Scheib Trust, Matter of

• Decision Date: 27 March 1990
• Docket Number: No. 88-1247,88-1247
• Citation: 457 N.W.2d 4
• Parties: In the Matter of the SCHEIB TRUST, Durwood K. Scheib and Robert C. Scheib, Trustees; and the Hattie K. Scheib Estate, Durwood K. Scheib, and Robert C. Scheib, Executors; and the Earl Scheib Estate, Durwood K. Scheib, Executor. Appeal of Rona Dee PURPURA.
• Court: Iowa Court of Appeals

Page 4

457 N.W.2d 4

In the Matter of the SCHEIB TRUST, Durwood K. Scheib and Robert C. Scheib, Trustees; and the Hattie K. Scheib Estate, Durwood K. Scheib, and Robert C. Scheib, Executors; and the Earl Scheib Estate, Durwood K. Scheib, Executor Appeal of Rona Dee PURPURA.

No. 88-1247.

Court of Appeals of Iowa.

March 27, 1990.

G. Robert Sackett of Willis & Sackett, Perry, and Emil Trott, Jr. of Barrett & Trott, Des Moines, for appellant Rona Purpura.

Kirke C. Quinn and Bruce L. Anderson of Doran, Courter, Quinn & Doran, Boone, for appellee Robert C. Scheib.

Virginia Poffenberger of Poffenberger & Joy, Perry, for Durwood Scheib as executor to the Earl Scheib Estate.

Bryan R. Jennings of the Reich Law Firm, Adel, as guardian ad litem for any unborn beneficiaries.

Considered by OXBERGER, C.J., and DONIELSON and HABHAB, JJ.

HABHAB, Judge.

Appellant, Rona Dee Purpura, appeals from a district court order approving the application for authority to sell real estate owned by the two estates and one trust in this case. We affirm in part and reverse in part.

Earl Scheib and Hattie Scheib, trustors and testators of the two estates and one trust involved herein, had five children: Robert Scheib, Durwood K. Scheib, Marilyn McGraw, Max Scheib, and Rona Dee Purpura. Each of these children have issue. Max is now deceased.

The property at issue consists of approximately 1,000 acres of Iowa farm land. At all times material to this controversy, this land was a part of the (1) Scheib Inter Vivos Trust, (2) Hattie Scheib's Estate or Testamentary Trust, and (3) Earl Scheib's Estate or Testamentary Trust. There are parts of the decedents' wills that created the trusts and the inter vivos trust itself that are important to this controversy, so we will discuss so much of those provisions as are necessary to a better understanding of the problem at hand.

I.

Scheib Inter Vivos Trust. On December 23, 1975, Earl Scheib and Hattie Scheib created the "Scheib Trust." We will refer to this trust from time to time as the inter vivos trust. Under the terms of the trust, Robert and Durwood were named trustees. The trustees were clearly prohibited from selling the two tracts of land which formed the basis for the inter vivos trust during the trustors' lifetimes. The trustees, however, were given the power to sell all or part of the land after the trustors' deaths, but only if each of their children "living at the time the trustees exercised said power to sell have consented in writing thereto...." The pertinent trust provision states:

The trustees shall not have the power to sell the above real estate during the lifetime of the grantors herein, but after the death of both of the grantors the trustees shall have the power to sell any part or all of the real estate at any time provided that each child of the grantors living at the time the trustees exercise said power to sell have consented in writing thereto; ....

Hattie Scheib's Will. Hattie died testate on November 5, 1981. Hattie's will bequeathed all her personal property and the use of the home where she resided at the time of her death to her husband, Earl. Hattie then devised all her real estate and mixed property, except her home, to Durwood and Robert as trustees for the use and benefit of Hattie's children and grandchildren. The trustees were given the power to sell Hattie's real estate located in any city or town, but the will is silent as to any power to sell any of the farm land.

Hattie's farm land that is to pass to the trust constitutes a part of this dispute. The terms of her will directed Robert and Durwood to act as trustees. Hattie's will further directed the net income from the trust to be distributed equally among her children. It further provided:

In the event of the death of any of said children, the share of said child shall be distributed equally among his or her children and upon the death of all of my children, then the remaining balance of funds on hand shall be distributed equally among my grandchildren per stirpes and not per capita and the title to the real estate included in the trust shall vest in my grandchildren per stirpes and not per capita, it being my intention that the share of each of my children shall vest in his or her children so that the children of each of my children shall own an undivided one-fifth (1/5th) interest in my estate.

Earl Scheib's Will. Earl died testate in 1986. His will is almost identical to Hattie's in regard to the creation of a trust and the distribution of the net income. Earl, however, executed five codicils to his will. One codicil, executed on June 2, 1975, grants the trustees the authority to sell real estate of the trust created by his will if all the surviving children at the time of the sale give their consent. Durwood, by one of the codicils, is named as the sole executor and sole trustee. In the second codicil to Earl Scheib's will, the following provision appears:

The trustees shall have the further power to sell any real estate owned by me, including any farmland which I own, at any time during the term of said trust, provided, however, that at the time of said sale all of my children and my widow surviving at the time of said sale shall have consented to the sale thereof.

II.

Earl and Hattie are now deceased. Under the inter vivos trust, the farm land can be sold if all of their surviving children consent thereto in writing. Under the trust provisions in Earl's will, the farm land can be sold if the surviving children give their consent. As stated above, the trust provision of Hattie's will is silent insofar as the trustees having power to sell the farm land.

It appears from the record before us that all of the children have consented to the sale of the farm land in question except the appellant, Rona. She claims that she does not now nor has she ever given a binding consent to sell the farm land. The appellees argue to the contrary and claim that Rona gave her consent to the sale at a family meeting attended by all the children and some of the grandchildren and that she should be estopped from denying that action.

Turning to the family meeting, after Earl's death discord between various members of the family occurred. A family meeting to discuss these differences was held on May 17, 1987. Virginia Poffenberger, then attorney for the executors, issued a letter memorializing the events of that meeting. In the May 17, 1987, letter, Ms. Poffenberger notes the family members present decided, among other points, "[t]o liquidate all the real estate, if possible." (Emphasis added.) Poffenberger further advised the family members to contact her if they found errors in the content of her letter. Poffenberger subsequently notified the family by letter on August 18, 1987, that various members of the family did not wish to agree to various items contained in the May 17th letter. As explained later, we are not convinced that with the use of the words "if possible" that Rona's presence at this meeting is sufficient to constitute the consent necessary to sell the farm land from the inter vivos trust.

A substantial part of the family disharmony centered around Durwood and Robert and their performances as personal representatives under their parents' estates and as trustees under the inter vivos trust. Their disagreements came to a head when, on November 9, 1987, Robert, as a beneficiary of his father's estate, filed a petition for removal of Durwood as executor of that estate. On January 21, 1988, after a one-day trial, Durwood and Robert entered into a settlement agreement ¹ which, among other things, provided for the sale of all farm land involved in this controversy. They then filed an application asking the court to approve the settlement agreement and further asked that the court take jurisdiction of the inter vivos trust.

The district court granted Durwood and Robert's application and took jurisdiction of the inter vivos trust under section 633.10(4). There the matter rested until June 23, 1988, when Robert filed another application to remove Durwood as trustee and executor. He claimed that Durwood failed to carry out the January 21, 1988, agreement. Robert, in the same application, asked for authority to sell real estate. The written consents of Robert C. Scheib, Marilyn McGraw, and Durwood K. Scheib were attached to the application. Rona did not consent.

The second application for removal and the application for authority to sell real estate was fixed for hearing on July 20, 1988. Notice of this hearing was given to all interested parties. Durwood filed an answer in which he asked the court to deny the application to sell. ² Rona also filed a written resistance to the application. On July 20, 1988, hearing was had on Robert's application. The district court ruled from the bench that Rona was estopped from objecting to the sale of the real estate. On August 5, 1988, the district court filed its written decision. The decree required Robert and Durwood to submit their resignations as fiduciaries and that the Valley National Bank or other corporate fiduciary would be appointed in order to conduct a sale of the real estate to family members. It also set an August 19, 1988, hearing date on the final report of the executor of Earl's estate.

On August 11, 1988, Durwood, the executor of Earl's estate, filed an application to continue the August 19th hearing. On August 15, 1988, the district court set a hearing on the application to continue for August 17th. At the August 17th hearing, which was attended by only Robert's attorney and Earl's estate's attorney, the district court ordered a modification of its earlier August 5th decree. The district court ruled that Robert should remain as the sole executor and trustee and carry out the family sale of the real estate.

Rona filed her notice of appeal from the August 5th order on August 17, 1988. On August 24, 1988, the district court filed its written order...