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Carson v. Rothfolk

Court of Appeal of Iowa

July 10, 2013

LARRY CARSON, Executor of the ELMER JOSEPH CARSON ESTATE, Plaintiff-Appellant,
v.
BONNIE L. ROTHFOLK, a/k/a BONNIE L. CARSON and JAY CARSON, Defendants-Appellees.

Appeal from the Iowa District Court for Linn County, Patrick R. Grady, Judge.

An executor appeals the district court's decision rejecting his attempts to set aside a conveyance of land and collect the profits from a growing crop.

Peter C. Riley of Tom Riley Law Firm, P.C., Cedar Rapids, for appellant.

Paul D. Burns and Jessica A. Doro of Bradley & Riley PC, Cedar Rapids, for appellees.

Considered by Doyle, P.J., and Danilson and Mullins, JJ.

MULLINS, J.

Larry Carson, as executor of his father's estate, appeals the district court's ruling (1) refusing to grant his request to set aside a conveyance of land the decedent executed in favor of one of his other children or, alternatively, to impose a constructive trust; (2) failing to award the estate the proceeds of the crop planted before the decedent's death but harvested after his death; and (3) assessing a portion of the deposition costs incurred during the litigation against the estate. We affirm the district court's refusal to set aside the conveyance. However, we find the estate is entitled to the profits from the crop planted during the decedent's life tenancy but harvested after his death. We therefore reverse the district court's decision on that issue. Finally, we find the district court did abuse its discretion in assessing a portion of the deposition costs to the estate.

I. BACKGROUND FACTS AND PROCEEDINGS.

Elmer Joseph Carson (Joe) died on August 7, 2008. Pursuant to a will executed in December 2006, Joe's son, Larry, was appointed as executor. Joe was estranged from most of his five children at various points in his life. He had the longest consistent relationship with his daughter Bonnie Rothfolk a/k/a Bonnie Carson. Following Joe's divorce from his first wife, the mother of his five children, Joe signed a contract in 1978 in which he sold sixty acres of land to Bonnie, while reserving to himself a life estate. Bonnie testified her father called to tell her he was sending her a contract to sign, notarize, and send back. After Bonnie received the contract she was concerned that it called for her to purchase the land with a $3000 down payment and make annual payments of $3000 until the sum of $30, 000 was paid. When Bonnie explained to her father that she did not have the money to purchase the land, Joe informed her that he was gifting the payment to her. Bonnie signed the contract and returned it to Joe, who recorded the contract and never demanded payment from her on that contract. It was known among at least some of the children that Joe transferred the property to Bonnie to try to avoid paying alimony to his first wife. However, Bonnie asserts she did not become aware of this motivation until her father became ill in 2006.

Joe was diagnosed with dementia after becoming ill in the fall of 2006. Bonnie and her brother, Jay, initiated a conservatorship proceeding in December 2006. Over Christmas, Larry took Joe out of the veteran's home where Joe was living and took Joe to Joe's attorney's office where Joe executed a new will removing Bonnie as a residual beneficiary. Joe also added a provision regarding the land conveyed in 1978, which stated, "I do not believe all payments have been made on that contract, and request my executor require an accounting from Bonnie Carson."[1] After executing the will, Larry then took Joe to another attorney that same day, to discuss the pending conservatorship proceeding. That attorney ultimately advised Joe to file a voluntary petition for the appointment of a guardian, which was accomplished in February 2007. Joe requested Larry be appointed his guardian. The district court heard both petitions together and appointed Jay as Joe's guardian and conservator.

Jay acted as the guardian and conservator for approximately a year, during which time he planted corn on the sixty acres in dispute. Jay was removed as conservator and guardian in June 2008, and attorney Judith Jennings Hoover was appointed in his place. Jay presented invoices to Judith for work he performed and expenses he incurred in planting the crop. However, Jay received payment for these services not from Joe's account but from an account Bonnie set up for the farm expenses. Joe died in August. Jay testified at the hearing in this matter that at the time of Joe's death, the crop was not yet mature. Larry and another of Joe's children, Ed, disputed Jay's contention, asserting the crop could have been harvested at that time for silage.

After Bonnie had Larry and Ed served with no trespassing notices prohibiting them from entering onto the farm, Jay harvested the crop in late October and early November grossing $34, 501.31. Jay sent an invoice for his service in harvesting the crop to Bonnie. The profits from the sale of the grain were deposited in Bonnie's account.

Larry, as the executor of the estate, filed a petition for declaratory relief against Bonnie and Jay asserting (1) the contract signed by Joe conveying the property to Bonnie was a sham as it was done to shield the real estate from claims from Joe's ex-wife (the mother of Larry, Bonnie, Jay, Ed, and Julie) and (2) the estate is entitled to the growing crop under the doctrine of emblements. The estate requested the contract conveying the land to be declared null and void and the crop be declared the property of the estate. Bonnie and Jay counterclaimed asking the court to declare the contract enforceable and to require the estate to prepare and execute a deed in satisfaction of the contract.

The case proceeded to trial in February 2012. The court issued its ruling finding that while the sale of the sixty acres to Bonnie was suspect, the estate failed to convince the court by clear and convincing evidence the transaction was fraudulent so as to justify setting aside the transfer. The court also rejected the estate's attempt to impose a constructive trust. The court found that because the crop was not mature at the time of Joe's death, the estate is not entitled to the proceeds from the harvested crop. Both parties filed posttrial motions under Iowa Rule of Civil Procedure 1.904(2), and the court amended its ruling, (1) ordering Bonnie to reimburse the estate for the amount the conservatorship contributed to the inputs for the crop, (2) declaring the land conveyance valid and enforceable and directing the clerk of court to issue a certificate of change of title to reflect Bonnie as the owner, and (3) taxing the estate with court costs and $540 for the deposition of Larry Carson.

The estate appeals.

II. SCOPE AND STANDARD OF REVIEW.


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