Court Opinion

ID: 9856009
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:36:20.015742+00
Date Added: 2024-06-11T09:25:53.862658
License: Public Domain

McGRAW, Chief Justice,
dissenting:
I cannot agree with the result reached by the majority. First, the failure of the statutory foreclosure scheme embodied in the provisions of Chapter 38, article 1 to provide the grantor an opportunity to be heard prior to sale violates due process. The “state action” which the majority finds lacking clearly appears on the face of these statutes. W.Va.Code § 38-1-3 and 38-1-4 provide for the sale of property conveyed by a deed of trust after personal service of notice of the sale upon the defaulting grantor. In the absence of contrary provisions in the trust deed, the provisions of Chapter 38, article 1, provide the exclusive mechanism by which property held under a deed of trust may be sold. Russell v. Webster Springs Nat’l Bank, 164 W.Va. 708, 265 S.E.2d 762 (1980). Since the statutes mandate the manner in which foreclosure under a trust deed must be conducted in such circumstances, it appears that sufficient state action exists to bring them within the ambit of the due process protections contained in W.Va. Const, art. 3, § 10.
Moreover, the failure of Chapter 38, article 1 to provide the grantor an opportunity to be heard clearly violates the public policy of the State of West Virginia. The purpose of affording an individual notice of a pending event or action is to afford him an opportunity to defend against such event or action. Under the statutory scheme today approved by the majority, the grantor of a trust deed is entitled to personal service of notice of the sale, but must stand by mutely while his home or his business is put on the auction block and sold to another, often for a fraction of its value, notwithstanding the fact that the grantor may have a perfectly legitimate defense which would prevent the sale if it could only be brought to the attention of a court empowered to act on the grantor’s behalf. The grantor is, in effect, “denied his basic right of protest or defense before his property is taken.” State ex rel. Payne *158v. Waldren, 156 W.Va. 60, 190 S.E.2d 770, 778 (1972).
The fact that the grantor may institute proceedings to bring his objections to the notice of the courts by injunction or by a suit to set aside the sale does not justify the defects in the statutory scheme. In any such action the grantor would be compelled to bear the burden of proof and, at least initially, the costs of the action. If a hearing were provided prior to the sale, the grantor could raise any objections as a manner of defense, without having to bear such burdens. The inconvenience to the trustee of requiring a pre-sale hearing on the other hand is minimal. In most cases the question would be simply whether the grantor had in fact defaulted. Consequently, the provisions of Chapter 38, article 1 are violative of due process and of the public policy of the State of West Virginia insofar as they do not provide the grantor of a trust deed an opportunity to be heard prior to the foreclosure sale.
Of course, the foreclosures in this case were controlled not by the terms of the statute, but by the express provisions of the deeds of trust. There is no question that the grantor of a trust deed may fore-go, by agreement to the terms of the instrument, any rights he may have to notice and an opportunity to be heard prior to sale. However, a waiver of such rights is effective only if it is knowing and voluntary. State v. Boyd, 167 W.Va. 385, 280 S.E.2d 669 (1981). Courts indulge every reasonable presumption against waiver of fundamental rights. State v. Mollohan, 166 W.Va. 60, 272 S.E.2d 454 (1980). The burden of proving waiver is on the party asserting it. See White v. Comm., 214 Va. 559, 203 S.E.2d 443 (1974).
In circumstances such as these, where property conveyed by a deed of trust is sold by the trustee upon default of the grantor, pursuant to the terms of the trust deed, without personal notice or an opportunity to be heard, the very least that is required is a hearing to determine whether the waiver of notice and an opportunity to be heard was knowing and voluntary.
The danger of not providing such a hearing is illustrated by the case of petitioner Dennison, who alleges that she was incompetent to make an effective waiver of her rights during the period in question. A hearing on this issue would protect those unable to understand the consequences of their actions from losing their homes and their land to unscrupulous speculators who could take advantage of the ill and infirm by inducing them to agree to such terms. This danger exists when we permit summary foreclosures without affording the grantor an opportunity to be heard prior to the sale. Consequently, I would hold that where, pursuant to the terms of a deed of trust, the grantor waives his right to personal notice and an opportunity to be heard prior to sale, such grantor is at least entitled to a hearing on the question of whether such provisions constitute an intelligent, voluntary and knowing waiver of his rights.