U.S. Bank National Ass'n v. Lamb

874 N.W.2d 112, 2016 Iowa Sup. LEXIS 11, 2016 WL 359064
CourtSupreme Court of Iowa
DecidedJanuary 29, 2016
DocketNo. 14-1536
StatusPublished
Cited by19 cases

This text of 874 N.W.2d 112 (U.S. Bank National Ass'n v. Lamb) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
U.S. Bank National Ass'n v. Lamb, 874 N.W.2d 112, 2016 Iowa Sup. LEXIS 11, 2016 WL 359064 (iowa 2016).

Opinion

APPEL, Justice.

In this case, we are called upon to determine the rights of .a mortgagee and a mortgagor when the mortgagee obtained a decree of foreclosure in February 2010, filed a notice of rescission in March 2012, and filed- a subsequent petition seeking foreclosure in October 2013. The mortgagor asserts that under .Iowa Code section 615.1 the mortgagee had only two years to enforce its March 2012 judgment and failure to do so extinguished “all liens.” The mortgagee contends that only the judgment lien is extinguished by the two-year statute of limitations in Iowa Code section : 615.1 and that its rescission of the original foreclosure judgment was valid under Iowa Code section 654.17.

The district court granted the mortgagee summary judgment. The mortgagor appealed. The court of appeals affirmed the judgment of the district court. On further review, we too affirm the judgment of the district court for the reasons stated' below.

I. Background Facts and Proceedings.

The facts are undisputed. Cathy Callen and Jereme Lamb executed a promissory note for real property in 2006. The note was secured by a mortgage. U.S. Bank National Association is the holder of the promissory note and mortgage. Callen and Lamb defaulted' on the promissory note. U.S. Bank then brought a foreclosure action and obtained an in rem judgment and decree of foreclosure against Callen and Lamb in February 2010. Two [115]*115sheriffs’ sales were scheduled but were both subsequently cancelled by U.S. Bank.

U.S. Bank filed a notice of rescission of the foreclosure in March 2012, more than two years after the entry of the original judgment. In October 2013, U.S. Bank filed its current foreclosure action and moved for summary judgment on the undisputed facts. Callen filed counterclaims for quiet title and wrongful foreclosure arguing that, despite not making any loan payments on the property for more than six years, she is entitled to own the property free and clear because the house was not sold within two years of the foreclosure decree. The district court ruled in favor of the bank on summary judgment, and the decision was affirmed by the court of appeals.1

II. Standard of Review.

We review rulings on motions for summary judgment for correction of errors at law. Iowa R.App. P. 6.907; Goodpaster v. Schwan’s Home Serv., Inc., 849 N.W.2d 1, 6 (Iowa 2014). In ruling on a motion for summary judgment, the court views the record in the light most favorable to the party opposing summary judgment. Goodpaster, 849 N.W.2d at 6.

III. Discussion.

A. Introduction. The dispute in this case involves the proper interpretation of two statutes related to mortgage foreclosure proceedings. We begin with Iowa Code section 615.1. This section provides, in relevant part:

Execution on certain judgments prohibited.
1. After the expiration of a period , of two years from the date of entry of judgment, ... a judgment entered in any of the following actions shall be null and void, all liens shall be extinguished, and no execution shall be issued except as a setoff or counterclaim:
a. (1) For a real estate mortgage ... executed prior to July 1, 2009, an action for the foreclosure ■ of the real estate mortgage_

Iowa Code § 615.1 (2013). Section 615.1, however, is qualified by Iowa Code section 654.17. Section 654.17 provides, in relevant part:

Recision of foreclosure.
1. At any time prior to the recording of the sheriffs deed, and before the mortgagee’s rights become unenforceable by operation of the statute of limitations, the judgment creditor ... may .rescind the foreclosure action by filing a notice of recision with the clerk of court....
2. Upon the filing of the notice of recisión, the mortgage loan shall'be enforceable according to the original terms of the mortgage loan and the rights of all persons with an -interest in the property may be enforced as if the foreclosure had not been filed.

Id. § 654.17.

Mortgagor Callen asserts that under Iowa Code section 615.1, “all liens” are extinguished if the mortgagee fails to execute on an ünderlying judgment of foreclosure within two years. Callen argues the plain meaning of “all liens” is that after the passage of two years from the date of the judgment of foreclosure, the mortgagee loses all interest in the underlying prop[116]*116erty. Callen further argues that while the mortgagee has a right to rescind a judgment of foreclosure under Iowa Code section 654.17, the right to rescind must be exercised “before the mortgagee’s rights become unenforceable by operation of the statute of limitations.” Id. Callen argues that -the applicable statute of limitations for rescinding a judgment of foreclosure is the two-year period provided in Iowa Code section 615.1.

Thus, according to Callen, the judgment of foreclosure obtained by the mortgagee bank in this case became null and void after the passage of two years without execution, and the bank’s ability to rescind the judgment of foreclosure also expired at the same time.

The mortgagee bank responds that considered in context, the term “all liens” in Iowa Code section 615.1 means only all judgment liens related to the underlying foreclosure action. It does not bar judgment liens arising out of a •second foreclosure action. The bank notes that Callen engaged in additional defaults after the original foreclosure judgment had been obtained.

In the alternative, the mortgagee bank suggests that under Iowa Code section 654.17, its rescission of the prior foreclosure action was timely. The bank argues that a rescission of a prior foreclosure is valid if filed within two years of the issuance of an execution of the prior judgment. In support of this argument, the bank cites Deaton v. Hollingshead, 225 Iowa 967, 974, 282 N.W. 329, 833 (1938). In Deaton, we held that if proceedings were instituted by “issuance of an execution, and levy is made during the lifetime of the judgment, a sale under such proceedings, though had after the judgment is barred by the statute of limitations, is valid.” Id. The bank suggests that because the execution issued on January 27, 2012, was issued within two years of the February 11, 2010 judgment, the bank’s rights had not become “unenforceable by operation of the statute of limitations.” Iowa Code § 654.17(1). As a result, the bank asserts it is not necessai-y to address the “open question” of whether the statute of limitations applicable to the lender’s rescission rights in section 654.17(1) is the two-year period established by Iowa Code section 615.1 or the standard ten-year period for breach of a written contract. See Bank of Am., N.A. v. Schulte, 843 N.W.2d 876, 883 n. 4 (Iowa 2014) (recognizing but not deciding the proper statute of limitation for rescission under Iowa Code section 654.17).

B. Analysis.

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Bluebook (online)
874 N.W.2d 112, 2016 Iowa Sup. LEXIS 11, 2016 WL 359064, Counsel Stack Legal Research, https://law.counselstack.com/opinion/us-bank-national-assn-v-lamb-iowa-2016.