Sari et al v. Wells Fargo Bank, N.A.

Filing 34

MEMORANDUM OPINION AND ORDER denying 24 Plaintiff's Motion for Summary Judgment; granting Defendant's Motion for Summary Judgment. The Court converts Wells Fargo's Response to Plaintiff's Motion for Summary Judgment 28 to a cross motion for summary judgment (Written Opinion). Signed by Judge Ann D. Montgomery on 08/05/2013. (TLU)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Aaron I. Sari,
Plaintiff,

MEMORANDUM OPINION
AND ORDER
Civil No. 12-1780 ADM/FLN

v.
Wells Fargo Bank, N.A.,

Defendant.
______________________________________________________________________________
Michael J. Wang, Esq., and Jonathan L.R. Drewes, Esq., Drewes Law, PLLC, Minneapolis, MN,
on behalf of Plaintiff.
Charles F. Webber, Esq., Trista M. Roy, Esq., and Elizabeth A. Walker, Esq., Faegre Baker
Daniels LLP, Minneapolis, MN, on behalf of Defendant.
______________________________________________________________________________
I. INTRODUCTION
On July 25, 2013, the undersigned United States District Judge heard oral argument on
Plaintiff Aaron I. Sari’s Motion for Summary Judgment [Docket No. 24]. For the reasons
discussed below, Plaintiff’s motion for summary judgment is denied.
II. BACKGROUND
The facts of this case are undisputed. Sari defaulted on his mortgage loan from Wells
Fargo Bank. Wells Fargo initiated foreclosure proceedings against Sari’s property in
Minnetonka, Minnesota. On September 22, 2011, Wells Fargo served Sari with a Notice of
Foreclosure Sale. Exs. Supp. Mot. to Dismiss [Docket No. 7] 23-25. Then, on September 24,
2011, Wells Fargo began publishing a Notice of Foreclosure Sale in Finance and Commerce. Id.
at 19. On September 26, 2011, Wells Fargo recorded a Notice of Pendency in the real estate
records of Hennepin County, Minnesota. Id. at 20-22. The property was sold at a sheriff’s sale
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on January 11, 2012.
The dispute concerns the interpretation and application of Minnesota Statute § 580.032,
Subd. 3 (2012), which provides, “A person foreclosing a mortgage by advertisement shall record
a notice of the pendency of the foreclosure with the county recorder or registrar of titles in the
county in which the property is located before the first date of publication of the foreclosure
notice but not more than six months before the first date of publication” (emphasis added).
Wells Fargo recorded its Notice of Pendency on September 26, 2011, two days after the first date
of publication, September 24, 2011.
III. DISCUSSION
A. Standard of Review
Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment shall be
granted if “there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). On a motion for summary judgment, the
court views the evidence in the light most favorable to the nonmoving party. Ludwig v.
Anderson, 54 F.3d 465, 470 (8th Cir. 1995).
B. Minnesota Law
On questions of state law, a federal court usually applies the rulings from that state's
highest court. See, e.g., In re W. Iowa Limestone, Inc., 538 F.3d 858, 866 (8th Cir. 2008); Hok
Sport, Inc. v. FC Des Moines, L.C., 495 F.3d 927, 934-35 (8th Cir. 2007). But if a state court
has not ruled on a particular question, a federal court must determine how the state’s highest
court would rule, considering similar state-court decisions, appropriate dicta, and other reliable
information. See Myers v. Lutsen Mtns. Corp., 587 F.3d 891, 896 (8th Cir. 2009). A ruling by

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the Eighth Circuit Court of Appeals is binding precedent on this Court. BPS Guard Servs., Inc.
v. NLRB, 942 F.2d 519, 524 (8th Cir. 1991).
C. Analysis
The Eighth Circuit Court of Appeals recently held that a homeowner cannot challenge a
foreclosure proceeding as not complying with Minn. Stat. § 580.032, subd. 3 because that
particular statute is not directed to the protection of the homeowner’s interests. Badrawi v.
Wells Fargo Home Mortg., Inc., 718 F.3d 756, 759 (8th Cir. 2013). Wells Fargo argues that
Badrawi is controlling authority in this case and requires judgment in its favor. Def.’s Letter
[Docket No. 30] 1. Sari concedes that his claim cannot be distinguished from the claim
presented in Badrawi, but he disagrees with the ruling in Badrawi and requests that this Court
certify a question on its applicability to the Minnesota Supreme Court. Pl.’s Letter [Docket No.
31] 1.
1. Badrawi v. Wells Fargo Home Mortgage, Inc.
The plaintiff in Badrawi challenged the foreclosure on her property on the ground that the
bank failed to comply with Minn. Stat. § 580.032, subd. 3. 718 F.3d at 757. Instead of
recording a Notice of Pendency in the county real estate records before publishing a Notice of
Foreclosure Sale in a newspaper, as the text of Minn. Stat. § 580.032, subd. 3. requires, the bank
did both on the same day. Id. The Eighth Circuit held that the plaintiff’s claim against the bank
for failure to comply with Minn. Stat. § 580.032, subd. 3, was not viable. Id. at 759. The court
acknowledged that the Minnesota Supreme Court has required strict compliance with the statutes
governing foreclosure by advertisement, but it concluded that the plaintiff could not challenge
the foreclosure because “[she] is not among the class whose interests Minn. Stat. § 580.032,

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subd. 3. was enacted to protect.” Id. Instead, the court found that the statute was meant “to
protect the interest of third parties who own a ‘redeemable interest’ in mortgaged property which
might be jeopardized if the mortgagor foreclosed without notice.” Id. The court relied in its
decision on the Minnesota Supreme Court’s case of Holmes v. Crummett, which held that “a
homeowner may not set aside a foreclosure based on ‘an omission of some prescribed act which
cannot have affected him, and cannot have been prescribed for his benefit.’” Id. (quoting
Holmes v. Crummett, 13 N.W. 924, 924 (Minn. 1882)).
The Court concludes that Badrawi controls the outcome of the present case and requires
judgment in favor of Wells Fargo. Sari’s claim is very similar to the claim in Badrawi. See
Am. Compl. [Docket No. 8] ¶ 12. The only difference is that in this case the bank filed its
Notice of Pendency two days late instead of on the same day. Since Sari is the homeowner, he is
not in a position to challenge the foreclosure on this ground according to the Eighth Circuit’s
decision in Badrawi, 718 F.3d at 759. Eighth Circuit decisions are binding authority on this
Court, and applying Badrawi to this case clearly results in a judgment for Wells Fargo. The
Court converts Wells Fargo’s Response to Plaintiff’s Motion for Summary Judgment [Docket
No. 28] to a cross motion for summary judgment because both parties briefed and argued the
effect of the Badrawi decision on the disposition of this case. See Fed. R. Civ. P. 56(f); Celotex
Corp. v. Catrett, 477 U.S. 317, 326 (1986) (“district courts are widely acknowledged to possess
the power to enter summary judgments sua sponte, so long as the losing party was on notice that
she had to come forward with all of her evidence”). Prolonging this by requiring Wells Fargo to
bring its own summary judgment motion would result in the same arguments already addressed
here and would not be an efficient use of the parties’ or the Court’s resources.

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2. Certification to the Minnesota Supreme Court
Sari requests that this Court certify a question about Minn. Stat. § 580.032, subd. 3 to the
Minnesota Supreme Court because the Eighth Circuit’s decision in Badrawi conflicts with the
Minnesota Court of Appeals decision in Ruiz v. 1st Fidelity Loan Servicing, LLC, No. A111081, 2012 WL 762313 (Minn. Ct. App. Mar. 12, 2012). The Minnesota Supreme Court “may
answer a question of law certified to it by a court of the United States . . . if the answer may be
determinative of an issue in pending litigation in the certifying court and there is no controlling
appellate decision, constitutional provision, or statute of this state.” Minn. Stat. § 480.065,
subd. 3 (2012). Use of a state’s certification procedure by a federal district court rests in the
court’s sound discretion. Lehman Bros. v. Schein, 416 U.S. 386, 390-91 (1974); Allstate Ins.
Co. v. Steele, 74 F.3d 878, 881-82 (8th Cir. 1996). The Court’s “most important” consideration
in deciding whether to certify a question to a state court is whether the Court “finds itself
genuinely uncertain about a question of state law.” Johnson v. John Deere Co., 935 F.2d 151,
153 (8th Cir. 1991) (quoting Tidler v. Eli Lilly & Co., 851 F.2d 418, 426 (D.C. Cir. 1988)).
The Court concludes that this case does not warrant a certified question to the Minnesota
Supreme Court. The Badrawi decision is binding authority on this Court, and its interpretation
of Minn. Stat. § 580.032, subd. 3 is grounded in the Minnesota Supreme Court’s decision in
Holmes, 13 N.W. at 924. Although the Minnesota Supreme Court has not cited Holmes recently,
the case has never been overruled and has been cited favorably in a decision of the Minnesota
Court of Appeals. See Farm Credit Bank of St. Paul v. Kohnen, 494 N.W.2d 44, 47 (Minn. Ct.
App. 1992). The only authority that supports Sari’s interpretation of Minn. Stat. § 580.032,
subd. 3 is the Minnesota Court of Appeals decision in Ruiz, No. A11-1081, 2012 WL 762313

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(Minn. Ct. App. Mar. 12, 2012). But, that decision is unpublished and thus is not precedential.
See Vlahos v. R&I Constr. of Bloomington, Inc., 676 N.W.2d 672, 676 n.3 (Minn. 2004). Based
on this set of authorities, this Court cannot say that it is genuinely uncertain about the
interpretation of Minn. Stat. § 580.032, subd. 3.
IV. CONCLUSION
Based upon the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED:
1.

Plaintiff’s Motion for Summary Judgment [Docket No. 24] is DENIED;
and,

2.

Defendant’s Motion for Summary Judgment is GRANTED.

LET JUDGMENT BE ENTERED ACCORDINGLY.

BY THE COURT:

s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT JUDGE
Dated: August 5, 2013.

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