Bank of Papillion v. Nguyen
| Decision Date | 01 August 1997 |
| Docket Number | No. S-95-1152,S-95-1152 |
| Citation | 567 N.W.2d 166,252 Neb. 926 |
| Parties | BANK OF PAPILLION, a Nebraska banking corporation, appellee, v. Ky Thi NGUYEN and Khoi Dinh Hoang, appellants. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Statutes: Appeal and Error. Statutory interpretation is a matter of law in connection with which an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determination made by the court below.
2. Limitations of Actions: Appeal and Error. The point at which a statute of limitations begins to run must be determined from the facts of each case, and the decision of the district court on the issue of the statute of limitations normally will not be set aside by an appellate court unless clearly erroneous.
3. Trusts: Deeds: Foreclosure. The Nebraska Trust Deeds Act provides two methods of foreclosing a trust deed. The trustee may exercise the power of sale conferred by the trust deed or the beneficiary may foreclose in the same manner as provided by law for the foreclosure of mortgages.
4. Secured Transactions: Trusts: Deeds: Limitations of Actions. Neb.Rev.Stat. § 76-1013 (Reissue 1990) establishes the limitations period for an action to recover a deficiency on any obligation, such as a promissory note or other contract, after sale of the real estate which secured the obligation pursuant to the Nebraska Trust Deeds Act.
5. Contracts. The law does not require the doing of a useless act.
6. Real Estate. A property owner holding property in fee simple is permitted to freely alienate any part of the property.
Donald C. Hosford, Jr., of Crossman & Hosford, Omaha, for Appellants.
James C. Cripe, Papillion, for Appellee.
Defendants-appellants, Ky Thi Nguyen and Khoi Dinh Hoang, filed an appeal from a deficiency judgment under the Nebraska Trust Deeds Act (Act), Neb.Rev.Stat. §§ 76-1001 to 76-1018 (Reissue 1990, Cum.Supp.1992 & Supp.1993), entered by the district court for Douglas County in favor of the plaintiff-appellee, Bank of Papillion (Bank). Because we determine that the deficiency claim was barred by the statute of limitations set forth in § 76-1013, we reverse the judgment and remand the cause to the district court with directions to dismiss.
On November 20, 1990, appellants (and two other individuals who are not parties to this action) executed a promissory note in the amount of $74,040.64 payable to the Bank. On April 14, 1992, appellants executed a trust deed for the purpose of securing the note, which at that time had an unpaid balance of $64,234.89. The real property subject to the trust deed was a residence owned by appellants. The final payment of principal and interest on the note secured by the trust deed was due by April 20, 1995.
The trust deed designated the Bank as both "trustee" and "beneficiary." As trustee After executing the trust deed, appellants made irregular payments on the promissory note until January 1994, when their payments ceased. As of that date, the outstanding balance on the note secured by the trust deed was $50,313.05.
the Bank was given the power of sale upon default in the payment of the indebtedness secured by the trust deed. The power of sale provision specifically authorized the beneficiary to purchase the property at a public sale conducted by the trustee. The trust deed was recorded on May 7, 1992, in the office of the register of deeds for Douglas County.
In its capacity as trustee, the Bank exercised the power of sale contained in the trust deed. The sale occurred on May 24, 1994. The Bank submitted the only bid, which was in the amount of $52,427.60. On May 27, a trustee's deed was filed with the Douglas County register of deeds whereby the Bank, in its capacity as trustee, conveyed the real property subject to the trust deed to itself. The trustee's deed contained the following recitations:
[I]n compliance with Sec. 76-1008, Statutes of Nebraska, on the 7th day of March, 1994, the Trustee filed a Notice of Default in the Office of the Register of Deeds of Douglas County, Nebraska, as noted at Book 1113, Page 229, which Notice fully complied with the requirements of said Statute; and
... in compliance with Sec. 76-1008, Statutes of Nebraska, on the 10th day of March, 1994, the Trustee mailed by certified mail, with postage prepaid, a copy of such Notice of Default with the recording date shown thereon, addressed to KHOI HOANG and KY NGUYEN, at 2122 N. 121st Street, Omaha, Nebraska 68164; and
... in compliance with Sec. 76-1007, Statutes of Nebraska, the Trustee gave written notice of the time and place of sale, particularly describing the property to be sold by publication of such notice on April 12, 1994, and continuing once each week for five (5) consecutive weeks, the last publication being at least ten (10) days, but not more than thirty (30) days, prior to the date of such sale in The Daily Record, a newspaper, which fully complied with the requirements of said Statute; and
... in compliance with Sec. 76-1008, Statutes of Nebraska, on the 13th day of April, 1994, the Trustor [sic] mailed by certified mail, with postage prepaid, a copy of the notice of the time and place of sale, addressed to KHOI HOANG and KY NGUYEN, at 2122 N. 121st Street, Omaha, Nebraska 68164[.]
The trustee's deed further recited that the sale was held on May 24, 1994, and that the Bank submitted the highest bid in the amount of $52,427.60.
The Bank considered the amount of its bid on the May 24, 1994, sale to be the balance due on the note which it "bid in," and therefore made no cash payment. The Bank then regarded itself as the "title owner" as a result of the sale. On June 1, the Bank paid off a prior lien in the amount of $10,675.66 and added that amount to the balance due from appellants. During the remainder of that month, the Bank obtained an appraisal, cleaned the property and removed debris, erected a "For Sale By Owner" sign, and showed the property to prospective purchasers. As a result of its efforts to sell the property, the Bank obtained purchase offers in the amounts of $36,000 and $40,000 and accepted the latter. The fair market value as determined by the appraiser was $41,000.
On August 10, 1994, the Bank, ostensibly acting in the capacity of trustee, executed a "Corrective Trustee's Deed" conveying the same real property to the "BANK OF PAPILLION." This document was similar to the original trustee's deed dated May 24, 1994, in that it recited the filing of a notice of default on March 7, the mailing of a copy of that notice to appellants on March 10, and the sale of the property to the Bank for $52,427.60. However, the "Corrective Trustee's Deed" differed from the earlier trustee's deed in three respects: (1) It recited that the public sale occurred on August 8, instead of May 24; (2) it recited that notice of the sale was published for 5 weeks beginning on June 28, instead of April 12; and (3) it recited that a copy of the notice was mailed to appellants on July 5 instead of April 13. This document was recorded on August 11. An officer The evidence received at trial includes two certified mail receipts reflecting delivery of mail to "Ky Nguyen" and "Khoi Hoang" at 2122 N. 121 St., Omaha, NE 68164 on March 12 and July 7, 1994. The receipts show that the mail was sent by the attorney who represents the Bank in these proceedings, but there is nothing in the record to identify what documents were actually delivered on these dates. Appellant Khoi Dinh Hoang testified that he did not receive any notice of default or notice of sale. Appellant Ky Thi Nguyen did not testify. There is nothing in the record to indicate that either appellant sought to invalidate the May 24, 1994, sale because of inadequate notice.
of the Bank testified that the "Corrective Trustee's Deed" and the August 8 sale reflected therein were necessitated by a "technical problem with a notice that occurred in or about August of 1994." However, the specific nature of that "problem" is not disclosed in the record
On or about September 7, 1994, the Bank sold the property to a third party for $40,000. On November 4, 1994, the Bank filed a petition in the district court for Douglas County, naming Ky Thi Nguyen and Khoi Dinh Hoang as defendants and sought a deficiency judgment in the amount of $25,706.57. After a demurrer to the original petition was sustained, the Bank filed an amended petition on January 24, 1995, which contained the same substantive allegations as the original petition but attached a copy of the trust deed and the promissory note.
Appellants filed an answer on January 31, 1995, which consisted of a general denial and an allegation that the action was "barred by the applicable statute of limitations." A bench trial was held on August 31.
In a ruling from the bench immediately following trial, the district court found that the operative date of sale under the Act was September 7, 1994, the date when the property was sold by the Bank to a third party. The court then determined that the Bank was entitled to a deficiency judgment in the amount of $25,196.47, calculated by taking the principal balance on the note of $50,313.05 and subtracting "late charges" of $155, to which the court held that the Bank was not entitled; subtracting the amount of $30,324.34, representing the stipulated fair market value of $41,000 less the $10,675.66 paid by the Bank to clear the first lien; and adding $1,643.39 in expenses and $3,719.37 in interest. The judgment was entered on the record on August 31, 1995.
After their motion for new trial was overruled on October 6, 1995, appellants perfected a timely appeal to the Nebraska Court of Appeals. Pursuant to our authority to regulate the caseloads of the Court of Appeals and this court, we removed this case to our docket.
Restated, appellant...
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