Court Opinion

ID: 9664438
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:19:01.133933+00
Date Added: 2024-06-11T18:15:06.407781
License: Public Domain

MESCHKE, Justice,
concurring and dissenting.
Foreclosure of a real estate mortgage or land contract is constrained by statute. NDCC 32-19-06 and 32-19-07 limit a deficiency judgment to one obtained in an action separate from the foreclosure and sale, and to an amount by which the debt exceeds the fair value of the property as determined by a jury. The history and phrasing of these statutes connote a strong public policy. See First State Bank of Cooperstown v. Ihringer, 217 N.W.2d 857 (N.D.1974). I agree with the majority that these statutes embody a strong public policy.
Most statutory rights can be contractually waived unless that waiver is against public policy. NDCC 1-02-28. An accepted principle of interpretation attaches a paramount purpose to a declaration of public policy as emphatic as these limitations on foreclosure procedure. When such an important public policy would be frustrated by contract, the policy outweighs enforcement of the contract. Moses v. Burleigh County, 438 N.W.2d 186, 189 (N.D.1989). To permit a contractual term to vary the intent of these laws limiting deficiency judgments in foreclosures would make the law ineffective. Id at 190. Intrinsically, this law limiting deficiency judgments outlaws contradictory contracts. Id. Therefore, the procedural rights of a mortgage or land contract debtor cannot be contractually waived by agreement when the mortgage or contract is made. We have so held. First State Bank of New Rockford v. Anderson, 452 N.W.2d 90 (1990). Therefore, I concur with the majority that the procedural rights of mortgagors and vendees under these deficiency limiting laws cannot be contractually waived in advance of default.
When it comes time to enforce a land contract or mortgage, however, no public policy reason should inhibit contractual waiver or settlement of foreclosure proceedings. See Moses, 438 N.W.2d at 190. Indeed, the majority opinion correctly recognizes that a different public policy, en*171couraging settlement of controversies, then prevails. For example, Blackburn, Nickels & Smith, Inc. v. National Farmers Union Property & Casualty Company, 452 N.W.2d 319, 323 (N.D.1990). For these reasons, I also concur with the majority that a debtor may contractually waive all or part of his procedural rights under NDCC 32-19-06 and 32-19-07 during enforcement or foreclosure stages. If this weren’t true, a debtor would never be able to validly deed the mortgaged property to the creditor in lieu of foreclosure. Waiver during enforcement is permissible.
Accordingly, I agree with the majority that the question in this case is whether Scarlett in fact waived any of those rights. At this point, I part company with the majority. The majority concludes that a waiver can only be made by a clear, unequivocal, and unambiguous expression— an extremely difficult task in contract law. Since Scarlett’s waiver was clouded by some ambiguity, the majority concludes Scarlett waived nothing. Because I believe that waiver is a question of fact and that the trial court factually found a waiver in this case, I respectfully dissent.
“The existence or absence of waiver is a finding of fact.” Peterson v. Front Page, Inc., 462 N.W.2d 157, 159 (N.D.1990). A waiver occurs when a person voluntarily and intentionally relinquishes a known right or privilege. Id. See also Wilhite v. Central Inv. Properties, 409 N.W.2d 348, 354 (N.D.1987). Brunsoman and Scarlett agreed:
Scarlett denies that he is liable to Brun-soman for any amount under the contract, but Brunsoman contends Scarlett is; however, both wish to mitigate, by the sale of the property to the buyer, any loss or liability, if any, that might arise between themselves under the contract for deed, without waiving or forfeiting any rights or defenses available to them under its terms.
That language is ambiguous. The trial court resolved the ambiguity and determined, as matter of fact, that Brunsoman and Scarlett waived the foreclosure procedure through the Sheriff’s Sale. The trial court went on to find:
I think we have to pick it up sometime after the sale and then fit it into the statute. And I think that [Brunsoman] has done that in this case and therefore can proceed.
I agree.
Our standard for reviewing a trial court’s findings of fact is spelled out in NDRCivP 52(a). Findings of fact are not to be set aside unless clearly erroneous. Id. “A choice between two permissible views of the evidence is not clearly erroneous when the trial court’s findings are based ... on ... documentary evidence, or inferences from other facts_” Explanatory Note, NDRCivP 52(a). National Bank of Harvey v. International Harvester, 421 N.W.2d 799, 803 (N.D.1988). I would apply these standards of review here, rather than insisting on a unique or unprecedented waiver that is “clear, unequivocal, and unambiguous,” as the majority does. Therefore, I .dissent from the conclusion that Brunsoman was not entitled to sue for a deficiency judgment.
Several additional questions raised by Scarlett’s appeal are not addressed by the majority opinion because of its disposition on different grounds.
First, Scarlett contends that the contract for deed was unambiguous in setting the purchase price of $150,000, and leaving a remaining balance of $74,044.57. For that reason, Scarlett argues that the trial court improperly used extrinsic evidence about the separate mortgage on the building with a balance of $129,246.83 to arrive at a total debt due of $203,291.40. I disagree. The contract for deed, viewed together with the antecedent lease and the contemporary mortgage, is ambiguous about the total amount due. Agreements between the same parties about the same subject matter must be construed together. 17 Am. Jur.2d Contracts § 264 (1964); Wayne v. Braun, 292 N.W.2d 578, 580 (N.D.1980). Because Brunsoman joined in Scarlett’s mortgage on the building, as a form of subordination, Scarlett necessarily owed him that amount, too. Therefore, I would *172conclude that the trial court was not clearly erroneous in finding from ambiguous documents that the total debt due was $203,-291.40.
Finally, Scarlett contends that the suit for deficiency judgment was not “brought within ninety days after the sale of the mortgaged premises” as limited by NDCC 32-19-06. Scarlett points to the fact that Brunsoman received and accepted the offer for purchase on June 20, 1988, but that Brunsoman did not begin his action for the deficiency until November 3, 1988, more than 90 days later. However, the trial court found that the sale of the property was concluded on August 5, 1988, when Brunsoman and Scarlett agreed to the sale. Until then, the offer and acceptance was contingent. Therefore, I would affirm the trial court’s finding and conclusion that Brunsoman’s action was not barred by the limitation in NDCC 32-19-06 that a separate action for a deficiency judgment must be commenced within 90 days after the sale of the property.
Because I would affirm the deficiency judgment of $56,825.56 determined by the jury, I respectfully dissent.