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IN THE COURT OF APPEALS OF IOWA No. 2-368 / 11-1389 Filed June 27, 2012

WELLS FARGO BANK, N.A., SUCCESSOR, Plaintiff-Appellee, vs. KATHLEEN M. VETICK, JOHN R. VETICK, PREMIER CREDIT UNION and PARTIES IN POSSESSION, Defendants-Appellants. ________________________________________________________________

Appeal from the Iowa District Court for Polk County, Donna L. Paulsen, Judge.

Kathleen and John Vetick appeal from the district court ruling granting summary judgment to the bank in this mortgage foreclosure action. AFFIRMED.

Jeffrey M. Lamberti and Stacey C. Rogers of Block, Lamberti & Gocke, P.C., Ankeny, for appellants. Sarah K. Franklin, Christopher S. Talcott, and David M. Erickson of Davis, Brown, Koehn, Shors & Roberts, P.C., Des Moines, for appellee.

Heard by Eisenhauer, C.J., and Potterfield and Mullins, JJ.

2 POTTERFIELD, J. Kathleen and John Vetick appeal from the district court ruling granting summary judgment to Wells Fargo Bank in this mortgage foreclosure action. Because there is no dispute that both Kathleen and John signed the mortgage and that Kathleen is in default on the loan she has with the bank, the bank is entitled to judgment as a matter of law. We reject the Veticks' Iowa Rule of Civil Procedure 1.943 two-dismissal argument. We affirm the district court. I. Background Facts and Proceedings. The following facts are not in dispute. On June 30, 2003, Kathleen Vetick alone executed a promissory note in favor of the lender (Wells Fargo Home Mortgage, Inc., predecessor in interest to Wells Fargo Bank). The principal amount of the note was $185,962; interest was set at 5.00%; and monthly payments were in the amount of $1470.58. A notarized purchase money mortgage was signed by "Kathleen M. Vetick, Borrower," and "John R. Vetick, Borrower," which include s these provisions: DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. .... (D) "Note" means the promissory note signed by Borrower and dated JUNE 30, 2003. The Note states that Borrower owes Lender ONE HUNDRED EIGHTY FIVE THOUSAND NINE HUNDRED SIXTY TWO AND 00/100 Dollars . . . plus interest. . . . .... This Security Instrument secures to Lender: (i) repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under the Security Instrument and the Note. For this

3 purpose, Borrower irrevocably mortgages, grants and conveys to lender, with power of sale, the following described property [in Polk City, Iowa] . . . . .... BORROWER COVENANTS that Borrower is lawfully seised of the state hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. .... 13. Joint and Several Liability; Co-signers, Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument ; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent. .... IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE, NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it. (Italics added.) John Vetick's name appears below, with the designation

"Borrower" under the signature line. The mortgage was recorded on September 15, 2003. On February 8, 2008, the bank filed a foreclosure petition, which was dismissed after the Veticks entered into a "Special Forbearance Agreement" on March 28, 2008, and a June 27, 2008 loan modification, which resulted in the

4 Veticks' payment default being eliminated, the monthly payment obligations reduced, and the maturity date of the promissory note extended. The Veticks stopped making payments under the terms of the 2008 loan modification agreement on December 1, 2008. On April 13, 2009, the bank filed a second foreclosure petition, which was dismissed after a prior lien on the real estate was discovered. On October 5, 2010, the bank filed the instant foreclosure petition asserting an unpaid principal of $141,525.87 plus interest, late charges, and other fees and costs. The Veticks answered and admitted the following allegations of the petition were true: 7. To secure payment of the [June 30, 2003] Note, the Defendants, John R. Vetick and Kathleen M. Vetick, executed and delivered to Wells Fargo Home Mortgage, Inc. one certain Mortgage dated June 30, 2003, which Mortgage was filed on September 15, 2003, . . . upon [certain real estate]. 8. A copy of the Mortgage together with the Recorder's certificate thereon is attached hereto as Exhibit "B" and by this reference incorporated herein. 9. The Mortgage and Note provide that in case of default the holder may declare the entire principal and the interest accrued thereon due and payable and the Mortgage maybe foreclosed. 10. The Defendant, Kathleen M. Vetick, has failed to pay the Note and interest thereon as provided by the terms of the Note. Exhibit B, the mortgage, bears a county recorder stamp from September 15, 2003. The bank filed a motion for summary judgment. submitted in support of the motion: The following were

three pre-2003 mortgages on the same

property, and a document entitled "Business Acknowledgments, Agreements and Disclosures" signed by both Veticks on June 16, 2003. Above John Vetick's

5 signature on the business acknowledgement is a certification that the "undersigned mortgagors, have executed the Mortgage/Deed of Trust in order to pledge our interest in the mortgaged property as security for the mortgage loan given to the Borrowers." Also included in that document is a grant of a limited power of attorney to the lender "to correct and initial all typographical or clerical errors discovered in any of the closing documents executed by me/us." The bank also submitted the June 27, 2008 loan modification agreement that incorporated the terms of the parties' forbearance agreement, as well as a detailed list of payments made on the loan. The Veticks resisted, generally disputing the amount due as well as contending Exhibit B was not an accurate copy of the mortgage they signed on June 30, 2003, and the mortgage was invalid in any event. Paragraph (B) of the "Definitions" section of the Bank's Exhibit B reads, "`Borrower' is JOHN R VETIK AND KATHLEEN M VETIK, HUSBAND AND WIFE." The Veticks provided a copy of the mortgage, in which Paragraph (B) of the "Definitions" section reads: "`Borrower' is KATHLEEN M VETICK, A MARRIED PERSON." Kathleen Vetick submitted an affidavit that certified, "I have reviewed the Statement of Disputed Facts filed simultaneously herewith and the information contained therein is true and correct." On May 25, 2011, a hearing was held on the motion for summary judgment at which the Veticks were informed by the court that their affidavit was insufficient to resist the summary judgment. They were granted more time to provide the court with material disputed facts.

6 The Veticks then filed a cross-motion for summary judgment, contending the bank had "filed in this court nearly identical foreclosure actions against the Veticks on the same note and mortgage" both of which were voluntarily dismissed. They argued that pursuant to Iowa Rule of Civil Procedure 1.943, the second dismissal operated as an adjudication against the bank on the merits and precluded foreclosure "now or in the future" and required "the mortgage be released from the property." Kathleen and John submitted affidavits stating they were each a defendant in two earlier foreclosure actions brought by the same lender, both of which were voluntarily dismissed. Following a hearing, the district court granted the bank's motion for summary judgment and denied the Veticks' cross-motion for summary judgment. The court rejected the Veticks' contentions that oral representations modified the terms of the loan agreement, pointing out the mortgage specifically provided that the terms could only be changed "by another written agreement ."1 The court noted the Veticks had conceded at the hearing that the bank had correctly stated the amount due to the bank. The court then concluded that no genuine issue of material fact existed to support the Veticks' claim that the mortgage was invalid : The Veticks do not dispute that John Vetick actually signed the same mortgage that Kathleen signed. Immediately above John Vetick's signature, as "Borrower," is his affirmation that he "accepts and agrees to the terms and covenants" contained within the Mortgage. This includes the agreement to "mortgage, grant and convey" interest in the subject real estate." Both John and Kathleen Vetick affirmed this intention by contemporaneously
A written modification is also required by Iowa Code section 535.17 (2007), the code in effect at the time the parties executed the loan modification. Section 535.17(2) provides in part, "When a modification is required by this section to be in writing and signed, such requirement cannot be modified except by clear and explicit language in a writing signed by the person against whom the modification is to be enforced."
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7 signing separate Business Acknowledgements, Agreement, and Disclosures certifying "that the undersigned mortgagors, have executed the Mortgage/Deed of Trust in order to pledge our interest in the mortgaged property as security for the mortgage loan given to the Borrowers." Not only did the Veticks execute this mortgage, they executed three prior mortgages pledging their interest in favor of the Lender. The court determined that even if the bank had changed the definitions portion of the first page of the mortgage as asserted by the Veticks, John Vetick executed "the same or like instrument" as Kathleen, as required by Iowa Code section 561.13.2 As to the Veticks' contention that civil procedure rule 1.943 required that the 2009 voluntary dismissal precluded the bank's instant foreclosure petition, the court ruled that the second lawsuit in 2009 was "based on the modified agreement and later defaults," and was not "based on the same cause" as the 2008 action or the earlier defaults. The Veticks now appeal.

Prior to the 2011 Code, section 561.13 read: 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. However, when the homestead is conveyed or encumbered along with or in addition to other real estate, it is not necessary to particularly describe or set aside the tract of land constituting the homestead, whether the homestead is exclusively the subject of the contract or not, but the contract may be enforced as to real estate other than the homestead at the option of the purchaser or encumbrancer. If a spouse who holds only homestead rights and surviving spouse's statutory share in the homestead specifically relinquishes homestead rights in an instrument, including a power of attorney constituting the other spouse as the husband's or wife's attorney in fact, as provided in section 597.5, it is not necessary for the spouse to join in the granting clause of the same or a like instrument. (Emphasis added.) The section has been amended, see 2011 Iowa Acts ch. 11,

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