AURORA LOAN SERVICES V. WADE RAMEY AND FRANCIS RAMEY
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RENDERED:
SEPTEMBER 3, 2004; 10:00 a.m.
TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-000993-MR
AURORA LOAN SERVICES
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE STEPHEN K. MERSHON, JUDGE
ACTION NO. 99-CI-005254
V.
WADE RAMEY
AND FRANCIS RAMEY
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, MINTON, AND TAYLOR, JUDGES.
MINTON, JUDGE:
Aurora Loan Services appeals from an order of
the Jefferson Circuit Court denying its post judgment motions
for relief.
We affirm.
This appeal arises out of a mortgage foreclosure filed
by
Aurora
against
John
and
Helen
Gross.
In
its
original
complaint, Aurora demanded a judgment against the Grosses for a
principal balance of $93,000.19 and interest “at the rate of
9.75% from February 1, 1999” and enforcement of a lien against
the
real
property.
Aurora
later
amended
its
complaint
to
allege:
“2.
The Plaintiff clarifies to this Honorable Court
that the interest accruing on Plaintiff’s Note, is adjustable
per the adjustable Note itself.”
The amended complaint simply
demanded judgment for “the relief prayed for in its Complaint.”
On August 31, 2001, the circuit court sustained Aurora’s default
judgment motion.
Aurora’s
The affidavit submitted with the motion by
Manager
of
Default
Servicing
stated
that
“plaintiff
seeks interest from February 1, 1999[,] at a variable rate of
interest.”
Aurora.
The circuit court signed the judgment drafted by
It granted recovery from the Grosses as follows:
a.
b.
Its costs herein expended.
d.
secure
Interest on [the principal sum of $93,000.19] at
a variable rate from February 1, 1999 until paid.
The interest may change on the first day of
March, 2000, and on that day every sixth month
thereafter. The interest rate will be based on an
“Index,” which is the average of interbank
offered
rates
for
six-month
U.S.
dollardenominated
deposits
in
the
London
market
(‘LIBOR”), as published in the Wall Street
Journal.
c.
To
The principal sum of $93,000.19[.]
Attorney fees in the amount of $900[.]
the
money
judgment,
the
judgment
further
granted
Aurora a lien on the real property described in the complaint
and
ordered
Commissioner.
that
this
property
be
sold
by
the
Master
The Master Commissioner advertised the property
and sold the real property at public auction on December 4,
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2001.
In
preparation
for
the
sale,
Aurora
informed
the
commissioner that the amount of principal and interest it needed
to
satisfy
the
judgment
totaled
$118,737.04.
This
was
the
figure used by the Master Commissioner to compute the amount to
be raised at the sale, $121,603.07, which was then included in
the posted sale bills and in the public advertising. Wade and
Frances Ramey became the purchasers, making the successful bid
of
$151,000.
The
commissioner’s
final
report
of
reflected the amount to be raised as $121,603.07.
sale
also
There were no
exceptions to the commissioner’s report of sale filed with the
court on December 7, 2001.
The circuit court confirmed the sale
by order entered January 24, 2002.
Soon after the sale, the Rameys began efforts to get a
deed.
At this point in the procedural history, the case ceased
to be a routine foreclosure action.
Beginning with a motion
filed April 15, 2002, the Rameys sought the intervention of the
circuit
interest
court
and
to
compel
costs
so
Aurora
to
that
provide
they
could
Commissioner and take delivery of the deed.
document
drafted
when
for
Aurora
the
realized
court
and
that
the
the
figures
an
itemization
pay
Master
The record does not
judgment
it
the
of
had
that
it
had
furnished
the
Master Commissioner were short an estimated $45,000 in interest
and other fees that might have been recovered under the terms of
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the
note
and
mortgage.
That
shortfall
blocked
the
routine
closing of this foreclosure and judicial sale.
After a delay of several months and after at least
three hearings before the court and the commissioner, Aurora
moved,
on
August
26,
2002,
to
amend
clerical mistakes and CR1 60.01.
issues
arguing
the
Rameys’
the
judgment,
citing
Aurora also raised a host of
lack
of
standing
to
press
for
resolution of the judicial sale and the Rameys’ failure to post
an
adequate
matters
to
bond.
the
The
circuit
court
commissioner.
referred
Following
all
pending
hearings,
the
commissioner recommended a finding that Aurora was entitled to
recover
the
principal
amount,2
plus
interest
of
$14,989.32,
calculated according to the terms of the judgment,3 and other
costs for a total of $112,591.94, plus interest until paid.
The
commissioner also recommended rejection of Aurora’s claim for
additional cost items and further recommended denial of Aurora’s
1
Kentucky Rules of Civil Procedure.
2
Whereas the principal judgment amount is $93,000.19, the Master
Commissioner’s Report, filed February 14, 2003 (Record, p. 352),
and the circuit court’s order adopting this report entered
April 9, 2003 (Record, p. 367), show the principal sum to be
$93,019.
3
The Master Commissioner followed the circuit court’s May 16,
2002, direction that interest on the principal judgment at the
variable interest rate would end thirty days from the date of
confirmation of the sale, February 25, 2002. This was a contempt
sanction imposed upon Aurora by the circuit court based upon its
finding that Aurora failed to respond timely to the court’s
April 23, 2002, order for itemization.
-4-
motions to deny party status to the Rameys to litigate.
order
entered
April
9,
2003,
the
circuit
court
In an
adopted
the
commissioner’s reports, concluding that “Aurora’s mistakes were
of its own making and were not the kind of mistakes envisioned
by CR 60.01.”
Aurora’s main contention on appeal is that the circuit
court abused its discretion in refusing to amend the judgment
because of (1) Aurora’s omission of a base interest rate of
6.99%, a figure that appears in the underlying note to be added
to the variable interest rate; and (2) its omission of certain
additional fees mentioned in the note or mortgage documents.
Aurora
further
argues
that
the
circuit
court
abused
its
discretion by failing to dismiss the Rameys as strangers to the
controversy and by failing to enforce the local rules of the
Jefferson
Circuit
Court
by
requiring
additional bond as purchasers.
the
Rameys
to
We will discuss Aurora’s main
contention first.
Kentucky’s CR 60.01 states in pertinent part that
[c]lerical mistakes in judgments, orders or
other parts of the record and errors therein
arising from oversight or omission may be
corrected by the court at any time of its
own initiative or on the motion of any party
and after such notice, if any, as the court
orders.
-5-
post
Kentucky’s rule is identical to FRCP4 60(a).
The overall form
and
modification
substance
of
the
provisions
for
the
of
judgments contained in CR 59 and CR 60 are sufficiently similar
to FRCP 59 and FRCP 60 that federal case law analyzing the
interplay of those rules is helpful for deciding the issues at
hand.
Inherent in the provisions of [FRCP] 59 and
60 for the modification of judgments is a
tension between two goals: (1) that of
ensuring that the court's judgment reflect
an appropriate adjudication of the rights
and obligations of the parties, and (2) that
of finally terminating the litigation in
order to provide the parties with certainty
as to the nature and extent of their rights
and obligations as adjudicated.
To these
ends, these
Rules
weigh
the
value
of
finality and repose against the various
grounds that a party may have for moving to
alter a judgment, and they place varying
limitations on the time within which such
motions may be made.
In general, the more
clearly it appears that the ground is one
upon which the judgment should be altered,
the longer the time within which the motion
is permitted; by the same token, the more
prompt the motion, the more grounds that may
be argued.5
FRCP 60(a) mediates between the interest in accuracy and the
interest in finality.
It does this by combining a very narrow
scope—“clerical mistakes”—and unlimited time.
The rationale for the provision that a
motion to correct a clerical error may be
4
Federal Rules of Civil Procedure.
5
In re Frigitemp Corp., 781 F.2d 324, 326-327 (2nd Cir. 1986).
-6-
made "at any time" is that the judgment
simply has not accurately reflected the way
in which the rights and obligations of the
parties have in fact been adjudicated.
In
those circumstances, the goals of finality
and repose are outweighed by the equitable
goal of allowing a party who has in fact
established his right to relief to receive
that relief.6
In
Whittenberg
Engineering
&
Construction
Company
v.
Liberty
Mutual Insurance Company, Kentucky’s highest court acknowledged
that “where failure to include interest is a clerical error, it
is correctable under CR 60.01.”7
however,
that
the
clerical
mistake
absence
of
correctable
The court in that case held,
prejudgment
by
CR
interest
60.01
where
is
the
not
a
movant
claimed prejudgment interest for the first time twenty-nine days
after the jury’s verdict.8
In the case at hand, Aurora demanded variable interest
in its amended complaint, but it was about a year post-judgment
and eight months after the judicial sale that appeared to settle
on what “variable interest” it wanted.
Aurora bungled every
opportunity prior to the confirmation of the judicial sale to
make
what
claim.
it
now
argues
to
be
the
proper
variable
interest
Furthermore, the additional cost item claims were never
disclosed
at
all
prior
to
judgment.
6
Id. at 327.
7
Ky., 390 S.W.2d 877, 884 (1965).
8
Id.
-7-
The
ultimate
question,
then, is whether Aurora’s blunders are properly characterized as
“clerical mistakes” so that the judgment and resulting judicial
sale should remain open to correction under CR 60.01 at any
time.9
We
are
persuaded
by
the
facts
that
the
interest
of
finality and repose should weigh heavily against these blunders
being
considered
record
to
find
“clerical
any
mistakes.”
inconsistency
We
between
have
what
searched
relief
the
Aurora
sought prior to judgment or what relief the circuit court stated
it
would
grant
reflects.10
the
prior
to
judgment
We find no inconsistency.
circuit
court
did
not
abuse
and
what
the
judgment
Accordingly, we hold that
its
discretion
in
denying
likewise,
without
CR 60.01 relief.
Aurora’s
merit.
remaining
arguments
are,
The trial court properly treated the Rameys as parties
to the action after the Master Commissioner’s report was filed.
“Where one becomes the purchaser at a judgment sale, made by
order of the [circuit court], he is a party to the proceeding in
the
event
the
validity
of
the
sale
is
questioned,
or
such
exceptions filed to the report of sale as, if sustained, would
9
Aurora has never advanced an alternative argument that its
omissions could be treated as a “mistake [or] inadvertence”
correctable under CR 60.02 on a motion made within a reasonable
time not to exceed a year after judgment. Of course, correction
by alteration or amendment under CR 59.05 is not available
because of the strictly-limited 10-day period from the entry of
the judgment.
10
See United States v. Griffin, 782 F.2d 1393 (7th Cir. 1986).
-8-
set it aside.”11
discretion
by
Likewise, the circuit court did not abuse its
denying
Aurora’s
motion
for
a
resale
of
the
property based upon the Rameys’ delay in posting the full amount
of the bond required by the local rules of the Jefferson Circuit
Court.
Aurora’s blunders are the source of the confusion about
the amount of the judgment.
Having caused the confusion, Aurora
cannot be heard to complain as the trial court attempted to
bring about an equitable resolution.
For the reasons discussed above, the Jefferson Circuit
Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES:
Glenn E. Algie
Cincinnati, Ohio
Michael R. Gosnell
Louisville, Kentucky
11
Stone v. Myrtle's Adm'r, 148 Ky. 57, 146 S.W. 20, 21 (1912).
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