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Laymon v. Minnesota Premier Properties, LLC

Court of Appeals of Minnesota

October 9, 2017

Mary Laymon as the personal representative of the Estate of Howard Arnold Laymon, Respondent,
v.
Minnesota Premier Properties, LLC, et al., Appellants.

         Hennepin County District Court File No. 27-CV-15-15949

          Kelly Vince Griffitts, Griffitts Law Offices, PLLC, Eagan, Minnesota (for respondent)

          John G. Westrick, Westrick & McDowall-Nix, PLLP, St. Paul, Minnesota (for appellants)

          Considered and decided by Reyes, Presiding Judge; Schellhas, Judge; and Stauber, Judge.[*]

         SYLLABUS

         Under Minn. Stat. § 524.3-101 (2016), a valid, transferable ownership interest in real property devolves immediately upon a testator's death to a person to whom the property is devised by the testator's will, even if the property is devised through a residuary clause rather than through a specific devise.

          OPINION

          SCHELLHAS, JUDGE

         Appellants challenge the district court's summary judgment against them on respondent's quiet-title claim and default judgment against one of them on respondent's slander-of-title claim. By notice of related appeal, respondent challenges the court's denial of default judgment against two appellants on the slander-of-title claim. Because we conclude that the district court properly denied respondent default judgment against appellants, erred in entering default judgment against one of appellants on respondent's slander-of-title claim, and erred in granting summary judgement to respondent, we affirm the denial of default judgment, and reverse the default judgment and summary judgment to respondent, and remand for further proceedings consistent with this opinion.

         FACTS

         In June 2005, Howard Laymon purchased real property in Golden Valley (subject property) with mortgage financing from World Savings Bank FSB (World Savings). Howard Laymon died testate in January 2015. He was survived by three adult children, including John Laymon and respondent Mary Laymon. Howard Laymon's will provides in relevant part:

I give all of my tangible personal property to my children who survive me, to be distributed to them in shares as nearly equal as is practical giving due regard as to the personal preferences of each.
I give the residue of my estate, consisting of all the property I can distribute by will and not effectively distributed by the preceding provisions of this will, except any property over which I then have a testamentary power of appointment, in equal shares to my children, if any that survive me. . . .
I constitute and appoint my daughter, MARY L. LAYMON, to serve as my Personal Representative. . . .
My Personal Representative, in addition to all other powers conferred by law that are not inconsistent with those contained in this will, shall have the power, exercisable without authorization of any court:
a. To sell at private or public sale, to retain, to lease, and to mortgage or pledge any or all of the real or personal property of my estate;
b. To make partial distributions from my estate from time to time and to distribute the residue of my estate in cash or in kind or partly in each, and for this purpose to determine the value of property distributed in kind; [and]
c. To settle, contest, compromise, submit to arbitration or litigate claims in favor of or against my estate . . . .

         The mortgage against the subject property in favor of World Savings went into default after Howard Laymon's death. In May 2015, World Savings commenced foreclosure proceedings by publication and served Mary Laymon with an occupant's notice of a foreclosure sale. On June 10, World Savings completed notice by publication of a foreclosure sale. On June 29, Wells Fargo Bank NA (Wells Fargo), as the mortgage servicing agent of World Savings, purchased the subject property through a sheriff's certificate of foreclosure sale.[1] The six-month mortgage-foreclosure redemption period expired on December 29, 2015.

         On July 3, 2015, John Laymon and his wife conveyed their interest in the subject property by quitclaim deed to appellant Minnesota Premier Properties LLC (Premier) in exchange for a payment of $10, 000. On July 6, Premier's quitclaim deed was recorded and Premier executed a mortgage against the subject property in favor of appellant Aquarium Capital Investments LLC (Aquarium). Aquarium's mortgage was recorded the same day. On July 9, Mary Laymon initiated informal probate of Howard Laymon's estate, and the probate division of the district court (probate court) appointed Mary Laymon as the personal representative of Howard Laymon's estate.

         On July 13, 2015, Premier quitclaimed its interest in the subject property to appellant Blue Golds Ventures LLC (BGV), and Aquarium assigned its mortgagee's interest in the subject property to appellant 4Path Realty (4Path).[2] Premier's quitclaim deed and Aquarium's mortgage assignment were recorded on July 15.

         On July 31, 2015, the probate court issued letters testamentary to Mary Laymon, allowing her to administer Howard Laymon's estate. On September 16, 2015, Mary Laymon, as personal representative of Howard Laymon's estate, sued appellants in district court, asserting quiet-title and slander-of-title claims regarding the subject property. On October 6, BGV, as an owner, redeemed the subject property from Wells Fargo and recorded its certificate of redemption. Premier, Aquarium, and BGV jointly and timely answered the complaint. None of the other appellants timely answered the complaint.

         On November 23, 2015, Mary Laymon moved for partial summary judgment against appellants on her quiet-title claim. Premier, Aquarium, and BGV jointly opposed the summary-judgment motion. None of the other appellants-4Path, Stonewood, Labatt, and Hermanson-opposed or appeared at the summary-judgment-motion hearing on December 21. On March 21, 2016, the district court granted partial summary judgment against appellants on Mary Laymon's quiet-title claim.

         In September 2016, Mary Laymon moved for default judgment against 4Path, Stonewood, Labatt, and Hermanson on her slander-of-title claim. Stonewood, Labatt, and Hermanson jointly opposed the default-judgment motion, and, on October 5, 4Path, Stonewood, Labatt, and Hermanson, filed a joint answer to the complaint. The district court struck the joint answer of 4Path, Stonewood, Labatt, and Hermanson and granted default judgment against "4Path Realty, an assumed name of Stonewood Realty, " on Mary Laymon's slander-of-title claim. But the court granted a monetary judgment against "Stonewood Realty LLC, doing business as 4Path Realty." The court subsequently amended its order sua sponte, granting a monetary judgment against "4Path Realty, an assumed name of Stonewood Realty" on the slander-of-title claim. The court denied Mary Laymon's request for leave to file a motion for reconsideration of the denial of default judgment against Stonewood, Labatt, and Hermanson on her slander-of-title claim.

         In November 2016, Mary Laymon moved for default judgment against Labatt (d/b/a 4Path) and Hermanson (d/b/a 4Path) on the slander-of-title claim; moved to amend the caption of the complaint to clarify 4Path's status as an assumed name of Stonewood, Labatt, and Hermanson; and moved to dismiss the slander-of-title claim as to Premier, Aquarium, and BGV. The district court amended the case caption to clarify 4Path's status as an assumed name of Stonewood, amending its default-judgment order to reflect a default judgment against "Stonewood Realty LLC d/b/a 4Path Realty" on Mary Laymon's slander- of-title claim; amended the default judgment to include Stonewood as a judgment debtor; denied Mary Laymon's motion for default judgment against Labatt (d/b/a 4Path) and Hermanson (d/b/a 4Path) on her slander-of-title claim; dismissed with prejudice the slander-of-title claim as to Premier, Aquarium, and BGV; and directed entry of judgment on its March 21, 2016 order for partial summary judgment.

         Appellants challenge summary judgment against them on Mary Laymon's quiet-title claim and the default judgment against Stonewood (d/b/a 4Path) on Mary Laymon's slander-of-title claim. In a notice of related appeal, Mary Laymon challenges the denial of default judgment against Labatt and Hermanson on her slander-of-title claim.

         ISSUES

         I. Did the district court err in declining to refer Mary Laymon's action against appellants to probate court?

         II. Did the district court err in concluding that Mary Laymon has standing to assert quiet-title and slander-of-title claims against appellants on behalf of Howard Laymon's estate?

         III. Did the district court otherwise err in entering summary judgment against appellants on Mary Laymon's quiet-title claim?

         IV. Did the district court otherwise err in entering default judgment against Stonewood (d/b/a 4Path) on Mary Laymon's slander-of-title claim?

         V. Did the district court err in denying default judgment against Labatt and Hermanson on Mary ...


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