Duree v. Blair

• Decision Date: 13 February 2002
• Citation: 40 P.3d 540,179 Or. App. 534
• Parties: John R. DUREE, Jr., and Mark M. Kemp and Wild Desert Ranch, LLC., Plaintiffs, v. Henry BLAIR, Appellant, and Freedom Cattle Ranch, L.L.C., an Oregon Limited Liability Corporation, Respondent.
• Court: Oregon Court of Appeals

40 P.3d 540

179 Or. App. 534

John R. DUREE, Jr., and Mark M. Kemp and Wild Desert Ranch, LLC., Plaintiffs, v. Henry BLAIR, Appellant, and Freedom Cattle Ranch, L.L.C., an Oregon Limited Liability Corporation, Respondent.

95-07-10956 L; A110605

Court of Appeals of Oregon.

Argued and Submitted December 13, 2001.

Decided February 13, 2002.

Brian L. Gingerich, Bend, argued the cause for appellant. With him on the briefs was Merrill O'Sullivan, LLP.

Charles R. Markley, Portland, argued the cause for respondent. With him on the brief were Gary L. Blacklidge and Greene & Markley, P.C.

Before LANDAU, Presiding Judge, and BREWER and SCHUMAN, Judges.

BREWER, J.

Defendant Henry Blair appeals from two trial court orders, the first rejecting his attempt to redeem real property that had been sold on execution of a judgment lien and the second confirming the sale of the property to defendant Freedom Cattle Ranch, LLC (Freedom). Because the relevant facts are undisputed, we review for errors of law, Franklin v. Spencer, 309 Or. 476, 789 P.2d 643 (1990), and reverse.

Blair owned several parcels of real property in Harney County. In 1995, a money judgment was entered against him in a Harney County Circuit Court action (Judgment No. 1). Judgment No. 1 was partially satisfied by a levy of execution on some of the real property owned by Blair, reducing the amount of the judgment to $18,000. In 1996, a second money judgment was entered against Blair for $7,320.70 in a Multnomah County District Court action (Judgment No. 2). Both judgments were assigned to Wild Desert Ranch, LLC (Wild Desert), in 1997 and 1999, respectively.

In June 1999, Wild Desert recorded a lien record abstract of Judgment No. 2 in the official records of Harney County. In September, Wild Desert assigned to Freedom its rights under Judgment No. 2. In October, Freedom, as a junior lien creditor under Judgment No. 2, redeemed the property sold on the levy of execution on Judgment No. 1, for $18,281.81. That sum represented the amount paid for the judgment by Wild Desert plus interest at 10 percent per annum.

On February 14, 2000, less than 180 days after the execution sale, Blair attempted to redeem the property from Freedom. Blair tendered to the clerk of the court $18,817.20, representing the redemption price paid by Freedom plus interest at the rate of nine percent per annum. Freedom objected to the attempted redemption, arguing that Blair had no remaining redemption rights and, if he did, that he also was required to satisfy Judgment No. 2 in order to redeem the property. The trial court agreed that Blair was required to satisfy Judgment No. 2 and rejected Blair's redemption tender. The court then issued an order confirming the sheriff's sale of the property to Freedom. See ORS 23.600.¹

On appeal, Blair contends that the trial court applied the wrong statute in determining the amount necessary for him to redeem the property. Blair argues that the trial court mistakenly applied ORS 23.550,² which provides for redemption by lien creditors, rather than ORS 23.560,³ which governs redemption by judgment debtors. He argues that the amount to be tendered and the period in which a debtor must do so are set out specifically in ORS 23.560 and that the required tender does not include the satisfaction of junior liens such as Judgment No. 2. Freedom responds that (1) the governing statutes do not afford a judgment debtor the right to redeem from an execution sale property that previously had been redeemed by a lien creditor; (2) if they do, there is no unambiguous statutory provision for the amount that the redeeming debtor must tender; and (3) sound and equitable policy favors a requirement that the judgment debtor pay the amount paid by the lien creditor on redemption, plus interest and, in addition, satisfy the lien creditor's own judgment. Freedom contends that—if Blair was entitled to redeem—he was required to pay the $18,817.20 he tendered, plus the $7,320.70 balance required to satisfy Judgment No. 2. For the reasons that follow, we conclude that Blair was entitled to redeem the property under ORS 23.560 without also satisfying Judgment No. 2.

We begin with a brief discussion of the statutory framework for redemption from a sheriff's sale following a levy of execution on a judgment or mortgage lien against real property. When real property is sold on execution, in most circumstances, the purchaser is entitled to possession of the property. Franklin, 309 Or. at 482, 789 P.2d 643. The purchaser receives a certificate of sale, ORS 23.510, which the purchaser retains until all statutory redemption periods have expired. At that time, if no redemption has occurred, "the purchaser shall be entitled to a conveyance from the sheriff." ORS 23.600.

Parties in two positions have the right to redeem real property sold on execution. First, the judgment debtor or mortgagor may redeem the property at any time within 180 days of the execution sale by tendering to the sheriff the amount paid by the purchaser, plus nine percent interest from the date of sale, plus taxes and other costs incurred by the purchaser, including amounts that the purchaser may have been required to pay on prior liens. ORS 23.560(2). If a debtor or mortgagor exercises the right to redeem, "the effect of the execution sale" is terminated. ORS 23.600. Second, a lien creditor may redeem the property at any time within 60 days of the execution sale by tendering the amount paid by the purchaser, plus 10 percent interest, taxes, and other costs "that the judgment debtor might be required to pay for redemption." ORS 23.540. In addition, other lien creditors may redeem from the redemptioner within 60 days of the prior redemption by tendering to the sheriff the amounts paid by the prior redemptioner, plus 10 percent interest, and the aforementioned costs and taxes. ORS 23.550. A lien creditor that has redeemed property is termed a "redemptioner." ORS 23.530(2). However, the legislature also has used the term "redemptioner" more broadly. For example, ORS 23.560(4), which governs accounts for rents, issues, and profits accruing while the purchaser was in possession before redemption by a judgment debtor or mortgagor, also describes the latter parties as "redemptioners."

With that background, we turn to the specific arguments of the parties on appeal. Blair contends that ORS 23.560 affords judgment debtors a 180-day right of redemption and that the trial court erred in refusing to allow him to exercise that right. Freedom responds that, although ORS 23.560 permits a judgment debtor to redeem from a purchaser, no statute allows a judgment debtor to redeem from a redemptioner. Freedom argues that, under ORS 23.550, "[o]nly lien creditors can redeem from redemptioners." Freedom is mistaken.

Although ORS 23.550 governs the rights of lien creditors to redeem property from previous lien creditor redemptioners, it does not limit the redemption rights of judgment debtors or mortgagors. ORS 23.560 is the statute that governs a mortgagor's or judgment debtor's right to redeem real property, and it does so only in regard to time, price, and procedure—in no way restricting from whom the debtor can redeem. Although ORS 23.560(2) contemplates that a judgment debtor shall redeem from a purchaser, ORS 23.560(5) defines "purchaser," for purposes of ORS 23.560, to include persons "holding after the purchaser." Because a redeeming judgment lien creditor holds after the purchaser at an execution sale, the term "purchaser"—in context—encompasses such a creditor. Our conclusion is consistent with our decision in State ex rel. Veterans Affairs v. Montgomery, 41 Or.App. 127, 130-31, 597 P.2d 835 (1979), in which we held that ORS 23.560 entitled a judgment debtor's successor, on giving notice of intent to redeem, to an accounting from a lien creditor that had previously redeemed pursuant to ORS 23.530.

For at least three reasons, the reference in ORS 23.530(2) to judgment lien creditors as "redemptioners" does not compel a different conclusion. First, the fact that lien creditors are "termed" by statute as "redemptioners" does not mean that redeeming judgment debtors are not also redemptioners. As noted, redemption by judgment debtors is separately governed, both procedurally and substantively, by ORS 23.560, which affords judgment debtors an unrestricted right to redeem at any time within the statutory redemption period. See First Federal v. Gruber, 290 Or. 53, 58, 618 P.2d 1265 (1980)

.⁴ Second, and confirming the first point, ORS 23.560(4) expressly refers to a redeeming judgment debtor or mortgagor as a "redemptioner." Third, although the right to redeem is strictly statutory and must be pursued in accordance with the applicable statutes, redemption statutes are remedial and are to be liberally construed. Household Finance v. Bacon, 58 Or.App. 267, 270, 648 P.2d 421,

rev. den. 293 Or. 653, 653 P.2d 998 (1982). Freedom's view of the interaction of the relevant statutes would, through a tenuous construction, restrict a judgment debtor's otherwise unlimited right to redeem during the prescribed period. We therefore conclude that ORS 23.560 permits a judgment debtor, for 180 days after the date of sale, to redeem from any person holding after the purchaser, including a judgment lien creditor redemptioner.

We turn to the question of whether Blair was required to satisfy Judgment No. 2 in order to redeem the property. Contrary to Freedom's assertion, ORS 23.560(2) unambiguously specifies the categories of payments that a judgment debtor must make in order to redeem. The amount of any unsatisfied junior judgment lien is not enumerated in that list. The statute provides that "redemption shall be made by paying" (1) the amount of the purchase money, with interest at nine percent per annum from the date of sale; (2) any taxes the purchaser may have been required to pay; (3) any sums necessarily expended by the purchaser to...