First United Bank and Trust Co. v. Wiley

• Decision Date: 19 December 2007
• Docket Number: No. 104,287. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.,104,287. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.
• Citation: 2008 OK CIV APP 39,183 P.3d 1022
• Parties: FIRST UNITED BANK AND TRUST CO., Pauls Valley, Oklahoma, Plaintiff/Appellant, v. W. Don WILEY and Aletta June Wiley, Husband and Wife, Defendants/Appellees, and James A. Wiley and Barbara Leyendecker, Defendants.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

183 P.3d 1022

2008 OK CIV APP 39

FIRST UNITED BANK AND TRUST CO., Pauls Valley, Oklahoma, Plaintiff/Appellant, v. W. Don WILEY and Aletta June Wiley, Husband and Wife, Defendants/Appellees, and James A. Wiley and Barbara Leyendecker, Defendants.

No. 104,287. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.

Court of Civil Appeals of Oklahoma, Division No. 2.

December 19, 2007.

Appeal from the District Court of Garvin County, Oklahoma; Honorable John A. Blake, Trial Judge

AFFIRMED

Heather Burrage, Burrage Law Firm, Durant, Oklahoma, for Plaintiff/Appellant.

C. Craig Cole, John E. Gatliff II, C. Craig Cole & Associates, Oklahoma City, OK, for Defendants/Appellees.

KEITH RAPP, Chief Judge:

¶ 1 The trial court plaintiff, First United Bank and Trust Co., Pauls Valley, Oklahoma (Bank), appeals an Order vacating a deficiency judgment held by Bank against the defendants, W. Don Wiley and Aletta June Wiley, husband and wife, and James A. Wiley (collectively Wiley).¹

BACKGROUND

¶ 2 The parties do not dispute the essential facts. Moreover, the facts are taken from the judgment roll and the trial court limited its inquiry to the judgment roll.

¶ 3 This case began in 1998 as an action to collect on a secured obligation and to foreclose the real property mortgage securing the obligation. Wiley lost on the merits and lost on appeal, resulting in a judgment in excess of $370,000.00, inclusive of interest, attorney fees and costs.

¶ 4 The real property was sold, in two tracts, to the plaintiff Bank at sheriff's sale on August 29, 2002, for a total of $207,000.00. On October 3, 2002, Bank filed a motion to confirm the sale, but this motion did not incorporate a motion for any deficiency nor was a separate motion for deficiency then filed as provided in 12 O.S.2001, § 686.²

¶ 5 The trial court confirmed the sale by order filed November 1, 2002, and no deficiency amount was fixed in that order.³

¶ 6 Bank filed a Motion For Leave to Enter Deficiency Judgment on December 26 2002, or 119 days after the sale. The statute, 12 O.S.2001, § 686, specifies that the deficiency motion be filed simultaneously with the motion to confirm or not later than ninety days after the sale. Wiley, through counsel, objected to the deficiency with a response filed January 15, 2004, but not on the ground that the motion for deficiency failed to meet the deadline under Section 686.⁴ After a hearing, which was not attended by Wiley or counsel for Wiley, the trial court entered a deficiency judgment of $177,930.57.⁵ The journal entry was filed March 4, 2003. Wiley did not appeal.

¶ 7 In September of 2006, Bank sought to execute on Wiley's property to recover on the deficiency judgment. Wiley, with new counsel, sought and obtained a temporary injunction against the execution. Wiley raised the failure to comply with the time deadline in Section 686 as a ground for injunctive relief and claimed that the deficiency judgment was void.

¶ 8 Thereafter, on December 5, 2006, Wiley moved to vacate the deficiency judgment. Wiley again asserted that the failure to meet the Section 686 deadline rendered the deficiency judgment void for lack of jurisdiction.

¶ 9 In response, Bank argued that Wiley cannot now complain because they participated in the deficiency proceedings and did not appeal. Second, Bank argued that Wiley waived its argument by appearing in the deficiency process without asserting the jurisdiction argument or by waiting too long to raise the issue. Wiley's reply distinguished void and voidable judgments and reiterated that the deficiency judgment was void for lack of jurisdiction due to failure to comply with Section 686.

¶ 10 The trial court agreed with Wiley and vacated the deficiency judgment for lack of jurisdiction. Supporting findings of fact and conclusions of law accompanied the trial court's judgment.⁶ Bank appeals.

STANDARD OF REVIEW

¶ 11 The test for measuring the legal correctness of the trial court's ruling on a motion to vacate or set aside judgment is whether sound discretion was exercised upon sufficient cause shown to vacate, modify, open or correct its earlier decision, or to refuse the relief sought. VanNort v. Davis, 1990 OK CIV APP 95, ¶ 9, 800 P.2d 1082, 1085. An order vacating said judgment will not be disturbed on appeal unless it clearly appears that the trial court has abused that discretion, because an application to vacate a judgment, under 12 O.S.2001 § 1031, is addressed to the sound legal discretion of the trial court. Burroughs v. Bob Martin Corp., 1975 OK 80, ¶ 23, 536 P.2d 339, 342-43.

¶ 12 Here, the trial court's ruling that the deficiency judgment was void provides the premise for vacating that judgment. Thus, in order to test whether the trial court abused its discretion, this Court must determine whether the trial court made a correct legal ruling. When the facts are not disputed, an appeal presents only a question of law. Baptist Bldg. Corp. v. Barnes, 1994 OK CIV APP 71, ¶ 5, 874 P.2d 68, 69. The appellate court has the plenary, independent, and nondeferential authority to reexamine a trial court's legal rulings. Neil Acquisition, L.L.C. v. Wingrod Inv. Corp., 1996 OK 125, 932 P.2d 1100 n. 1. Matters involving legislative intent present questions of law which are examined independently and without deference to the trial court's ruling. Keizor v. Sand Springs Ry. Co., 1993 OK CIV APP 98, ¶ 5, 861 P.2d 326, 328.

¶ 13 To ascertain intent, the Court looks to the language of the pertinent statute(s) and presumes the legislative body intends what it expresses. Where a statute's language is plain and unambiguous, and the meaning clear and unmistakable, no justification exists for the use of interpretative devices to fabricate a different meaning. Terms in a statute are given their plain and ordinary meaning, except when a contrary intention plainly appears, and the words of a statute should generally be assumed to be used by the law-making body as having the same meaning as that attributed in ordinary and usual parlance. Neer v. Oklahoma Tax Comm'n, 1999 OK 41, ¶¶ 15-16, 982 P.2d 1071, 1078.

ANALYSIS AND REVIEW

¶ 14 The decisive question is whether Section 686 removes the court's power to act whenever a foreclosing party fails to request a deficiency judgment within the prescribed time. Such power is one of the three components of a valid court judgment — jurisdiction of the person, jurisdiction of the subject matter, and the power of the court to decide the particular matter and render the particular judgment at issue.⁷ In re A.N.O., a Minor Child, 2004 OK 33, ¶ 9, 91 P.3d 646, 649. If a court lacks the power to act, but acts notwithstanding the lack of power, its judgment is void and the parties are incapable of conferring power to act.⁸ Ricks Exploration Co. v. Oklahoma Water Resources Bd., 1984 OK 73, ¶ 6, 695 P.2d 498, 502; Model Clothing Co. v. First Nat'l Bank of Cushing, 1916 OK 852, 160 P. 450 (Syl.1, 2). When a district court judgment or order is void on the face of the judgment roll (and no extrinsic proof is needed to show a fatal jurisdictional defect), no lapse of time can bar an attack, direct or collateral. Hough v. Hough, 1989 OK 65, ¶ 4, 772 P.2d 920, 921.

¶ 15 It is generally held that the right to a deficiency in a foreclosure did not exist in equity and a mortgagor had to proceed in an action at law on the debt. The right to obtain a deficiency in a foreclosure action is a creature of statute. Conerty v. Richtsteig, 379 Ill. 360, 41 N.E.2d 476, 479-80 (1942); Harrow v. Metropolitan Life Ins. Co., 285 Mich. 349, 280 N.W. 785, 787 (1938); Otselic Valley Nat'l Bank of South Otselic v. Dapson, 170 Misc. 514, 10 N.Y.S.2d 588, 591 (N.Y.Sup.Ct.1939). However, in the 1930s the history of apparent abuse by mortgagors of the right to a deficiency led to the enactment of sundry forms of anti-deficiency statutes.⁹ The problem was summarized in Home Owner's Loan Corp. v. Roach, 163 Misc. 760, 297 N.Y.S. 716, 717 (N.Y.Sup.Ct. 1936):

At the special legislative session in February, 1932, the lawmakers recognized that a practice in mortgage foreclosure suits had grown up that was shockingly unfair, if not legalized larceny. The lender of a mortgage loan would foreclose his lien. In almost every instance there would be no bidder at the sale except plaintiff who would bid a nominal figure and become the owner of the property. Later the referee would file his report of sale. It would show that the amount realized at the sale was less than the principal and unpaid charges.

Based upon the fiction that the bid represented the real market value of the property and upon the further fiction that the difference between the principal plus charges and the amount bid was a total loss to plaintiff, the court permitted — in fact it had to permit — the latter to enter a judgment against the mortgagor, for that difference which became known as a "deficiency judgment." These judgments were always substantial and often greater than the loan itself.

At the conclusion of the foreclosure, plaintiff would not only have title to defendant's property but, in addition a judgment against him often in excess of the amount of the money originally advanced. This was intolerable and unconscionable.

¶ 16 Legislation enacted during the Depression still restricts the availability of deficiency judgments in several states. In some jurisdictions, deficiency judgments are proscribed in certain situations, while in other states, they are limited to the amount by which the debt exceeds the fair market value of the property.

¶ 17 As noted above, the Oklahoma antideficiency statute was enacted in 1941 as an amendment to Section 686. One court has conjectured that this amendment was "lifted out of the New York statute and neatly inserted into Section 686."¹⁰ Ingerton v. First Nat'l Bank & Trust Co. of Tulsa, 291 F.2d 662, 665 (10th Cir.1961). In fact, the 1941 amendment to Section...