Kennedy v. Lash, 081517 MDSCA, 511
| Judge | Kehoe, Berger, Sharer, J. Frederick (Senior Judge, Specially Assigned), JJ. |
| Parties | GAIL R. KENNEDY v. RICHARD A. LASH, ET. AL. |
| Docket Number | 511 |
| Court | Court of Special Appeals of Maryland |
| Date | 15 August 2017 |
Circuit Court for Baltimore County Case No. 03-C-14-006628
Kehoe, Berger, Sharer, J. Frederick (Senior Judge, Specially Assigned), JJ.
OPINION [*]
Sharer, J.
It is not disputed that appellant, Gail R. Kennedy (Kennedy), defaulted on a promissory note securing the financing of her home, or that appellees, Richard A. Lash, et al. (Substitute Trustees), initiated foreclosure proceedings in the Circuit Court for Baltimore County. Kennedy's several attempts to dismiss or stay the proceedings, based primarily on her assertions of lack of notice, were denied. A foreclosure sale took place on January 12, 2016, which was ratified, over Kennedy's objection.
In her appeal, Kennedy presents two questions for our review, which we have recast as follows:1
1. Did the circuit court err when it ratified the foreclosure sale without first requiring the Substitute Trustees to undertake further efforts to give notice of the foreclosure sale when notice, sent by certified mail, had been returned undelivered?
2. Did the circuit court err by failing to hold a hearing on Kennedy's objection to the ratification of the foreclosure sale?
We shall affirm the judgment of the circuit court.
BACKGROUND
In December 2005, Kennedy executed a promissory note for $437, 500 with First Horizon Home Loan Corporation to refinance the mortgage on residential property located at 1602 Ridge Road in Baltimore County. The Note was secured by a properly recorded Deed of Trust. In April 2011, Kennedy defaulted on the Note and has since failed to make payments as and when required pursuant to the Note. In June 2014, First Horizon's substitute trustees, Richard A. Lash, et al., 2 initiated a foreclosure action on behalf of the current holder of the Note.3
In July 2014, Kennedy filed a motion to dismiss the foreclosure action. While that motion was pending, she also requested mediation, which was unsuccessful. On April 29, 2015, following receipt of the mediation report, the circuit court denied the motion to dismiss. A separate contemporaneous order was entered allowing the Substitute Trustees to proceed to a foreclosure sale. Kennedy then filed a motion for reconsideration, which was also denied.
After denial of her motion for reconsideration, Kennedy filed a petition for Chapter 13 Bankruptcy, which stayed the foreclosure proceeding. On October 14, 2015, the bankruptcy petition was dismissed, resulting in the lifting of the automatic stay.
The foreclosure sale was scheduled for January 12, 2016. On December 30, 2015, notice of the sale was sent to Kennedy, as the debtor and record owner, and also to the "holder(s) of any subordinate interest in the property[, ]" by certified mail, return receipt requested, and also by first class mail. Additionally, on December 16, 2015, the notice of sale was sent by first class mail to "All Occupants" located at the property address. As required, the Substitute Trustees also published notice of the sale in "The Jeffersonian, " a newspaper of general circulation in Baltimore County, for the three consecutive weeks preceding the sale date.
The foreclosure sale was held on January 12, 2016, and the property was sold to The Bank of New York Mellon f/k/a The Bank of New York as trustee for First Horizon Alternative Mortgage Securities Trust 2006-FA1 for $508, 284.85. Thereafter, the Substitute Trustees filed the requisite "Post-Sale Package, " containing all required post-sale documents, verifying compliance with the relevant rules and statutes.
On February 11, 2016, Kennedy filed, pro se,
4 an objection to the ratification of the sale, alleging that she had not received a notice of the foreclosure sale date. The Substitute Trustees filed an opposition to her objection on March 16th, contending that they fully complied with the notice requirements of Md. Rule 14-210. Shortly thereafter, the Substitute Trustees sought ratification of the foreclosure sale, averring that that they had complied with relevant rules and asserting that no exceptions had been filed. Two weeks later, Kennedy filed a motion requesting a postponement of a decision on the ratification, with a request for a hearing. On April 25, 2016, the court entered an order denying Kennedy's objection and, in a separate order, ratified the foreclosure sale. This appeal followed.
DISCUSSION
Notice
When "ruling on exceptions to a foreclosure sale and whether to ratify the sale, trial courts may consider both questions of fact and law." Jones v. Rosenberg, 178 Md.App. 54, 68 (2008). In our review of the "court's ruling on exceptions to a sale, we apply a de novo standard of review as to questions of law but do not substitute our judgment for that of the trial court as to findings of fact unless we find them to be clearly erroneous." Hood v. Driscoll, 227 Md.App. 689, 697 (2016) (citation omitted).
Since "'there is a presumption that the sale was fairly made[, ] … the burden is upon one attacking the sale to prove the contrary.'" Hood, 227 Md.App. at 696-97 (2016) (quoting Burson v. Capps, 440 Md. 328, 342-43 (2014)).
Because the certified mailing of the notice of sale was returned to the Substitute Trustees as "RETURN TO SENDER - NOT DELIVERABLE AS ADDRESSED - UNABLE TO FORWARD, " Kennedy contends that she did not receive notice of the foreclosure sale. Therefore, she posits, the Substitute Trustees failed "to comply with Maryland law regarding notice to the property owner of the scheduled date of sale." We are not persuaded.
Rule 14-210 requires - other than publication of notice - that "[b]efore selling the property[, ] … the [authorized party] shall also send notice of time, place, and terms of sale (1) by certified mail and by first class mail[.]" Rule 14-210(b) (emphasis added). Additionally, the Rule requires only that the secured party "shall file an affidavit stating that (1) the [authorized party] has complied with the mailing provisions of this Rule or (2) the identity or address of the borrower … is not reasonably ascertainable." Rule 14-210(e). Further, if the identity or address is not "reasonably ascertainable" the foreclosing party need only include details of the "reasonable, good faith efforts that were made to ascertain the identity or address." Id. The test is whether the notice was mailed, as required, not whether it was received.
Similarly, the corresponding provisions of Md. Code, Real Property Article (R.P.) provide that - in addition to publication - a written notice "shall be sent: (i) [b]y certified mail, postage prepaid, return receipt requested, bearing a postmark from the United States Postal Service, to the record owner; and (ii) [b]y first-class mail." R.P. § 7-105.2(c)(1). The primary component of notice of sale, throughout the statute, is that notice "shall be sent." There is no requirement that proof of receipt be shown. Id. This is evident by the foreclosing party's choice of filing with the court, either a return receipt of the mailing or an affidavit, which verifies compliance of mailing or that the "address of the record owner is not reasonably ascertainable." R.P. § 7-105.2(c)(3). Further, the statute does not require giving notice to a record owner "whose address is not reasonably ascertainable[, ]" R.P. § 7-105.2(c)(4), nor does it require that a "new or additional notice need be given" if the sale is postponed. R.P. § 7-105.2(d). See also R.P. § 7-105.9(f).
The provisions of both the R.P. § 7-105.1(h) and corresponding Md. Rule 14-209 provide assurances as to delivery of the preliminary order to docket or complaint to foreclose by requiring personal service on the mortgagor, or qualified co-resident, but, if those efforts fail, service can be effectuated by posting and mailing copies of the notice. See R.P. §§ 7-105.1(h)(1), 7-105.1(h)(5). See also Rule 14-209(a)-(b). It is not unreasonable to conclude that, if receipt of a notice of sale by certified mail were required, the legislature would have expressed that requirement in the statute, as it has done with the requirement of filing of a proof of service, for however service was...
To continue reading
Request your trial