Wednesday, June 12, 2013

Minnesota Supremes Void Mortgage On Home Solely-Owned & Mortgaged By Wife Where Earlier Title Transfer To Her By Ex-Co-Owner Hubby Lacks Express Waiver Of Homestead Rights

From a recent Opinion Summary:

  • Respondent credit union sought to foreclose on the homestead that Appellant and her husband (Husband) owned. The district court granted summary judgment to Appellant after concluding that the mortgage Appellant signed with Respondent was void under Minn. Stat. 507.02 because it was not also signed by Husband.

    The court of appeals reversed, concluding that the mortgage was valid because Husband had quitclaimed all of his interest in the homestead property to Appellant before the mortgage was executed.

    The Supreme Court reversed, holding that the mortgage signed by Appellant in favor of Respondent was void because (1) the mortgage at issue here did not meet any of the statutory exceptions to the signature requirement in section 507.02; and (2) Husband's quitclaim deed did not constitute an explicit waiver of his rights under the homestead statute.(1)
Source: Opinion Summary: Marine Credit Union v. Detlefson-Delano.

For the ruling, see Marine Credit Union v. Detlefson-Delano, No. A11-1925 (Minn. May 22, 2013).

(1) From the court ruling ('Antonio' is the hubby; 'Detlefson-Delano' is the wife):
  • The principal dispute in this case is over what effect, if any, Antonio's quitclaim deed to Detlefson-Delano has on the statutory requirement that he sign any conveyance of the homestead in order for the conveyance to be valid.[3]
  • MCU first argues that Antonio was not required to sign the mortgage because the quitclaim deed transferring his interest in the homestead to Detlefson-Delano fits within an exception to the signature requirement because it was a conveyance between spouses.

    Minnesota Statutes § 507.02 unambiguously provides, in relevant part, that "[if] the owner is married, no conveyance of the homestead . . . shall be valid without the signatures of both spouses" unless one of the statutory exceptions applies.

    The mortgage at issue here is a conveyance separate from the quitclaim deed between Antonio and Detlefson-Delano and must independently fit under one of the statutory exceptions in order to be valid without the signatures of both spouses.

    It is not a mortgage for purchase money under section 507.03,[4] nor is it a conveyance between spouses pursuant to section 500.19, subdivision 4.[5] Finally, it does not involve a severance of a joint tenancy pursuant to section 500.19, subdivision 5.[6] Therefore, under the plain language of section 507.02, the absence of Antonio's signature on the mortgage renders it void unless Antonio had expressly waived his rights under the homestead statute before Detlefson-Delano executed the mortgage. See Dvorak, 285 N.W.2d at 677.

    MCU also argues that the mortgage is valid without Antonio's signature because the quitclaim deed transferring Antonio's interest in the homestead to Detlefson-Delano waived Antonio's homestead rights. Clearly, Detlefson-Delano had the right to convey the real estate that she owned. However, under the second paragraph of section 507.02, which provides that a "spouse, by separate deed, may convey any real estate owned by that spouse, except the homestead, subject to the rights of the other spouse therein," Detlefson-Delano had no right to convey the homestead unilaterally. Minn. Stat. § 507.02 (emphasis added).

    While section 507.02 does not specifically provide that a waiver of one spouse's homestead rights is an exception to the signature requirement, we have said that homestead rights may be waived even though they are constitutional in nature. See Argonaut Ins. Co. v. Cooper, 261 N.W.2d 743, 744 (Minn. 1978). However, a party may waive those rights only "by an act which evidences an unequivocal intention to do so." Id. The presumption is against such a waiver. Gale v. Hopkins, 165 Minn. 177, 181, 206 N.W. 164, 165 (1925).

    A waiver of one's homestead rights must generally be express in order to be valid. For example, in Argonaut Insurance Company v. Cooper, we held that language in an indemnity agreement in which one party agreed to "waive and abandon . . . all rights to claim any of the property, including the respective homesteads, as exempt from levy, execution, sale or other legal process" was a proper waiver of homestead rights because the party "clearly listed the [homestead] as security" and had therefore "waived his constitutional and statutory right to claim any of his [homestead] property as exempt." 261 N.W.2d at 743-45.

    In contrast, we are reluctant to conclude that a party has waived homestead rights when the purported waiver consists of general language without mention of the specific homestead property. For example, in Benning v. Hessler, we held that a waiver as to a party's "right and benefit of any law . . . exempting property, real, or personal, from sale on judgment execution" was not a valid waiver of homestead rights. 144 Minn. 403, 403-04, 175 N.W. 682, 682-83 (1920). We reasoned:

    The waiver . . . binds no specific property. It does not purport to be a charge upon property. It is in terms but a waiver. It describes nothing and creates a lien upon nothing. It cannot be said that the debt sued upon is a charge in writing on the premises in question. It does not subject the homestead to a levy under the execution.
    Id. at 405, 175 N.W. at 683.

    Whether Antonio waived his homestead rights turns on the language of the quitclaim deed between Antonio and Detlefson-Delano, which we review de novo. See In re Stisser Grantor Trust, 818 N.W.2d 495, 502 (Minn. 2012). The quitclaim deed states that Antonio "does hereby remise, release and quitclaim . . . all the right, title, interest and claim" that he had in the property to Detlefson-Delano. However, the quitclaim deed does not include an express waiver of Antonio's homestead rights.

    Additionally, the deed suffers from the some of the same flaws as the purported waiver in Benning. It is completely silent as to any language that would charge the property, create a lien upon it, or subject it to execution by creditors. Therefore, we conclude that Antonio did not waive his homestead rights through the execution of the quitclaim deed.

    In conclusion, we hold that both spouses must sign a conveyance of the homestead to a third party pursuant to Minn. Stat. § 507.02 unless (1) a statutory exception to the signature requirement applies or (2) one spouse has explicitly waived his or her rights under the homestead statute.

    Because the mortgage at issue here does not meet any of the statutory exceptions and because Antonio's quitclaim deed did not contain an explicit waiver of his rights under the homestead statute, we reverse the court of appeals decision and conclude that the mortgage signed by Detlefson-Delano in favor of MCU is void pursuant to Minn. Stat. § 507.02.


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