Thilges v. Reding

• Court: Iowa Court of Appeals
• Writing for the Court: TABOR
• Decision Date: 23 November 2011
• Docket Number: No. 1-827 / 11-0633,1-827 / 11-0633
• Citation: Thilges v. Reding, No. 1-827 / 11-0633 (Iowa App. Nov 23, 2011)
• Parties: LEROY M. THILGES, MARLENE ALTMAN, KAREN BERTE, EVELYN LICTEIG and KATHY LEGG, Plaintiffs-Appellants, v. MAXINE S. REDING, BERNARD J. THILGES, LUELLA M. BANWART, LEE ANN M. TRAUB, and ROBERT E. THILGES, Defendants-Appellees.

LEROY M. THILGES, MARLENE ALTMAN, KAREN BERTE, EVELYNLICTEIG and KATHY LEGG, Plaintiffs-Appellants,

v. MAXINE S. REDING, BERNARD J. THILGES, LUELLA M. BANWART,LEE ANN M. TRAUB, and ROBERT E. THILGES, Defendants-Appellees.

No. 1-827 / 11-0633

COURT OF APPEALS OF IOWA

Filed November 23, 2011

Appeal from the Iowa District Court for Palo Alto County, Patrick M. Carr, Judge.

The district court dismissed a declaratory judgment alleging contractual wills by plaintiffs' parents, and asserting one codefendant sibling's purchase of farmland and subsequent forfeiture of the sale contract distinguished his right to buy the property at discount after his mother's death. AFFIRMED.

Eldon J. Winkel of Eldon J. Winkel Law Office, Algona, for appellants.

Matthew T.E. Early of Fitzgibbons Law Firm, Estherville, and Brian W. Thul of Thul Law Firm, Wittemore, for appellees.

Heard by Tabor, P.J., Mullins, J., and Miller, S.J.*

*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2011).

TABOR, P.J.,

This case involves the interpretation of separate wills executed by a farm couple. In 1976, Felix and Eulalia Thilges executed wills that devised their farmland to their ten children. Both wills granted their son Robert a first option to purchase the land at a twenty percent discount. Felix died in 1981. In 1982, Robert entered into a contract with his mother and siblings to purchase eighty acres. Robert eventually forfeited the contract and conveyed the land back to the owners. In 2006, Elulalia executed a new will, excluding five of her children. The new will also included Robert's purchase option. Eulalia died in 2009.

In 2010, the five children excluded from their mother's will filed an action for declaratory judgment against the five children who remained beneficiaries of her estate. The action alleged that the parents had executed contractual or mutual wills in 1976, invalidating any later wills executed by Eulalia. The action also asserted that Robert's purchase of the farmland and subsequent forfeiture of the sale contract distinguished his right to buy the real estate at a twenty percent discount after his mother's death.

The district court dismissed both divisions of the declaratory judgment. The five disinherited siblings bring this appeal. Because the language used in the 1976 wills did not expressly communicate the Thilges' intent that their wills be construed as contractual or mutual, we affirm the district court's dismissal. We also conclude that Robert did not waive, abandon, renounce, or otherwise forego his right to purchase the farmland at twenty-percent below fair market value as provided in his mother's 2006 will.

I. Background Facts and Proceedings

Felix and Eulalia Thilges owned a 240-acre farm in Palo Alto County. They had ten children. Five of them—Leroy Thilges, Marlene Altman, Karen Berte, Evelyn Lickteig, and Kathy Legg—are the plaintiffs in this case. Five of them—Maxine Reding, Bernard Thilges, Luella Banwart, Lee Ann Traub and Robert Thilges—are the defendants. Eulalia excluded the plaintiffs from her will executed on May 3, 2006. Eulalia died on September 17, 2009.

The plaintiffs filed an action for declaratory judgment on September 21, 2010, seeking interpretation of the two wills executed by their parents on December 27, 1976. Specifically, the plaintiffs alleged the 1976 wills were "contractual and mutual," and obligated each of the parents to abide by certain provisions with respect to the disposition of their farm real estate. The plaintiffs sought a ruling that the contractual nature of the 1976 wills rendered void contrary provisions in their mother's 2006 will.

In the second division of the action, the plaintiffs sought to invalidate a provision of Eulalia's will granting her son Robert the first option to purchase any or all of the real estate owned by the decedent at the time of her death, at twenty percent below its appraised value. The plaintiffs alleged Robert was not entitled to this purchase option because after his father's death in 1981 he had entered a contract with his mother and siblings to purchase eighty acres of the farm, but forfeited the contract and quit claimed the property back to them.

The defendants filed a combined motion for a more specific statement and motion to dismiss. They alleged they were not provided with a signed copy ofEulalia's 1976 will. They also moved to dismiss the second division of the declaratory judgment action, contending it "fails on its face to state a claim upon which relief may be granted." The defendants asserted:

Robert Thilges, at the time of the attempted purchase on a contract of a portion of the Thilges Family Farm, had only a latent future option to purchase farmland at a 20 percent discount. The land in question was subject to a life estate interest of Eulalia Thilges and any 20 percent discount option was not mature nor could it have been exercised at the time the attempted purchase was made.

The defendants also attached an affidavit from Robert Thilges, describing how he farmed his family's acreage for many years. He attested that his contract to purchase the land in 1982 did not involve a twenty percent discount. He further stated he did not consider his right to purchase the farmland at twenty percent below market value to be operative until after his mother's death.

The plaintiffs amended their petition, attaching a signed copy of Eulalia's 1976 will, and resisted the motion to dismiss division two of their action. The defendants then withdrew their motion for a more specific statement, but moved to dismiss the first division of the declaratory judgment action. The defendants denied that the will attached to the amended petition was "what it purported to be." The defendants also asserted their parents' 1976 wills did "not state that the testators mutually agree to anything nor do they say that each in consideration of a promise of the other are executing their will for the devise of property in a certain manner." Accordingly, the defendants argued the petition did not state a claim upon which any relief could be granted. See Iowa R. Civ. P. 1.421 On November 30, 2010, the district court granted the defendants' motion to dismiss the first division of the plaintiff's petition.¹ The court concluded:

The 1976 wills contain absolutely no language indicating that they are mutual or contractual. Neither will refers to the other, and there is no language indicating a binding agreement between Felix and Eulalia. The Court acknowledges that no specific language is required to create mutual and contractual wills, but there is no language in these two wills that suggests they create any sort of agreement between Felix and Eulalia.

The court considered the second division of the plaintiff's petition at a hearing on February 23, 2011. The record consisted of five exhibits: the 1976 wills of Felix and Eulalia, the real estate contract executed in May 1982, an agreement to cancel the installment sale contract dated November 1986, and the quit claim deed signed by Robert Thilges. On March 25, 2011, the district court issued an order dismissing the second division of the plaintiff's action. The court found "no indication at all from any party, either sellers or buyers, to waive, abandon, renounce, or vacate by accord and satisfaction Robert's option rights." The court added:

In considering whether a surrender of performance, estoppel or promissory estoppel may have occurred, in addition to the total absence of evidence of intent to do so by Robert, the Court also considers that he had no right to exercise any option at all with respect to all or any part of the Thilges family farm until after his mother died. It appears also that the right to exercise the option was personal to him. It is thus arguable that he was required to survive his mother's death in order to exercise the option.

On April 21, 2011, the plaintiffs filed a notice of appeal.

II. Issues on Appeal

The plaintiffs frame their assignments of error as follows: (1) should the district court have impressed a trust in favor of the plaintiffs against the farm real estate owned by Eulalia subject to the option granted to purchase the property at a twenty percent discount? and (2) should the district court have decreed that Robert gave up his right to purchase at a twenty percent discount the undivided interest in the Felix Thilges estate he previously purchased and thereafter conveyed back to the plaintiffs?

III. Scope and Standard of Review

Although we normally review actions in equity de novo, Iowa R. App. P. 6.907, we review decisions on motions to dismiss for correction of errors at law. Mlynarik v. Bergantzel, 675 N.W.2d 584, 586 (Iowa 2004). A motion to dismiss under rule 1.421 is sustainable "only when it appears to a certainty that the plaintiff would not be entitled to relief under any state of facts that could be proved in support of the claims asserted." Id. (citation omitted).

We will affirm such a dismissal only if the petition "on its face shows no right of recovery under any state of facts." Klobnak v. Wildwood Hills, Inc., 688 N.W.2d 799, 800 (Iowa 2004). The district court's factual findings are binding upon us if they are supported by substantial evidence in the record, but "we are not bound by the district court's application of legal principles or its conclusions of law. Ultimately, our decision to overrule or sustain a motion to dismiss must rest on legal grounds." Id.

IV. Analysis

A. On the issue of contractual or mutual wills, did the petition fail to state a claim upon which any relief could be granted?

Iowa Code section 633.270 (2009) marks the starting point for our analysis of the 1976 wills. That probate provision states: "No will shall be construed to be contractual or mutual, unless in such will the testator shall expressly state the intent that such will be so construed." We do not entertain extrinsic evidence of the testator's intent; instead we look...