VELMA J. HUSSEMANN, By Her Next Friend and Attorney-In-Fact MARCELLA D. RITTER, Appellant,
HERBERT J. HUSSEMANN JR. and ROBERT J. HUSSEMANN, as Trustees of the HERBERT J. HUSSEMANN INTER VIVOS TRUST AGREEMENT, dated June 3, 1991, Appellees
Appeal from the Iowa District Court for Benton County, Patrick R. Grady, Judge. A surviving spouse appeals the district court's order granting judgment on the pleadings to the trustees of the decedent's estate and denying her claim of a spousal elective share.
Daniel L. Seufferlein of Ackley, Kopecky & Kingery, LLP, Cedar Rapids, for appellant.
Mark E. Mossman and Amy L. Van Wechel of Mossman & Mossman, LLP, Vinton, for appellees.
This conflict-of-laws case requires us to determine whose state law governs the enforceability of mutual clauses in a postnuptial agreement that waived each spouse's elective share. Two Florida residents were married in Florida in 1991. A few months later, they signed a postnuptial agreement in Florida. The agreement expressly provided that Florida law would apply. The married couple subsequently moved to Iowa in 2005. In 2012, one of the spouses died, and the other spouse sought to claim an elective share under Iowa law, notwithstanding the waiver of the share in the postnuptial agreement. The district court denied relief based on Florida law. Applying the principles of the Restatement (Second) of Conflict of Laws, we give effect to the choice-of-law provision in the agreement and hold that Florida law applies. Accordingly, we affirm the judgment of the district court.
I. Facts and Procedural Background.
Herbert J. Hussemann Sr. and Velma J. Hussemann were married on February 7, 1991, in Florida at a time when both were Florida residents. Herbert and Velma had been married previously and had children from their prior marriages. Marcella Ritter is Velma's daughter from her first marriage, and Herbert Hussemann Jr. (Herbie) and Robert Hussemann are Herbert's children from his first marriage.
Shortly after their February 1991 marriage, when they were still Florida residents,
the couple entered into a postnuptial agreement. The agreement was signed by the parties on June 3, 1991, in Citrus County, Florida. The agreement contained a separate " Statement of Assets and Liabilities" for each spouse, and it was witnessed and notarized. The agreement provided that each spouse's premarital assets would remain his or her own property, that property acquired after marriage would become and remain the property of the party in whose name title was taken, and that the parties waived rights to spousal support or equitable division of property in the event of dissolution of marriage. The agreement further contained a provision detailing the " Disposition of Property Upon Death." Subsection B of that provision stated:
Wife hereby waives and releases all rights in and claims against the estate of Husband on his death, including elective share, dower, family allowance, inheritance, or any spousal support or other claims or rights given by law or otherwise. Neither Wife nor Husband intend that this Agreement limit or restrict the right of Husband to make any bequest, devise or gift to Wife by Will or otherwise. Husband may elect to make a bequest, devise or gift to Wife by his Will, without invalidating this Agreement, and may thereafter change or eliminate such bequest, devise or gift by a codicil or trust amendment, or by another Will, or otherwise, without in any way affecting the continued effectiveness of this Agreement.
The agreement also disclosed that Herbert had been represented by independent counsel in the negotiation of the agreement and that Velma had not been represented by counsel. A choice-of-law provision stated, " All questions relating to the validity and construction of this Agreement shall be determined in accordance with the laws of the State of Florida."
On the same day the postnuptial agreement was signed, Herbert also created an inter vivos trust (the Trust) into which he placed his assets. The Trust made no provision for Velma, and all residual assets were left to Herbie and Robert. Herbert was named as the settlor and trustee, and Herbie and Robert were named as successor trustees. The Trust was not only formed in Florida, but (like the postnuptial agreement) provided that it was governed by Florida law.
Herbert and Velma continued to live in Florida for another fourteen years. In 2005, the couple moved to Belle Plaine, Iowa. They remained there until Herbert's death on September 17, 2012. Herbert died intestate.
Following Herbert's death, on September 20, Velma (through her next friend and attorney-in-fact, Marcella Ritter) filed a petition claiming her spousal elective share of the Trust under Iowa Code section 633.238. See Iowa Code § 633.238 (2011) (describing elective share of surviving
spouse). The trustees answered the petition and asserted Velma had waived her rights to a spousal share under the postnuptial agreement, and the waiver was valid and enforceable under the laws of Florida, which had been selected as the controlling law in the agreement.
On February 27, 2013, the trustees filed a motion for judgment on the pleadings. Velma resisted the motion, filed her own motion for judgment on the pleadings, and argued the entire postnuptial agreement was void as violating Iowa's public policy against postnuptial agreements.
The district court issued its order on June 11. In it, the court concluded " the undisputed choice of law provision in the agreement has effectively taken the matter out of the purview of Iowa law and subsequently Iowa's public policy." The court added:
Furthermore, accepting Plaintiff's argument declaring the entire agreement void would lead to an unfavorable consequence. Parties who intentionally enter into such agreements in states allowing them could simply circumvent the agreement later by bringing a claim in Iowa.
As a result, the court granted the trustees' motion for ...