TBF Financial, LLC v. Gregoire
118 A.3d 511
Vt.2015Background
- Defendants Barrett and Linda Gregoire defaulted on loans secured by four multi-family rental properties; lender (RBS Citizens, later TBF Financial) foreclosed after receivership and multiple stipulations.
- A receiver was appointed in July 2010; disputes arose about the receiver’s conduct and fees, and defendants alleged collusion between the receiver and the bank’s workout officer.
- Parties entered an August 2011 stipulated order resolving many disputes and authorizing entry of foreclosure judgments; that order preserved defendants’ separate ability to challenge receiver expenditures in another action.
- The court entered final judgments and decrees of foreclosure in August/October 2011; a certification of nonredemption issued, but the parties then executed an October 2011 stipulated forbearance that stayed sales and returned property control to defendants under a payment plan.
- Defendants defaulted on the October 2011 plan; they moved (in Jan. 2013) to set aside the foreclosure judgments and the October stipulation, alleging fraud, misrepresentation, fiduciary abuse and duress.
- Trial court denied relief as untimely under V.R.C.P. 60(b) and found defendants in default under the October stipulation; the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were the August 2011 foreclosure judgments final? | Foreclosures are final and appealable judgments; finality promoted by policy. | August judgments were not final because October 2011 stipulation stayed sales and contemplated vacatur. | August 2011 foreclosure judgments were final and unappealed; October stipulation did not eliminate finality. |
| Could defendants obtain relief from the foreclosure judgments under V.R.C.P. 60(b) for fraud? | Motion was time‑barred under 60(b)(3); no fraud upon the court shown for 60(b)(6). | Alleged collusion between receiver and bank constitutes fraud (or fraud upon the court) warranting relief. | Motion under 60(b)(3) barred by one‑year rule; 60(b)(6) relief denied for unreasonable delay and no demonstrated fraud upon the court. |
| Did defendants timely raise receiver/bank misconduct such that relief is available? | N/A (bank argued timeliness against defendants). | Defendants said they lacked full info and pursued claims when default occurred. | Defendants knew or had reason to know of alleged misconduct before stipulations; their delay and affirmative acceptance of stipulations forfeited relief. |
| Is the October 2011 stipulated forbearance voidable for fiduciary abuse/duress, and did bank breaches excuse defendants’ default? | October stipulation is enforceable; foreclosure judgments remain intact; default provisions trigger lift of stay. | The stipulation was induced by fiduciary abuse, misrepresentation, or duress and is therefore voidable; bank’s failures excuse performance. | October stipulation is enforceable: defendants entered it with knowledge of allegations, affirmed it by taking possession and acting under it for >1 year, and did not timely rescind; breaches alleged do not excuse default. |
Key Cases Cited
- Godin v. Godin, 168 Vt. 514, 725 A.2d 904 (Vt. 1998) (defines narrow doctrine of fraud upon the court and high evidentiary standard)
- Mortgage Lenders Network, USA v. Sensenich, 177 Vt. 592, 873 A.2d 892 (Vt. 2004) (foreclosure decree is final judgment even if right of redemption remains)
- Woodbine Condominium Ass'n v. Lowe, 174 Vt. 457, 806 A.2d 1001 (Vt. 2002) (policy favoring finality of foreclosure judgments; Rule 60(b) not a vehicle to evade appeal rules)
- Citibank, N.A. v. Groshens, 171 Vt. 639, 768 A.2d 1272 (Vt. 2000) (dismissal where party failed to timely seek relief from foreclosure decree)
- Riehle v. Tudhope, 171 Vt. 626, 765 A.2d 885 (Vt. 2000) (Rule 60 relief limited by finality; only extraordinary circumstances excuse delay)