Montierth v. Deutsche Bank Nat'l Trust Co.

• Citation: 415 P.3d 654
• Decision Date: 13 April 2018
• Docket Number: S-17-0212
• Parties: John R. MONTIERTH, Appellant (Plaintiff), v. DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee in trust FOR the benefit of the certificate holders for AMERIQUEST MORTGAGE SECURITIES TRUST 2005–R7, ASSET-BACKED PASS-THROUGH CERTIFICATE, SERIES 2005–R7 whose address is 1761 East St. Andrew Place, Santa Ana, CA 92705–4934, Appellee (Defendant).
• Court: United States State Supreme Court of Wyoming

415 P.3d 654

John R. MONTIERTH, Appellant (Plaintiff),

v.DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee in trust FOR the benefit of the certificate holders for AMERIQUEST MORTGAGE SECURITIES TRUST 2005–R7, ASSET-BACKED PASS-THROUGH CERTIFICATE, SERIES 2005–R7 whose address is 1761 East St. Andrew Place, Santa Ana, CA 92705–4934, Appellee (Defendant).

S-17-0212

Supreme Court of Wyoming.

April 13, 2018

Representing Appellant: Danielle M. Mathey, Mathey Law Office, P.C., Green River, Wyoming.

Representing Appellee: James R. Bell and Phillip R. Wulf, Murane & Bostwick, LLC, Casper, Wyoming. Argument by Mr. Bell.

Before BURKE, C.J., and HILL^* , DAVIS, FOX, and KAUTZ, JJ.

FOX, Justice.

[¶ 1] John R. Montierth filed suit in district court, seeking to quiet title to property he purchased at a tax sale. Deutsche Bank National Trust Company (Deutsche Bank), the mortgagee on the property and a defendant in the quiet title suit, filed counterclaims alleging that Mr. Montierth's tax deed was void. The district court entered summary judgment in favor of Deutsche Bank, concluding that the statutorily-required notice regarding redemption provided by Mr. Montierth to the property owner and to Deutsche Bank was deficient and that the tax deed was void. Mr. Montierth appeals. We affirm.

ISSUES

[¶ 2] We restate the issues as follows:

1. Did Deutsche Bank have standing to challenge Mr. Montierth's quiet title action?

2. Did the district court properly conclude that Mr. Montierth's tax deed is void?

3. Did the district court's reliance upon a document that was not contained in the record amount to reversible error?

4. Do the doctrines of laches and unclean hands apply to bar Deutsche Bank's argument that the tax deed is void?

5. Did the district court err when it concluded that Mr. Montierth could not recover on his common law unjust enrichment claim and when it declined to examine Mr. Montierth's statutory claims for reimbursement?

FACTS

[¶ 3] The facts in this case are undisputed. In June 2005, Kevin Alvesteffer borrowed $168,000 from Ameriquest Mortgage Company (Ameriquest) to purchase property in Green River, Wyoming. Ameriquest recorded a mortgage on the property and, in 2009, assigned the mortgage to Deutsche Bank. Property taxes on the property were not paid, which resulted in a tax delinquency and tax sale. John R. Montierth purchased the property at the tax sale for $977.83 in August 2007. On January 17, 2013, Mr. Montierth mailed the notice required under Wyo. Stat. Ann. § 39–13–108(e)(v)(B) to Mr. Alvesteffer and to Deutsche Bank, and beginning on January 18, 2013, he published a notice of his intent to apply for a tax deed for three days in the Rock Springs newspaper. Mr. Montierth never personally served Mr. Alvesteffer with the statutory notice.

[¶ 4] The January 17 notice letter stated:

Take notice that on May 2, 2013, per the Wyoming Statute, John R. Montierth will make application for a tax deed with respect to the following property in Sweetwater County, Wyoming:

EDGEWATER ADDN BLK 6 LOT 4.

On August 2, 2007, John R. Montierth purchased said real property for 2006 delinquent taxes. The street address is 1625 Colorado Cir., Green River, WY 82935. The property was taxed in the name of ALVESTEFFER, KEVIN J. The time for redemption of said property expired August 2, 2011 .^[1]

(Emphasis added.) Neither Mr. Alvesteffer nor Deutsche Bank responded to the notice or redeemed the property. On May 9, 2013, Sweetwater County issued a tax deed conveying the property to Mr. Montierth. The deed was recorded on May 14, 2013. After receiving the tax deed, Mr. Montierth invested a significant amount of money in the property to make it livable.

[¶ 5] Mr. Montierth filed this lawsuit against Mr. Alvesteffer and Deutsche Bank, seeking to quiet title to the property and void Deutsche Bank's mortgage lien. Mr. Alvesteffer failed to answer and the district court entered default judgment against him. Deutsche Bank asserted affirmative defenses and counterclaimed for declaratory relief, alleging that the tax deed was void because Mr. Montierth's notice was defective since it contained the wrong redemption date and was not properly served upon Mr. Alvesteffer. The parties filed cross-motions for summary judgment; the district court granted Deutsche Bank's motion for summary judgment and denied Mr. Montierth's motion. Mr. Montierth timely appeals.

STANDARD OF REVIEW

[¶ 6] We review the district court's entry of summary judgment as follows:

Summary judgment can be sustained only when no genuine issues of material fact are present and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c) ; Felix Felicis, LLC v. Riva Ridge Owners Ass'n , 2016 WY 67, ¶ 29, 375 P.3d 769, 778 (Wyo. 2016). We review a grant of summary judgment deciding a question of law de novo. Id . We accord no deference to the district court on issues of law and may affirm the summary judgment on any legal grounds appearing in the record. Sky Harbor Air Serv., Inc. v. Cheyenne Reg'l Airport Bd. , 2016 WY 17, ¶ 40, 368 P.3d 264, 272 (Wyo. 2016).

Anadarko Land Corp. v. Family Tree Corp. , 2017 WY 24, ¶ 15, 389 P.3d 1218, 1223 (Wyo. 2017) (quoting Cheyenne Newspapers, Inc. v. City of Cheyenne , 2016 WY 125, ¶ 10, 386 P.3d 329, 333 (Wyo. 2016) ).

DISCUSSION

I. Did Deutsche Bank have standing to challenge Mr. Montierth's quiet title action?

[¶ 7] Mr. Montierth filed this action to quiet title based upon the tax deed and he named Deutsche Bank as a defendant. Deutsche Bank successfully argued to the district court that the tax deed is void for two reasons: first, the notice erroneously indicated that the time for redemption had passed, and second, the notice was not personally served on Mr. Alvesteffer, as required by statute. Mr. Montierth contends that even though it sued Deutsche Bank, the bank lacks standing to assert these arguments.

[¶ 8] Both parties cite White v. Woods , 2009 WY 29A, 208 P.3d 597 (Wyo. 2009) in support of their standing arguments. In White , we considered whether parties who claimed ownership of property by adverse possession had standing to challenge a tax deed. Id . at ¶ 20, 208 P.3d at 603. We explained "[t]he validity of a tax title or of a tax sale can be assailed only by one who can show that he or those under whom he claims had some title to or interest in the property at the time of the sale." Id . at ¶ 21, 208 P.3d at 603 (quoting Hudson v. Erickson , 67 Wyo. 167, 185–86, 216 P.2d 379, 385 (1950) ). In White , we relied upon federal law to describe standing requirements in Wyoming, and concluded that to have standing to challenge the validity of a tax deed, a party must establish that they suffered an injury in fact caused by the non-compliance with the statutes, and that a favorable decision from the court can redress the injury. Id . at ¶ 20, 208 P.3d at 608 (citing Lujan v. Defenders of Wildlife , 504 U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ).

[¶ 9] We recently reiterated, however, that while we may find guidance in federal standing law, "our standing analysis should not be governed by federal law." Allred v. Bebout , 2018 WY 8, ¶ 35, 409 P.3d 260, 269 (Wyo. 2018). We apply the four-part test for standing adopted in Brimmer v. Thomson , 521 P.2d 574, 578 (Wyo. 1974) :

First, a justiciable controversy requires parties having existing and genuine, as distinguished from theoretical, rights or interests. Second, the controversy must be one upon which the judgment of the court may effectively operate, as distinguished from a debate or argument evoking a purely political, administrative, philosophical or academic conclusion. Third, it must be a controversy the judicial determination of which will have the force and effect of a final judgment in law or decree in equity upon the rights, status or other legal relationships of one or more of the real parties in interest, or, wanting these qualities be of such great and overriding public moment as to constitute the legal equivalent of all of them. Finally, the proceedings must be genuinely adversary in character and not a mere disputation, but advanced with sufficient militancy to engender a thorough research and analysis of the major issues. Any controversy lacking these elements becomes an exercise in academics and is not properly before the courts for solution.

Allred , 2018 WY 8, ¶ 37, 409 P.3d at 270 (quoting Brimmer , 521 P.2d at 578 ).

[¶ 10] We first apply these factors to Deutsche Bank's challenge to the validity of the notice provided by Mr. Montierth and find Deutsche Bank meets all the prongs of the Brimmer test. First, it has genuine, as opposed to theoretical, interests in the property. Deutsche Bank held a mortgage on the property and was thereby statutorily entitled to accurate notice regarding its right to redeem. Wyo. Stat. Ann. § 39–13–108(e)(v)(B)(III) (LexisNexis 2017). A mortgagee possesses a substantial property interest that is significantly affected by a tax sale. Mennonite Bd. of Missions v. Adams , 462 U.S. 791, 798, 103 S.Ct. 2706, 2711, 77 L.Ed.2d 180 (1983) (a tax sale can ultimately result in the loss of the mortgagee's interest because the purchaser acquires title free of all liens at the conclusion of the redemption period). Second and third, the controversy is one upon which the judgment of the court can effectively operate, and the determination of the controversy will have the force and effect of a final judgment on the parties. A declaration that the tax deed is void, the relief sought by Deutsche Bank, would extinguish Mr. Montierth's tax deed and would also result in the survival of Deutsche Bank's mortgage interest. Finally, these proceedings are genuinely adversary in character and not a mere disputation. Accordingly, Deutsche Bank has standing to assert its argument that the adequacy of the notice provided to it by Mr. Montierth rendered the tax deed void. See Porter v. Bankers Trust Co. of Cal., N.A. , 773 N.E.2d 901, 905 (Ind. Ct. App. 2002) (mortgagee...