Appeal from the Iowa District Court for Polk County, Eliza Ovrom, Judge.
The opinion of the court was delivered by: Bower, J.
Defendant appeals from the district court's ruling in favor of plaintiffs. AFFIRMED.
Heard by Doyle, P.J., and Mullins and Bower, JJ.
Lynn Anderson, husband of decedent, Jan Anderson, appeals from the district court's ruling in favor of Ryan and Chris Monsma, Jan's sons, on the Monsmas' suit against Lynn for breach of common law fiduciary duty and unjust enrichment resulting from Lynn's depletion of Jan's assets contrary to her intent. Lynn argues the district court erred in finding: (1) Jan's change of beneficiary forms were ambiguous and that extrinsic evidence was admissible to determine Jan's intent, (2) the existence of a constructive trust, (3) the existence of a resulting trust, and (4) Lynn violated a fiduciary duty.
Upon our review, we find a latent ambiguity existed in Jan's change of beneficiary forms and therefore the district court properly considered extrinsic evidence to construe Jan's intent in regard to Lynn's capacity as set forth on the forms. We find a constructive trust should be imposed on funds Lynn received through the beneficiary forms on Jan's various accounts in light of Lynn's unjust enrichment following his sole receipt of Jan's assets. We further find the existence of a resulting trust under these facts because Jan conveyed her money to Lynn with the intent that a trust be created, Lynn acknowledged the money was in trust to be equally divided between himself and the Monsmas, and Lynn violated the fiduciary duty he owed to the Monsmas. Accordingly, we affirm on all issues raised on appeal.
I. Background Facts and Proceedings.
This case arose following the death of Janice Anderson on December 8, 2008, from cancer. At the time of her death, Jan was married to Lynn Anderson. Ryan and Chris Monsma are Jan's two adult sons from a prior marriage.
In late October or early November 2008, Jan contacted attorney Apryl DeLange about changing her will. Jan met with attorney DeLange and stated she wanted to: (1) leave the marital residence and personal property to Lynn, except for her grandfather clocks and jewelry which were to go to Ryan and Chris, (2) change the beneficiaries on all her life insurance policies, annuities, and retirement accounts to go into a trust, and then (3) use the trust to pay off the mortgage on the home, Jan and Lynn's credit card debts, give $3000 to her step-daughter for the benefit of her two children, with the remainder to be divided in equal parts for Lynn, Ryan, and Chris.
On November 20, 2008, attorney DeLange wrote a letter to Jan concerning a draft of the will. The letter stated in part:
Also, it is very important that you change the beneficiaries on your life insurance, retirement accounts, and other contractual investments like annuities, to be the Jan E. Anderson Family Trust established by this Will. If the beneficiary designation stays the same, all of the proceeds from those various accounts will go directly to Lynn as the designated beneficiary. Without the funds from these various accounts, your desires will not be fulfilled.
DeLange also told Jan in person that she needed to change the beneficiaries on her life insurance, annuities, and 401(k) accounts to the trust. These assets were valued at approximately $600,000.
As directed, Jan signed the change of beneficiary forms for her life insurance and retirement accounts, including a Principal Managed IRA, Principal Annuity, Time Insurance Company life insurance policy, Wells Fargo life insurance policy, and a Wells Fargo 401(k) policy. The change of beneficiary forms were completed and signed by Jan during November 2008. However, instead of naming the trust as beneficiary, the change of beneficiary forms all named Lynn Anderson as beneficiary.
Jan signed her will on December 1, 2008.*fn1 The will states:
I bequeath the residue of my estate, which shall be called the Jan
E. Anderson Family Trust, to James Krambeck*fn2 and Lynn Anderson, as co-trustees, to be administered as follows:
1. My trustees may either pay off the mortgage on my home or distribute the amount of such ...