Bank of America, N.A.
Seamus P. O'Kelly, Jennifer S. O'Kelly and State of Vermont Department of Taxes and Sandra J. Lockerby
Appeal from Superior Court, Washington Unit, Civil Division
Mary Miles Teachout, J.
William R. Dziedzic and Rachel K. Ljunggren of Bendett and
McHugh, P.C., Farmington, Connecticut, and Connie Flores
Jones of Winston & Strawn LLP, Houston, Texas, for
P. Riley of Rice & Riley, PLLC, Montpelier, for
Intervenor-Appellee Sandra J. Lockerby.
PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll,
1. Bank of America appeals a trial court order confirming the
sale of a foreclosed property in favor of Sandra Lockerby.
For the reasons below, we reverse and remand for proceedings
consistent with this opinion.
2. The property at issue was foreclosed by judicial order in
December 2015. The foreclosure order included a six-month
redemption period, permitting Seamus and Jennifer O'Kelly
and the Vermont Department of Taxes to redeem the property
before or during June 2016.The foreclosure order further
provided that if the property was not redeemed, it would be
sold to the highest bidder at a public sale. A year later,
six months after the redemption period expired, Bank of
America held a foreclosure sale of the property. The Bank
retained an auctioneer for the sale. The Bank's bid
package, which was emailed to the auctioneer on the morning
of the sale, included a blank report of sale and a purchase
and sale agreement. The bid package also included the amount
that the Bank planned to bid for the property at the
foreclosure sale. In addition to the auctioneer, the Bank
also retained a representative to appear in person at the
sale on behalf of the Bank and enter the Bank's bid.
3. The Bank's representative had difficulty locating the
property on the day of the foreclosure sale and did not
arrive at the sale in time to enter the Bank's bid. The
auctioneer entered the Bank's bid on behalf of the Bank.
Sandra Lockerby, the only bidder who appeared in person at
the foreclosure sale, entered a bid approximately one-third
the amount of the Bank's bid.
4. The Bank subsequently filed a motion to void the
foreclosure sale, noting that the Bank's representative
was not able to find the property in time for the sale and
therefore could not enter the Bank's bid. The Bank
requested that the trial court grant it sixty days in which
to hold a new foreclosure sale. The trial court held a
hearing on the Bank's motion in April 2017. The court
issued an order after the hearing stating that the
auctioneer's bid on behalf of the Bank would not be
confirmed because it was "improper" under Bank
of New York Mellon v. Campbell, a nonprecedential
decision issued by the same trial court in 2013. Nos.
229-4-10 Wrcv, 78-2-12 Wrcv, 568-10-11 Wrcv, 319-5-12 Wrcv,
2013 WL 6631044 (Vt. Sup. Ct. Dec. 2, 2013),
[https://perma. cc/N3U4-TH8J]. The court further stated that
it had learned during the hearing that a bidder was present
at the foreclosure sale and "may be entitled to have his
or her bid declared as the successful bid." The court
ordered that a second hearing be held on the Bank's
motion to void the foreclosure sale and that the Bank serve
the bidder with the court's order and notice of the
hearing on the Bank's motion. Shortly thereafter, Sandra
Lockerby, the bidder described in the trial court's
order, filed a motion to intervene in the proceedings, which
the trial court granted.
5. The trial court held a second hearing on the Bank's
motion to void the foreclosure sale in May 2017. The
auctioneer, the Bank's representative, and Sandra
Lockerby testified at the hearing. The Bank argued that the
trial court had the discretion to deny confirmation of the
foreclosure sale to Sandra Lockerby, and that it should do so
for two reasons-first, because the Bank representative's
failure to appear at the foreclosure sale was due to
excusable neglect, and second, because Sandra Lockerby's
bid was significantly lower than both the Bank's bid and
the foreclosure judgment and, therefore, not commercially
reasonable. The Bank specifically stated that it was not
arguing that a bank could simply bid through an auctioneer
without sending a representative to be present at the sale
and place a bid. Rather, the Bank's argument focused on
asking the trial court to exercise its discretion to decline
confirmation of the foreclosure sale where, the Bank argued,
excusable neglect in the failure to appear and the commercial
reasonableness of bids received supported voiding the
foreclosure sale. The court questioned the Bank regarding its
discretion to void a foreclosure sale because the bids
received were not commercially reasonable in the following
THE COURT: And where are you saying that I have discretion?
Just by the fact that it's an equitable proceeding?
THE BANK: Right. I mean, if you don't have discretion,
then you'd have to, I mean, approve every sale.
THE COURT: Which we do. We have lots and lots and lots of
cases where the judgment might have climbed up to 120, 000
dollars but the property goes for fifteen, thirty, twenty.