Court Opinion

ID: 9785016
Source: CourtListenerOpinion
Date Created: 2023-08-30 21:01:00.642457+00
Date Added: 2024-06-11T07:36:03.361308
License: Public Domain

McAnany, J.,
concurring in part, dissenting in part: I agree with the majority’s conclusion that Citifinancial did not acquiesce in the judgment by its failure to stay execution. However, I would save for another day the issue of whether the equitable considerations described in K.S.A. 60-2415(b) are solely for the benefit of the mortgagor. First, I do not believe the district court determined that equitable relief was not available to mortgagees. Second, I believe that resolution of this issue is unnecessaiy since, contrary to the majority’s view, I do not find that the district court abused its discretion in deciding that Citifinancial was not entitled to equitable relief under the particular facts presented.
With respect to the first point, Citifinancial moved to set aside the sheriff s sale. No case authority was cited in its motion and no supporting brief was filed. The matter was set for hearing on June 8, 2006. The record discloses no briefing of the issue in advance of that hearing. Further, we have no record of the proceedings on June 8, other than the court’s later memorandum decision. In its *158memorandum decision, the district court simply stated that the authorities cited by Citifinancial
“apply to instances where the mortgagor will suffer an inequity due to a bid that was substantially inadequate when compared to the fair market value of the property. In this case the mortgagors are in default, and assigned their redemption rights and do not seek to set aside the sale.”
We do not know what specific cases Citifinancial cited to the court. However, the cases it has since cited do, in fact, involve instances in which the mortgagor complained of an adequate winning bid which, if confirmed, would result in a significant deficiency judgment against the mortgagor. See, for example, Olathe Bank v. Mann, 252 Kan. 351, 845 P.2d 639 (1993), in which the mortgagor, who was subject to a deficiency judgment of over $150,000, complained about the court using the anticipated holding costs between the date of the sheriff s sale and the winning bidder s future disposal of the property in measuring the fair value of the property at the time of the foreclosure sale.
To the contrary, in the case now before us tire mortgagor expressed no complaints whatsoever about the sale. In fact, 4 days after the sheriff s sale she transferred her redemption rights to the buyer at the sale, thereby abandoning her right to retain the property free and clear of the now foreclosed mortgage by simply repaying the successful foreclosure sale bidder for his bid plus interest and costs. See K.S.A. 60-2414. Had the mortgagor complained about the sale, she would have been heard. Since she did not, the court was required to focus on the equities claimed by Citifinancial. I do not read the district court’s memorandum decision as foreclosing Citifinancial from an argument based on equity. The fact that the district court considered and rejected Citifinancial’s claim for equitable relief does not mean that the court did so merely because Citifinancial was the mortgagee. Accordingly, I would not address this unnecessary issue.
Second, it is apparent to me that the district court examined the equities of Citifinancial’s position and simply chose not to exercise its discretionary equitable powers. The statute is clear. K.S.A. 60-2415(b) provides that the court may decline to confirm the sale *159when the bid is substantially inadequate. Our legislature could have required the court to reject a sale based upon a substantially inadequate bid. It chose not to do so. Here, the court declined to exercise its discretionary power based upon the particular facts before it. Citifinancial initiated this foreclosure and was aware of each stage of the proceedings. It arranged for the sheriff s sale and issued the requisite notices. Its representative failed to appear at the sale. It planned to offer a bid which, if successful, still would have resulted in a significant deficiency judgment against the mortgagor. The failure to appear was attributed to a miscommunication between CitifinanciaTs attorneys. The court noted in the journal entry memorializing these proceedings that the sale had been conducted “in all respects according to law.” In its memorandum decision, the court concluded that “in this instance equity should follow the law and not allow a remedy that is contrary to law.” (Emphasis added.) I take from this remark that the district court did not consider it appropriate under the circumstances to exercise its equity powers.
I am not persuaded that the antique authorities cited by Citifinancial, when applied to the facts before us, demonstrate an abuse of discretion by the district court. Taken in chronological order, Dewey v. Linscott, 20 Kan. 684 (1878), involved a mortgagee whose agent failed to appear at a foreclosure sale to bid on the property. The agent was prevented from attending because he was required by a subpoena to attend a criminal trial in an adjoining county scheduled for the same time. The court noted that die inadequacy of the successful bid standing alone was insufficient to set aside the sale. Further, had the agent been negligent in failing to attend, intervention by the court would not be warranted. But since the agent’s failure to appear was not of his own making and not due to the agent’s negligence, the motion to confirm the sale should not have been granted. 20 Kan. at 689-90. This stands in contrast to the facts now before us, which involve conduct which die court would be warranted in characterizing as negligence for failing to appear at the sale.
In Means v. Rosevear, 42 Kan. 377, 22 Pac. 319 (1889), the mortgagee’s agent intended to attend the foreclosure sale and enter *160a bid which would fully satisfy the mortgagee’s judgment against the mortgagor. However, the agent arrived at the sale 5 minutes late because the attorney for the ultimate purchaser at the sale misled him regarding the time of the sale. Clearly, equity should intervene in such a situation. But, here, Citífinancial was not misled about the time of the sale. It lacks this compelling argument for equity’s intervention.
Wolfert v. Milford Savings Bank, 5 Kan. App. 222, 47 Pac. 175 (1896), is another case in which the mortgagee’s agent failed to attend the foreclosure sale “without negligence on his part.”
Finally, Insurance Co. v. Stegink, 106 Kan. 730, 189 Pac. 965 (1920), is another case in which the mortgagee intended to enter a bid at the foreclosure sale which would have completely satisfied the judgment against the mortgagor. The mortgagee’s counsel sent to the clerk of the district court a proposed order setting the date of the foreclosure sale. The attorney did not receive from the clerk the notice of sale until the day after the sale had been conducted. Under the circumstances, the district court did not abuse its discretion in setting aside the sale. Here, there was no question that Citífinancial was aware of the date of the sale.
The district court found that the sale to Brunsvold had been properly conducted and chose not to exercise its equity power and set it aside. Equity aids the vigilant and not those who slumber on their rights. Rex v. Warner, 183 Kan. 763, 771-72, 332 P.2d 572 (1958). “Equity cannot be invoked to reheve one from the consequence of one’s own negligence.” Bankers Trust Company v. United States of America, 29 Kan. App. 2d, 215, Syl. ¶ 2, 25 P.3d 877 (2001).
Citífinancial was aware of its rights but failed to act upon them by attending the foreclosure sale. Under the circumstances, it is certainly possible that the district court could have excused Citifinancial’s failure to appear. I do not think it would have abused its discretion in doing so if equitable relief is available to mortgagees (an issue I believe we need not reach). However, this abuse of discretion standard prevents me from criticizing the district court for not choosing this path.
*161I must dissent from the majority’s conclusion that no reasonable person would agree with the district court that Citifinancial was not entitled to equitable relief under the circumstances. Accordingly, I would affirm.