Opinion ID: 2210826
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Heading: Iowa Code Section 654.16: Right to Fair Market Valuation of Homestead and Right to Redeem.

Text: In 1986 the Iowa Legislature amended Iowa Code chapter 654 by adding a new section, section 654.16. The new section was in two paragraphs and provided as follows: If a foreclosure sale is ordered on agricultural land used for farming, as defined in section 175.2, the mortgagor may, by a date set by the court but not later than ten days before the sale, designate to the court the portion of the land which the mortgagor claims as a homestead. The homestead may be any contiguous portion of forty acres or less of the real estate subject to the foreclosure. The homestead shall contain the residence of the mortgagor and shall be as compact as practicable. If the homestead is not sold separately, but rather is sold in conjunction with the nonhomestead property in order to satisfy the judgment, the court shall determine the fair market value of the homestead. The court may consult with the county appraisers appointed pursuant to section 450.24 to determine the fair market value of the homestead. The mortgagor may redeem the homestead separately by tendering the fair market value of the homestead pursuant to chapter 628. 1986 Iowa Acts ch. 1216, § 2 (codified at Iowa Code § 654.16 (1987)). This new section applied to all actions filed on or after the effective date of the Act which was May 31, 1986. Id. §§ 13, 15. In 1987 the legislature amended section 654.16, effective June 4, 1987. The amendment retroactively extended the redemption period for agricultural homesteads in certain cases and revised the procedure for evaluating a homestead subject to redemption. See 1987 Iowa Acts ch. 142, §§ 4, 5, 28, 29. Section 4 of the Act provided that if a designated homestead is sold at a foreclosure sale to satisfy the judgment, the court shall determine its fair market value. Section 5 allowed the mortgagor to redeem the designated homestead by tendering the fair market value at any time within two years from the date of the foreclosure sale, pursuant to procedures set out in chapter 628. However, the two-year redemption period in section 5 did not apply to a member institution which ha[d] purchased a designated homestead at a foreclosure sale. A member institution was defined as any lending institution that is a member of the federal deposit insurance corporation, the federal savings and loan insurance corporation, the national credit union administration, or an affiliate of such institution. Id. § 5. In case of a member institution, the redemption period remained at one year. Id. Section 28 of the Act applied sections 4 and 5 to foreclosure sales of agricultural land held ... within one year before the effective date of [the] Act if the holder of the sheriff's certificate of sale is a mortgagee who has not sold or otherwise disposed of the agricultural land and whose mortgage was enforced by the foreclosure sale. In Arnold, we held unconstitutional that portion of section 5 that granted a shorter period of redemption (one year) to member institutions. Arnold, 426 N.W.2d at 157-58. But we let stand a two-year period of redemption for all farmer-mortgagors. Id. We also held unconstitutional section 28 which made sections 4 and 5 retroactive. Id. at 161. On appeal, the Coles rely on the 1986 legislation which added section 654.16 and not on the 1987 amendments to that statute. Simply put, the Coles are contending that our holding in Arnold does not bar their claim to relief under Division I. The bank points out, and we agree, that the Coles waived any claim to relief under Division I. In their application for interlocutory appeal following the district court's adjudication of law ruling with respect to Division II, the Coles clearly stated: [D]ivision one of plaintiff's petition is based on the failure to value the homestead which division was made moot by this court's decision in the Federal Land Bank of Omaha v. Arnold, No. 87-1309, decided June 15, 1988 [426 N.W.2d 153 (Iowa 1988)], in that the sheriff's sale in this case took place prior to the enactment of the legislation revising the procedure for valuing such homestead subject to redemption which this court has held cannot apply to sales prior to the date of enactment. In their posttrial brief the Coles again conceded that, because of Arnold, the redemption provisions of section 654.16 did not apply to them. In its decision the district court referred to this concession and, in reliance on it, dismissed Division I: In light of the Iowa Supreme Court's ruling in the Arnold case, plaintiffs now concede that Division I should be decided against them. As they stated in their post-trial brief: On June 15, 1988, following the date plaintiffs filed their action, the Supreme Court of Iowa in the case of Federal Land Bank of Omaha v. Arnold, 426 N.W.2d 153 (Iowa 1988) held that the Act of the legislature enacted on May 25, 1987, was unconstitutional as to the provision making the application of the Act retroactive to Sheriff's sales in 1986. Plaintiffs' claimed relief under Division I of its Petition was based on this Act and the retroactive application of this Act. Plaintiffs' claim was that the homestead was not separately valued so that the plaintiffs had an opportunity to purchase the homestead separately. However, the Sheriff's sale was held prior to May 25, 1987, so the provisions of that Act do not apply to this sale. The Coles could have alerted the district court to the position they now take on appeal through a rule 179(b) motion. See Iowa R.Civ.P. 179(b). They did not do so. State Farm Mut. Auto. Ins. Co. v. Pflibsen, 350 N.W.2d 202, 206 (Iowa 1984) (It is well settled that a rule 179(b) motion is essential to preservation of error when a trial court fails to resolve an issue, claim, defense, or legal theory properly submitted to it for adjudication). On appeal we determine the case on the same theory presented and tried to the district court. We do not give consideration to a theory or issue not initially raised. See In re Staros, 280 N.W.2d 409, 411 (Iowa 1979); Aetna Casualty & Sur. Co. v. Jewett Lumber Co., 209 N.W.2d 48, 50 (Iowa 1973). We agree with the bank that it would be unfair to allow the Coles to revive a claim on appeal that they had abandoned in the district court. See Miller v. Bonar, 337 N.W.2d 523, 530 (Iowa 1983) (Parties may not remain silent and allow the court to commit an inadvertent error only to raise it later on appeal).