Estate of Hansen, Matter of

Citation458 N.W.2d 264
Decision Date03 July 1990
Docket NumberNos. 890232,890224 and 890248,s. 890232
PartiesIn the Matter of the ESTATE of Albert F. HANSEN, Deceased. STATE BANK OF TOWNER, Plaintiff and Appellee. v. Albert F. HANSEN, deceased, and Dianna M. Hansen, as the Personal Representative of the Estate of Albert F. Hansen, deceased, Defendants and Appellants. James H. WILLIAMS and Connie D. Williams, Plaintiffs and Appellees, v. Dianna M. HANSEN a/k/a Dianna M. Hansen, individually and as Personal Representative of the Estate of Albert F. Hansen, deceased, Defendant and Appellant, Steve Rolla; State Bank of Towner; G.W. Peterson d/b/a Northwest Collection Agency; the heirs, devisees and assigns of any Defendants deceased; and the assigns or successors in interest of any Defendants; and all other persons unknown claiming any estate or interest in or lien or encumbrance upon the property described in the Complaint, Defendants. The STATE of North Dakota doing business as the Bank of North Dakota acting by and through the Board of University and School Lands, Plaintiff and Appellee, v. Dianna M. HANSEN, Individually and as Personal Representative of the Estate of Albert F. Hansen, deceased, Defendant and Appellant, State Bank of Towner, Defendant and Appellee, and G.W. Peterson, Defendant. Civ.
CourtUnited States State Supreme Court of North Dakota

Richard P. Olson (argued), Olson, Sturdevant & Burns, Minot, for plaintiff, defendant and appellee State Bank of Towner and plaintiffs and appellees James H. Williams and Connie D. Williams.

Donald A. Anderson, Sp. Asst. Atty. Gen., Minot, for plaintiff and appellee Bank of North Dakota. Submitted on brief.

Thomas M. Disselhorst (argued), Disselhorst Law Office, Bismarck, for defendants and appellants.

MESCHKE, Justice.

These three cases stem from mortgage and tax foreclosures against the same real property once owned by Albert F. Hansen, now deceased, and Dianna M. Hansen. In State Bank of Towner v. Hansen, Hansen appeals from the trial court's denial of her NDRCivP 60(b) motion for relief from a judgment foreclosing the junior mortgage held by the State Bank of Towner and from the resulting foreclosure sale. In Williams v. Hansen, Hansen appeals from a summary judgment quieting title to the property in James H. Williams and Connie D. Williams based on a tax deed. In State v. Hansen, Hansen appeals from orders designating the sequence of sale and confirming the sale to foreclose the senior mortgage held by the Bank of North Dakota. Because these cases are interrelated, we resolve them in one opinion. We affirm each decision.

Facts

In February 1975, Albert Hansen borrowed $53,000 from the Bank of North Dakota [BND] and, to secure the debt, mortgaged 1,040 acres of property in McKenzie County. The mortgage covered both the surface and minerals. In July 1981, Albert and Dianna Hansen gave the State Bank of Towner [SBT] a $200,000 promissory note in settlement of pending legal actions. See State Bank of Towner v. Hansen, 302 N.W.2d 760 (N.D.1981). To secure this debt, the Hansens gave SBT a second mortgage on the surface of the property earlier mortgaged to BND. The SBT mortgage expressly provided that the minerals "shall not be subject to this mortgage." The Hansens defaulted on the debt to SBT in November 1984.

In December 1984, James H. Williams, the president of SBT, and his wife, Connie D. Williams [together referred to as Williams], purchased the property from the McKenzie County Auditor for 1983 delinquent taxes and received tax sale certificates. In February 1985, SBT sued the Hansens to foreclose its mortgage. The Hansens filed for bankruptcy and the foreclosure action was stayed. See In re Hansen, 77 B.R. 722 (D.N.D.1987). Meanwhile, Williams paid delinquent taxes on the property for 1984, 1985, and 1986, and received subsequent tax sale certificates.

Albert Hansen died in 1987, the bankruptcy was dismissed, and Albert's estate was substituted as a defendant in SBT's foreclosure. A trial resulted in determination of an indebtedness of $223,365.55 and a judgment of foreclosure on January 12, 1988. The foreclosure sale took place on February 16, 1988. Dianna Hansen appeared at the sale and requested that the sheriff sell the property in separate parcels. Instead, the property was sold in one parcel to SBT for $180,000. A sheriff's certificate was issued to SBT and was recorded on February 17, 1988. The trial court signed the order confirming the foreclosure sale on February 29, 1988, and Hansen was served with the order on March 3, 1988.

In May 1988, the McKenzie County Auditor issued nine notices of expiration of time for redemption from the tax sale and served them on Hansen. The notices informed Hansen that the time for redemption would expire 90 days after service and stated the amount needed to redeem. Hansen did not redeem. On September 12, 1988, the County Auditor issued a corrected auditor's tax deed conveying the property to Williams.

BND sued to foreclose its mortgage on the Hansen property in August 1988. In January 1989, Williams sued to quiet their tax title as the owners in fee based on their auditor's tax deed. In February 1989, shortly before the time to redeem ended in SBT's foreclosure, Hansen moved under NDRCivP 60(b) for relief from that foreclosure judgment and from that February 1988 foreclosure sale. But Hansen did not redeem from the SBT foreclosure and a sheriff's deed was issued to SBT on February 17, 1989.

On March 7, 1989, BND obtained a judgment of foreclosure against Hansen for $73,252.70. Hansen then moved in the BND foreclosure for an order directing that the surface be sold first in seven separate parcels and that the minerals be sold afterward in the same sequence. The trial court ruled that the minerals should be sold separately from the surface, but that in order to properly protect SBT as the junior lienholder as well as the homestead rights of Hansen if she wished to redeem, the minerals would be sold first in the sequence designated by Hansen and the surface would be sold second in the same sequence. The BND foreclosure sale took place on April 28, 1989, and the minerals were sold for $74,680 to James Williams, Walter F. Gehrts, Kenneth Henry, and Raymond Sharkey, original "owner/directors" of SBT.

In Williams's quiet title action, the trial court granted summary judgment on May 4, 1989, quieting title in Williams "except for a senior mortgage to [BND]." In the BND foreclosure action, a sheriff's certificate for the minerals was issued to Williams, Gehrts, Henry, and Sharkey, and, on May 15, 1989, an order confirmed that foreclosure sale to them. In the SBT foreclosure action, on May 19, 1989, the trial court denied Hansen's Rule 60(b) motion for relief from the foreclosure judgment and sale. Hansen appealed the three adverse decisions.

State Bank of Towner v. Hansen

Hansen asserts that, in the SBT foreclosure action, the trial court erred in denying her NDRCivP 60(b) motion for relief from the foreclosure judgment and sale because the sheriff refused her request to sell the land in separate parcels. Under NDCC 28-23-07 and 1987 N.D.Sess.Laws Ch. 194, 1 Hansen argued that the sheriff was bound to honor her request.

With her motion, Hansen presented affidavits showing that she and her representatives attended the foreclosure sale and in writing requested the sheriff to sell the property in seven separate parcels in a specified sequence "pursuant to authority given in 28-23-07 N.D.C.C." The sheriff denied the request and sold the property as directed by the foreclosure judgment. The judgment said, "since the premises constitute and were mortgaged as one entire tract, that the same be sold as one parcel and without division." The trial court denied Hansen's Rule 60(b) motion, concluding, among other things, that her motion was untimely, that her allegations supplied no reason for relief from a final and unappealed judgment, and that to grant Hansen's request for relief "would substantially prejudice [SBT] and would be inequitable under these circumstances."

Hansen's motion relied on four of the six reasons for which relief is authorized by NDRCivP 60(b), (i) [mistake, inadvertence, surprise, or excusable neglect]; (iii) [fraud, misrepresentation, or other misconduct of an adverse party]; (iv) [the judgment is void]; and (vi) [any other reason justifying relief from the operation of the judgment]. Unless a judgment is void for lack of jurisdiction under Rule 60(b)(iv), a trial court must exercise sound discretion in deciding whether the movant's reasons are sufficient to set aside a final judgment or order. First Nat'l Bank of Crosby v. Bjorgen, 389 N.W.2d 789, 794 (N.D.1986). The movant has the burden of establishing sufficient grounds for disturbing the finality of the judgment. Avco Financial Services v. Schroeder, 318 N.W.2d 910, 912 (N.D.1982). For the most part, a trial court's decision on a Rule 60(b) motion will not be disturbed on appeal absent an abuse of discretion.

We reject Hansen's argument that the foreclosure judgment and sale are void because the sheriff refused to sell the property in separate parcels and in the sequence that she requested, allegedly in violation of NDCC 28-23-07 and 1987 N.D.Sess.Laws Ch. 194. A judgment is void if the court lacked subject matter jurisdiction over the action or if the court lacked personal jurisdiction over the parties. But a contention that the trial court misapplied a statute generally implicates neither subject matter nor personal jurisdiction. Northwestern Nat'l Life Ins. Co. v. Delzer, 425 N.W.2d 365, 368 (N.D.1988); Production Credit Ass'n v. Dobrovolny, 415 N.W.2d 489, 491 (N.D.1987); First Nat'l Bank of Crosby v. Bjorgen, 389 N.W.2d at 794. The "subject matter jurisdiction of a district court is not determined by whether or not it correctly applied a statute to a particular cause of action because, to hold otherwise, would vest subject matter jurisdiction in a district court subject to divestment...

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