Brown v. Vonnahme, 69439

• Decision Date: 18 January 1984
• Docket Number: No. 69439,69439
• Citation: 343 N.W.2d 445
• Parties: Larry BROWN and Darlene Beyerink, Executors of the Estate of Clarence Brown, Deceased; and Larry Brown and Darlene Beyerink and Leona Brown, Individually and as Devisees and Sole Beneficiaries Under the Last Will and Testament of Clarence Brown, Appellees, v. Mary VONNAHME, Administrator of the Estate of Barbara Trecker, Deceased, Appellant, Dennis Trecker; Ted A. Langel; Clara J. Langel; Agristor Credit Corporation; and Prudential Insurance Company of America, Defendants.
• Court: Iowa Supreme Court

Page 445

343 N.W.2d 445

Larry BROWN and Darlene Beyerink, Executors of the Estate of Clarence Brown, Deceased; and Larry Brown and Darlene Beyerink and Leona Brown, Individually and as Devisees and Sole Beneficiaries Under the Last Will and Testament of Clarence Brown, Appellees, v. Mary VONNAHME, Administrator of the Estate of Barbara Trecker, Deceased, Appellant Dennis Trecker; Ted A. Langel; Clara J. Langel; Agristor Credit Corporation; and Prudential Insurance Company of America, Defendants.

No. 69439.

Supreme Court of Iowa.

Jan. 18, 1984.

Gary L. McMinimee of Wunschel, Eich & McMinimee, P.C., Carroll, for appellant.

Thomas L. McCullough of McCullough Law Firm, P.C., Sac City, and David E. Green of Green & Siemann, Carroll, for appellees.

Considered by McGIVERIN, P.J., and LARSON, SCHULTZ, CARTER and WOLLE, JJ.

McGIVERIN, Presiding Justice.

Defendant administrator of the estate of Barbara Trecker, deceased, appeals, and plaintiffs cross appeal, from a ruling of the district court that impressed a judgment lien for plaintiffs upon an undivided one-half interest in an improved forty acre tract of land located in Carroll County which Barbara and Dennis Trecker formerly occupied as their homestead. The court's ruling was based impliedly on a finding that Barbara and Dennis Trecker fraudulently obtained a dissolution of their marriage for the purpose of putting their property beyond the reach of Barbara's judgment creditors. We conclude, on de novo review of this equity case, that plaintiffs, as judgment creditors, are not entitled to a judgment lien on, or any other interest in, the forty acre homestead. This result is based in part on the well settled law of Iowa that a judgment lien does not attach to property used and occupied as a homestead. Furthermore, we conclude that even if improper motives existed in the dissolution case, there could be no fraud on judgment creditors as to the homestead property because the creditors never were entitled to any interest in such property. Therefore, we reverse the district court ruling.

The forty acres involved in this dispute, along with an additional forty acre tract, were deeded to Barbara and Dennis Trecker, as joint tenants with right of survivorship, in 1968. Barbara and Dennis, as husband and wife, and their children then established their home on this property.

In 1976, Clarence Brown died as a result of an auto-pedestrian accident in which he was struck by a car driven by Michael Trecker and owned by his mother, Barbara Trecker. Neither Michael nor Barbara had any liability insurance on the auto.

In 1977, the plaintiffs in this case, as executors and devisees of Brown, brought a wrongful death action against Barbara and Michael Trecker. Barbara's husband, Dennis, was not made a party to that action. Judgment was entered against Barbara and Michael, on May 12, 1978, in the sum of $106,222.68 plus interest at the rate of seven percent from May 12, 1978, and also for punitive damages against Michael in the sum of $25,000.00 plus interest at the rate of seven percent from May 12, 1978, for damages caused by the wrongful death of Clarence Brown. No judgment was sought or entered against Dennis Trecker. This judgment was properly indexed and recorded by the Carroll County Clerk of Court.

At the time judgment was entered, the Treckers' eighty acres were encumbered by a first mortgage held by Prudential Life Insurance Company of America in the principal sum of $18,000 and a second mortgage held by Agristor Credit Corporation in the principal sum of approximately $12,000. In addition, Ted and Clara Langel purportedly held an option to purchase the eighty acres for $650 per acre. This alleged option was subsequently found by this court to be a preemption agreement that was invalid because it placed an unreasonable restraint on alienation. See Trecker v. Langel, 298 N.W.2d 289 (Iowa 1980).

Following the entry of the wrongful death judgment, the parties' attorneys entered into negotiations attempting to settle the judgment. A series of letters were exchanged, but a written negotiated settlement document was never signed. Plaintiffs did not pursue execution and levy on the eighty acres in their efforts to collect their wrongful death judgment. They were aware of the two mortgages and the litigation attempting to determine the validity of the Langel "option to purchase."

On December 20, 1979, Barbara Trecker amended a separate maintenance action she had filed on February 8, 1977, and sought a dissolution of her marriage with Dennis Trecker. The judgment arising out of the wrongful death action was not set forth by either party in financial affidavits, nor did either party inform the court of the existence of this judgment during the course of the proceedings. After trial, the court on January 7, 1980, entered a decree dissolving the Trecker marriage. Barbara was awarded custody of their minor children. The decree also provided for a property division in which Barbara received the forty acre homestead tract subject to the Prudential and Agristor mortgages and Dennis received the unimproved forty acres "free and clear of any liens." None of the Treckers' creditors were before the court during the dissolution proceedings.

Plaintiffs, thereafter, filed this action in equity, pursuant to Iowa Code sections 630.16-.19 (1977), asserting a judgment lien on the entire eighty acres notwithstanding the dissolution decree's property division. Plaintiffs alleged that the dissolution of the Trecker marriage was pursued by the Treckers with fraudulent intent to place their property beyond the reach of their creditors and that Barbara's estate is estopped from claiming that the plaintiffs do not have an enforceable judgment lien on the entire eighty acres based on the doctrines of promissory and equitable estoppel.

On August 17, 1980, Barbara Trecker died intestate before trial of the present case. Plaintiffs substituted the administrator of Barbara's estate as a party in her place. Iowa Code § 611.22 (1981).

After trial, the trial court held on October 25, 1982, that a judgment lien does not attach to a joint tenant's interest in property until a severance has occurred; that an agreement had never been reached between the parties for settlement of plaintiffs' wrongful death judgment and that the theory of promissory estoppel had not been established; and held by implication that the concealment of the outstanding wrongful death judgment from the dissolution court was fraudulent, therefore entitling the plaintiffs to a lien against one-half of the forty acre tract then "owned by the estate of Barbara Trecker" and a lien against one-half of the forty acre tract then owned by Dennis Trecker.

Barbara's estate appealed and plaintiffs cross appealed. Dennis Trecker, Prudential, Agristor, and the Langels are not now parties to this appeal. Therefore, this appeal is concerned only with the rights of the parties now before us in the forty acre homestead.

I. Plaintiffs' cross appeal. Plaintiffs' cross appeal is moot. They contend that an agreement to settle the wrongful death judgment against Barbara had been entered into by the Treckers and themselves prior to the dissolution of the Trecker marriage. The terms of this alleged settlement supposedly gave plaintiffs the "equity" in the non-homestead forty acres that remained after paying off the Prudential and Agristor mortgages. However, this cross appeal is no longer a justiciable controversy in view of an agreement entered into during the course of this appeal between plaintiffs and Dennis Trecker concerning their respective rights in the equity of the non-homestead forty acres that was awarded to Dennis by the dissolution decree. The agreement between plaintiffs and Dennis was brought to our attention by appellee's counsel in oral argument. The non-homestead forty acres is, accordingly, no longer an issue in the case. We, therefore, dismiss plaintiffs' cross-appeal as moot based on its failure to present a justiciable controversy. In view of this disposition, it is unnecessary to rule on a motion by the administrator of Barbara's estate to dismiss plaintiffs' cross-appeal.

II. Attachment of judgment lien. An important issue necessary for the determination of the parties' respective rights and interests in the forty acre homestead involves the question of when, if ever, a judgment lien attaches to a judgment debtor's interest in real property used and occupied as a homestead and held in joint tenancy with right of survivorship.

Relying upon Eastern Shore Building & Loan Corp. v. Bank of Somerset, 253 Md. 525, 253 A.2d 367 (1969), the trial court held that a judgment lien does not attach to a judgment debtor's joint tenancy interest in real property until such interest has been severed and a tenancy in common arises. We need not look beyond the law of this state, however, for authority to answer this question.

It is well established that a judgment lien is a legal right based upon statutory authority:

Judgments are not, of themselves, liens upon property. A lien predicated upon the rendition or entry of judgment did not exist at common law. It arose from the right, granted by statutes enacted in early times, to take out an elegit or to subject the property to seizure and sale upon execution. Consequently, such liens are creatures of statutory provisions, owe their life and force entirely to legislation, and do not exist except by its authority.

46 Am.Jur.2d Judgments § 238 (1969) (emphasis added). See also 49 C.J.S. Judgments § 454 (1947); 10A Thompson on Real Property § 5304 (1957).

Iowa law provides for judgment liens in Iowa Code section 624.23 (1977):

Judgments in the appellate or district courts of this state, or in the circuit or district court of the United States within the state, are liens upon the real estate owned by the defendant at the time of such rendition, and also upon all he [or she] may...