Third Federal Savings & Loan Association of Cleveland Successor by Merger to Deepgreen Bank v. Randy L. Beltramea, L.L.C., and Randy L. Beltramea A/K/A Randy Lee Beltramea, Karen Spence State of Iowa-Department of Revenue and Finance United States of America-Internal Revenue Service Carol S. Beltramea, N/K/A Carol S. Dick James L. Cook June E. Cook Estate of James Ray Fisher Joanne Fisher Clarence Dowell Coburn Dorothy Jarman Coburn Discover Bank Alan Fisher Laura Fisher Alan Mahrer Nancy Mahrer James Turbett Shelly A. Beltramea, and Parties in Possession
16-1651
| Iowa Ct. App. | Jun 7, 2017Background
- Randy Beltramea obtained a home-equity line of credit in 2003 secured by a Cedar Rapids rental property; the lender (Deepgreen) later merged into Third Federal. By 2014 Randy was in default and Third Federal initiated foreclosure.
- Randy’s 1997 dissolution decree (modified in 1998, 2004, 2010) created a child-support obligation to his ex-wife Carol (now Carol Dick); Carol’s 2014 answer asserted there were outstanding child-support judgment liens against Randy and requested any surplus foreclosure proceeds be paid to junior lienholders.
- Randy initially denied Carol had any rights to the property, but on summary-judgment briefing he claimed Carol’s child-support liens were superior to Third Federal’s mortgage and asked the court to pay those liens from foreclosure proceeds.
- Third Federal moved for summary judgment establishing its superior interest; Carol did not press a claim asserting her lien’s superiority and did not participate further after counsel withdrew.
- The district court held Randy lacked standing to assert Carol’s rights and found Third Federal’s mortgage was senior to any child-support liens; summary judgment for Third Federal and the foreclosure decree were entered and the property sold at sheriff’s sale.
Issues
| Issue | Plaintiff's Argument (Randy) | Defendant's Argument (Third Federal) | Held |
|---|---|---|---|
| Whether Randy has standing to assert Carol’s claim that her child-support lien is superior to Third Federal’s mortgage | Randy, as the judgment debtor and interested party, may raise the priority of the child-support lien | Randy cannot assert Carol’s rights for her; Carol (third party) did not assert superiority and was not hindered from doing so | Randy lacks standing to assert Carol’s interests; he cannot litigate her jus tertii claim |
| Whether any child-support judgment lien is senior to Third Federal’s 2003 mortgage | Carol’s child-support interest (originating from 1997 decree) predates the mortgage and thus is superior | Any applicable child-support judgment liens either expired or are junior to the 2003 mortgage; Third Federal’s recorded mortgage has priority | Any delinquent support liens predating the mortgage expired (10-year lien life); liens arising after the mortgage are junior; Third Federal’s mortgage is superior |
| Whether Third Federal met its summary-judgment burden to show superior interest | Randy argued material facts exist regarding lien priority | Third Federal produced evidence of its recorded mortgage and argued Randy offered no admissible evidence to create a genuine issue | Court held Third Federal met its burden; Randy produced no evidence creating a genuine issue of material fact |
| Whether foreclosure proceeds should be escrowed pending resolution of support lien priority | Randy requested escrow to preserve potential rights of Carol | Third Federal opposed; foreclosure proceeded without supersedeas bond and sale occurred | Motion to escrow denied; sale was not stayed and proceeds were not held pending further resolution |
Key Cases Cited
- Powers v. Ohio, 499 U.S. 400 (1991) (third-party standing requires injury in fact, close relation, and hindrance to third party’s ability to sue)
- Hollingsworth v. Perry, 570 U.S. 693 (2013) (litigants generally must assert their own legal rights; cannot rest a claim on third parties’ rights)
- Atkin v. Westfall, 69 N.W.2d 523 (Iowa 1955) (plaintiff need only show title superior to defendant, not title good against whole world)
- Schuling v. Tilley, 454 N.W.2d 899 (Iowa Ct. App. 1990) (unpaid child-support judgment creates a lien but that lien is subject to prior recorded liens)
- First State Bank v. Kalkwarf, 495 N.W.2d 708 (Iowa 1993) (prior recorded mortgage has priority over subsequently recorded or filed liens even with actual notice)