HUMBERT MORTGAGE, INC. VS. REDELL (ANTONETTE I.), ET AL.Annotate this Case
RENDERED: SEPTEMBER 5, 2008; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
HUMBERT MORTGAGE, INC. MONEY
PURCHASE PENSION PLAN
APPEAL FROM BOONE CIRCUIT COURT
HONORABLE PAUL W. ROSENBLUM, SPECIAL JUDGE
ACTION NO. 04-CI-00077
ANTONETTE I. REDELL, ERIC
RICHARDS, AND WESTMARK
** ** ** ** **
BEFORE: CAPERTON AND STUMBO, JUDGES; BUCKINGHAM, SENIOR
BUCKINGHAM, SENIOR JUDGE: Humbert Mortgage, Inc. Money Purchase
Pension Plan appeals from an order of the Boone Circuit Court approving
Westmark Properties, LLC’s purchase and exercise of the right of redemption in
Senior Judge David C. Buckingham sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
certain real property Humbert had purchased at public auction in a master
commissioner’s sale. We affirm.
The City of Florence filed an action in rem against 39 parcels of real
property, seeking to collect delinquent ad valorem property taxes. Count XXIX of
the complaint described Lot 41 of Stonegate Meadows Subdivision and sought past
due taxes on that property for the years 2001 and 2002. The lot was owned by
Antonette I. Redell. Humbert held a recorded mortgage lien on the property.
Kentucky Revised Statutes (KRS) 92.810 and KRS 91.484 through
KRS 91.527 provide a statutory procedure for cites to use in the collection of
delinquent property taxes. If the tax bills remain unpaid, the court may order the
property sold to satisfy the unpaid taxes. KRS 91.4885.
The City complied with the notice requirements of the statute by
publishing a notice and sending notice to those having interests in the properties.
See KRS 91.4883; KRS 91.4884. Both the published notice and the notice sent to
Humbert specified that “[r]edemption may be made for a period of sixty (60) days
after the Master Commissioner’s enforcement sale, if the sale price is less than the
parcel’s current assessed value as certified by the Department of Revenue.” KRS
91.511(2) also provides for the exercise of a right of redemption for a period of 60
days from the date of sale.
Humbert asserted its interest in the property by filing an answer and
cross-claim. It thereafter filed a motion seeking a judgment and sale of the
property. The court granted Humbert’s motion, and the order and judgment of sale
directed the property be sold on June 24, 2005. The order further directed that any
sale proceeds would first be applied to pay the master commissioner fees and costs
of sale and then to the delinquent property taxes. Any remaining balance would be
paid on the mortgage indebtedness to Humbert.
Redell filed bankruptcy, causing the sale to be postponed. Following
termination of the bankruptcy proceedings, the sale was rescheduled for February
9, 2006. Unbeknownst to the court and master commissioner, Redell died intestate
on December 18, 2005. Neither her estate nor her only heir at law, her son Eric
Richards, was substituted as a party in the case.
The property was appraised at $114,000 with a tax assessment
valuation of $112,000. Submitting the only bid, Humbert purchased the property
at the commissioner’s sale for $10,000. The court approved the sale, and a deed
was given to Humbert and the sale proceeds were distributed.
On February 7, 2007, two days less than one year after the sale,
Westmark Properties, LLC filed a notice of its purchase and exercise of the right of
redemption, stating that it had purchased the right of redemption from Richards for
$3,000. It also paid the purchase price to the Boone Circuit Clerk. The master
commissioner filed a motion for determination of valid exercise of right of
redemption and for an order of distribution. Humbert then filed a motion seeking
to correct the legal description of the tract and seeking a new deed absent language
allowing a right of redemption.
The circuit court determined that Richards had inherited the right of
redemption as a real property interest and could transfer that right to Westmark
free of any obligation to pay his deceased mother’s debts, including the balance of
the Humbert mortgage. The court additionally found the procedure for redemption
was not controlled by KRS 91.511(2) but rather by KRS 426.530(1) which allows
the right of redemption to exist for one year after the sale if the purchase price was
less than two-thirds of the appraised value. The court also corrected an error in the
original description of the property that identified it as Lot 4 rather than Lot 41.
This appeal by Humbert followed.
The time limit for the exercise of a right of redemption when property
is sold to satisfy unpaid property taxes is 60 days after the sale. KRS 91.511(2).
In a more typical master commissioner sale, such as when a mortgage holder seeks
a sale by the master commissioner, the time limit to exercise a right of redemption
is one year. KRS 426.530(1).
Humbert argues that the 60-day time limit in KRS 91.511 applied
because this case was initiated by the City of Florence as an action to collect
delinquent property taxes. It additionally cites authority relevant to Kentucky
Rules of Civil Procedure (CR) 13.07 and argues that its cross-claim is dependent
upon and relates back to the original action. Humbert also notes that the 60-day
period for the right of redemption was stated in the notice mailed to it. On the
other hand, Westmark argues that the one-year time limit for exercising the right of
redemption, as set forth in KRS 426.530(1), applies because the property was sold
pursuant to Humbert’s motion.2
The circuit court agreed with Westmark that the one-year time limit
applied, and it upheld Westmark’s exercise of the right of redemption. We agree.
The circuit court action consisted of a claim by the City to collect the delinquent
property taxes and a claim by Humbert to enforce its mortgage lien. The property
was sold to enforce Humbert’s lien; it was not sold pursuant to the City’s action to
enforce the collection of property taxes. Therefore, the one-year time limit of KRS
426.530(1) was applicable.
Humbert next argues that Richards had no authority to transfer the
right of redemption to Westmark free of the debt owed to Humbert. It argues that
Richards inherited the right of redemption from his mother and that the right was
in the nature of personal property that passed into her estate. Because no
administration of the estate had occurred when Richards sold the right, Humbert
maintains that Richards had no authority to sell the right of redemption to
Westmark. Alternatively, Humbert argues that even if the right of redemption was
in the nature of a real property interest rather than personal property, such interest
was subject to the claims of Redell’s creditors, including Humbert.
Citing cases from other jurisdictions, the circuit court held that the
right of redemption “is a statutory privilege which passes to the heir of the owner
in the same manner as the land itself. Furthermore, these jurisdictions treat the
Neither party cited any authority directly on point to support its argument. Likewise, we could
find no authority directly on point.
right of redemption as an interest which the owner may convey or devise and
which will pass to his heirs in case of death intestate.” In other words, the circuit
court held that the right of redemption passed directly to Richards at Redell’s
We conclude that both Humbert and the circuit court overlooked the
fact that Redell died before the commissioner sale of the property. When Redell
died, the property itself passed by intestate succession directly to Richards as her
sole heir. See Wood v. Wingfield, 816 S.W.2d 899, 902 (Ky. 1991); Slone v.
Casey, 194 S.W.3d 336, 337 (Ky.App. 2006). No right of redemption existed at
that time because the property had not sold. Therefore, at the time of the sale, the
property was owned by Richards. Then, because the property did not sell for twothirds of its appraised value, Richards’ right of redemption arose. See KRS
426.530(1). We therefore reject Humbert’s argument that Richards did not have
the legal right to sell the right of redemption.3
We likewise reject Humbert’s argument that the right of redemption
was subject to the claims of creditors of Redell’s estate. The circuit court held that
the right of redemption existed free of Humbert’s mortgage lien. The court cited
Makibben v. Arndt, 10 S.W. 642 (Ky. 1889), wherein the court stated
The mortgage lien ceases to exist whenever the sale is
made enforcing it. The right to the property passes to the
purchaser, subject to confirmation by the court, and
Also, “a debtor can transfer the statutory right of redemption to another. In turn, the debtor’s
grantee can exercise the right of redemption.” Town Branch Storage, Inc. v. Commonwealth,
995 S.W.2d 398, 400 (Ky.App. 1999).
subject also to be divested in favor of the debtor by
redemption within the time allowed, if it be a case where
the right exists.
Id. at 643. We agree with the circuit court that the right of redemption was not
subject to Humbert’s mortgage.
Finally, Humbert requests the sale be set aside pursuant to CR
60.02(f) for reasons of an extraordinary nature justifying relief. Not having
Richards or the estate as a named party and the typographical error listing the lot
do not reach the level of an extraordinary nature anticipated by the rule.4 The
circuit court corrected the typographical error in its order, and no further relief was
The order of the Boone Circuit Court is affirmed.
STUMBO, JUDGE, CONCURS.
CAPERTON, JUDGE, CONCURS AND FILES SEPARATE
CAPERTON, JUDGE, CONCURRING: I concur with the majority
and write separately only to explicate Humbert’s argument that it should enjoy a
60-day rather than a one-year right of redemption.
I think the majority opinion is well-reasoned and will not reiterate
such here. It suffices to say that to accept Humbert’s argument would put Humbert
in a better position as a cross-claimant than if Humbert had filed a separate action
to enforce its claim. No one would contest that a one-year right of redemption,
The judgment and order of sale that contained the error in the legal description was prepared
by Humbert’s attorney.
controlled by KRS 426.530(1), would have applied if Humbert had filed a separate
action. Similarly, no one contests that the 60-day right of redemption, controlled
by KRS 91.511, applies when the action is brought by a city, here the city of
Florence. Thus, Humbert asserting a claim as a cross-claimant in an action
wherein a city is a party puts Humbert in no better position than asserting the same
claim in an action separate from the city. To do as Humbert suggests, would allow
the period for redemption to turn upon the fortuitous circumstance of Humbert
asserting its claim in an action where a city is a party. Regardless of who brings
the action, the rights are particular to the parties. Therefore, Humbert, in moving
the trial court for an order of sale, asserted its rights and made KRS 426.530(1)
applicable. I concur.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES
Leonard G. Rowekamp
Michelle Foley Turner
Michael R. Schmidt