Chase Plaza Condominium Association, Inc. and Darcy, LLC v. JPMorgan Chase Bank, N.A.
2014 D.C. App. LEXIS 317
| D.C. | 2014Background
- York purchased a Washington, D.C. condo in 2005, financed by a mortgage secured by a deed of trust with MERS as nominee.
- Chase Plaza foreclosed in 2010 for six months of delinquent condo assessments; Darcy purchased the unit at foreclosure for $10,000.
- JPMorgan filed suit arguing the foreclosure was void because the price was unconscionably low and because the sale extinguished JPMorgan’s first deed of trust claim.
- The trial court granted partial summary judgment in JPMorgan’s favor, voiding the sale as to the first deed of trust and declaring JPMorgan title, then dismissed remaining claims by stipulation.
- Appellate questions included standing, the effect of the automatic stay, and whether York and Washington Mutual were indispensable parties; the court reversed and remanded on merits.
- The central issue is whether Chase Plaza’s six-month super-priority lien forecloses and extinguishes JPMorgan’s first deed of trust under D.C. Code § 42-1903.13(a)(2).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge foreclosure | JPMorgan asserts standing via possession of the note. | Chase Plaza and Darcy contest JPMorgan’s entitlement to sue. | JPMorgan has standing. |
| Effect of super-priority foreclosure on first deed of trust | Six-month super-priority foreclosure cannot extinguish the first deed of trust. | Foreclosure on the super-priority lien extinguishes the first deed of trust. | Foreclosure on the super-priority lien extinguishes the first deed of trust. |
| Automatic stay violation | No violation because stay did not apply to property or pre-petition interests. | Judgment or proceedings violated the automatic stay. | No violation of the automatic stay. |
| Indispensable parties under Rule 19 | York and Washington Mutual not indispensable; their interests not necessary to grant relief. | York and Washington Mutual could be indispensable due to competing interests. | York and Washington Mutual are not indispensable parties. |
Key Cases Cited
- Pappas v. Eastern Sav. Bank, FSB, 911 A.2d 1230 (D.C. 2006) (foreclosure extinguishes lower-priority liens when proceeds are insufficient)
- Leake v. Prensky, 798 F. Supp. 2d 254 (D.D.C. 2011) (holder of blank-indorsed note is entitled to enforce via foreclosure)
- Jones v. Cain, 804 A.2d 322 (D.C. 2002) (automatic stay considerations and related implications)
- Malakoff v. Washington, 434 A.2d 432 (D.C. 1981) (cited regarding standards of statutory interpretation and implied requirements)
- Waco Scaffold & Shoring Co. v. 425 Eye St. Assocs., 355 A.2d 780 (D.C. 1976) (well-settled foreclose-on-senior-lien extinguishes junior liens principle)