court of Appeals affirmed a lower court's order to set aside a sale where the mortgagee arrived eight minutes late to the sale. Johnson v. Jefferson Std. Life Ins. Co., 429 P2d 474, 475-76 (ArizCtApp 1967). In Johnson , the judgment debt was $56,228 and the appraised value was $73,000, but the accepted bid at the foreclosure sale was $5,000. Id. at 475. The court noted that mere inadequacy of price is generally not sufficient to set aside a sale, but there is authority to set aside the sale when the inadequacy is so great as to `. . . shock the conscience of the court[.]' Id. However, the court continued: When there is inadequacy of price which in itself might not be grounds for setting aside the sale, `. . . slight additional circumstances or matters of equity . . .' justify the court in setting aside the sale. Id. (quoting AmJur2d Executions § 733) (additional citation omitted). Therefore, the court concluded that [i]n view of the gross inadequacy of the price obtained, and in light of surrounding circumstances, we see no abuse of discretion in setting aside the sale. Id. at 476. [¶ 16.] Similarly in the present case, Trust has not demonstrated that the circuit court abused its discretion in vacating the sheriff's sale and certificate of sale. First, the price is inadequate when SD Housing authorized a bid for the judgment amount of almost $100,000, the original loan was for $95,247, but the accepted bid was only $10,000. Second, the circumstances surrounding Fredericks' inability to arrive at the sale on time support the circuit court's decision that her untimely arrival was due to mistake, misapprehension, or inadvertence. Fredericks has attended twenty-five to thirty sales per year for twelve years, utilizing the same procedure each time and was never late prior to this occasion. Finally, Trust will receive the amount of its bid plus interest. It is not prejudiced by the decision, other than it will not be able to take advantage of the windfall of receiving a property for $10,000 that is worth substantially more. Under these facts, we find no abuse of discretion. [¶ 17.] Affirmed. [¶ 18.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and MEIERHENRY, Justices, concur.