IN THE COURT OF APPEALS OF IOWA

No. 15-1271

Filed August 17, 2016

BANK ONE, NATIONAL ASSOCIATION, as Trustee,

Plaintiff-Appellant,

vs.

CHRISTOPHER G. DANIELS; Parties in Possession; 

Unknown spouse, if any, of Christopher G. Daniels,

Defendants-Appellees.

________________________________________________________________

Appeal from the Iowa District Court for Wright County, Christopher C. Foy, 

Judge.

A mortgagee bank appeals the district court’s determination the bank’s 

notice of recision of the foreclosure action was untimely. REVERSED AND 

REMANDED. 

Mark D. Walz of Davis, Brown, Kohen, Shors & Roberts, West Des 

Moines, for appellant.

Christopher G. Daniels, Eagle Grove, for appellees.

Considered by Tabor, P.J., and Bower and McDonald, JJ.
2

TABOR, Presiding Judge.

This appeal arises from a foreclosure action filed in equity on February 6, 

2003, by Bank One1against Christopher G. Daniels2for defaulting on an April 3, 

2001 promissory note secured by a mortgage of the same date. The bank’s 

petition elected to foreclose without redemption, waived its rights to a deficiency 

judgment, and stated the mortgaged property is a residential dwelling. The bank 

sought judgment in rem against the real estate for unpaid principal and interest, 

costs, and attorney fees.3 The court foreclosed the mortgage by default decree 

entered on April 8, 2003. The decree entered judgment in rem in favor of the 

bank and made the judgment a lien upon the mortgaged property. 

Daniels filed a chapter 13 action in bankruptcy court, which stayed the 

bank’s attempt to execute on its April 8, 2003 judgment. The bankruptcy court 

dismissed the action in early 2007. Thereafter, the bank filed a praecipe for 

special execution with the Wright County Clerk of Court on February 15, 2007. 

But for reasons not explained in our record, no sheriff’s deed was issued. On 

June 3, 2015, the bank filed a notice electing “to rescind and set aside the [April 

8, 2003] foreclosure decree” under Iowa Code section 654.17 (2015).

4

 

 

1 Bank One brought the action as the trustee for SASCO2006—BC3 Trust Fund.

2 The bank included parties in possession as defendants.

3 The bank’s petition asked that interest be calculated from November 1, 2002, which 

was the date cited in its notice to cure sent to Daniels in December 2002.

4

 The statute states:

At any time prior to the recording of the sheriff’s 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 . . . . In addition, if the 

original loan documents are contained in the court file, . . . [u]pon the 

payment of [a] fee, the clerk shall . . . return the original loan documents 

to the mortgagee.

Iowa Code § 654.17(1) (emphasis added).
3

On June 26, 2015, the district court ruled the bank’s notice of recision5

was void, reasoning:

Under section 654.17, a notice of recision must be filed 

“before the mortgagor’s rights become unenforceable by operation 

of the statute of limitations.” Here, the applicable statute of 

limitations is two years from the date the decree of foreclosure was 

entered, not counting any time during which execution was stayed 

pending a bankruptcy action. Iowa Code § 615.1.6

After noting the April 8, 2003 entry of the foreclosure decree, the district court 

ruled: “Any stay that might have been in effect due to the bankruptcy of the 

mortgagor was lifted or terminated no later than February 15, 2007.” Based on 

these facts, the court found the last day for the bank to “enforce its rights under 

the foreclosure decree before expiration of the limitations period in section 615.1 

or to file a notice of recision pursuant to section 654.17 was February 15, 2009.” 

The court concluded the bank’s failure to timely file its notice of recision rendered 

the notice “void and of no effect.”

On appeal, the bank claims the district court erred in holding motions to 

rescind a foreclosure judgment are subject to the two-year statute of limitations in 

section 615.1(1). We review de novo. Iowa R. App. P. 6.907.

 

5 While “rescission is the standard and etymologically preferable spelling,” according to 

Bryan A. Garner, Garner’s Dictionary of Legal Usage 777 (3d ed. 2011), our legislature 

used the alternative spelling—recision—in section 654.17, which we will use for 

consistency in this opinion. 

6 Section 615.1 sets out a “special statute of limitations” for the “purpose of aiding 

judgment debtors.” See Lacina v. Maxwell, 501 N.W.2d 531, 533 (Iowa 1993). The 

relevant portion provides:

After the expiration of a period of two years from the date of entry 

of judgment, exclusive of [time during a bankruptcy stay] . . . a [residential 

foreclosure] judgment [for a real estate mortgage executed prior to July 1, 

2009,] shall be null and void, all liens shall be extinguished, and no 

execution shall be issued except as a setoff of counterclaim.

Iowa Code § 615.1(1) (emphasis added). 
4

After the district court’s 2015 ruling, our supreme court aided our 

resolution of this appeal by harmonizing the interplay of the two statutory 

provisions—section 654.17(1) and section 615.1(1)—into a “coherent whole.” 

See U.S. Bank, N.A. v. Callen, 874 N.W.2d 112, 119 (Iowa 2016). The court 

ruled the special statute of limitations in section 615.1(1) “relates only to 

enforcing the foreclosure judgment, not recision” under section 654.17(1). Id.; 

see U.S. Bank, N.A. v. Vahle, No. 12-0439, 2012 WL 5539865, at *5 (Iowa Ct. 

App. Nov. 15, 2012) (“[S]ection 615.1 addresses the time for execution of a 

foreclosure judgment, not the time for a mortgagee to enforce its rights under the 

mortgage.”).

Although a judgment lien is “null and void” after two years from the date of 

judgment under 615.1(1), nevertheless, “the mortgage indebtedness survives.” 

Callen, 874 N.W.2d at 119. Accordingly, a “mortgagee’s rights” in section 

654.17(1), which become “unenforceable” by the statute of limitations, are 

broader rights than the “right to enforce a judgment lien” in section 615.1(1). Id. 

“[M]ortgagee’s rights,” instead, are “rights arising from the underlying mortgage 

that survives the two-year period.” Id. The Callen court concluded:

[W]hen a foreclosure judgment is subject to Iowa Code 

section 615.1, the penalty . . . for failure to execute on the judgment 

within the prescribed two-year period is that the mortgagee forfeits 

the right to obtain a deficiency judgment in any subsequent 

foreclosure action. It does not extinguish the mortgagee’s rights 

altogether.

. . . .

. . . We hold that the “all liens” language in Iowa Code 

section 615.1(1) applies only to all judgment liens and the two-year 

special statute of limitations in Iowa Code section 615.1(1) does not 

limit the period of time for a mortgagee to rescind a prior 

foreclosure judgment.
5

Id. at 120 (citing Iowa Code § 654.17(2)). Based on this premise, we reverse the 

district court’s ruling and hold Bank One’s mortgage lien survived the two-year 

period in section 615.1(1). See id.

But the question remains whether the applicable statute of limitations was 

ten years under section 614.1(5) (requiring actions “founded on written contracts” 

be brought within ten years of the cause of action accruing) or twenty years 

under section 614.21 (barring actions to foreclose or enforce any real estate 

mortgage after twenty years of the date thereon). See id. (leaving open the 

question of which of these two limitations periods applied); see also Bank of Am., 

N.A. v. Schulte, 843 N.W.2d 876, 883 n.4 (Iowa 2014) (recognizing but not 

deciding proper statute of limitations for recision under section 654.17). 

Bank One argues we should hold “at the very least” the ten-year period 

provided under section 614.1(5) governs motions for recision under section 

654.17. The bank does not assert on what date it believes the ten-year statute of 

limitations began to run. While the district court held the two-year period under 

section 615.1 commenced on February 15, 2007, that calculation considered the 

stay pending Daniels’s bankruptcy action. Iowa Code sections 614.1(5) and 

614.21 do not expressly exclude time for a bankruptcy action. Accordingly, we 

find it necessary to remand this case for further proceedings where the district 

court should determine, in the first instance with the benefit of argument by the 

parties, which statute of limitations applies to Bank One’s mortgagee’s rights and 

when the limitations period commenced. We do not retain jurisdiction.

REVERSED AND REMANDED.