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Prudential Insurance Company of America v. Rand & Reed Powers Partnership, Iowa Bankers Association, Amicus on Behalf Of
Citations: 141 F.3d 834; 1998 U.S. App. LEXIS 6542; 1998 WL 148996Docket: 97-3484
Court: Court of Appeals for the Eighth Circuit; April 2, 1998; Federal Appellate Court
Rand Reed Powers Partnership appeals a summary judgment favoring Prudential Insurance Company of America regarding a loan for agricultural land, specifically challenging the enforcement of a contractual prepayment prohibition in light of Iowa Code section 535.9. The appellant argues that this statute, which prohibits prepayment penalties, should also invalidate the contract's language forbidding prepayment. The court determined that section 535.9 does not confer an absolute right to prepay agricultural loans and clarified that the statute only disallows additional costs beyond normal repayment. The court also addressed Powers Partnership's claim of contractual ambiguity, ruling that any ambiguity pertains to the statute rather than the contract language itself. Furthermore, the court noted that the common law 'perfect tender in time' rule remains applicable to agricultural mortgages, as reaffirmed by Iowa case law. Ultimately, the court upheld the district court's ruling, emphasizing that any changes to the statutory framework must come from the Iowa legislature, not the federal courts. Thus, the district court's decision was affirmed.