Kindsfather v. Bowling (In re Glaser)
| Decision Date | 30 April 2021 |
| Docket Number | No. 19-0008,19-0008 |
| Citation | 959 N.W.2d 379 |
| Parties | In the MATTER OF the ESTATE OF Francis O. GLASER, Deceased. Sherri M. Kindsfather, Appellant, v. Judy E. Bowling, Fiduciary of the Estate of Francis O. Glaser, and State of Iowa ex rel. Department of Revenue, Appellees. |
| Court | Iowa Supreme Court |
John T. Flynn of Brubaker, Flynn & Darland, P.C., Davenport, for appellant.
David Pillers of Pillers & Richmond, DeWitt, for appellee Judy E. Bowling, fiduciary of the Estate of Francis O. Glaser.
Thomas J. Miller, Attorney General, and Laurie Heron McCown, Assistant Attorney General, Des Moines, for appellee Iowa Department of Revenue.
In this case, we consider the timeliness of an estate's effort to void a predeath transfer of certain farm property by the decedent to a friend through the estate's motion to amend, at the close of evidence, the original motion to set aside property conveyances but which failed to mention the farm property. The district court permitted the late amendment to the pending proceedings to include the farm property and found that the amendment related back to the date of the filing of the estate's original motion. As a result of its ruling that the amendment related back to the date of the filing of the original motion, the district court concluded that the claim was not barred by the applicable statute of limitations. The district court then proceeded to find, by clear and convincing evidence, that all the decedent's conveyances which the estate attacked were made to avoid creditors and ordered that they be set aside.
The transferee appealed. We transferred the case to the court of appeals. The court of appeals held that the district court did not abuse its discretion by allowing the late amendment but concluded that the late amendment did not relate back to the original motion. As a result, the amended claim seeking to set aside the transfer of the farm property was barred by the applicable statute of limitations. With respect to the timely property transfers, the court of appeals upheld the rulings of the district court rejecting the transferee's assertion that the claims of the estate were barred by unclean hands or the homestead exemption. The court of appeals also rejected a challenge to the estate's recovery of the other property on the grounds that the value of the voided conveyances exceeded the amount of outstanding debts of the estate.
We granted further review. We exercise our discretion to review only the question of whether recovery under the late amendment to the estate relates back to the original filing and therefore survives the statute of limitations and whether the district court order provided the administrator with excessive relief. For the reasons expressed below, we conclude that the district court erred in concluding that the late amendment related back to the date of the original motion. As a result, like the court of appeals, we conclude that the late claim to set aside the farm property is barred by the applicable statute of limitations. On the excessive relief issue, we conclude that the administrator may set aside the remaining transactions only to satisfy the debts owed by the estate to creditors.
A. Introduction. The facts surrounding this case have considerable notoriety. On September 9, 2014, the decedent, Francis Glaser, pulled a gun on a meeting of the Jackson County Board of Supervisors as he was protesting tax matters and attempted to shoot local officials. In the resulting struggle, he turned the gun on himself and died of a resulting gunshot.
Glaser had a history of problems with tax authorities. In February 2007, he received a letter from the Iowa Department of Revenue (IDOR) informing him of delinquent income taxes. In May, Glaser received an assessment for back taxes, and in June, the IDOR commenced a collection action. From that point on, the IDOR recorded multiple tax liens which began on January 7, 2008. Ultimately, according to IDOR, Glaser owed over $100,000 in taxes at the time of his death. The evidence at trial suggested that during these times and in subsequent years, Glaser was experiencing financial difficulties.
In 2003, Glaser met Sherry Kindsfather and she and Glaser became close and at times intimate friends. On September 9, 2011, Glaser transferred an undivided one-half interest in a farm to Judy Shreve, the mother of Kindsfather. About a year later, on September 19, 2012, Shreve transferred the interest in the farm property to Kindsfather.
On November 19, 2012, Glaser transferred what was described in the litigation as Lots 11, 12, and 13 to Kindsfather. The apparent consideration for the transfer of the lots was one dollar each.
B. District Court Litigation. Glaser died intestate. The IDOR asked the administrator of the estate to file a motion in district court to set aside what it regarded as fraudulent conveyances from Glaser to Kindsfather.
On June 28, 2016, the administrator filed the motion to set aside certain conveyances in district court. Paragraph 1 of the motion noted "[t]hat on November 19, 2012, [Glaser] executed three (3) quit claim deeds transferring and conveying his interest in certain real property ("Property") to Sherry M. Kindsfather." The quitclaim deeds related to the property were attached as Exhibit A. The quitclaim deeds identified the property as Lots 11, 12, and 13 of the Hillside Acres Addition to the City of Maquoketa.
On April 5, 2018, Kindsfather timely filed a motion in limine. Kindsfather stated that the list of exhibits submitted by the administrator pursuant to a pretrial order indicated that the administrator intended to offer evidence related to a new claim beyond the pleadings. Kindsfather asserted that the addition of a new claim involving a separate real estate transaction from that which was pled after the expiration of the statute of limitations would be improper.
The district court conducted a bench trial on May 15 and 16. During the trial, Kindsfather objected to the admission of exhibits related to the transfer of the farm property on the grounds that the exhibits were beyond the scope of the pleadings and that any claim to the farmland would be barred by the statute of limitations. At the close of evidence, the administrator made an oral motion for leave to amend the original motion to include a claim regarding the farm transfers. The district court allowed the amendment. Because the district court concluded that the farm property amendment related back to the filing of the original motion, the farm property claim was not barred by the applicable five-year statute of limitations. See Iowa Code §§ 614.1(4), 684.9(1) (2011).
Based on the evidence at trial, the district court found that all of the conveyances—Lots 11, 12, and 13 as well as the conveyances of the farm property—were designed to defraud creditors and should be set aside.
C. Court of Appeals Opinion. The court of appeals affirmed in part, reversed in part, and remanded the case to the district court with instructions. The court of appeals did not disturb the decision of the district court to permit the amendment to the original motion to include the transfer of farmland from Glaser to Shreve and from Shreve to Kindsfather. The court of appeals, however, concluded that the amendment did not relate back to the filing of the administrator's original motion, and as a result, was barred by the applicable five-year statute of limitations. The court of appeals also rejected Kindsfather's argument that the administrator could not recover Lots 11, 12, and 13 because of the clean hands doctrine. The court of appeals further concluded that the homestead exemption did not prevent the court from setting aside the conveyance of Lots 11, 12, and 13 from Glaser to Kindsfather. Finally, the court of appeals rejected Kindsfather's argument that the transactions should only be avoided to the extent necessary to satisfy the liens of the IDOR.
We granted further review. We elect to review only the decision of the court of appeals relating to the question of whether the amendment related back to the original filing of the motion and the extent of the remedies permitted under Iowa Code section 633.368. See In re N.C. , 952 N.W.2d 151, 153 (Iowa 2020) (). On the remaining issues, the decision of the court of appeals is final.
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