Appeal from the Iowa District Court for Scott County, Mark J. Smith, Judge.
Timothy McDonnell appeals a district court's ruling vacating his affidavit of forfeiture for improper service.
John Flynn, Davenport, for appellant.
John Newman of Wehr, Berger, Lane & Stevens, and Michael Koury, Davenport, for appellees.
Considered by Vogel, P.J., and Danilson and Tabor, JJ.
Vendor Timothy McDonnell appeals the district court's order vacating the forfeiture of his real estate contract with vendee Francisco Duque. The court decided Timothy had not complied with Iowa Code section 656.2(2) (2011). That statute requires a vendor to serve notice of forfeiture on a person in possession of the property if different from the vendee. Although the petition filed by Francisco and Esperanza Duque did not allege the failure to serve their son and daughter-in-law, Bruce and Tina Duque, the court nonetheless found the younger couple qualified as persons in possession.
Because the district court sua sponte ruled on a ground not raised in the Duques' petition, we reverse. Moreover, even if the petition's reference to "improper service" could be read so broadly as to encompass the issue reached by the district court, the court erred in finding Bruce and Tina Duque were persons in possession when they did not physically occupy the property or have an interest in the real estate contact.
I. Background Facts and Proceedings
Francisco and Esperanza Duque and their son, Bruce, ran a used car lot called Aardvark Auto Sales in Davenport. They rented the land at 802 West 2nd Street, where the dealership was located. On March 30, 2000, Francisco entered into a real estate purchase contract with R.C. McDonnell to buy the property for $105, 000 at eight percent interest. The agreement included a $5000 down payment, with the balance to be paid over fifteen years in monthly installments of $956. Francisco also was responsible for paying real estate taxes and maintaining insurance on the property.
Although the contract is between Francisco Duque and R.C. McDonnell, Bruce Duque and his wife, Tina, paid contract installments and property taxes. Bruce and Tina were occasionally late on their contract payments and would sometimes fall behind on the property taxes. When R.C. McDonnell died in 2004, Bruce and Tina sent payments to his estate and to his successors in interest: Harold McDonnell, Mary Cox, and Joanne Meyers. Three years later, Aardvark Auto Sales closed, and the couple rented the property to Brad Burris for his business, Bridgeview Auto Sales. As tenant, Bridgeview Auto Sales sent rent payments to Bruce and Tina.
In June 2008, R.C. McDonnell's nephew, Timothy McDonnell, purchased the real estate contract. Bruce and Tina were delinquent on many payments to Timothy as well, which increased the interest added to the contract balance. At the time of trial, parties disputed the amount owed. Bruce and Tina contended $30, 000 is still due; Timothy argued $68, 954.54 remains unpaid.
Timothy contacted Bruce and Tina in June 2011 regarding the property's delinquent taxes and the $12, 000 in outstanding payments on the contract. He served a notice of forfeiture on Bruce's parents, Francisco and Esperanza Duque, that same month. Bruce and Tina addressed the delinquent tax payments and paid the contracted amount owed through July 1, 2011, but neglected to continue paying on the contract or taxes due. September 30, 2011 passed without the couple paying taxes.
On November 8, 2011, Timothy served a notice of forfeiture on Francisco and Esperanza Duque at their residence and served a notice on Bridgeview Auto Sales. Timothy attempted to serve notice on Bruce and Tina Duque, but ...