Richard H. Boucher v. Kevin E. Sweet
147 A.3d 71
| R.I. | 2016Background
- In 1994 Sweet signed an $80,000 promissory note to Boucher secured by a mortgage on 54 New London Ave., West Warwick; Sweet defaulted and Boucher initiated foreclosure.
- Foreclosure sale advertised with terms: $8,000 deposit at sale, balance within 30 days, and sale "subject to all taxes, assessments, mortgages, any prior encumbrances and other encumbrances."
- At the January 7, 1997 auction Boucher was the sole bidder and bid $35,000 but did not pay the $8,000 deposit or sign the sale agreement.
- Boucher sued in December 1998 for the deficiency; after procedural motions and a rehearing, the Superior Court excluded unpaid taxes from recovery and entered summary judgment for Boucher for $48,155.35 plus interest and $3,237 in fees.
- Sweet appealed, asserting improprieties in the foreclosure sale (failure to follow sale terms and the large disparity between sale price and stipulated $90,000 fair market value); the Supreme Court considered whether those alleged defects defeated summary judgment.
Issues
| Issue | Plaintiff's Argument (Boucher) | Defendant's Argument (Sweet) | Held |
|---|---|---|---|
| Whether alleged failures to follow sale terms (no $8,000 deposit; no signed sale agreement; Boucher sought unpaid taxes contrary to "subject to taxes") rendered sale improper | Boucher argued any minor defects did not amount to fraud or collusion and he was entitled to deficiency where no evidence of impropriety existed | Sweet argued these failures, together with grossly inadequate price relative to $90,000 FMV, showed an improperly conducted/advertised sale permitting challenge to the foreclosure | Court held the failures were minor and not evidence of fraud or collusion; summary judgment for Boucher affirmed |
| Whether inadequacy of sale price alone can void a foreclosure sale | Boucher maintained inadequate price alone is insufficient without additional proof of improper conduct | Sweet relied on price disparity plus alleged procedural defects to impeach the sale | Court reiterated that price inadequacy alone is insufficient; without evidence of collusion or impropriety, sale stands |
| Burden on mortgagor to overturn foreclosure sale | Boucher argued mortgagor must produce competent evidence of collusion/impropriety to defeat summary judgment | Sweet contended his allegations and stipulated FMV created a genuine issue of material fact | Court held the mortgagor (Sweet) bore the burden and failed to present competent evidence of impropriety; summary judgment appropriate |
| Proper remedy for claimed deviations from sale terms (taxes/sewer fees) | Boucher conceded unpaid taxes/sewer fees were included in the low purchase price and these were excluded from the deficiency award | Sweet argued collector of unpaid taxes violated the sale condition that property sold "subject to all taxes" | Court accepted exclusion of unpaid taxes from judgment but otherwise denied challenge to the sale |
Key Cases Cited
- DeLuca v. Klegraefe, 706 A.2d 1351 (R.I. 1998) (mortgagor must show collusion or improprieties in advertisement or conduct of sale to impeach foreclosure sale)
- Galvin v. Newton, 36 A. 3 (R.I. 1895) (inadequate price may be considered with other evidence of collusion/fraud to void sale)
- Woolley v. Tougas, 1 A.2d 92 (R.I. 1938) (mere technical violations of sale terms do not necessarily establish overreaching or collusion)
- Nichols v. Flagg, 51 A. 1039 (R.I. 1902) (entire transaction may justify voiding sale if convincingly indicative of collusion and unfair dealing)
- Hyde v. Roman Catholic Bishop of Providence, 139 A.3d 452 (R.I. 2016) (summary-judgment review is de novo)