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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Young v. Embley (09/08/2006) sp-6042
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
| CYNTHIA YOUNG, | ) |
| ) Supreme Court No. S- 11584 | |
| Appellant, | ) |
| ) Superior Court No. | |
| v. | ) 3AN-03-7095 CI |
| ) | |
| KENNETH EMBLEY, | ) O P I N I O N |
| ) | |
| Appellee. | ) No. 6042 - September 8, 2006 |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Peter Michalski, Judge.
Appearances: Kneeland Taylor, Anchorage, for
Appellant. James T. Stanley, Amodio, Stanley
& Reeves, Anchorage, for Appellee.
Before: Bryner, Chief Justice, Eastaugh,
Fabe, and Carpeneti, Justices. [Matthews,
Justice, not participating.]
CARPENETI, Justice.
I. INTRODUCTION
I. Cynthia Young cohabited with David Dang for several
years and ran a bed and breakfast establishment with him.
Unbeknownst to Young, Dang executed a deed of trust on the
property granting a security interest to Donald Joyner, from whom
he had borrowed money. Kenneth Embley later acquired Joyners
interest. Dang then purportedly granted Young a lien on the
property, securing an obligation to her. Dang defaulted on both
obligations. Embley foreclosed on the deed of trust, acquiring
the property at a nonjudicial foreclosure sale. Young attempted
to halt the sale by asserting that she had the right to cure
Dangs default, but the sale went ahead. The superior court
declined to set aside the sale. Young appeals. Because junior
lienholders have the right to cure a senior interest holders
default on a deed of trust, we reverse the judgment of the
superior court and remand for a determination of the nature of
Youngs interest in the property.
II. FACTS AND PROCEEDINGS
A. Facts
This case concerns the disposition of property located
at 2910 West 31st Avenue in the Spenard area of Anchorage.
Cynthia Young and David Dang lived on and operated the property
as a bed and breakfast called The Alaska Wilderness Plantation.1
Dang held sole title to the property. Even so, Young held
herself out as an owner of the property. She also used the name
Cynthia Dang though she and Dang never married. Young and Dang
have a daughter who was five years old in 2004.
On August 30, 2002 Dang executed a deed of trust on the
property, using the property to secure a $40,000 loan made by
Donald Joyner. Young was apparently unaware of the execution of
this deed of trust. Dang subsequently defaulted on the deed of
trust and Joyner had a notice of default recorded by Land Title
Company of Alaska on November 21, 2002 and posted shortly
thereafter. A foreclosure sale was scheduled for February 25,
2003. Joyner then sold the note and assigned his interest to
appellee Kenneth Embley. The foreclosure sale was delayed to
allow Embley to complete his purchase of the note.
On March 3, 2003, Dang executed an agreement in favor
of Young that promised to pay Young $158,000 as a sep[a]ration
settlement. The agreement also provided that Young would have a
lien on the property at issue if Dang failed to pay her $50,000
on March 4, 2003. Dang failed to make the payment, as a result
of which Young filed suit against him and recorded a lis pendens
on the property.2
On March 12 and April 1, 2003 Young asked Embley not to
hold the foreclosure sale, asserting that she had not been given
the statutorily required notice. Young also asserted at that
time that she had the right to cure Dangs default on the
Embley/Joyner deed of trust. The sale was postponed until April
25, 2003. On that date Embley provided Young with a Cure Figure
Worksheet and an Offset Bid Figure Worksheet enumerating the
amounts for which Dang was in default. Young did not tender a
cure at the time but objected to the foreclosure sale, though she
did not seek to enjoin it. Embley purchased the property at the
foreclosure sale for $165,201.04. Embley also paid the accrued
arrearages on the most senior loan on the property, held by First
Interbay.
B. Proceedings
Young filed suit against Embley and Land Title in May
2003, seeking damages, a declaration voiding the foreclosure
sale, and seeking a declaration that she was entitled to cure
Dangs default. Young amended her complaint to add a demand for
punitive damages. Land Title moved to strike Youngs request for
jury trial, arguing that [a] suit to set aside a foreclosure sale
under a deed of trust is an equitable one. The superior court
granted the motion to strike the jury demand.
Youngs second amended complaint, filed in November
2003, stated similar claims, including wrongful foreclosure and
abuse of process, and again asked for compensatory and punitive
damages and equitable relief. The complaint did not include a
demand for jury trial. Young moved for reconsideration of the
courts order striking her jury demand, which the court denied.
Both Embley and Land Title filed motions for summary judgment,
which the superior court granted. Young appealed both summary
judgments, but later settled with Land Title and withdrew her
appeal against it.
III. STANDARD OF REVIEW
We apply our independent judgment to questions of law,
adopting the rule of law that is most persuasive in light of
precedent, reason, and policy.3 When a question of statutory
interpretation is involved, we will independently evaluate the
trial courts interpretation.4 If a statute is ambiguous we apply
a sliding scale of interpretation, where the plainer the
language, the more convincing contrary legislative history must
be. 5 We interpret Alaska law according to reason, practicality,
and common sense, taking into account the plain meaning and
purpose of the law as well as the intent of the drafters.6 We
have stated: In assessing statutory language, unless words have
acquired a peculiar meaning, by virtue of statutory definition or
judicial construction, they are to be construed in accordance
with their common usage.7
We use our independent judgment in reviewing a grant of
summary judgment, drawing all factual inferences in favor of, and
viewing the facts in the light most favorable to the non-
prevailing party (generally the non-movant).8 We will affirm a
grant of summary judgment if there are no genuine issues of
material fact and the prevailing party was entitled to judgment
as a matter of law.9 Where, as here, the superior court granted
summary judgment without articulating its reasoning, we examine
all grounds on which the movant (Embley) relied to determine if
any were sufficient.10
IV. DISCUSSION
A. Junior Lienholders Are Entitled to Equitable Redemption on a
Deed of Trust.
1. The history of equitable redemption
1. While this appeal concerns the extent of a statutory right,
we must begin with a brief detour into the history of mortgages.
The mortgage was created by the early English court as a transfer
of title from the mortgagor to the mortgagee, generally as
security for a loan by the mortgagee to the mortgagor. Once the
mortgagor repaid the loan proceeds, title to the property would
return to him.11 If, however, the mortgagor failed to pay the
mortgage by the due date, called the law day, he would forfeit
all interest in the property. This deadline applied without
exception, even if the mortgagor could not find the mortgagee to
pay him,12 or if the borrower was robbed on his way to Law Day,13
and thus often resulted in injustice.
In response to these injustices, the Court of Chancery
created the remedy of equitable redemption. Equitable redemption
allowed the borrower to come into court after default, and if he
told a convincing story, he was allowed to force a reconveyance
of the land.14 When mortgagors began to take advantage of this
remedy, sometimes redeeming the property years after law day, the
Court created the remedy of foreclosure to end the period of
equitable redemption so that the new owner could be sure that his
title was secure and the previous owner could not redeem the
land.15 Thus, a mortgage is said to carry with it an equity of
redemption, the right, until the foreclosure sale, to reimburse
the mortgagee and cure the default.16 But this (mortgagors)
remedy of equitable redemption is limited by the (mortgagees)
remedy of foreclosure.
While at common law the execution of a mortgage
required transfer of title, most American jurisdictions, Alaska
included, now recognize mortgages under the lien theory, which
treats the mortgage as merely a security interest in the property
and confers no right to possession of that real estate on the
mortgagee.17 Accordingly, the
mortgagor has the right to possession until there has been a val
id foreclosure.18 We stated, in Brand v. First Federal Savings &
Loan Assn of Fairbanks:19 In light of our territorial precedents,
likely reliance thereon, and the provisions of AS 09.45.680, we
believe that the territorial view that mortgages in Alaska convey
to the mortgagee only a lien, not any sort of title, should be
retained.20 The lien theory, we noted, is said to mark a distinct
advance in legal ideas over the crude conception of the title
theory.21
Mortgages under the lien theory continue to carry the
equity of redemption. Alaska has partly codified the mortgagors
right of redemption. Under AS 09.35.250, The judgment debtor or
a successor in interest may redeem the property before
confirmation of sale on paying the amount of the purchase money,
with interest and any taxes due. Alaska has also enacted a
procedure for redemption by the debtor within a year after
confirmation of the foreclosure sale.22 This statutory enactment
does not occupy the field, however, as we continue to recognize
judicially the right of equitable redemption.23 This view is in
line with the Restatement, which declares that
a performance in full of the obligation
secured by a mortgage . . . , by one who is
primarily responsible for performance of the
obligation, redeems the real estate from the
mortgage . . . . Performance may be made
prior to the time the obligation is due . . .
or may be made at or after the time the
obligation is due but prior to
foreclosure.[24]
2. Redemption of deeds of trust
We treat deeds of trust as identical to mortgages in
almost all respects.25 In Brand, we stated: A deed of trust is a
mortgage in effect, being only a somewhat different device for
accomplishing the same purpose, creating a security interest in
land. . . . [A] deed of trust does not move title out of the
trustor, but only creates a lien.26 Because mortgages and deeds
of trust are virtually identical, and because mortgages carry the
equity of redemption, we conclude that deeds of trust also carry
the equity of redemption.
In contrast to mortgages, however, there is no
statutory post-sale redemption available under a deed of trust
unless the deed of trust so provides.27 Instead of post-sale
redemption, AS 34.20.070(b) provides a statutory right of cure
under a deed of trust. The statute states that foreclosure may
be forestalled by payment of arrearages, costs and attorneys
fees.28 Equitable redemption traditionally requires the payment
of the full amount of debt owed in order to clear the property of
the previous encumbrance. If only a portion of the debt is in
default, however, then that portion can be redeemed separately
with the consent of the obligee.29 Alaska Statute 34.20.070(b)
forces the lender to accept partial payments when a deed of trust
is in default. The crux of this case is to determine from whom
the lender must accept those payments.
3. The equity of redemption extends to junior
lienholders on the property secured by the deed of
trust.
The traditional right of equitable redemption generally
extends in some manner to holders of interests junior to the
obligors interests. Under the Restatement approach,
A performance in full of the obligation
secured by a mortgage, or a performance that
is accepted by the mortgagee in lieu of
payment in full, by one who holds an interest
in the real estate subordinate to the
mortgage but is not primarily responsible for
performance, does not extinguish the
mortgage, but redeems the interest of the
person performing from the mortgage and
entitles the person performing to subrogation
to the mortgage. . . . Such performance may
not be made until the obligation secured by
the mortgage is due, but may be made at or
after the time the obligation is due but
prior to foreclosure.[30]
This right of redemption for junior interest holders exists to
protect their interests since a foreclosure cuts off all
interests junior to the one foreclosed. Junior interests that
are protected include junior mortgagees, the holders of junior
mechanics liens and other liens, junior lessees, and easement
holders.31 As the Washington Court of Appeals has held, in order
to posses equitable redemption rights, a person must have an
interest in land and it must be derived in some way . . . from or
through or in the right of the mortgagor so as to constitute a
part of the mortgagors original equity of redemption.32 More than
a century ago the Oregon Supreme Court stated the proposition
even more broadly, holding that the right of redemption exists
not only in the mortgagor himself, but in every other person who
has an interest in, or legal or equitable lien upon, the
mortgaged premises, and includes judgment creditors, all of whom
may insist upon a redemption of the mortgage.33
Thus, we conclude that a junior lienholder holds a
right of redemption under a deed of trust. The equity of
redemption, as we have stated, would normally require payment of
the full amount mortgaged. We now consider whether a junior
lienholder is entitled to invoke AS 34.20.070(b) and require the
obligee to accept payment of arrearages to cure a senior interest
holders default.
B. A Junior Lienholder is Protected by the Cure Provision of AS
34.20.070(b).
1. The plain meaning of the statute supports an expansive
interpretation.
The parties vigorously dispute the meaning of AS
34.20.070(b), which provides for cure of a defaulted deed of
trust before foreclosure by the obligee.34 That statute states,
in relevant part:
At any time before the sale, if the default
has arisen by failure to make payments
required by the trust deed, the default may
be cured by payment of the sum in default
other than the principal that would not then
be due if no default had occurred, plus
attorney fees or court costs actually
incurred by the trustee due to the default.
If, under the same trust deed, notice of
default under this subsection has been
recorded two or more times previously and the
default has been cured under this subsection,
the trustee may elect to refuse payment and
continue the sale.
Embley argues that the statute must be read as granting a right
of cure only to obligors because the statute makes no mention of
other persons. Young argues that the statute should be read more
broadly because it uses the passive voice rather than designating
the beneficiary of the right of de-acceleration. Young proposes
that we interpret AS 34.20.070(b) to protect the same classes of
persons who are entitled to notice of foreclosure under AS
34.20.070(c). That subsection requires the trustee to notify:
(1) the grantor in the trust deed; (2) the
successor in interest to the grantor whose
interest appears of record or of whose
interest the trustee or the beneficiary has
actual notice, or who is in possession of the
property; (3) any other person in possession
of or occupying the property; (4) any person
having a lien or interest subsequent to the
interest of the trustee in the trust deed,
where the lien or interest appears of record
or where the trustee or the beneficiary has
actual notice of the lien or interest.
Young thus claims a right to cure Dangs default either as a
possessor or occupant of the property or as a holder of a
subsequent interest in the property.
In matters of statutory interpretation, we must give
effect to the intent of the legislature, with due regard to the
meaning that the statutory language conveys to others.35 If a
statute is unambiguous and expresses the legislatures intent, we
will not modify or extend it by judicial construction.36 However,
in cases where the plain language of the statute permits more
than one plausible interpretation, we apply a sliding scale:
[T]he plainer the language, the more convincing contrary
legislative history must be.37 Thus, the inquiry begins with the
text of the statute, buttressing the text with legislative
history if necessary.
The language at issue here was adopted in 1976.38 As
the parties have argued, the language admits of two possible
interpretations. The legislature may have omitted express
mention of obligors because it assumed that the reference would
apply only to obligors; alternatively, it may have omitted
express mention because it wished to include other interested
persons such as those listed in AS 34.20.070(c). From the plain
text either interpretation is plausible.39
Because the statute is written in the passive voice it
states that the default may be cured its meaning is ambiguous.
In Exxon Corp. v. State,40 we considered the terms of a contract
which stated that the Prudhoe Bay oil and gas unit may be
enlarged from time to time.41 In determining whether Exxon or the
state was entitled to enlarge the unit, we held that the language
is ambiguous. The passive voice can be ambiguous.42 Since,
however, subsequent sections of the contract in that case laid
out procedures by which the state could decide on unit expansion,
we held that only the state was entitled to expand the unit.43
Likewise, AS 34.20.070(b) is ambiguous because it uses the
passive voice. And, as was the case with the contract in Exxon,
the statutory context provides some guidance: AS 34.20.070(c), in
establishing a broad group of persons entitled to notice of
foreclosure, suggests that the right of cure extends beyond the
obligor.
2. Legislative history does not rebut an expansive
interpretation of the statute.
At the first hearing on the bill, its sponsor Rep.
Sullivan noted that the then-current law permitted foreclosure if
a mortgagor was only one day late in payment.44 At a subsequent
hearing Rep. Sullivan stated that the legislation gives the buyer
a chance to get caught up to date.45 A further committee
statement indicated that the bill would prevent an unscrupulous
seller from vulturing in wait of a missed payment.46
These statements certainly indicate a legislative
assumption that the right of de-acceleration would extend to the
obligor. While the legislature concerned itself chiefly with the
substance of the right rather than the persons to whom it would
extend, there is no hint in the statements that an expansive
interpretation of the statute would conflict with legislative
intent.47
3. The common law supports an expansive reading of the statute.
1. Especially when statutory language and legislative history
are ambiguous, we look to the common law48 as a useful tool to
discern legislative intent and to interpret statutes. The common
law . . . furnishes one of the most reliable backgrounds upon
which analysis of the objects and purposes of a statute can be
determined.49 By statute dating back to territorial days, Alaska
has adopted the common law (where not inconsistent with federal
or state constitutions or with state statutes) as the rule of
decision in this state.50 We presume that the legislature is
aware of the common law when enacting statutes.51 Moreover, the
common law is an especially important tool when a statute
attempts to restate the common law.52 We have stated that
[s]tatutes which establish rights that are in derogation of
common law are to be construed in a manner that effects the least
change possible in common law.53
The equity of redemption, as we have discussed, is
analogous to the right of cure granted by AS 34.20.070(b). If a
lienholder is able to redeem the property, then that person
should also be able to cure a default. As Young argues in her
brief, cure is a more liberal right than the right of redemption,
indicating that anyone entitled to redeem should also have the
right to cure. We have characterized cure as a type of
redemption: If the party who executes the deed of trust defaults
the obligation, the party nonetheless has a right of redemption.
In other words, the party has the opportunity to cure the default
at any time before a nonjudicial sale.54 Therefore, just as the
junior lienholder has the right to redeem a mortgage, we
determine that the junior lienholder also possesses the right to
cure default on a deed of trust before the foreclosure sale. Our
conclusion is further buttressed by the twin principles that
redemption statutes should be construed liberally55 and that
equity abhors a forfeiture.56
As noted above,57 we share the view expressed by the
Oregon Supreme Court that the right of equitable redemption on a
deed of trust extends beyond the obligor to every other person
who has an interest in, or legal or equitable lien upon, the
mortgaged premises.58 Thus the right of cure granted by AS
34.20.070(b) should extend to those persons. However, this
equitable right would not extend to mere occupants or possessors
lacking any claim to the property.59 Thus, if Young wishes to
invoke AS 34.20.070(b) she must do so on her claim of interest in
the property rather than her occupancy of it.
C. Young Introduced Enough Evidence of an Equitable Lien To
Survive Summary Judgment.
In order to survive Embleys summary judgment motion
Young must present more than a scintilla of evidence that she
possesses some form of protected interest in the property.60
Young argues that she either had an unwritten, unrecorded
ownership interest in the subject property or that the facts
establish an equitable lien in her favor. We address each
claimed interest separately.
Youngs evidence of an ownership interest includes her
own testimony on several points. First, she averred that she and
Dang purchased the Alaska Wilderness Plantation in January 2002
with intent to own it as 50/50 partners. According to Young,
This was our intention although the title was placed solely in
Davids name. Young stated that David and I were living together
at that point with our child . . . and with two other children,
one mine from a previous relationship, and one Davids from a
previous relationship. She further stated that David and I
purchased the property by assuming a large loan, and by pouring
into the property everything we earned.61 Young asserts that
these facts establish her ownership interest in the property
under Bishop v. Clark.62 Bishop is not on point. In that case we
upheld the superior courts finding that a cohabiting couple
impliedly agreed to the distribution of property accumulated
during cohabitation and upheld the courts award of half the
couples assets to Clark.63 In the present case the superior court
made no such findings. Furthermore, even assuming Youngs
evidence is sufficient to support a division of property, such
division would occur only between Young and Dang; Young cannot
assert the interest against Embley without first obtaining a
judgment specifically granting her an interest in the property.
Such an assertion against Embley would otherwise be precluded by
the statute of frauds.64 We turn to Youngs claim to an
equitable interest. Youngs evidence of an equitable lien
consists of the note signed by Dang, which purports to
memorialize her interest in the property, and her own testimony
about Dangs intent to grant her an interest.65 In Queen of the
North, Inc. v. LeGrue,66 we adopted the definition of an equitable
lien used by the Michigan Court of Appeals: [A]n equitable lien
arises from an agreement that both identifies property and
evidences an intention that such property serve as security for
an obligation.67 The note executed on March 3, 2003, coupled with
Youngs testimony, provides more than a scintilla of evidence that
Young possessed an equitable lien on the property. We must
remand this case to the superior court to determine whether Young
did in fact possess such a lien; if she did, then she was
entitled to cure Dangs default of the Joyner/Embley deed of
trust.
Embley argues that Young failed to preserve her right
to cure the default because she failed to tender the cure amount
or to seek a stay of the foreclosure sale. The record indicates
that Young repeatedly requested a cure amount from Embley,
obtaining it only on the morning of the foreclosure sale. Timely
provision of the cure amount, Young argues, would have allowed
her to tender a cure. As we stated in Hagberg v. Alaska National
Bank,68 AS 34.20.070(b) imposes on the lender a duty to seasonably
advise the obligor on request of the amount in default.69 In that
case we held that three days notice was insufficient.70 Here,
Youngs counsel, according to his affidavit, was provided with the
figure only as the foreclosure sale was about to begin. Although
Embley had a colorable argument that Young was not entitled to
the cure figure and so his failure to provide it was in apparent
good faith our holding today establishes that he had a duty to
provide the figure to Young at a reasonable time before
foreclosing.71 Accordingly, Youngs failure to seek a stay of the
sale is not a basis for ruling that she waived her rights.
Embley also implies that the provision of statutory
remedies excludes the availability to Young of an equitable lien.
But the provision of statutory remedies does not necessarily
preclude traditional remedies. In addition to presuming the
legislatures awareness of the common law, we assume that whenever
the legislature enacts a provision, it has in mind previous
statutes relating to the same subject matter, and all should be
construed together.72 In Donnybrook Building Supply Co., Inc. v.
Alaska National Bank of the North,73 we held that Donnybrook could
not seek an equitable lien because the mechanics lien statutes
establish a complex and detailed scheme for the protection of
suppliers on construction projects.74 Under these circumstances,
we concluded, The legislature clearly sought to balance the
conflicting interests of developers, lenders and suppliers under
this statutory umbrella.75 We declined to impose additional
remedies in Donnybrook because doing so would have disturbed the
balance embodied in a complete and prioritized system of
remedies.76 In contrast, although Alaskas deed of trust and
nonjudicial foreclosure statutes are complex and detailed, they
lack the completeness or exclusivity of the mechanics lien
statutes. For example, AS 34.35.060 provides a detailed priority
scheme among competing liens that has no analog in the deed of
trust statutes, and a holder of a junior interest to a deed of
trust is not confined to statutory remedies. We cannot say as a
matter of law that the equitable lien is unavailable to Young.
Although a lis pendens which relates to an interest
arising after the execution of the deed of trust will not affect
the title obtained by a purchaser at a valid foreclosure sale,77
the remedy provided by AS 34.20.070(b) forestalls the ability of
the mortgagor to conduct a foreclosure sale. If Young had a
valid interest in the property, then she was denied her right to
cure the default and thus the foreclosure sale was invalid. We
have stated our reluctance to set aside foreclosure sales except
in the most unusual circumstances. Even when the sale fails to
comply with the statutory provisions, we will set it aside only
in cases that reach unjust extremes. 78 The right of cure carries
with it a right to prevent the foreclosure sale from ever
happening. Thus, Embley lacked the authority to hold the sale,
so it was invalid when it was held.79 We need not inquire, then,
whether the result of the sale reaches an unjust extreme.
D. The Superior Court Did Not Err in Striking Youngs Jury
Demand and in Dismissing Her Claims at Law.
Young asked for a jury trial of her claims. The
superior court granted Land Titles motion to strike the jury
demand. Youngs basis for the demand appears to be that because
so much time has passed since the foreclosure sale, a damages
remedy is preferable to an equitable remedy; since damages are
the province of law rather than equity, then Young should get a
jury trial. This argument lacks merit.
Youngs argument reverses the order of the inquiry; the
need for a jury trial is determined by the nature of the claims,
not by the ease of remedying the situation. Young has not
properly alleged any claims for compensatory or punitive damages
and thus is not entitled to a jury trial under article I, section
16 of the Alaska Constitution.80 As we have stated, [t]he Alaska
Constitution preserves a jury trial only for those causes of
action which are legal, and not equitable in nature.81 In McGill
v. Wahl, we found that an action alleging that a prescriptive
easement had been established was equitable whether it was styled
as quiet title or ejectment.82 Similarly, a foreclosure suit,
whether it is styled as an action to recover property or as an
action for abuse of process, seeks a relief that sounds properly
only in equity; the entitlement to jury trial extends only to
legal issues independent of the foreclosure suit.83 However Young
frames her claims, she has not alleged any claims at law such
that she is entitled to a jury.
Young also alleges that Embley committed the tort of
abuse of process but does not make out a prima facie case. She
alleges that Embleys purpose at the foreclosure sale was to
purchase the subject property and not to collect the secured
debt. Accordingly, Embley was prepared to outbid other potential
purchasers of the property. Furthermore, Embley refused to give
Young a cure figure on the note. It is hard to see how these
allegations could meet the requirements of the tort: first, an
ulterior purpose, and second, a willful act in the use of the
process not proper in the regular conduct of the proceeding.84
Embley purchased the property at a public auction at which Young
was free to bid. Since the purpose of a foreclosure sale is to
allow the deed holder to recover as much money as possible, it is
hard to assign an ulterior motive to Embley for bidding at the
sale. Because Youngs tort claim fails as a matter of law, the
superior court properly dismissed it.
V. CONCLUSION
I. The right of cure enumerated in AS 34.20.070(b) extends not
only to the obligor on a deed of trust but also to holders of
junior interests. Young presented enough evidence of an
equitable lien on the property to withstand summary judgment.
Accordingly, we REVERSE the judgment of the superior court on
these matters. Youngs demand for jury trial and her abuse of
process claim are deficient as a matter of law. Accordingly, we
AFFIRM the superior courts dismissal of her tort claim and its
rejection of her jury demand. We REMAND for further proceedings
consistent with this opinion.
_______________________________
1 The property is of some renown as the former residence
of Anchorage businessman Peter Zamarello.
2 Young v. Dang, No. 3AN-03-5442 CI (complaint filed Mar.
11, 2003). Embleys counsel wrote Youngs counsel declaring the
lis pendens to be a slander of title and asking that it be
removed.
3 Lawson v. Lawson, 108 P.3d 883, 885 (Alaska 2005).
4 Nystrom v. Buckhorn Homes, Inc., 778 P.2d 1115, 1118
(Alaska 1989).
5 Tesoro Petroleum Corp. v. State, 42 P.3d 531, 537
(Alaska 2002) (citations omitted).
6 Native Village of Elim v. State, 990 P.2d 1, 5 (Alaska
1999).
7 Govt Employees Ins. Co. v. Graham-Gonzalez, 107 P.3d
279, 284 (Alaska 2005) (quoting Muller v. BP Exploration (Alaska)
Inc., 923 P.2d 783, 787-88 (Alaska 1996)).
8 Rockstad v. Erickson, 113 P.3d 1215, 1219 (Alaska
2005).
9 Id.
10 Yates v. Halford, 73 P.3d 1236, 1240 (Alaska 2003).
11 See 1 Grant S. Nelson & Dale A. Whitman, Real Estate
Finance Law 1.2, at 6-7 (4th ed. 2002).
12 Id. at 7.
13 Land Assocs., Inc. v. Becker, 656 P.2d 927, 930 (Or.
1982).
14 Id.
15 Id. at 931.
16 Blacks Law Dictionary 561 (7th ed. 1999).
17 Restatement (Third) of Prop.: Mortgages 4.1(a) (1997).
See AS 09.45.680; Ariz. Rev. Stat. Ann. 33-703(A) (2005); Cal.
Civ. Proc. Code 744 (West 2006); Colo. Rev. Stat. Ann. 38-35-
117 (West 2000); Matter of Spencer, 115 B.R. 471, 477 (D. Del.
1990); Fla. Stat. Ann. 697.02 (West 1994); Ga. Code Ann. 44-14-
30 (West 2006); Haw. Rev. Stat. Ann. 506-1 (LexisNexis 2005);
Idaho Code Ann. 6-104 (2005); Egbert v. Egbert, 132 N.E.2d 910,
918 (Ind. 1956); Iowa Code Ann. 557.14 (West 1992); Hoelting
Enters. v. Trailridge Investors, L.P., 844 P.2d 745, 749 (Kan.
App. 1993); Watts Admr v. Smith, 63 S.W.2d 796, 800 (Ky. 1933);
Midwest Bank v. OConnell, 405 N.W.2d 201, 203 (Mich. App. 1987);
Minn. Stat. Ann. 559.17(1) (West 2000); Mont. Code Ann. 71-1-
105 (2005); Neb. Rev. Stat. 76-276 (2005); Nev. Rev. Stat. Ann.
40.050 (West 2006); N.M. Stat. Ann. 48-7-1 (West 2006); N.Y.
Real Prop. Law 611(3) (McKinney 1979); N.D. Cent. Code 35-03-
01.1(1) (2005); Okla. Stat. Ann. tit. 42, 10 (2001); Or. Rev.
Stat. Ann. 86.010 (West 2003); S.C. Code Ann. 29-3-10 (2005);
State of Wis. Inv. Bd. v. Hurst, 410 N.W.2d 560, 564 (S.D. 1987);
Taylor v. Brennan, 621 S.W.2d 592, 593 (Tex. 1981); Utah Code
Ann. 78-40-8 (West 2006); Wash. Rev. Code Ann. 7.28.230(1)
(West 2006); Glover v. Marine Bank of Beaver Dam, 345 N.W.2d 449,
453 (Wis. 1984); L Slash X Cattle Co. v. Texaco, Inc., 623 P.2d
764, 768-69 (Wyo. 1981).
18 1 Nelson & Whitman 1.5, at 10. Some states still use
the common-law title theory while others use a hybrid or
intermediate theory, which gives the right of possession to the
mortgagor at least until default, and, generally, gives it to the
mortgagee after default. See id.
19 478 P.2d 829 (Alaska 1970).
20 Id. at 831. AS 09.45.680 provides: Mortgage not a
conveyance. A mortgage of real property is not a conveyance that
will enable the owner of the mortgage to recover possession of
the property without a foreclosure and sale. See Lewis v. Wells,
85 F. 896, 902 (D. Alaska 1898) ([U]nder the laws of Oregon,
which, by the act of congress of May 17, 1884, became the laws of
this district, a mortgage does not convey title, but only creates
a lien upon real property.).
21 Brand, 478 P.2d at 831.
22 AS 09.35.250. Alaskas redemption statutes also allow
either the debtor or a creditor having a lien on the property
subsequent in time to that on which the property was sold to
redeem the property within sixty days of the order confirming the
foreclosure sale. AS 09.35.220, AS 09.35.230 & AS 09.45.190.
This right does not extend to deeds of trust. See AS
34.20.090(a):
The sale and conveyance transfers all title
and interest that the party executing the
deed of trust had in the property sold at the
time of its execution, together with all
title and interest that party may have
acquired before the sale, and the party
executing the deed of trust or the heirs or
assigns of that party have no right or
privilege to redeem the property, unless the
deed of trust so declares.
23 See, e.g., Harris v. Alaska Title Guar. Co., 510 P.2d
501, 503 & n.3 (Alaska 1973). See also 2b Norman A. Singer,
Sutherland Statutory Construction 50:02, at 146 (6th ed. 2000
rev.) (The provision of statutory remedies does not per se
preclude resort to appropriate common-law remedies.). Although
the legislature has the ability to abolish common-law rules and
remedies, such an intent is not to be presumed in the absence of
clear and explicit language. 2B Singer, 70:4, at 499.
24 Restatement (Third) of Prop.: Mortgages 6.4(a) (1997).
25 Our statutes explicitly treat deeds of trust as
mortgages in form; AS 34.20.110 states that [f]or the purposes of
record, a deed of trust, given to secure an indebtedness, shall
be treated as a mortgage of real estate, and recorded in full in
the book provided for mortgages of real property. The
Restatement refers to a deed of trust as a type of mortgage.
Restatement (Third) Prop.: Mortgages, Introduction, at 3. In
some states different theories apply to mortgages and deeds of
trust. For example, contrast Ga. Code Ann. 44-14-30 (A mortgage
in this state is only security on a debt and passes no title.)
with Ga. Code Ann. 44-14-60 (A deed of trust is an absolute
conveyance, with the right reserved by the grantor to have the
property reconveyed to him upon payment of the debt . . . and
shall not be held to be a mortgage.).
26 Brand, 478 P.2d at 831-32 (quoting R. Powell, The Law
of Real Property 553 (1970) (other citations omitted)).
27 See AS 34.20.090(a), supra n.22, providing that no
right of redemption exists unless the deed of trust so declares.
28 AS 34.20.070(b).
29 The Restatement notes that, with some exceptions, a
performance in full of the obligation secured by a mortgage, or a
performance that is accepted by the mortgagee in lieu of
performance in full . . . redeems the real estate from the
mortgage. Restatement (Third) of Prop.: Mortgages 6.4(a) (1997)
(emphasis added). The common law rule is that a mortgagee may
insist on a partial redemption. See 1 Nelson & Whitman 7.3, at
609. Under AS 34.20.070(b) the ability to insist on partial
redemption is mutual. In the present case Embley exercised his
equity of redemption by paying the accrued arrearages on the most
senior lien on the property, held by First Interbay. Embleys
payments were not a full payment of the First Interbay loan but
were only the amount of debt in default. First Interbay
consented, however, to this partial redemption.
30 Restatement (Third) of Prop.: Mortgages 6.4(e).
31 Id. at 6.4 cmt. g.
32 Brost v. L.A.N.D., Inc., 680 P.2d 453, 455 n.3 (Wash.
App. 1984).
33 Sellwood v. Gray, 5 P. 196, 198 (Or. 1884) (emphasis
added). Accord John Stepp, Inc. v. First Fed. Savs. & Loan Assn
of Miami, 379 So. 2d 384, 386 (Fla. Dist. App. 1980) ([T]he law
favors redemption by anyone who has an interest in the mortgaged
premises who would be a loser by foreclosure.); Am. Button-Hole,
Overseaming & Sewing Mach. Co. v. Burlington Mut. Loan Assn, 16
N.W. 527, 528 (Iowa 1883) (The general doctrine undoubtedly has
been that a junior lienholder has an equitable right to redeem
from a mortgage debt.); First Fed. Savs. & Loan Assn of Port
Washington v. Smith, 441 N.Y.S.2d 309, 310 (App. Div. 1981)
(Clearly, the owner of the equity of redemption or any person
with an interest in the mortgaged premises has a right to redeem
the property at any time prior to the actual sale under a
judgment of foreclosure.).
34 We have not previously considered the meaning of AS
34.20.070(b) to any great extent. Our only substantive
discussion of the statute is found in Hagberg v. Alaska National
Bank, 585 P.2d 559 (Alaska 1978), where we assumed a narrow
meaning of the language, describing the 1976 amendment as
designed to permit the obligor under a note secured by a deed of
trust to terminate a non-judicial deed of trust sale by paying
all arrearages. Id. at 560. We went on to state, in dicta, that
under the amendment [a]n obligor on a note must still pay the
principal and interest . . . . However, the defaulting obligor
may bring his payments current and stop the non-judicial
foreclosure as a matter of right only twice. Id. at 561-62.
Finally, we referred to the right of cure as [t]he right of an
obligor to call a halt to a nonjudicial foreclosure which imposes
on the lender a duty to seasonably advise the obligor on request
of the amount in default. Id. at 562.
35 Tesoro Petroleum Corp. v. State, 42 P.3d 531, 537
(Alaska 2002) (citation omitted).
36 Id.
37 Id.
38 Ch. 176, 1, SLA 1976.
39 For an example of a statutory scheme that clearly
specifies to whom the right of cure extends, see Cal. Civ. Code
2924c(a)(1) (cure may be exercised by the trustor or mortgagor or
his or her successor in interest in the mortgaged or trust
property or any part thereof, or any beneficiary under a
subordinate deed of trust or any other person having a
subordinate lien or encumbrance of record thereon.).
40 40 P.3d 786 (Alaska 2001).
41 Id. at 794.
42 Id. (citing Plate v. State, 925 P.2d 1057, 1065 (Alaska
App. 1996) (ambiguity due to passive voice in evidence rule
resolved by resort to commentary to rules); E.I. du Pont de
Nemours & Co. v. Train, 430 U.S. 112, 128 (1977) (other portions
of federal statute relevant to resolution of ambiguous passive
language)).
43 Id. at 794-95.
44 1975-76 Minutes of the House Judiciary Committee, May
19, 1975, at 141.
45 1975-76 Minutes of the House Judiciary Committee, Mar.
24, 1976, at 229.
46 1975-76 Minutes of the House Judiciary Committee, Apr.
3, 1976, at 242.
47 We may presume that the legislature was aware of the
effect of drafting in the passive voice. See Employment Sec.
Commn v. Wilson, 461 P.2d 425, 428 (Alaska 1969) ([W]e may assume
that the legislature knew and understood the rules of grammar.).
48 Here we use the term common law in the very general
sense of the decisions and principles that form the basis of our
legal system, encompassing both the traditional realms of law and
equity.
49 2B Singer, supra n.23, 50:01, at 139.
50 AS 01.10.010.
51 See 2B Singer, supra n.23, 50:01, at 139-140, 3A
Singer, 70:4, at 499-500. See Sears v. State, 713 P.2d 1218,
1219 (Alaska App. 1986) (legislature presumed to be aware of
common-law terms of art). Accord Ultrawall, Inc. v. Wash. Mut.
Bank, FSB, 25 P.3d 855, 859 (Idaho 2001) (legislature presumed
aware of judicial decisions when amending mechanics lien
statute); In re Proceedings of King County for Foreclosure of
Liens for Delinquent Real Prop. Taxes for the Years 1985 Through
1988, 811 P.2d 945, 950 (Wash. 1991) (legislature enacting tax
foreclosure statute presumed aware of case law on sufficiency of
description of property); Mack Motor Truck Corp. v. Wolfe, 303
S.W.2d 697, 700-01 (Mo. App. 1957) (legislature presumed aware of
common law of lien priority); State ex rel. Gladden v. Lonergan,
269 P.2d 491, 496 (Or. 1954) (legislature presumed to be aware of
common-law right preserved by Sixth Amendment).
52 2B Singer, supra, 50:02, at 146.
53 Univ. of Alaska v. Shanti, 835 P.2d 1225, 1228 n.5
(Alaska 1992). See also Roeckl v. Fed. Deposit Ins. Corp., 885
P.2d 1067, 1074 (Alaska 1994).
54 Bauman v. Day, 892 P.2d 817, 823 n.5 (Alaska 1995)
(emphasis in original). See also Burnett, Waldock & Padgett
Invs. v. C.B.S. Realty, 668 P.2d 819, 824 (Alaska 1983)
(Rabinowitz, J., concurring) (referring to right to redeem the
property under AS 34.20.070(b)).
55 Land Assocs., Inc. v. Becker, 656 P.2d 927, 932 (Or.
1982); State ex rel. LeFevre v. Stubbs, 642 S.W.2d 103, 106 (Mo.
1982) (All doubt will be resolved in favor of the right to
redeem.); Ulrich v. Lincoln Realty Co., 153 P.2d 255, 259 (Or.
1944). See 3A Singer, 70:4, at 481-82:
Statutes allowing foreclosure under a power
of sale contained within the trust deed or
mortgage are strictly construed against the
exercise of such power.
Legislative provisions giving the mortgagee
and junior lienholders the right of
redemption after judicial sale have been
given a very liberal interpretation so that
the property of the debtor will satisfy as
many of the debtors liabilities as possible.
56 See, e.g., Yates v. Halford, 73 P.3d 1236, 1241 & n.15
(Alaska 2003).
57 See supra n.33 and accompanying text.
58 Sellwood v. Gray, 5 P. 196, 198 (Or. 1884).
59 Cf. Restatement (Third) Prop.: Mortgages 6.4 cmt. g
(right of redemption protects junior mortgagees, the holders of
junior mechanics liens and other liens, junior lessees, and
easement holders).
60 See Meyer v. State, 994 P.2d 365, 368 (Alaska 1999).
61 Presumably this is a reference to the First Interbay
loan in the amount of approximately $500,000.
62 54 P.3d 804 (Alaska 2002).
63 Id. at 810-11.
64 Alaska Statute 09.25.010(a) provides:
In the following cases and under the
following conditions an agreement, promise,
or undertaking is unenforceable unless it or
some note or memorandum of it is in writing
and subscribed by the party charged or by an
agent of that party:
. . . .
. . . (6) an agreement . . . for the sale of
real property, or of any interest in real
property, or to charge or encumber real
property . . . .
65 The handwritten agreement, dated March 3, 2003 and
signed by Young and Dang, reads:
Prommisory Note
I Cynthia Young AKA Cynthia Dang agree to
accept $200,000.00 as a payment of seperation
settlement: Of this I have recd $42,000.00 in
increments through Feb. of 2003.
I expect $50,000.00 of this remaining balance
to be paid by March 4, 2003 or I will place a
lien on existing property known as
Alaska Wilderness
2910 West 31st
Anchorage, Alaska
99517
Let this be the final notification of the
purpose of lien & separation.
(Signed) Cynthia Young
(Signed) David Dang
66 582 P.2d 144 (Alaska 1978).
67 Id. at 149-50 (quoting Warren Tool Co. v. Stephenson,
161 N.W. 2d 133, 139 (Mich. App. 1968)).
68 585 P.2d 559 (Alaska 1978).
69 Id. at 562.
70 Id. at 561-62.
71 Young also argues that Embleys notice to her as an
occupant was deficient under AS 34.20.070(c). Even assuming that
Young did not obtain notice until March 12, 2003, she
acknowledges that this was forty-five days before the foreclosure
sale. Moreover, it appears that Embley postponed the foreclosure
sale for some period at Youngs request.
72 Hafling v. Inlandboatmens Union of the Pac., 585 P.2d
870, 877 (Alaska 1978), disavowed on other grounds by State v.
Alex, 646 P.2d 203 (Alaska 1982).
73 736 P.2d 1147 (Alaska 1987).
74 Id. at 1153.
75 Id.
76 Id. at 1154.
77 Alaska Laborers Training Fund v. P & R Enters., Inc.,
583 P.2d 825, 827 (Alaska 1978).
78 Cook Schuhmann & Groseclose, Inc. v. Brown & Root,
Inc., 116 P.3d 592, 595-96 (Alaska 2005) (quoting Rosenberg v.
Smidt, 727 P.2d 778, 783 (Alaska 1986)).
79 See, e.g., Burnett, Waldock & Padgett Invs. v. C.B.S.
Realty, 668 P.2d 819, 823 (Alaska 1983) (prior valid foreclosure
sale deprived second deed of trust holder of power to hold second
foreclosure sale, rendering second sale invalid).
80 See also Winegardner v. Greater Anchorage Area Borough,
534 P.2d 541, 544 (Alaska 1975) (no entitlement to jury trial if
actions not suits at common law).
81 McGill v. Wahl, 839 P.2d 393, 396 (Alaska 1992).
82 Id.
83 Sunwest Bank of Clovis, N.A. v. Garrett, 823 P.2d 912,
915-16 (N.M. 1992).
84 Jenkins v. Daniels, 751 P.2d 19, 22 (Alaska 1988)
(quoting W. Page Keeton, et al., Prosser and Keeton on the Law of
Torts 121, at 898 (5th ed. 1984)).
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