Daily Development for Friday, February 16, 2000

For Friday, here's a little case with a comforting result.

MORTGAGES; STATUTE OF LIMITATIONS: For purposes of statute stating that mortgage must be foreclosed within 15 years of its maturity date, a maturity date is "clearly stated" in the mortgage, even if a specific date is not recited, if the date can be deduced by calculating the terms shown in the mortgage.

DeSalle v. Gibraltar Title Agency L.L.C., 621 N.W.2d. 31 (Minn.App. 2000).

Gibraltar Title Agency missed a mortgage when it searched title for a sale from the Bollas to Pamela DeSalle. The mortgagees, the Niskas, brought a foreclosure in 1999. Ms. DeSalle sued Gibraltar for a judgment equal to the amount due under the mortgage. Gibralter defended against the foreclosure by asserting that the Niskas had not foreclosed within the 15year time period. The Niska mortgage did not recite a maturity date. It was recorded in 1982. DeSalle argued that, because no maturity was stated, the right to foreclose the mortgage expired 15 years after it was executed.

The trial court granted summary judgment to DeSalle. It relied on Minn.Stat. 541.03, which says that the 15year limit "shall begin to run from the date of such mortgage, unless the time of the maturity of the debt or obligation secured by such mortgage shall be clearly stated in such mortgage."

On appeal, the Niskas pointed to Polish Union of the U.S. of N. America v. Kruszewski, 213 N.W. 913 (Minn. 1927), which held that the mortgage contained a maturity date when, by reading its terms, one could deduce the date. The Niska mortgage was not as straightforward as Kruszewski, which called for 10 semiannual payments. However, the appeals court found that one could determine the Niska maturity date with "a preprinted amortization schedule or computer software," and that was sufficient. Comment: Don't try this at home, kids. This mortgagee got lucky. The best practice, usually, is to set forth the note as an exhibit to the mortgage. This not only gives a permanent memorial of the note intended to be secured, it eliminates any uncertainty about compliance with statutory requirements for describing the debt.

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