WELLS FARGO BANK, N.A., Plaintiff-Appellant, vs. TROY D. HUDSON and JODI HUDSON, Defendants-Appellees.
Annotate this Case
Download PDF
IN THE COURT OF APPEALS OF IOWA
No. 7-501 / 06-1941
Filed October 24, 2007
WELLS FARGO BANK, N.A.,
Plaintiff-Appellant,
vs.
TROY D. HUDSON and JODI HUDSON,
Defendants-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Richard Blane,
Judge.
Plaintiff appeals district court’s grant of summary judgment for defendants
and dismissal of plaintiff’s foreclosure petition. AFFIRMED.
David Erickson and Tara Hall of Davis, Brown, Koehn, Shors & Roberts
Law Firm, Des Moines, for appellant.
Robert Nading of Nading Law Firm, Ankeny, for appellees.
Heard by Sackett, C.J., and Huitink and Vogel, JJ.
2
SACKETT, C.J.
The district court dismissed on summary judgment Wells Fargo Bank’s
(Wells Fargo) petition for foreclosure of a real estate mortgage on property
owned by defendant Troy D. Hudson. The court found the undisputed facts to be
that (1) the property at the time the mortgage was given was the homestead of
Troy and his wife, defendant Jodi Hudson, and (2) Jodi Hudson had not signed
either the note or the mortgage. Under these facts in applying Iowa Code section
561.13 (2005), the district court found the mortgage was null and void.
On
appeal Wells Fargo contends (1) the district court erred in granting summary
judgment, and (2) Wells Fargo should have been found to have an equitable
mortgage or equitable lien on the property. We affirm.
I.
BACKGROUND.
On December 28, 2004 Troy executed and delivered to Wells Fargo Bank
a promissory note in the principle sum of $185,500. As security for the note
Troy, representing himself as a married person, signed and delivered to Wells
Fargo a mortgage on certain real estate locally known as 1590 Northeast 70th
Avenue in Ankeny, Iowa. The mortgage was duly recorded in the office of the
Polk County Recorder. Jodi’s signature does not appear on either the note or the
mortgage.
The mortgage provided that in case of default on the note, Wells Fargo
could declare the entire principal and accrued interest due and payable, exercise
its right to enforce payment of the note, and foreclose the mortgage.
On July 6, 2006 Wells Fargo filed a petition in equity contending Troy was
in default on the note, deeming it due and payable, and seeking foreclosure of
3
the mortgage. The Hudsons answered, raising as an affirmative defense that the
property was a homestead.
Both parties filed motions for summary judgment. Wells Fargo’s motion
was dismissed after a hearing. The Hudsons contended the action should be
dismissed because the mortgage held by Wells Fargo was void as to both of
them; for at the time of the encumbrance, the property was a homestead and
Jodi did not sign the mortgage. An affidavit by Jodi was filed wherein she stated
she was Troy’s lawful wife and had been his wife since before Troy obtained any
interest in the real estate in question. She further stated she has resided on the
property with her husband and children since before Troy gave the mortgage to
Wells Fargo. In addition, she stated she never signed a document conveying
any interest she might have in the property to Wells Fargo. Troy also filed an
affidavit wherein he stated that he was the owner of the property and it had been
his homestead when he signed the note and mortgage. The mortgage’s terms
required Hudson to occupy the property as his principle residence unless Hudson
obtained Wells Fargo’s consent.
Wells Fargo did not dispute these facts.
Rather, they contended that they were entitled to an equitable mortgage or
equitable lien on the property.
The district court found the mortgage void, dismissed the foreclosure
action without prejudice, and refused to establish an equitable mortgage or
equitable lien in Wells Fargo’s favor.
4
II.
SCOPE OF REVIEW.
Our review of a grant of summary judgment is for correction of errors of
law. Wiedmeyer v. Equitable Life Assurance Soc'y of U.S., 644 N.W.2d 31, 33
(Iowa 2003).
III.
SUMMARY JUDGMENT.
Wells Fargo contends the district court erred in granting the motion for
summary judgment because they do not have an adequate remedy at law
because a lien cannot attach to the Hudsons’ homestead.
Summary judgment is appropriate only when the moving party shows
there are no genuine issues of material fact. Wright v. Am. Cyanamid Co., 599
N.W.2d 668, 670 (Iowa 1999). We examine the record in the light most favorable
to the party opposing summary judgment.
Kelly v. Iowa Mut. Ins. Co., 620
N.W.2d 637, 641 (Iowa 2001).
The burden is on the party moving for summary judgment to prove the
facts are undisputed. Kolarik v. Cory Int’l Corp., 721 N.W.2d 159, 162 (Iowa
2006). A party seeking summary judgment must show “there is no genuine issue
as to any material fact and that the moving party is entitled to a judgment as a
matter of law.” Iowa R. Civ. P. 1.981(3). A genuine issue of material fact is
present if reasonable minds could differ on how the issue should be resolved.
Christy v. Miulli, 692 N.W.2d 694, 699 (Iowa 2005). In considering whether the
moving party has met its burden, we view the record in the light most favorable to
the nonmoving party. Eggiman v. Self-Insured Servs. Co., 718 N.W.2d 754, 758
(Iowa 2006).
If the moving party has met its burden to show there are no
genuine issues of material fact, the nonmoving party must set forth specific facts
5
to show a genuine factual issue exists. K & W Elec., Inc. v. State, 712 N.W.2d
107, 112 (Iowa 2006).
In a mortgage foreclosure action where the facts are not in dispute,
summary judgment may be appropriate. Willow Tree Inv., Inc. v. Wagner, 453
N.W.2d 641, 642 (Iowa 1990).
However, where rational minds could draw
different inferences from the facts, summary judgment in a foreclosure action is
not appropriate. First Nat’l Bank v. Kinney, 454 N.W.2d 589, 592 (Iowa 1990).
“Homestead rights are jealously guarded by the law.” Iowa State Bank &
Trust Co. v. Michel, 683 N.W.2d 95, 101 (Iowa 2004); Merchants Mut. Bonding v.
Underberg, 291 N.W.2d 19, 21 (Iowa 1980).
Iowa Code section 561.13 provides:
A conveyance or encumbrance of, or contract to convey or
encumber the homestead, if the owner is married, is not valid,
unless and until the spouse of the owner executes the same or a
like instrument, or a power of attorney for the execution of the same
or a like instrument, and the instrument or power of attorney sets
out the legal description of the homestead.
The purpose of this section governing “conveyance or encumbrance” of
the homestead is to prevent the destruction of homestead rights of married
persons, except in the manner prescribed by statute. Wright v. Flatterich, 225
Iowa 750, 756, 281 N.W. 221, 224 (1938). The homestead right is peculiarly
favored, and there can be no operative conveyance or effectual release of the
exemption, unless the mode pointed out by section 561.13 is pursued with
reasonable strictness. See Pagel v. Tietje, 193 Iowa 467, 469, 186 N.W. 938,
939 (1922).
The statute providing that conveyance or encumbrance of the
homestead, if the owner is married, is not valid unless and until the owner’s
spouse executes the same or a like instrument, makes a deed invalid. Martin v.
6
Martin, 720 N.W.2d 732, 736-37 (Iowa 2006). It is void without the signature of
both spouses, not merely voidable by the spouse who did not sign. Id.; see also
Thayer v. Sherman, 218 Iowa 451, 458, 255 N.W. 506, 509 (1934).
The
legislative provision is for the benefit of all who are interested in the homestead,
the husband, the wife, and the children. See generally Lunt v. Neeley, 67 Iowa
97, 98, 24 N.W. 739, 739 (1885) (naming widower and children as plaintiffs in an
action asserting homestead rights to property wife alone had assigned).
The undisputed facts are that at the time the mortgage was given, Troy’s
wife did not sign the mortgage on the property which was the parties’ homestead.
The mortgage was void as to both parties. See Martin, 720 N.W.2d at 736. The
district court did not err in dismissing Wells Fargo’s petition to foreclose the
mortgage.
IV.
EQUITABLE MORTGAGE OR LIEN.
Wells Fargo next contends they have no adequate remedy at law and that
they should have an equitable mortgage or an equitable lien.
There is some authority for the granting of a limited lien under
circumstances similar to these. The North Dakota Supreme Court in Red River
State Bank v. Reierson, 533 N.W.2d 683, 685 (N.D. 1995), affirmed a finding that
a mortgage was unenforceable against homestead property because the
homestead exemption waiver clause in the mortgage was not printed in a
conspicuous manner. However, the court also found a trial court did not abuse
its discretion in granting the Bank an equitable lien on the homestead subject to
the homestead exemption so long as the debtors occupied the property as a
homestead. Red River, 533 N.W.2d at 685.
7
However, the Iowa Supreme Court reached a different result in Iowa State
Bank & Trust Co. v. Michel, 683 N.W.2d 95, 98 (Iowa 2004), where they
addressed a challenge to a trial court’s granting a lender an equitable mortgage
under somewhat similar circumstances. Phillip and Marci Michel, husband and
wife, as security for a loan, gave a mortgage on property determined to be an
agricultural homestead. Michel, 683 N.W.2d at 98-99. The Michels waived their
statutory homestead exemption but did not sign the agricultural homestead
disclosure required by Iowa Code section 561.22 (1997). Id. at 99. In rejecting
the lender’s argument that granting of the equitable mortgage should be affirmed,
the court reasoned that courts of equity are bound by statues and follow the law
in absence of fraud or mistake. See id. at 107 (citing Mensch v. Netty, 408
N.W.2d 383, 386 (Iowa 1987)). The court recognized that while its conclusion in
the case may result in a grave injustice to the lender, a court of equity cannot
expand its jurisdiction to completely override statutes or ignore established
doctrines. Id.; see also Alvis v. Alvis, 123 Iowa 546, 551-54, 99 N.W. 166, 16869 (1904) (rejecting theories of constructive trust and subrogation and finding a
conveyance unenforceable because the grantor’s spouse failed to sign a deed as
required for waiver of the spouse’s homestead rights despite the spouse’s
apparent later ratification of the conveyance). Such a rule preserves the integrity
of the legislature’s judgment that certain transactions will be given effect only if
they comply with the requirements set out in a statute. Michel, 683 N.W.2d at
107.
The mortgage clearly identified Troy Hudson as a married man. His wife,
Jodi Hudson, neither signed nor ratified the mortgage on property which was
8
their homestead. There is no basis to establish an equitable mortgage or lien
and we decline Wells Fargo’s invitation to do so.
Having so decided we have also found there is no basis for Wells Fargo’s
argument that they should have equitable relief because they have no remedy at
law. Even if the argument were valid, Wells Fargo does have a legal remedy.
They can bring suit against Troy on the promissory note. We affirm the granting
of the summary judgment.
AFFIRMED.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
