Young v. Embley, No. S-11584.
| Court | Supreme Court of Alaska (US) |
| Writing for the Court | Carpeneti |
| Citation | 143 P.3d 936 |
| Parties | Cynthia YOUNG, Appellant, v. Kenneth EMBLEY, Appellee. |
| Docket Number | No. S-11584. |
| Decision Date | 08 September 2006 |
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v.
Kenneth EMBLEY, Appellee.
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COPYRIGHT MATERIAL OMITTED
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Kneeland Taylor, Anchorage, for Appellant.
James T. Stanley, Amodio, Stanley & Reeves, Anchorage, for Appellee.
Before: BRYNER, Chief Justice, EASTAUGH, FABE, and CARPENETI, Justices.
CARPENETI, Justice.
I. INTRODUCTION
Cynthia Young cohabited with David Dang for several years and ran a bed and breakfast establishment with him. Unbeknownst to Young, Dang executed a deed of trust on the property granting a security interest to Donald Joyner, from whom he had borrowed money. Kenneth Embley later acquired Joyner's interest. Dang then purportedly granted Young a lien on the property, securing an obligation to her. Dang defaulted on both obligations. Embley foreclosed on the deed of trust, acquiring the property at a nonjudicial foreclosure sale. Young attempted to halt the sale by asserting that she had the right to cure Dang's default, but the sale went ahead. The superior court declined to set aside the sale. Young appeals. Because junior lienholders have the right to cure a senior interest holder's default on a deed of trust, we reverse the judgment of the superior court and remand for a determination of the nature of Young's interest in the property.
II. FACTS AND PROCEEDINGS
A. Facts
This case concerns the disposition of property located at 2910 West 31st Avenue in the Spenard area of Anchorage. Cynthia Young and David Dang lived on and operated the property as a bed and breakfast called "The Alaska Wilderness Plantation."1 Dang held sole title to the property. Even so, Young held herself out as an "owner" of the property. She also used the name "Cynthia Dang" though she and Dang never married. Young and Dang have a daughter who was five years old in 2004.
On August 30, 2002 Dang executed a deed of trust on the property, using the property to secure a $40,000 loan made by Donald Joyner. Young was apparently unaware of the execution of this deed of trust. Dang subsequently defaulted on the deed of trust and Joyner had a notice of default recorded by Land Title Company of Alaska on November 21, 2002 and posted shortly thereafter. A foreclosure sale was scheduled for February 25, 2003. Joyner then sold the note and assigned his interest to appellee Kenneth Embley. The foreclosure sale was delayed
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to allow Embley to complete his purchase of the note.
On March 3, 2003, Dang executed an agreement in favor of Young that promised to pay Young $158,000 "as a sep[a]ration settlement." The agreement also provided that Young would have a lien on the property at issue if Dang failed to pay her $50,000 on March 4, 2003. Dang failed to make the payment, as a result of which Young filed suit against him and recorded a lis pendens on the property.2
On March 12 and April 1, 2003 Young asked Embley not to hold the foreclosure sale, asserting that she had not been given the statutorily required notice. Young also asserted at that time that she had the right to cure Dang's default on the Embley/Joyner deed of trust. The sale was postponed until April 25, 2003. On that date Embley provided Young with a "Cure Figure Worksheet" and an "Offset Bid Figure Worksheet" enumerating the amounts for which Dang was in default. Young did not tender a cure at the time but objected to the foreclosure sale, though she did not seek to enjoin it. Embley purchased the property at the foreclosure sale for $165,201.04. Embley also paid the accrued arrearages on the most senior loan on the property, held by First Interbay.
B. Proceedings
Young filed suit against Embley and Land Title in May 2003, seeking damages, a declaration voiding the foreclosure sale, and seeking a declaration that she was entitled to cure Dang's default. Young amended her complaint to add a demand for punitive damages. Land Title moved to strike Young's request for jury trial, arguing that "[a] suit to set aside a foreclosure sale under a deed of trust is an equitable one." The superior court granted the motion to strike the jury demand.
Young's second amended complaint, filed in November 2003, stated similar claims, including wrongful foreclosure and abuse of process, and again asked for compensatory and punitive damages and equitable relief. The complaint did not include a demand for jury trial. Young moved for reconsideration of the court's order striking her jury demand, which the court denied. Both Embley and Land Title filed motions for summary judgment, which the superior court granted. Young appealed both summary judgments, but later settled with Land Title and withdrew her appeal against it.
III. STANDARD OF REVIEW
We apply our independent judgment to questions of law, adopting "the rule of law that is most persuasive in light of precedent, reason, and policy."3 When a question of statutory interpretation is involved, we will independently evaluate the trial court's interpretation.4 If a statute is ambiguous "we apply a sliding scale of interpretation, where `the plainer the language, the more convincing contrary legislative history must be.'"5 We interpret Alaska law "according to reason, practicality, and common sense, taking into account the plain meaning and purpose of the law as well as the intent of the drafters."6 We have stated: "In assessing statutory language, unless words have acquired a peculiar meaning, by virtue of statutory definition or judicial construction, they are to be construed in accordance with their common usage."7
We use our independent judgment in reviewing a grant of summary judgment, "drawing all factual inferences in favor of, and viewing the facts in the light most favorable
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to the non-prevailing party (generally the non-movant)."8 We will affirm a grant of summary judgment if there are no genuine issues of material fact and the prevailing party was entitled to judgment as a matter of law.9 Where, as here, the superior court granted summary judgment without articulating its reasoning, we examine all grounds on which the movant (Embley) relied to determine if any were sufficient.10
IV. DISCUSSION
A. Junior Lienholders Are Entitled to Equitable Redemption on a Deed of Trust.
1. The history of equitable redemption
While this appeal concerns the extent of a statutory right, we must begin with a brief detour into the history of mortgages. The mortgage was created by the early English court as a transfer of title from the mortgagor to the mortgagee, generally as security for a loan by the mortgagee to the mortgagor. Once the mortgagor repaid the loan proceeds, title to the property would return to him.11 If, however, the mortgagor failed to pay the mortgage by the due date, called the law day, he would forfeit all interest in the property. This deadline applied without exception, "even if the mortgagor could not find the mortgagee to pay him,"12 or if "the borrower was robbed on his way to Law Day,"13 and thus often resulted in injustice.
In response to these injustices, the Court of Chancery created the remedy of equitable redemption. Equitable redemption "allowed the borrower to come into court after default, and if he told a convincing story, he was allowed to force a reconveyance of the land."14 When mortgagors began to take advantage of this remedy, sometimes redeeming the property years after law day, the Court created the remedy of foreclosure "to end the period of equitable redemption so that the new owner could be sure that his title was secure and the previous owner could not redeem the land."15 Thus, a mortgage is said to carry with it an equity of redemption, "the right, until the foreclosure sale, to reimburse the mortgagee and cure the default."16 But this (mortgagor's) remedy of equitable redemption is limited by the (mortgagee's) remedy of foreclosure.
While at common law the execution of a mortgage required transfer of title, most American jurisdictions, Alaska included, now recognize mortgages under the "lien theory," which treats the mortgage as merely a security interest in the property "and confers no right to possession of that real estate on the mortgagee."17 Accordingly, the mortgagor
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"has the right to possession until there has been a valid foreclosure."18 We stated, in Brand v. First Federal Savings & Loan Ass'n of Fairbanks:19 "In light of our territorial precedents, likely reliance thereon, and the provisions of AS 09.45.680, we believe that the territorial view that mortgages in Alaska convey to the mortgagee only a lien, not any sort of title, should be retained."20 The lien theory, we noted, "is said to mark `a distinct advance in legal ideas' over the `crude conception' of the title theory."21
Mortgages under the lien theory continue to carry the equity of redemption. Alaska has partly codified the mortgagor's right of redemption. Under AS 09.35.250, "The judgment debtor or a successor in interest may redeem the property before confirmation of sale on paying the amount of the purchase money, with interest" and any taxes due. Alaska has also enacted a procedure for redemption by the debtor within a year after confirmation of the foreclosure sale.22 This statutory enactment does not occupy the field, however, as we continue to recognize judicially the right of equitable redemption.23 This view is in line with the Restatement, which declares that
a performance in full of the obligation secured by a mortgage ..., by one who is primarily responsible for performance of the obligation, redeems the real estate from the mortgage.... Performance may be made prior to the time the obligation is due ... or may be made at or after the time the obligation is due but prior to foreclosure.24
2. Redemption of deeds of trust
We treat deeds of trust as identical to mortgages in almost all respects.25 In Brand, we stated: "A deed of trust is `a
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mortgage in effect,' being...
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...against party causing injury).72 Commission Report , supra note 23, at 19 (describing problem of subrogation); see also Young v. Embley , 143 P.3d 936, 945 (Alaska 2006) ("We presume the legislature is aware of the common law when enacting statutes.").73 Rutledge v. Pharm. Care Mgmt. Ass'n,......
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Buntin v. Schlumberger Tech. Corp., Supreme Court Nos. S-17309/17519
...it is a creation of the courts rather than of legislatures." 15A C.J.S. Common Law § 2 (2020) (footnote omitted); see Young v. Embley , 143 P.3d 936, 945 (Alaska 2006) (alteration in original) ("The common law ... furnishes one of the most reliable backgrounds upon which analysis of the obj......
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Alaska Tr., LLC v. Ambridge, S–14915.
...held as security for the performance of an obligation, normally the payment of a debt evidenced by a promissory note.”).6 Young v. Embley, 143 P.3d 936, 940 (Alaska 2006) (footnote omitted) (citing 1 Grant S. Nelson & Dale A. Whitman, Real Estate Finance Law § 1.2, at 6–7 (4th ed.2002)).7 S......
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Buntin v. Schlumberger Tech. Corp., Supreme Court No. S-17309
...it is a creation of the courts rather than of legislatures." 15A C.J.S. Common Law § 2 (2020) (footnote omitted); see Young v. Embley, 143 P.3d 936, 945 (Alaska 2006) (alteration in original) ("The common law . . . furnishes one of the most reliable backgrounds upon which analysis of the ob......
-
Knolmayer v. McCollum, Supreme Court No. S-17792
...against party causing injury).72 Commission Report , supra note 23, at 19 (describing problem of subrogation); see also Young v. Embley , 143 P.3d 936, 945 (Alaska 2006) ("We presume the legislature is aware of the common law when enacting statutes.").73 Rutledge v. Pharm. Care Mgmt. Ass'n,......
-
Buntin v. Schlumberger Tech. Corp., Supreme Court Nos. S-17309/17519
...it is a creation of the courts rather than of legislatures." 15A C.J.S. Common Law § 2 (2020) (footnote omitted); see Young v. Embley , 143 P.3d 936, 945 (Alaska 2006) (alteration in original) ("The common law ... furnishes one of the most reliable backgrounds upon which analysis of the obj......
-
Alaska Tr., LLC v. Ambridge, S–14915.
...held as security for the performance of an obligation, normally the payment of a debt evidenced by a promissory note.”).6 Young v. Embley, 143 P.3d 936, 940 (Alaska 2006) (footnote omitted) (citing 1 Grant S. Nelson & Dale A. Whitman, Real Estate Finance Law § 1.2, at 6–7 (4th ed.2002)).7 S......
-
Buntin v. Schlumberger Tech. Corp., Supreme Court No. S-17309
...it is a creation of the courts rather than of legislatures." 15A C.J.S. Common Law § 2 (2020) (footnote omitted); see Young v. Embley, 143 P.3d 936, 945 (Alaska 2006) (alteration in original) ("The common law . . . furnishes one of the most reliable backgrounds upon which analysis of the ob......