Bernard J. Wihlm and Patricia M. Balek v. Shirley A. Campbell and Parties in Possession ( 2018 )

IN THE COURT OF APPEALS OF IOWA
No. 15-0011
Filed September 14, 2016
BERNARD J. WIHLM and
PATRICIA M. BALEK,
Plaintiffs-Appellees,
CLERK OF SUPREME COURT
vs.
SHIRLEY A. CAMPBELL, individually,
And as executor of the ESTATE OF
JOHN JOSEPH WIHLM, and as trustee
of the JOHN JOSEPH WIHLM REVOCABLE
TRUST dated April 2, 2012, and PARTIES
IN POSSESSION,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Cerro Gordo County, DeDra L.
Schroeder, Judge.
SEP 14, 2016
Defendant appeals from an order partitioning by sale certain inherited
properties. REVERSED AND REMANDED.
ELECTRONICALLY FILED
Michael G. Byrne of Winston & Byrne, P.C., Mason City, for appellant.
Collin M. Davison of Heiny, McManigal, Duffy, Stambaugh & Anderson,
P.L.C., Mason City, for appellees.
Heard by Tabor, P.J., and Bower and McDonald, JJ.
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MCDONALD, Judge.
This case arises out of a dispute between three siblings regarding the
disposition of several parcels of land—totaling approximately 300 acres—they
inherited as tenants in common upon their father’s death. The land at issue is
divided into several parcels, including a 60-acre parcel and a 160-acre parcel,
both in Cerro Gordo County, and two 40-acre parcels, both in Franklin County.
Two of the siblings, Bernard Wihlm and Patricia Balek, brought partition actions
in Cerro Gordo and Franklin Counties. Wihlm and Balek sought to partition the
properties by sale and divide the proceeds. The third sibling, Shirley Campbell,
requested an in-kind division, at least with respect to her share. She requested
she be awarded approximately 79 acres, including a multi-generational family
homestead. The partition actions were consolidated for trial in Cerro Gordo
County, and the district court ordered the property to be sold with the proceeds to
be divided equally. The district court entered its partition order on November 7,
2014. Campbell filed a motion to enlarge and amend pursuant to Iowa Rule of
Civil Procedure 1.904(2) on November 21. The district court denied the motion
to enlarge and amend, and Campbell filed her notice of appeal within thirty days
of that order.
Before addressing the merits of the parties’ claims, we first address our
jurisdiction over the appeal. Generally, notice of appeal must be filed within thirty
days after the filing of a final order or judgment. See Iowa R. App. P. 6.101(1)(b).
“However, if a motion is timely filed under Iowa [Rule of Civil Procedure] 1.904(2)
. . . the notice of appeal must be filed within 30 days after the filing of the ruling
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on such motion.” Id. This tolling period applies only where the motion is both
timely and proper. See Harrington v. State, 659 N.W.2d 509, 513 (Iowa 2003)
(“If the rule 1.904(2) motion is not timely filed, however, it will not toll the thirty-
day time period for filing a notice of appeal.”); Bellach v. IMT Ins. Co., 573
N.W.2d 903, 904–05 (Iowa 1998) (stating that an improper motion will not toll the
time period to file an appeal). To be timely, a Rule 1.904(2) motion must be filed
“within fifteen days after filing of the verdict, report or decision.” Iowa R. Civ. P.
1.1007.
Wihlm and Balek contend this court lacks jurisdiction because Campbell’s
Rule 1.904(2) motion was neither timely nor proper. Wihlm and Balek first
contend the appeal was untimely because Campbell did not file her brief in
support of her motion to enlarge and amend within fifteen days of the partition
order. Rule 1.1007 requires only that the motion be filed within fifteen days. The
rule does not address briefing. Here, Campbell filed her motion fourteen days
after the order was entered. Nothing more was required to meet the timeliness
requirement. Wihlm and Balek also argue Campbell’s motion was improper
because it did “nothing more than rehash legal issues raised and decided
adversely to Campbell.” We disagree. Campbell’s Rule 1.904(2) motion
requested the district court to reconsider certain facts and asked for an
expansion of the order. If a motion “asks the court to examine facts it suspects
the court overlooked and requests an expansion of the judgment in view of that
evidence, then the motion is proper.” Sierra Club Iowa Chapter v. Iowa Dep’t of
Transp., 832 N.W.2d 636, 641 (Iowa 2013) (citing City of Waterloo v. Black Hawk
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Mut. Ins. Ass’n, 608 N.W.2d 442, 444 (Iowa 2000)). Because Campbell’s motion
was timely and proper, the jurisdictional appeal deadline was tolled. We
conclude we have jurisdiction over the appeal.
A partition of real property is an equitable proceeding. Iowa R. Civ. P.
1.1201(1). Our review is de novo. Spies v. Prybil, 160 N.W.2d 505, 507 (Iowa
1968). Even on de novo review, however, we afford some deference to the
decision of the district court because of “notions of judicial comity and respect;
recognition of the appellate court’s limited function of maintaining the uniformity
of legal doctrine; recognition of the district court’s more intimate knowledge of
and familiarity with the parties, the lawyers, and the facts of a case; and
recognition there are often undercurrents in a case—not of record and available
for appellate review—the district court does and should take into account when
making a decision.” In re P.C., No. 16-0893, 2016 WL 4379580, at *2 (Iowa Ct.
App. Aug. 17, 2016).
“The general rule, both at common law and by statute, favors partition in
kind. This is no longer true in Iowa, however.” Spies, 160 N.W.2d at 508
(internal citation omitted). Iowa Rule of Civil Procedure 1.1201(2) provides as
follows:
Property shall be partitioned by sale and division of the proceeds,
unless a party prays for partition in kind by its division into parcels,
and shows that such partition is equitable and practicable. But
personalty which is subject to any lien on the whole or any part can
be partitioned only by sale.
“The rule . . . is unequivocal in favoring partition by sale and in placing upon the
objecting party the burden to show why this should not be done in the particular
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case.” Spies, 160 N.W.2d at 508. The objecting party must show the in-kind
division is both “equitable and practicable.” Id. “When partition can be
conveniently made of part of the premises but not of all, one portion may be
partitioned and the other sold, as provided in the rules in this division.” Iowa R.
Civ. P. 1.1201(3).
The disposition of this case turns largely on the testimony of three expert
witnesses and whether or not appraising farmland is so speculative that partition
in-kind becomes impracticable. The parties agreed Vernon Greder, a certified
real estate appraiser, would appraise the properties. He valued the properties at
$3,144,000. Greder testified that if the property were sold at auction, he would
recommend it be sold in separate parcels because doing so would attract more
bidders for each parcel. Greder thus concluded the parcels Campbell requested
could be divided from the remainder of the properties without materially
impacting the sale value of the remainder of the properties at auction. Greder
testified the value of the property Campbell sought was approximately one-third
of the value of the properties. He testified the in-kind division would be fair and
equitable. Greder did concede, however, that the value of farmland had been in
some fluctuation.
Reed Kuper, who owns a real estate business, testified about the
advantages of selling the parcels together. Kuper testified it would be
advantageous to keep the land together due to the benefits of economies of
scale. Kuper believed bidders would prefer the land as a whole. Kuper further
testified that this was particularly true for these properties because of large
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quality differences between the parcels. When questioned whether using the
appraisal values in this case would produce an equitable result, Kuper said no.
Kuper explained, in his opinion, appraisals do not factor in “fence line buyers”
that overpay for land to which they are emotionally attached. Kuper also testified
that market fluctuations made appraisals largely speculative. Kuper is not a
certified appraiser.
Cory Behr, co-owner of an auction business, testified that his farm sales
almost always exceed the appraised value of the property and that auctions
establish a fair market value. Behr testified that separating Campbell’s requested
parcels from the remainder of the properties would have a limited effect on the
land’s total value. Indeed, like Greder, Behr testified it would be preferable to sell
the parcels separately to maximize the sale value. When questioned whether
Greder’s calculations remained equitable, Behr responded “[t]he poorer quality
soils have declined in value.” Behr stated the only way to find the true value of
the land was to put interested buyers into a room to bid on it. Anything else
would be speculative, in his opinion. Behr is not a certified appraiser.
The district court’s conclusion that Campbell failed to prove the division of
the properties in kind was both equitable and practicable was predicated on the
assumption, supported by Kuper’s and Behr’s testimony, that appraising farm
property was largely a speculative endeavor. The district court stated “[t]he
volatile nature of farmland as affected by the crop prices has made a partition in
kind merely guesswork when factoring in the nature and qualities of the land.”
The district court concluded: “The Court is simply not in a position to engage in
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guesswork to determine a division in kind, which may or may not be equitable to
the parties. The true market value of the land will be ascertained through a sale
on the free market.”
We disagree with the conclusion that appraisal of farmland, generally, is
merely a speculative endeavor. See Hawk v. Council Bluffs Airport Auth., No.
05-0133, 2006 WL 1230010, at *6 (Iowa Ct. App. Apr. 26, 2006) (“Appraisal is
not an exact science, but a subjective exercise of professional judgment by
qualified and skilled individuals who may reasonably disagree.”) (citing Sears,
Roebuck & Co. v. Sieren, 484 N.W.2d 616, 617 (Iowa Ct. App. 1992)). The
record reflects that appraisal is absolutely more certain than mere speculation.
Further, the appraiser’s opinion in this case was well-supported. Greder was a
certified appraiser with extensive experience in the area. His appraisal was
based on the economic value of the property based on CSR ratings and
comparable sales, both providing reliable data points to appraise the properties
at issue. In his testimony, he acknowledged the value of farmland, particularly
low-quality farmland, had been decreasing in the area. His appraisal accounted
for current market conditions. We see no reason to reject the concept of
appraisal, generally, and Greder’s testimony, specifically, out of hand.
On de novo review, we conclude Campbell proved in-kind division of the
property was equitable. The certified appraiser, agreed upon by all parties,
testified the land requested by Campbell was “a solid representation of near one-
third of the total value.” Greder further testified that the balance of the remaining
real estate, which would be awarded to the two other siblings, was a “solid
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representation of two-thirds of the total value.” The record reflects that the
property Campbell seeks can be divided without material diminution of the value
of the remainder. See 68 C.J.S. Partition § 123 (stating the test is “whether or
not the value of the share of each, after partition, would be materially less than
the share of the money equivalent that each could probably obtain from the
whole”). According to Wihlm and Balek, Campbell’s property may be worth
$36,000 more than their shares if sold. Even if this were true, it is an immaterial
difference where the properties appraised at more than $3 million. A further
equitable consideration favors division in-kind. The property at issue is a multi-
generational family farm. While Campbell does not farm the property, all else
being equal, the sentimental attachment she may have to the property weighs in
favor of dividing her interest in kind. See id. (stating that “length of owner and
sentimental attachment to property may be considered in a partition action”).
On de novo review, we conclude Campbell proved division of the property
was practicable. “When partition can be conveniently made of part of the
premises but not of all, one portion may be partitioned and the other sold. . . .”
Iowa R. Civ. P. 1.1201(3); see also Newhall v. Roll, No. 14-1622, 2015 WL
5965205, at *3–5 (Iowa Ct. App. Oct. 14, 2015) (reversing the district court’s
order to partition by sale as to avoid “guesswork” and ordering a partition in kind)
(further review granted Jan. 19, 2016); Anderson v. Johnson, No. 03-2045, 2004
WL 2804854, at *2 (Iowa Ct. App. Dec. 8, 2004) (affirming the district court’s
order awarding a partition in kind and a partition by sale). The land Campbell
seeks to divide from the other parcels is readily identifiable and largely
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contiguous. There are no topographical issues that would make the division
impracticable. Indeed, two of the three experts testified the properties can and
should be sold in separate parcels.
The parties raise two other issues that must be addressed. Campbell
argues that the appointed referee, Behr, had a conflict of interest because he
also served as an expert witness. Campbell cites to a Nebraska case, Phillips v.
Phillips, 104 N.W.2d 52, 55 (Neb. 1960), for the proposition that the court should
not appoint someone to act as a referee in a partition case who is “biased or
prejudiced to any party to the action.” Further, “objections to the appointment of
anyone to act as referee, on the ground of his being biased or prejudiced, are
addressed to the sound discretion of the court making the appointment and the
overruling thereof will not be set aside unless the record affirmatively shows that
such discretion has been abused.” Phillips, 104 N.W.2d at 55. The Nebraska
Supreme Court found the trial court did not abuse its discretion in appointing as a
referee an attorney who was litigating another matter against one party’s
counsel. See id. at 55–56. The court found there was no showing of prejudice or
bias. See id. at 56.
Likewise, here there was no evidence presented that the auctioneer, Behr,
was prejudiced or biased against Campbell. There is no conflict of interest
because Behr’s interests are aligned with his responsibility to act as a referee to
sale the land. Behr’s job is to maximize the profits for all parties, as well as
himself. There is no evidence Behr will fail to carry out his duties as a referee.
The district court did not abuse its discretion in appointing Behr as the referee.
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Finally, Wihlm and Balek request appellate attorney fees. Under Iowa
Rule of Civil Procedure 1.1225, “[o]n partition of real estate, but not of personal
property, the court shall fix, and tax as costs, a fee in favor of plaintiff’s attorney,
in a reasonable amount, to be determined by the court.” Iowa R. Civ. P. 1.1225.
The rule says nothing about appellate attorney fees. See Gleason v. Gleason,
No. 13-0876, 2015 WL 9450403, at *6 (Iowa Ct. App. Dec. 23, 2015) (denying
request for appellate attorney fees because the “provision says nothing about
appellate attorney fees” and there was no argument that appellate attorney fees
be read into the provision). Wihlm and Balek argue the applicable rules of civil
procedure do not limit the award of fees to only those incurred as part of trial, but
fail to cite to any authority. We therefore decline Wihlm and Balek’s request.
For the foregoing reasons, we reverse the judgment of the district court
and remand this matter for in-kind partition of the property as requested by
Campbell and for partition by sale of the remainder with the proceeds to be
divided between Wihlm and Balek.
REVERSED AND REMANDED.
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State of Iowa Courts
Case Number Case Title
15-0011 Wihlm v. Campbell
Electronically signed on 2016-09-14 08:46:46
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