This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).







Wells Fargo Home Mortgage, Inc.,





Timothy P. McCarthy,



City County Federal Credit Union, et al.,




Filed August 5, 2003

Affirmed in part and remanded

Huspeni, Judge*



Ramsey County District Court

File No. C2-02-006743


Rebecca F. Schiller, Reiter & Schiller, Six West Fifth Street, St. Paul Building, Seventh Floor, St. Paul, MN 55102 (for respondent)


Timothy P. McCarthy, 683 LaFond Avenue, St. Paul, MN 55104 (pro se appellant)



            Considered and decided by Kalitowski, Presiding Judge, Schumacher, Judge, and Huspeni, Judge.

U N P U B L I S H E D   O P I N I O N


            In challenging the district court’s award of summary judgment to respondent, pro se appellant argues that (1) respondent failed to obtain personal jurisdiction over appellant and the court should have granted a motion to dismiss this proceeding on that ground; (2) the court improperly denied appellant’s motion to strike certain affidavits; (3) an award of summary judgment to respondent was improper because genuine issues of material fact exist; (4) the district court erred in refusing to consider pleadings of a corporation that was not represented by counsel; and (5) appellant’s counterclaims are still valid and must be addressed.  Because we conclude that (1) appellant waived any jurisdictional arguments he may have possessed; (2) the district court was within its discretion in ruling on the challenged affidavits; (3) there are no genuine issues of material fact; and (4) the district court properly refused to consider pleadings from a corporation not represented by an attorney, we affirm the award of summary judgment.  Because it appears that the district court did not rule on the viability of appellant’s counterclaims, we remand to enable the court to address that issue.


On October 5, 1995, appellant Timothy McCarthy signed and executed a promissory note and mortgage in favor of Meridian National Bank, encumbering a parcel of real property he owns in Ramsey County (the premises).  On that same day, Meridian assigned the mortgage to respondent Wells Fargo Home Mortgage, Inc.  Both Meridian and Wells Fargo filed their mortgages for record with the Ramsey County Recorder on November 17, 1995.  On February 5, 2001, McCarthy entered into an agreement with R & D Food Services, Inc. (R&D), purporting to give R&D a security interest in the premises.  R&D subsequently filed a financing statement with the Minnesota Secretary of State.  No payments were made by McCarthy on the note and mortgage after February 1, 2002. 

Wells Fargo commenced a foreclosure by advertisement by filing a notice of pendency and power of attorney to foreclose mortgage with the Ramsey County Recorder on June 12, 2002.  Wells Fargo attempted, but was unable, to personally serve McCarthy with the notice of mortgage foreclosure despite “numerous attempts.”  Wells Fargo also attempted to “communicate in writing with [McCarthy] regarding the service issue and the status of the mortgage foreclosure proceeding.  Said efforts were unsuccessful.”  On July 18, 2002, Wells Fargo commenced this action for recovery of all sums owing under the note and mortgage, and for sale of the subject premises to pay the debt secured by the mortgage.  Wells Fargo attempted to personally serve the summons and complaint on appellant, but was unsuccessful.  Having failed to serve McCarthy personally, Wells Fargo proceeded to serve him by publication, pursuant to Minn. R. Civ. P. 4.04(a)(1). 

            McCarthy filed an answer with the court on August 23, 2002, and served Wells Fargo with that pleading on August 26, 2002.  McCarthy also served interrogatories, requests for admissions, and requests for production of documents.  Finally, on October 10, 2002, McCarthy served counterclaims on Wells Fargo.  Wells Fargo filed a motion for summary judgment on October 17, 2002, and answers to McCarthy’s counterclaims on October 24, 2002.  McCarthy served Wells Fargo with motions to dismiss and strike certain affidavits on November 7, 2002.  Wells Fargo served responsive memoranda on November 14, 2002.  On November 18, 2002, McCarthy served Wells Fargo with his memorandum in opposition to plaintiff’s motion for summary judgment, supported by his own affidavit. 

            On November 20, 2002, the district court heard both Wells Fargo’s summary-judgment motion and McCarthy’s motions to dismiss and to strike certain affidavits.  Wells Fargo’s motion for summary judgment was granted; McCarthy’s motions to dismiss and to strike were denied. 

            Two weeks after the award of summary judgment to Wells Fargo, McCarthy filed a Chapter 7 bankruptcy petition; the bankruptcy court subsequently granted Wells Fargo relief from the automatic stay.  This appeal followed.



            We first address McCarthy’s allegation that the district court did not have personal jurisdiction over him and, therefore, this proceeding must be dismissed.  The district court, in denying McCarthy’s allegation that dismissal was required, determined that the defense of lack of personal jurisdiction was not pleaded in McCarthy’s answer and was, thus, waived under Minn. R. Civ. P. 12.08(a).[1]  We review de novo the construction of a rule of court procedure.  Patterson v. Wu Family Corp., 608 N.W.2d 863, 866 (Minn. 2000).  In addition, the question of whether personal jurisdiction exists is a question of law, which is reviewed de novo.   Id.

            We agree with the district court that the defense of lack of personal jurisdiction was waived.  There is no dispute that McCarthy filed and served an answer, served significant discovery requests, and filed a counterclaim before filing the motion to dismiss.  While both parties cite Patterson as informative, the holding of that case supports Wells Fargo’s position.  The Patterson court addressed both the language of rule 12.08(a) and the policies that the rule seeks to serve, and concluded that

once a defendant affirmatively invokes the court’s power to determine the merits of all or part of a claim, the defendant cannot then deny the court’s jurisdiction over him based on defective service. 


Id. at 869.

McCarthy’s argument regarding service must fail.  He could have preserved that issue by pleading lack of jurisdiction in his answer or by motion.  He failed to do so.  He did not attempt to amend his answer to include this defense.  Instead, he filed an answer, requests for discovery, and later a counterclaim.  His objection to having the district court consider the claims against him came too late.  He has waived any issue of defects in service. 


The decision to admit or exclude evidence is within the district court’s discretion, and this decision will only be reversed when that discretion has been clearly abused.  Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (Minn. 1997).  Here, the district court, in denying McCarthy’s motion to strike certain affidavits submitted by Wells Fargo to support its summary-judgment motion, concluded that the motion “is unsupported by the controlling law and * * * [McCarthy] failed to demonstrate any unfairness or lack of probative value.”   We see no abuse of discretion in the district court’s decision.

            The affidavit challenged by McCarthy was that of William M. Miller, manager of Blue Dog Properties, LLC, which appears to be a process-serving company.  McCarthy argued that the affidavit was internally inconsistent, lacked clarity, had a clear prejudicial slant, lacked relevance to the issue before the court, and was meant to present McCarthy in a negative light.  McCarthy also argued that he should have the right to cross-examine Miller. 

            Miller’s affidavit states that there is a “no trespassing” sign posted on McCarthy’s property, includes the wording of the sign, and discusses the many attempts he made to serve McCarthy personally.  It also states that Miller “notic[ed] that an individual was looking out of the upstairs window but refused to respond or answer the door.”  This is the entirety of the challenged affidavit. 

            We note once more that McCarthy has waived any challenge to personal jurisdiction he might have possessed.  Even if such were not the case, unquestionably Miller’s affidavit contains relevant evidence showing the attempts made by Wells Fargo to personally serve McCarthy.  While McCarthy contends that he was not in the residence and that the individual Miller claims to have seen may have been a friend there to “give food and nurturance to his pets,” we are at a loss to see how the challenged affidavit could have prejudiced McCarthy.

            McCarthy also argues that the district court erred in failing to strike portions of the affidavit of Janice Bergthold, an employee of Wells Fargo.  Again, we see no abuse of discretion.  Bergthold’s affidavit repeats Miller’s observations regarding inability to serve an occupant of the premises despite someone being present there and indicates that because the requirement of personal service for a non-judicial foreclosure was not met, Wells Fargo commenced the present action.   

            Again, we are at a loss to see how Bergthold’s affidavit could have prejudiced McCarthy.  Any hearsay in this affidavit is inconsequential because that hearsay is fully supported by Miller’s affidavit, which was based on his personal knowledge.


            In granting Wells Fargo’s motion for summary judgment, the district court rejected McCarthy’s claims that genuine issues of material fact exist under the Uniform Commercial Code (U.C.C.), the Fair Debt Collection Practices Act, and two Federal Reserve publications from 1961 and 1997.

On an appeal from summary judgment, we ask two questions:  (1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law. 


State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990) (citation omitted).

            We conclude that summary judgment was properly awarded.  Despite McCarthy’s attempts to characterize this proceeding as a U.C.C.-based claim, it is a foreclosure action.  In order to foreclose on a mortgage by advertisement, our statutes require that (1) a mortgage be in default; (2) no other actions are currently proceeding on the debt; and (3) the mortgage be recorded.  Minn. Stat. § 580.02 (2002).  Wells Fargo submitted evidence as to the amount of the debt, its terms, and the fact that it was in default.  McCarthy did not produce any evidence contesting these essential facts, except to dispute that a debt was ever created based on his definition of debt.  During the hearing, McCarthy’s own statements established that a payment obligation did, in fact, exist:   

THE COURT:  Cause I want to clearly understand what you’re telling me.  And I want to start from a very simple premise.  That is, that you acknowledged giving them or signing the note, and you acknowledged signing the mortgage; and I think when I read your papers, you acknowledged giving them the note.




THE COURT:  All right.  That much I . . . I gleaned from your papers.  * * *  Now what I’m trying to understand is at the end of that transaction, without arguing to me about what you think it was * * * .  Did you end up with some money?




Again, we note that material facts are not disputed in this case.  McCarthy produced no evidence to contradict Wells Fargo’s evidence of the fact and extent of McCarthy’s indebtedness, and McCarthy’s failure to pay that indebtedness. 

            The essence of McCarthy’s argument is that R&D has the only valid security interest in the property because R&D filed a security agreement with the Secretary of State in 2002.  While imaginative, this argument is defeated by the plain language of both the U.C.C. and the recording statute.  In fact, McCarthy concedes in his appellate brief that a mortgage is an interest in real property. 

            Article nine of the U.C.C. states unequivocally that “this article” does not apply to “the creation or transfer of an interest in or lien on real property.”  Minn. Stat. § 336.9‑109(d)(11) (2002).  As such, McCarthy’s grant of a mortgage in favor of Meridian was a transaction wholly outside of the plain terms of article nine of the U.C.C.  The comments in section 336.9-109 eliminate any uncertainty in this matter.  Comment 7 states:

Example 1: O borrows $10,000 from M and secures its repayment obligation, evidenced by a promissory note, by granting to M a mortgage on O’s land.  This Article does not apply to the creation of the real-property mortgage.  However, if M sells the promissory note to X or gives a security interest in the note to secure M’s own obligation to X, this Article applies to the security interest thereby created in favor of X.  The security interest in the promissory note is covered by this Article even though the note is secured by a real-property mortgage.


Minn. Stat. Ann. § 336.9-109 U.C.C. cmt. at 7 (West Supp. 2002).  As the comment makes clear, as between McCarthy and Meridian, article nine of the U.C.C. does not apply.  Since Wells Fargo purchased the mortgage from Meridian, it steps into Meridian’s place. 

            Minn. Stat. § 507.34 (2002) provides that the transfer of an interest in real estate must be recorded in the office of the county recorder.  Here, Meridian validly recorded its interest with the Ramsey County Recorder’s Office.  Meridian’s assignment to Wells Fargo was also properly recorded with the Ramsey County Recorder in 1995.

            There are no genuine issues of material fact for determination in this case.  Summary judgment was properly awarded.


            McCarthy also alleges that the district court erroneously concluded that because Roger Mensing was not an attorney, various filings offered by him on behalf of R&D must be excluded from consideration.  We see no error.

            The Minnesota Supreme Court last dealt with the issue of a non-lawyer attempting to represent a corporation in Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753 (Minn. 1992).  In that case, the court concluded that under the common law a corporation must be represented by an attorney when making an appearance in court.  Id. at 755.  As support for that ruling, the court cited Cary & Co. v. F.E. Satterlee & Co., a 1926 case, in which the court stated:

The ruling refusing to permit Mr. Francis C. Cary to appear as attorney for plaintiff was correct.  Mr. Cary is no longer an attorney at law, and the right of a party to a suit in court to appear in person therein does not entitle him to appear for a corporation, even if he owns all its capital stock for the corporation is a distinct legal entity.


Nicollet Restoration, 486 N.W.2d at 754 (citing Cary & Co., v. F.E. Satterlee & Co., 166 Minn. 507, 509, 208 N.W. 408, 409 (1926)).  Thus, precedent clearly establishes that a lawyer must represent R&D.[2]  The district court’s decision on this question is affirmed.


Finally, McCarthy seeks to have this court address the issue of the counterclaims he has filed and served.  We are unable to do so, however, because it appears that the district court did not explicitly consider these claims when it granted summary judgment to Wells Fargo.  We have considered whether the grant of summary judgment to respondent may be interpreted by this court as an implied denial of counterclaims, but have concluded that the better course is to remand. 

            Without intending to in any way limit or influence the exercise of the district court’s discretion on remand, we note that pursuant to Minn. R. Civ. P. 13.01, McCarthy should have filed his counterclaims with his answer in this proceeding.  Minn. R. Civ. P. 13.06, however, allows a party, with leave of the court, to correct the inadvertent failure to properly include a counterclaim.  There is no indication that McCarthy asked for leave of the court here or that the court, sua sponte, granted leave.  Thus, it appears that whatever validity or lack of validity the counterclaims might contain, they were not timely filed and, to date, that problem has not been addressed by the district court.  Remand will enable the district court to address the applicability of the Minnesota Rules of Civil Procedure and to determine whether any further proceedings are warranted on the counterclaims raised by McCarthy.

            Affirmed in part and remanded.


* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.


[1]  Minn. R. Civ. P. 12.08(a) provides:


A defense of lack of jurisdiction over the person, insufficiency of process, or insufficiency of service of process is waived (1) if omitted from a motion in the circumstances described in Rule 12.07, or (2) if it is neither made by motion pursuant to this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15.01 to be made as a matter of course.

[2]  Although Minn. Stat. § 481.02 (2002) contains language indicating that a sole shareholder may appear on behalf of the corporation, both the Minnesota Supreme Court’s and this court’s cases have consistently held that a corporation may appear only when represented by an attorney.