New Penn Fin. v. Burke

• Decision Date: 14 July 2022
• Docket Number: 21-AP-252
• Parties: New Penn Financial LLC v. Stephen W. Burke* et al.
• Court: Vermont Supreme Court

New Penn Financial LLC
v.
Stephen W. Burke* et al.

No. 21-AP-252

Supreme Court of Vermont

July 14, 2022

In the case title, an asterisk (*) indicates an appellant and a double asterisk (**) indicates a cross-appellant. Decisions of a three-justice panel are not to be considered as precedent before any tribunal.

APPEALED FROM: Superior Court, Chittenden, Civil Division CASE NO. 517-5-13 Cncv Trial Judge: Samuel Hoar, Jr.

ENTRY ORDER

In the above-entitled cause, the Clerk will enter:

Defendant appeals the civil division's order confirming the sale of the residential property that is the subject of this foreclosure action. We affirm.

The following facts are undisputed. In 2013, plaintiff filed a complaint to foreclose defendant's interest in a residential property in Underhill, Vermont. The trial court entered a judgment of foreclosure in 2016. Defendant subsequently filed for bankruptcy protection, halting the foreclosure proceeding. The case was reopened in 2018 after the bankruptcy proceeding concluded. A foreclosure sale took place in July 2018. However, the court declined to confirm the sale because the auctioneer incorrectly informed the bidders that there was a superior first mortgage. It ordered plaintiff to conduct another sale.

After several court-authorized extensions of time, plaintiff notified defendant in December 2019 by first-class and certified mail that a foreclosure sale would be conducted at the property in February 2020. Defendant attended the sale, at which plaintiff was the only bidder. Plaintiff subsequently moved to confirm the sale. Both the notice of sale and the motion to confirm were sent to defendant instead of to his counsel.

In April 2020, the court notified the parties of their right to a confirmation hearing. Defendant requested a hearing, arguing that the sale was void because plaintiff had sent the notice of sale and the motion to confirm the sale to him instead of to his attorney in violation of Vermont Rule of Civil Procedure 5. He also argued that plaintiff violated the ethical rule prohibiting an attorney from communicating directly with a represented party.

After a hearing, the court granted plaintiff's motion to confirm the sale. The court reasoned that the foreclosure statute permitted service of the notice of sale on either the party or their attorney of record. The court concluded that although plaintiff violated Rule 5(b) by failing to serve the motion for confirmation on defendant's counsel, defendant had not shown that he

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was prejudiced by the violation because counsel had actual notice of the motion and timely filed a motion for a hearing.

On appeal, defendant claims that the trial court's order confirming the sale should be reversed because plaintiff sent the notice of sale directly to him instead of his attorney.^[1]"Confirmation of a foreclosure sale is a discretionary judicial action, the purpose of which is to ensure fairness in the foreclosure process." HSBC Bank USA N.A. v. McAllister, 2018 VT 9, ¶ 7, 206 Vt. 445. We review the court's decision confirming the sale for abuse of discretion. Id.

The court acted within its discretion here because plaintiff complied with the notice provisions of the foreclosure statute and defendant has not shown that plaintiff's failure to follow Rule 5(b) undermined the integrity of the foreclosure process. Section 4952(c) of Title 12, which sets forth the procedure for judicial sales in foreclosure...