Antongiovanni and Willmott Secure Summary Judgment in Dispute Over Foreclosed Property Deed

Michael J. Antongiovanni and Madison Willmott successfully obtained summary judgment dismissing a plaintiff’s claim to void a client’s deed to property that had been foreclosed upon. The client had acquired the property in an arms-length transaction from the foreclosing lender following a foreclosure sale of the property.  The client thereafter invested substantial funds renovating the property.

Plaintiff subsequently succeeded in vacating the judgment of foreclosure that the foreclosing lender had obtained in the foreclosure action on the grounds that plaintiff had not been properly served with process and, therefore, personal jurisdiction over him was not obtained. The plaintiff then commenced a separate litigation against the client to void the deed, claiming that res judicata barred the re-litigation of issues in the foreclosure action that resulted in the foreclosure judgment being vacated and that all subsequent transfers of the property, including to the client, were void as a result of the foreclosure judgment being vacated.

On summary judgment, Michael and Madison argued that (i) res judicata did not apply because the client was a necessary party that did not have a full and fair opportunity to be heard at the foreclosure hearing to vacate the judgment due to lack of notice and (ii) because the client was a good faith purchaser for value whose intervening rights would be materially affected by a return of the property to plaintiff, the court may order the value of the purchase price be restored to plaintiff instead of returning the property to him.  The court agreed and dismissed all of plaintiff’s claims against the client, finding that the plaintiff must seek monetary restitution solely against the foreclosing lender.