Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Leeco, Inc. v. Cornerstone Bank

Court of Appeals of Minnesota

July 3, 2017

Leeco, Inc., a Nebraska corporation, Appellant,
v.
Cornerstone Bank, a Nebraska corporation, Respondent.

         Crow Wing County District Court File No. 18-CV-15-95

          Thomas C. Pearson, Daniel M. Hawley, Gammello, Qualley, Pearson & Mallak PLLC, Baxter, Minnesota (for appellant)

          Aaron J. Glade, Joseph A. Gangi, Farrish Johnson Law Office, Chtd., Mankato, Minnesota (for respondent)

          Considered and decided by Worke, Presiding Judge; Johnson, Judge; and Kirk, Judge.

         SYLLABUS

         1. Respondent complied with section 580.08 of the Minnesota Statutes by selling the mortgaged property in a single foreclosure sale because the mortgaged property does not consist of separate and distinct tracts, even though it consists of four parcels for purposes of property taxes.

          2. Respondent complied with section 580.04(a)(3) of the Minnesota Statutes by accounting for all debts owed to it by the debtor and the guarantor when stating the amount "due on the mortgage" in the notice of foreclosure sale.

          OPINION

          JOHNSON, Judge

         A bank foreclosed on a mortgage on lakeshore property after the property owner failed to satisfy a guaranty on a line of credit. The mortgagor challenged the foreclosure sale on two grounds. First, the mortgagor argued that the lakeshore property should have been sold as separate tracts in separate foreclosure sales because the property consists of multiple parcels for purposes of property taxes. Second, the mortgagor argued that the bank's notice of foreclosure sale misstated the amount due on the mortgage. The district court rejected both of the mortgagor's arguments on cross-motions for summary judgment. We conclude that the district court was correct in its rulings. Therefore, we affirm.

         FACTS

         In 2009, Cornerstone Bank provided financing to Jacob North Printing Company, Inc. The financing included a line of credit of as much as $1, 200, 000. Jacob North Printing's debt to Cornerstone Bank was guaranteed by Leeco, Inc. Leeco secured its guaranty by granting Cornerstone Bank a mortgage on real property.

         The real property that secured Leeco's guaranty is on Pelican Lake in Crow Wing County. The property has 298 feet of lakeshore and a cabin. The property is composed of three lots. For purposes of property taxes, the property is divided into four parcels, each of which has a distinct tax-identification number. There are no markers or physical separations between the three lots or the four tax parcels. In fact, the cabin straddles a line separating two tax parcels. Only one of the tax parcels has lakeshore access. Three of the four tax parcels are too small by themselves to be separate, buildable lots in light of the applicable zoning ordinances.

         Leeco's mortgage identifies the property that secured its guaranty as "Lots Five (5), Six (6), and Seven (7), First Addition to Weaver's Point and part of vacated Pelican Trail, Crow Wing County, Minnesota." The first paragraph of the mortgage, which is entitled "Maximum Lien, " states, "Notwithstanding anything to the contrary herein, the maximum principal amount of the line of credit secured by this Mortgage at any one time is $1, 200, 000." The fifth paragraph, entitled "Revolving Line of Credit, " states, "This Mortgage secures the Indebtedness including, without limitation, a revolving line of credit . . . up to a maximum principal amount of $1, 200, 000 . . . ." The fourth paragraph, which is entitled "Cross-Collateralization, " states, "In addition to the Note, this Mortgage secures all obligations, debts and liabilities . . . of either Grantor or Borrower to Lender . . . whether now existing or hereafter arising . . . ." A paragraph entitled "Sale of the Property" states, "In exercising its rights and remedies, [Cornerstone Bank] shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales."

         In January 2013, Jacob North Printing filed a bankruptcy petition. Leeco defaulted on its guaranty of Jacob North Printing's debt to Cornerstone Bank. Cornerstone Bank commenced a foreclosure by advertisement on Leeco's lakeshore property. In January 2014, Cornerstone Bank issued a notice of foreclosure sale. Paragraph 12 of the notice states, "The original principal amount secured by the Mortgage was $1, 200, 000.00." Paragraph 13 of the notice states that, as of the date of the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.