IN THE SUPREME COURT OF IOWA
No. 14–1536
Filed January 29, 2016
U.S. BANK NATIONAL ASSOCIATION, as Trustee in Trust for SASCO
2006-BC3 Trust Fund,
Appellee,
vs.
JEREME L. LAMB; BANK OF AMERICA, N.A.; NATIONSTAR MORTGAGE,
LLC; STATE OF IOWA, DEPARTMENT OF REVENUE; U.S. BANK
NATIONAL ASSOCIATION, as Trustee For The C-BASS MORTGAGE
LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-SL1,
Defendants,
and
CATHY R. CALLEN,
Appellant.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Robert J.
Blink, Judge.
Mortgagor seeks further review of a court of appeals decision
affirming the trial court’s grant of summary judgment in favor of the
mortgagee bank. AFFIRMED.
David A. Morse of Rosenberg & Morse, Des Moines, for appellant.
David W. Nelmark of Belin McCormick, P.C., Des Moines, and
Benjamin W. Hopkins of Petosa, Petosa & Boecker, L.L.P., Clive, for
appellee.
Patrick B. Bauer, Iowa City, for amicus curiae.
2
APPEL, Justice.
In this case, we are called upon to determine the rights of a
mortgagee and a mortgagor when the mortgagee obtained a decree of
foreclosure in February 2010, filed a notice of rescission in March 2012,
and filed a subsequent petition seeking foreclosure in October 2013. The
mortgagor asserts that under Iowa Code section 615.1 the mortgagee had
only two years to enforce its March 2012 judgment and failure to do so
extinguished “all liens.” The mortgagee contends that only the judgment
lien is extinguished by the two-year statute of limitations in Iowa Code
section 615.1 and that its rescission of the original foreclosure judgment
was valid under Iowa Code section 654.17.
The district court granted the mortgagee summary judgment. The
mortgagor appealed. The court of appeals affirmed the judgment of the
district court. On further review, we too affirm the judgment of the
district court for the reasons stated below.
I. Background Facts and Proceedings.
The facts are undisputed. Cathy Callen and Jereme Lamb
executed a promissory note for real property in 2006. The note was
secured by a mortgage. U.S. Bank National Association is the holder of
the promissory note and mortgage. Callen and Lamb defaulted on the
promissory note. U.S. Bank then brought a foreclosure action and
obtained an in rem judgment and decree of foreclosure against Callen
and Lamb in February 2010. Two sheriffs’ sales were scheduled but
were both subsequently cancelled by U.S. Bank.
U.S. Bank filed a notice of rescission of the foreclosure in March
2012, more than two years after the entry of the original judgment. In
October 2013, U.S. Bank filed its current foreclosure action and moved
for summary judgment on the undisputed facts. Callen filed
3
counterclaims for quiet title and wrongful foreclosure arguing that,
despite not making any loan payments on the property for more than six
years, she is entitled to own the property free and clear because the
house was not sold within two years of the foreclosure decree. The
district court ruled in favor of the bank on summary judgment, and the
decision was affirmed by the court of appeals. 1
II. Standard of Review.
We review rulings on motions for summary judgment for correction
of errors at law. Iowa R. App. P. 6.907; Goodpaster v. Schwan’s Home
Serv., Inc., 849 N.W.2d 1, 6 (Iowa 2014). In ruling on a motion for
summary judgment, the court views the record in the light most
favorable to the party opposing summary judgment. Goodpaster, 849
N.W.2d at 6.
III. Discussion.
A. Introduction. The dispute in this case involves the proper
interpretation of two statutes related to mortgage foreclosure
proceedings. We begin with Iowa Code section 615.1. This section
provides, in relevant part:
Execution on certain judgments prohibited.
1. After the expiration of a period of two years from
the date of entry of judgment, . . . a judgment entered in any
of the following actions shall be null and void, all liens shall
be extinguished, and no execution shall be issued except as
a setoff or counterclaim:
a. (1) For a real estate mortgage . . . executed prior to
July 1, 2009, an action for the foreclosure of the real estate
mortgage . . . .
1The court gratefully acknowledges the helpful amicus brief filed in this matter
by Professor Patrick B. Bauer of the University of Iowa law school, a leading expert in
Iowa mortgage foreclosure law.
4
Iowa Code § 615.1 (2013). Section 615.1, however, is qualified by Iowa
Code section 654.17. Section 654.17 provides, in relevant part:
Recision of foreclosure.
1. 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 . . . .
2. Upon the filing of the notice of recision, the
mortgage loan shall be enforceable according to the original
terms of the mortgage loan and the rights of all persons with
an interest in the property may be enforced as if the
foreclosure had not been filed.
Id. § 654.17.
Mortgagor Callen asserts that under Iowa Code section 615.1, “all
liens” are extinguished if the mortgagee fails to execute on an underlying
judgment of foreclosure within two years. Callen argues the plain
meaning of “all liens” is that after the passage of two years from the date
of the judgment of foreclosure, the mortgagee loses all interest in the
underlying property. Callen further argues that while the mortgagee has
a right to rescind a judgment of foreclosure under Iowa Code section
654.17, the right to rescind must be exercised “before the mortgagee’s
rights become unenforceable by operation of the statute of limitations.”
Id. Callen argues that the applicable statute of limitations for rescinding
a judgment of foreclosure is the two-year period provided in Iowa Code
section 615.1.
Thus, according to Callen, the judgment of foreclosure obtained by
the mortgagee bank in this case became null and void after the passage
of two years without execution, and the bank’s ability to rescind the
judgment of foreclosure also expired at the same time.
The mortgagee bank responds that considered in context, the term
“all liens” in Iowa Code section 615.1 means only all judgment liens
5
related to the underlying foreclosure action. It does not bar judgment
liens arising out of a second foreclosure action. The bank notes that
Callen engaged in additional defaults after the original foreclosure
judgment had been obtained.
In the alternative, the mortgagee bank suggests that under Iowa
Code section 654.17, its rescission of the prior foreclosure action was
timely. The bank argues that a rescission of a prior foreclosure is valid if
filed within two years of the issuance of an execution of the prior
judgment. In support of this argument, the bank cites Deaton v.
Hollingshead, 225 Iowa 967, 974, 282 N.W. 329, 333 (1938). In Deaton,
we held that if proceedings were instituted by “issuance of an execution,
and levy is made during the lifetime of the judgment, a sale under such
proceedings, though had after the judgment is barred by the statute of
limitations, is valid.” Id. The bank suggests that because the execution
issued on January 27, 2012, was issued within two years of the
February 11, 2010 judgment, the bank’s rights had not become
“unenforceable by operation of the statute of limitations.” Iowa Code
§ 654.17(1). As a result, the bank asserts it is not necessary to address
the “open question” of whether the statute of limitations applicable to the
lender’s rescission rights in section 654.17(1) is the two-year period
established by Iowa Code section 615.1 or the standard ten-year period
for breach of a written contract. See Bank of Am., N.A. v. Schulte, 843
N.W.2d 876, 883 n.4 (Iowa 2014) (recognizing but not deciding the
proper statute of limitation for rescission under Iowa Code section
654.17).
B. Analysis. We begin with the question of whether the “all liens”
language in Iowa Code section 615.1 extinguishes all claims the
mortgagee has against the debtor mortgagor. At the outset, we recognize
6
that Iowa Code section 615.1 “prescribes a ‘special statute of limitations’
that ‘was passed with the legislative purpose of aiding judgment
debtors.’ ” Id. (quoting Lacina v. Maxwell, 501 N.W.2d 531, 533 (Iowa
1993)). The question before us is not whether the statute gives relief to
judgment debtors, which it surely does, but the scope of such relief.
We deal first with the plain meaning argument advanced by Callen.
No doubt there are occasions when the language of the statute in the
context of a particular dispute is unambiguous. Yet, we must apply the
plain meaning rule with caution. Rolfe State Bank v. Gunderson, 794
N.W.2d 561, 564 (Iowa 2011) (“[C]ourts should be circumspect regarding
narrow claims of plain meaning and must strive to make sense of our law
as a whole.”). In particular, legislative use of terms such as “any” and
“all” often require contextual analysis of surrounding language to
determine their precise meaning.
For example, we recently held in a workers’ compensation
discovery context that a statute providing for the release of “all
information” should not be so broadly construed as to require release of
work product or privileged material. See Iowa Ins. Inst. v. Core Grp. of
Iowa Ass’n for Justice, 867 N.W.2d 58, 79 (Iowa 2015) (holding that
statute requiring workers’ compensation carrier to release all information
concerning the employee’s physical or mental condition does not affect
the work product doctrine); In re Estate of Troester, 331 N.W.2d 123, 126
(Iowa 1983) (the words “all orders” in a statute proving that all orders in
a probate court are final decrees was not intended “to provide finality and
thus make appealable those procedural rulings” in probate hearings);
Johnson v. Bd. of Adjustment, 239 N.W.2d 873, 880–81 (Iowa 1976)
(finding that the words “all uses” in a zoning ordinance did not mean
every lot was required to satisfy a minimum acreage requirement); Silver
7
Lake Consol. Sch. Dist. v. Parker, 238 Iowa 984, 997, 29 N.W.2d 214, 221
(1947) (holding “the word ‘all’ in various parts of the school laws” applied
only to all public schools); In re Licenses for Sale of Used Motor Vehicles,
179 N.W. 609, 611 (Iowa 1920) (concluding words “all vehicles” did not
include all used vehicles).
Here, we conclude the statute is at least sufficiently ambiguous to
require construction and interpretation. See Iowa Ins. Inst., 867 N.W.2d
at 71–72. We certainly understand the argument that all liens means all
liens, yet the location of the phrase within a statute that appears to
narrowly govern certain judgments imposes an obligation of further
analysis to determine the objective meaning of the statute. See In re
Estate of Melby, 841 N.W.2d 867, 879 (Iowa 2014) (“When construing
statutes, we assess not just isolated words and phrases, but statutes in
their entirety . . . .”); Norman J. Singer & J.D. Shambie Singer, 2A
Sutherland Statutory Construction § 46:5, at 225 (7th ed. rev. 2014) (“A
statutory subsection may not be considered in a vacuum, but must be
considered in reference to the statute as a whole . . . .”);. In other words,
because we find the bank’s interpretation that all liens means all
judgment liens arising from a foreclosure judgment plausible and that it
does not do direct violence to the statutory language, we think further
inquiry is required. Sherwin-Williams Co. v. Iowa Dep’t of Revenue, 789
N.W.2d 417, 424 (Iowa 2010) (“A statute is ambiguous if reasonable
minds could differ or be uncertain as to the meaning of the statute.”
(quoting Carolan v. Hill, 553 N.W.2d 882, 887 (Iowa 1996))); State v.
McCullah, 787 N.W.2d 90, 94 (Iowa 2010) (stating that ambiguity may
arise “from the general scope and meaning of the statute when all of its
provisions are examined” (quoting Carolan, 553 N.W.2d at 887)).
8
We begin with considering the context of the “all liens” language in
Iowa Code section 615.1(1). T & K Roofing Co. v. Iowa Dep’t of Educ., 593
N.W.2d 159, 162 (Iowa 1999) (We “consider the context within which the
words are used” when interpreting a statute.); accord State v. Carter, 582
N.W.2d 164, 166 (Iowa 1998). No one contends that “all liens” is so
broad to include, for instance, junior mortgage liens of third parties or
third-party mechanics’ liens on the property being foreclosed by a
mortgagee who is a stranger to other lienholders. Thus, the term “all
liens” necessarily requires some interpretive limits.
We note that the “all liens” language appears in a chapter entitled
“Limitations on Judgments,” Iowa Code chapter 615, and in a section of
the Code labeled “Execution on certain judgments prohibited.” Iowa
Code § 615.1. We think the bank makes a persuasive case that in
context, the term “all liens,” in the larger statutory context, means “all
[judgment] liens.” See Den Hartog v. City of Waterloo, 847 N.W.2d 459,
462 (Iowa 2014) (finding the title of the chapter and other provisions
instructive in statutory interpretation). As we noted in Rolfe State Bank,
we should be cautious of accepting a broad reading of a statute found in
a narrow area of the Code, calling such an approach “a trap for the
unwary.” 794 N.W.2d at 567.
Aside from the title of the chapter and of the section, we note the
language of Iowa Code section 615.1 specifically and repeatedly refers to
“judgments.” The first sentence refers to the expiration of two years from
the date of entry of “judgment,” exclusive of any time when the execution
on the “judgment” is stayed by bankruptcy or order of court, and then
states that a “judgment” is null and void, and that “no execution” shall be
issued, except as a setoff or counterclaim. Iowa Code § 615.1(1)
(emphasis added). The context of the specific section thus suggests that
9
“all liens shall be extinguished” is a reference to judgment liens and not
the underlying mortgage debt. See id.; Smith v. City of Fort Dodge, 160
N.W.2d 492, 497 (Iowa 1968) (emphasizing that interpretation of
“doubtful words may be ascertained by reference to the meanings of
words associated with them”).
In looking closely at the language of the statute, we recognize that
the legislature refers to “all liens,” a plural term, thus implying that more
than one lien may be extinguished. We note, however, that the
foreclosure of a mortgage may encumber multiple parcels of real estate
that give rise to multiple judgment liens. As a result, we do not think the
use of the plural term cuts against our interpretation of the statute.
Our caselaw under the predecessor to the current language in Iowa
Code section 615.1(1) supports our interpretation. In Berg v. Berg, we
emphasized that the legislature only limited the enforceability of
judgments and not the underlying debt. 221 Iowa 326, 327–28, 336, 264
N.W. 821, 822, 827 (1936). Then, in Beckett v. Clark, we unequivocally
endorsed the distinction, noting that if the legislature had intended to
abolish the underlying mortgage debt, it could have said so in clear
language. 225 Iowa 1012, 1017–18, 282 N.W. 724, 727 (1938). We
stated:
If it had been the purpose or intent of the legislature to
attain such a result [extinguishing the mortgage lien], it
would have been very easy to say so . . . by declaring that
any and all securities given for the debt sued on were also
barred in two years.
Id.The approach in Berg and Beckett appeared in subsequent cases.
In Dobler v. Bawden, we stressed that the predecessor of Iowa Code
section 615.1 was designed to provide “an exemption of certain forms of
10
judgment which otherwise would be entitled to the twenty-year period
provided by the general statute of limitations.” 238 Iowa 76, 83, 25
N.W.2d 866, 870 (1947). Similarly, in Hell v. Schult, we noted that the
purpose of the statute was to free a debtor “from the burden of years of
judgment liens.” 238 Iowa 511, 514–15, 28 N.W.2d 1, 3 (1947).
We note that in Monast v. Manley, we held that when a debt is
barred by the statute of limitations, the remedy upon the mortgage is
also barred. 228 Iowa 641, 645, 293 N.W. 12, 13 (1940). Monast,
however, did not involve an Iowa Code section 615.1(1) issue. Further,
the question in Monast was whether extinguishing the debt extinguished
the mortgage, not the statutory question of whether the expiration of the
special statute of limitations of Iowa Code section 615.1(1) extinguishes
the underlying debt or only the judgment lien arising from the
foreclosure judgment.
Against this caselaw backdrop, the legislature in 2006 enacted the
“all liens shall be extinguished” language that now appears in section
615.1(1). See 2006 Iowa Acts ch. 1132, § 2 (codified at Iowa Code
§ 615.1(2007)). Three years later, the legislature amended both Iowa
Code section 615.1(1) and Iowa Code section 654.17 in a single bill. See
2009 Iowa Acts ch. 51, §§ 2, 9 (codified at Iowa Code § 615.1 and
§ 654.17 (2011)). We assume that the legislature was aware of Berg,
Beckett, and their progeny when it enacted the new statutory language.
See Ackelson v. Manley Toy Direct, L.L.C., 832 N.W.2d 678, 688 (Iowa
2013) (noting “we presume the legislature is aware of our cases that
interpret its statutes”). We discern no legislative intent to overturn our
established approach to limitations on the enforcement of judgments
embraced in our caselaw.
11
We thus conclude that the best reading of Iowa Code section
615.1(1) (2013) is that the “all liens” language refers only to judgment
liens arising from a foreclosure proceeding in which the underlying
judgment becomes null and void by operation of the two-year limit
imposed by Iowa Code section 615.1(1). As a result, a mortgagee does
not lose all rights in the property upon the expiration of the two-year
period in Iowa Code section 615.1(1), but only the ability to enforce
judgment liens against the property obtained by the now null and void
judgment of foreclosure.
Callen makes one additional claim. Callen argues that the two-
year statute of limitations in Iowa Code section 615.1(1) not only means
that a foreclosure judgment cannot be enforced after two years but also
that a rescission of the foreclosure action is barred after two years as
well. Thus, Callen claims that by failing to seek rescission within two
years, U.S. Bank cannot seek it thereafter. Thus, the theory of Callen is
that after the passage of two years from the date of the judgment of
foreclosure, U.S. Bank is left with in personam remedies but no in rem
remedies. We expressly left this question open in Bank of America, 843
N.W.2d at 883 n.4.
Iowa Code section 615.1(1), however, by its terms relates only to
enforcing the foreclosure judgment, not rescission. Rescission is
governed by Iowa Code section 654.17(1). We must look to this provision
of the Code for determining when a rescission action may be brought by
a mortgagee.
In considering Iowa Code section 654.17(1), we must recognize that
while the judgment lien is null and void after the passage of two years
from the date of judgment, the mortgage indebtedness survives. Beckett,
225 Iowa at 1017–18, 282 N.W. at 727; Berg, 221 Iowa at 336, 264 N.W.
12at 827. Under Iowa Code section 654.17(1), an action for rescission of
the prior foreclosure may be brought within the period of time before the
“mortgagee’s rights” become “unenforceable by operation of the statute of
limitations.” We think the term “mortgagee’s rights” is broader than the
right to enforce a judgment lien referred to in Iowa Code section 615.1.
Instead, the construction of the term “mortgagee’s rights” that is most
consistent with our Beckett and Berg caselaw is that the phrase refers to
the rights arising from the underlying mortgage that survives the two-
year period. We think the legislature recognized the Berg and Beckett
type distinction when it used the broader phrase “mortgagee’s rights” in
Iowa Code section 654.17(1).
Further, we think the provisions of Iowa Code section 654.17(2)
reinforce our view. This provision provides, among other things, that
mortgagees who rescind judgments “subject to the provisions of section
615.1” are “permanently barred from a deficiency judgment.” Iowa Code
§ 654.17(2). In short, when a foreclosure judgment is subject to Iowa
Code section 615.1, the penalty under Iowa Code section 654.17(2) 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.
In sum, we conclude the statute of limitations for such
“mortgagee’s rights,” which govern the timeliness of rescission, is thus
not the two-year special statute of limitations for enforcement of
judgment liens created in Iowa Code section 615.1 but is instead either a
ten-year or twenty-year statute of limitations found in the Iowa Code.
See id. § 614.1(5) (requiring actions “founded on written contracts” be
13
brought within ten years); id. § 614.21 (barring actions to foreclose or
enforce any real estate mortgage after twenty years of the date thereon).
We are tasked with harmonizing the various sections of the statute
into a coherent whole. Nw. Bell Tel. Co. v. Hawkeye Tel. Co., 165 N.W.2d
771, 774 (Iowa 1969). We think all the various statutory provisions can
be made consistent with our caselaw and form a workable statutory
framework under our interpretation. We hold that the “all liens”
language in Iowa Code section 615.1(1) applies only to all judgment liens
and that 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.
IV. Conclusion.
For the above reasons, the order of the district court granting
summary judgment on behalf of the mortgagee U.S Bank is affirmed.
AFFIRMED.