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Estate of Steensma v. Buysman, Inc.

Court of Appeals of Iowa

June 6, 2018

ESTATE OF TENA STEENSMA, Plaintiff-Appellee,

          Appeal from the Iowa District Court for Osceola County, Don E. Courtney, Judge.

         A corporation and three individuals appeal from the denial of their post-judgment motion to void the judgment and motion to enlarge. AFFIRMED IN PART, VOIDED IN PART, AND REMANDED.

          Curt Krull of Waagmeester Law Office, P.L.C., Rock Rapids, for appellants.

          John E. Lande and Thomas D. Hanson of Dickinson, Mackaman, Tyler & Hagen, P.C., Des Moines, for appellee.

          Heard by Vaitheswaran, P.J., and Potterfield and Tabor, JJ.


         This appeal stems from disputes between shareholders of Buysman, Inc. (Buysman). The plaintiff, the Estate of Tena Steensma, filed the underlying lawsuit against the Buysman corporation (later adding the individual defendants, Jesse, Dale, and Danna Braaksma) for failure to perform a 2011 stock redemption agreement. The estate owned half the shares of Buysman; Jesse Braaksma owned the other half.

         The district court granted summary judgment in favor of the estate, required Jesse to relinquish his shares in Buysman, and entered judgment in the amount of $203, 930.32 jointly and severally against the four defendants.

         Buysman and the Braaksmas filed a post-judgment motion, which the court denied, and they then filed this appeal of the district court's ruling. The estate filed a motion to dismiss, arguing the appeal was untimely and should be dismissed for lack of jurisdiction.[1]The defendants respond that the motion they filed following the court's January 11, 2017 ruling was not an Iowa Rule of Civil Procedure 1.904(2) motion to enlarge or amend but rather a motion to challenge the ruling as void-which can be done at any time-and they timely appealed from the court's ruling on that motion.

         If we determine the appeal is timely and reach the merits, Buysman and the Braaksmas ask that we find the district court's ruling is void as to each of the four defendants because the court failed to rule on a pending motion before entering the ruling and because defendant Jesse Braaksma, a non-lawyer, was allowed to represent himself, as well as Dale and Danna Braaksma and the corporation in the proceedings. They maintain the proper remedy is to declare the ruling and judgment void and remand the case to the trial court for further proceedings. The estate argues that the judgment should be affirmed as to each of the four defendants.

         I. Background Facts and Proceedings.

         Buysman is a corporation comprised of 320 acres of farmland. Dale Braaksma and Tena Steensma purchased equal shares in Buysman in 2003 for a total value of $736, 000.[2] Dale conveyed half of his shares to his wife Danna in 2003, and in 2004 Dale and Danna conveyed all of their shares to their son Jesse. The Braaksmas have always held the majority, if not all, of the director and officer positions in Buysman. Jesse rents farmland from Buysman.

         Tena Steensma passed away in 2010. Her estate's claims against Buysman and the Braaksmas include that Jesse does not pay fair market value for the land he rents and consistently has lower yields than the county average.

         In March 2015, the estate filed a petition for dissolution against Buysman asserting lack of proper accounting, breach of fiduciary duty, oppression, breach of contract for failing to uphold a redemption agreement, unjust enrichment, and civil conspiracy. Buysman filed an answer through counsel in April. In December 2015, the estate filed a motion to amend to add Dale, Danna, and Jesse as defendants.

         Buysman's counsel withdrew in January 2016. A thirty-day stay was granted in order for Buysman to obtain new counsel. At a March telephonic hearing on the estate's motion to amend the petition and add new parties, Jesse participated on behalf of Buysman, himself, and his parents to resist the motion to amend. The estate objected to

          Buysman appearing without counsel. In reply, Jesse stated he intended to employ a lawyer, but "would not object to [the estate's] objection. I would rather be represented. That is my intention, but so far I have not been able to find anyone." At the end of the hearing, the court admonished Jesse, "[Y]ou need to get counsel employed on behalf of Buysman, Inc. as soon as possible." The court granted the estate's petition to add the three Braaksmas as parties and stated, "On this occasion the court allowed Mr. Braaksma, a nonlawyer to participate but cautioned him that the corporation needed to employ an attorney for future proceedings."

         Neither Buysman nor the Braaksmas filed an answer or any response to the estate's amended petition. On April 12, the estate filed a notice of intent to file for entry of default judgment against Buysman and the Braaksmas. On April 22, Buysman and the Braaksmas filed a "Joint Motion to Dismiss" with individual signature lines for Buysman and each of the Braaksmas. None had counsel of record at that time. The estate filed a resistance as to all parties, arguing as to Buysman that the corporation could not file a motion unrepresented by counsel. The district court did not rule on the motion to dismiss until its denial of the post-judgment motion.

         The estate filed a second application for default specifically against Buysman on May 19. Buysman was still unrepresented by counsel. The estate argued Buysman had not filed a responsive pleading as required by Iowa Rule of Civil Procedure 1.303 in response to the estate's amended petition, both because a motion to dismiss is not a responsive pleading tolling the deadline in rule 1.303 and an answer had not been filed, and because Buysman had not filed anything through counsel. The district court did not rule on the estate's applications for default, although the court mentioned in its ruling on summary judgment filed in January 2017 that Buysman was in default.

         Jesse Braaksma continued to participate on behalf of Buysman. His parents separately signed motions and pleadings. In June, Buysman and the Braaksmas filed a motion for extension of time to respond to the estate's motion to remove confidentiality from bank documents. In July, they filed a resistance to the ...

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