Request for Notice of Sale in Trust Deed Did Not Apply to Senior Lienholder
First Neb. Educators Credit Union v. U.S. Bancorp, 293 Neb. 308 (2016).
U.S. Bank filed a trust deed on real property in Nebraska in 2006. First Nebraska filed a trust deed on the same property in 2007. The First Nebraska trust deed contained a clause requesting notice of default and foreclosure of superior deeds of trust, but the clause did not identify a specific trust deed by parties, date, or recording information.
In 2009, the trustee of U.S. Bank’s trust deed filed a notice of default and sold the real property to a third party. First Nebraska sued U.S. Bank. First Nebraska did not receive notice of the sale, did not attend the sale, and the sale of the property extinguished First Nebraska’s junior lien. U.S. Bank filed a motion to dismiss, which the district court granted. The trial court found First Nebraska’s request for notice of sale did not comply with Nebraska Revised Statutes section 76-1008(1), and therefore, First Nebraska was not entitled to notice of the sale. First Nebraska appealed.
The sole issue on appeal was whether the Nebraska Trust Deeds Act required U.S. Bank to mail a notice of sale to First Nebraska. Nebraska Revised Statutes sections 76-1008(1) and 76-1008(3) were the relevant statutory provisions. Section 76-1008(1) requires a separate filing subsequent to the deed of trust, and the separate request must identify a specific trust deed by the parties, date of recording, and recording information, for example, book and page number. Section 76-1008(3) requires a trust deed to contain a “request for notice” clause and a party to mail a notice of sale under the trust deed to the other parties to the trust deed “as though a separate request therefor had been filed by each of such persons.”
First Nebraska alleged the request for notice in First Nebraska’s trust deed obligated U.S. Bank to send First Nebraska notice of the sale “as though a separate request therefor had been filed.” In other words, including the request for notice in First Nebraska’s trust deed per section 76-1008(3) satisfied the obligation for a separate request under section 76-1008(1).
U.S. Bank argued a “request for notice” clause under section 76-1008(3) requires notice only to the parties to the trust deed containing the clause. In other words, First Nebraska’s trust deed required notice only to the parties to First Nebraska’s trust deed of a sale under that trust deed; First Nebraska’s trust deed did not require U.S. Bank to provide First Nebraska notice of a sale under U.S. Bank’s trust deed.
The Nebraska Supreme Court affirmed. First Nebraska was not a party to U.S. Bank’s trust deed, and therefore, First Nebraska was not entitled to a notice of sale under that trust deed. First Nebraska did not adequately request notice under section 76-8001(1) because its request for notice did not detail the precise information regarding U.S. Bank’s trust deed, including the parties, date of recording, and recording information.