Mayer v. Countrywide Home Loans

647 F.3d 789, 2011 U.S. App. LEXIS 15908, 2011 WL 3300675
CourtCourt of Appeals for the Eighth Circuit
DecidedAugust 3, 2011
Docket10-1702
StatusPublished
Cited by64 cases

This text of 647 F.3d 789 (Mayer v. Countrywide Home Loans) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mayer v. Countrywide Home Loans, 647 F.3d 789, 2011 U.S. App. LEXIS 15908, 2011 WL 3300675 (8th Cir. 2011).

Opinions

WOLLMAN, Circuit Judge.

After Kathleen Barbara Mayer defaulted on her mortgage, Countrywide Home Loans (Countrywide) foreclosed on the property. Mayer filed suit, alleging that Countrywide violated Minnesota’s Farmer-Lender Mediation Act (FLMA), Minnesota Statutes §§ 583.20-583.32 (2008), by failing to engage in mediation before foreclosure. Countrywide moved for summary judgment, and in her memorandum in opposition to the motion, Mayer alleged that the mortgage was procured through fraud. The district court2 granted summary judgment in favor of Countrywide, holding that Mayer’s property was ineligible for FLMA protection and that her fraud claim was untimely and without merit. We affirm, although on a basis different from that relied upon by the district court in reaching its judgment.

I. Background

Mayer’s home is located on a 6.21-acre parcel near Glenwood, Minnesota. In 1993, she created and recorded a revocable inter vivos trust to hold the homestead parcel, along with two adjacent parcels. The two adjacent parcels comprised approximately fifty-five acres. The trust named Mayer both the trustor and the trustee. Mayer presented evidence that the three parcels — together constituting approximately sixty-two acres — had long been considered one farm.

In October 2006, Mayer contacted a local bank about refinancing her home. The bank arranged for an appraisal of the home and the parcel on which it is located. Mayer qualified for a mortgage of $156,000. According to Mayer, the bank prepared documents that transferred the parcel out of the trust and into her name, encumbered the parcel with the mortgage, and restored the encumbered parcel to the trust.3 In late November 2006, the closing was held and Mayer signed the mortgage and promissory note in favor of the bank. [791]*791Shortly thereafter, the bank assigned the loan servicing rights to Countrywide. After payment of closing costs and other debts, Mayer realized a net cash payment of $141,034.91. The adjacent parcels were not subject to the mortgage.

Mayer defaulted on the loan in May 2007. In September, Countrywide commenced foreclosure proceedings and in October purchased the property at the sheriffs sale for the outstanding mortgage amount. Six months after the sheriffs sale, on the day the redemption period ended, Mayer commenced this action.

The complaint pleaded a violation of the FLMA. The opening paragraph alleged that Mayer “brings this action under the Farmer Lender Mediation Act, to secure preliminary and permanent injunctive relief, rescission of contracts, restitution, disgorgement, and other equitable relief for the Defendant’s fraudulent acts or practices in connection with the lending and foreclosure practices in connection with said alleged mortgage.” Mayer’s motion for a preliminary injunction was denied.

After the deadline for amending pleadings had passed, Countrywide moved for summary judgment. Thereafter, discovery closed and Mayer filed her response to Countrywide’s motion, alleging that the mortgage was procured through fraud. The district court granted summary judgment in favor of Countrywide. Mayer continues to live on the homestead parcel.

II. Discussion

We review de novo the district court’s grant of summary judgment, viewing the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Rakes v. Life Investors Ins. Co. of Am., 582 F.3d 886, 893 (8th Cir.2009). Summary judgment is appropriate if there are no genuine disputes of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56. A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party; a fact is material if its resolution affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

A. FLMA

The FLMA stays foreclosure proceedings against qualified debtors to allow them an opportunity to mediate any dispute with their creditors. See Minn.Stat. § 583.26 subd. 5. For the statute to apply, Countrywide must be a creditor. § 583.24 subd. 1. Countrywide satisfies the FLMA definition if it is “the holder of a mortgage on agricultural property.” § 583.22 subd. 4. It is undisputed that Countrywide is the holder of the mortgage, and thus we must determine whether the Mayer’s debt is a “mortgage on agricultural property.” As relevant here, agricultural property means “real property that is principally used for farming,” § 583.22 subd. 2, and farming means “the production of (1) agricultural products; (2) livestock or livestock products; (3) milk or milk products; or (4) fruit or horticultural products,” § 500.24 subd. 2.

Viewing the evidence in the light most favorable to Mayer, the record fails to create a genuine issue of material fact that the 6.21-acre parcel is “principally used for farming,” as defined in the FLMA. Mayer contends that the parcel is a farm homestead and that it “is necessarily agricultural property for the purposes of storing equipment, tools, and materials necessary for farming.” Appellant’s Reply Br. at 5. Mayer cites to an appraiser’s description of her pole shed, which Mayer argues is “a typical 32 x 30 pole shed for purposes of storing farm equipment and [792]*792tools, despite the lender’s appraisers calling it a 2-car ‘detached garage’ with a ‘dirt floor.’ ” The homestead parcel, however, is not principally used for the production of agricultural products; it is a residence, and the pole shed comprises only 720 square feet of the 6.21-acre4 parcel.

We look only to the mortgaged property to determine whether Mayer’s debt is a mortgage on agricultural property. § 583.22 subd. 4 (“ ‘Creditor’ means the holder of a mortgage on agricultural property. ...”). Accordingly, the two adjacent parcels are not included in this inquiry. Mayer’s showing that she farms small grains on part of the sixty-two acres, raises three to five head of cattle, and has had less than $20,000 in annual gross sales of agricultural products is thus insufficient to survive summary judgment because the record does not support the assertion that the encumbered homestead parcel is principally used for farming.5 Cf. Rengstorf v. Richards, 417 N.W.2d 138, 140 (Minn.Ct. App.1987) (affirming conclusion that 133-acre parcel did not qualify for protection under the FLMA because “[o]nly 25 acres were baled, and the value of that harvest was minimal” and because “the property’s value as a residence exceeded] the value of its agricultural production”).

We are also not convinced that the encumbered parcel is the sort of property the FLMA was designed to protect. The purpose of the FLMA was to prevent “the loss of [debtors’] farmland, equipment, crops, and livestock through mortgage and lien foreclosures” by ensuring that farmers first had the opportunity to engage in mediation with their creditors. MinmStat. § 583.21.

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647 F.3d 789, 2011 U.S. App. LEXIS 15908, 2011 WL 3300675, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mayer-v-countrywide-home-loans-ca8-2011.