New England Phoenix Company, Inc. v. Grand Isle Veterinary Hospital, Inc., 275 A.3d 134

In 2010 Bank of America made two loans to related veterinary entities totaling $610,244.20, secured by a mortgage on real property and by business personal property; Anne Bazilwich personally guaranteed both loans.
The borrower defaulted, Bazilwich abandoned the property, and Bank of America assigned the loans to New England Phoenix in 2018.
New England Phoenix foreclosed in 2019; after a redemption period and COVID-related delay, it purchased the property at judicial sale in July 2020 for $325,000.
Phoenix moved to confirm the sale and obtain a deficiency judgment, claiming roughly $790,230.48 due and seeking a $465,230.48 deficiency (later recalculated under the rule to $340,230.48); it did not cite V.R.C.P. 80.1(j)(2) initially.
The trial court confirmed the sale but denied the deficiency entirely on equitable grounds (finding Phoenix knew the loans were long in default and the property had depreciated), and it denied Phoenix’s motion to reconsider. Phoenix appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether trial court was required to apply V.R.C.P. 80.1(j)(2) when mortgagee purchased at sale	Phoenix: Rule governs deficiency calculation; court must limit deficiency to difference between fair market value at time of sale (established by appraisal/evidence) and debt+costs	Respondent: Court has equitable discretion under statute to deny or limit deficiency	Court: Rule applies; where mortgagee is purchaser court must establish FMV per Rule 80.1(j)(2) and use it to calculate any limited deficiency; remanded for FMV finding and recalculation
Whether trial court abused discretion by denying deficiency in its entirety	Phoenix: No equitable basis to deny whole deficiency; denial was untenable and court failed to follow Rule	Respondent: §4954(d) and equity permit denying deficiency where appropriate	Court: §4954(d) uses "may" so courts have discretion, but here the trial court abused that discretion by failing to determine FMV and by resting denial on clearly untenable factual/reasoning grounds; reversed and remanded
Whether Phoenix has independent contract claim against guarantor (not mortgagor)	Phoenix: Even if deficiency can be denied, Phoenix may recover against Bazilwich personally as guarantor	Respondent: Argument was not timely raised; default and equitable defenses support denial	Court: Declined to reach merits—argument raised first on reconsideration and thus waived; issue not considered on appeal

State v. Eldredge, 910 A.2d 816 (Vt. 2006) (standard of review for legal questions)
HSBC Bank USA N.A. v. McAllister, 182 A.3d 593 (Vt. 2018) (court confirmation of foreclosure sale is discretionary; may consider fairness)
Bank of Am., N.A. v. O’Kelly, 194 A.3d 746 (Vt. 2018) (foreclosure confirmation and equitable considerations)
Merchants Bank v. Lambert, 559 A.2d 665 (Vt. 1989) (foreclosure is an equity action; courts may weigh equities)
United Sav. Bank v. Barber, 375 A.2d 993 (Vt. 1977) (deficiency may be pursued where demonstrated)
Vt. Nat’l Bank v. Leninski, 687 A.2d 890 (Vt. 1996) (deficiency measured by difference between FMV and debt)
Chittenden Trust Co. v. Maryanski, 415 A.2d 206 (Vt. 1980) (secured creditor must dispose of collateral commercially reasonably)
Pownal Dev. Corp. v. Pownal Tanning Co., 765 A.2d 489 (Vt. 2000) (foreclosure is subject to equitable jurisdiction; equity disfavors forfeiture)
Quazzo v. Quazzo, 386 A.2d 638 (Vt. 1978) (unreasonable delay in foreclosure requires prejudice to mortgagor to be a defense)
LaFrance Architect v. Point Five Dev., 91 A.3d 364 (Vt. 2013) (setting aside default; affirmative defenses and timeliness)