Plaintiff's Motion to Set Aside Sheriffs Sale Granted
OPINION AND ORDER
A. KARSNITZ, JUDGE
dual goal of any Sheriffs Sale is to follow the procedural
rules and achieve the highest price. This Sheriffs Sale
involved a bidding error, and a sale price that was either
just below or just above 50% of the value of the property,
depending upon which appraiser's opinion I accept. I have
wide discretion to review Sheriffs Sales. In my view, the
high bid at this sale was insufficient and prejudicial to
both the lender and the owner. The low price was primarily
the result of a bidding error of the lender's agents. Had
I addressed the issue of whether a unilateral bidding error
by the lender was sufficient to set aside a Sheriff Sale on
my own, I might have answered no. However, the Delaware
Supreme Court twenty five years ago answered yes,  as I will do. Given
the low price and the bidding error, I am exercising my
discretion to set aside the sale. Under the circumstances,
and because of the lender's error, I also will require
the lender to make the successful bidder whole.
facts are simple and undisputed (with the sole exeception of
the appraisal of the property). Plaintiff JP Morgan Chase
Bank, National Association, ("JP Morgan") filed a
foreclosure action against a landowner, Defendant William M.
Shea ("Shea") to sell residential real property
owned by Shea with a postal address of 5 John Hall Drive,
Ocean View, Delaware, the property went to sale and was
purchased by 1995 Property Management, Inc.
("1995") for the price of $ 109, 000. Shortly after
the sale was completed, JP Morgan realized its agents had
made a mistake in executing its bidding instructions. In
short, an error was made by the law firm for JP Morgan, and
the firm did not bid up to the maximum bid price of just
under $206, 800, as directed. When JP Morgan realized the
error, and within a week of the sale, it notified 1995, and
shortly thereafter filed this Motion.
"Judicial review of a contested Sheriffs Sale implicates
the Court's inherent equitable power to control the
execution process and functions to protect the affected
parties from injury or injustice."
of fact, including a unilateral mistake, may be grounds to
set aside a Sheriffs Sale. The Superior Court has broad
discretion to confirm or set aside a Sheriffs
scale of reasons to set aside a Sheriffs Sale, a bidder's
unilateral error is towards the weaker end. As 1995 argues,
the unilateral error of JP Morgan to justify setting a sale
aside gives the lender rights which are superior to all other
bidders. For me, though, when that error is coupled with an
inadequate price, the tipping point has been reached.
sale price of $109, 000 is less than half of the property
value, if the appraisal by JP Morgan is accepted, or just
over 53% of the property value, if the appraisal provided by
1995 is accepted. I utilize the appraisal provided by 1995.
It is for more comprehensive and includes a review and
analysis of both the interior and exterior of the property.
The appraisal provided by JP Morgan was a classic "ride
by" appraisal which fails to consider a number of issues
in the interior.
math works as follows: 1995's appraisal gave a value of
$204, 000. $109, 000 divided by $204, 000 equals 53%. JP
Morgan's appraisal was $240, 000. $109, 000 divided by
$240, 000 equals 45%.
law provides a bright line. If a property is sold at Sheriffs
Sale for less than half its fair market value (the 50%)
test), it "shocks the conscience of the Court", and
justifies setting aside the sale.
of 1995's appraisal puts the price-to-value ratio at just
over 50%). I find little solace that this exceeds the
necessarily arbitrary figure of 50 percent, especially when
the difference, as here, is nominal. The low price coupled
with the bidding error is enough for me. I also think it ...