First Properties, Llc. v. Jpmorgan Chase Bank

993 So. 2d 438 (2008)

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Nature of the Case

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Facts

On October 19, 1998, the Fire District conducted a foreclosure sale on property located at 933 Heflin Avenue East in Birmingham. Ruthia Cullen Dumas held duly recorded title to the property. Ruthia was delinquent on her dues assessed by the fire district for fire-protection services. The District sold the property in accordance with its duly published statutory procedures. With a bid of $603.45, the District was the highest bidder at the sale. The business manager of the District executed a deed purporting to convey the property from the District, as grantor, to District, as grantee. The District recorded the deed but the deed was not listed in the grantor/grantee index, did not refer to Dumas as the owner of record, and contained what the trial court determined was an inadequate description of the property. On November 9, 1999, Dumas secured a loan of $67,550 by executing a mortgage on the property. The mortgage was eventually assigned to P, and it was recorded on June 14, 2005. On December 18, 2004, the District executed a quitclaim deed to the property to D, in consideration of $ 2,851.25. The quitclaim deed listed Dumas as the owner of record before the foreclosure sale held on October 19, 1998. On December 23, 2004, D recorded the quitclaim deed. On June 8, 2005, P filed an action seeking a judgment declaring that it was a bona fide holder for value of the property without notice of the foreclosure sale by the District. P alleged that the foreclosure deed and the quitclaim deed were outside the chain of title and therefore did not serve as constructive notice to P of the claimed interests. Before trial, the parties stipulated to the following additional facts: (1) First Franklin's mortgage of the property was recorded in the Jefferson County Probate Office; (2) P held the mortgage to the property by virtue of First Franklin's assignment of that mortgage to P; and (3) at the time of the District's foreclosure sale, the District did not send a warning to redeem to First Franklin or P. The court determined that P is a bona fide encumbrancer of the property, for value, without notice of the foreclosure deed. The court held that the foreclosure sale and deed are ineffective as against P. D appealed.