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In re Estate of Christoffersen

Court of Appeals of Iowa

April 17, 2019

IN THE MATTER OF THE ESTATE OF DAVID L. CHRISTOFFERSEN, Deceased.
v.
SHIRLEY CHRISTOFFERSEN, Appellee. KAREN E. CHRISTOFFERSEN, Appellant,

          Appeal from the Iowa District Court for Shelby County, Timothy O'Grady, Judge.

         The administrator of an estate appeals a probate order finding she engaged in self-dealing and disapproving an amended report and inventory.

          Thomas J. Anderson of Thomas J. Anderson, P.C., L.L.O., Papillion, Nebraska, for appellant.

          James V. McKinney of McKinney Law Offices, PC, Waukee, for appellee.

          Considered by Tabor, P.J., and Mullins and Bower, JJ.

          Tabor, Presiding Judge.

         David Christoffersen borrowed $110, 962.30 from his sister Shirley Christoffersen during the final four years of his life. After David's death in January 2016, Shirley sought repayment of her loans by making a claim against David's estate, which was administered by his surviving spouse, Karen Christoffersen. Karen did not pay Shirley's claim and moved to amend the report and inventory in several ways. After a hearing, the probate court found Karen engaged in self-dealing under Iowa Code section 633.160 (2017). The court also refused to approve the amended report and inventory, finding Karen was attempting to "reduce the amount of funds in the estate available to pay unsecured claims." Karen appeals the probate ruling.

         Because the probate court properly applied the provisions of Iowa Code chapter 633 to Karen's conduct as the administrator of David's estate, we affirm the self-dealing determination. We slightly modify the ruling on the amended report and inventory to allow the correction of genuine inaccuracies in the original report.

         I. Facts and Prior Proceedings

         David and Karen Christoffersen were married for twenty-eight years. Karen had a daughter from a previous relationship. During their marriage, Karen worked as a homemaker. David had a degree in mechanical engineering and handled the family's finances, sharing little information with Karen.

         In April 2012, David found himself in a "financial bind" and started borrowing money from his sister Shirley. The first check was for $5000. The second check, dated January 2013, was for $3500. After that, Shirley wrote David personal checks on an almost monthly basis, the last one in September 2015. All told, David accumulated a debt to his sister in the amount of $101, 000. According to Shirley, David regretted borrowing the money, but he promised to pay her back when he sold a warehouse in Atlantic from which he operated a parts-distribution business called Chewit Properties, LLC (Chewit Properties).[1]

         Suffering from heart and lung failure, David checked into the hospital in October 2015 and died in January 2016. Both Karen and Shirley visited him daily, and during a conversation in the hospital cafeteria about the couple's troubled finances, Shirley mentioned the loans she'd been making to David. Karen had been unaware of her husband's borrowing.

         In the same timeframe, Karen received three default notices from Midstates Bank. In November 2015, Shirley accompanied Karen to meet with the loan officer. Shirley agreed to advance $9217.32 to pay off two of three bank notes on Chewit Properties. She also paid other expenses related to that account in the amounts of $114.98, $255, and $375. With those additional advances, David owed his sister a total of $110, 962.30 at the time of his death.

         Karen was appointed administrator of David's estate in late January 2016. The original report and inventory valued the gross estate for federal tax purposes at $687, 076.08. It valued Chewit Properties at $140, 000. In March 2016, Karen sold the Atlantic warehouse for $300, 000 and first used those funds to pay the $161, 290 mortgage balance on the Chewit property. Shirley testified David intended her unsecured loans be repaid after the Chewit mortgage. But Karen used the remainder of the sale proceeds to pay off two personal mortgages: (1) the remaining balance of $104, 696.35 from a $160, 000 mortgage on farm property owned by David and Karen as ...


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