Chelsea Groton Bank v. Gates Realty Holdings, LLC

Syllabus

The plaintiff in error, W, the initial successful bidder and a nonparty in the underlying foreclosure action brought by the defendant in error, C Co., filed two writs of error with this court challenging the trial court's orders granting C Co.'s motion to forfeit his deposit and denying his motion to intervene as of right. W failed to close on the sale of the property within thirty days from the notice of the court's approval of the sale, and C Co. filed the motion to forfeit, a motion to reset the sale date, and a caseflow request seeking expedited adjudication of the motions, but did not serve any of the filings on W. The court granted the motions and, the property was sold to another entity. Held: 1. The trial court improperly granted C Co.'s motion to forfeit W's deposit: in determining whether to order the forfeiture or the return of a deposit, the court, sitting in equity, may consider a variety of factors, and, because forfeiture is not automatic and is subject to the balancing of the equities, a defaulting, nonparty purchaser is entitled to notice of a motion to enforce the forfeiture of a deposit; moreover, the proper procedural mechanism and the manner of service of the notice of a motion to forfeit a deposit to which a defaulting purchaser is entitled necessarily depend on whether the defaulting purchaser already has a party appearance in the case, and, here, W, a nonparty, was entitled to assume that the proper legal procedure would be followed and that an order to show cause would be issued, citing him to appear and to be heard, such that the lack of service of the motion on W was legally insufficient to render W subject to the jurisdiction of the court; accordingly, on remand, it will be for the trial court, applying equitable principles, to consider whether W's deposit should in fact be forfeited, this court holding only that W was entitled to notice and an opportunity to be heard on the motion to forfeit. 2. The second writ of error, challenging the