Thomas J. Litterer; Mary L. Litterer Plaintiffs - Appellants,
Rushmore Loan Management Services, LLC, as Servicing Agent for U.S. Bank National Association as Legal Title Trust for Truman 2012 SC Title Trust; U.S. Bank National Association, as Legal Title Trust for Truman 2012 SC Title Trust Defendants - Appellees.
Submitted: March 9, 2017
from United States District Court for the District of
Minnesota - Minneapolis
WOLLMAN, COLLOTON, and SHEPHERD, Circuit Judges.
COLLOTON, CIRCUIT JUDGE.
appeal arises from a foreclosure on the home of Thomas and
Mary Litterer in Burnsville, Minnesota. The home was sold at
a sheriff's sale to U.S. Bank, the mortgage owner, in
November 2014. The redemption period-that is, the period
during which the Litterers could pay off their debt and
"redeem" their property-expired on March 1, 2015.
On March 2, the Litterers sued their loan servicer, Rushmore
Loan Management Services, in Minnesota state court for breach
of contract, unjust enrichment, and injunctive relief. On May
6, 2015, the Litterers filed a lis pendens-a notice
in the property's chain of title that the property is the
subject of ongoing litigation.
removed the suit to federal district court, where the
Litterers amended their complaint to add a claim that
Rushmore violated the Minnesota statutory requirements for
handling foreclosures. See Minn. Stat. §
582.043. They also added U.S. Bank as a party. In federal
court, the Litterers pursued only their claim under §
582.043 and abandoned the others.
Stat. § 582.043, subdiv. 7(a) gives mortgagors like the
Litterers a cause of action to set aside a foreclosure sale
if the loan servicer violated the section's substantive
provisions. Section 582.043, subdiv. 7(b), however, requires
a mortgagor bringing an action under subdivision 7(a) to file
a lis pendens within the mortgagor's redemption
period. "The failure to record the lis pendens creates a
conclusive presumption that the servicer has complied with
this section." § 582.043, subdiv. 7(b). Because the
Litterers filed the lis pendens two months after
their redemption period expired, normal operation of §
582.043, subdiv. 7(b) would create the conclusive presumption
that Rushmore complied with the statute and thereby bar any
relief to the Litterers.
Rule of Civil Procedure 6.02, however, authorizes courts in
their discretion to extend a deadline in certain
circumstances. As relevant here, Rule 6.02 provides:
"When by statute . . . an act is required or allowed to
be done at or within a specified time, the court for cause
shown may . . . upon motion made after the expiration of the
specified period permit the act to be done where the failure
to act was the result of excusable neglect . . . ." If
Rule 6.02 may be used to extend the deadline in §
582.043, subdiv. 7(b), then the Litterers' failure to
file the lis pendens within the redemption period
does not necessarily trigger the provision's conclusive
presumption, and the Litterers may still have a viable claim
and U.S. Bank moved for summary judgment in part on the
ground that the Litterers did not file the lis
pendens within the redemption period as required by
§ 582.043, subdiv. 7(b). In response, the Litterers
conceded that they were late in filing the lis
pendens but urged that the court should extend the
filing deadline for "excusable neglect" under
Minnesota Rule of Civil Procedure 6.02. Applying Minnesota
law, the district court concluded that Rule 6.02 may not be
used to extend the lis pendens deadline, and
therefore granted summary judgment in favor of Rushmore and
Litterers appeal and argue that the district court erred by
concluding that it could not employ Rule 6.02 to extend the
lis pendens deadline. Because the Litterers'
claim turns on the application of Rule 6.02, we certified the
following question to the Minnesota Supreme Court: "May
the lis pendens deadline contained in Minn. Stat.
Sec. 582.043, subd. 7(b) be extended upon a showing of
excusable neglect pursuant to Minn. R. Civ. P. 6.02?"
Minnesota Supreme Court accepted the certified question and
issued an opinion answering the question in the negative.
Litterer v. Rushmore Loan Mgmt. Servs., LLC, 905
N.W.2d 623, 624 (Minn. 2018). The court explained that
Minnesota's Rules of Civil Procedure cannot modify
substantive law, id. at 626, and determined that
"extending the deadline in Minn. Stat. § 582.043,
subd. 7(b), would alter the substantive rights of the
litigants." Id. at 628. As a result, the court
concluded that "Rule 6.02 may not be used to extend this
Minnesota Supreme Court's decision resolves this appeal.
There is no dispute that the Litterers failed to file the
lis pendens within their redemption period as
required by § 582.043, subdiv. 7(b). Because Rule 6.02
may not be used to extend the deadline, subdivision 7(b)
required the district court to apply the conclusive
presumption that Rushmore complied with the requirements of
§ 582.043. The district court therefore correctly
determined as a matter of law that the Litterers were not
entitled to relief on their claim under § 582.043.
judgment of the district ...