Arnold v. Palmer
| Decision Date | 29 October 2009 |
| Docket Number | No. 34738.,34738. |
| Citation | 686 S.E.2d 725 |
| Court | West Virginia Supreme Court |
| Parties | Lois ARNOLD, Plaintiff Below, Appellee, v. David G. PALMER, Trustee; Christina J. Palmer, Trustee; Advantage Bank, an Ohio Corporation; and Jeffrey Scott Arnold, Executor of the Last Will and Testament of Jeffrey A. Arnold, Deceased, Defendants Below, Advantage Bank, Third-Party Plaintiff Below, Appellant, v. Jeffrey Scott Arnold, Individually; Samantha Nicole Foggin; Melissa Ann Dailey; and Kelli Beth Arnold; Beneficiaries of the Estate of Jeffrey A. Arnold, Deceased, Third-Party Defendants Below, Appellees. |
Syllabus by the Court
1. "The entry of an order denying a motion for summary judgment made at the close of the pleadings and before trial is merely interlocutory and not then appealable to this Court." Syllabus, Wilfong v. Wilfong, 156 W.Va. 754, 197 S.E.2d 96 (1973).
2. "As the purpose of the summary judgment proceeding is to expedite the disposition of the case a summary judgment may be rendered against the party moving for judgment and in favor of the opposing party even though such party has made no motion for judgment." Syllabus point 4, Employers' Liability Assurance Corp. v. Hartford Accident & Indemnity Co., 151 W.Va. 1062, 158 S.E.2d 212 (1967).
3. "Upon a hearing on a motion of one of the parties for summary judgment, after due notice, when it is found that there is no genuine issue as to any material fact and that the adverse party is entitled to judgment as a matter of law, the failure of such party to file a motion for summary judgment does not preclude the entry of such judgment in his favor." Syllabus point 5, Employers' Liability Assurance Corp. v. Hartford Accident & Indemnity Co., 151 W.Va. 1062, 158 S.E.2d 212 (1967).
4. "A circuit court's entry of summary judgment is reviewed de novo." Syllabus point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).
5. " Syllabus point 2, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).
6. "[A] promissory note, signed by the maker, containing an unconditional promise to pay a sum certain in money and payable on demand or a fixed or determinable future time, to order or bearer, is negotiable in its origin, and continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise." Syllabus point 1, in part, Maryland Trust Co. v. Gregory, 129 W.Va. 35, 38 S.E.2d 359 (1946).
7. A "deed of trust" is a deed that conveys title to real property in trust as security until the grantor repays the loan. In the case of default of a debt secured by a deed of trust, the property becomes liable to sale under the power of sale conferred upon the trustee.
8. A lending institution may require the trustee of a valid deed of trust to initiate foreclosure proceedings on the property subject to the deed of trust, even though one of the signatories to the deed of trust did not sign the underlying promissory note.
9. Syllabus point 1, Sally-Mike Properties v. Yokum, 175 W.Va. 296, 332 S.E.2d 597 (1985).
10. Syllabus point 5, Hall v. Hartley, 146 W.Va. 328, 119 S.E.2d 759 (1961).
William Crichton V, William Crichton VI, Crichton and Crichton, Parkersburg, WV, for the Appellant, Advantage Bank.
Robert L. Bays, Paul L. Hicks, Bowles Rice McDavid Graff & Love, Parkersburg, WV, for the Appellee, Jeffrey Scott Arnold, Executor of the Last Will and Testament of Jeffrey A. Arnold, Deceased.
Richard A. Hayhurst, Parkersburg, WV, for the Appellee, Lois Arnold.
David Allen Barnette, Charles D. Dunbar, Jackson Kelly PLLC, Charleston, WV, for Amici Curiae, West Virginia Bankers Association, Inc., and the West Virginia Association of Community Bankers, Inc.
This is an appeal by the defendant/third-party plaintiff below and appellant herein, Advantage Bank (hereinafter referred to as "Advantage"), from an August 18, 2008, order of the Circuit Court of Wood County. By that order, the circuit court denied Advantage's trustee from foreclosing on the home of the plaintiff below and appellee herein, Lois Arnold, (hereinafter referred to as "Mrs. Arnold"), which order effectively prevented Advantage from enforcing a deed of trust. In this appeal, Advantage asserts that it had a proper right to foreclose on the subject property and that the circuit court erred in denying it such right. Upon review of the parties' arguments,1 the pertinent authorities, and the record designated for appellate consideration, we find that the circuit court erred by enjoining Advantage's right to foreclose on the subject property under the deed of trust. Accordingly, we reverse the decision of the circuit court.
Factually, this is a straightforward case, which began with the filing of Mrs. Arnold's action for injunctive relief against three defendants: Advantage, Advantage's trustees,2 and the executor of her late husband's estate.3 In her claim for injunctive relief, Mrs Arnold sought an order restraining foreclosure on her residence and enjoining the defendants below from enforcing any putative lien of the deed of trust. She further requested that her husband's estate be compelled to satisfy any remaining obligations under the deed of trust.
The record reveals that Mrs. Arnold and her late husband were married for approximately twenty years prior to his death. Before Mr. Arnold's death, he and Mrs. Arnold had owned the residence at issue before this Court, which was located in Wood County, West Virginia, for approximately five years. By deed dated November, 3, 1998, Mr. and Mrs. Arnold conveyed the subject property to themselves as joint tenants with rights of survivorship.
Thereafter, on November 3, 2002, Mrs. Arnold's husband executed a promissory note in the original principal sum of $128,000.00. It is undisputed that the note was executed by only Mrs. Arnold's husband. Mrs. Arnold did not sign the promissory note. Subsequently, on November 5, 2002, both Mrs. Arnold and her husband executed a deed of trust in favor of Advantage's trustee. Both Mrs. Arnold and her husband signed the deed of trust, which secured the real property at issue that was used as the collateral for the repayment of the executed promissory note.
Mrs. Arnold's husband died testate on January 20, 2007, at which time, the property title immediately vested in Mrs. Arnold based on her status as a joint tenant with right of survivorship. Prior to his death, Mrs. Arnold's husband had executed a last will and testament, wherein he directed the executor of his estate to pay his debts. In the course of the administration of the estate, the estate was referred to a fiduciary commissioner. The commissioner published notice to the estate's creditors, establishing June 9, 2007, as the last date upon which any claims for payment of any debts could be filed against the estate. Advantage did not file any claims for debt repayment against the estate.4
The loan came to be in default,5 and Advantage Bank directed the trustees to foreclose on the subject deed of trust. Mrs. Arnold, on November 13, 2007, filed an action for injunctive relief in the circuit court asking for Advantage to be enjoined from any foreclosure activities because "[w]hen, as here, the creditor is estopped from enforcing the obligation secured by a promissory note, it is likewise precluded by operation of law from enforcing the lien of the deed of trust." Advantage filed an answer and counterclaim to Mrs. Arnold's complaint for injunctive relief, and also filed a third-party complaint against the estate and its beneficiaries requesting a distribution from the proceeds of the estate or, if the disbursements had been made to the beneficiaries, requesting a pro rata amount from the distributees. Advantage then filed its motion for summary judgment seeking affirmation of its right to foreclose.6
On August 18, 2008, the circuit court entered an order denying Advantage's motion for summary judgment. In that order, the lower court found that The lower court further found that "[Mrs. Arnold] is not liable on the Note, or the underlying debt secured by the Deed of Trust." It was further explained that "[i]t is clear that [Mrs. Arnold] did not sign the Note (or instrument) in this case and, thus, is not liable on the Note, meaning [Mrs. Arnold] is not personally obligated to pay the sums due thereunder." Relying on the language of the deed of trust, the lower court reasoned that Advantage could not foreclose on the property because
"[i]n a suit to enforce a lien securing a negotiable note, the same...
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