United States District Court, N.D. Iowa, Western Division
RULING ON MOTION FOR SUMMARY JUDGMENT
A. ROBERTS, UNITED STATES MAGISTRATE JUDGE
matter comes before the Court on Plaintiff's Motion for
Summary Judgment. (Doc. 17.) Pursuant to Local Rule 7(c), the
motion will be decided without oral argument.
April 19, 2018, the United States of America filed a
Complaint in the instant action seeking judgment on a
promissory note and foreclosure of a mortgage issued by the
United States of America through the Farmers Home
Administration, United States Department of Agriculture.
(Doc. 17-3 at 4-14.) Named as defendants were Ronald D. Van
Otterloo; Barbara A. Van Otterloo; H&S Partnership, LLP
(“H&S”); Pinnacle Bank; and HBI, LLC.
Pinnacle Bank and HBI, LLC were voluntarily dismissed. On
July 17, 2018, the Clerk of Court entered default against
Defendants Ronald Van Otterloo and Barbara Van Otterloo.
(Doc. 10.) Plaintiff filed an Amended Complaint on July 25,
2018. (Doc. 11.) On September 19, 2018, H&S filed its
Answer admitting certain allegations, denying other
allegations, and asserting certain affirmative defenses.
(Doc. 13). Accordingly, H&S is the only defendant
contesting the action.
December 6, 2018, the Court adopted a proposed Scheduling
Order and Discovery Plan submitted by the Parties. At that
time, the case was referred to me to conduct all further
proceedings and the entry of judgment, in accordance with 28
U.S.C. § 636(c) and the consent of the Parties.
December 3, 2018, Plaintiff timely filed the instant motion.
(Doc. 17.) H&S filed a timely resistance on December 20,
2018. (Doc. 21.) Plaintiff filed a timely reply on January
28, 2019. (Doc. 27.)
support of its Motion for Summary Judgment, Plaintiff
attached a Statement of Undisputed Material Facts, in
compliance with Federal Rule of Civil Procedure 56(c) and
Local Rule 56(a)(3). H&S filed a response as required by
LR 56(b)(2) and a Statement of Additional Material facts
under LR 56(b)(3), which were admitted by Plaintiff.
instant case, most of the relevant facts are not in dispute.
Where an objection is raised to any statement of a material
fact, the dispute largely concerns the legal effect of a
certain fact or facts - not whether the facts are true. From
the undisputed facts the following appears:
18, 1985, the Van Otterloos executed and delivered to
Plaintiff a promissory note (“the Note”) for $45,
000 bearing annual interest at 11.375 percent. (Doc. 17-2
¶1.) The Van Otterloo defendants also executed and
delivered to Plaintiff a purchase-money security interest in
the form of a real estate mortgage (“the
Mortgage”) for the following property:
The Westerly 60.0 feet of the Southerly 121.9 feet of the
Northerly 182.0 feet of Lot Three (3) in Deans First Addition
to The City of Sheldon, O'Brien County and State of Iowa
(“the Property.”) (Id. ¶ 2.) The
Mortgage was recorded with the O'Brien County Recorder on
July 19, 1985, in Book 63 at Page 347. (Id.) The
payment history shows the last voluntary payment received on
the Note was dated May 31, 2012, and that the Note is
currently in default. (Id. ¶ 3.)
Plaintiff's payment history shows a total balance of
$105, 464.20 as of November 6, 2018. (Doc. 21-2 ¶ 4.)
Plaintiff first sent acceleration letters to the Van
Otterloos on July 2, 2014. (Doc. 21-3 ¶ 1.)
acquired its interest in the Property via a deed from a
related corporate entity, HBI, LLC recorded on March 20,
2017. (Doc. 17-2 ¶ 5.) HBI, LLC acquired its interest by
a deed from a different related corporate entity, REO Asset
Management, LLC, that was recorded on December 31, 2015.
Id. REO Asset Management, LLC, acquired its interest
via a sheriff's sale and resulting deed executed on
December 16, 2015, and recorded on December 29, 2015.
(Id.) The sheriff's sale arose from a
foreclosure by a junior creditor commenced in June 2015.
(Id. ¶ 6.) Although Plaintiff's mortgage
was properly recorded, Plaintiff was not named as a defendant
in the foreclosure action. (Id.) Nothing in the
record appears to explain why H&S or its predecessors
proceeded with its investment in the Property based on the
foreclosure of the junior interest.