Asset Pres., LLC v. Oak Rd. W., LLC

• Decision Date: 20 January 2017
• Docket Number: 2150939
• Citation: 239 So.3d 578
• Parties: ASSET PRESERVATION, LLC v. OAK ROAD WEST, LLC
• Court: Alabama Court of Civil Appeals

239 So.3d 578

ASSET PRESERVATION, LLC

v.OAK ROAD WEST, LLC

2150939

Court of Civil Appeals of Alabama.

January 20, 2017

Rehearing Denied March 17, 2017

Certiorari Denied May 12, 2017

Alabama Supreme Court 1160549

Franklin H. Eaton, Jr., Northport, for appellant.

Richard E. Davis, Jr., of Davis & Fields, P.C., Daphne, for appellee.

THOMAS, Judge.

Asset Preservation, LLC ("Asset"), appeals from a summary judgment entered by the Baldwin Circuit Court in favor of Oak Road West, LLC ("Oak Road"). We affirm.

Background

In 2014, Humphrey Investments, LLC, executed a mortgage in favor of Quality First Financial, Inc., which was secured by certain property that is located in Gulf Shores ("the disputed property"). On March 26, 2015, Quality First Financial, Inc., foreclosed upon the mortgage and purchased the disputed property at a foreclosure sale. On August 19, 2015, Steven G. Humphrey, an "authorized member" of Humphrey Investments, LLC, executed two documents in favor of Oak Road, each entitled "Assignment of Statutory Right of Redemption"; Steven Humphrey executed one of those documents on his own behalf and the other on behalf of Humphrey Investments, LLC (Steven Humphrey and Humphrey Investments, LLC, are hereinafter referred to collectively as "the assignors").¹ On August 24, 2015, Quality First Financial, Inc., executed a warranty deed conveying its interest in the disputed property to Oak Road.

On March 23, 2016, Steven Humphrey executed a quitclaim deed, individually and on behalf of Humphrey Investments, LLC, conveying their interests, "including the right of redemption," in the disputed property to Asset. Two days later, Asset initiated an action in the circuit court seeking to redeem the disputed property pursuant to § 6–5–248, Ala. Code 1975, and alleging, among other things, that Oak Road had committed waste by making unnecessary permanent improvements on the disputed property and that Asset was therefore unable to ascertain the lawful charges it was required to pay to redeem the property. Thus, Asset requested, among other things, that the circuit court determine the correct amount of lawful charges that it was required to pay to redeem the property.

Oak Road responded to Asset's claims by submitting a motion for a summary judgment on "two completely independent bas[e]s." (emphasis in original.) First, Oak Road asserted that, because the assignors had already assigned their statutory redemption rights to Oak Road when it acquired the disputed property in August 2015, Asset could not have acquired a statutory right to redeem the disputed property via the subsequently executed quitclaim deed referenced in its complaint. Second, Oak Road argued that, even assuming that Asset had acquired a statutory right of redemption, Oak Road was nevertheless entitled to a judgment as a matter of law because Asset had failed to tender the redemption price or, alternatively, had failed to request a statement of lawful charges before the expiration of the redemption period.

Asset submitted a response to Oak Road's motion in which it asserted, among other things, that Oak Road could not rely upon the assignors' assignments of their statutory redemption rights because Oak Road had not recorded the assignments, as Asset contended was required under Alabama law. Asset also admitted that it had not tendered the redemption price or requested a statement of lawful charges but argued that it was not "statutorily required" to do so because there was a "bona fide disagreement as to what are permanent improvements and the value therein."

Oak Road thereafter submitted a "supplemental brief in support of its motion for [a] summary judgment" in which it argued that Asset could not avail itself of the protection afforded by Alabama's recording statutes because, it asserted, those statutes protected only bona fide purchasers, Asset was merely a quitclaim grantee, and quitclaim grantees are not bona fide purchasers as a matter of law. Asset submitted a response to Oak Road's supplemental brief in which it argued that it was permitted to redeem the disputed property notwithstanding the assignors' prior assignments of their statutory rights of redemption to Oak Road because, Asset contended, "[t]he statutory right of redemption, like a license[,] can be assigned as many times as the assignor desires, unless otherwise limited, until one of the assignees exercises the right, as required by statute."

On May 19, 2016, the circuit court entered an order granting Oak Road's summary-judgment motion without specifying the reason for its decision. Asset filed a postjudgment motion on June 18, 2016, and the circuit court entered an order on August 9, 2016, denying Asset's postjudgment motion. Asset filed a timely notice of appeal to the Alabama Supreme Court. The appeal was transferred to this court by the supreme court, pursuant to § 12–2–7(6), Ala. Code 1975.

Standard of Review

"The pertinent facts are not in dispute, and, therefore, this action must be resolved by applying the applicable law to the undisputed facts. ‘Where only a question of law is presented, a case is appropriate for a summary judgment.’ Finch v. Auburn Nat'l Bank of Auburn, 646 So.2d 64, 65 (Ala. Civ. App. 1994) ; see also Bice v. Indurall Chem. Coating Sys., Inc., 544 So.2d 948, 952 (Ala. 1989) (‘The uncontroverted facts offered below in support of and in opposition to the motion for summary judgment present a question of law appropriate for resolution by summary judgment.’). " ‘[O]n appeal, the ruling on a question of law carries no presumption of correctness, and this Court's review is de novo.’ " Rogers Found. Repair, Inc. v. Powell, 748 So.2d 869, 871 (Ala. 1999) (quoting Ex parte Graham, 702 So.2d 1215, 1221 (Ala. 1997) ).

Hardin v. Metlife Auto & Home Ins. Co., 982 So.2d 522, 524 (Ala. Civ. App. 2007). Furthermore, when the summary-judgment movant has presented the trial court with multiple alternative bases for a favorable judgment and "the trial court [has] not specif[ied] the ground upon which it based its summary judgment in favor of [the movant], the law in Alabama is clear that this Court is bound to sustain a trial court's judgment if there is a valid basis for it." Hughes v. Allenstein, 514 So.2d 858, 860 (Ala. 1987).

Analysis

On appeal, Asset argues that the circuit court's judgment should be reversed because, it contends, it acquired the assignors' statutory rights of redemption via the March 23, 2016, quitclaim deed and properly exercised that right by filing its complaint in the circuit court. Oak Road argues that the circuit court's judgment should be affirmed, either because it had already acquired the assignors' statutory rights of redemption before they executed the quitclaim deed to Asset or because Asset did not properly assert its statutory right of redemption by failing to timely request a statement of lawful charges. Notably, Asset does not argue on appeal that the assignors' assignments of their statutory rights of redemption to Oak Road were somehow invalid; rather, it insists that the assignors' conveyance of their statutory rights of redemption via the quitclaim deed to Asset was also valid. Thus, the dispositive issue regarding Oak Road's first argument is whether the assignors' execution of the quitclaim deed effectively assigned to Asset their statutory rights to redeem the disputed property.

"When real property in Alabama is mortgaged, the legal title passes to the mortgagee and the mortgagor retains the equity of redemption, which he may convey. First National Bank of Mobile[] v. Gilbert Imported Hardwoods, Inc., 398 So.2d 258 (Ala. 1981).... Unlike the equity of redemption, which exists prior to foreclosure and is deemed an interest in the property, the statutory right of redemption arises after foreclosure and is a mere personal privilege conferred by statute; it is not property or a property right."

Dominex, Inc. v. Key, 456 So.2d 1047, 1052–53 (Ala. 1984). Section 6–5–248 provides, in relevant part:

"(a) Where real estate, or any interest therein, is sold the same may be redeemed by:

"....

"(5) Any transferee of the interests of the debtor or mortgagor, either before or after the sale. A transfer of any kind made by the debtor or mortgagor will accomplish a transfer of the interests of that party."

Citing Dominex, supra ; Garvich v. Associates Financial Services Co. of Alabama, Inc., 435 So.2d 30 (Ala. 1983) ; First Colbert National Bank v. Security Federal Savings and Loan Association, 411 So.2d 786 (Ala. 1982) ; Flirt v. Kirkpatrick, 278 Ala. 61, 175 So.2d 755 (1965) ; Stevenson v. King, 243 Ala. 551, 10 So.2d 825 (1942) ; Upchurch v. West, 234 Ala. 604, 176 So. 186 (Ala. 1937) (overruled on another ground by Dominex, supra ) ; Chess v. Burt, 87 So.3d 1201 (Ala. Civ. App. 2011) ; and Deutsche Bank National Trust Co. v. Citibank, N.A., 806 F.Supp.2d 1212 (M.D. Ala. 2011), Asset argues that

"[t]he statutory right of redemption is a mere personal privilege, clearly assignable, that can be exercised by ‘any vendee or assignee of the right of redemption under this Code.’ Dominex, Inc. v. Key, 456 So.2d 1047[, 1053] (Ala. 1984) [ (quoting former § 6–5–230, Ala. Code 1975 ) ] .... The statutory language and case law does not restrict or otherwise limit the number of times the personal privilege can be assigned but does limit the statutory right to only those identified parties, the hierarchy of redemption rights[,] and exactly how the right must be exercised by the prescribed mode, manner, and time provisions."

(Emphasis in original.)

Oak Road responds by noting that none of the cases upon which Asset relies stand for the proposition that a particular mortgagor can effectively convey its statutory right of redemption to multiple sequential assignees. In support of its position, Oak Road relies upon Warren v. Gallagher, 252 Ala. 621, 42 So.2d 261 (1949), in which our supreme court considered whether a trial court had properly allowed a third party to intervene...