Nash Finch Co. v. Corey Development, Ltd.

Summary

The Iowa Supreme Court answered a certified question concerning whether a creditor may file a deed in lieu of foreclosure under a forbearance agreement and then pursue further recovery for the remaining debt. The court held that the parties' agreement permitted further remedies because the deed was accepted in partial satisfaction of the note and the creditor reserved its rights. The extent of the satisfaction attributable to the deed was left for determination by the trial court.

Holdings

1. As a matter of law, a mortgagee or creditor may pursue further remedies against a defaulting debtor after filing a deed in lieu of foreclosure when the parties' agreement provides that the deed is only in partial satisfaction of the debt and reserves the creditor's rights under the note or mortgage.
2. The deed only partially extinguished the underlying debt under the parties' agreement, but the extent of the satisfaction could not be determined as a matter of law on the record and must be determined by a trial court.

Questions Presented

1. Whether a creditor may accept and file a deed in lieu of foreclosure pursuant to a forbearance agreement and then pursue further remedies, including a deficiency judgment, when the agreement states that the deed is in partial satisfaction of the debt and reserves the creditor's other rights.
2. Whether the Iowa foreclosure statutes, particularly Iowa Code sections 654.1 and 654.18, preclude the parties from contracting for further remedies after filing a deed in lieu of foreclosure.
3. Whether the Iowa Supreme Court could determine as a matter of law the extent to which the filed deed satisfied the underlying debt.

Disposition

other