Iowa Mortgage Center, L.L.C. v. Lana Baccam and Phouthone Sylavong
2013 Iowa Sup. LEXIS 129
| Iowa | 2013Background
- IMC loaned Baccam and Sylavong $52,000 with a 20% interest rate, evidenced by a loan agreement and promissory note signed May 22, 2009.
- IMC disbursed loan proceeds directly to the borrowers' creditors at their direction and used a loan payment schedule to describe repayment.
- Forty-two payments were received by IMC from May 22 to September 18; no payments were made after September 18.
- IMC sought $41,568.65 principal and $355.89 for escrow payments, plus interest and fees; the district court reserved the escrow issue as unrelated to the appeal.
- The district court bench trial found IMC failed to prove the contract terms and failed to prove damages, and IMC appealed.
- Iowa Court of Appeals affirmed the district court on contract/damages issues but IMC sought Supreme Court review, which granted further review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a contract existed between IMC and borrowers | IMC proved contract terms via loan agreement and promissory note; stipulations establish existence. | Disputed reliance on signatures and terms; no binding contract proven at trial. | Yes; contract existence established as a matter of law. |
| Proper burden of proof for breach and damages on the loan | IMC possession of note creates presumption of nonpayment; borrower must prove any payment defense if IMC proves balance due. | District court correctly required IMC to prove breach and damages. | District court applied wrong burden; remanded to apply correct burden and determine breach and damages. |
Key Cases Cited
- Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222 (Iowa 1998) (elements of breach-of-contract claim outlined)
- In re Estate of Rutter, 633 N.W.2d 740 (Iowa 2001) (presumption of nonpayment when holder possesses note)
- Graen’s Mens Wear, Inc. v. Stille-Pierce Agency, 329 N.W.2d 295 (Iowa 1983) (interpretation of stipulations of fact)
- Boyle v. Alum-Line, Inc., 710 N.W.2d 741 (Iowa 2006) (remand for findings of fact consistent with opinion)
- Iowa Dept. of Human Servs. v. NevadaCare, Inc., 783 N.W.2d 459 (Iowa 2010) (standard of review for breach of contract; corrections of law)