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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Farmer v. Alaska USA Title Agency, Inc. (10/24/2014) sp-6963

Farmer v. Alaska USA Title Agency, Inc. (10/24/2014) sp-6963

         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, email  



ROBERT J. FARMER,                                    )  

                                                     )        Supreme Court No. S-15163  

                  Appellant,                         )  

                                                     )        Superior Court No. 3AN-13-04416 CI  

         v.                                          )  

                                                     )        O P I N I O N  

ALASKA USA TITLE                                     )  

AGENCY, INC. and PEGGY JO                            )        No. 6963 - October 24, 2014  


WATSON,                                              )  


                  Appellees.                         )  

_______________________________ )  

                  Appeal from the Superior Court of the State of Alaska, Third  


                  Judicial District, Anchorage, Erin B. Marston, Judge.   

                  Appearances:    Kenneth  P.  Jacobus,  P.C.,  Anchorage,  for  


                  Appellant.    David  D.  Clark,  Law  Office  of  David  Clark,  

                  Anchorage, for Appellee Peggy Jo Watson.  No appearance  


                  for Appellee Alaska USA Title Agency, Inc.  

                  Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  


                  Bolger, Justices.  

                  STOWERS, Justice.  


                  A  debtor  was  given  proper  initial  notice  of  a  pending  nonjudicial  

foreclosure sale but was not given additional notice when the sale was postponed.  The  

debtor argued that equity required re-notice after each postponement and that the lack  

of  re-notice  violated  his  due  process  rights.    The  superior  court  granted  summary  

----------------------- Page 2-----------------------

judgment to the creditor.  We affirm because equity does not require re-notice after  

postponement of a nonjudicial foreclosure sale and notice of a postponement by public  

announcement satisfies due process.   



                    In 1992 Robert J. Farmer and his wife, Kathy J. Farmer, bought Wolverine  


Lodge in Glennallen from Peggy Jo Watson.   The purchase price of $365,000 was  

secured by a deed of trust on the property.  Farmer defaulted on the mortgage for the first  

time in 1996, but he cured before the foreclosure sale occurred.  

                    In 2012 Farmer defaulted again.  Farmer was almost five months late on the  


payments, had not paid the real estate taxes or room taxes, and had no insurance on the  


property.    Watson  paid  all  of  these  expenses  herself  in  order  to  keep  the  property  


up-to-date and insured.  She testified that "Farmer promised many times that he would  

bring the loan current and obtain insurance," but "[h]e never did."  


                    In March 2012 Watson commenced nonjudicial foreclosure proceedings.  


Watson's attorney recorded a notice of default and a notice of sale, and distributed them  


to Farmer by mail and personal service.  Notice of the nonjudicial foreclosure sale was  

published  in  the  Alaska  Journal  of  Commerce  and  posted  at  various  locations  in  



                    The nonjudicial foreclosure sale was postponed six times.  It was initially  


set for July 25, but Watson postponed it until August 29.  On August 28 Farmer filed for  


Chapter 13 bankruptcy, and Watson  again postponed the sale, this time at Farmer's  



                    The deed of trust reflects that the property was purchased from Peggy Jo  


Dicks and Jesse Allen Dicks.  Peggy Jo presumably later changed her name to Peggy Jo  


                                                              -2-                                                           6963  

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request, until September 26. Because of the ensuing automatic bankruptcy stay,                                                     2 the sale 

was postponed until October 31, then until November 28, then again until December 19,             

                                                                                                              3   Watson's attorney  

and finally until December 27, when the sale actually took place.                                                 

was the only attendee at each of the scheduled sales.  Each of these postponements was  


announced publicly on the sale date, and the trustee signed the notice of postponement  


every time.  Farmer was not otherwise notified of any of the postponements, and, at the  

time   of   the   actual   sale,   he   alleges   that   neither   "[he],   [his]   wife,   nor   [his]  

bankruptcy attorney knew . . . that a deed of trust foreclosure sale was scheduled for  

December 27, 2012."  


                      Over the course of the postponements, Farmer asked for the cure amount  


three separate times, the  last time being on December 11, 2012.  Watson's attorney  

provided the cure amount after each request.  Farmer testified that he "was in the process  


of obtaining funds in order to bring the deed of trust current, and would have been able  


to do so."  But the record contains no documentation of any attempt to cure, and Farmer  


presented no evidence of his attempts to "obtain[] funds."  At the time of the bankruptcy  


proceedings, Farmer had $200 in cash and $113 in his bank account.  Watson swore in  

an affidavit that Farmer "never promised . . . to cure the foreclosure" after she received  

relief from the bankruptcy stay.  


                      At the nonjudicial foreclosure sale on December 27, 2012, Watson bought  


the property with a bid of $120,000.  The only valuation of the property was Farmer's  


own valuation on his bankruptcy worksheet, which was $150,000.  Watson believed that  


$150,000  was  "in  the  ball-park  given  the  amount  of  deferred  maintenance  on  the  


           2          See 11 U.S.C.  362(a) (2012).  

           3          The automatic stay was lifted on December 7, 2012.  

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                       Farmer filed suit in January 2013, challenging the nonjudicial foreclosure.  


He argued mainly that he had not received notice of the sale, that he could have cured,  


and that the foreclosure was a forfeiture.  Watson moved for summary judgment on the  


validity of the foreclosure.  She argued that the trustee was not required to send notice  

to  Farmer  every  time  the  sale  was  postponed,  and  that  Farmer  offered  no  evidence  


 showing that he was in a position to cure. The superior court granted summary judgment  

to Watson.  The court concluded that the foreclosure was conducted "according to the  

appropriate  statutes,"  was  properly  postponed,  and  that  "Watson  did  not  mislead  

 [Farmer] by providing a cure amount."  Farmer appeals.  



                       We review the "grant of a summary judgment motion de novo, affirming  


if the record presents no genuine issue of material fact and if the movant is entitled to  


judgment as a matter of law."    In this examination, we draw all reasonable inferences  

in favor of the nonmovant.5  In order to survive a motion for summary judgment, a party  


must present more than "unsupported assumptions and speculation."   We "apply our  


independent judgment to questions of law, adopting the rule of law most persuasive in  

light of precedent, reason, and policy."7  

            4          Erkins   v.   Alaska  Tr.,  LLC ,  265  P.3d  292,  296  (Alaska  2011)  (quoting  

Beegan v. State, Dep't of Transp. & Pub. Facilities                                   , 195 P.3d 134, 138 (Alaska 2008))       

(internal quotation marks omitted).  

            5          Id .  



                       Boyko  v.  Anchorage  Sch.  Dist. ,  268  P.3d  1097,  1103  (Alaska  2012)  

(quoting Perkins v. Doyon Universal Servs., LLC , 151 P.3d 413, 416 (Alaska 2006))  

(internal quotation marks omitted).  



                       Shaffer v. Bellows, 260 P.3d 1064, 1068 (Alaska 2011) (quoting Smith v.

Radecki , 238 P.3d 111, 114 (Alaska 2010)) (internal quotation marks and alterations


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                   Farmer makes three arguments on appeal: (1) that failing to notify him after  


each postponement was inequitable and violated his due process rights under the Alaska  


Constitution; (2) that he was misled into thinking that he would have a "reasonable time"  

to cure; and (3) that the sale price was a forfeiture.  

         A.	       The Superior Court Did Not Err By Concluding That Farmer Had  

                   Sufficient Notice Of The Sale.  

                   Farmer's central contention is that he should have received notice of the  


date and time of the foreclosure sale after each postponement.  He argues that re-notice  


is required by equity, and the lack of such notice violated his due process rights.  The  


superior court determined that "[t]he foreclosure sale . . . was done correctly" and "[t]he  

sale  was  properly  postponed."    We  agree:    equity  does  not  require  re-notice  after  

postponement of a nonjudicial foreclosure sale, and Farmer received constitutionally  

sufficient notice.  


                   Nonjudicial foreclosure sales are governed by AS 34.20.080.  The statute  

requires re-notice to the debtor only when "the foreclosure [is] postponed for more than  

                 8  Re-notice is not required here because the foreclosure sale occurred within  

12 months."                                                                                    

12 months of the original foreclosure sale date.  Parties may also contract for additional  



         8         AS 34.20.080(e); see Ostrow v. Higgins , 722 P.2d 936, 941-42 (Alaska  

1986)  (holding  that  the  statute  did  not  require  re-notice  because  "the  legislature  

presumed that the trustee followed postponement notice requirements enunciated in the  


deed of trust itself").  

                                                           -5-	                                                   6963

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notice,  but Farmer did not.  Thus, any re-notice requirement must be based in equity or 

flow from constitutional rights.  


                    1.	      Equity does not require re-notice after a nonjudicial foreclosure  

                             is postponed.  

                    Farmer argues that we should impose an "actual notice" requirement "based  

                                                           10	                                 11 

on equity, similar to Rosenberg [v. Smidt   ] and Young [v. Embley   ]."  He further argues  


that "[i]f a trustee has to exercise due diligence to locate an actual address for the purpose  


of actual notice, equity also requires that the trustee must provide actual notice when the  

address is known."  

                   Neither Rosenberg nor Young supports the proposition that the court should  

imply a notice requirement in equity. Young did not speak to the issue of equity at all,12  


and the situation in Rosenberg is distinguishable.  In Rosenberg , we examined whether  


the trustee was required to exercise due diligence to learn the debtor's new address when  

                                                                                            13   We  noted  a  tension  

notice  of  the  pending  foreclosure  was  returned  "unclaimed."       

"between [the] free and easy alienability of real property and notice to persons whose  



interest  in  real  property  is  to  be  affected  by  .  .  .  private  action."                         We  implied  a  


heightened notice requirement to "balance adequately the competing interests involved"  


          9         See Ostrow, 722 P.2d at 941.

          10        727 P.2d 778 (Alaska 1986). 

          11        143 P.3d 936 (Alaska 2006).

          12        In  Young we held that the trustee, if requested, had a duty to provide the                

cure amount "at a reasonable time before foreclosing."  Id. at 947.  But our holding was   

an exercise in statutory interpretation, not based in equity. Id.  

          13       Rosenberg , 727 P.2d at 779-80.  

          14       Id. at 783.  

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at that stage in the nonjudicial foreclosure process.                            But Rosenberg dealt with a much  

more important stage of notice - initial notice of the pending nonjudicial foreclosure.16  

Here Farmer had actual initial notice that his property would be sold via nonjudicial  


foreclosure; he simply did not receive actual re-notice after each public postponement.  


But Farmer had the critical piece of information - that foreclosure was pending.  Had  

Farmer appeared at each scheduled sale, he would have learned of the postponements  


and rescheduled dates of the sale.  Thus, his interest in re-notice is much weaker than the  

interest in receiving notice of the initial foreclosure at stake in Rosenberg .  

                    Since  Rosenberg ,   we   have   declined   to   imply   a   heightened   notice  

requirement when it "would impose a significant burden on a routine transaction."17  

Postponement  of  a  nonjudicial  foreclosure  sale  is  one  such  routine  transaction.  

Foreclosures may be postponed multiple times; implying a re-notice requirement after  


each postponement would severely complicate the nonjudicial foreclosure process.  And  


as we have explained, the debtor's interest in notice here is much weaker than was the  


debtor's interest in Rosenberg :  in Rosenberg , the interest was in receiving initial notice  


of the pending nonjudicial foreclosure; in this case, the debtor's interest is in the right to  

be inattentive.18  

          15        Id.   

          16        Id. at 780.  

          17        Blood v. Kenneth A. Murray Ins., Inc. , 151 P.3d 428, 434 (Alaska 2006).  



                    Under  the  current  statutory  requirements,  debtors  must  either  keep  in  


contact with the trustee or attend the foreclosure sales to learn of the postponement dates.  


See AS 34.20.080(e).  If re-notice were required, debtors would not have to make any  

independent inquiries or attend the foreclosure sales.  

                                                               -7-                                                         6963

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                    Farmer could have contracted for more notice,                             but he did not; he could  

have  attended  the  foreclosure  sales,  but  he  did  not;  and  he  could  have  contacted  


Watson's attorney to inquire about the sale date, but he did not.  Thus, Farmer bears the  


consequence of his own inattention.                       The superior court did not err when it concluded  

that re-notice is not required by equity.  

                    2.        Re-notice is not required under the Alaska Constitution.  

                    Farmer also argues that failing to give notice after every postponement  

violated   his   procedural   due   process   rights   because   "[o]ne   of   the   fundamental  


requirements of procedural due process is the right to have adequate notice of what is  


being done to you or your property." He argues that there was state action because "[t]he  


entire statutory scheme under which nonjudicial foreclosures take[] place was created by  


state action." But we have already decided this issue.  In Ostrow v. Higgins the appellant  


argued that her due process rights were violated when the trustee did not give notice after  


the nonjudicial foreclosure of her property was postponed.                                   We held:  

                    Even  assuming  arguendo  the  presence  of  state  action  in  


                    Alaska's  deed  of  trust  statute,  we  conclude  that  Ostrow  

          19        See  Ostrow v. Higgins, 722 P.2d 936, 942 (Alaska 1986).                                 Farmer's deed  

of trust allows the trustee to postpone the sale without providing further notice.  

          20        In re Nghiem , 264 B.R. 557, 562 (B.A.P. 9th Cir. 2001) ("Other courts  

have  .  .  .  point[ed]  out  that  debtors  who  receive  notice  of  foreclosure  sales  before  

bankruptcy know that the property is threatened with foreclosure and have an obligation  


to stay informed of the status of the foreclosure process."); In re Jauregui , 197 B.R. 673,  


675 (Bankr. E.D. Cal. 1996) ("A debtor who ignores or chooses to forget the status of  

a pending foreclosure should rightly bear the consequences of doing so."); Fitzgerald v.  

First Nat'l Bank of Boston , 703 N.E.2d 1192, 1195 (Mass. App. 1999) ("[T]he plaintiffs  


failed to attend the . . . auction  at  their peril . . . .  They could have protected their  


interests by attending the . . . auction and communicating with the auctioneer . . . .").  

          21        Ostrow, 722 P.2d at 940-42.  

                                                               -8-                                                         6963

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                    suffered no deprivation because both she and potential third  


                   party bidders received sufficient notice. A construction of  


                   AS 34.20.080(e) as allowing sale by public declaration gives  


                   notice reasonably calculated to reach interested parties.  



Farmer fails to present any persuasive reason to depart from our precedent.                                    Therefore,  

we  continue  to  hold  that  postponement  by  a  public  announcement  "gives  notice  

reasonably calculated to reach interested parties."24  


          B.	       The Superior Court Did Not Err By Concluding That Farmer Was Not  

                   Misled By The Cure Amount Or The Time To Cure.  


                   Farmer next argues that "he was not aware of the amount required to cure,  


and believed and relied on acts of Ms. Watson . . . that there would be a reasonable time  

allowed to bring the default current."25  But he supplied no evidence of communications  

          22	      Id. at 942 (italicization removed).  

          23       See McCrary v. Ivanof Bay Vill.                 , 265 P.3d 337, 341 (Alaska 2011) ("We  

will overrule a prior decision only when clearly convinced that the rule was originally  

erroneous or is no longer sound because of changed conditions, and that more good than  


harm would result from a departure from precedent." (quoting Guerrero ex rel. Guerrero  

v. Alaska Hous. Fin. Corp. , 123 P.3d 966, 982 n.104 (Alaska 2005)) (internal quotation  


marks omitted)).  

          24        Ostrow, 722 P.2d at 942 (citing Mullane v. Cent. Hanover Bank & Trust  


Co., 339 U.S. 306,  314-15 (1950);  Wickersham v. State, Commercial Fisheries Entry  

Comm'n, 680 P.2d 1135, 1144 (Alaska 1984)).  



                   Farmer argues that he was denied the right to cure and that the cure amount  


kept changing.  Neither argument has merit. Farmer was provided with the cure amount  


on three separate occasions but still failed to cure. He presented no evidence, aside from  

his affidavit, that he had any money with which to cure.  And the cure amount kept  

increasing to reflect the fees and unpaid costs that accumulated over the months. See  

AS 34.20.070(b) (allowing cure "by payment of the sum then in default, other than the  


principal that would not then be due if no default had occurred, and attorney and other  

foreclosure fees and costs actually incurred by the beneficiary and trustee due to the  


                                                             -9-	                                                      6963

----------------------- Page 10-----------------------

with Watson to support his allegation that Watson misled him.  The superior court found  


that "Ms. Watson did not mislead the plaintiff by providing a cure amount."  

                    We  have  held  that  under  AS  34.20.070(b)  the  lender  has  a  duty  to  


"seasonably advise the obligor on request of the amount in default."                                      This requires the  

lender to "provide the figure . . . at a reasonable time before foreclosing" if the debtor has  



requested it.          In  Young v. Embley we found the cure procedure defective when the  

debtor had repeatedly asked for the cure amount, but the lender only provided it on the               


morning  of  the  foreclosure.                    Likewise,  in  Hagberg  v.  Alaska  National  Bank  we  


concluded that a preliminary injunction should have been granted to stop a nonjudicial  


foreclosure where the cure amount was only provided three days before the foreclosure  


                    Watson's attorney provided cure figures to Farmer in July and September.  


The cure amount was provided a third time on December 11, 2012. The foreclosure sale  


occurred two weeks later, on December 27, 2012.  Watson timely provided the cure  


amount every time Farmer asked.  Farmer knew  of the cure amount throughout the  


pendency of the sale, yet failed to cure.   He also failed to inquire in his cure-amount  

requests when the sale was scheduled.  So long as the debtor is promptly provided the  


cure amount on request, the trustee need not wait a set time after the cure amount is  


default"); Albrecht v. Alaska Tr., LLC, 286 P.3d 1059, 1063 (Alaska 2012) (holding that  


inclusion of foreclosure costs and fees was proper under AS 34.20.070(b)).  

          26        Hagberg v. Alaska Nat'l Bank , 585 P.2d 559, 562 (Alaska 1978).  

          27        Young v. Embley, 143 P.3d 936, 947 (Alaska 2006).  

          28        Id.  

          29        Hagberg , 585 P.2d at 561-62.  

                                                              -10-                                                         6963

----------------------- Page 11-----------------------

provided to foreclose.  The superior court did not err by concluding that Watson did not  

mislead Farmer regarding the time to cure.  

         C.        The Nonjudicial Foreclosure Sale Was Not A Forfeiture.  

                   Finally, Farmer argues that the $120,000 sale price was inadequate because  

he had paid over $500,000 to Watson and had made substantial improvements to the  


property.        Watson responds that the sale price was not a forfeiture because it was 80%  

of Farmer's valuation.  

                   Under a deed of trust, the trustee has the power to "foreclose and sell the  



property according to the terms provided in the deed" if the debtor defaults on the loan. 


The  nonjudicial  foreclosure  sale  may  be  voided  for  certain  types  of  defects  in  the  

           32                                                                                         33 

process,       but mere inadequacy of price is generally not sufficient by itself.                        "However,  


if the inadequacy of the sale price is (1) 'so gross as to shock the conscience and raise  


         30        Farmer  also  alleges  that  Watson  sold  two  of  his  liquor  licenses  at  the  

foreclosure sale and that the proceeds of these licenses should have been used to bring  

his  payments  up  to  date.    But  the  liquor  licenses  were  not  part  of  the  nonjudicial  

foreclosure and are not relevant to this proceeding.  If the liquor licenses are eventually  


sold in a private UCC sale, the surplus above the debt that they are securing will be paid  

to    Farmer's        company,         Farmer        Valley       Liquors,       Inc.     See     AS      45.29.615;  

U.C.C.    9-615(d)(1)  (2012);  4  J 

                                                AMES  J.   WHITE  &   ROBERT  S.   SUMMERS ,   UNIFORM  

COMMERCIAL CODE   34-4 (6th ed. 2010).  

         31        Baskurt      v.    Beal ,    101      P.3d     1041,      1044      (Alaska       2004)      (citing  

AS 34.20.070(a)).  

         32        See Rosenberg v. Smidt, 727 P.2d 778, 784 (Alaska 1986) (holding that sale  


is voidable when defect goes "not to the trustee's right to proceed with foreclosure but  


only to the mechanics of exercising the power") (internal quotation marks omitted).  

         33        Baskurt , 101 P.3d at 1044 (citing McHugh v. Church , 583 P.2d 210, 213  

(Alaska 1978)).  Homes generally do not sell at a foreclosure sale for the full amount  

they would fetch through a normal transaction. BFP v. Resolution Trust Corp. , 511 U.S.  


531, 537-38 (1994).  

                                                          -11-                                                    6963

----------------------- Page 12-----------------------

a presumption of fraud or unfairness,' or (2) is coupled with other irregularities in the   

                                                                                                             34   "Gross inadequacy is  

 sale procedures, then invalidation of the sale may be justified."                                               

measured by reference to the fair market value of the property at the time of the sale."35  


                       We considered what would constitute an inadequate price for a trustee  

                                                                                           36     We  explained  that,  although  

foreclosure  sale  of  a  property  in  Baskurt  v.  Beal .      

jurisdictions disagree on the threshold for unacceptability, "[f]oreclosure sale prices of  


fifty percent or more of fair market value are routinely upheld."37   Here the property sold  


for 80% of its undisputed value; this is not a forfeiture.  And whatever improvements  


Farmer made would be reflected in the valuation of the property, a valuation Farmer  


himself provided.  Finally, the amount Farmer has paid on the property is not relevant  

to whether the property sold for a reasonable amount.  


                       The superior court did not err in concluding that the sale of the property  

was properly conducted.  

V.          CONCLUSION  

                       We AFFIRM the decision of the superior court in all respects.  

            34         Baskurt , 101 P.3d at 1044 (quoting McHugh , 583 P.2d at 213-14).

            35         Id.

            36         Id. at 1046 (invalidating a sale for 15% of the value of the property).

            37         Id. at 1044 (collecting cases from other jurisdictions).

                                                                        -12-                                                                      6963  

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