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IN THE COURT OF APPEALS OF IOWA No. 1-826 / 11-0542 Filed December 21, 2011

BANK OF THE WEST, Successor-inInterest to COMMERICAL FEDERAL BANK, Plaintiff-Appellee, vs. AIRPORT PLAZA, L.L.C., JODY M. WALTERS, DANIEL J. STANBROUGH, and PARTIES IN POSSESSION, Defendants, and DAVID M. WALTERS, Defendant-Appellant. ________________________________________________________________ Appeal from the Iowa District Court for Polk County, Eliza J. Ovrom, Judge.

David Walters appeals from an order determining Iowa Code section 628.4 (2011) applied to bar his redemption rights to certain real property. REVERSED AND REMANDED WITH DIRECTIONS.

Jerrold Wanek of Garten & Wanek, Des Moines, for appellant. Jonathan Kramer of Whitfield & Eddy, P.L.C., Des Moines, for appellee.

Considered by Vaitheswaran, P.J., and Potterfield and Doyle, JJ.

2 DOYLE, J. David Walters, a judgment debtor, appeals the district court's order determining Iowa Code section 628.4 (2011) applied to bar his redemption rights to certain real property after a stay of execution on the judgment had been entered. Because David was not a party who stayed execution on the judgment and because the statute does not contemplate "de -facto" stays, we conclude, under the record before us, section 628.4 is inapplicable to David, and we therefore reverse and remand with directions. I. Background Facts and Proceedings. David and Jody Walters each executed commercial guarantees guaranteeing payment of indebtedness of Airport Plaza, L.L.C. to Bank of the West. Bank of the West obtained a default judgment against Airport Plaza,

L.L.C. in a foreclosure action. After a bench trial, the Walterses were determined to be liable to Bank of the West for the debt they guaranteed, and on December 14, 2009, Bank of the West obtained a $2,021,203.24 judgment against the Walterses. In January 2010, Jody filed a Chapter 7 bankruptcy petition in federal bankruptcy court. She then filed a notice of bankruptcy in the foreclosure action in district court. The district court subsequently entered an order staying all

proceedings until further order of the court. In October 2010, Bank of the West filed a motion to vacate the stay and to determine the period of redemption. It claimed Jody received her discharge in bankruptcy and there was no further need for the stay. It alleged the Walterses jointly owned certain real property in Pleasant Hill, Iowa, and collection against

3 the property was stayed by Jody's bankruptcy filing and the district court's "much broader stay of collection efforts against all defendants." Further, Bank of the West alleged David's fraudulent conduct in holding assets in the name of others and inaccurate testimony given at his judgment debtor exami nation "operated as a stay." Bank of the West requested the court to apply Iowa Code section 628.4 and declare the Walterses had no period of redemption on the Pleasant Hill property. In response to the motion, the Walterses moved to strike, claiming only the stay in bankruptcy had been extended. The district court continued the stay as to Jody, finding Jody indicated a stay remained in place as to the determination of her rights. However, the court found there was no such order regarding the other defendants, including David, and it lifted the stay regarding judgment execution as against all other defendants. ordered: Because there was a stay entered in this matter, the court finds that Iowa Code section 628.4 is applicable as against [David] and that he shall have no period of redemption regarding the [Pleasant Hill] property in the event such property is eventually sold at execution sale pursuant to this judgment. David appeals. II. Discussion. This appeal requires an interpretation of Iowa Code section 628.4. Asserting he did not file the petition in bankruptcy and did not request the stay entered by the district court, David argues section 628.4 is not applicable to him and the district court erred in so finding. Additionally, the court

4 We "review for correction of errors at law the district court's interpretation of applicable statutes." Schneider v. State, 789 N.W.2d 138, 144 (Iowa 2010). When tasked with interpreting a statute: [O]ur primary goal is to give effect to the intent of the legislature. That intent is evidenced by the words used in the statute. When a statute is plain and its meaning clear, courts are not permitted to search for meaning beyond its express terms. In the absence of legislative definition, we give words their ordinary meaning. Anderson v. State, 801 N.W.2d 1, 3 (Iowa 2011) (internal citations and quotations omitted). Section 628.4 bars the redemption rights of a party who has stayed execution on the judgment. Specifically, Iowa Code section 628.4 reads: "A party who has stayed execution on the judgment is not entitled to redeem." This statute has been a part of the Iowa Code since 1873. See Farmers Trust & Sav. Bank v. Manning, 359 N.W.2d 461, 464 (Iowa 1984). It has been said that the provisions of this section are "so plain that there is no room for construction." Dobbins v. Lusch, Carton & Co., 53 Iowa 304, 308, 5 N.W. 205, 208 (1880). Our supreme court has further stated: Because of the clear legislative mandate, the statutory right of redemption is barred whenever the debtor secures a stay of execution on the judgment, regardless of how the stay is obtained. It is clear the intent of section 628.4 is that a debtor who obtained a stay order should not be entitled to have the benefits of both the delay of the foreclosure sale and the statutory right of redemption. Hawkeye Bank & Trust N.A. v. Milburn, 437 N.W.2d 919, 923 (Iowa 1989). The right of redemption and the right to stay proceedings pending an appeal are "purely creatures of statute." First Nat'l Bank v. Matt Bauer Farms Corp., 408 N.W.2d 51, 53 (Iowa 1987). "A stay may be given by statute, or effect uated by

5 order of court or by agreement of the parties." Id. at 54. An automatic stay resulting from the filing of a voluntary petition in bankruptcy is a stay under section 628.4. Id. at 55. It is against this backdrop that we review the appeal before us. There is no dispute that stays of execution stopping or arresting execution on the judgment were obtained; one given by bankruptcy statute1 and the other by order of the district court. Having concluded section 628.4 was applicable to David, the district court implicitly and necessarily found David was a party who secured or obtained a stay of execution on the judgment.2 But David was not a party to Jody's bankruptcy filing that resulted in an automatic stay of collection and other actions against Jody and the Walterses' jointly owned Pleasant Hill property. Jody was the only debtor listed in the bankruptcy proceeding. And it was only Jody, not David, who filed the notice of bankruptcy in the federal Iowa district court. In response thereto, the district court entered an order staying all proceedings in this action until further order of the court. There is nothing in the record to indicate David requested or caused entry of this broader stay of collection efforts against all defendants. It was Jody, not David, who obtained or secured the stays. Accordingly, under its plain language, Iowa Code section 628.4 is not applicable as against David under the record presented in this case, and the district court erred in so finding. However, our inquiry does not end here.

See 11 U.S.C.

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