U.S. Bank, N.A. v. Howie
280 P.3d 225
| Kan. Ct. App. | 2012Background
- James W. Howie executed a promissory note to U.S. Bank for $151,600, signed by James only.
- Georgia Howie and James mortgaged property in Ottawa, Kansas, with MERS as the mortgagee acting as nominee for Lender and successors.
- James died in 2008, leaving Georgia as survivor; Georgia stopped payments and Note defaulted by 2009.
- U.S. Bank assigned the Mortgage from MERS in 2009 and filed a mortgage foreclosure petition; U.S. Bank sought only in rem relief against the Property.
- Georgia moved for summary judgment arguing lack of personal liability, failure to timely demand under K.S.A. 59-2239(1), and severed Note from Mortgage; district court denied and later granted summary judgment for U.S. Bank.
- On appeal, court addressed (i) applicability of K.S.A. 59-2239(1), and (ii) whether a severance of Note and Mortgage occurred, considering MERS’s agency status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of K.S.A. 59-2239(1) to foreclose the Mortgage | Howie argues debt extinguished due to no demand after death. | U.S. Bank contends statute exempted liens existing at decedent’s death; not applicable here since no money judgment sought. | K.S.A. 59-2239(1) inapplicable; statute does not bar foreclosure. |
| Whether Note and Mortgage were severed; standing to foreclose | Mortgage and Note severed because held by different entities; foreclosing entity cannot proceed. | MERS held Mortgage as nominee; no severance; U.S. Bank holds both Note and Mortgage; may foreclose. | No severance; agency relation exists; MERS acted as agent; foreclosure permitted. |
| Existence of agency relationship between MERS and U.S. Bank | Argues Landmark shows MERS not agent when separate interests; no agency thus severed. | Mortgage language creates express agency; MERS as nominee indicates agency; Martinez supports agency finding. | Agency exists; MERS acted as agent; Note and Mortgage not severed. |
Key Cases Cited
- Landmark Nat'l Bank v. Kesler, 289 Kan. 528 (2009) (splitting mortgage and note requires agency; MERS acts as lender's agent)
- Landmark Nat'l Bank v. Kesler, 216 P.3d 158 (2009) (supreme court decision cited for agency concept)
- Graham v. Mortgage Elec. Registration Sys., Inc., 44 Kan. App. 2d 547 (2010) (MERS as nominee; lack of agency affects standing)
- Kuxhausen v. Tillman Partners, 291 Kan. 314 (2010) (de novo review on no-fact-dispute summary judgment; agency context)
- Osterhaus v. Toth, 291 Kan. 759 (2011) (summary judgment standard and appellate review guidance)
- Robbins v. City of Wichita, 285 Kan. 455 (2007) (affirming outcomes when grounds support decision)