Richard H. Boucher v. Kevin E. Sweet , 2016 R.I. LEXIS 109 ( 2016 )

Supreme Court
No. 2002-7- Appeal
(KC 98-1065)
Richard H. Boucher :
v. :
Kevin E. Sweet. :
NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested to
notify the Opinion Analyst, Supreme Court of Rhode Island,
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Supreme Court
No. 2002-7- Appeal
(KC 98-1065)
Richard H. Boucher :
v. :
Kevin E. Sweet. :
Present: Suttell, C.J., Goldberg, Robinson, and Indeglia, JJ.
OPINION
Justice Indeglia, for the Court. The defendant, Kevin E. Sweet (defendant or Sweet),
appeals the grant of summary judgment in favor of the plaintiff, Richard H. Boucher (plaintiff or
Boucher), in the amount of $48,155.35, plus interest, and counsel fees of $3,237. This case came
before the Supreme Court on September 28, 2016, pursuant to an order directing the parties to
appear and show cause why the issues raised in this appeal should not be summarily decided.
After hearing the arguments of counsel and reviewing the memoranda submitted on behalf of the
parties, we are satisfied that cause has not been shown. Accordingly, we shall decide the appeal
at this time without further briefing or argument. For the reasons set forth herein, we affirm the
judgment of the Superior Court.
I
Facts and Travel
On November 15, 1994, Sweet executed a promissory note to Boucher in the amount of
$80,000, secured by a mortgage on real estate at 54 New London Avenue, West Warwick, Rhode
Island. Sweet later defaulted on the note and Boucher commenced foreclosure proceedings on
the real estate.
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Boucher advertised notice of the public sale in the Kent County Daily Times. The sale’s
terms required payment of an $8,000 deposit at the time of sale, payment of the balance within
thirty days after the sale, and an agreement encompassing the terms of sale (sale agreement) to
be signed by the successful bidder. Additionally, pursuant to the sale’s terms, the property’s sale
was “subject to all taxes, assessments, mortgages, any prior encumbrances and other
encumbrances * * *.” The foreclosure sale was held at a public auction on January 7, 1997.
Boucher, the only bidder, purchased the property for $35,000; however, he did not pay the
$8,000 deposit or sign the sale agreement.
In December 1998, Boucher brought an action against Sweet in the Kent County Superior
Court to collect the deficiency on the note, plus interest, attorney’s fees, and costs. Sweet filed
an answer; and, on September 3, 1999, Boucher moved for summary judgment. In his motion,
Boucher argued that no issue of material fact existed because Sweet acknowledged that he
executed and delivered the note to Boucher, he defaulted on the note, and he still owed Boucher
the amount claimed.
On September 30, 1999, a justice of the Kent County Superior Court granted Boucher’s
motion for summary judgment in the amount of $55,532.16, plus interest, attorney’s fees, and
costs. 1 Sweet subsequently moved to vacate the judgment, arguing that he never received
Boucher’s motion, supporting memorandum, or notice of the hearing on the motion. In August
2000, a hearing justice denied Sweet’s motion to vacate the judgment.
Ultimately, after further motion by Sweet, a second justice agreed to vacate the summary
judgment and rehear Boucher’s motion. In opposition, Sweet maintained that the disparity
between the property’s fair market value of $90,000 and the foreclosure sale price of $35,000
1
Sweet was not present at the hearing on the motion.
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was a factor in determining if an impropriety existed in the foreclosure sale. 2 Sweet also argued
that Boucher’s violations of the terms of sale—namely, his failure to pay the $8,000 deposit and
sign the sale agreement—were improprieties in the sale. He further contended that Boucher’s
attempt to collect the unpaid real estate taxes, sewer taxes, and sewer fees violated the terms of
sale because the property was sold “subject to all taxes.”
The hearing justice issued a bench decision, again granting Boucher’s motion for
summary judgment. She found that Boucher’s failure to pay the $8,000 deposit and sign the
sale agreement were not “the type of defect[s] in the advertising, in the conducting of this
foreclosure sale, that would amount to fraud or collusion.” The hearing justice found the
disparity between the appraisal values and the foreclosure sale price insufficient to show an
improper or fraudulent sale. Although “[i]nadequacy of price may be considered a factor in
determining whether the foreclosure sale was proper,” Sweet did not offer any evidence that the
manner in which the sale was advertised was deficient or that Boucher fraudulently conducted
the sale. The hearing justice did find, however, that the property’s low purchase price included
the property’s unpaid taxes, sewer fees, and sewer taxes. Thus, she excluded those taxes from
the judgment. Accordingly, on June 7, 2001, the hearing justice granted Boucher’s motion for
summary judgment in the amount of $48,155.35, plus interest and attorney’s fees, totaling
$3,237.
On June 18, 2001, Sweet appealed. Action on this appeal was stayed since January 2002
due to several ongoing bankruptcy proceedings that Sweet initiated. In October 2015, Sweet
notified Boucher that the bankruptcy proceedings were discharged or dismissed, and the parties
proceeded with this appeal.
2
At the hearing, the parties stipulated that the property’s fair market value at the time of the
foreclosure sale was $90,000.
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II
Standard of Review
“This Court reviews a trial justice's decision to grant summary judgment de novo.” Hyde
v. Roman Catholic Bishop of Providence, 139 A.3d 452, 460 (R.I. 2016). “We will affirm a
[trial] court's decision only if, after reviewing the admissible evidence in the light most favorable
to the nonmoving party, we conclude that no genuine issue of material fact exists and that the
moving party is entitled to judgment as a matter of law.” Newstone Development, LLC v. East
Pacific, LLC, 140 A.3d 100, 103 (R.I. 2016) (quoting Daniels v. Fluette, 64 A.3d 302, 304 (R.I.
2013)). “The nonmoving party bears the burden of showing the existence of disputed issues of
material fact by competent evidence; it cannot rest on allegations or denials in the pleadings or
on conclusions or legal opinions.” Danforth v. More, 129 A.3d 63, 68 (R.I. 2016) (quoting
Takian v. Rafaelian, 53 A.3d 964, 971 (R.I. 2012)).
III
Discussion
On appeal, Sweet argues that the hearing justice erred by not considering Boucher’s
failure to adhere to the terms of sale. When the notice and advertisement requirements for a
foreclosure have been complied with, the mortgagor must “produce evidence of collusion or
other improprieties in connection with the advertisement or conduct of the sale that would have
improperly deflated the foreclosure price.” DeLuca v. Klegraefe, 706 A.2d 1351, 1352 (R.I.
1998) (Mem.). Although Sweet acknowledged that an inadequate price alone is insufficient to
void the foreclosure, he contended that the aforementioned failures rendered the sale “an
improperly advertised and improperly conducted mortgagee’s sale.” Such improprieties, Sweet
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maintained, would allow the court to consider the discrepancy between the price that Boucher
paid for the property and its stipulated fair market value at the time of the foreclosure sale.
While Sweet cites Galvin v. Newton, 19 R.I. 176, 36 A. 3 (1895), to support his argument
that proof of actual fraud is not required to challenge the propriety of a foreclosure sale, the
improprieties present in Galvin are clearly distinguishable from the minor deficiencies alleged
here. In Galvin, the defendant, the treasurer of the mortgagee-bank, purchased the mortgaged
property at a public auction. Id. at 177, 36 A. at 4. The plaintiff-mortgagor alleged that the
defendant conducted the sale before an executor was appointed for the deceased mortgagor’s
estate, in an attempt to extinguish the latter’s interest in the property. Id. at 177, 179, 36 A. at 4.
There was also an allegation that the defendant colluded with another mortgagor who held an
interest in the property. Id. at 179, 36 A. at 4. At the sale, the defendant was the only bidder and
paid a grossly inadequate price. Id. This Court acknowledged that the inadequate price alone
was not enough to impeach the mortgage sale; however, it could be considered alongside the
other allegations. Id.
We agree with the hearing justice’s finding that the alleged improprieties are not “the
type of defect[s] in the advertising, in the conducting of this foreclosure sale, that would amount
to fraud or collusion.” Sweet has not raised the sort of allegations present in Galvin. Boucher’s
failure to deposit the $8,000 upon sale, pay the balance within thirty days, and sign the sale
agreement do not “support an inference that the mortgagee[] had overreached the mortgagor * *
*.” Woolley v. Tougas, 61 R.I. 434, 439, 1 A.2d 92, 94 (1938). This is not a case where “[t]he
whole transaction, from the advertisement to the delivery of the deed, is so convincing of
collusion and unfair dealing on the part of the owners of the property, [the mortgagee], and the
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purchaser, as to render a consideration of questions of law needless.” Nichols v. Flagg, 24 R.I.
30, 32, 51 A. 1039, 1040 (1902).
Since “it was incumbent upon [the defendant] * * * to produce evidence demonstrating
the impropriety of the foreclosure sale,” DeLuca, 706 A.2d at 1352, and Sweet has not set forth
such evidence, we conclude that the hearing justice properly granted summary judgment.
IV
Conclusion
For the reasons stated herein, we affirm the judgment of the Superior Court. The record
shall be returned to that tribunal.
Justice Flaherty did not participate.
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RHODE ISLAND SUPREME COURT CLERK’S
OFFICE
Clerk’s Office Order/Opinion Cover Sheet
TITLE OF CASE: Richard H. Boucher v. Kevin E. Sweet.
CASE NO: No. 2002-7-Appeal.
(KC 98-1065)
COURT: Supreme Court
DATE OPINION FILED: October 28, 2016
JUSTICES: Suttell, C.J., Goldberg, Robinson, and Indeglia, JJ.
WRITTEN BY: Associate Justice Gilbert V. Indeglia
SOURCE OF APPEAL: Kent County Superior Court
JUDGE FROM LOWER COURT:
Associate Justice Netti C. Vogel
ATTORNEYS ON APPEAL:
For Plaintiff: Lisa A. Geremia, Esq.
For Defendant: Frederick A. Costello, Esq.