from the Iowa District Court for Howard County, John J.
assignee of a debtor's right of redemption appeals the
district court's determination that the assignment was
not valid and enforceable under the terms of the underlying
foreclosure decree. REVERSED AND REMANDED.
L. Duffy of Heiny, McManigal, Duffy, Stambaugh &
Anderson, P.L.C., Mason City, for appellant.
Wickham Hartman, Erin R. Nathan, and Jared F. Knight of
Simmons Perrine Moyer Bergman PLC, Cedar Rapids, for
Considered by Potterfield, P.J., Doyle, J., and Carr, S.J.
Dougan, the assignee of a debtor's statutory right of
redemption, appeals following the dismissal of her petition
in district court seeking declaration of her assignment's
validity, as well as calculation of the interest due to
redeem the assignor-debtor's foreclosed property. Dougan
challenges the district court's determination that the
use of the word "exclusive" in the foreclosure
decree meant the debtor was prohibited from validly assigning
his right of redemption. Dougan further asserts the court
erred in finding that because the debtor did not appeal the
decree, "the law of the case" and res judicata
rendered Dougan's assignment invalid and unenforceable.
Upon our review, we reverse the ruling and remand the case
back to the district court for further proceedings consistent
with this opinion.
Background Facts and Proceedings.
December 2016, lender Great Western Bank filed a petition in
district court alleging Conrad Clement, the debtor, was in
default under the terms of the parties' mortgage
agreement for failing to pay the bank as agreed. The bank
requested judgment be entered against Clement for the sums of
money due under the parties' agreement. The bank also
requested the property securing the parties'
agreement-208 acres of agricultural land-be foreclosed upon
to satisfy the judgment.
January 2017, the bank filed a motion seeking entry of a
default judgment against Clement and parties in possession.
On February 3, 2017, the district court entered an order
finding Clement and parties in possession in default and
entered a default judgment against them. The court directed
the bank to submit a proposed judgment and decree of
foreclosure consistent with the relief it prayed for in its
March 24, 2017, the district court entered a decree granting
the bank's request to foreclose upon the farm property
that secured Clement's mortgage. The decree noted the
judgment and decree had been submitted by the bank as
previously directed by the court. Among the findings of fact
set out in the decree, one paragraph stated: "The court
notes that the Subject Real Estate is agricultural real
estate and, as such, there shall be a one-year redemption
following sheriff's sale, exclusive to the Defendant,
Conrad D. Clement only. The court further notes that
sheriff's sale may be scheduled immediately upon request
by [the bank]." Similarly, in the "order, judgment
and decree" section of the decree, the decree provided:
The court finds that the Subject Real Estate is agricultural
real estate and, as such, following sheriff's sale of the
Subject Real Estate, which may take place immediately upon
written request by counsel for Lender, there shall be a
one-year period of redemption exclusive to the Defendant,
Conrad D. Clement, following any such sheriff's sale.
a sheriff's sale, the farm property was purchased by
Wayne Mlady on May 22, 2017. Almost eleven months later, Sue
Ann Dougan filed a petition in the case essentially seeking
entry of a declaratory judgment in her favor. Dougan's
petition stated Clement had assigned his right to redeem the
farm property to her, with a copy of the assignment attached
thereto. The assignment stated it was effective March 28,
2018, and it assigned Clement's "exclusive right to
redeem the [farm] real estate" for value received. In
her petition, Dougan states she had tendered to the district
court clerk more than the sum due pursuant to Iowa Code
sections 628.13 and .18 (2017) to redeem the property. She
requested the district court "[r]atify and confirm the
redemption of the [farm property] by [Dougan] in accordance
with the terms determined by the court." Mlady answered
the petition and resisted Dougan's claims she validly
redeemed the farm property.
hearing on Dougan's petition was held in April 2018
before a judge not previously involved in the foreclosure
case. Thereafter, the court entered an order denying
Dougan's petition and determining Clement's
assignment was not valid and enforceable. The court
concluded: "The decree states that the redemption right