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Home Federal Savings Bank v. Michael Trettin

January 9, 2013

HOME FEDERAL SAVINGS BANK, PLAINTIFF-APPELLANT,
v.
MICHAEL TRETTIN, MAREN TRETTIN, BRYCE J. CHRISTENSEN, KRISTA A. POLKING-CHRISTENSEN, WELLS FARGO BANK, N.A. AND VERIDIAN CREDIT UNION, DEFENDANTS-APPELLEES.



Appeal from the Iowa District Court for Dallas County, Gregory A. Hulse, Judge.

The opinion of the court was delivered by: Eisenhauer, C.J.

Plaintiff appeals the district court's grant of summary judgment to appellees, finding plaintiff's efforts to enforce a judgment were barred by a special statute of limitations.

REVERSED AND REMANDED.

Heard by Eisenhauer, C.J., and Vogel and Vaitheswaran, JJ.

Federal Home Savings Bank appeals from a grant of summary judgment in favor of Michael Trettin, Maren Trettin, Bryce H. Christensen, and Krista A. Polking-Christensen. We reverse and remand.

I. Background Facts & Proceedings.

On January 19, 2004, Silverleaf Land Company, LLC, obtained a loan for $975,000 from Home Federal Savings Bank (Bank). This loan was secured by a mortgage on agricultural property in Dallas County, Iowa, and a commercial security agreement. In addition, the loan was secured by commercial guaranties signed by John C. Kline, Inc.; John C. Kline, individually (Kline); Randal L. Walters, Inc.; and Randal L. Walters, individually. The loan was later modified to extend the maturity date and increase the loan amount.

Silverleaf defaulted on the loan. On November 26, 2007, the Bank filed a petition for foreclosure of the real estate mortgage in Dallas County. In the same petition it sought to enforce the commercial security agreement and written guaranties. On June 3, 2008, the district court granted summary judgment and entered a decree, finding the allegations in the petition were true and incorporating them into its decree. The principal balance plus interest and penalties due at that time was $1,411,285.63. The court entered judgment against Silverleaf; John C. Kline, Inc.; Kline; Randal L. Walters, Inc.; and Randal L. Walters.*fn1 The present case involves only the judgment against John C. Kline, Inc.

At the time of the judgment on June 3, 2008, John C. Kline, Inc. owned two undeveloped lots in Dallas County. On September 3, 2008, John C. Kline, Inc. sold one of the lots to Meridian Homes, LC. A home was built on the property, which was subsequently purchased in September 2009 by Bryce Christensen and Krista Polking-Christensen. John C. Kline, Inc. sold the other lot to Drake Companies, LLC, on September 9, 2008. A home was built on that lot, which was purchased in January 2009 by Michael and Maren Trettin.*fn2

Kline, individually, filed for bankruptcy protection on February 17, 2009. A stay order as to Kline was entered in the district court proceedings. The bankruptcy proceedings were dismissed on September 24, 2009.

On August 18, 2010, the Bank filed a petition for foreclosure of the judgment lien against the homeowners. The petition also named Mortgage Electronic Registrations Systems, Inc., Veridian Credit Union, and Wells Fargo Bank, as defendants. The Bank asserted $560,101.45 remained unpaid on the loan and it was entitled to enforce its judgment against property owned by John

C. Kline, Inc. in Dallas County on the date of the judgment, including the two lots purchased by the homeowners. The Bank claimed its lien was superior to the rights and interests of the defendants in the property.

On May 18, 2011, the homeowners filed a motion for partial summary judgment, asserting the Bank's claims were barred by the special statute of limitations found in Iowa Code section 615.1 (Supp. 2009).*fn3 The Bank filed a resistance to the motion and filed its own motion for summary judgment. It argued it was proceeding against John C. Kline, Inc. based on the guaranty signed by the company, not on the basis of a real estate mortgage, which would be covered by section 615.1. In the alternative, the Bank claimed the two-year statute of limitations found in section 615.1 had been extended due to the bankruptcy proceedings involving Kline. The homeowners resisted the Bank's motion for summary judgment.

A hearing on the motions for summary judgment was held July 19, 2011. After the hearing, but prior to the court's ruling, Wells Fargo filed a motion seeking to supplement its resistance to the Bank's motion for summary judgment. Wells Fargo claimed the judgment lien against John C. Kline, Inc. did not appear in the Iowa Court Information Services (ICIS) judgment lien index. The homeowners and PPH ...


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