You can
search the entire site.
or go to the recent opinions, or the chronological or subject indices.
Barr v. Goldome Realty Credit Corp. (5/10/2002) sp-5566
Barr v. Goldome Realty Credit Corp. (5/10/2002) sp-5566
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
DONNA M. BARR, )
) Supreme Court No. S-9413
Appellant, )
) Superior Court No.
v. ) 3AN-98-7755 CI
)
GOLDOME REALTY CREDIT ) O P I N I O N
CORPORATION, n/k/a )
NATIONSBANC MORTGAGE ) [No. 5566 - May 10, 2002]
CORPORATION, )
)
Appellee. )
________________________________)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Peter A. Michalski, Judge.
Appearances: Rebecca S. Copeland, Koval &
Featherly, P.C., Anchorage, for Appellant.
Richard Ullstrom, Routh Crabtree, APC,
Anchorage, for Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
I. Donna Barr appeals the superior courts grant of partial
summary judgment to Nationsbanc Mortgage Corporation on
Nationsbancs claim for possession of real property occupied by
Barr and Barrs counterclaim for damages. Barr argues that
Nationsbanc did not apply surplus escrow funds to Barrs monthly
note obligations according to the terms of the deed of trust,
resulting in improper foreclosure on the property and damage to
Barr. Because we agree with Barr that genuine issues of material
fact remain, we reverse the superior courts partial grant of
summary judgment to Nationsbanc, vacate its findings, and remand
for further proceedings.
II. FACTS AND PROCEEDINGS
Donna Barr assumed ownership of the property at 11840
Mary Street in Anchorage subject to a deed of trust.
Nationsbanc, as beneficiary, initiated foreclosure proceedings
against the property in January 1998 because it believed the
underlying note was in default. A notice of default was then
recorded and served upon Barr. Barr filed for Chapter 13
bankruptcy in February 1998. The foreclosure sale was held in
June 1998 after the bankruptcy court lifted the bankruptcy stay;1
Nationsbanc was the buyer at the foreclosure sale.
Nationsbanc also filed a complaint against Barr in June
1998 for forcible entry and detainer to evict Barr from the
property, and for recovery of fair rental value of the premises
and any damages Barr might have caused to the property. In her
answer to the complaint, Barr denied that Nationsbanc was
properly vested with title to the property. Barr alleged that
Nationsbancs declaration of default was improper because
Nationsbanc knowingly failed to credit funds in Barrs note
account that would have cured any deficiency. Barr
counterclaimed, asserting that these acts caused her to suffer
damages exceeding $150,000, and requested that punitive damages
be assessed against Nationsbanc.
After discovery, Nationsbanc moved for partial summary
judgment seeking both a judgment in its favor with respect to its
right to possess the property and dismissal of Barrs
counterclaim. Among other things, the motion was supported by
Barrs discovery answers in which she admitted she had not made
her monthly note payments in the three months before the
foreclosure November and December 1997, and January 1998.
Barr opposed Nationsbancs motion, arguing that no
default occurred because an overpayment on the loan and a surplus
in the escrow account should have been credited to some or all of
Barrs monthly note obligations for November and December 1997 and
January 1998.2 In support of her opposition, Barr submitted her
own affidavit and an affidavit from Sherry Whah. Whah affied
that she was an experienced accountant and that based on her
review of Barrs payment history, she had determined that Barr had
made excess payments, exceeding $7,465, on the note.
Nationsbancs supplemental reply argued that the records
Barr submitted to support Whahs affidavit were inadmissible
hearsay, and that they actually supported Nationsbanc by showing
that the foreclosure was proper. Four days before the hearing on
Nationsbancs motion for partial summary judgment, Barr submitted
her own supplemental affidavit in which she described her note
payment practices and swore that Nationsbanc had never refunded
any excess escrow reserves. Barr supported her affidavit with a
package of documents that were intended to demonstrate the
inconsistency of Nationsbancs record-keeping practices, the
failure of Nationsbanc to refund any escrow reserves, and the
failure of Nationsbanc to credit Barrs account. At an August
1999 hearing Nationsbanc objected to the documents because it
claimed they were submitted too late to permit a reply, were not
produced in discovery, and were unauthenticated and inadmissible
hearsay.
In September 1999 the superior court granted partial
summary judgment to Nationsbanc, dismissed Barrs counterclaim
with prejudice, and determined that under Alaska Rule of Civil
Procedure 54(b) there was no need to further consider the issues
Nationsbanc raised at the hearing. The superior courts findings
of fact and conclusions of law appear to have been adopted in
toto from the proposed findings and conclusions submitted by
Nationsbanc at the courts direction. The court denied Barrs
motion for reconsideration.
Barr appeals.
III. DISCUSSION
A. Standard of Review
This court reviews a grant of summary judgment de novo
and affirms only if there are no genuine issues of material fact
and the moving party is entitled to judgment as a matter of law.3
In making this determination, we draw all reasonable inferences
in favor of the non-moving party.4
B. Granting Summary Judgment to Nationsbanc Was Error Because
There Remained Factual Disputes Whether the Loan Was Current and
Whether an Overpayment Was Available to Apply to Barrs Account.
A. Barrs affirmative defense contends that Nationsbanc failed
to properly give credit on her account and that she was not in
arrears on her payments per the Deed of Trust. On appeal she
explains that she had overpaid her account and excess funds were
in the escrow account at the time the foreclosure was commenced,
which funds would have satisfied the default. Barr argues that
the alleged excess escrow funds, which were in the possession and
control of Nationsbanc, should have been applied to avoid the
default.
There is a genuine dispute of material fact whether
Barrs loan was current and whether there was a surplus in her
escrow account when default was declared.
Barr affied that a credit balance in excess of
$7,465.00 existed in her account on the date foreclosure was
initiated. To support this assertion, and to overcome a motion
to strike by Nationsbanc, Barr submitted copies of the documents
on which she relied in arriving at the $7,465 figure. These
documents recorded monthly payments on the loan and the date
through which Barr alleged each payment rendered the loan
current. The documents showed that in May 1997 the loan was paid
thru that month only; no payments were made in June or July 1997;
and payments in the amount of the monthly obligation were made in
August, September, and October 1997. The documents do not record
escrow payments or an escrow balance for any period. Thus, Barrs
affidavit is not sufficient on its own to create a material fact
dispute.
However, Barrs claim regarding the alleged surplus is
supported by Whahs affidavit, which stated that [b]ased on the
accounting undertaken by Affiant, it appears that the discrepancy
in the numbers between Nationsbanc and Affiant relate primarily
to late fees, payments and distributions from the escrow account,
and uncredited payments over the term of the mortgage.
A genuine issue of fact exists when the evidence,
viewed in the light most favorable to the nonmoving party, is
such that reasonable jurors could differ in their judgment on
that issue.5 Although Nationsbanc disputes Barrs claim, the
evidence presented when read in the light most favorable to Barr
could permit a finding that there was an escrow surplus in Barrs
account in October 1997. Whah affied that through January 1998,
the month in which the foreclosure was initiated by Nationsbanc,
. . . Barr had made excess payments and overpaid the mortgage
with Nationsbanc in prior years in excess of $7,465.00, and that
Barrs loan was not in default at the time the foreclosure was
initiated by Nationsbanc. If there was an account excess three
months after Barr last made a payment, a factfinder could
permissibly infer that the excess also existed when she made her
last payment in October.
Nationsbanc questions the admissibility of the
documents Whah relies upon in reaching her conclusions. But Barr
has not sought to establish that the documents relied upon by
Whah are themselves admissible in evidence, only that they are a
permissible basis for Whahs expert opinions. Alaska Evidence
Rule 703 provides that facts or data relied upon by experts in
forming opinions need not be admissible in evidence, but must be
of a type reasonably relied upon by experts in the particular
field in forming opinions or inferences upon the subject.6
Nationsbanc argues that Barr cannot establish that all of the
documents meet this standard because Whah admitted that she only
attached to her affidavit some of the documents upon which she
relied in forming her opinion.7 But Whah affied that many of the
records she relied upon were provided to Barr by Nationsbanc and
are certainly in [Nationsbancs] possession and control although
they were not attached to Whahs affidavit. Without a more
convincing showing by Nationsbanc that the documents Whah
reviewed were so unreliable as to preclude an expert from forming
an opinion in reliance on them, we conclude that for purposes of
summary judgment, Whahs affidavit was admissible evidence.
Nationsbanc argues that the language of both the deed
of trust and regulations of the U.S. Department of Housing and
Urban Development (HUD) prevented it from applying the escrow
surplus, even if it existed, to future payments. Nationsbanc
argues that by failing to make her payments in at least November
1997 through January 1998, Barrs loan was not current.8
Nationsbanc correctly notes that an escrow surplus may be applied
to future payments only if the loan is current.9 As noted above,
however, the Whah affidavit contained evidence both that the loan
was current and that Barr had an escrow surplus in January 1998.10
Barr argues that since the loan was current when the foreclosure
was commenced, Nationsbanc should have applied [the surplus] to
principal and interest payment[s] [as] was the practice of
Nationsbanc and its predecessors in interest. Barrs assertion in
her affidavit that a surplus existed in January 1998, along with
Whahs affidavit, creates a genuine issue of material fact as to
whether the loan was current in October 1997.
HUD regulations require a refund to the borrower of any
surplus greater than $50.11 When the regulations are read in
conjunction with the deed of trust, it would still be permissible
for Barr to request that any surplus be applied to principal and
interest payments. A HUD regulation stating that the surplus
shall . . . [be] refund[ed] . . . to the borrower12 does not, by
itself, forbid the borrower from requesting that the refund be
redirected to principal or interest payments. Indeed, paragraph
4 of the deed of trust allows for this possibility. It states
that any excess, if the loan is current, at the option of the
Trustor [Barr], shall be credited on subsequent payments to be
made by the Trustor, or refunded to the Trustor. Barr argues
that it was Nationsbancs prior practice to apply the surplus in
this manner. The same factual inferences favorable to Barr that
create a genuine issue of material fact as to whether the loan
was current in October 1997 also create a genuine issue of
material fact as to whether Nationsbanc could have applied any
escrow surplus to Barrs monthly payments in November and December
1997 and January 1998. Accordingly, we conclude that Nationsbanc
has failed to meet its burden of disproving Barrs affirmative
defense.13 It was therefore not entitled to summary judgment.
C. Dismissing Barrs Counterclaim Was Error Because There Was a
Factual Dispute Whether Nationsbancs Foreclosure Was Proper.
Barr argues that the trial court wrongfully dismissed
her counterclaim for damages caused by Nationsbancs purportedly
improper foreclosure. Like Barrs affirmative defense, her
counterclaim focuses on whether a surplus existed, and if it did,
whether it was available to be applied to the balance owed on the
property. Because Nationsbanc did not conclusively show that a
surplus did not exist, it has failed to meet its burden in
disproving Barrs damage claim. Hence, the genuine factual
dispute that requires us to reverse Nationsbancs summary judgment
motion also requires us to reverse the dismissal of Barrs
counterclaim.
D. We Vacate the Superior Courts Findings of Fact and
Conclusions of Law.
A. Barr argues that the superior court erred by adopting
Nationsbancs proposed findings and conclusions in toto without
carefully considering their content. Barr also alleges that those
findings and conclusions contained multiple errors. Barr is
correct to the extent that any of the findings or conclusions go
to issues which remain in genuine dispute. On the other hand, we
recognize that many of the findings and conclusions may not have
been erroneously entered and may stand alone, regardless of the
genuine factual dispute discussed in Part III.B. But there is no
reason to decide which findings and conclusions those might be
because the parties have not briefed that proposition and because
there is no present dispute about the validity of the individual
findings and conclusions beyond the narrow issues we have
discussed above. Instead we simply vacate the superior courts
findings of fact and conclusions of law because we have
determined that there are genuine factual disputes that are
material to the issues discussed above.
IV. CONCLUSION
Because there are genuine issues of material fact about
the extent or existence of a surplus that could be credited to
Barrs account, we REVERSE the partial summary judgment entered
for Nationsbanc, VACATE the findings of fact and conclusions of
law, and REMAND for further proceedings consistent with this
opinion.
_______________________________
1 The bankruptcy court lifted the stay after determining
that Barr had violated the stays conditions. The court explained
that Barrs reasoning for not delivering her payment to local
counsel in June 1998, as required by a May 1998 order of the
bankruptcy court, was vague and unsatisfactory.
2 Nationsbanc moved to strike Barrs opposition on grounds
that it was not signed by her counsel of record and that it
relied upon matters not disclosed in discovery despite specific
requests by Nationsbanc. This motion was denied.
3 Moore v. Allstate Ins. Co., 995 P.2d 231, 233 (Alaska
2000) (citations omitted).
4 Id.
5 Bliss v. Bobich, 971 P.2d 141, 145 n.4 (Alaska 2000)
(citation omitted); see also Schneider v. Pay N Save Corp., 723
P.2d 619, 623 (Alaska 1986) (stating material issue of fact
exists where reasonable jurors could disagree in resolving
factual issues presented by moving papers) (citation omitted).
6 See also Norris v. Gatts, 738 P.2d 344, 349-50 (Alaska
1987) (stating expert witness entitled to rely upon inadmissable
evidence meeting reasonable reliance element of Rule 703).
7 Nationsbanc notes that Alaska Civil Rule 56(e) requires
that [s]worn or certified copies of all papers or parts thereof
referred to in an affidavit [opposing summary judgment] shall be
attached thereto or served therewith. (Emphasis added.)
8 24 Code of Federal Regulations (C.F.R.)
3500.17(f)(2)(ii) (2000) states:
A borrower is current if the servicer
receives the borrowers payments within 30
days of the payment due date. If the
servicer does not receive the borrowers
payment within 30 days of the payment due
date, then the servicer may retain the
surplus in the escrow account pursuant to the
terms of the mortgage loan documents.
9 Paragraph 4 of the deed of trust states:
If the total of the payments made [under the
note plus taxes and insurance] exceed the
amount of payments actually made by
Beneficiary for ground rents, taxes or
assessments, of (sic) insurance premiums, as
the case may be, such excess, if the loan is
current, at the option of the Trustor, shall
be credited on subsequent payments to be made
by the Trustor, or refunded to the Trustor.
10 Even if the loan was not current, the beneficiary could
not simply keep the escrow surplus without accounting for it.
11 24 C.F.R. 3500.17(f)(2)(i) (2000).
12 Id.
13 Wassink v. Hawkins, 859 P.2d 712, 713-14 (Alaska 1993)
(reversing grant of summary judgment where genuine issues of
material fact exist regarding affirmative defenses).
