Bank of America, N.A. v. Schulte
2014 Iowa Sup. LEXIS 22
Iowa2014Background
- Bank sought rescission of foreclosure under Iowa Code § 654.17 nearly two years after judgment and filed a motion to set aside the decree; An ex parte order set aside the foreclosure decree after notice; Schulte and Del Valle argued notices of rescission and the motion were time-barred under Iowa Rules of Civil Procedure 1.1012/1.1013; District court held a two-year limitations period under Iowa Code § 615.1 applied and granted rescission; Bank paid filing fees and served notices; Schulte and Del Valle appealed; the court affirmed.
- Bank of America sought rescission before the sheriff’s deed was recorded and before mortgage rights became unenforceable; notices of rescission were served and filings completed within applicable periods; the district court granted the motion to set aside the decree; Schulte and Del Valle opposed on timeliness and service grounds; the court analyzed the interplay between Rule 1.1012/1.1013 and § 654.17, and ultimately found timely rescission under § 615.1; the judgment was affirmed.
- The August 17, 2010 foreclosure decree was rescinded under § 654.17; the two-year period of § 615.1 applied to timing; the mortgage remained enforceable after rescission; the case was properly before the court; error preservation issues regarding substitution and constitutional challenges were not preserved for review; the district court’s interpretation and timing were sustained.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper limitations for rescission under § 654.17(1) | Schulte: 1.1013 applies (one-year limit). | Bank: § 615.1 two-year limit governs. | Two-year limit applies; not limited to § 1.1013 |
| Relation of rescission to § 1.1012/1.1013 vs § 654.17 | Rescission follows § 1.1013 timing. | Rescission is independent of § 1.1012/1.1013; operates upon filing. | § 654.17 not bound by § 1.1013 timing; rescission effective upon filing |
| Effect of rescission on rights and mortgage | If timely, decree setting aside and mortgage remain; rights unchanged. | Rescission voids foreclosure and restores status quo. | Rescission restores enforceability of mortgage as of filing |
| Preservation of substitution and constitutional claims | Substitution and due process issues preserved for review. | Issues not properly preserved; district court ruling silent on substitution. | No error preserved; issues not reviewable |
Key Cases Cited
- Holmes v. Polk City Sav. Bank, 278 N.W.2d 32 (Iowa 1979) (vacatur timing not controlling for rescission)
- In re Estate of Falck, 672 N.W.2d 785 (Iowa 2003) (error preservation and appellate review principles)
- Meier v. Senecaut, 641 N.W.2d 532 (Iowa 2002) (error preservation doctrine)
- Lacina v. Maxwell, 501 N.W.2d 531 (Iowa 1993) (statutory interpretation context for limitations)
- State v. Mulvany, 600 N.W.2d 291 (Iowa 1999) (error preservation and constitutional issues context)