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Wilmington Savings Fund Society, FSB v. Smith-Martinez

Court of Appeals of Iowa

July 24, 2019

WILMINGTON SAVINGS FUND SOCIETY, FSB, d/b/a CHRISTIANA TRUST, not in its Individual Capacity, but Solely as Trustee for BCAT 2015-13BTT, Plaintiff-Appellee,
v.
SHEREE SMITH-MARTINEZ and MICHAEL MARTINEZ, Defendants-Appellants.

          Appeal from the Iowa District Court for Linn County, Mary E. Chicchelly (summary judgment) and Patrick R. Grady (foreclosure), Judges.

         Sheree Smith-Martinez and Michael Martinez appeal from the district court's grant of summary judgment in a mortgage-foreclosure action. AFFIRMED.

          Sheree L. Smith-Martinez and Michael Martinez, Cedar Rapids, pro se appellants.

          Margaret A. Hanson and Matthew E. Laughlin of Davis, Brown, Koehn, Shors & Roberts, P.C., Des Moines, for appellee.

          Considered by Mullins, P.J., Bower, J., and Vogel, S.J. [*]

          MULLINS, PRESIDING JUDGE

         Sheree Smith-Martinez and Michael Martinez appeal the district court's grant of summary judgment in favor of Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust not in its individual capacity but solely as trustee for BCAT 2015-13BTT (Wilmington), in a mortgage-foreclosure action.[1] The Martinezes assert the court should have dismissed the foreclosure action based on Wilmington's lack of standing, the court's lack of jurisdiction, and because the note and mortgage documents were not attached to the foreclosure petition. Further, the Martinezes assert the court abused its discretion by refusing to hold a hearing on Wilmington's motion for summary judgment and genuine issues of material fact remain regarding the note and mortgage documents that preclude summary judgment. Finally, they challenge the order of a supersedeas bond in order to stay the proceedings. The Martinezes request appellate attorney fees and the assessment of the costs on appeal to Wilmington.

         I. Background Facts and Proceedings

         In September 2001, Katharin Stevens executed a uniform residential loan application and a promissory note for $165, 400.00, in favor of IMS Mortgage Company (IMS), for property in Linn County.[2] As security for the note, Katharin; her husband, Jack; her daughter, Sheree; and Sheree's husband, Michael, executed a mortgage on the property, in favor of IMS. In October, the mortgage was recorded. IMS assigned the mortgage to Wells Fargo Home Mortgage Inc. (Wells Fargo HM). The assignment of the mortgage was also recorded. Katharin died in 2005, and Jack died in 2006.

         In 2013, Wells Fargo Bank N.A. (Wells Fargo), successor by merger with Wells Fargo HM, filed a foreclosure petition against multiple parties including Sheree, Michael, and Katharin's estate. Wells Fargo alleged the note was in default due to nonpayment and sought to foreclose the mortgage. Wells Fargo alleged an outstanding and unpaid principal balance of $146, 875.60, plus interest. Sheree and Michael generally denied the petition. In August 2015, Wells Fargo assigned the mortgage to Wilmington. In October, the assignment was recorded.

         In January 2016, Sheree moved to dismiss the foreclosure based on, among other things, Wells Fargo's alleged lack of standing and the court's lack of subject matter jurisdiction over the matter. She further challenged the validity of the mortgage, note, and the mortgage's original assignment from IMS to Wells Fargo HM. In February, over Sheree's resistance, the court substituted Wilmington as plaintiff after finding the assignment from Wells Fargo to Wilmington was effective and Wilmington became the real party in interest. The court also denied Sheree's motion to dismiss, finding it had jurisdiction over the matter and any issues relating to the validity of the various documents in the cases were matters best suited to examination at trial. The court also stated that if the Martinezes believed that they had claims specifically against Wells Fargo, they could seek to add Wells Fargo as a party or could file an appropriate motion to challenge Wilmington's status as the real party in interest. The Martinezes did not file any pleadings related to these two issues.

         In April, Wilmington moved for summary judgment. In her resistance, Sheree alleged several issues that she contended were genuine issues of material fact precluding summary judgment, repeating many of the same arguments from prior pleadings, including standing and thus the court's lack of subject matter jurisdiction as well as the authenticity of the mortgage and note documents.

         In June, the court denied summary judgment. In its ruling, the court found Sheree's multiple allegations were largely duplicative and mostly unsupported by evidence. The court, in response to Sheree's challenge to the authenticity of the mortgage and note document, found the mortgage documents in the record to be identical. However, it found discrepancies between the filed note documents in the record, which Sheree had raised in her resistance to the motion but which Wilmington had not addressed in its reply. The court noted Wilmington could submit a renewed motion for summary judgment after resolving the issues with the note documents.

         In September, Wilmington renewed its motion for summary judgment. In October, it filed the affidavit of Ashley Dellinger, a vice president for loan documentation for Wells Fargo. Her affidavit stated that Jack signed the loan application but was not a borrower, so Jack's signature on the note was an error. Wilmington provided a copy of the note with Jack's signature redacted as well as the loan application, which did not list Jack as a borrower.

         When the court considered the renewed motion in November, it determined its June ruling had resolved all issues except the unexplained crossing off of Jack's signature on one version of the note. Based upon the Dellinger affidavit, the court determined no genuine factual dispute remained as to the note's validity. For that reason, it granted summary judgment. Sheree moved for reconsideration. However before the court could rule on the motion, Sheree and Michael filed notices of appeal, divesting the court of jurisdiction.

         In March 2017, Wilmington moved for entry of a foreclosure decree given the court's grant of summary judgment and though the Martinezes filed notices of appeal of the grant, they had not posted a supersedeas bond to stay the proceedings while their appeal was pending. The supreme court determined the appeal was interlocutory, treated the Martinezes' filings as applications for interlocutory appeal, and denied the applications.

         In August, the district court entered a foreclosure decree and ordered the sale of the property.[3] The court also ordered the Martinezes to post a supersedeas bond of $285, 000.00 if they wished to stay the proceedings.[4] Sheree moved for reconsideration. However before the court could rule on the motion, the ...


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