Badrawi v. Wells Fargo Home Mortgage, Inc.
2013 U.S. App. LEXIS 13300
| 8th Cir. | 2013Background
- Badrawi defaulted on a mortgage, Wells Fargo foreclosed by advertisement and purchased the property.
- Wells Fargo recorded a pendency of foreclosure and published the notice; sale occurred on June 13, 2011.
- Badrawi filed a December 2, 2011 state-court action challenging the foreclosure on multiple grounds; count six claimed untimely publication.
- Wells Fargo removed to federal court and moved to dismiss; the district court dismissed all counts, including count six, as nonviable.
- District court held § 580.032, subd. 3 adds no burden beyond § 580.02; Badrawi received direct notice under § 580.03, so no relief under § 580.032, subd. 3.
- On appeal, the Eighth Circuit affirms dismissal, holding Holmes v. Crummett bars relief under § 580.032, subd. 3 for Badrawi; Ruiz is not controlling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 580.032, subd. 3 provides relief to Badrawi. | Badrawi contends strict compliance is required and noncompliance voids foreclosure. | Wells Fargo argues § 580.032, subd. 3 does not benefit mortgagors who receive direct notice and has no effect here. | No relief under § 580.032, subd. 3; district court correctly dismissed. |
| Whether recording pendency before publication is required to invalidate foreclosure. | Untimely recording/publication could void proceedings under strict compliance. | Compliance with § 580.02 suffices; § 580.032 aids only those with redeemable interests who request notice. | Foreclosure not void; compliance with § 580.02 and lack of beneficiary interest defeats strict-compliance claim. |
| Whether Badrawi, as a mortgagor receiving personal notice, can enforce § 580.032, subd. 3. | All homeowners should have relief against noncompliance with notice provisions. | § 580.032 protects those with redeemable interests who request notice; mortgagor/occupant not protected when served under § 580.03. | Badrawi cannot enforce § 580.032, subd. 3; notice under § 580.03 suffices. |
| What is the controlling Minnesota law on strict compliance for foreclosure by advertisement in this context. | Ruiz suggests relief for noncompliance under § 580.032, subd. 3. | Ruiz is not binding; Holmes binds the outcome here; requires strict compliance with § 580.02 but not § 580.032, subd. 3. | Holmes controls; § 580.032, subd. 3 does not provide relief here; Ruiz not controlling. |
Key Cases Cited
- Holmes v. Crummett, 30 Minn. 23 (1882) (homeowner cannot challenge foreclosure for act omission not affecting him)
- Farm Credit Bank of St. Paul v. Kohnen, 494 N.W.2d 44 (Minn. Ct. App. 1992) (service valid if rights to be foreclosed are not prejudiced by lack of notice)
- Ruiz v. 1st Fidelity Loan Servicing, LLC, 829 N.W.2d 53 (Minn. 2013) (strict compliance with foreclosure-by-advertisement; unpublished intermediate ruling not controlling)
- Doe v. Baxter Healthcare Corp., 380 F.3d 399 (8th Cir. 2004) (predicting state law; binding when state decisions absent)