Murphy v. Financial Development Corp.

126 N.H. 536, 495 A.2d 1245 (1985)

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Nature of the Case

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Facts

Financial Development Corp. (D) was the mortgagee for Murphy (P). P had purchased the house in 1966 financing it with a mortgage loan. They refinanced it by means of a mortgage loan with D in 1980. The note and the mortgage were later assigned to Colonial Deposit Company. In 1981, P became unemployed, and by September 1981, P was seven months in arrears and had also failed to pay utility assessments and real estate taxes. P defaulted on the loan, and D foreclosed. P made attempts to refinance and even paid the seven months’ arrearage but failed to pay $643.18 in costs and legal fees associated with the foreclosure proceedings. D postponed the foreclosure once, but finally held the foreclosure sale after proper notice and the amount due was $743.18 as well as mortgage payments then due. At the sale, nobody was present except P and D and even though it had snowed the night before the roads were clear and the weather was warm. D bought the property for $27,000 and then sold it to another party two days after the foreclosure for $38,000 after an initial offer of $27,000 and a counter offer by D of $40,000 were rejected. P sued; P claimed that D did not use due diligence in getting a proper price for the property. A special master was appointed and found for P and awarded legal fees in that D had failed to exercise good faith and due diligence in obtaining a fair price for the property. The master ruled that the purchaser was a bona fide purchaser for value and thus had acquired legal title to the house. The master determined the fair market value of the home to be $54,000. He assessed damages at $27,000 and legal fees. D appealed.