MAXWELL R. ALBERHASKY, Plaintiff-Appellant,
GEORGE RODNEY ALBERHASKY, Defendant-Appellee, and GRAYSON H. ALBERHASKY, Intervenor-Appellee.
from the Iowa District Court for Johnson County, Mary E.
appeals the dismissal of the lawsuit against his father
alleging breach of fiduciary duties.
Stephen C. Gerard II and Angela Boeke, Breckenridge,
Colorado, for appellant.
A. Finley and Stephen B. Jackson Sr. of Shuttleworth &
Ingersoll, PLC, Cedar Rapids, for appellee George Rodney
A. Teitle of Teitle Law Offices, P.C., Bettendorf, for
appellee Grayson H. Alberhasky.
by Vogel, C.J., and Doyle and Tabor, JJ.
Alberhasky sued his father, George Rodney Alberhasky,
alleging Rod breached his fiduciary duties as a trustee of
assets transferred to Max by Rod's mother, Alois
Alberhasky. The district court dismissed Max's
petition on Rod's motion. Because we must assume the
petition's well-pled facts to be true, and because those
facts reveal a conceivable route for Max to prove a right of
recovery, we find dismissal was premature. We reverse and
remand for further proceedings.
Facts and Prior Proceedings
father-son dispute inhabits the intersection of a
grandmother's generosity and an acrimonious divorce. The
divorce litigation dates back to 1999, when Rod petitioned to
end his marriage to Angela Boeke. Together, Rod and Angela
had two sons-Max and Grayson. In 2000, the boys' paternal
grandmother, Allie, established a revocable trust
(Allie's Trust) as part of her estate planning. Allie
named herself trustee and designated her son, Rod, and her
daughter, JoEllen, as successor trustees upon her
incapacitation. Rod and JoEllen assumed their roles as
co-trustees of Allie's Trust in 2009.
2010, Allie's Trust enrolled in an Iowa Advisor 529
with Max as the named beneficiary, depositing $65, 000 in
trust assets into the account. The check drawn from
Allie's Trust and deposited into the 529 plan was
annotated: "FBO Max Alberhasky." Allie's Trust
likewise set up 529 plans with identical deposits for the
benefit of her other three grandchildren. Also as part of her
estate planning, Allie transferred her interest in a North
Liberty farm to the Alberhasky Family LLC and distributed
shares to Rod, JoEllen, Max, Grayson, and JoEllen's two
children. Allie gave these shares to her grandchildren
through the Uniform Transfers to Minors Act
died in 2011. In 2012, Rod modified the 529 plan initially
naming Max as the beneficiary to instead name Max's
younger brother Grayson as beneficiary.
December 2013, Max sued Rod. The petition alleged these facts:
• Allie "made regular annual monetary gifts to each
of her grandchildren."
• Allie "also funded 529 College Savings Plans
for each of her grandchildren in equal amounts specifically
to provide for her grandchildren's future
• Rod "has acted as a trustee of various assets
and funds" belonging to Max, held under the
• Rod "also acted as co-trustee of the 529
College Savings Plan" established for Max's
benefit by Allie's Trust.
• The district court presiding over the divorce
proceedings removed Rod as trustee of Max's UTMA assets
and 529 plan.
• The court subsequently appointed USBank as successor
trustee of Max's UTMA funds.
• Max received the UTMA assets held by the USBank
trust department in November 2013.
on these facts, the petition contended Rod owed Max fiduciary
duties in handling both the 529 plan and UTMA funds, and Rod
breached those fiduciary duties. The petition sought three
remedies: (1) an accounting of the UTMA assets held for Max,
(2) a voiding of the transaction transferring the beneficiary
designation of the 529 account from Max to Grayson, and (3)
damages stemming from Rod's alleged breach of fiduciary
February 2014, Rod moved to dismiss Max's suit for
failure to state a claim upon which relief can be granted.
Rod argued the 529 plan was not subject to the Iowa Trust
Code (Iowa Code chapter 633A) and Max lacked standing to
challenge any change in beneficiary designation of the 529
plan because plan owners are authorized to change
beneficiaries as they see fit. See Iowa Code §
12D.3(3)(a)-(b). Rod further asserted the UTMA assets were
not governed by the trust code, but he agreed to provide an
accounting of the UTMA funds.
moved to intervene, alleging he had "a direct financial
interest in the outcome of these proceedings." The court
granted Grayson's motion.
district court held a hearing on Rod's motion to dismiss.
Rod offered the testimony of two experts on 529
plans-financial advisor Robert Milbrath and attorney Robert
N. Downer. Rod additionally submitted a number of exhibits
relating to Allie's Trust and the 529
the hearing, the district court granted the motion to
dismiss. On the UTMA assets, the court concluded: "[T]he
Iowa Trust Code does not apply to the UTMA account and the
UTMA account was closed with funds distributed to the
petitioner in 2012." In dismissing Max's claim
relating to the 529 plan, the court found Max had "no
standing" to challenge how the account was controlled by
the owner. The court also found no authority to support the
proposition that a 529 account is subject to the trust code.
appeals, arguing the district court erred in holding an
evidentiary hearing on the motion to dismiss and misapplied
legal standards in dismissing his claims. Because Max's
petition satisfies Iowa's liberal notice-pleading
standards, we reverse the district court's grant of
Rod's motion to dismiss for failure to state a claim upon
which relief can be granted.
Scope and Standard of Review
review the grant of a motion to dismiss for correction of
errors at law. Turner v. Iowa State Bank & Tr.
Co., 743 N.W.2d 1, 2-3 (Iowa 2007). Dismissal is
appropriate if the petitioner "fails to state a claim
upon which any relief may be granted." Id. at 2
(citing Iowa R. Civ. P. 1.421(1)(f)). A motion to dismiss
tests "the legal sufficiency of the petition."
Id. at 3 (citing Berger v. Gen. United Grp.,
Inc., 268 N.W.2d 630, 634 (Iowa 1978)). We view the
petition in the light most favorable to Max, resolving any
doubts in his favor. See Rees v. City of Shenandoah,
682 N.W.2d 77, 79 (Iowa 2004).
Did the district court treat Rod's motion as a request
for summary judgment?
argues the evidence considered and standard employed by the
district court are of no consequence, because "[w]hen a
district court considers additional matters outside the
pleadings, the reviewing court may treat a motion to dismiss
as a motion for summary judgment." Rod's argument
overstates when a court may consider substance over form and
treat a motion that, in name, seeks dismissal on the
pleadings, but in content, ...