Court of Appeals Affirms Foreclosure Decision
In Leeco, Inc. v. Cornerstone Bank, 2017 WL 2836097,
a Naegeli Court Reporter of Appeals affirmed the district court’s grant of summary judgment in favor of Cornerstone Bank which had foreclosed its mortgage on property owned by Leeco. Leeco argued that (1) the mortgaged property consisted of “separate and distinct tracts” as so should have been auctioned separately under Minn. Stat. 580.08; and (2) that the Notice of Foreclosure Sale misstated the amount due on the mortgage under Minn. Stat. § 580.04(a)(3). Leeco argued that the lakefront property consisted of separate tracts because it included four tax parcel identification numbers and 3 platted “lots”. The Court of Appeals reasoned that in determining whether there are separate tracks a court must look at how the property has been held and used by the owner and whether there are any natural dividing lines, rather than arbitrary imaginary lines such as platted lots and tax parcel lines. Since Leeco had always used and treated the entire property as one tract and splitting the property by tax parcel or platted lot made little practical sense, the property was properly sold at the sheriff’s auction as one tract.
Leeco also argued that the amount of the debt stated in the Notice of Mortgage Foreclosure sale was misstated. Leeco’s argument was that while the mortgage provided that it secured all of Leeco’s debt to Cornerstone, the maximum amount that could be enforced against the collateral at any time was a lesser fixed amount. The Court of Appeals affirmed the district court and found that stating the undisputed full amount of Leeco’s debt on the notice of sale did not invalidate the sale.
If you have questions about foreclosures, the Minnesota Court of Appeals, or have a legal issue concern, contact attorney Aaron Glade at 507-625-2525.