Court Opinion

ID: 3150093
Source: CourtListenerOpinion
Date Created: 2015-10-28 15:04:15.237478+00
Date Added: 2024-06-11T12:13:53.877370
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                 No. 14-1651
                           Filed October 28, 2015

US BANK NATIONAL ASSOCIATION, AS
TRUSTEE, SUCCESSOR IN INTEREST TO
BANK ONE, NATIONAL ASSOCIATION
AS TRUSTEE FOR CREDIT SUISSE
FIRST BOSTON MORTGAGE
SECURITIES CORP., MORTGAGE
PASS-THROUGH CERTIFICATES,
SERIES 2003-8,
     Plaintiff-Appellee,

vs.

LEDERMAN BONDING, MAIN STREET
ACQUISITIONS CORPORATION,
AND PARTIES IN POSSESSION,
     Defendants,

and

TERRY F. RICE and
DAVID A. GOINGS,
     Defendants-Appellants.
________________________________________________________________
     Appeal from the Iowa District Court for Black Hawk County, David F.

Staudt, Judge.

      Property owners appeal the district court’s grant of summary judgment to

the bank, foreclosing the mortgage on the property in question. AFFIRMED.

      John W. Holmes of Holmes & Holmes, Waterloo, for appellants.

      Jesse Linebaugh and Angela Morales of Faegre Baker Daniels LLP, Des

Moines, for appellee.

      Considered by Vogel, P.J., and Potterfield and McDonald, JJ.
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MCDONALD, Judge.

       Terry Rice and David Goings (property owners) appeal the district court’s

grant of summary judgment in favor of U.S. Bank, foreclosing a mortgage on

property located in Black Hawk County. We affirm the district court.1

       The material facts in this case are not in dispute.             Rice signed and

delivered a promissory note to Mortgage One, Inc., dated October 25, 2002, in

the fixed principal sum $67,950. The promissory note was secured by property

owned by Rice and Goings, each of whom signed a mortgage on the property.

On September 29, 2011, U.S. Bank initiated this foreclosure action after the

property owners defaulted on the note. U.S. Bank held the original note. After

the case was initiated, Mortgage One, Inc. assigned the mortgage to U.S. Bank.

       The district court granted U.S. Bank’s motion for summary judgment. It

concluded “the Note falls under the definition of a negotiable instrument under

[Iowa Code section] 554.3104 [(2011)].           Pursuant to [section] 554.3205, the

bearer of a negotiable instrument is entitled to enforce the contractual

provisions.” The court also concluded the transfer of the note “carries to the

transferee the benefit of the mortgage” even if the written assignment of the

mortgage contained technical errors. See Iowa Code § 554.9203(7); Whitney v.

Eichner, 216 N.W. 625, 626 (Iowa 1927) (“Some fundamental questions of law

1
  U.S. Bank asserts this appeal should be dismissed as the property owners filed the
notice of appeal before the foreclosure decree was entered, making their appeal
interlocutory. “When a ruling sustaining a motion for summary judgment is dispositive of
the entire case, it is a final judgment for purposes of appeal.” Swets Motor Sales, Inc. v.
Pruisner, 236 N.W.2d 299, 302 (Iowa 1975). The summary judgment ruling in this case
resolved all issues in the foreclosure action, and the foreclosure decree was a mere
formality. We therefore will decide the case on the merits even though the final
foreclosure decree was filed after the notice of appeal.
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are settled, among which are: First, that the transfer of one of a series of notes

secured by a mortgage carries to the transferee the benefit of the mortgage,

even though the mortgage may not be assigned to him.”).

      The property owners make numerous arguments in support of their

appeal. They maintain: (1) there was no delivery of a mortgage assignment by

the original mortgagee to U.S. Bank before the original mortgagee was dissolved;

(2) the note was not a negotiable instrument because the parties modified the

terms of the loan at closing; (3) there was no evidence that the note sued on was

delivered to U.S. Bank before the suit was filed; (4) there was no affidavit U.S.

Bank took the note in good faith and without notice of default; (5) the note was

not signed by both titleholders to the real estate; and (6) U.S. Bank failed to

produce proof of an unbroken chain of title to the mortgage.

      We conclude the district court did not err in granting U.S. Bank’s motion

for summary judgment. The property owners failed to preserve error on many of

the arguments they now make on appeal, and we will not address them for the

first time here. See Doe v. Roe, No. 14-0490, 2015 WL 576060, at *2 (Iowa Ct.

App. Feb. 11, 2015) (“Thus, under our error preservation rules, an issue must

ordinarily be raised in and decided by the district court before we will address it

on appeal.”). To the extent the property owners’ issues are properly presented

for appellate review, the issues are not material. See Iowa R. Civ. P. 1.981(3)

(“The judgment sought shall be rendered forthwith if . . . there is no genuine issue

as to any material fact and that the moving party is entitled to a judgment as a

matter of law.”); Dickerson v. Mertz, 547 N.W.2d 208, 212 (Iowa 1996) (“An issue
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of fact is ‘material’ only when the dispute is over facts that might affect the

outcome of the litigation, given the applicable governing law.”). The questions

presented have long been settled by statute and case law, and the bank was

entitled to foreclose the mortgage.    See Iowa Code §§ 554.3301 (stating the

person entitled to enforce an instrument includes the holder of the instrument),

554.1201(2)(u) (defining “holder” to include the person in possession of the

negotiable instrument made payable to the bearer of the instrument or an

identified person in possession), 561.13(1) (“A conveyance or encumbrance of,

or contract to convey or encumber the homestead, if the owner is married, is not

valid, unless and until the spouse of the owner executes the same or a like

instrument.”); see also Pope & Slocum v. Jacobus, 10 Iowa 262, 263 (1859)

(“The assignment of the debt, it is conceded as a general rule, draws after it the

mortgage, as a consequence or appurtenance to it.”); Crow, McCreary & Co. v.

Vance, 4 Iowa 434, 441 (1857) (“The right of the mortgagee is a mere chattel

interest, inseparable from the debt it is intended to secure, and transferable by a

mere assignment of the debt, without deed or writing. The debt is the principal

thing. The right of the mortgagee in the land, is an incident attached to the debt,

and ceasing when the debt is discharged.”).

      We affirm the district court without further opinion.     See Iowa Ct. R.

21.26(1)(a) and (d).

      AFFIRMED.