Bank-Fund Staff Federal Credit Union v. Cuellar

Guillermo Vivado and his wife (defendants) mortgaged their house to secure a loan from Bank-Fund Staff Federal Credit Union (the mortgagee) (plaintiff). When the Vivados defaulted on the loan, the mortgagee notified them that their house would be auctioned at a June 1990 foreclosure sale. The notice complied with the District of Columbia’s residential-foreclosure statute by identifying the minimum balance the Vivados needed to pay in order to cure the default and reinstate the loan (the cure amount). The Vivados declared bankruptcy, forcing postponement of the June foreclosure sale. The mortgagee sent the Vivados a second notice naming a September date for the foreclosure sale. On the wrongful assumption that the house was no longer the Vivados’ family residence, this second notice declared that the residential-foreclosure statute was inapplicable, and therefore the notice did not restate the cure amount. The mortgagee successfully bid on the house at the foreclosure sale and sued the Vivados for possession. The trial court agreed with the Vivados that the house remained their residence and granted them summary judgment because of the second notice’s omission of the cure amount. The mortgagee appealed to the District of Columbia Court of Appeals. That court consolidated the appeal with other actions, including the mortgagee’s action against Milko Cuellar, which otherwise was unrelated to the Vivados’ case.