Alaska Trustee, LLC v. BachmeierAnnotate this Case
In 2009 Elisabeth Bachmeier defaulted on a loan secured by a deed of trust against her home, and a nonjudicial foreclosure was initiated. Bachmeier requested a reinstatement quote in order to halt the foreclosure. Alaska Trustee, the trustee under the deed of trust, replied with a quote which included foreclosure costs that were not attorney's fees or court costs, the only items the foreclosure statute expressly mentions as recoverable in a reinstatement amount. Bachmeier brought suit against Alaska Trustee, Routh Crabtree Olsen (the law firm aiding in the foreclosure), and Richard Ullstrom (an attorney employed by Routh Crabtree Olsen), alleging that the inclusion of the disputed foreclosure costs violated the foreclosure statute and was a deceptive practice in violation of the Unfair Trade Practices and Consumer Protection Act (UTPA). Bachmeier also argued that her deed of trust did not provide that all foreclosure costs could be recovered in the reinstatement amount. Both sides moved for summary judgment. The superior court concluded that the inclusion of the foreclosure costs violated the foreclosure statute and that the UTPA applied to nonjudicial foreclosures. Alaska Trustee appealed. The Supreme Court granted review to determine: (1) the scope of permissible charges to be included in the reinstatement amount given to homeowners facing nonjudicial foreclosure under AS 34.20.070(b); and (2) whether the UTPA applied to nonjudicial deed of trust foreclosures. The Court held that because the beneficiary of a deed of trust has a right to be returned to its status quo ante when the borrower reinstates after a default, Alaska Trustee could include in Bachmeier's reinstatement amount all reasonable costs it incurred pursuing the foreclosure under the foreclosure statute, regardless of whether Bachmeier's deed of trust specifically provided for the inclusion of such costs. Furthermore, the Court held that the UTPA did not apply to nonjudicial deed of trust foreclosures.