by Blair Gisi, Esq.  
SouthLaw, P.C.  
USFN Member (IA, KS, MO, NE)

A recent appellate decision given in Bucklin Nat'l Bank v. Hayse Ranch, 475 P.3d 1 (Kan. Ct. App. 2020) yielded an interesting result which may impact the redemption and subsequent conveyance of ownership process in Kansas.  In 2018, Bucklin National Bank (“Bucklin”) initiated a foreclosure action against the defendants (“Hayses”); however, while that 2018 action was pending, a third party (“Pruitt”) intervened claiming ownership of the subject real estate.  Pruitt had purchased and exercised the redemption rights from the Hayses in a 2002 foreclosure action.  In Kansas, rights of redemption are as transferrable as any other ownership interest.  

Even though Pruitt believed that she had exercised her right of redemption, there was a question as to the transfer of ownership as Pruitt did not record any deed of conveyance.  Instead, Pruitt claimed legal title to the property under Kan. Stat. Ann. § 60-2414, arguing that a deed was not required as the statute gave her the exclusive means of obtaining ownership.  

The foreclosure action initiated in 2002 resulted in a Sheriff’s Sale in May 2003.  The day before redemption expired, Pruitt obtained the redemption rights and filed a notice of exercise of redemption rights then depositing the redemption funds with the court.  The notice also included a statement that, “All should take notice that [Pruitt] is now owner of legal title to the above described real property.” 

Even further, in 2007, Pruitt had her attorney draft an affidavit and subsequently filed in the county’s Register of Deeds of office describing the subject real estate and declaring Pruitt as the owner of the same by virtue of her exercising her redemption rights.  Nevertheless, again, no actual deed of conveyance was signed or recorded.

The 2018 foreclosure action against the Hayses resulted from a 2015 loan that included, in part, the real estate purportedly owned by Pruitt.   Pruitt sought intervention and answered pro se.  Pruitt then requested an order naming her owner and declaring the subject real estate was “not lawfully subject to any liens, mortgages or encumbrances allegedly held by [the foreclosing bank], nor any other person or entity.”

Bucklin filed a Motion for Summary Judgment asserting there was no deed of conveyance to Pruitt and that there was no Kansas authority supporting Pruitt’s position that redemption alone transfers title of the property from a mortgagor to a third party; in fact, Bucklin argued, the only authority cited (from other states) actually rejected this supposition.  

The subsequent hearing on Bucklin’s Motion for Summary Judgment resulted in the foreclosing of the subject property and an order declaring the Bucklin as having “superior title” to all parties, including Pruitt.  Specifically, the court ordered:

2. The Court finds that [Pruitt’s] excise of an assigned right of redemption in a previous foreclosure case was ineffective to pass title to [Pruitt], and that absent a document of conveyance, the legal effect of [Pruitt’s] exercise of the right of redemption in the previous case was to restore title in the record owner, [Hayse].

Pruitt was then dismissed as a party.

Following that decision, Pruitt retained counsel and sought relief from the judgment.  All post-trial motions for relief were ultimately denied. The gist of the court’s opinion in reconsidering its granting of summary judgment came down to there being no evidence of an actual transfer of ownership of the subject property.  The appeal followed.

After reviewing the history of the redemption process in Kansas, the Court of Appeals analyzed the statutory right of redemption that arises after the foreclosure sale (a difference from the equitable right of redemption that arises prior to the sale).  Using that analysis, the Court then interpreted Kan. Stat. Ann. § 60-2414 to mean that the assignee of the redemption rights obtains “all property rights of the owner upon exercise of the redemption right”.  

The Court then looked at the various ways parties can convey a property interest without an actual deed of conveyance under various Kansas statutes.  Of particular weight to the Court, this scrutiny included the conveyance of property by contract and the Court found:

If Pruitt can establish that she obtained title to the property based on the contract of assignment and on the filing of the contract and exercise of her redemption rights as noted in the court’s journal entry from the foreclosure action, she could prevail without presenting a deed of conveyance.

Questioning the authority relied upon by the Plaintiff and, subsequently, the district court and the Court of Appeals found that Kansas provides for the statutory right of redemption as well as the assignment of that right of redemption without a requirement that the assignor transfer their full property interest.  In other words, Pruitt received a legitimate interest in the property by virtue of the assignment of redemption rights without any further action since Pruitt then held the exclusive right of redemption. 

Alternatively, Pruitt argued she acquired ownership of the subject real estate through adverse possession.  In Kansas, the adverse possession period is 15 years.  Pruitt redeemed in August 2003 and sought intervention in the foreclosure action in February 2018 with summary judgment granted in July 2019.  The district court never addressed this material fact.

The summary judgment was reversed and remanded to address whether a conveyance of real property may only be accomplished by a deed and whether Pruitt has an adverse possession claim.  

Whether redeeming a property or having a property redeemed following a foreclosure sale, this case emphasizes the importance of quality title work as a thorough title examination prior to loan origination in 2015 and (or) prior to the 2018 foreclosure action would have saved the Plaintiff a lot of hassle… and money. 

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February 2021 e-Update