Court Opinion

ID: 4387742
Source: CourtListenerOpinion
Date Created: 2019-04-16 17:00:14.874415+00
Date Added: 2024-06-11T13:31:35.911178
License: Public Domain

NOT PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT
                  _____________

                       No. 17-3195
                      _____________

  KEB HANA BANK USA, NATIONAL ASSOCIATION,
           A national banking association

           *Chestnut Grove Village Realty, LLC,
                   Intervenor in USCA

                             v.

                  RED MANSION, LLC
                d/b/a Naomi Village Resort,
                                     Appellant

      *(Pursuant to the Court’s Order dated 12/6/2017)
                      ______________

       On Appeal from United States District Court
          for the Middle District of Pennsylvania
            (District Court No. 3:14-cv-01664)
      District Judge: Honorable Karoline Mehalchick
                      ______________

     Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                      May 24, 2018
                    ______________

Before: McKEE, SHWARTZ, and NYGAARD, Circuit Judges.

              (Opinion filed: April 16, 2019)

                _______________________
                                          OPINION ∗

McKEE, Circuit Judge.

       Red Mansion, LLC, appeals the district court’s confirmation of a mortgage

foreclosure sale arguing that the legally required notice of sale contained the wrong

address which resulted in a grossly reduced sale price and invalid sale. For the reasons

that follow, we affirm the district court. 1

       The district court confirmed the sale upon motion of Appellee, KEB Hana Bank

USA. 2 The issue on appeal is whether the use of “2743 Route 390” instead of “2374

Route 390” in the notice of property reduced the number of potential bidders and resulted

in an inadequate sale price. We review the district court’s confirmation of sale for abuse

of discretion. 3

       As a preliminary matter, the district court appropriately concluded that Red

Mansion is estopped from claiming that the address used in the notice of foreclosure was

inaccurate. Red Mansion itself listed the address used in the foreclosure sale notice – the

address that it now challenges as the incorrect address – in the loan documents for the

∗
  This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
1
  The district court had jurisdiction pursuant to 28 U.S.C. § 1332. We have appellate
jurisdiction to review the district court’s final decision under 28 U.S.C. § 1291.
2
  KEB Hana Bank USA, Nat’l Ass’n v. Red Mansion, LLC, No. 3:14-CV-01664, 2017 WL
3868517, at *3 (M.D. Pa. Sept. 5, 2017).
3
  Virgin Islands Nat’l Bank v. Tyson, 506 F.2d 802, 804 (3d Cir. 1974).

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property. 4 Additionally, Red Mansion twice conceded the accuracy of the address

contained in the notice when responding to Appellee’s complaints and included the

address in its own brief for Rule 11 sanctions. 5 The doctrine of estoppel “precludes a

party from assuming a position in a legal proceeding that contradicts or is inconsistent

with a previously asserted position.” 6 The district court correctly determined that

“[h]aving already sworn that the address for the property is ‘2743’ and not ‘2374,’ Red

Mansion is estopped from now asserting the address identified is incorrect.” 7

        Even assuming arguendo that the address was incorrectly listed, the notice of

foreclosure was sufficient to notify all interested parties of the relevant information.

Pennsylvania law requires that a notice of mortgage foreclosure sale contain “a brief

description of the property to be sold, its location, any improvements, the judgment of the

court on which the sale is being held, the name of the owner or reputed owner, and the

time and place of sale.” 8 Pennsylvania law does not require the address be listed in the

notice. 9

        The only dispute is whether the location of the property was properly noticed. The

4
  KEB Hana, 2017 WL 3868517, at *2. The following documents, among others, listed
the street number as “2743”: the property’s mortgage; several property appraisals; and the
Marshal’s deed to the purchaser.
5
  Id.
6
  Delgrosso v. Spang & Co., 903 F.2d 234, 241 (3d Cir. 1990).
7
  KEB Hana, 2017 WL 3868517 at *2.
8
  Pa. R. Civ. P. 3129.2(b)(1).
9
  See Shimkus v. Klimatis, 105 A.2d 592, 593 (Pa. 1954) (finding a notice adequate that
did not give the property’s street address but instead provided a description of the
property, by block and lot number, map description, and the metes and bounds).

                                              3
notice provided by Appellee contained, among other things: the name of the company

and the specific name of the resort operated on the property; a recognized postal address;

eleven parcel numbers and tax pins; the property’s deed book; and the township, county

and state where the property was located. Accordingly, the notice provided “sufficient

information to put any prospective bidder on notice as to the location and the general

nature of the property subject to the sale.” 10

       Red Mansion argues that the allegedly incorrect address led to a reduced sale price

for the property, but it does not show that the sale price was legally deficient nor does it

offer anything more than speculation that the allegedly incorrect address contributed to a

lower sale price. 11 Pennsylvania courts set aside a sale only when the price is deemed

“grossly inadequate,” which has been interpreted as “roughly ten percent or less . . . of

the established market value.” 12 Red Mansion claims that it purchased the property in

2006 for $1.8 million and therefore the sale price of $305,000 13 is grossly inadequate.

Even assuming that the initial purchase price of the house is correct and the appropriate

value from which to make the calculation, the sale price was not “grossly inadequate.” 14

       Moreover, the established market value of the property is likely far lower than

10
   Penn Sec. Bank & Tr. Co. v. Matchulat, 30 Pa. D. & C. 3d 427, 431 (Pa. Com. Pl.
1983).
11
   “Without some assurance of a substantially higher bid, the assumption that a higher
price could be obtained is pure speculation.” Id. (citing Shimkus, 105 A.2d at 593).
12
   Bank of Am., N.A. v. Estate of Hood, 47 A.3d 1208, 1212 (Pa. Super. Ct. 2012).
13
   Red Mansion claims that the sale price was $305,000, but later claims the sale price
was $325,000. Compare Appellant Br. at 4 with Appellant Br. at 6.
14
   Ten percent of $1.8 million is $180,000.

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$1.8 million; a 2017 appraisal listed the market value at $540,000. While Red Mansion

owned the property it incurred significant casualty losses. Accordingly, the district court

did not err when it concluded that the sales price was not “grossly inadequate.” 15

       For the reasons above and in the district court’s opinion, we affirm the district

court’s confirmation of the foreclosure sale. 16

15
   This is true even assuming that the market value did not decline because of the losses
and that it remained close to $540,000. Even allowing for a reasonable appreciation from
that value, the actual sales price was still far in excess of the 10% of market value that
guides Pennsylvania courts.
16
   Following Red Mansion’s appeal to this Court, Appellee moved to dismiss for
mootness. Appellee claimed that Red Mansion’s failure to move for a stay of execution
prior to the issuance of a writ of execution, subsequent full payment by the purchaser,
and delivery of the deed, leaves Red Mansion’s appeal moot. Because we affirm the
district court’s confirmation of sale in its entirety, we do not address this issue.
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