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Candee v. Candee

Supreme Court of North Dakota

November 16, 2017

Douglas Candee and Lyla Candee, Plaintiffs and Appellees
v.
Keith Candee, Defendant and Appellant

         Appeal from the District Court of Stark County, Southwest Judicial District, the Honorable Rhonda Rae Ehlis, Judge.

          Nathan M. Bouray, Dickinson, N.D., for plaintiffs and appellees.

          Monte L. Rogneby, Bismarck, N.D., for defendant and appellant.

          OPINION

          TUFTE, JUSTICE.

         [¶ 1] Keith Candee appeals from a summary judgment granted to his parents, Lyla and Douglas Candee, awarding them an $884, 508.83 deficiency judgment following foreclosure of properties in California and North Dakota. We reverse and remand, concluding California law bars a deficiency judgment in this case as a matter of law.

         I

         [¶ 2] Keith Candee and Lyla and Douglas Candee executed a settlement agreement and mutual release of claims in 2013 relating to earlier disputes between the parties about the management of their family assets. Under the settlement agreement, Keith Candee agreed to pay $2.2 million to Lyla and Douglas Candee. The $2.2 million settlement amount was secured by real property in California and North Dakota. A deed of trust in favor of Lyla and Douglas Candee secured the California property, and a mortgage secured the property in North Dakota. The deed of trust securing the California property included a power of sale provision allowing Lyla and Douglas Candee to foreclose the property in a nonjudicial manner via a trustee's sale.

         [¶ 3] The agreement provided that upon default, Lyla and Douglas Candee would foreclose the California property first. The North Dakota property would be foreclosed upon if the proceeds from the foreclosure of the California property were insufficient. The agreement also provided that California law would apply to foreclosure and deficiency judgment proceedings, to the extent applicable.

         [¶ 4] After Keith Candee failed to make payments under the settlement agreement, Lyla and Douglas Candee foreclosed the California property. They proceeded with a nonjudicial foreclosure and in January 2014 purchased the property at a trustee's sale for a credit bid of $200, 000. Lyla and Douglas Candee foreclosed the North Dakota property and purchased the property for $975, 000 at a July 2015 sheriff's sale.

         [¶ 5] In September 2015, Lyla and Douglas Candee sued Keith Candee in North Dakota for a deficiency judgment for the difference between the amount Keith Candee owed under the settlement agreement and the amount Lyla and Douglas Candee obtained through foreclosure of the California and North Dakota properties. Keith Candee argued a deficiency judgment was not available under the agreement because California law applied and a deficiency judgment was prohibited under California law. The district court concluded California law applied only to the California property and granted summary judgment to Lyla and Douglas Candee. The court entered an $884, 508.83 deficiency judgment against Keith Candee.

         II

         [¶ 6] Keith Candee argues the district court erred in awarding Lyla and Douglas Candee a deficiency judgment. He argues the California anti-deficiency statutes apply to the settlement agreement, and those statutes bar a deficiency judgment in this case.

         [¶ 7] Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from the facts, or if the only issues to be resolved are questions of law. Sorenson v. Bakken Invs., LLC, 2017 ND 127, ΒΆ 6, 895 N.W.2d 302. In determining whether the district court properly granted summary judgment, we view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all ...


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