Alliance Mortgage Co. v. Pastine

Johnson, J.,

dissenting: Disagreeing with tire majority’s statutory interpretation and believing that K.S.A. 2003 Supp. 60-205 is applicable, I respectfully dissent.

First, the majority suggests that an adequate sale price mandates confirmation of a mortgage foreclosure sheriffs sale. K.S.A. 60-2415(a) does not say that. The required confirmation finding is that the proceedings were regular and conformed with law and equity. *458The sale price is only part of the equation; a high bid at the sheriff s sale will not cure irregularities in the court proceedings leading up to the sale. Indeed, the majority’s citation to Board of Reno County Comm'rs v. Akins, 271 Kan. 192, 196, 21 P.3d 535 (2001), and McGraw v. Premium Finance Co. of Missouri, 7 Kan. App. 2d 32, 37, 637 P.2d 472 (1981), rev. denied 231 Kan. 801 (1982), corroborates the proposition that more than an adequate sale price is required for confirmation, notwithstanding the distinguishable facts of those cases.

Next, the majority finds that the service of the initial petition and summons was all that was necessary to hold Beneficial bound by all subsequent actions in the case. If that were so, one would expect plaintiffs, after effecting service on defendants, to simply move for summary judgment without notifying the defendants or doing so by publication. Obviously, that is not permitted. K.S.A. 2003 Supp. 60-205(a) requires that “written notices,” as well as other pleadings, are to be “served upon each of the parties.” Publication notice is not a permissible method prescribed in K.S.A. 2003 Supp. 60-205(b).

The majority mentions Beneficial’s concession that Kansas lacks precedent requiring a foreclosing mortgagee to provide a junior lienholder with actual notice of the sheriff s sale. This misses the point. Beneficial entered an appearance in the foreclosure action and filed an answer. It was tiren entitled to receive notice of impending action as a participating litigant, not because of its status as a junior lienholder. The majority points out that the Coxes, as purchasers, had the option of standing in the shoes of the foreclosing mortgagee. As such, they would be subject to the foreclosing mortgagee’s failure to provide notices, as required by law.

The majority relies heavily upon K.S.A. 60-2410(a) which provides, in pertinent part: “Lands and tenements taken on execution shall not be sold until the officer gives public notice of the time and place of sale.” (Emphasis added.) The obvious purpose of this provision is to get the word out that the real estate is being sold in order to facilitate a meaningful sale. The provision is not a substitute for compliance with the K.S.A. 2003 Supp. 60-205 requirement to notify other parties of actions being taken in the case.

*459Likewise, the majority reads into K.S.A. 60-2414(c) a requirement that a lienholder must have foreclosed its lien in order to redeem. The provision is entitled “Creditors who may redeem” and reads: “Any creditor whose claim is or becomes a lien prior to the expiration of the time allowed by law for the redemption by creditors may redeem.” K.S.A. 60-2414(c). Beneficial was a creditor, and its claim had become a hen prior to the expiration of the redemption period. A plain reading of the statute gives Beneficial standing to redeem.

Finally, the majority denies the district court the opportunity to fashion an equitable remedy by extending the period of redemption. The denial runs counter to the concept of equity. After the district court’s ruling, Beneficial held real property which it could sell to recoup at least a portion of the money it was owed. The Coxes had all their purchase price money back, plus an additional $3,685.50 for expenses they incurred. The only detriment suffered by the Coxes was a missed opportunity to get a tremendous bargain. The court’s remedy was an equitable balancing of the rights of all concerned.