Muhr v. Willenborg
| Docket Number | 22-1780 |
| Decision Date | 24 January 2024 |
| Parties | DAVID A. MUHR and CHRISTINE L. MICKEL, Plaintiffs-Appellants, v. RACHELLE E. WILLENBORG, Defendant-Appellee. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Carroll County, Christopher C. Polking, Judge.
Two cotenants challenge the district court's hybrid partition of a family farm. AFFIRMED.
James R. Van Dyke of the Law Office of James Van Dyke, P.C., and Jessica L. Morton of Bruner, Bruner, Reinhart &Morton LLP, Carroll, for appellant.
Eric J. Eide of Nyemaster Goode, P.C., Ames, and Ryan Stefani of Nyemaster Goode, P.C., Des Moines, for appellee.
Considered by Schumacher, P.J., and Chicchelly and Buller JJ.
In Iowa, we've waffled on our preferences in partitioning family farms, bouncing between partition in kind and partition by sale.[1] See Iowa Code § 651.30 ( current legislative preference for partition in kind); Spies v. Prybil, 160 N.W.2d 505, 507 (Iowa 1968) (). Now, we must decide if a district court can order a hybrid of both remedies, as it did with a Carroll County farm owned by cotenants David Muhr Christine Mickel, and Rachelle ("Shelly") Willenborg. Muhr and Mickel requested the farm be sold in its entirety, while Willenborg sought physical division of her share of the land. Applying a 2018 statute, the district court ordered a hybrid partition-dividing the land partially in kind and partially by sale-with an owelty payment from Willenborg to balance the ledger.
Muhr and Mickel contend the district court erred in its application of the statute in two ways. First, they assert the district court lacked authority to order a hybrid partition. And second, they claim the court erred in the "great prejudice" inquiry required under a subchapter specific to heirs property. Iowa Code §§ 651.30, .31. They also request attorney fees. While we find an error in the district court's application of the statute, its ultimate division of the property was statutorily sound, equitable, and practicable. We affirm the district court's order and deny Muhr and Mickel's fee request.
After their mother's death around twenty years ago, Muhr, Mickel, Willenborg's husband, and two other siblings inherited 273 acres of Carroll County farmland as cotenants. From then on, the siblings shared in paying taxes and insurance on the land. Willenborg's husband also helped farm the land, as he had since high school.
Willenborg's husband passed away unexpectedly in February 2020, and she inherited his share. Muhr and Mickel commissioned an appraisal, which determined the market value of the property was $2,382,750 as of October 2020.
By the next November, only Muhr, Mickel, and Willenborg's interests in the land remained. The three discussed selling or buying their respective shares, but they could not come to an agreement. Based on this lack of consensus, Muhr and Mickel petitioned the district court to partition the farmland by sale in November 2021. Willenborg answered the petition, asking the district court to partition the land in kind. Both parties agreed the land was heirs property subject to subchapter III of Iowa Code chapter 651. See id. § 651.27. And neither party requested the opportunity to make a cotenant buyout. Id. § 651.29.
The district court appointed a referee to evaluate the farmland and make a recommendation on how to divide it. The referee had an agricultural business background-with more than forty years of experience as a farm manager and more than thirty years as a rural appraiser-and had served as a referee for partition actions before. Muhr and Mickel commissioned an updated appraisal from the same appraiser used in 2020, who found the market value of the property was $3,221,400 as of January 2022. The parties and the referee agreed to this valuation for purposes of these proceedings. Based on the appraisal, the referee endeavored to physically divide the property such that each party's parcel was worth $1,073,800.
But the referee found splitting the property three ways impractical because of the farm's unusually "diverse topography," including "two open ditches that dissect the west half of the property and the southeast part of the property." As the referee explained it, these ditches were "not crossable with vehicles or farm equipment," making "access to certain parts of the farm . . . extremely limited or entirely impossible." As a result, the referee concluded a three-way division would not work "[d]ue to the lack of access to some parts of the farm and the potential farming inefficiencies[.]" Instead, the referee recommended a two-way split, dividing the land into a "North Parcel" and a "South Parcel," as depicted on diagrams included with the referee's filed report and reproduced below. See id. § 651.16(4) ().
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The referee reasoned "[t]his division would give good access to both parcels and would be more advantageous for soil conservation practices and farming efficiencies." The South Parcel was 95.62 gross acres valued at $1,125,000; roughly one-third of the entire property. And the North Parcel was 177.38 gross acres valued at $2,096,400-roughly two-thirds of the entire property.
The referee proposed the court award the South Parcel to Willenborg and the North Parcel to Muhr and Mickel. He also suggested Willenborg make a onetime owelty payment of $25,600 each to Muhr and Mickel to offset the discrepancy between the proportional values of the North and South Parcels. In the referee's opinion "creating the two parcels as described would represent an equitable and practical division of the property." He also recommended the court order the North Parcel be sold at public auction, in line with Muhr and Mickel's wishes. And the referee noted the North Parcel could be further split so Muhr and Mickel could each sell their own parcel, though doing so could "result in farming inefficiencies and may make it more difficult to implement soil conserving measures."
Muhr and Mickel objected to the referee's recommendation, again seeking partition of the entire property by sale. Willenborg agreed with the referee. At an October 2022 partition hearing, the referee testified he physically inspected the property "maybe five times total." And he reiterated When questioned as to the practicality of his proposed division, he opined, "I think considering the farm it's about as practical as you're going to get." And he concluded that it would not "diminish the value of the property dividing it this way." Willenborg testified about her sentimental attachment to the farm, explaining that her late husband "loved [the land] dearly," that she had walked the beans herself, and both she and her husband wished to pass the land to their children after his death.
The district court ordered the land be divided partially in kind and partially by sale, consistent with the referee's recommendation. The court also ordered Willenborg to make the owelty payments recommended by the referee. The court further ordered the North Parcel be sold at auction upon completion of the necessary surveys. Muhr and Mickel appeal.
Actions to partition property are tried in equity and reviewed de novo. Grout v. Sickels, 985 N.W.2d 144, 149 (Iowa 2023) (citing Iowa Code § 651.2). We give weight to the district court's fact-finding, especially on credibility issues, but we are not bound by it. Id. As for statutory interpretation, our review is for correction of errors at law. Garrison v. New Fashion Pork LLP, 977 N.W.2d 67, 76 (Iowa 2022).
Muhr and Mickel claim the district court's hybrid partition of the farmland was not allowed by statute. And they assert the court failed to properly evaluate whether "great prejudice" would result from partition. Last, they request attorney fees. We tackle each argument separately, walking through Iowa's partition history and the structure of chapter 651 along the way.
Muhr and Mickel first argue the district court exceeded its statutory authority when it partitioned the land partially in kind and partially by sale. They specifically assert the language and organization of Iowa Code chapter 651 do not permit a hybrid partition of heirs property. To address this claim, we start with the text, history, and intended purpose of chapter 651.
Iowa's partition history has peaks and valleys. Historically, our statutes favored partitions in kind. See Prybil, 160 N.W.2d at 507. But partitions by sale occurred under this regime, despite the preference otherwise, when physically dividing the property would result in great prejudice. Branscomb v. Gillian, 7 N.W. 523, 523 (Iowa 1880) ( a partition in kind "would be manifestly inequitable"). And courts ordered hybrid partitions. See Nehls v. Walker, 244 N.W. 850, 851 (Iowa 1932) (recognizing "partial partition" as an option) cf. Newhall v. Roll, No. 14-1622, 2015 WL 5965205, at *4 (Iowa Ct. App. Oct. 14, 2015), vacated on other grounds, 888 N.W.2d 636 (Iowa 2016). This flexibility followed the traditional role of equity courts to "vary, qualify, restrain, and model the remedy, so as to suit it to mutual and adverse claims, controlling equities, and the real and substantial rights of all the parties." 1 Joseph Story, Commentaries on Equity...
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