Summary
rejecting mortgagor's challenge to validity of sale to second highest bidder where mortgagor's husband, the highest bidder, failed to close the sale
Summary of this case from Infinity Real Estate LLC v. Deutsche Bank Nat'l Tr. Co.Opinion
No. 12–P–730.
2013-03-5
Mary T. COSTELLO v. MERRILL LYNCH CREDIT CORP. & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
After the plaintiff defaulted on her mortgage loan, the defendant Sovereign Bank, FSB (bank), foreclosed on her property and sold it at auction. The property eventually was purchased by the second highest bidder, defendant Merrill Lynch Credit Corp. (Merrill Lynch), when the highest bidder, the plaintiff's husband, failed to make payment within thirty days of the auction, as required by the terms of sale.
The plaintiff argues on appeal, as she did below, that the sale to Merrill Lynch was invalid because the auctioneer failed to announce prior to the bidding that the bank reserved the right to sell the property to the second highest bidder in the event of a default by the highest bidder. However, following a jury-waived trial, a judge of the Land Court found that “the plaintiff's assertions are simply not credible.” The judge found that, prior to the bidding, the auctioneer had publicly read the full contents of a foreclosure auction agreement which stated in relevant part: “the Mortgagee, in the event of Purchaser's default, reserves the right, at its option, to sell the Premises to the second or any prior high bidder, under the same terms and conditions as were offered at the Foreclosure Auction or to assume any prior bid.” “Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.” Mass.R.Civ.P. 52(a), as amended, 423 Mass. 1402 (1996). See Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 509–510 (1997). Here, the judge's finding was supported by the testimony of three individuals present at the auction—the auctioneer, her husband, and a third witness—as well as by expert testimony that it is customary before sale at auction to read aloud the foreclosure auction agreement. The only support for the proposition that the auctioneer did not announce the salient provision before the auction commenced was the testimony of the plaintiff's husband, which the judge was entitled to reject as not credible.
The notice of sale did not contain language authorizing the bank to sell to the second highest bidder in the event of a default by the highest bidder. However, the notice of sale permitted the bank “to amend the terms of the sale by written or oral announcement made before or during the foreclosure sale.” The plaintiff does not dispute that an oral announcement of the condition in question would have sufficed. See 146 Dundas Corp. v.. Chemical Bank, 400 Mass. 588, 593–596 (1987).
At bottom, the plaintiff's argument is a technical one. As the judge found, the plaintiff's husband executed documents putting him on notice of the condition immediately after he was declared the high bidder. The judge also noted that the plaintiff's husband “testified that had he known about the provision related to default sale to the second highest bidder, it would not have changed the process of his bidding at the foreclosure sale” (emphasis supplied).
In short, the judge had ample basis to reject the factual premise of the plaintiff's argument that the foreclosure sale was invalid.
Deciding as we do, we need not consider whether the plaintiff properly reads 146 Dundas Corp. v. Chemical Bank, 400 Mass. 588, 593–596 (1987), as requiring that the reservation of the right to sell to the second highest bidder if the highest bidder defaults must be announced prior to the auction.
Judgment affirmed.