Bldg. Energetix Corp. v. EHE, LP

Appellant Corporation executed a promissory note secured by a deed of trust on property to Respondents. Appellant did not pay annual property taxes, and a delinquent-tax certificate was issued. Because Corporation also did not make the payments due on Respondents' note, Respondents recorded a notice of default and election to sell. After a nonjudicial foreclosure sale, Respondents purchased the property and brought this action against Appellants for the deficiency. Because Respondents did not record the trustee's deed until after the two-year period to redeem the property from the delinquent-tax certificate ran out, the county treasurer held the property in trust until Respondents paid the back taxes and penalties due. Appellants argued that Respondents could not validly foreclose while the county treasurer held the property in trust on the delinquent-tax certificate and that, without a valid foreclosure, Respondents were precluded from recovering a deficiency judgment. The district court disagreed and awarded Respondents a deficiency judgment against Corporation. The Supreme Court affirmed, holding that the foreclosure sale was proper, and thus, the deficiency judgment was also proper. View "Bldg. Energetix Corp. v. EHE, LP" on Justia Law