Kansas City Life Insurance v. Bratsky Farms

No. 89-48
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
KANSAS CITY LIFE INSURANCE COMPANY,
a corporation,
Plaintiff and Respondent,
-vs-
BRATSKY FARMS, a Montana corporation,
Defendant and Appellant.
APPEAL FROM: District Court of the ~hirteenth~udicial~istrict,
In and for the County of Carbon,
The Honorable ~ i l l i a mJ. Speare, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
L. R. Bretz, In propria Persona, ~illings,Montana
For Respondent:
Byron H. Dunbar, U.S. Attorney; Frank D. Meglen
Asst. U.S. Atty., ~illings, Montana
Submitted on Briefs: July 7, 1989
Decided: August 11, 1989
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Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
L.R. Bretz appears pro per as the sole stockholder of
Bratsky Farms, Inc. He appeals from an order of the District
Court for the Thirteenth Judicial District, Yellowstone
County, which denied his motion to vacate an October 31,
1988, order denying a motion to quash or vacate a writ of
assistance. We affirm.
Bretz raises five issues relating to the validity of a
foreclosure sale of property owned by Bratsky Farms, Inc.
Bratsky Farms, Inc., owned a ranch in Carbon County,
Montana, on which Kansas City ~ i f eInsurance Company held a
mortgage. The individuals named as defendants in this action
held stock in Bratsky Farms, Inc., at the time this action
was filed. On March 19, 1984, the ~istrict Court issued a
Judgment and Decree of Foreclosure against the defendants.
On the same date, the court issued an order of sale of the
property. Also on that date, Bratsky Farms, Inc., filed for
bankruptcy, resulting in an automatic stay of the foreclosure
proceedings.
On February 26, 1985, after the stay was lifted by order
of the bankruptcy court, the Carbon County Sheriff issued a
certificate of sale to Kansas City Life Insurance Company.
On February 20, 1986, the Farmers Home ~dministration (FmHA),
a junior lienholder, redeemed the property by paying Kansas
city Life Insurance Company the sum of $337,384.77. The
Bratskys made application to lease the property from FmHA,
but their application was rejected and their right to appeal
that decision has been exhausted.
Bretz claims sole shareholder status in Bratsky Farms,
Inc., beginning January 15, 1988. On June 1, 1988, FmHA
filed a mot..on for an order for writ of assistance, asking
for assistance to obtain immediate possession of the ranch,
which Leo C. and ~ o u i s eJ. Bratsky still occupied. The writ
was issued June 1, 1988. It commanded the sheriff of Carbon
County to enter the property and eject the Bratskys.
Bretz filed a motion to quash the writ of assistance.
The ~istrictCourt denied the motion and Bretz appeals.
I.
Was the sheriff's sale void because it was based on
improper statutory notice?
Bretz argues that the publication notice of the February
26, 1985, sheriff's sale did not comply with $3 25-13-701,
MCA. He also argues that due process was denied him because
actual notice of the sale was never given to Bratsky Farms,
Inc., or to its trustee in bankruptcy.
section 25-13-701, MCA, requires that notice of sale on
execution be given
(c) in case of real property, by posting a simi-
lar notice, particularly describing the property,
for 20 days in three public places in the county
where the property is situated and also where the
property is to be sold, which may be either at the
courthouse or on the premises, and publishing a
copy thereof once a week for the same period in
some newspaper published in the county, if there be
one, which notice shall be substantially as fol-
lows: ...
The affidavit of publication shows that notice was published
on February 7, 14, and 21, 1985. The sheriff's sale took
place on February 26, 1985. Bretz points out that only 19
days passed between the date of the first posted notice and
the date of the sale.
The District Court cited Burton v. ~ i p p(19041, 30 Mont.
275, 76 P. 563. In that case, this Court held that the
notice requirement in the antecedent to the above statute is
directory only and that the failure to observe it does not
avoid the sale as to a purchaser who is free from fault.
Burton, 76 P. at 566. The Court also held that the remedy
provided in what is now S 25-13-702, MCA, (that a sheriff
selling without the required notice is liable for $500 to the
aggrieved party) must be deemed exclusive.
Bretz cites several cases involving sheriff's sales of
personal property, but those cases do not apply here, as this
was a sale of real property. He also cites Sink v. Squire
(Mont. 1989), 769 P.2d 706, 46 St.Rep. 352, which discussed
service of process, not notice of a sheriff's sale. We hold
that Burton controls and that the provision days '
notice instead of 20 days' notice does not invalidate the
sheriff's sale.
111.
Is the FmHA notice of redemption deficient?
Bretz argues that the FmHA notice of redemption is
deficient in that it does not set forth exactly what was owed
on the judgment, what the purchase price was, what interest
had been paid, what taxes had been paid, or what the purchas-
er's lien debt was. He also points out that the notice
erroneously gives the date of the foreclosure sale as April
Section 25-13-806, MCA, sets forth the requirement for a
notice of redemption:
Notice of redemption, liens, and taxes and assess-
ments p z d . Written notice of redemption must be
given to the sheriff and a duplicate filed with the
county clerk, and if any taxes or assessments are
paid by the redemptioner or if he has or acquired
any liens other than that upon which the redemption
was made, notice thereof must in like manner be
given to the sheriff and filed with the county
clerk, and if such notice be not filed, the proper-
ty may be redeemed without paying such tax, assess-
ment.~,or lien.
The statute does not require that the notice include any of
the information Bretz lists. The notice of redemption given
in this case provided a description of the real property, the
date of the judgment and decree of foreclosure, and the
amount of the judgment. It gave the total amount paid in
redemption and was signed by an agent of FmHA as redemption-
er. It is true that the date given in the notice as the date
of the foreclosure sale is incorrect; it is the date of the
originally-scheduled sale, before the bankruptcy. However,
the statute does not require that the date of the foreclosure
sale be stated in the notice. We conclude that the informa-
tion provided was sufficient for the purpose of giving no-
tice. We hold that the notice of redemption is not
deficient.
Is the sheriff's deed void and invalid as a basis for
the writ of assistance?
Bretz argues that a sheriff's deed cannot be issued
until 60 days after a notice of redemption has been given.
The redemption by FmHA occurred in February 1986 and notice
of redemption was dated June 17, 1986. The sheriff's deed is
dated July 7, 1986.
Section 25-13-810, MCA, provides:
When purchaser entitled - conveyance.
to If no
redemption be made within 1 year after the sale,
the purchaser or his assignee is entitled to a
conveyance; or if so redeemed, whenever 60 days
have elapsed and no other redemption has been made
and notice thereof given and the time for redemp-
tion has expired, the last redemptioner or his
assignee is entitled to a sheriff's deed; but in
all cases, the judgment debtor shall have the
entire period of 1 year from the date of the sale
to redeem the property.
The statute allows a sheriff's deed to be issued when 1) 60
days have elapsed after the redemption, 2) no other
redemption has been made, 3 ) notice of redemption has been
given, and 4) the time for redemption has expired. The
statute gives no time requirement related to the notice. We
hold that the sheriff's deed is valid as a basis for the writ
of assistance.
IV.
Did the failure to provide Bratsky Farms, Inc., with
actual notice of the setting of the judicial sale of the
property deny due process?
Bretz cites Peterson v. Montana Bank of Bozeman, N.A.
(1984), 212 Mont. 37, 687 P.2d 673, as authority that actual
notice must be given to the mortgager before a judicial sale
may be held. However, the holding in Peterson was limited to
the situation presented there. Factors included no court
record of posting of notice of the sale, inadequacy of the
purchase price at the sale, and a sale of realty treated as a
sale of personal property. Peterson, 687 P.2d at 680.
Section 25-13-701, MCA, set forth above under Issue 11,
does not require personal notice to the mortgager in sales on
execution of judgment on real property. In the present case,
the stockholders of Bratsky Farms, Inc., were represented by
counsel and appeared in person at the proceedings leading up
to the judgment against them, before the execution sale. We
hold that the failure to provide Bratsky Farms, Inc., with
actual notice of the judicial sale did not deny due process
of the law.
v.
Did the District Court err in issuing a Writ of Assis-
tance because the record fails to show that FmHA was entitled
to the writ?
Bretz argues that the following defects were present in
the motion for an order of writ of assistance: the affidavit
in support of the FmHA motion showed the wrong dates for the
sheriff's sale and the certificate of sale; no judgment was
properly obtained; there was no proper notice of redemption,
no proper publication of notice of sale, and no actual notice
of sale; the redemption time was exceeded according to the
dates given on the notice; and the sheriff's deed was issued
too early.
Many of the defects claimed under this issue are dis-
cussed under the other issues in this appeal. It is true
that the dates given in the affidavit as the dates of the
sheriff's sale and the certificate of sale were incorrect.
We admonish respondent's counsel, who executed the affidavit
in support of the motion for the writ, to exercise caution in
insuring the accuracy of his filings.
For a writ of assistance to properly issue, there must
be a judgment, a sale conducted according to the judgment,
and a sheriff 's deed to the property. Federal Land Bank of
Spokane v. Heidema (Mont. 1986), 727 P.2d 1336, 43 St.Rep.
2020. The record shows that those elements were present here
and met the statutory requirements. We hold that the Dis-
trict Court did not err in issuing the Writ of Assistance.
Affirmed.
We concur: