Wilson v. Fenton

• Decision Date: 25 November 1981
• Docket Number: No. 64973,64973
• Citation: 312 N.W.2d 524
• Parties: Woodrow L. WILSON and Patricia A. Wilson, Plaintiffs, v. Honorable Ray A. FENTON, of the Iowa District Court for Decatur County, Defendant.
• Court: Iowa Supreme Court

Page 524

312 N.W.2d 524

Woodrow L. WILSON and Patricia A. Wilson, Plaintiffs, v. Honorable Ray A. FENTON, of the Iowa District Court for Decatur County, Defendant.

No. 64973.

Supreme Court of Iowa.

Nov. 25, 1981.

Richard C. Turner, West Des Moines, for plaintiffs.

Jonathan C. Wilson and Steven L. Nelson, of Davis, Hockenberg, Wine, Brown & Koehn, Des Moines, for defendant.

Considered by REYNOLDSON, C. J., and LeGRAND, UHLENHOPP, McCORMICK, and SCHULTZ, JJ.

McCORMICK, Justice.

Plaintiffs Woodrow L. Wilson and Patricia A. Wilson brought this certiorari action to challenge an adjudication and sentence for contempt. The adjudication was based on their failure to convey merchantable title to farm land pursuant to a trial court decree. They challenge the validity of the contempt finding and the penalty. We find no merit in their attack upon the adjudication, but we find the penalty cannot stand. Therefore we annul the writ in part, sustain it in part, and remand for the assessment of a new penalty.

Wilsons were adjudged in contempt for failing to comply with a decree of specific performance of a contract for the sale of 2700 acres of farm land to Peter Youngblut. The decree was affirmed by this court in Youngblut v. Wilson, 294 N.W.2d 813 (Iowa 1980). The contempt proceedings occurred during the pendency of the appeal.

In attacking the contempt adjudication, Wilsons repeat two arguments which we rejected in the appeal. We held that they did not provide "merchantable title in accordance with Iowa Title Standards" as required by the real estate contract and the decree. Id. at 818. We also rejected their argument that abatement of the purchase price and foreclosure of a collateral assignment were effective remedies for their breach of duty. Id. We adhere to those holdings.

Wilsons urge several additional contentions. They allege the decree was unclear and allowed Youngblut's attorneys to decide compliance. They assert the decree was stayed by the appeal despite their failure to file a supersedeas bond. They also assert that less drastic remedies than contempt were available, the evidence did not show willfulness, and they established their defense of inability to comply.

In attacking the penalty, Wilsons contend that taxing them with Youngblut's attorney fees and costs was unconscionable and unauthorized. We will address the validity of the adjudication and penalty separately.

I. Validity of the adjudication. The decree of specific performance ordered Wilsons to "deliver abstracts showing merchantable title to (Youngblut's) attorney on or before December 1, 1979." Although Wilsons argue they did not know what the court meant by "merchantable title," the record shows otherwise. Youngblut's attorney had objected to the title principally because of a $76,000 mechanics lien filed against the premises by W. R. Grace and Company. In the specific performance action the trial court had denied Wilsons' attempted forfeiture of the contract in part because of their own default in failing to clear the W. R. Grace lien to make the title merchantable as required by the contract. In that context it is impossible to believe Wilsons did not know what the court meant in ordering them subsequently to deliver abstracts showing merchantable title.

Principles governing a vagueness claim in a contempt proceeding are summarized in Callenius v. Blair, 309 N.W.2d 415, 418 (Iowa 1981). Wilsons have fallen far short in their attempt to establish that the specific performance decree was vague under those principles. In addition to the evidence showing they understood what the specific performance decree required of them, the record shows they had used the same merchantable title concept in the real estate contract.

The merchantable or marketable title concept is basic in Iowa title law. A title is merchantable if a person of reasonable prudence would accept the title in the ordinary course of business. DeLong v. Scott, 217 N.W.2d 635, 637 (Iowa 1974). In this case the parties had agreed that marketability was to be determined in accordance with the Iowa Title Standards. Under standard 1.1 a title is not marketable when it is subject to an encumbrance not "expressly provided for by the client's contract." See 36 I.C.A. (1980-81 Supp.) 50. The W. R. Grace lien was plainly such an encumbrance.

Wilsons desired to dispute the validity of the lien and did so in collateral litigation. However, rather than show the title was marketable, the existence of the dispute illustrates the wisdom and validity of Youngblut's objection to title. Youngblut had no obligation to participate in the dispute. He bargained for the farm, not for a lawsuit. So long as the encumbrance existed and the litigation continued, title was not merchantable within the meaning of the decree.

Wilsons' argument that the decree permitted Youngblut's attorney to decide whether they complied with the decree is similarly untenable. The marketable title concept and title standards provided an objective basis for measuring compliance with the decree.

We also reject Wilsons' arguments that the appeal stayed the original decree. Iowa R.App.P. 7(a) provides precisely to the contrary. Although the amount of supersedeas bond was fixed after hearing in the specific performance case, no bond was ever filed. Various stays obtained in connection with hearings relating to the bond had all expired on February 6, 1980, more than one month before the contempt action was initiated.

Nor does the record show the contempt adjudication was unwarranted because of the existence of another effective remedy. The alternative remedies suggested by Wilsons would either be ineffective or would impose burdens or risks on Youngblut which the contract and decree did not require him to bear.

Finally, we find no merit in Wilsons' contentions that the proof of willfulness was insufficient and that they proved their defense of inability to comply with the decree.

We do not review the evidence de novo. We examine it only to ensure that the proof of contempt was clear and satisfactory. Callenius, 309 N.W.2d at 419. Moreover, the alleged contemnor has the burden of proof on a defense of inability to comply. Foust v. Denato, 175 N.W.2d 403, 405 (Iowa 1970). The defense bears on the issue of willfulness. When a decree has not been obeyed, the defense allows the alleged contemnor to avoid an adjudication of contempt by proving a good faith effort was made to comply. Id.

In the present situation, Wilsons did not comply with the decree because they did not clear the W. R. Grace lien. In support of their defense of inability to comply, they showed only that they could not discharge the lien with income from the farm involved because they had lost the farm. They did not show their noncompliance with the decree was unavoidable despite a good faith effort to comply. In fact, the record contains evidence to the contrary. Even when the lien could have been satisfied from escrowed funds, Wilsons refused to consent to that procedure.

Clear and satisfactory evidence was adduced to show that Wilsons' failure to comply with the decree was motivated by a desire to resist it by every available means. Defendant district court did not err in finding their conduct was willful and unexcused by impossibility.

We have considered all of Wilsons' contentions and arguments concerning the contempt adjudication and find them unmeritorious. No error in the adjudication has been demonstrated.

II. Validity of the penalty. After finding Wilsons were in contempt of court for failing to comply with the specific performance decree, the court imposed the following penalty:

(Wilsons) shall have two (2) weeks from the date of this order to purge themselves of contempt by providing abstracts showing merchantable title to (Youngblut's) attorneys; failing to do so, they shall be fined the sum of $250.00 per day from and after that date, until the Decree is complied with. Said fine shall apply first for the benefit of (Youngblut) for his costs of gathering evidence and preparing for the hearing, including attorney fees. (Youngblut's) attorneys are directed to file an affidavit showing said costs and fees. If (Wilsons) shall purge themselves of contempt before the fine exceeds such costs and fees, (Wilsons) shall nonetheless pay a fine in the amount of said costs and fees.

Wilsons assert this penalty was unlawful because taxing them with Youngblut's attorney fees and expenses was unconscionable and unauthorized. We believe the issue of the court's authority to impose the penalty is determinative.

Defendant court contends the penalty was authorized under its inherent power in contempt cases and by statute. This court has recognized that an Iowa court's contempt power is inherent. Lutz v. Darbyshire, 297 N.W.2d 349, 354 (Iowa 1980). However, the court has also held that a statute limiting punishment for contempt is valid. Eicher v. Tinley, 221 Iowa 293, 297, 264 N.W. 591, 594 (1936): "... (W)e think the greater weight of authority on this proposition is that a limitation as to the punishment that may be imposed for contempt by a constitutional court is not such an interference with the inherent right of a court to punish for contempt as to prevent the enactment of such provision by the legislative branch of the state." In Eicher, the court held that the respondent court acted illegally in imposing a fine of $300 and sentence of 90 days when the applicable statute provided for a fine of $50 and imprisonment not exceeding one day.

Furthermore, this court has held that when the legislature enacts a comprehensive statute to regulate the contempt power, the statute is a constructive repeal of the common law on that subject. See Drady v. Given, 126 Iowa 345, 349, 102 N.W. 115, 117 (1905) ("the courts must in all cases be governed by the provisions of the statute").

The present contempt action was brought pursuant to chapter 665, The Code....