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Hunter v. Anchor Bank, N.A.

Court of Appeals of Minnesota

December 23, 2013

Margaret Ann Hunter, Appellant,
v.
Anchor Bank, N.A., Respondent, Emigrant Mortgage Company, Inc., Respondent.

Washington County District Court File No. 82-CV-12-4683

Ryan R. Dreyer, Eric G. Nasstrom, Morrison Sund PLLC, Minnetonka, Minnesota (for appellant)

Kristine K. Nogosek, Stein & Moore, P.A., St. Paul, Minnesota (for respondent Anchor Bank, N.A.)

Christina M. Snow, Michael R. Sauer, Wilford, Geske & Cook, P.A., Woodbury, Minnesota (for respondent Emigrant Mortgage Company, Inc.)

Considered and decided by Smith, Presiding Judge; Johnson, Judge; and Rodenberg, Judge.

SYLLABUS

If two separate parcels of land secure one mortgage, each parcel must be sold separately at a foreclosure sale, as required by Minnesota Statutes section 580.08, and the failure to strictly comply with this requirement causes a non-compliant foreclosure sale to be void.

OPINION

JOHNSON, Judge

In 2004, Margaret Hunter borrowed money from Anchor Bank, N.A., to purchase a home for her adult son. The loan was secured by a mortgage on the son's home and on Hunter's home. Anchor Bank assigned the loan and mortgage to Emigrant Mortgage Company, Inc. In 2011, after the loan went into default, Emigrant Mortgage conducted a foreclosure by advertisement pursuant to section 580.05 of the Minnesota Statutes. But the homes encumbered by the mortgage were sold together, contrary to section 580.08, which requires that separate mortgaged parcels be sold separately at a foreclosure sale.

In 2012, Hunter commenced this action against Anchor Bank and Emigrant Mortgage by a multi-count complaint. Hunter sought, among other things, a judgment setting aside the foreclosure sale because the two separate properties were sold together in one foreclosure sale. Hunter later moved to amend the complaint to plead additional claims. The district court entered summary judgment in favor of Anchor Bank and Emigrant Mortgage and denied Hunter's motion to amend the complaint.

We conclude that the district court erred by granting summary judgment to Emigrant Mortgage with respect to Hunter's claim to set aside the foreclosure sale because the foreclosure-by-advertisement statutes require strict compliance such that a non-compliant foreclosure sale is void. We also conclude that the district court did not err by granting summary judgment to Anchor Bank and Emigrant Mortgage with respect to four other claims alleged in the complaint. We further conclude that the district court did not err by denying Hunter's motion to amend the complaint to allege an additional claim. Therefore, we affirm in part, reverse in part, and remand for further proceedings on Hunter's claim to set aside the foreclosure sale.

FACTS

In February 2004, Hunter and Anchor Bank entered into a loan agreement by which Anchor Bank lent Hunter $265, 000, which she used to purchase a home for her son in the city of Newport, in Washington County. As security for the note, Hunter executed and delivered to Anchor Bank a mortgage encumbering the son's home and her own home, which is located in the city of Inver Grove Heights, in Dakota County. Anchor Bank promptly assigned its interest in the note and mortgage to Emigrant Mortgage. The mortgage and the assignment were filed with the Washington County Recorder's Office and the Dakota County Recorder's Office.

Hunter later defaulted on the loan by failing to make payments. In July 2011, Emigrant Mortgage commenced a foreclosure by advertisement. Notice of a foreclosure sale in Washington County was published for six consecutive weeks. In February 2012, Emigrant Mortgage purchased both properties together at the foreclosure sale.

In August 2012, Hunter commenced this action against Anchor Bank and Emigrant Mortgage. In her complaint, she alleged six claims: (1) fraud and misrepresentation, (2) negligent misrepresentation, (3) promissory estoppel, (4) mutual mistake, (5) defective foreclosure sale, and (6) financial exploitation of a vulnerable adult. In November 2012, Hunter moved to amend her complaint to both add and remove claims. She sought to allege the following claims in the proposed amended complaint: (1) fraud and misrepresentation, (2) negligent misrepresentation, (3) promissory/equitable estoppel, (4) defective foreclosure sale, (5) reformation of mortgage, and (6) violations of the federal Truth in Lending Act (TILA).

In August 2012, Emigrant Mortgage moved to dismiss Hunter's complaint for failure to state a claim on which relief can be granted. See Minn. R. Civ. P. 12.02(e). In November 2012, Anchor Bank moved for judgment on the pleadings or, alternatively, for summary judgment. See Minn. R. Civ. P. 12.03, 56.02. The district court converted both of the respondents' motions into motions for summary judgment.

In January 2013, the district court granted the respondents' motions and entered summary judgment in favor of Anchor Bank and Emigrant Mortgage on all claims pleaded in Hunter's complaint. The district court also denied Hunter's motion to amend the complaint. Hunter appeals.

ISSUES

I. Did the district court err by granting Emigrant Mortgage's motion for summary judgment with respect to Hunter's claim that the foreclosure sale is void?

II. Did the district court err by granting respondents' motions for summary judgment with respect to counts 1, 2, 3, and 4 of Hunter's complaint?

III. Did the district court err by denying Hunter's motion to amend the complaint?

ANALYSIS

I.

Hunter first argues that the district court erred by granting Emigrant Mortgage's motion for summary judgment with respect to the fifth claim pleaded in the complaint, in ...


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