Deutsche Bank National Trust Company v. Citibank, N.A. (LEAD)
2:09-cv-00324
M.D. Ala.Aug 29, 2011Background
- Consolidated cases involve a mortgage foreclosure on property at 413 Parks Rd., Pike Road, AL; Citibank held the first mortgage lien, Deutsche Bank held a second mortgage, and the Marvins originally owned the property.
- Citibank foreclosed in Nov. 2008, with a credit bid of $194,149.60 and no deficiency; Citibank conveyed title to itself.
- Deutsche Bank foreclosed its second mortgage on Sept. 11, 2008, and recorded a foreclosure deed.
- The Marvins conveyed their equity of redemption to Deutsche Bank via the second mortgage; the Marvins remained liable on the Citibank debt at the time of foreclosure.
- Sherwin Williams recorded a judgment against Theresa Marvin in Oct. 2008; its right of redemption was later assigned to the Portises.
- Portises acquired rights from Sherwin Williams and from the Marvins through assignments and filed suit asserting redemption rights; Deutsche Bank also seeks redemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who has the statutory right of redemption? | Portises claim as debtors/transferees of debtors; Deutsche Bank argues mortgagor status. | Portises: redemption rights as transferees; Deutsche Bank: mortgagor/debtor status. | Deutsche Bank has a redemptive right as transferee of the mortgagor’s redemption interest and is entitled to redeem. |
| Does Deutsche Bank qualify as a mortgagor or debtor for priority purposes? | Deutsche Bank as transferee stands in the Marvins’ shoes, thus a mortgagor. | Statutory categories do not plainly include transferees; interpretation favors traditional mortgagor/debtor framing. | Deutsche Bank qualifies as a mortgagor/debtor through transfer of redemption rights and thus has priority. |
| Was Deutsche Bank's redemption timely and properly pursued under Alabama law? | Amended complaint relates back to original filing; written demand not required to bar redemption. | Demands and tenders were not properly made; relation back should not save the claim. | Relation back permitted; failure to tender or demand is excused; timely relation back valid. |
| Were statutory demand/tender prerequisites mandatory or permissive? | Demand for statement of charges is permissive; redemption can proceed without it. | Demand/tender must be complied with to redeem. | Demand is permissive; failure to demand does not bar redemption; tender can be avoided under certain circumstances. |
| How is priority allocated among redeeming parties (mortgagor vs. debtor vs. transferee)? | Mortgagor has priority over debtor, and transferees stand in those shoes. | Portises as transferees claim priority similar to debtors/mortgagors; Deutsche Bank as transferee of mortgagor has priority over Portises. | Deutsche Bank, as transferee of the mortgagor’s right, has priority over Portises; Deutsche Bank entitled to redeem. |
Key Cases Cited
- Dominex, Inc. v. Key, 456 So.2d 1047 (Ala. 1984) (transfer of equity of redemption; mortgagor’s rights carried by second mortgagee)
- In re Robin Poe, 477 F.3d 1317 (11th Cir. 2007) (debtor status and redemption rights post-foreclosure; relation back considered)
- Huie v. Smith, 183 So.661 (Ala. 1938) (second mortgagee stands in grantor’s shoes; equity of redemption conveyed)
- Ala. Home Mortgage, Inc. v. Harris, 582 So.2d 1080 (Ala. 1991) (clarifies mortgagor retains equitable title after second mortgage)
- Dominex, Inc. v. Key, 456 So.2d 1047 (Ala. 1984) (earlier treatment of redemption rights)
- Spencer v. West Ala. Properties, Inc., 564 So.2d 425 (Ala. 1990) (permissive demand language allowing redemption despite lack of demand)
- Bank Indep. v. Jenkins Builders, Inc., 564 So.2d 880 (Ala. 1990) (redeeming party should align pleadings with redemption claim)
- Robino v. Green, 119 So.2d 897 (Ala. 1960) (excuses strict tender when seeking to vacate foreclosure; jurisdiction and equity)