ATP Holdings, LLC, Respondent,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-1605

ATP Holdings, LLC,
Respondent,

vs.

Curtis Trude,
Appellant,

Martha Peterson,
Defendant.

Filed July 2, 2018
Affirmed
Johnson, Judge

Meeker County District Court
File No. 47-CV-17-756

Douglass E. Turner, Christopher T. Kalla, Hanbery & Turner, P.A., Minneapolis,
Minnesota (for respondent)

Curtis Trude, Litchfield, Minnesota (pro se appellant)

Considered and decided by Johnson, Presiding Judge; Reyes, Judge; and Smith,
Judge.
U N P U B L I S H E D O P I N I O N
JOHNSON, Judge
This is an eviction case. Appellant challenges the eviction on the grounds that, first,
the predecessor-in-interest of the party seeking eviction did not acquire a valid interest in
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the property in a mortgage foreclosure sale and, second, he was not properly served with
the notice of the foreclosure sale. We affirm.
FACTS
This action concerns a 28.15 -acre parcel of property in Meeker County . The
property previously was owned by Charles D. Peterson and Martha M. Peterson , who
granted two mortgages on the property to State Bank of Eden Valley . The Petersons
executed the first mortgage on the property in June 2005, and it was recorded in early July
2005. The Petersons executed the second mortgage on the property in April 2009, and it
was recorded later that month.
In November 2011, the Petersons defaulted on the loan secured by the second
mortgage. The bank initiated a foreclosure by advertisement. See Minn. Stat. § 580.02
(2016). The b ank gave the Petersons n otice that the amount due on the loan was
$81,734.54. On December 29, 2011, the bank purchased the property at a foreclosure sale
for $84,201.35. Three days later, the Petersons conveyed their interest in the property to
Curtis Trude by quit-claim deed. On January 24, 2012, Trude timely redeemed by giving
the county sheriff’s office a cashier’s check for $84,969.24.
In June 2012, Trude defaulted on the loan secured by the first mortgage. The bank
initiated another foreclosure by advertisement. See Minn. Stat. § 580.02. The bank gave
Trude notice that the amount due on the loan was $356,771.43. On August 9, 2012, the
bank purchased the property at a foreclosure sale for $361,652.76. Trude did not redeem
within the six-month redemption period.
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In March 2013, the bank conveyed the property to Trude by a contract for deed.
The purchase price was $379,911.79, to be paid by December 15, 2014. The contract for
deed was recorded later that month.
Trude did not fulfill the terms of the contract for deed. In February 2015, the bank
served Trude with a notice of cancellation of the contract for deed. The notice stated that
Trude was in default for his “failure to pay principal and interest due at maturity on
December 15, 2014, in the amount of $274,419.78, plus additional late fees and charges in
the amount of $29,679.70 as of February 9, 2015.” Trude did not redeem within the 60 -
day redemption period.
Trude did not vacate the property. In July 2015, the bank commenced an eviction
action to oust him. The district court held a hearing on July 14, 2015. The district court
found that Trude was in default because he did not appear at the hearing. The district also
found, by a preponderance of the evidence , that Trude did not vacate the property after
notice was given , that he defaulted on the contract for deed, and that he was a holdover
tenant. The district court entered judgment in favor of the b ank and issued a writ of
recovery. Trude did not appeal.
In February 2017, the bank (now known, after a merger, as the Farmers and
Merchants State Bank of Pierz ) conveyed its interest in the property to ATP Holdings,
LLC. In August 2017, ATP commenced a second eviction action against Trude. Later that
month, ATP moved for summary judgment and requested an immediate writ of recovery.
After a hearing, t he district court granted ATP’s motion, entered judgment for ATP, and
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issued a writ of recovery. The district court later filed an order with additional findings of
fact and a supplemental memorandum. Trude appeals.
D E C I S I O N
Trude argues that the district court erred by granting ATP’s motion for summary
judgment. A district court must grant a motion for summary judgment “if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any material fact and that either party is
entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. A genuine issue of
material fact exists if a rational trier of fact, considering the record as a whole, could find
for the non -moving party. Frieler v. Carlson Mktg. Grp., Inc. , 751 N.W.2d 558, 564
(Minn. 2008). This court applies a de novo standard of review to the district court ’s legal
conclusions on summary judgment and views the evidence in the light most favorable to
the party against whom the motion was granted . Commerce Bank v. West Bend Mut. Ins.
Co., 870 N.W.2d 770, 773 (Minn. 2015). We note that a summary-judgment motion may
have been unnecessary in this case because an eviction action is “a summary court
proceeding to remove a tenant or occupant from or otherwise recover possession of real
property.” Minn. Stat. § 504B.001, subd. 4 (2016); see also Federal Home Loan Mortg.
Corp. v. Mitchell, 862 N.W.2d 67, 72 (Minn. App. 2015), review denied (Minn. June 30,
2015). A summary-judgment motion may be useful in obtaining an earlier resolution. But
if there are genuine issues of material fact, either party has a right to a jury trial. See Minn.
Stat. § 504B.335 (2016).
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Trude makes two arguments. First, he argues that ATP does not have an interest in
the property because ATP’s predecessor-in-interest, the bank, forfeited its right to foreclose
on the first mortgage, the s enior mortgage, by not bidding at the foreclosure sale on the
second mortgage, the j unior mortgage. Second, Trude argues that the December 2011
foreclosure sale is void on the ground that ATP’s predecessor-in-interest, the bank, did not
properly serve him with notice of the foreclosure sale. In response, ATP argues that
Trude’s arguments are barred by the statute of limitations and the doctrines of res judicata
and collateral estoppel and that the district court’s decision is correct.
We note that Trude essentially asks this court to conclude that ATP did not acquire
valid title to the property from the bank, making the first and second eviction actions void.
We recognize that this argument goes beyond the narrow scope of an eviction action . An
eviction action “merely determines the right to present possession .” Dahlberg v. Young, 231 Minn. 60, 68, 42 N.W.2d. 570, 576 (1950). An eviction action “is not a bar to an action
involving the title” and “does not adjudicate the ultimate legal or equitabl e rights of
ownership possessed by the parties.” Id. Nonetheless, the district court considered the
issues raised by Trude’s arguments, and the parties have fully briefed the issues to this
court, so we will proceed to resolve the parties’ dispute.
I.
Trude first argues that ATP does not have an interest in the property because ATP’s
predecessor-in-interest, the bank, forfeited its right to foreclose on the first mortgage, the
senior mortgage, by not bidding at the foreclosure sale on the second mortgage, the junior
mortgage. Trude contends that when the bank purchased the property at the foreclosure
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sale, its ownership interest merged with its interest in the s enior mortgage, thereby
extinguishing the senior mortgage. The district court rejected this argument on the ground
that Trude ’s redemption of the property “annulled the foreclosure sale ,” leaving “no
obligation by a senior creditor . . . to redeem.” The district court also reasoned that the
cancellation of the contract for deed was upheld in the prior eviction action and that ATP
was the owner of record.
Trude’s first argument is governed by a statute that provides, in relevant part, as
follows:
If no redemption is made by the mortgagor, the
mortgagor’s personal representatives or assigns, the most
senior creditor having a legal or equitable lien upon the
mortgaged premises, or some part of it, subsequent to the
foreclosed mortgage, may redeem within seven days after the
expiration of the redemption period determined under section
580.23 or 582.032, whichever is applicable; and each
subsequent creditor having a lien may redeem, in the order of
priority of their respe ctive liens, within seven days after the
time allowed the prior lienholder by paying the amount
required under this section.

Minn. Stat. § 580.24(a) (2016) (emphasis added). A mortgagor and his personal
representatives and assigns have the first opportun ity to redeem after a mortgage
foreclosure sale. Farmers & Merchants Bank v. Junge, 458 N.W.2d 698, 700 (Minn. App.
1990). When the mortgagor’s redemption period expires, junior creditors have a statutory
right of redemption, if certain conditions are satisfied. Minn. Stat. § 580.24(a).
In this case, Trude was an assignee of the mortgagor. The certificate of redemption
states, “Charles Peterson and Martha Peterson are the mortgagors who have assigned their
interest in such property, including their equity or redemption, to Curtis Trude.” The
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certificate also states that Trude’s redemption of the junior mortgage derives from “two (2)
quit claim deeds . . . executed by Charles Peterson and Martha Peterson and naming
redemptioner, Curtis Trude as the grantee of such properties.” Accordingly, when Trude
redeemed the property, he did so as the owner of the property , not as a credito r. See
Farmers, 458 N.W.2d at 700 (defining “owner” of real property).
This distinction is relevant because a redemption of a foreclosed property by the
owner “annuls the [foreclosure] sale.” Minn. Stat. § 580.27 (2016). When Trude redeemed
the property as the owner, the bank’s purchase of the property at the foreclosure sale on
the junior mortgage became null and void. See Farmers, 458 N.W.2d at 700 (holding “title
is not acquired until all rights of redemption have expired”); see also In re Hecker , 496
B.R. 541, 545 n.9 (B.A.P. 8th Cir. 1986). Because the condition stated in the first clause
of section 580.24 was not satisfied, other creditors were unable to redeem. See Minn. Stat.
§ 580.24(a). Thus, contrary to Trude’s argument, the bank did not have an obligation to
redeem under the senior mortgage.
Trude further contends that, when the bank purchased the property at the foreclosure
sale, its ownership interest merged with its interest in the senior mortgage, thereby
extinguishing the senior mortgage. A mortgage foreclosure sale is intended “to terminate
all interests junior to the mortgage being foreclosed and provide the sale purchaser with a
title identical to that of the mortgagor as of the time the mortgage was executed.” Farmers,
458 N.W.2d at 700 (emphasis added) (citing Gerdin v. Princeton State Bank, 348 N.W.2d
868, 871 (Minn. 1986)). The plain language of section 580.24(a) expressly distinguishes
between senior creditors and junior creditors. See Minn. Stat. § 580.24(a). The statute
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provides that, if and when the redemption period has expired, creditors with an existing
lien on the mortgaged property that is “subsequent to the foreclosed mortgage” are allowed
seven days to redeem. See id. This provision implies that creditors with a n existing lien
on the mortgaged property that is senior to the foreclosed mortgage have no obligation to
redeem. See id. Thus, the foreclosure sale on the junior mortgage did not terminate the
bank’s interest in the senior mortgage.
When a redemption period expires, the mortgagor loses his rights in the property
sold at a foreclosure sale, and title to the property vests in the purchaser. Minn. Stat.
§ 508.12 (2016) (final paragraph); Farmers, 458 N.W.2d at 699-700. When Trude did not
redeem after the foreclosure sale on the senior mortgage, title vested in the bank, which
later conveyed its title to ATP. Thus, the b ank became the lawful holder of title to the
property on February 9, 2013, when the six-month redemption period expired, as evidenced
by the sheriff’s certificate of sale. See Minn. Stat. § 580.19 (2016). Consequently, the
bank conveyed valid title to ATP.
Thus, the district court did not err by rejecting Trude’s argument that the b ank
forfeited its interest in the senior mortgage by not bidding at the foreclosure sale on the
junior mortgage.
II.
Trude also argues that the December 2011 foreclosure sale is void on the ground
that ATP’s predecessor-in-interest, the bank, did not properly serve him with notice of the
foreclosure sale.
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In a foreclosure by advertisement, t he mortgagee must provide notice “upon the
person in possession of the mortgaged premises” prior to the foreclosure sale. See Minn.
Stat. § 580.03 (2016). The notice must be “served in like manner as a summons in a civil
action.” Id.; see also Minn. R. Civ. P. 4.03(a). In general, foreclosure by advertisement
requires strict compliance with the statute’s requirements. Ruiz v. 1st Fid. Loan Servicing,
LLC, 829 N.W.2d 53, 56, 59 (Minn. 2013); Drews v. Fed. Nat. Mortg. Ass’n, 850 N.W.2d
738, 742 (Minn. App. 2014). “Absent strict compliance with the foreclosure statute, the
foreclosure proceeding is void.” Drews, 850 N.W.2d at 742; see also Hunter v. Anchor
Bank, N.A., 842 N.W.2d 10, 16 (Minn. App. 2013), review denied (Minn. Mar. 18, 2014).
It is undisputed that the notice of foreclosure by advertisement was personally
served on the Petersons, who were in possession of the property, on July 8, 2012. One day
later, on July 9, 2012, the notice of foreclosure was effectively served on Trude when it
was handed to and left with “a person of suitable age and discretion” who lived on the
property. See Minn. R. Civ. P. 4.03(a). Trude does not dispute the accuracy of the sheriff’s
affidavits of service, which were attached to the certificate of sale. Accordingly, service
of the notice of the foreclosure sale complied with the requirements of section 580.03. See
Skartum v. Koch, 174 Minn. 47, 48-49, 218 N.W. 446, 446-47 (1928).
Thus, the district court did not err by rejecting Trude’s argument that the bank did
not give him proper notice of the foreclosure sale on the senior mortgage.
In light of our resolution of Trude’s arguments on the merits, we need not consider
ATP’s responsive arguments that Trude’s arguments are barred by the statute of limitations
10
and the doctrines of res judicata and collateral estoppel. In sum, the district court did not
err by granting ATP’s motion for summary judgment.
Affirmed.