Whitefish Credit Union v. PrindivilleAnnotate this Case
Defendants acquired real property by borrowing more than $2 million from Whitefish Credit Union (WCU) and signing a promissory note to WCU, secured by mortgages on the property. Defendants later defaulted on that note, owing a principal balance of $1,951,670. WCU filed this action for foreclosure and collection of the debt. The property was sold at a sheriff’s sale to WCU for $1,100,000. Thereafter, WCU filed a request for entry of a deficiency judgment against Defendants for the amount of $745,365. Defendants opposed the request, arguing that the fair market value of the property exceeded the loan balance. After a hearing, the district court found the property was worth $2,366,667 as of the date of the sheriff’s sale and that no deficiency was owed to WCU. The Supreme Court affirmed in part and reversed in part, holding (1) the district court did not abuse its discretion by proceeding in equity to determine the fair value of the property for purposes of entering a deficiency judgment; but (2) evidentiary errors clearly affected the outcome of the proceeding to the prejudice of WCU. Remanded for further proceedings on the evidentiary issues and the applicable standard.