McGINNITY v. KIRK
2015 OK 73
| Okla. | 2015Background
- In 1987 the Kirks bought an 1883 house under a contract for deed (monthly payments) from the Neeces; the Neeces assigned the contract to the McGinnitys in 1998.
- McGinnitys sued (consolidated forcible entry and detainer plus foreclosure) alleging breaches of the contract for deed: failure to keep property insured, unlawful conveyance to Mary Komonce, waste, failure to maintain buildings, and failure to timely restore.
- The parties stipulated the unpaid balance on the contract was $27,406.27; the trial court found the Kirks breached the contract and granted in rem foreclosure, quieted title, and denied the Kirks’ counterclaims (including abuse of process).
- On appeal (and certiorari), the Kirks argued (inter alia) there was no waste, the property value exceeded the debt, insurance had been maintained, the quitclaim to Komonce was ineffective, and the abuse-of-process claim was timely.
- The Oklahoma Supreme Court affirmed: no waste that undermined security and the property value exceeded the debt, but the Kirks breached by failing to maintain insurance and to keep the property in good repair; abuse of process claim failed. The Court awarded appeal-related attorneys’ fees and costs to the McGinnitys and remanded to fix the fee amount.
Issues
| Issue | Plaintiff's Argument (McGinnitys) | Defendant's Argument (Kirks) | Held |
|---|---|---|---|
| Whether waste occurred such that foreclosure was required | Waste rendered security inadequate; foreclosure allowable | No waste as a matter of law; Phillips v. Hill bars breach finding because buyers intended to become owners | No waste shown; value exceeded debt; foreclosure not based on waste |
| Whether Kirks breached by failing to maintain insurance | Contract required maintaining full replacement-value insurance; insurer non-renewed due to neglect; duty is continuing during foreclosure | They either maintained coverage or were not told what to do; they were moving and therefore didn’t obtain new coverage | Breach proven: continuing covenant to keep property insured existed and was not met after June 2005 |
| Whether Kirks breached by failing to maintain property (good repair) | Contract separately required keeping buildings in good repair; evidence showed serious interior/exterior deterioration and infestations | Kirks performed repairs and many photos are inaccurate or post-possession; some systems remained functional | Breach proven: trial court’s finding not against clear weight of evidence given conflicting testimony and exhibits |
| Whether Kirks’ abuse of process counterclaim succeeds | Forcible entry action was an improper use of process to evict beyond foreclosure remedies | McGinnitys legitimately used forcible entry and detainer together with foreclosure; no ulterior primary purpose | Dismissed: process used for its intended purpose; no abuse of process as a matter of law |
Key Cases Cited
- Phillips v. Hill, 555 P.2d 1043 (Okla. 1976) (tender of full contractual debt can nullify default-based relief; facts controlling when buyer seeks to become owner)
- Federal Land Bank of Wichita v. Story, 756 P.2d 588 (Okla. 1988) (mortgagee's rights and courts' power to prevent waste during foreclosure; limits on debtor-relief statutes)
- Greenberg v. Wolfberg, 890 P.2d 895 (Okla. 1994) (abuse of process requires use of process for an immediate purpose other than that intended; legitimate use to authorized conclusion is not abuse)
- Carr v. Union Mut. Ins. Co., 598 P.2d 269 (Okla. Civ. App. 1979) (mortgagor retains insurable interest during foreclosure)
- Wilson v. Glancy, 913 P.2d 286 (Okla. 1995) (mortgagor’s right to redeem and continuation of equitable interests until foreclosure sale confirmed)