Opinion
A22-0141
08-31-2022
In re the Matter of the Petition of Kent Rossman.
Filed Date: 9/6/2022
Hennepin County District Court File No. 27-ET-CV-19-118
Considered and decided by Gaïtas, Presiding Judge; Cochran, Judge; and Bryan, Judge.
ORDER OPINION
Jeanne M. Cochran, Judge
BASED ON THE FILE, RECORD, AND PROCEEDINGS, AND BECAUSE:
1. In this proceeding subsequent, appellant Theresa Anderson challenges the district court's decision granting summary judgment to respondent Kent Rossman and ordering the registrar of titles to issue a new certificate of title for certain property in Rossman's name. Anderson argues that the district court erred by granting summary judgment to Rossman because it failed to first join a necessary and indispensable party. Because we conclude that the district court did not fail to join a necessary and indispensable party, we affirm.
2. This case arises from the foreclosure of a mortgage that Anderson granted to a creditor in connection with the purchase of her Brooklyn Park home in 2008. In 2012, respondent MidFirst Bank (the bank) became the assignee of that mortgage. In 2018, the bank foreclosed the mortgage and purchased the property at a sheriff's sale. Before the six-month statutory redemption period expired, a junior creditor, Collection Resource LLC, filed a notice of intention to redeem. After the redemption period expired without Anderson redeeming the property, Collection Resource redeemed the property from the bank. Collection Resource then conveyed the property by warranty deed to Rossman. Since then, Anderson has challenged the foreclosure and redemption in two separate proceedings: (1) a civil lawsuit against the bank and the other entities involved, and (2) Rossman's proceeding subsequent that is the subject of this appeal.
3. Anderson initiated the civil action in 2018 when she sued the bank, challenging the validity of the mortgage foreclosure and seeking to quiet title. She later amended her complaint to bring claims against Collection Resource and Rossman, contesting Collection Resource's redemption of the property and the subsequent conveyance of the property to Rossman. The district court granted summary judgment to the bank, concluding that there was no genuine issue of material fact with respect to the validity of the foreclosure proceeding and the resulting sheriff's sale. The district court later granted Collection Resource and Rossman's rule 12 motion to dismiss, concluding that Anderson lacked standing to pursue her claims against them. On appeal, this court affirmed the district court's decisions. Anderson v. MidFirst Bank, No. A20-1056, 2021 WL 2201511, at *1 (Minn.App. June 1, 2021), rev. denied (Minn. Aug. 24, 2021).
4. In June 2019, Rossman initiated the proceeding subsequent to initial registration that gives rise to this appeal. In March 2020, following the district court's decision in the civil action, Rossman filed an amended petition. Rossman sought an order directing the registrar of titles to cancel the certificate of title that shows Anderson as the owner of the property and issue a new certificate of title in Rossman's name, pursuant to Minn. Stat. § 508.58, subd. 1 (2020) (establishing that any person who becomes the owner of registered land through proceedings to foreclose a mortgage may petition for a new certificate of title to the land).
5. After receiving a report from the examiner of titles, the district court issued an order to both Anderson and the bank to show cause why the certificate of title should not be reissued in Rossman's name. Anderson filed an answer in which she asserted several affirmative defenses, including the failure to join Collection Resource as a party to the proceeding. The bank did not file an answer.
6. Rossman then filed a motion for summary judgment and supporting legal memorandum. In his supporting memorandum, Rossman argued that Anderson lacks standing to challenge his petition because she no longer has an interest in the property, and that her defenses are barred by collateral estoppel. Anderson filed a memorandum of law opposing the motion. She argued that the warranty deed that conveyed the property from Collection Resource to Rossman is invalid, and Rossman therefore has no rights to the property. In support of her argument, she contended that Collection Resource's redemption of the property in 2018 was invalid because Collection Resource did not have a judgment against her but rather had a judgment against "a different person with a similar name." For the same reasons, Anderson argued that she retains her own rights to the property and therefore has standing to challenge Rossman's petition.
7. The matter was then referred by the district court to the examiner of titles. Following a hearing on the summary-judgment motion, the examiner of titles issued a report concluding that (1) Anderson does not have standing to challenge Rossman's petition and her legal arguments are barred by res judicata and collateral estoppel, and (2) Rossman is entitled to summary judgment because no genuine issue of material fact exists. In the report, the examiner explained that Anderson has no standing to object to redemption by a junior creditor because she lost her interest in title to the property when she failed to redeem the property during the statutory redemption period.
The examiner also concluded that Rossman is entitled to entry of default judgment against the bank.
8. The examiner recommended that the district court issue an order granting summary judgment to Rossman and directing the registrar of titles to cancel the certificate of title in Anderson's name and enter a new certificate of title in Rossman's name. The district court adopted the examiner's report in full.
9. Anderson's only argument on appeal is that the district court erred by granting summary judgment to Rossman because the failure to join Collection Resource as a party is a valid defense to Rossman's petition seeking a new certificate of title. We review a grant of summary judgment de novo. Kenneh v. Homeward Bound, Inc., 944 N.W.2d 222, 228 (Minn. 2020). A district court appropriately grants summary judgment when the evidence, viewed in the light most favorable to the nonmoving party, demonstrates that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Minn. R. Civ. P. 56.01; Warren v. Dinter, 926 N.W.2d 370, 375 (Minn. 2019).
10. In granting summary judgment to Rossman, the district court did not expressly analyze the joinder issue that Anderson emphasizes on appeal, but it concluded that none of the affirmative defenses that Anderson asserted in response to Rossman's petition for a new certificate of title-which included failure to join Collection Resource as a party-were valid.
11. Anderson bases her joinder argument on Minnesota Statutes sections 508.58 and 508.67 and Minnesota Rule of Civil Procedure 19. The statutes establish the right of a person who acquires title to property by action or through a foreclosure to petition the court for a new certificate of title. Minn. Stat. §§ 508.58, subd. 1, .67, subd. 1 (2020). Minn. R. Civ. P. 19 establishes the conditions for the required joinder of parties. Citing these authorities, Anderson argues that Collection Resource is one of multiple parties with potential claims to the property and that the district court erred by granting Rossman's motion for summary judgment and ordering the issuance of a new certificate of title in Rossman's name because "[i]t is not possible to transfer title of property without joining all parties having an interest in the title of real property as part of this instant action." We are not persuaded.
12. Minn. Stat. § 508.58, subd. 1, provides that after a person who has acquired property through a foreclosure petitions the court for a new certificate of title, "the court shall . . . after due notice to all parties in interest . . . make an order for the issuance of a new certificate of title to the person entitled thereto." Minn. Stat. § 508.58, subd. 1. (emphasis added). And Minn. R. Civ. P. 19 provides:
A person who is subject to service of process shall be joined as a party in the action if (a) in the person's absence complete relief cannot be accorded among those already parties, or (b) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (1) as a practical matter impair or impede the person's ability to protect that interest or (2) leave any one already a party subject to a substantial risk or incurring double, multiple, or otherwise inconsistent obligations by reason of the person's claimed interest. If the person has not been so joined, the court shall order that the person be made a party.Minn. R. Civ. P. 19.01.
13. The district court concluded that Collection Resource no longer had any interest in the property because it conveyed any interest it held to Rossman by a properly recorded warranty deed. Therefore, "Rossman now holds any interest in the property that Collection Resource could claim." On that basis, the district court implicitly concluded that Collection Resource was not a necessary or indispensable party to the proceeding subsequent. We agree.
14. Because Collection Resource conveyed its interest in the property to Rossman, Collection Resource is no longer a party "in interest" entitled to notice of any petition for new title under section 508.58, subdivision 1. Further, the absence of Collection Resource as a party to the proceeding subsequent does not prevent complete relief from being accorded among the existing parties-Anderson, Rossman, and the bank-and Collection Resource does not claim any interest in the proceeding subsequent such that its disposition would negatively affect that interest. We therefore conclude that the district court did not err by declining to join Collection Resource as a party to the proceeding subsequent.
15. Anderson's argument to the contrary relies on an assumption that there was a problem in the transfer of the property from the bank to Collection Resource that now affects the chain of title. To the extent that Anderson challenges the validity of the original redemption of the property by Collection Resource, the district court expressly concluded that such a challenge is barred by the doctrines of res judicata and collateral estoppel. Anderson does not challenge those conclusions on appeal, and we see no basis for reversal of the district court's decision on those issues.
16. In sum, we conclude that Collection Resource was not a necessary and indispensable party to the current proceeding subsequent. The district court therefore did not err by granting summary judgment to Rossman without first joining Collection Resource as a party.
IT IS HEREBY ORDERED:
1. The district court's order is affirmed.
2. Pursuant to Minn. R. Civ. App. P. 136.01, subd. 1(c), this order opinion is nonprecedential, except as law of the case, res judicata, or collateral estoppel.