Estate of Steensma v. Buysman, Inc.
| Decision Date | 06 June 2018 |
| Docket Number | No. 17-0693,17-0693 |
| Citation | 919 N.W.2d 766 (Table) |
| Parties | Estate of Tena STEENSMA, Plaintiff-Appellee, v. BUYSMAN, INC., Jesse D. Braaksma, Dale W. Braaksma, and Danna S. Braaksma, Defendants-Appellants. |
| Court | Iowa Court of Appeals |
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.
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 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 estate’s motion to remove confidentiality from bank documents. The court ruled on the motions.
In October, the estate filed a motion for summary judgment and another application for default judgment. In November, the Braaksmas and Buysman, still unrepresented by counsel, filed a motion to continue a hearing set on the estate’s motion for summary judgment. Notably, Buysman and the Braaksmas did not ask the court for more time to obtain an attorney but requested additional time "to review these new filings and to prepare suitable arguments in their defense" because the estate had filed a supplement to the motion for summary judgment two days before the hearing.
The motion to continue was denied and an unreported hearing was held on November 16 on the estate’s motion for default judgment and motion for summary judgment. Jesse participated on behalf of Buysman, himself, and his parents at the hearing, and he filed a resistance to the estate’s motion for summary judgment with signature lines for each defendant.
In January 2017, the court granted the estate’s motion for summary judgment.3 The court determined the estate was entitled to judgment as a matter of law because all three Braaksmas had breached their fiduciary duty to the estate by continuing to allow Jesse to farm the real estate despite mounting losses, by permitting Jesse to take hundreds of thousands of dollars from Buysman while distributing comparatively little to the estate, by approving the use of Buysman’s assets as collateral for personal loans to the Braaksmas, by failing to share the gains of Buysman proportionally with the estate, and by failing to file tax returns. The court determined the estate was entitled to rescind the 2011 redemption agreement because of Jesse’s material breach of the agreement. Additionally, even though the estate and Jesse were the only two shareholders of Buysman, the court held Dale and Danna jointly and severally liable for the balance of the damages owed to the estate following Jesse’s relinquishment of his shares because "there is sufficient evidence of at least an implied agreement between Dale, Danna, and Jesse Braaksma to breach their fiduciary duties to [the estate]." Although the court had the authority to dissolve the corporation, it declined to do so because of "the onerous tax bill due in the event of liquidation." Instead, the court awarded "a monetary judgment in favor of the Estate and ... offset such judgment by ordering Jesse Braaksma’s shares of Buysman, Inc. to be turned over to the Estate in partial satisfaction of the amounts that Jesse Braaksma owes the estate and Buysman, Inc." Jesse was ordered to relinquish all of his shares of the corporation, and the Braaksmas and Buysman were ordered to pay the remaining judgment of $203,930.32.4
The court mentioned in its ruling the estate was entitled to a default judgment against Buysman because it had not appeared through an attorney but concluded "the relief for the Estate against Buysman is redundant of the relief the Estate is entitled to against the Braaksmas after consideration of the merits of the Estate’s motion for summary judgment." The estate does not now request a default judgment.
On January 27, still unrepresented, Buysman and the Braaksmas filed a motion to void the order granting summary judgment and enlarge the findings, arguing the district court was required to have ruled on their motion to dismiss before it granted summary judgment. The estate resisted.
In February, after finally obtaining counsel, Buysman and the Braaksmas filed a supplemental motion to void and enlarge, arguing the ruling on summary judgment is void as to all defendants because Jesse engaged in the unauthorized practice of law.
The court denied the earlier filed motion to dismiss and the two post-judgment motions, finding the post judgment motions were untimely.
Buysman and the Braaksmas appeal, now appearing through counsel and without separate argument...
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