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In the Matter of the Estate v. Jerry C. Loy

April 24, 2013

IN THE MATTER OF THE ESTATE OF PAUL BYRON LOY, DECEASED LARRY P. LOY, PLAINTIFF-APPELLANT, AND BRENDA J. LOY, PLAINTIFF,
v.
JERRY C. LOY, GARY B. LOY, BARRY A. LOY, JODEENA RENAE ROBINS, ZACHERY CHARLES LOY, STACY BYRON LOY, RYAN LEE LOY, JESSICA J. MCBRIDE-HENDRICKSON, DESIRAE C. LOY, GARTH LOY, KYLE ROBERT LOY, TAYLOR JOAN LOY AND RUTH ANN BURK, DEFENDANTS-APPELLEES.



Appeal from the Iowa District Court for Clarke County, Sherman W. Phipps, Judge.

The opinion of the court was delivered by: Tabor, J.

Larry Loy appeals from the district court order rejecting claims he brought against his father's estate and granting the estate's counterclaims against him. AFFIRMED.

Heard by Eisenhauer, C.J., and Potterfield and Tabor, JJ.

Larry Loy appeals from the district court order rejecting claims he brought against his father's estate and granting the estate's counterclaims against him. Like the district court, we decline to impose a constructive trust on the farm devised to Larry in his father's will. We also agree Larry did not prove he incurred costs on his father's behalf, and that actually Larry was unjustly enriched at the expense of the estate. Accordingly, we affirm the order in all respects.

I. Background Facts and Proceedings

Paul Loy had five sons: Terry, Larry, Jerry, Gary, and Barry. Paul's marriage to Dixie Loy ended in 1984. Paul did not remarry, though he lived with Ruth Ann Burke from 2000 to 2007. Ruth Ann knew Paul had not drafted a will and urged him to do so-given "his holdings" and the number of sons who stood to inherit. In February 2004, Paul heeded her advice and wrote out his "final wishes" in long hand, drawing a column for each of his five sons. He designated his son Jerry as executor of his estate. Relevant to the issues in this appeal, he wrote the following in Larry's column: "200 acres Thayer . . . I put $12,000 in the 200 acres you purchased and couldn't keep. Pay the $12,000 to Gary."

The so-called Thayer farm consisted of 200 acres of land in Union County originally purchased by Larry under a real estate contract from Kathleen Randall. Larry paid Randall $2050 in earnest money in June 1982 and $10,000 as a down payment in September 1982. The purchase caused Larry trouble with his application for a loan from the Farmers Home Administration (FmHA). The FmHA informed Larry in February 1983 that he was not authorized to purchase the farm using its security. To resolve the problem, Paul borrowed $12,000 so that his son could repay the FmHA. In March 1983, Larry assigned the real estate contract to his father. That same month Larry entered a cash farm lease for the property, setting the annual rent due to Paul at $10,000 for three years. Paul, in turn, made the real estate contract payments to Randall, except in 1989, 1990, and 1991, when Larry paid Randall $6000 per year. Paul reimbursed Larry for the payments he made in those three years. Randall conveyed the Union County property to Paul by warranty deed dated March 2001.

Paul enrolled 130 of the 200 acres in the Conservation Reserve Program (CRP) in 1987. He listed himself as owner of one hundred percent of the shares in the farm. Paul received $9310 in CRP payments per year until 1999, when the payments increased to $10,889. Paul took out a mortgage on the Thayer farm and paid on that mortgage. Paul also paid real estate taxes and maintained insurance on that property.

In 1984, Paul's divorce lawyer, J.A. Reynoldson, mentioned the Thayer farm in a letter to Dixie Loy's attorney, James Steffes. The letter stated:

The 200 acre farm that shows a little equity on Paul's financial statement filed with the bank in December is really Larry Loy's farm. Larry was buying this farm on contract and was not able to make a payment and Paul took over the contract and borrowed money to make that payment in order to not have it forfeited. We do feel that although that contract is now in Paul's name it is not an asset that we should consider.

But the Union County property was listed as being owned by Paul in the 1984 dissolution decree. The property was not listed as an asset belonging to Larry in Larry's 1999 dissolution decree.

Paul died on February 19, 2010. His son Jerry filed a petition for probate of the will and was appointed as executor on March 18, 2011. On August 13, 2010, Larry filed his claim in probate, advancing two positions: (1) the court should recognize he owned the Thayer farm, under equitable principles, even before he was devised the property in his father's will, and (2) the estate should reimburse him for $104,604.06 in expenses he allegedly incurred from 1983 through 2010 for maintaining machinery and equipment owned by his father.

Larry also filed an objection, arguing his father's holographic will was not subject to probate. Larry was joined in his objection by Brenda Loy, his brother Terry's widow.*fn1 She argued the will was vague and ambiguous and by its terms was only effective if Paul died in an accident. In June 2011, Larry withdrew his will contest.

In September 2011, the estate filed an answer and counterclaims, alleging Larry had been farming his father's property without paying rent to the estate's detriment and Larry was unjustly enriched by using equipment belonging to his father. The court held a trial on Brenda Loy's will contest, Larry Loy's claims against the estate, and the estate's counterclaims against Larry and actions for ...


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