Court Opinion

ID: 7374715
Source: CourtListenerOpinion
Date Created: 2022-07-28 14:02:29.208011+00
Date Added: 2024-06-11T16:21:00.785292
License: Public Domain

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             DISTRICT OF COLUMBIA COURT OF APPEALS

                                 No. 20-CV-695

                            KAYAN, LLC, APPELLANT,

                                        v.

                         AZAD YUNUS, et al., APPELLEES.

                         Appeal from the Superior Court
                          of the District of Columbia
                                (CAR-7677-18)

                      (Hon. Laura A. Cordero, Trial Judge)

(Argued April 26, 2022                                     Decided July 28, 2022)

      Abdullah H. Hijazi, with whom Martin D. Zhou was on the brief, for appellant.

      Azad Yunus, pro se.

      Zack Hill, with whom Mariah Hines, Jennifer Joseph, and Jonathan H. Levy
were on the brief, for The Legal Aid Society of the District of Columbia, amicus
curiae in support of appellee.

      Before EASTERLY, MCLEESE, and DEAHL, Associate Judges.

      MCLEESE, Associate Judge: Appellant Kayan, LLC challenges an order

denying its motion to intervene in a judicial-foreclosure action brought by Bank of

America, N.A., against appellee Azad Yunus. We affirm.
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                                         I.

      In 2018, Bank of America filed an action seeking to foreclose on a property

owned by Mr. Yunus. The trial court entered judgment for Bank of America and

ordered that the property be sold at foreclosure. The foreclosure sale occurred in

November 2019, and Kayan was the purchaser. Because the purchase price was

larger than Mr. Yunus’s mortgage debt, the sale resulted in a surplus. The trial court

ratified the sale in January 2020, and Kayan obtained a deed to the property in

February 2020.

      In March 2020, Kayan filed a separate action for possession of the property,

alleging that Mr. Yunus had unlawfully remained on the property after the

foreclosure sale. Meanwhile, in the foreclosure action, Bank of America moved in

August 2020 to ratify the accounting of the sale. In September 2020, Kayan filed a

motion to intervene in the foreclosure action as a matter of right under Super. Ct.

Civ. R. 24(a)(2). Kayan sought an award from the surplus from the foreclosure sale,

arguing that Kayan was entitled to damages due to Mr. Yunus’s alleged refusal to

leave the property.
                                            3

      The trial court denied the motion. The trial court noted that Rule 24(a)(2)

requires the trial court to permit the intervention of a party that “claims an interest

relating to the property or transaction that is the subject of the action, and . . . is so

situated that disposing of the action may as a practical matter impair or impede the

movant’s ability to protect its interest, unless . . . existing parties adequately

represent that interest.” The trial court explained that this court has applied a

“flexible and practical approach” to determining what qualifies as an “interest” for

the purpose of intervention, viewing the interest requirement as a “practical guide to

disposing of lawsuits by involving as many apparently concerned persons as is

compatible with efficiency and due process.” See Calvin-Humphrey v. District of

Columbia, 340 A.2d 795, 798-99 (D.C. 1975).

      The trial court concluded for several reasons that denying intervention would

not impair Kayan’s interests and that permitting Kayan to intervene would not be

compatible with efficiency and due process. First, adjudication of Kayan’s damages

claim based on an alleged refusal by Mr. Yunus to leave the property was outside

the purview of the Mortgage Foreclosure Calendar, which was handling the

foreclosure matter and which deals with a very high volume of cases. Second, the

foreclosure matter had been pending for two years, and judgment had been entered

over a year ago, so intervention would cause undue delay. Third, Kayan had
                                          4

adequate remedies in other parts of the Superior Court, and Kayan had in fact filed

an action for possession.

                                          II.

      “To the extent that the trial court’s ruling on a motion to intervene as a right

is based on questions of law, it is reviewed de novo; to the extent that it is based on

questions of fact, it is ordinarily reviewed for abuse of discretion.” McPherson v.

District of Columbia Hous. Auth., 833 A.2d 991, 994 (D.C. 2003) (brackets and

internal quotation marks omitted). It is not entirely clear how this standard of review

applies to the trial court’s determinations in this case. We need not decide that

question, however, because we agree with the trial court’s ruling.

      We need not resolve the question whether an unadjudicated claim of unlawful

possession of real property is a protectable interest within the meaning of Rule

24(a)(2). Even assuming that such a claim is a protected interest, we share the trial

court’s concerns about the practical implications of permitting parties with such

claims to intervene as of right in foreclosure proceedings. See Calvin-Humphrey,

340 A.2d at 798-99 (explaining that application of Rule 24(a)(2) should “prevent[]

litigation from becoming unmanageably complex”).           To rule on such claims,
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foreclosure courts would have to determine the period of any unlawful occupancy,

the value of the use of the property, defenses that the prior owner might have, and

the relative rights of other possible claimants to any surplus. Allowing parties with

such claims to intervene as a matter of right in foreclosure proceedings to try to

recover from the surplus would doubtless make foreclosure cases both longer and

more complex. In sum, we agree with the trial court that permitting intervention in

this case would have excessively delayed the foreclosure case.

      We are not persuaded by Kayan’s arguments to the contrary. First, Kayan

argues that intervention in the foreclosure action was the only way Kayan could

recover damages based on the claim that Mr. Yunus illegally remained on the

property after the foreclosure sale. We disagree. Whether or not Kayan could have

sought such damages in its action for possession, Kayan unquestionably could have

sought such damages in an action for ejectment. See D.C. Code § 16-1109(a)(2)

(authorizing recovery of damages for use and occupation of property); Hernandez v.

Banks, 84 A.3d 543, 556 (D.C. 2014) (“In an ejectment action, D.C. Code § 16-

1109(a)(2) (2012 Repl.) allows a plaintiff to embody in [the] complaint, in a separate

count, a claim for the clear value of the use and occupation of the property sued

for—extending to the time of the verdict, and also damages for waste or injury to the

premises during that period.”) (ellipses and internal quotation marks omitted).
                                          6

      Second, Kayan relies on a decision of the Superior Court that permitted a

purchaser at a foreclosure sale to intervene in a foreclosure action to make a claim

against the foreclosure surplus based on the prior owner’s alleged refusal to leave

the property after foreclosure. See Everbank v. Johnson, No. 2015 CA 000658 (D.C.

Super. Ct. Feb. 25, 2019). That decision is not binding on this court. District of

Columbia v. Gould, 852 A.2d 50, 55 n.6 (D.C. 2004) (“[T]his court obviously is not

bound by decisions of the Superior Court.”). Moreover, the motion to intervene in

Everbank does not appear to have been opposed, and the trial court did not explain

its basis for granting the motion. Everbank, at 1.

       Third, Kayan relies on a decision from Maryland permitting foreclosure

purchasers to file motions seeking to recover damages from foreclosure-sale

surpluses based on the prior owner’s alleged refusal to leave the property after a

foreclosure sale. See Legacy Funding LLC v. Cohn, 914 A.2d 760 (Md. 2007).

Legacy Funding also is not binding on this court. Moreover, the court in Legacy

Funding did not use the term “intervention” and did not address the standards

applicable to intervention, instead focusing almost entirely on the substantive

question whether and to what extent such damages are recoverable. Id. at 762-66.
                                          7

      Fourth, Kayan asserts that it should be viewed as in effect a secured creditor

with respect to the foreclosure surplus, because as the successful bidder at the

foreclosure action Kayan “stepped into the position of the foreclosing mortgagee.”

That assertion, however, is not supported by the sole District of Columbia decision

Kayan cites, which notes that lenders who pay off a pre-existing mortgage and take

a new mortgage as security for a new loan “step[] into the shoes of the [previous]

mortgagee.” Ward v. Wells Fargo Bank, N.A., 89 A.3d 115, 122 n.5 (D.C. 2014).

Kayan did nothing of that sort in this case, instead simply paying the purchase price

at a foreclosure sale.

      Fifth, Kayan relies on a case stating that “it is not enough to deny intervention

under [R.] 24(a)(2) because applicants may vindicate their interests in some later,

albeit more burdensome, litigation.” HSBC Bank USA, N.A. v. Mendoza, 11 A.3d

229, 236 n.23 (D.C. 2010) (internal quotation marks omitted).            We are not

persuaded, however, that requiring Kayan to raise its claim in an action separate

from the foreclosure proceedings imposes an undue burden on Kayan. We recognize

that filing such an action is not a perfect solution from Kayan’s perspective, because

it is possible that Kayan would be unable to enforce a judgment that it obtained in a

separate action. Kayan thus would prefer to be treated as though it had a secured
                                           8

interest in the foreclosure surplus. As we have explained, however, we conclude

that Kayan is not entitled to be so treated.

      Finally, Kayan relies on the principle that “any doubt concerning the propriety

of allowing intervention should be resolved in favor of the proposed intervenors.”

HSBC Bank, 11 A.3d at 233 (brackets and internal quotation marks omitted).

Because we do not doubt the propriety of the trial court’s ruling denying

intervention, that principle does not aid Kayan.

      For the foregoing reasons, the judgment of the Superior Court is affirmed.

                                         So ordered.