Cawiezell v. Coronelli

• Decision Date: 30 April 2021
• Docket Number: No. 19-1214,19-1214
• Parties: In the Matter of the ESTATE OF Vera E. CAWIEZELL, Deceased, Phyllis Knoche, Terry Brooks, and Jill Brooks, Appellants, v. Tom CORONELLI and Beth Coronelli, Appellees.
• Court: Iowa Supreme Court

958 N.W.2d 842

In the Matter of the ESTATE OF Vera E. CAWIEZELL, Deceased, Phyllis Knoche, Terry Brooks, and Jill Brooks, Appellants,

v.Tom CORONELLI and Beth Coronelli, Appellees.

No. 19-1214

Supreme Court of Iowa.

Submitted March 24, 2021

Filed April 30, 2021

Gregg Geerdes (argued), Iowa City, for appellants.

Andrew B. Howie (argued) of Shindler, Anderson, Goplerud & Weese, P.C., West Des Moines, for appellees.

McDonald, J., delivered the opinion of the court, in which all justices joined.

McDONALD, Justice.

In this appeal, the executors of an estate challenge several rulings of the district court in probating a will. The court of appeals affirmed the district court in all respects, and we granted further review. "On further review, we have the discretion to review any issue raised on appeal." Burton v. Hilltop Care Ctr. , 813 N.W.2d 250, 255 (Iowa 2012) (quoting State v. Marin , 788 N.W.2d 833, 836 (Iowa 2010), overruled on other grounds in Alcala v. Marriott Int'l, Inc. , 880 N.W.2d 699 (Iowa 2016) ). We choose to address only the executors’ contention that the district court erred in holding a twenty-year transfer restriction on devised farmland was an impermissible restraint on alienation. Our review of that issue is de novo. See Est. of Hurt v. Hurt , 681 N.W.2d 591, 593 (Iowa 2004). The court of appeals decision is final as to all other issues.

Vera Cawiezell died testate in April 2018, and her will was admitted to probate later that month. In item 3 of her will, Cawiezell devised approximately 150 acres of farmland to her friends Tom and Beth Coronelli subject to certain general restrictions and subject to other provisions in favor of Terry Brooks, who leased and farmed Cawiezell's land while Cawiezell was alive. Item 3 provided:

I hereby will, devise and bequeath all of my farm real estate located ... in Muscatine County, Iowa, except my homestead referred to in Item 2 above, consisting of approximately 150 acres to my friends, Tom and Beth Coronelli or unto the survivor of them, subject to the restriction that they should not sell or transfer the property outside their immediate family within a period of twenty years after my death. Terry Brooks has been leasing the farm from me under a share crop agreement and I would request that the Coronelli family continue leasing to Terry under favorable terms for his benefit. I further give Terry Brooks the first option to purchase the farm during the twenty year period following my death and I would further request that the terms of sale be favorable for Terry Brooks.

Item 4 of the will devised all farm equipment and livestock to Brooks and forgave any money Brooks owed to Cawiezell. The residue and remainder of the property was awarded to Cawiezell's friend Phyllis Knoche.

The will nominated, and the district court appointed, Terry and Jill (Terry's spouse) Brooks and Knoche as executors. In October, the executors filed an application for court approval of their actions. The executors requested the court approve a restriction in the deed to be given to the Coronellis. The proposed deed restriction provided:

THIS DEED IS EXECUTED AND DELIVERED UPON THE CONDITION THAT IN THE EVENT ALL OR PART OF THE HEREIN DESCRIBED PROPERTY IS SOLD OR TRANSFERRED TO ANYONE OTHER THAN TERRY BROOKS OR AN IMMEDIATE FAMILY MEMBER OF TOM AND BETH CORONELLI ON OR BEFORE APRIL 17, 2038, THEN THE HEREIN DESCRIBED PROPERTY SHALL REVERT TO PHYLLIS A. KNOCHE, OR HER HEIRS OR ASSIGNS, AS THE RESIDUAL BENEFICIARY OF THE VERA CAWIEZELL ESTATE, FREE AND CLEAR OF ANY CLAIMS OF THE GRANTEE, CONSISTENT WITH THE TERMS OF THE LAST WILL AND TESTAMENT OF VERA CAWIEZELL FILED IN MUSCATINE COUNTY IOWA, ESPR011653.

The Coronellis resisted the application and contended the restriction placed on the devise of the farmland was a restraint on alienation of the property and void. The Coronellis requested the district court disallow the deed restriction. After some additional motion practice and hearings not relevant here, the district court ultimately held the restriction on the transfer of the devised farmland was an invalid restraint on alienation and void.

The executors challenge that ruling on several grounds. They first contend the restriction is not a restraint on alienation. If the restriction is a restraint on alienation, they contend reasonable restraints on alienation are allowed under Iowa Code section 614.24 and a more recent decision of this court. Finally, they contend this court should adopt a more flexible approach toward restraints on alienation as set forth in the Restatement (Third) of Property: Servitudes.

"[T]he rule against restraints on alienation bars direct restraints on the alienability of present or future vested interests." Martin v. Peoples Mut. Sav. & Loan Ass'n , 319 N.W.2d 220, 226 (Iowa 1982) (en banc). It has long been the rule of this state that a restraint on alienation whether by deed or will is unlawful and void. See Crecelius v. Smith , 255 Iowa 1249, 1254, 125 N.W.2d 786, 789 (1964) ("A general restraint on alienation, whether by deed or will, is undoubtedly void." (quoting 31 C.J.S. Estates § 8 )); Graham v. Johnston , 243 Iowa 112, 117, 49 N.W.2d 540, 543 (1951) ("The imposition of restraints as set forth in the deeds of grantor conflicts with the previous grants of an absolute interest and we hold that such are invalid—they might be termed directions, but are of no binding force and effect."); Guenther v. Roche , 238 Iowa 1348, 1351, 29 N.W.2d 222, 223 (1947) ("The courts generally will not give effect to a testamentary provision to the effect that a devisee shall not for a period of time sell the property devised."); Sisters of Mercy of Cedar Rapids v. Lightner , 223 Iowa 1049, 1059, 274 N.W. 86, 92 (1937) ("In this state a restraint against alienation in a conveyance of a vested estate in fee simple is void and this is true though the restraint is for a limited or particular time."); Dolan v. Newberry , 204 Iowa 443, 446, 215 N.W. 599, 601 (1927) (stating when a clause of a deed conveys fee simple title, then any subsequent language "of condition or limitation[ ] must be disregarded[ ] as repugnant thereto"); Davidson v. Auwerda , 192 Iowa 1338, 1340, 186 N.W. 406, 406 (1922) ("The only safe rule ... is to hold, as I understand the common law for ages to have been, that a condition or restriction which would suspend all power of alienation for a single day is inconsistent with the estate granted, unreasonable, and void." (quoting McCleary v. Ellis , 54 Iowa 311, 315, 6 N.W. 571, 573 (1880) )).

The executors contend this long-standing rule is inapplicable here because the Coronellis were not bequeathed an absolute fee. Instead, according to the executors, the Coronellis were bequeathed only a limited fee that did not include the right for the Coronellis to sell or transfer the property outside their immediate family for twenty years. Because the right to sell or transfer outside the family for a period of twenty years was not included in the "bundle of sticks" devised to the Coronellis, according to the executors, the restriction does not restrain the Coronellis’ right to alienate the property.

The executors’ circular argument is unconvincing. "The purpose of construing a will is to ascertain the intent of the testator. Authorities agree that questioned provisions should be considered, not as standing alone, but as related to all other provisions of the will." In re Est. of Organ , 240 Iowa 797, 800, 38 N.W.2d 100, 102 (1949). Here, the testamentary provision devises and bequeaths all of Cawiezell's farmland in Muscatine County, except her homestead, to the Coronellis. There is no indication in this provision or any other provision that the fee is anything other than a fee simple. See, e.g. , In re Est. of Bigham , 227 Iowa 1023, 1026, 290 N.W. 11, 12 (1940) (holding that testamentary provision bequeathing property to wife was "an unqualified fee estate"); In re Est. of Hellman , 221 Iowa 552, 555, 266 N.W. 36, 38 (1936) ("The old familiar stock phrases of the common law, such as ‘in fee simple,’ ‘absolutely,’ ‘to have and to hold forever,’ do not appear, but words of this character are unnecessary in conveying the fee-simple title."). The will's subsequent restriction on the fee is an invalid restraint on alienation under our precedents and is void. See Crecelius , 255 Iowa at 1254, 125 N.W.2d at 789 ; Graham , 243 Iowa at 117, 49 N.W.2d at 543 ; Guenther , 238 Iowa at 1351, 29 N.W.2d at 223 ; Sisters of Mercy , 223 Iowa at 1059, 274 N.W. at 92 ; McCleary , 54 Iowa at 314–18, 6 N.W. at 572–74.

Taking a different approach, the executors contend Iowa law allows for reasonable restraints on alienation of property. The executors first rely on Iowa Code section 614.24, which they contend allows for restraints on alienation of property for no more than twenty years. That provision provides:

No action based upon any claim arising or existing by reason of the provisions of any deed or conveyance or contract or will reserving or providing for any reversion, reverted interests or use restrictions in and to the land therein described shall be maintained either at law or in equity in any court to recover real estate in this state or to recover or establish any interest therein or claim thereto, legal or equitable, against the holder of the record title to such real estate in possession after twenty-one years from the recording of such deed of conveyance or contract or after twenty-one years from the admission of said will to probate unless the claimant shall, personally, or by the claimant's attorney or agent, or if the claimant is a minor or under legal disability, by the claimant's guardian, trustee, or either parent or next friend, file a verified claim with the recorder of the county wherein said real estate is located within said twenty-one year period.

Iowa Code § 614.24(1) (2018).

We conclude the statute is inapplicable here. This Code provision, also known as the Stale Uses...