Murphy v. Financial Development Corp. case brief summary
495 A.2d 1245 (1985)
CASE FACTS
At the sale, the lenders purchased the property for the amount owed them, plus costs. Within a few hours, the lenders had sold the property to another defendant for an amount much greater than the foreclosure sale price. In the action below, the master denied the lenders' motion to dismiss and found that the lenders had failed to exercise good faith and due diligence, assessed damages against them equal to the difference between the property's fair market value and the price obtained at the sale, and awarded attorney fees.
DISCUSSION
CONCLUSION
The court reversed in part with respect to the award of attorney fees. The court affirmed the master's conclusion that the lenders failed to obtain a fair price at the foreclosure sale, but disagreed with the master's finding of bad faith, finding only a lack of due diligence instead. The court remanded for a redetermination of damages, finding that the master had applied the wrong measure.
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495 A.2d 1245 (1985)
CASE SYNOPSIS
Defendant lenders appealed from a
judgment of the Superior Court of Hillsborough County (New Hampshire)
in favor of plaintiff mortgagors in the mortgagors' action seeking to
set aside the foreclosure sale of their home, or, in the alternative,
money damages.CASE FACTS
At the sale, the lenders purchased the property for the amount owed them, plus costs. Within a few hours, the lenders had sold the property to another defendant for an amount much greater than the foreclosure sale price. In the action below, the master denied the lenders' motion to dismiss and found that the lenders had failed to exercise good faith and due diligence, assessed damages against them equal to the difference between the property's fair market value and the price obtained at the sale, and awarded attorney fees.
DISCUSSION
- On appeal, the court held that denial of the motion to dismiss was proper because RSA 479:25, II only barred an action challenging a foreclosure based on facts the mortgagor knew or should have known soon enough to permit filing a petition to enjoin the action prior to the sale.
- Here, the action was based on events at or after the sale.
- The court found insufficient evidence to support the master's finding of bad faith, but did find a lack of due diligence in obtaining a fair price.
- The master erred with respect to the measure of damages, which should have been the difference between a fair price for the property and the price obtained at the foreclosure sale.
CONCLUSION
The court reversed in part with respect to the award of attorney fees. The court affirmed the master's conclusion that the lenders failed to obtain a fair price at the foreclosure sale, but disagreed with the master's finding of bad faith, finding only a lack of due diligence instead. The court remanded for a redetermination of damages, finding that the master had applied the wrong measure.
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