Candee v. Candee

Keith Candee appealed the grant of summary judgment to his parents, Lyla and Douglas Candee, awarding them an $884,508.83 deficiency judgment following foreclosure of properties in California and North Dakota. Keith and his parents 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 agreed to pay $2.2 million to Lyla and Douglas. 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 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 to foreclose the property in a nonjudicial manner via a trustee's sale. After Keith failed to make payments under the settlement agreement, Lyla and Douglas 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 foreclosed the North Dakota property and purchased the property for $975,000 at a July 2015 sheriff's sale. In September 2015, Lyla and Douglas sued Keith in North Dakota for a deficiency judgment for the difference between the amount Keith owed under the settlement agreement and the amount Lyla and Douglas obtained through foreclosure of the properties. Keith 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. The court entered an $884,508.83 deficiency judgment against Keith. On appeal, Keith maintained the California anti-deficiency statutes applied to the settlement agreement, and those statutes barred a deficiency judgment in this case. The North Dakota Supreme Court reversed and remanded, concluding California law barred a deficiency judgment in this case as a matter of law. View "Candee v. Candee" on Justia Law