Solon State Bank v. Liberty View Mall, L.L.C., Lien T. Vu a/k/a Lien Thi Vu, and Sankar Baruah

IN THE COURT OF APPEALS OF IOWA

No. 23-1672
Filed January 9, 2025

SOLON STATE BANK,
Plaintiff-Appellee,

vs.

LIBERTY VIEW MALL, L.L.C., LIEN T. VU a/k/a LIEN THI VU, and SANKAR
BARUAH,
Defendants-Appellants,
________________________________________________________________

Appeal from the Iowa District Court for Johnson County, Sean W.

McPartland, Judge.

Mortgagors in a foreclosure proceeding appeal the district court’s grant of

summary judgment for the mortgagee. AFFIRMED.

Thomas B. Read of Read & Roemerman, PLC, Cedar Rapids, for

appellants.

Siobhan Briley and Ryan J. Prahm of Pugh Hagan Prahm PLC, Coralville,

for appellee.

Considered by Schumacher, P.J., and Ahlers and Langholz, JJ.
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LANGHOLZ, Judge.

Three mortgagors—Lien Vu, Sankar Baruah, and Liberty View Mall, L.L.C.

(collectively “Liberty View”)—defaulted on three promissory notes executed with

Solon State Bank. As a result, Solon State Bank initiated foreclosure proceedings

and moved for summary judgment. Liberty View resisted summary judgment by

arguing that it had entered into a forbearance agreement with Solon State Bank.

And because it upheld its end of the purported agreement by making partial

payments each month, foreclosure was improper. Solon State Bank disputed the

existence of any forbearance agreement. And the district court agreed that Liberty

View failed to show the existence of any such agreement. So it granted summary

judgment for Solon State Bank. Liberty View appeals.

We agree that Liberty View failed to generate a dispute of material fact over

whether the parties entered into a forbearance agreement. Liberty View’s

summary-judgment evidence does not show any mutual intent to cabin Solon State

Bank’s foreclosure rights, instead resting exclusively on its own subjective—and

unilateral—understanding of the circumstances. And Liberty View cannot rely on

Solon State Bank’s course of conduct leading up to foreclosure to infer the

existence of an agreement, as Solon State Bank could accept partial payments

without waiving its foreclosure rights and indeed acted to enforce its rights,

including accelerating all three notes. Thus, because Liberty View agrees it was

in default and we find no evidence showing the parties entered into a forbearance

agreement, we affirm the district court’s grant of summary judgment.
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I.

Vu and Baruah are a married couple who purchased real estate through a

limited liability company, Liberty View Mall, L.L.C. Liberty View Mall, L.L.C.

executed two promissory notes with Solon State Bank—a $2.2 million note in

August 2016 and a $485,000 note in December 2020. Vu and Baruah also

individually executed a promissory note with Solon State Bank for $236,000 in

August 2017. These notes are secured by mortgages on various properties, and

the combined monthly payment was $19,375. Vu paid Solon State Bank each

month on behalf of herself, Baruah, and Liberty View Mall, L.L.C.

In February 2022, Solon State Bank notified Liberty View that it was in

default on the first note and gave twenty days to cure. In response, Vu made a

$50,000 catch-up payment. Vu then paid nothing in March. In April, Solon State

Bank notified Liberty View that it was in default on the second note and again gave

twenty days to cure. Five days later, Vu deposited $14,000. And between May

and December, Vu continued to pay roughly $14,000 a month.1 Meanwhile, Solon

State Bank accelerated all three notes in September, demanding payment of the

full $2.9 million balance within fourteen days.2 Vu did not pay the accelerated sum.

At the end of December, Solon State Bank initiated foreclosure

proceedings, alleging Liberty View was in default. Solon State Bank later moved

1 The actual payments varied—$13,975 in May, $17,070 in June, $14,000 in July,

$18,945 in August, $14,000 in October, $14,000 in November, and $14,000 in
December. But none were the full $19,375 owed to Solon State Bank each month
on the notes.
2 Each mortgage provided, subject to certain limitations, that Solon State Bank

“may accelerate the Secured Debt and foreclose this Mortgage in a manner
provided by law if [Liberty View] is in default.”
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for summary judgment, showing it held the mortgages on the identified properties

and that Liberty View was in default of their payment obligations. Liberty View

resisted, arguing that Solon State Bank “agreed to a forbearance of a foreclosure

action” if Liberty View “continued to make certain payments on the notes, which

they did.” In support, Vu authored an affidavit claiming it was her “understanding”

that if she “made payments to the Bank each in the amount of $14,000 per month

the Bank wouldn’t foreclose.” The district court granted summary judgment for

Solon State Bank, reasoning that Liberty View did not generate a dispute of

material fact over whether a forbearance agreement existed.

Liberty View appeals.

II.

Summary judgment is required when “there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of law.”

Iowa R. Civ. P. 1.981(3). To overcome a well-supported motion for summary

judgment, the nonmoving party “must set forth specific facts showing that there is

a genuine issue for trial.” Id. r. 1.981(5). Indeed, nonmoving parties must “go

beyond generalities” and “show what evidence it has that would convince a trier of

fact to accept its version of the events.” Feeback v. Swift Pork Co., 988 N.W.2d

340, 348 (Iowa 2023) (cleaned up). Without that quantum of evidence, summary

judgment properly “weed[s] out paper cases and defenses in order to make way

for litigation which does have something to it.” Id. (cleaned up). We review a grant

of summary judgment for correction of legal error. Freedom Fin. Bank v. Est. of

Boesen, 805 N.W.2d 802, 806 (Iowa 2011).
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The parties agree that Liberty View did not pay in full each month, nor did it

pay its total balance once Solon State Bank accelerated the notes, and that the

mortgages’ written terms allow Solon State Bank to foreclose. Yet Liberty View

insists Solon State Bank cannot foreclose because the parties entered into a

separate forbearance agreement. And because the parties dispute whether a

forbearance agreement exists, Liberty View argues that dispute should have

precluded summary judgment. But Liberty View overstates its summary-judgment

evidence.

Vu’s affidavit never asserts that the parties entered into a forbearance

agreement. Instead, Vu merely offered her own “understanding” that if Liberty

View paid “14,000 per month the Bank wouldn’t foreclose.” One party’s unilateral

understanding does not create a binding foreclosure agreement—there must be a

meeting of the minds. See First Am. Bank v. Urbandale Laser Wash, LLC, 874

N.W.2d 650, 654–57 (Iowa Ct. App. 2015) (affirming summary judgment on

foreclosure action because mortgagor did not show mutual intent to enter into a

forbearance agreement); Jewell v. Logsdon, 206 N.W. 136, 137–38 (Iowa 1925)

(finding mortgagor’s testimony alone failed to prove existence of forbearance

agreement).

On appeal, Liberty View tries to bolster Solon State Bank’s assent to a

forbearance agreement by pointing to nine monthly payments of around $14,000

that Solon accepted before petitioning for foreclosure. But that evidence falls short

of showing the parties mutually intended to cabin Solon State Bank’s ability to

foreclose. Mortgagees may accept partial payments without waiving their

foreclosure rights. See Jewell, 206 N.W. at 138 (declining to infer the existence of
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a forbearance agreement based on several tendered payments in part because

“[t]he mortgagee cannot be penalized for the mere receipt of that to which he is in

equity and good conscience entitled”). And even if mere passive acceptance of

partial payments could be significant, Solon State Bank did not sit idly by during

these months. Rather, it issued a notice of default in April and accelerated all three

notes in September. So Liberty View cannot point to Solon State Bank’s course

of conduct to support assent to a forbearance agreement. Thus, absent any

evidence showing the parties entered into a forbearance agreement, the district

court properly granted Solon State Bank summary judgment.

AFFIRMED.