In re Edry
United States Bankruptcy Court for the District of Massachusetts
201 B.R. 604 (1996)
Rhode Island Hospital Trust National Bank (the Bank) (defendant) foreclosed on Edry's (plaintiff) home, providing only the statutory minimum notice — a small legal-section newspaper notice — and specifically instructed the auctioneer to do the minimum required, rather than following the customary practice of also buying larger, more visible real-estate-section ads. The Bank made only a single bid at auction, exactly equal to its own debt of about $85,500, and the house sold for $86,500 despite the Bank never trying to ascertain the property's actual fair market value, later established at trial to be $190,000; Edry filed for chapter 13 bankruptcy, and the bankruptcy court enjoined the sale pending trial.
Whether a mortgagee conducting a foreclosure sale breaches its duty of good faith and reasonable diligence when it deliberately limits notice of the sale below customary practice and makes no effort to ascertain the property's fair market value, resulting in a sale price less than half of actual value.