Thomas J. Litterer and Mary L. Litterer, Appellants,
Rushmore Loan Management Services, LLC as Servicing Agent for U.S. Bank National Association as Legal Title Trust for Truman 2012 S.C. Title Trustand U.S. Bank National Association as Legal Title Trust for Truman 2012 S.C. Title Trust, Respondents.
Question United States Court of Appeals for the Eighth
Circuit Office of Appellate Courts
R. Neve, Evan H. Weiner, Neve Webb, PLLC, Edina, Minnesota,
L. Ostlie, Shapiro & Zielke, LLP, Burnsville, Minnesota,
the excusable neglect standard of Minnesota Rule of Civil
Procedure 6.02 to the lis pendens deadline contained
in Minn. Stat. § 582.043, subd. 7(b) (2016), would alter
the substantive rights provided by the statute. Therefore,
Rule 6.02 may not be applied to extend the deadline.
question answered in the negative.
mortgage foreclosure dispute, the United States Court of
Appeals for the Eighth Circuit asks us to decide whether the
lis pendens deadline in Minn. Stat. § 582.043,
subd. 7(b) (2016), may be extended upon a showing of
excusable neglect under Minn. R. Civ. P. 6.02. Appellants,
Thomas J. Litterer and Mary L. Litterer, argue that the
lis pendens recording requirement is procedural in
nature, and thus the excusable neglect provision of Rule 6.02
may be used to extend the time limit for recording a lis
pendens. Respondents, Rushmore Loan Management Services,
LLC and U.S. Bank National Association, take the opposite
position, contending that the lis pendens
requirement is substantive in nature, and therefore Rule 6.02
may not be used to extend the deadline for recording a
lis pendens. We hold that applying Rule 6.02 to
extend the lis pendens deadline is prohibited
because to do so would impermissibly modify the substantive
rights provided by the statute. We therefore answer the
certified question in the negative.
case requires us to determine the legal relationship between
the recording deadline for a lis pendens in Minn.
Stat. § 582.043, subd. 7(b), and the excusable neglect
provision in Minn. R. Civ. P. 6.02.
by the Legislature in 2013, Minn. Stat. § 582.043 (2016)
requires mortgage servicers to notify mortgagors of loss
mitigation options before referring the mortgage for
foreclosure. Minn. Stat. § 582.043, subds. 3, 5. The
statute prohibits "dual tracking, " in which a
servicer refers a mortgage to an attorney for foreclosure
while simultaneously processing a loss mitigation
application. Minn. Stat. § 582.043, subd. 6. The statute
also creates a cause of action for mortgagors to enjoin or
set aside a foreclosure sale based on a violation of section
582.043. Minn. Stat. § 582.043, subd. 7(a). For an
action under subdivision 7(a), "[a] lis pendens must be
recorded prior to the expiration of the mortgagor's
applicable redemption period, " Minn. Stat. §
582.043, subd. 7(b). Failure to record a lis pendens
prior to this deadline "creates a conclusive presumption
that the servicer has complied with this section."
relevant facts of this case are undisputed. Appellants,
Thomas J. Litterer and Mary L. Litterer
("Litterers"), financed the purchase of their home
in 2004 with a loan from Wells Fargo secured by a mortgage.
The Litterers began to have trouble making the payments on
their loan in late 2011, when Thomas Litterer lost his job.
For more than two years, the Litterers sought to either
modify their mortgage or enter into a repayment plan with
their mortgage servicer. During this time, their mortgage was
transferred from Wells Fargo to U.S. Bank. U.S. Bank
eventually transferred the servicing of the loan to Rushmore
Loan Management Services, LLC ("Rushmore"). The
Litterers repeatedly completed the required applications and
submitted the documentation Rushmore told them was needed for
a loan modification. Throughout the application process,
Rushmore gave the Litterers conflicting information regarding
the status of the mortgage modification application and the
appropriate person to contact at Rushmore, and was frequently
nonresponsive to the Litterers. After receiving erroneous and
conflicting information from different Rushmore agents, the
Litterers were told that their modification was denied, and
that they could not appeal the denial, even if the denial was
due to errors by Rushmore.
the Litterers were served with foreclosure documents, and a
sheriff's sale was conducted six months later. The home
was sold back to U.S. Bank at the sale. After various
extensions, the redemption period for the Litterers'
mortgage expired on March 1, 2015. On February 27, 2015, just
before the redemption period ended, the Litterers filed a
lawsuit against Rushmore and U.S. Bank in Dakota County
March 2, 2015, defendants (respondents here) were served,
marking the commencement of the lawsuit. See Minn.
R. Civ. P. 3.01(a). The Litterers' complaint, as amended,
alleged that respondents had failed to comply with the
requirements of Minn. Stat. § 582.043 by, among other
things, failing to fully evaluate the Litterers' loan
modification application and referring ...