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Shea v. Lorenz

Court of Appeals of Iowa

October 25, 2017

ALICE M. SHEA, Plaintiff-Appellant/Cross-Appellee,

         Appeal from the Iowa District Court for Pottawattamie County, James M. Richardson, Judge.

         Both parties appeal the district court orders that followed our previous decision remanding this matter. AFFIRMED ON BOTH APPEALS AND REMANDED

          Gary J. Shea of Gary J. Shea Law Offices, Cedar Rapids, for appellant/cross-appellee.

          David J. Skalka of Croker, Huck, Kasher, DeWitt, Anderson & Gonderinger, L.L.C., Omaha, Nebraska, and M. Brett Ryan, Council Bluffs, for appellees/cross-appellants.

          Vogel, P.J., and Potterfield and Mullins, JJ.

          MULLINS, Judge.

         Alice Shea appeals, and Theresa Lorenz and her siblings: Heidi Lorenz, Valerie Bisanz, Kristin Ostrander, and Thomas Lorenz (collectively the Lorenz siblings) cross-appeal, the district court's decision following our previous opinion remanding this matter to the district court for the establishment of a constructive trust. See Shea v. Lorenz, No. 14-0898, 2015 WL 4158781, at *20 (Iowa Ct. App. July 9, 2015). In this appeal, Alice asserts (1) the district court should not have appointed the Lorenz siblings as receivers of the constructive trust, (2) the Lorenz siblings should pay interest at a rate of 5% on the funds they received from their father, Bill Lorenz, from the time they obtained possession of the funds, and (3) the district court erred in retaxing the trial court costs on remand.

         In their cross-appeal, the Lorenz siblings assert (1) we should give full faith and credit to the Nebraska's Supreme Court opinion in the Bill Lorenz probate case which should result in vacating our previous opinion, (2) Alice's acceptance of the past due spousal support waives her claims to expand the prior district court ruling, (3) they should not have to pay interest on the spousal support payments, (4) the court's appointment of any receivers is an error, (5) the court erred in ordering interest on the past due spousal support and in enjoining them from using the funds, and (6) the court erred in assessing the full amount of the judgment against Theresa instead of reducing the amount by the funds that were paid to her now deceased brother, Matthew Lorenz.

          I. Background Facts and Proceedings.

         The background facts of this acrimonious litigation are sufficiently outlined in our prior decision, and they need not be repeated here except where pertinent to the current issues in this appeal. See Shea, 2015 WL 4158781, at *1-4. Our prior decision resulted in a remand to the district court for the establishment of a constructive trust, which was to be made up of the amount of funds each Lorenz sibling obtained from their father's pay-on-death investment accounts with Schwab. We ordered:

Each child shall be responsible up to the amount they received from these accounts, except the Estate of Matthew Lorenz and Debbie Lorenz who were dismissed by Alice prior to trial. Theresa shall be jointly and severally liable for the full amount of the fraudulently transferred funds from the Schwab accounts.

Id. at *20. In addition, this court entered a separate order that assessed Alice, Theresa, and Mark Lorenz with one-third of the costs on appeal and directed "a retaxation of trial court costs in district court upon remand." Alice's spousal support obligation continued to accrue during the prior appeal, and on September 28, 2015, the Lorenz siblings and Mark Lorenz deposited the sum of $62, 000[1] with the court for satisfaction of thirty-one months of spousal support payments.

[A] constructive trust shall be formed with Defendants Theresa Lorenz, Kristin Ostrander, Mark Lorenz, Valerie Bisanz, [Thomas Lorenz[2] and Heidi Lorenz responsible for said alimony obligation to the extent of any Schwab investment account received from [Bill] Lorenz. Defendant Theresa Lorenz shall be jointly and severally liable for the total amount of the fraudulently transferred funds from [Bill] Lorenz's Schwab accounts.

         Thereafter, Alice filed a motion to retax court costs and also a motion to establish a constructive trust, which would name an independent receiver to take possession of the funds and authorize the receiver to oversee the monthly spousal support distributions and investment of the funds. These motions came on for hearing in February 2016, and the court left in place its previous ruling assessing court costs to Theresa, though it specifically articulated the amount of the expert witness fees, mileage, and postage. It ordered interest to accrue on past due spousal support payments at a rate of 10% per annum until paid and made the interest a valid claim against the constructive trust. It ordered Alice to file a written demand for the exact interest she claimed. It also entered judgment for the specific amount each Lorenz sibling would be responsible to pay under the constructive trust for Alice's spousal support and appointed each sibling as the receiver of the trust for the amount each is responsible to pay. Finally, it ordered each of the siblings to be "enjoined and prohibited from transferring or encumbering in any way any asset or funds held by them as a result of their inheritance from their father until they have paid the entire judgments entered against them in this case."

         Alice filed a posttrial motion seeking the court to expand its order to include additional court costs, additional interest from the time the Lorenz siblings obtained possession of the funds from their father or from when the lawsuit was filed, and for an order for each Lorenz sibling to provide an accounting of the funds. The court summarily denied Alice's motion.

         The Lorenz siblings then filed a "motion to vacate judgment or alternatively rule 1.904(2) motion to amend judgment." The Lorenz siblings asserted the Nebraska Supreme Court recently issued its decision in the Bill Lorenz probate case, which must be given full faith and credit under the U.S. Constitution and required a finding that Alice's claims in Iowa be dismissed. In the alternative, the motion requested the court correct the total judgment entered against Theresa by subtracting out the funds that were paid to her now deceased brother, Matthew, who had been dismissed from the lawsuit before the prior appeal. The motion also asked the court to reconsider its decision on interest, and remove the injunction placed on the siblings from using the funds. Alice filed a resistance to this motion, but before the court could rule, Alice filed a notice of appeal.[3]However, Alice also sought a limited remand from our supreme court so that the district court could rule on this motion, which was granted by the supreme court.

         In April 2016, the district court denied the Lorenz siblings' amended motion, concluding in accordance with our prior opinion the Nebraska probate case did not affect Alice's Iowa claims under the Uniform Fraudulent Transfers Act (UFTA), the total amount of the judgment against Theresa was correct but she was entitled to a full credit for the amounts paid by her siblings, the siblings are enjoined for using the funds in order to ensure sufficient funds are available to fulfill the spousal support obligation, and the 10% interest on the past due payments would remain in accordance with Iowa Code section 535.3(2) (2011). The Lorenz siblings filed a cross-appeal.

         II. Motion to Dismiss Cross-Appeal.

         As a preliminary matter, Alice filed a motion to dismiss the Lorenz siblings' cross-appeal, asserting the district court and this court lack jurisdiction or authority to address the effects of the Nebraska probate case on this litigation, the motion was an improper collateral attack on our prior opinion that did not comply with the rules governing a petition to vacate under Iowa Rules of Civil Procedure 1.1012 and 1.1013, and the Lorenz siblings did ...

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