O'Malley v. Chevy Chase Bank, F.S.B.

Summary

The District of Columbia Court of Appeals reversed summary judgment for a bank and foreclosure trustee and remanded for further proceedings. The court held that D.C. Code § 45-715.1's limitation on statutory cure rights did not restrict a borrower's more generous contractual right to cure under the deed of trust. The court also found genuine disputes of material fact concerning whether the borrower was denied the opportunity to cure before the first foreclosure sale.

Holdings

1. Section 45-715.1(b) establishes a minimum statutory right to cure for residential mortgage debtors whose contracts do not otherwise provide a right to cure; it does not impose a ceiling on the number of cures permitted by contract. Where a deed of trust grants a more generous cure right and contains no numerical limitation, the contractual provision governs.
2. Summary judgment was improper because genuine disputes of material fact existed concerning whether O'Malley requested and was denied the opportunity to cure and reinstate the loan before the January 3, 1996 sale.
3. The court did not reach the question whether a mortgagor's equity of redemption transfers to a purchaser upon a successful foreclosure-sale bid because the case was remanded for factual proceedings concerning the validity of the first sale.

Questions Presented

1. Whether D.C. Code § 45-715.1(b)'s limitation of the statutory right to cure to not more than one time in two consecutive calendar years limits a more generous contractual right to cure contained in a deed of trust.
2. Whether summary judgment was proper where material facts were disputed concerning whether the bank or trustee allowed O'Malley to exercise his contractual right to cure before the first foreclosure sale.
3. Whether the court needed to decide whether a mortgagor's equity of redemption transfers to a foreclosure-sale purchaser upon a successful bid.

Disposition

reversed_and_remanded