PROPERTY LAW
Megan Mason Dister
In Thomas v. Joseph P. Casteel Trust, 496 P.3d 403 (Alaska 2021), the supreme court upheld a nonjudicial foreclosure because the junior lienholder was not prejudiced by a failure to provide supplemental notice, the sale price did not warrant the foreclosure being set aside, and there was not sufficient evidence of fraud. (Id. at 410–12). Elkins bought real property from Frelin with a promissory note to Frelin backed by a recorded deed of trust naming Frelin the beneficiary, Elkins the trustor, and Fidelity Title Agency of Alaska, LLC as the successor trustee. (Id. at 407). Elkins defaulted and Frelin allowed Fidelity to begin a nonjudicial deed of trust foreclosure. (Id.). The property was encumbered by delinquent property taxes, a condominium lien, a judgement lien held by Thomas, and a child support lien held by Alaska Child Support Services Division (CSSD) for Mary Elkins. (Id.). Fidelity gave all of the interested parties notice of the default and pending foreclosure, but it did not provide CSSD statutorily required supplemental notice. (Id. at 408). Casteel Trust was the only bidder at the foreclosure sale and purchased the property for approximately 9% of the property’s estimated value. (Id.). Thomas filed suit arguing the foreclosure was voidable because Fidelity failed to provide supplemental notice, the sale price was “grossly inadequate,” and fraud, but the superior court dismissed Thomas’s claims. (Id. at 409). The supreme court affirmed, reasoning Fidelity’s failure to provide supplemental notice to CSSD did not impact the fundamental fairness of the transaction and this lack of notice did not prejudice Thomas. (Id. at 410). Additionally, the sale price was not so grossly inadequate that it indicated fraud. (Id. at 410-11). Affirming the lower court’s decision, the supreme court upheld a nonjudicial foreclosure because the junior lienholder was not prejudiced by a failure to provide supplemental notice, the sale price did not warrant the foreclosure being set aside, and there was not sufficient evidence of fraud. (Id. at 410–12).
