Bank of Nova Scotia v. Family Broadcasting, Inc. , 121 F. App'x 440 ( 2005 )

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
1-5-2005
Bank of Nova Scotia v. Family Broadcasting
Precedential or Non-Precedential: Non-Precedential
Docket No. 03-4573
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"Bank of Nova Scotia v. Family Broadcasting" (2005). 2005 Decisions. Paper 1583.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/1583
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
NO. 03-4573
BANK OF NOVA SCOTIA
IKON OFFICE SOLUTIONS (Intervenor in D.C.)
v.
FAMILY BROADCASTING, INC.;
G. LUZ A. JAMES; ASTA K. JAMES,
Appellants
On Appeal from the United States District Court
of the Virgin Islands, Division of St. Thomas Appellate Division
(D.C. Civil No. 00-cv-00052)
Appellate Judges: Hon. Raymond L. Finch, Hon. Thomas K. Moore,
and Hon. Rhys S. Hodge
Argued December 13, 2004
Before: SLOVITER, FUENTES, and GREENBERG, Circuit Judges
(Filed: January 5, 2005)
G. Luz A. James (Argued)
Christiansted, St. Croix
U.S. Virgin Islands 00822
Attorney for Appellant
Francis J. D’Eramo (Argued)
Nichols Newman Logan & D’Eramo, P.C.
Christiansted, St. Croix
U.S. Virgin Islands
Attorney for Appellee
OPINION
SLOVITER, Circuit Judge.
Appellants G. Luz James and Asta James (hereafter “James”) defaulted on a loan
from the Bank of Nova Scotia (“Bank”). The Bank sued to collect on the debt and to
foreclose on the mortgage property. James, despite having been personally served with
process, failed to answer, and the Territorial Court of the United States Virgin Islands
entered summary judgment in favor of the Bank and a judgment of foreclosure on all of
the properties on April 19, 1995. The Marshal advertised the sale but James did not
object and the Territorial Court then entered an Order Confirming Sale and Deficiency
Judgment against James in the amount of $4,509.67 on January 8, 1998.
On October 15, 1998, James filed a motion pursuant to Fed. R. Civ. P. 60(b) for
relief from the default judgment and Order Confirming Sale. The Territorial Court
denied the motion following a hearing. James appealed to the Appellate Division of the
District Court of the Virgin Islands, which denied his appeal. James appeals.1 In
reviewing the Appellate Division’s orders, this court must review the Territorial Court’s
1
The District Court had jurisdiction pursuant to the Revised Organic Act of 1954,
48 U.S.C. §§ 1541-1645, and 4 V.I. Code Ann. § 33. This court has jurisdiction under 28
U.S.C. §§ 1291, 1294(3), and 48 U.S.C. § 1613a(c).
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determination using the same standard of review as applied by the Appellate Division.
Tyler v. Armstrong, 365 F.3d 204, 208 (3d Cir. 2004). Thus, we review the Territorial
Court’s denial of the Rule 60(b) motion for abuse of discretion. Brown v. Phila. Hous.
Auth., 350 F.3d 338, 342 (3d Cir. 2003).
After consideration of the arguments and the record, we cannot find that the court
abused its discretion in denying the Rule 60(b) motion for reconsideration. James argues
that the Territorial Court erred in holding that the statutory period of redemption was six
months whereas, according to James, it was twelve months, and therefore timely. The
Territorial Court did not err in holding that the redemption period had passed.
There are two relevant provisions in the Virgin Islands Code. The generally
applicable provision, 5 V.I. Code Ann. § 496, provides:
A judgment debtor or his successor in interest may redeem the
property at any time prior to the confirmation of sale on
paying the amount of the purchase money, with interest at the
legal rate per annum thereon from the date of sale, together
with the amount of any taxes which the purchaser may have
paid thereon after the purchase. If the judgment debtor does
not redeem until after the confirmation of the sale, thereafter
he shall redeem within twelve months from such order of
confirmation and not otherwise.
Another section, 28 V.I.Code Ann. § 535, provides for a six month period of redemption
when the sale follows a judgment or foreclosure. That section, in pertinent part, provides
that:
A judgment of foreclosure shall not have the effect of barring
the equity of redemption, and real property sold on execution
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issued upon such judgment may be redeemed . . . under
sections 492 through 500 of Title 5 except that,
notwithstanding the provisions of section 496 of Title 5, the
judgment debtor or his successor in interest, on paying the
amount of the purchase money, with interest at the legal rate
per annum thereon from the date of sale, together with the
amount of any taxes which the purchaser may have paid
thereon after purchase, shall redeem within six months after
the order of confirmation of sale. . . .
28 V.I. Code Ann. § 535.
In short, section 535, which covers the situation here, clearly states that
notwithstanding the twelve month redemption period provided in section 496, debtors
attempting to redeem after a judgment of foreclosure only have a redemption period of six
months. James does not point to any record evidence showing that he attempted to
redeem the properties within the six month statutory period. Instead, he argues that he
had twelve months to redeem the property. As noted above, this is clearly incorrect.
Therefore, because the court applied the correct statutory redemption period and because
James failed to redeem during this period, there is no merit to James’ argument that the
court erred in denying his Rule 60(b) motion on that ground.
James next argues that the trial court erred in denying his motion for
reconsideration of the Order Confirming the Sale when he presented evidence that the
value of the property far exceeded the sale price and that the amount owed at the time of
the Marshal’s sale was significantly less than the amount for which judgment was
granted. This appears to be a claim under Rule 60(b) of either mistake or newly
4
discovered evidence. We reject the claim on both grounds. James sought to introduce a
hand-written bank book which the Territorial Court found would have no probative value
because no affidavit or other evidence of record laid a foundation for its submission into
evidence. Moreover, the bank book only reflected payments on the $500,000 debt and
not the second $100,000 note. Nor was this newly discovered evidence, as it was in
James’ possession throughout.
Finally, James argues that the Marshal sold the property for a grossly inadequate
price and specifically for a price far below what James claims was the appraised value of
$1.5 million. He bases this on a 1990 appraisal, which was not introduced in evidence.
Nor is there any competent evidence or affidavit that supports the assertion of value at the
time of the sale.
Under the Restatement, Third of Property: Mortgages § 8.3, with respect to the
adequacy of a foreclosure sale price, the term “gross inadequacy” is clarified to some
extent by the Comment which provides that a court “is warranted in invalidating a sale
where the price is less than 20 percent of fair market value and, absent other foreclosure
defects, is usually not warranted in invalidating a sale that yields in excess of that
amount.” Restatement (Third) of Prop.: Mortgages § 8.3 cmt. b. (1997). The Comment
further states that the trial court’s judgment in matters of price adequacy is entitled to
particular deference but notes that in “extreme cases a price may be so low (typically well
under 20% of fair market value) that it would be an abuse of discretion for the court to
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refuse to invalidate it.” Id.
In this case, as the Bank states, “the foreclosure sale exceeded 30% of the amount
of Appellants’ alleged appraisal values, which is significantly more than the 20% required
for confirmation under the Restatement.” Br. of Appellee at 14. Pursuant to 1 V.I. Code
Ann. § 4, and in the absence of local laws to the contrary, the Restatements of Law are
the rule of decision in the courts of the Virgin Islands. Accordingly, the Restatement
provision cited above is dispositive of this issue. The sale price of these properties was
more than 30% of the appraisal value and as such, we cannot say the price was
inadequate.
We recognize that James firmly believes that the price received from the sale of
the property was not adequate, but we can find no reason to disagree with the decision of
the Appellate Division of the District Court of the Virgin Islands that the Territorial Court
did not abuse its discretion. Its decision will be affirmed.
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