Opinion ID: 2193938
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Heading Rank: 4

Heading: ICCC Provisions.

Text: This case presents several questions under the Iowa Consumer Credit Code (ICCC) which necessitate separate discussion of the notes involved. All references are to the Iowa Consumer Credit Code as it existed under the 1977 Code. Legislative changes since that time may well affect some of the conclusions we reach. The Mannings contend the loans were subject to the ICCC as consumer loans. We set out the relevant portion of section 537.1301(15) defining a consumer loan: 15. Consumer loan. a. Except as provided in paragraph b, a consumer loan is a loan in which all of the following are applicable: (1) The person is regularly engaged in the business of making loans. (2) The debtor is a person other than an organization. (3) The debt is incurred primarily for a personal, family, household or agricultural purpose. (4) Either the debt is payable in installments or a finance charge is made. (5) Either the amount financed does not exceed thirty-five thousand dollars, or the debt is not incurred primarily for an agricultural purpose and is secured by an interest in land. b. A consumer loan does not include: (1) A sale or lease in which the seller or lessor allows the buyer or lessee to purchase or lease pursuant to a seller credit card. (2) A loan secured by an interest in land if the security interest is bona fide and not for the purpose of circumvention or evasion of this chapter and the finance charge does not exceed twelve percent per year calculated according to the actuarial method on the assumption that the debt will be paid according to the agreed terms and will not be paid before the end of the agreed terms. The Mannings also contend this action was prematurely brought because no notice to cure was given. Section 537.5110, The Code 1977, provides in part as follows: 2. A creditor who believes in good faith that a consumer is in default may give the consumer written notice of the alleged default, and, if the consumer has a right to cure the default, shall give the consumer the notice of right to cure provided in section 537.5111 before exercising any right he may have to enforce. .... 4. If the consumer has a right to cure a default: a. A creditor shall not accelerate the maturity of the unpaid balance of the obligation, demand or take possession of collateral, otherwise than by accepting a voluntary surrender of it, or otherwise attempt to enforce the obligation until twenty days after a proper notice of right to cure is given. Before discussing the applicability of the statutes to the present facts, we consider a procedural question upon which the parties were unable to agree. Each says it was the other's burden to prove that a notice had (or had not) been given. We hold the bank had the burden to prove that a notice to cure, if one was required, was given. See Mosebach v. Blythe, 282 N.W.2d 755, 759 (Iowa Ct.App.1979); cf. Herman Ford-Mercury, Inc. v. Betts, 251 N.W.2d 492, 496 (Iowa 1977) (secured party must plead and prove notice under section 554.9504(3), The Code.) A notice to cure is a condition precedent to bringing suit. Failure to comply is cause for dismissal of the action. The bank argues First Northwestern National Bank v. Crouch, 287 N.W.2d 151 (Iowa 1980) established the rule that a defendant must raise failure to give a cure notice as an affirmative defense. We do not read Crouch that way. In Crouch the issue was raised by defendant, but nothing we said indicates it had to be. Id. at 152. The burden properly belongs on the one seeking to enforce the obligation. See Mosebach v. Blythe, 282 N.W.2d at 759. Apparently the trial court found the Mannings waived compliance with the notice provision. There is authority that one in whose favor a condition precedent exists may waive it. Blythe, 282 N.W.2d at 760; H. L. Munn Lumber Co. v. City of Ames, 176 N.W.2d 813, 816 (Iowa 1970). But see § 537.1107, The Code 1977 (waiver of ICCC terms and conditions). We need not decide if the Mannings could have waived their statutory right to notice, because we hold there was no waiver. The question of waiver arises because the Mannings did not plead the bank's failure to give a notice to cure. The matter was, however, thoroughly inquired into at trial. The evidence of noncompliance (except as to one note referred to later) was undisputed. Mannings' failure to plead a matter which the bank had the burden to prove is not a waiver. We hold that the notice-to-cure statute was not complied with and that there was no waiver by the Mannings. We now consider how this conclusion affects the various obligations.