Security Federal Sav. & Loan Ass'n of Mayfield v. Nesler, 84-SC-874-DG

• Decision Date: 26 September 1985
• Docket Number: No. 84-SC-874-DG,84-SC-874-DG
• Citation: 697 S.W.2d 136
• Court: United States State Supreme Court — District of Kentucky
• Parties: SECURITY FEDERAL SAVINGS & LOAN ASSOCIATION OF MAYFIELD, Appellant, v. Fred L. NESLER, Clarence T. Hensley, and the Estate of Orvis D. McReynolds, Deceased, Appellees.

Page 136

697 S.W.2d 136

SECURITY FEDERAL SAVINGS & LOAN ASSOCIATION OF MAYFIELD, Appellant, v. Fred L. NESLER, Clarence T. Hensley, and the Estate of Orvis D. McReynolds, Deceased, Appellees.

No. 84-SC-874-DG

Supreme Court of Kentucky.

Sept. 26, 1985.

As Corrected Nov. 1, 1985.

E. Dan Sharp, Jr., Mayfield, for appellant.

Dennis L. Null, Lookofsky & Null, Mayfield, for appellee/Fred L. Nesler.

James B. Brien, Jr., Dennis Lortie, Neely & Brien, Mayfield, for appellee/Clarence T. Hensley.

Wayne Freeman, Mayfield, for appellee/Estate of Orvis D. McReynolds, Deceased.

WINTERSHEIMER, Justice.

This appeal is from a decision of the Court of Appeals which affirmed the circuit court as to the finality of a foreclosure judgment, order confirming sale and order establishing priorities for the payment of claims within the meaning of Civil Rule 54.02.

The issue is whether the "Judgment and Order of sale" is a final and appealable order rather than the "Final judgment, order confirming sale, and order establishing priorities for the payment of claims."

Three tracts of real estate were the subject of a foreclosure action by Security. On May 17, 1983, a judgment and order of sale was issued by the circuit court which directed the Master Commissioner to sell the property to satisfy the liens securing their obligations. The judgment determined the amounts due and the order of priorities. The first mortgage on all of the three separate tracts was security for a $76,000 note executed in 1977. The second mortgage on only the first two tracts was security for a $60,000 note executed in 1978. Nesler was joined as a defendant to adjudicate his rights in a 1981 mortgage on the third tract, security for a $40,000 note. Hensley was joined to adjudicate his rights on a 1982 lis pendens on all three tracts. The Estate of Orvis D. McReynolds was joined to adjudicate its rights on a 1980 mortgage on the first two tracts, security for a note. Tracts I and II were adjacent to each other and Tract III was a few miles distant.

The Commissioner sold Tract III separate from I and II. Security bid $51,000 for Tracts I and II and $76,000 for Tract III. There was no objection to the conduct of the sale at that time. Thereafter Security filed a motion to set aside the sale seeking a resale based on an earlier oral request of the Commissioner by the savings association president to sell all three tracts together. Later Security filed a supplemental motion contending that the judgment and order of sale entered on May 17 was a final order and judgment and that the sale conducted by the Commissioner had not complied with the terms and order of judgment. On September 15, 1983, a final judgment, order confirming sale and establishing priorities confirmed the sale, denied the motion to set aside the sale and ordered the Master Commissioner to execute deeds. That order changed the payment priorities which had been established by the May 17 judgment. The proceeds of Tract I and II were distributed without challenge. In distributing the proceeds of Tract III, the debts of Nesler, Hensley and the McReynolds estate were placed ahead of the balance due to Security on the Tracts I and II mortgage.

A majority of the Court of Appeals panel determined that the May 17 judgment was not final under CR 54 because the September 15 judgment disposed of remaining questions regarding disbursement of money and payment of costs.

Security argues that Alexander v. Springfield Production Credit Assn., Ky.App., 673 S.W.2d 741 (1984), supports their position. Discretionary review was not sought in Alexander, supra, in which the Court of Appeals vacated and remanded an improper order of sale as preceding determination of the validity and priority of claims.

Nesler and Hensley contend that the September 15 judgment merely clarified the payment of the claims or determined the right of the Master Commissioner to proceed as he did. They distinguish Alexander on the grounds that the May 17 judgment did not dispose of all the matters in issue. The dissent in this Court of Appeals case states that the May 17 judgment was final and appealable and the court lacked jurisdiction to change the final judgment it had entered more than 10 days previously. Consequently, the September 15 judgment should be reversed and the May 17 judgment reinstated.

A judgment holding that the purchase of land was subject to a lien and decreeing a sale of the land to satisfy that debt is a final order from which an appeal lies. May v. Ball, 108 Ky. 180, 56 S.W. 7 (1900). An order of sale...