Millay v. Cam
| Decision Date | 21 May 1998 |
| Docket Number | No. 65177-9,65177-9 |
| Citation | 955 P.2d 791,135 Wn.2d 193 |
| Parties | Jack M. MILLAY, Petitioner, v. Elena K. CAM and Raymond Blaisdell, Respondents. |
| Court | Washington Supreme Court |
Case & Dusterhoff, James D. Case, R. Bruce Dusterhoff, Portland, for Petitioner.
Joseph Udall, Bradley Andersen, Skamania County Prosecutor, Stevenson, for Respondents.
We are asked to clarify the procedures for statutory redemption of real property. Three issues are presented: (1) may a prospective redemptioner toll the statutory redemption period by filing a declaratory judgment action without paying the amount required to redeem, (2) does the filing of a declaratory judgment action substantially comply with the payment requirement in RCW 6.23.040(3) and 6.23.080(1), and (3) if a declaratory action will not substitute for payment, should we grant equitable relief when the redemptioner in possession submits a grossly exaggerated statement of the sum required to the prospective redemptioner.
The trial court found in favor of Elena Cam, the redemptioner in possession. The Court of Appeals affirmed. Millay v. Cam, 84 Wash.App. 369, 928 P.2d 463 (1996). We reverse and remand. A declaratory judgment action will not suffice for payment of the sum required, but equitable tolling may apply when the redemptioner in possession submits a grossly exaggerated statement of the sum required to redeem.
This case involves redemption rights to the "Biba Hot Springs," property in the City of North Bonneville. The property was purchased by Vadim Krijanovsky through his company, Bonneville Hot Springs Resort, Inc., in 1981. Krijanovsky attempted to develop the property as a hot springs resort and employed the services of John Graham and Company as architects and the law firm of Le Chevallier & Englund, P.C., to do legal work.
In 1989 Krijanovsky and various entities defaulted on the mortgage. John and Nita Sullivan and Hazel V. Stutsman purchased the property at the sheriff's sale in 1990. On March 29, 1991, Sandra Smith, one of Krijanovsky's limited partners, redeemed the property from Sullivan and Stutsman. On April 10, 1991, Elena Cam asserted an interest senior to Smith and subsequently redeemed the property from her. On June 8, Jack Millay redeemed from Cam with a senior lien interest. Cam then redeemed from Millay, paying off his senior lien on June 17, 1991. On at least two of these redemptions, statements were provided to the prospective redemptioners regarding the sum required to redeem.
On August 9, 1991, eight days prior to the end of the 60-day redemption period, Millay gave notice to the sheriff of his intent to redeem from Cam a second time and requested a payoff statement and accounting. Smith also filed a notice of intent to redeem. The sheriff indicated he would interplead the funds and ask for declaratory action if a dispute resulted over the sum required to redeem.
On August 15, 1991, one day prior to the end of the 60-day period, Cam provided the sheriff a statement of the sum required to redeem from Cam and a document which purportedly assigned Le Chavallier's lien to Cam. The sheriff faxed the statement to Millay. In her statement Cam claimed she was owed $509,817.92, nearly twice what had been due two months earlier. Three of the liens were assigned to Cam from Laura Evans, Krijanovsky's live-in companion, and the fourth was a lien from Le Chevallier. Along with the statement of the sum required, Cam submitted questionable documentation on two of the interests, declined to submit any evidence of one assignment, and asserted an interest junior to Millay's interest.
Millay, sure the amount was grossly exaggerated but uncertain as to the precise sum required, filed a declaratory judgment action rather than paying the requested redemption price on the last day of the redemption period. Smith also filed a declaratory judgment action and the cases were consolidated. Smith's claim was dismissed for failure to appear and is not at issue here.
The trial court found in favor of Millay initially. The court determined Cam was required to submit verifying documentation on the liens asserted particularly because there was a "strong aura of fraudulent manipulation" of the asserted interests. Clerk's Papers at 85. It concluded a declaratory judgment action was the equivalent of paying the sum required to redeem property. On reconsideration, however, the trial court reversed itself, holding redemption requires payment and Millay bore the burden of determining the sum required to redeem, and actually paying it. The Court of Appeals affirmed. Millay, 84 Wash.App. 369, 928 P.2d 463. We granted review. Millay v. Cam, 132 Wash.2d 1001, 939 P.2d 216 (1997).
Interpretation of a statute is a question of law requiring de novo review. Medcalf v. Department of Licensing, 133 Wash.2d 290, 297, 944 P.2d 1014 (1997).
When a mortgage is foreclosed and the property sold under execution, junior lien creditors whose liens have been extinguished by the sale have the statutory right to redeem the property from the purchaser. If the lien creditor redeems the property, another redemptioner has 60 days after the previous redemption to redeem from the redemptioner in possession of the property. RCW 6.23.040(1). The property may be redeemed as often as a redemptioner is so disposed. RCW 6.23.040(1).
A person seeking to redeem "may do so by paying to the sheriff the sum required" within 60 days after the previous redemption. RCW 6.23.080(1), 6.23.040(3). Once payment is made to the sheriff, the sheriff must give a certificate to the person redeeming, which states the sum paid, from whom redeemed, the date thereof, and a description of the property redeemed. RCW 6.23.080(1). The certificate must be recorded and the recording officer must note the redemption in the margin of the record of the certificate of sale. RCW 6.23.080(1).
The first issue is whether a prospective redemptioner may toll the statutory redemption period by filing a declaratory judgment action without paying the sum required to redeem the property. Chapter 6.23 does not allow a declaratory judgment action to substitute for actual payment of the redemption price for three reasons: first, chapter 6.23 requires payment of the sum required to effectuate redemption; second, the statutory scheme indicates the Legislature intentionally omitted a preredemption procedure for determining the sum required; and, third, to allow a prospective redemptioner to file a declaratory action in lieu of paying any money to redeem encourages unqualified applicants to file suit to toll the redemption period to gain financing and undermines the well-settled preference for finality in land title.
First, chapter 6.23 expressly requires payment of the sum required for redemption. The provisions of chapter 6.23 must be viewed in relation to each other and harmonized if possible. Addleman v. Board of Prison Terms & Paroles, 107 Wash.2d 503, 509, 730 P.2d 1327 (1986) (citing Burlington N., Inc. v. Johnston, 89 Wash.2d 321, 326, 572 P.2d 1085 (1977)). The plain language of the redemption statutes requires payment in order for redemption to occur. RCW 6.23.040(3) (); RCW 6.23.080(1) (). This interpretation accords with the general rule that "[w]here the statute provides for a tender of the redemption money to the person entitled thereto, as a general rule such a tender is a condition to the exercise of the statutory right of redemption." 59 C.J.S. Mortgages § 850(a)(2) (1949). Payment or tender thereof constitutes redemption.
Several statutory provisions aid a prospective redemptioner to determine the "sum required" for redemption. The Legislature has defined the "sum required" as: (1) the sum paid on the last previous redemption plus eight percent interest; (2) the amount of any assessments or taxes paid by the last redemptioner with like interest; and (3) the amount of any senior liens other than the judgment under which the property was sold held by the last redemptioner with interest. RCW 6.23.040(3).
RCW 6.23.080(3) and 6.23.050 further alleviate any guesswork in figuring the sum required to redeem. Both statutes serve to " 'inform subsequent redemptioners of the price which they must be prepared to pay' " when redeeming property. GESA Fed. Credit Union v. Mutual Life Ins. Co., 105 Wash.2d 248, 253, 713 P.2d 728 (1986) (). See also 15 Lewis H. Orland & Karl B. Tegland, Washington Practice § 497, at 223 (5th ed.1996); Salsbery v. Ritter, 48 Cal.2d 1, 306 P.2d 897, 904 (1957). If the redemptioner in possession fails to submit to the sheriff documentary evidence of any liens which are senior to the person seeking to redeem including the amount due on the liens, such liens may be disregarded in computing the sum required. 1 RCW 6.23.080(3). The sum then becomes the last previous judgment plus interest and any recorded taxes or assessments paid by the redemptioner in possession. RCW 6.23.080(3), 6.23.040(3). Such amount is usually ascertainable because it is recorded with the county.
Likewise, RCW 6.23.050 requires the redemptioner in possession to file a statement for recording. Failure to do so excuses the prospective redemptioner from including in his payment such taxes, assessments, or liens absent actual notice. The statute also provides even if a prospective redemptioner has notice, payment may be excused upon a showing of prejudice resulting from failure to file the statement. RCW 6.23.050.
RCW 6.23.070 provides post-redemption relief to the prospective redemptioner as well. The statute states: "When a...
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