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C & M Real Estate Services, Inc., Respondent, vs. Ganesh Thondikulam: REAL PROPERTY - would-be lien creditor with no right to redeem from foreclosure; pre-Judgment notice

STATE OF MINNESOTA
IN COURT OF APPEALS
A06-1459
C & M Real Estate Services, Inc.,
Respondent,
vs.
Ganesh Thondikulam,
Appellant.
Filed October 2, 2007
Affirmed
Willis, Judge
Anoka County District Court
File No. C4-05-10663
Matthew A. Anderson, Andrew J. Hippert, Babcock Neilson Mannella & Klint, P.L.L.P.,
118 East Main Street, Anoka, MN 55303 (for respondent)
Darrell A. Jensen, Susan E. Sheely, Barna, Guzy & Steffen, Ltd., 400 Northtown
Financial Plaza, 200 Coon Rapids Boulevard, Coon Rapids, MN 55433 (for appellant)
Considered and decided by Willis, Presiding Judge; Minge, Judge; and Hudson,
Judge.
S Y L L A B U S
A purported lien creditor has no right to redeem property from foreclosure if the
notice of intent to redeem is filed before the docketing of the judgment that establishes the
lien.
-2-
O P I N I O N
WILLIS, Judge
In this appeal from summary judgment in an ejectment action involving a priority
dispute, appellant is the assignee of a creditor who attempted to redeem the property from
foreclosure. Appellant argues that the district court misapplied the law by concluding
that appellants assignor was not a judgment-lien creditor when it filed its notice of intent
to redeem. Because the district court did not misapply the law, we affirm.
FACTS
On May 27, 2004, the Anoka County Sheriff sold at a foreclosure sale a fourbedroom
home in Lexington, Minnesota, after Daniel Landon, the owner and mortgagor,
defaulted on the mortgage. US Bank National Association, ND (US Bank), the
mortgagee, purchased the sheriffs certificate of sale at the foreclosure, subject to a sixmonth
redemption period.
In September 2003, Sheri Welch obtained a conciliation-court judgment against
Landon. On November 10, 2004, Welch assigned the judgment to Omega Financial,
LLC, and on the same day, Omega tendered for filing in Anoka County District Court a
copy of the conciliation-court transcript of judgment, the assignment of judgment, and an
affidavit of identification of judgment debtor.
On November 17, 2004, US Bank assigned the sheriffs certificate of sale to
respondent C & M Real Estate Services, Inc. Landon did not redeem the property by
November 29, 2004, the last day of the redemption period. On November 29, 2004, at
10:20 a.m., Omega filed with the Anoka County Recorder a notice of intent to redeem the
-3-
property from foreclosure based on Omegas asserted status as a junior lien creditor. But
the conciliation-court judgment on which the purported lien was based was not docketed
by the district-court administrator until 11:37 a.m. on November 29, about an hour and a
half after Omega filed its notice of intent to redeem.
On December 3, 2004, Omega tendered to the Anoka County Sheriff certified
funds to redeem the property. The sheriff issued a certificate of redemption, which
Omega recorded. The sheriff also forwarded a copy of the certificate of redemption and
the certified funds to C & M. But on December 9, C & M returned the funds to the
sheriff, objecting to the redemption on the ground that the judgment that was the claimed
basis for Omegas lien had not yet been docketed when Omega filed its notice of intent to
redeem, so that Omega was not a lien creditor at that time and was not entitled to redeem.
On January 5, 2005, Omega conveyed the property by warranty deed to appellant
Ganesh Thondikulam, a real-estate investor. Thondikulam received keys to the property
after Omega changed the locks without C & Ms permission. On October 12, 2005,
C & M filed a district-court action seeking (1) a determination that C & M owned the
property, (2) possession of the property, and (3) damages for unlawful entry and
possession.
C & M moved for summary judgment, arguing that Thondikulam did not have
good title to the property. The parties did not dispute that Omegas notice of intent to
redeem was filed an hour and a half before the docketing of the judgment that was the
basis for Omegas claimed lien. After a hearing, the district court granted summary
judgment to C & M on the ownership and possession issues and ordered Thondikulam to
-4-
vacate the property. The district court denied summary judgment on C & Ms claim that
it was entitled to mesne profts as damages and determined that the issue of breaking
and entering was not properly before the court. Judgment was entered under Minn. R.
Civ. P. 54.02, and this appeal follows.
ISSUE
Did the district court err by concluding that Omega had no right to redeem because
the judgment on which its purported lien was based had not yet been docketed when it
filed its notice of intent to redeem?
ANALYSIS
In reviewing an appeal from summary judgment, this court determines whether
there are any genuine issues of material fact and whether the district court erred in its
application of the law. Cummings v. Koehnen, 568 N.W.2d 418, 420 (Minn. 1997). We
review de novo the district courts determination of a purely legal question. Frost-Benco
Elec. Assn v. Minn. Pub. Utils. Commn, 358 N.W.2d 639, 642 (Minn. 1984).
As a preliminary matter, C & M argues that Thondikulam misrepresents the record
on appeal. C & M claims that the record shows that Omega did not tender for filing all of
the documents necessary to docket the judgment until November 29, 2004. But C & Ms
counsel acknowledged at the summary-judgment hearing that Omega tendered the
affidavit of judgment debtor to the district-court administrator for filing on November 10,
even though the judgment was not docketed until November 29. And the record does not
refute Thondikulams claim that Omega also tendered for filing on November 10 the
-5-
transcript of judgment and the assignment of judgment. We therefore reject C & Ms
argument.
Minn. Stat. 548.09, subd. 1 (2006), provides, with certain exceptions not
applicable here, that every judgment . . . shall be entered by the court administrator
when ordered by the court and will be docketed by the court administrator upon the filing
of an affidavit [of a judgment creditor]. . . . From the time of docketing the judgment is a
lien . . . upon all real property in the county then or thereafter owned by the judgment
debtor. Thus, by statute, a judgment becomes a lien against a debtors property when
the judgment is docketed. Nussbaumer v. Fetrow, 556 N.W.2d 595, 598 (Minn. App.
1996), review denied (Minn. Feb. 26, 1997). Because a judgment lien provides the legal
basis for a judgment creditor to proceed against a judgment debtor, until the judgment is
docketed, no lien exists against the debtors property, and a right of action to collect the
debt secured by that lien has not accrued. See Lowe v. Reierson, 201 Minn. 280, 284, 276
N.W. 224, 226 (1937) (stating that [t]he right to proceed against the debtor accrues
immediately upon entry and docketing of judgment) (emphasis added).
Thondikulam argues that because the statute provides that judgment will be
docketed when the judgment creditors affidavit is filed, the district court erred by
failing to determine that a lien was created when the affidavit was filed on November 10,
2004. But Minnesota appellate courts have strictly construed the docketing requirement.
See Brady v. Gilman, 96 Minn. 234, 236, 104 N.W. 897, 897 (1905) (holding that
attempted redemption from foreclosure sale was invalid when notice of intent to redeem
was filed before docketing of judgment on which lien was based); see also Oldewurtel v.
-6-
Redding, 421 N.W.2d 722, 727 (Minn. 1988) (holding that when a judgment was not
docketed, even for reasons not apparent from the record, a judgment lien did not exist).
The district court relied on Brady in determining that Omega did not have a lien
on the property when it filed its notice of intent to redeem. In Brady, the plaintiff
obtained from a defaulting mortgagor a confession of judgment on a mortgage, which
was delivered to the clerk of court before 12:20 p.m. on a certain day, with a request for
docketing. 96 Minn. at 235, 104 N.W. at 897. At 1 p.m. the same day, the plaintiff filed
a notice of intent to redeem the premises from a foreclosure sale. Id. The judgment,
however, was not docketed until 5 p.m. that day. Id. The Minnesota Supreme Court held
that the attempted redemption was not valid because it had occurred before the plaintiff
was, in fact, a lien creditor. Id. at 236, 104 N.W. at 897. The supreme court stated:
It is a condition precedent to the exercise of the right of [a]
creditor to redeem that he file a notice of his intention to do
so, and to entitle him to give the notice he must have a lien on
the premises at the time he files his notice. Therefore a notice
of an intention to so redeem, filed by an intended
redemptioner before he is in fact a lien creditor, is void, even
though by the docketing of his judgment he afterwards
becomes such creditor . . . .
Id.
Thondikulam attempts to distinguish Brady, in which the docketing request
occurred only four hours before the judgment was docketed, from this case, in which the
docketing request occurred 19 days earlier. But the same legal principle applies: because
the docketing of a judgment is necessary to create a judgment lien, a notice of intent to
redeem that is filed before docketing is void.
-7-
Thondikulam argues that the in nominal damages provided by Minn. Stat.
548.09, subd. 3 (2006), for failure to docket a judgment is insufficient to compensate a
judgment creditor for the value of a lost lien. See id. (stating that [i]f the court
administrator violates [section 548.09], neither the judgment nor the docketing is invalid,
but the court administrator shall be liable to a person damaged by the violation in the sum
of .). But the district court correctly determined that subdivision 3 does not provide
that if court administration mistakenly delays docketing, then the filing will nonetheless
be considered docketed. When the language of a statute is plain, we will not amend it
by supplying language that the legislature omitted. See Tracy State Bank v. Tracy-Garvin
Coop., 573 N.W.2d 393, 395 (Minn. App. 1998) (stating that when a statutory question
involves the failure of expression rather than the ambiguity of expression, this court is not
free to substitute amendment for construction and thereby supply the omissions of the
legislature).
Thondikulam also maintains that public policy supports his argument because
bureaucratic backlogs may unreasonably delay docketing and deny judgment creditors
the right to recover. We disagree. Public policy requires consistency in determining lien
priority among judgment creditors. See Nussbaumer, 556 N.W.2d at 599 (stating that
judgment creditors, as a matter of public policy, must be able to rely on public records).
Thondikulam additionally maintains that C & M lacks standing to challenge
Omegas redemption of the property, citing Remole v. Jonathan Dev. Corp., 277 N.W.2d
362 (Minn. 1979). In Remole, the Minnesota Supreme Court held that the assignee of a
mortgagees interest in a sheriffs certificate of sale lacked standing to complain when a
-8-
junior lienholder filed a notice of intent to redeem foreclosed property after the
redemption period expired. Id. at 363. But the district court properly rejected this
argument because, unlike the lienholder in Remole, Omega had no lien on the property
when it filed its notice of intent to redeem because its judgment had not yet been
docketed. And because Omega lacked a lien, it lacked a right to redeem the property
from foreclosure. See Minn. Stat. 580.24 (2006) (discussing redemption by creditors).1
Thus C & M, as the assignee of the sheriffs certificate, became the owner of the property
when the property was not redeemed.
Thondikulam argues finally that Omega substantially complied with the
requirements for redeeming from a foreclosure sale. See Sieve v. Rosar, 613 N.W.2d
789, 793 (Minn. App. 2000) (stating that strict construction of statutory redemption
procedures does not preclude redemption when formal defects do not prejudice the rights
of junior lienors). But to redeem a property from foreclosure, a lienholder must produce
a copy of the docket of the judgment that evidences the lien. Minn. Stat. 580.25(1).
The requirement of producing proof of a docketed judgment that supports a notice of
redemption is an essential element[] of the statute [that] must be strictly adhered to.
Sieve, 613 N.W.2d at 793; see also Graybow-Daniels Co. v. Pinotti, 255 N.W.2d 405,
407 (Minn. 1977).
1 The Minnesota legislature amended Minn. Stat. 580.24, .25 in 2004, effective
January 1, 2005. See 2004 Minn. Laws ch. 234, 4-6, at 724-26. We apply the current
statutory version because the record does not show that the parties had vested rights that
were affected by the amendment. See Interstate Power Co. v. Nobles County Bd. of
Commrs, 617 N.W.2d 566, 575 (Minn. 2000).
-9-
D E C I S I O N
The district court did not err by concluding that Omegas attempt to redeem the
property failed because Omega was not a lien creditor when it filed its notice of intent to
redeem.
Affirmed.
 

 
 
 

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