Bac Home Loans Servicing, LP v. Trancynger

• Decision Date: 16 April 2014
• Docket Number: No. 26736.,26736.
• Citation: 847 N.W.2d 137,2014 S.D. 22
• Court: South Dakota Supreme Court
• Parties: BAC HOME LOANS SERVICING, LP f/k/a Countrywide Home Loans Servicing, LP, Plaintiff and Appellee, v. Thomas C. TRANCYNGER; Susan D. Trancynger, Defendants and Appellants, and Mortgage Electronic Registration Systems, Inc.; and any Person in Possession, Defendants.

847 N.W.2d 137

2014 S.D. 22

BAC HOME LOANS SERVICING, LP f/k/a Countrywide Home Loans Servicing, LP, Plaintiff and Appellee,

v. Thomas C. TRANCYNGER; Susan D. Trancynger, Defendants and Appellants,andMortgage Electronic Registration Systems, Inc.; and any Person in Possession, Defendants.

No. 26736.

Supreme Court of South Dakota.

Considered on Briefs on Feb. 18, 2014.

Decided April 16, 2014.

David C. Piper of Mackoff Kellogg Law Firm, Dickinson, North Dakota, attorneys for plaintiff and appellee.

David L. Claggett, Spearfish, South Dakota, attorney for defendants and appellants.

WILBUR, Justice.

[¶ 1.] The circuit court granted summary judgment to BAC Home Loans Servicing, LP (BAC) entitling BAC to foreclose on its residential real estate mortgage. The circuit court also awarded attorney fees to BAC and reformed the mortgage by changing the legal description. Thomas Trancynger and Susan Trancynger (Trancyngers), husband and wife, appeal, arguing that a genuine issue of material fact precludes summary judgment. We affirm.

Background

[¶ 2.] Trancyngers entered into a mortgage with Countrywide Home Loans (Countrywide) in February 2003.¹ The mortgage secured a promissory note in the original amount of $165,750 and encumbered the property commonly known as Lot 26. In July 2003, Lot 26 was subdivided into Lot 26A and Lot 26B. The plat was recorded in December 2003. In May 2005, a modification of mortgage and partial release of Lot 26B executed by Countrywide was filed with the Lawrence County Register of Deeds.

[¶ 3.] Trancyngers later refinanced the above-described loan by executing a promissory note in May 2007 in favor of Countrywide in the original amount of $236,900. On the same day, the Trancyngers executed a mortgage on the above-described property in favor of BAC.² The mortgage encumbered all of Lot 26 instead of Lot 26A.

[¶ 4.] Trancyngers defaulted under the terms of the subject note and mortgage in 2009, and BAC initiated its lawsuit to foreclose the mortgage in June 2009. After learning the mortgage encumbered all of Lot 26, BAC amended its complaint in September 2011 in order to reform the mortgage to encumber only Lot 26A. Trancyngers failed to file an answer to BAC's original complaint. Trancyngers filed an answer to the amended complaint in March 2013.

[¶ 5.] A summary judgment hearing was held on April 1, 2013. At this hearing the circuit court granted BAC's motion to reform the mortgage to encumber only Lot 26A, but continued the hearing until May 3, 2013, to allow the parties to further brief the issue of whether summary judgment of foreclosure was appropriate. At the May 3 hearing the circuit court concluded there were no genuine issues of material fact and granted BAC's motion for summary judgment.

[¶ 6.] Trancyngers filed a notice of appeal on June 28, 2013. On June 25, 2013, Trancyngers received the notice of real estate sale, which was scheduled to take place on August 16, 2013. On August 2, Trancyngers moved to stay the real estate sale by way of supersedeas bond. A telephonic hearing was held August 12. The circuit court set the bond at $9,000 and required Trancyngers to post the bond with the court by August 15 in order to stay the August 16 sheriff's sale.³ Trancyngers did not provide the required bond and the property was sold to BAC at the August 16 sheriff's sale. BAC filed a satisfaction of judgment in October 2013.

[¶ 7.] The following issues are raised on appeal:

1. Whether Trancyngers' failure to post a supersedeas bond to stay the foreclosure sale renders this appeal moot.

2. Whether the circuit court erred in granting BAC summary judgment to foreclose the mortgage.

3. Whether the circuit court erred in awarding BAC attorney fees and costs.

4. Whether the circuit court erred in reforming the mortgage.

Standard of Review

[¶ 8.] Our review of summary judgment is well-settled:

We must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.

De Smet Farm Mut. Ins. Co. of S.D. v. Busskohl, 2013 S.D. 52, ¶ 11, 834 N.W.2d 826, 831 (citation omitted). “[A] trial court's award of attorney fees is reviewed under an abuse of discretion standard.” Eagle Ridge Estates Homeowners Ass'n, Inc. v. Anderson, 2013 S.D. 21, ¶ 13, 827 N.W.2d 859, 865 (citation omitted). “An abuse of discretion is a discretion exercised to an end or purpose not justified by, and clearly against, reason and evidence.” Roth v. Haag, 2013 S.D. 48, ¶ 11, 834 N.W.2d 337, 340 (citation omitted).

Decision

[¶ 9.] 1. Whether Trancyngers' failure to post a supersedeas bond to stay the foreclosure sale renders this appeal moot.

[¶ 10.] BAC argues that Trancyngers' failure to post a supersedeas bond resulting in the failure to stay the real estate foreclosure sale renders this appeal moot because this Court is without power to rescind a foreclosure sale. This Court only decides “actual controversies affecting people's rights.” Sullivan v. Sullivan, 2009 S.D. 27, ¶ 11, 764 N.W.2d 895, 899 (citation omitted). “Accordingly, an appeal will be dismissed as moot where, before the appellate decision, there has been a change of circumstances or the occurrence of an event by which the actual controversy ceases and it becomes impossible for the appellate court to grant effectual relief.” Id. (citation omitted).

[¶ 11.] The actual controversy regarding this appeal is whether summary judgmentwas appropriate. In essence, BAC is claiming that the foreclosure sale eradicated that controversy so that even if we agree with Trancyngers on the summary judgment issues, our decision cannot rescind the foreclosure sale. We disagree. Courts of this state have the power to reverse judgments and set aside foreclosure sales. SeeSDCL 15–30–2; DJBAS Living Trust v. Meinhardt, 2008 S.D. 84, 755 N.W.2d 501 (affirming a circuit court's ruling to set aside a foreclosure sale); Rist v. Hartvigsen, 70 S.D. 571, 19 N.W.2d 830 (1945) (this Court decided, on the merits, an action brought to set aside a foreclosure sale); Lipsey v. Crosser, 63 S.D. 185, 257 N.W. 125, 129 (1934) (reversing the circuit court and holding that “appellants are entitled upon this record to have the deed canceled, the sale set aside, and an accounting of respondent's possession”).

[¶ 12.] Moreover, BAC was the purchaser at the foreclosure sale and is now a party before this Court. We further note that the foreclosure sale is subject to statutory rights of redemption. See SDCL chapter 21–49. “Based on equitable principles, redemption has long provided a means for reversing sales of real property. Where, as here, the creditor-purchaser is before the [C]ourt, the [C]ourt could exercise similar equitable principles and reverse the sale.” In re Sun Valley Ranches, Inc., 823 F.2d 1373, 1375 (9th Cir.1987). Under these specific circumstances, “it would not be impossible for the Court to fashion some sort of relief.” Id. (citation omitted); see also Sullivan, 2009 S.D. 27, ¶ 11, 764 N.W.2d at 899 (citation omitted). Therefore, Trancyngers' appeal is not moot.

[¶ 13.] 2. Whether the circuit court erred in granting BAC summary judgment to foreclose the mortgage.

[¶ 14.] Trancyngers assert that BAC is not entitled to foreclosure on summary judgment because BAC was precluded from initiating foreclosure proceedings and utilized improper tactics throughout the proceedings. Trancyngers claim “that good faith has not existed on the part of BAC” and “that the mortgage handling and foreclosure practices of which Trancyngers complain mirror documented national mortgage abuse practices.” In reference to the national mortgage abuse practices, Trancyngers point to a consent judgment obtained in the United States District Court, District of Columbia, United States, et al. v. Bank of America, et al., 922 F.Supp.2d 1 (D.D.C.2013), which was the “result of settlements between government entities and major mortgagees ... for alleged misconduct in home-mortgage practices.” Ghaffari v. Wells Fargo Bank. N.A., ––– F.Supp.2d ––––, ––––, 2013 WL 6070364, at *3 (D.D.C. Nov. 19, 2013).

[¶ 15.] General allegations which do not set forth specific facts will not prevent summary judgment. Citibank S.D., N.A. v. Schmidt, 2008 S.D. 1, ¶ 8, 744 N.W.2d 829, 832 (citing Bordeaux v. Shannon Cnty. Sch., 2005 S.D. 117, ¶ 14, 707 N.W.2d 123, 127). Trancyngers liken their unsuccessful loan modification to the unfair mortgage practices outlined in national news publications. Trancyngers further link the unfair mortgage practices to the consent judgment settlement and claim that because a settlement was reached, BAC is not entitled to a foreclosure and must refinance the mortgage. Trancyngers' reliance on national mortgage abuse practices without setting forth any particular mistreatment regarding their loan fails to raise any genuine issue of material fact because the assertion relies on general allegations at an aggregate level.

[¶ 16.] Trancyngers attempt to set forth specific facts by arguing that BAC's loan modification process was improper because BAC returned two payments—one for failure to submit a certified check and the other for lack of the necessary funds to bring the default current. Aside from their vague reliance on the consent judgment, Trancyngers fail to cite to any authority that requires BAC to accept partial payment and renegotiate the loan. Even if the Trancyngers could articulate what part of the consent...