Estate of Tena Steensma v. Buysman, Inc., Jesse D. Braaksma, Dale W. Braaksma, and Danna S. Braaksma , 919 N.W.2d 766 ( 2018 )

IN THE COURT OF APPEALS OF IOWA
No. 17-0693
Filed June 6, 2018
ESTATE OF TENA STEENSMA,
Plaintiff-Appellee,
vs.
BUYSMAN, INC., JESSE D. BRAAKSMA, DALE W. BRAAKSMA, and
DANNA S. BRAAKSMA,
Defendants-Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Osceola County, Don E. Courtney,
Judge.
A corporation and three individuals appeal from the denial of their post-
judgment motion to void the judgment and motion to enlarge. AFFIRMED IN
PART, VOIDED IN PART, AND REMANDED.
Curt Krull of Waagmeester Law Office, P.L.C., Rock Rapids, for appellants.
John E. Lande and Thomas D. Hanson of Dickinson, Mackaman, Tyler &
Hagen, P.C., Des Moines, for appellee.
Heard by Vaitheswaran, P.J., and Potterfield and Tabor, JJ.
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POTTERFIELD, Judge.
This appeal stems from disputes between shareholders of Buysman, Inc.
(Buysman). The plaintiff, the Estate of Tena Steensma, filed the underlying lawsuit
against the Buysman corporation (later adding the individual defendants, Jesse, Dale,
and Danna Braaksma) for failure to perform a 2011 stock redemption agreement. The
estate owned half the shares of Buysman; Jesse Braaksma owned the other half.
The district court granted summary judgment in favor of the estate, required Jesse
to relinquish his shares in Buysman, and entered judgment in the amount of $203,930.32
jointly and severally against the four defendants.
Buysman and the Braaksmas filed a post-judgment motion, which the court denied,
and they then filed this appeal of the district court’s ruling. The estate filed a motion to
dismiss, arguing the appeal was untimely and should be dismissed for lack of jurisdiction.1
The defendants respond that the motion they filed following the court’s January 11, 2017
ruling was not an Iowa Rule of Civil Procedure 1.904(2) motion to enlarge or amend but
rather a motion to challenge the ruling as void—which can be done at any time—and they
timely appealed from the court’s ruling on that motion.
If we determine the appeal is timely and reach the merits, Buysman and the
Braaksmas ask that we find the district court’s ruling is void as to each of the four
defendants because the court failed to rule on a pending motion before entering the ruling
and because defendant Jesse Braaksma, a non-lawyer, was allowed to represent himself,
as well as Dale and Danna Braaksma and the corporation in the proceedings. They
maintain the proper remedy is to declare the ruling and judgment void and remand the
1 Our supreme court ordered us to consider the motion to dismiss as part of the appeal.
3
case to the trial court for further proceedings. The estate argues that the judgment should
be affirmed as to each of the four defendants.
I. Background Facts and Proceedings.
Buysman is a corporation comprised of 320 acres of farmland. Dale Braaksma
and Tena Steensma purchased equal shares in Buysman in 2003 for a total value of
$736,000.2 Dale conveyed half of his shares to his wife Danna in 2003, and in 2004 Dale
and Danna conveyed all of their shares to their son Jesse. The Braaksmas have always
held the majority, if not all, of the director and officer positions in Buysman. Jesse rents
farmland from Buysman.
Tena Steensma passed away in 2010. Her estate’s claims against Buysman and
the Braaksmas include that Jesse does not pay fair market value for the land he rents
and consistently has lower yields than the county average.
In March 2015, the estate filed a petition for dissolution against Buysman asserting
lack of proper accounting, breach of fiduciary duty, oppression, breach of contract for
failing to uphold a redemption agreement, unjust enrichment, and civil conspiracy.
Buysman filed an answer through counsel in April. In December 2015, the estate filed a
motion to amend to add Dale, Danna, and Jesse as defendants.
Buysman’s counsel withdrew in January 2016. A thirty-day stay was granted in
order for Buysman to obtain new counsel. At a March telephonic hearing on the estate’s
motion to amend the petition and add new parties, Jesse participated on behalf of
Buysman, himself, and his parents to resist the motion to amend. The estate objected to
2Steensma and Dale Braaksma were involved in farming together. Dale has been described as
Steensma’s informally adopted son. There was animosity between Steensma’s relatives and the
Braaksmas as a result.
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Buysman appearing without counsel. In reply, Jesse stated he intended to employ a
lawyer, but “would not object to [the estate’s] objection. I would rather be represented.
That is my intention, but so far I have not been able to find anyone.” At the end of the
hearing, the court admonished Jesse, “[Y]ou need to get counsel employed on behalf of
Buysman, Inc. as soon as possible.” The court granted the estate’s petition to add the
three Braaksmas as parties and stated, “On this occasion the court allowed Mr.
Braaksma, a nonlawyer to participate but cautioned him that the corporation needed to
employ an attorney for future proceedings.”
Neither Buysman nor the Braaksmas filed an answer or any response to the
estate’s amended petition. On April 12, the estate filed a notice of intent to file for entry
of default judgment against Buysman and the Braaksmas. On April 22, Buysman and the
Braaksmas filed a “Joint Motion to Dismiss” with individual signature lines for Buysman
and each of the Braaksmas. None had counsel of record at that time. The estate filed a
resistance as to all parties, arguing as to Buysman that the corporation could not file a
motion unrepresented by counsel. The district court did not rule on the motion to dismiss
until its denial of the post-judgment motion.
The estate filed a second application for default specifically against Buysman on
May 19. Buysman was still unrepresented by counsel. The estate argued Buysman had
not filed a responsive pleading as required by Iowa Rule of Civil Procedure 1.303 in
response to the estate’s amended petition, both because a motion to dismiss is not a
responsive pleading tolling the deadline in rule 1.303 and an answer had not been filed,
and because Buysman had not filed anything through counsel. The district court did not
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rule on the estate’s applications for default, although the court mentioned in its ruling on
summary judgment filed in January 2017 that Buysman was in default.
Jesse Braaksma continued to participate on behalf of Buysman. His parents
separately signed motions and pleadings. In June, Buysman and the Braaksmas filed a
motion for extension of time to respond to the estate’s motion to remove confidentiality
from bank documents. In July, they filed a resistance to the estate’s motion to remove
confidentiality from bank documents. The court ruled on the motions.
In October, the estate filed a motion for summary judgment and another application
for default judgment. In November, the Braaksmas and Buysman, still unrepresented by
counsel, filed a motion to continue a hearing set on the estate’s motion for summary
judgment. Notably, Buysman and the Braaksmas did not ask the court for more time to
obtain an attorney but requested additional time “to review these new filings and to
prepare suitable arguments in their defense” because the estate had filed a supplement
to the motion for summary judgment two days before the hearing.
The motion to continue was denied and an unreported hearing was held on
November 16 on the estate’s motion for default judgment and motion for summary
judgment. Jesse participated on behalf of Buysman, himself, and his parents at the
hearing, and he filed a resistance to the estate’s motion for summary judgment with
signature lines for each defendant.
In January 2017, the court granted the estate’s motion for summary judgment.3
The court determined the estate was entitled to judgment as a matter of law because all
three Braaksmas had breached their fiduciary duty to the estate by continuing to allow
3 The court’s ruling was based on a proposed ruling submitted by the estate.
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Jesse to farm the real estate despite mounting losses, by permitting Jesse to take
hundreds of thousands of dollars from Buysman while distributing comparatively little to
the estate, by approving the use of Buysman’s assets as collateral for personal loans to
the Braaksmas, by failing to share the gains of Buysman proportionally with the estate,
and by failing to file tax returns. The court determined the estate was entitled to rescind
the 2011 redemption agreement because of Jesse’s material breach of the agreement.
Additionally, even though the estate and Jesse were the only two shareholders of
Buysman, the court held Dale and Danna jointly and severally liable for the balance of the
damages owed to the estate following Jesse’s relinquishment of his shares because
“there is sufficient evidence of at least an implied agreement between Dale, Danna, and
Jesse Braaksma to breach their fiduciary duties to [the estate].” Although the court had
the authority to dissolve the corporation, it declined to do so because of “the onerous tax
bill due in the event of liquidation.” Instead, the court awarded “a monetary judgment in
favor of the Estate and . . . offset such judgment by ordering Jesse Braaksma’s shares of
Buysman, Inc. to be turned over to the Estate in partial satisfaction of the amounts that
Jesse Braaksma owes the estate and Buysman, Inc.” Jesse was ordered to relinquish
all of his shares of the corporation, and the Braaksmas and Buysman were ordered to
pay the remaining judgment of $203,930.32.4
The court mentioned in its ruling the estate was entitled to a default judgment
against Buysman because it had not appeared through an attorney but concluded “the
relief for the Estate against Buysman is redundant of the relief the Estate is entitled to
4 If Jesse failed to relinquish his stock in Buysman, the court indicated judgment would be entered
jointly and severally against Buysman and Jesse, Dale, and Danna Braaksma for $1,140,851.82.
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against the Braaksmas after consideration of the merits of the Estate’s motion for
summary judgment.” The estate does not now request a default judgment.
On January 27, still unrepresented, Buysman and the Braaksmas filed a motion to
void the order granting summary judgment and enlarge the findings, arguing the district
court was required to have ruled on their motion to dismiss before it granted summary
judgment. The estate resisted.
In February, after finally obtaining counsel, Buysman and the Braaksmas filed a
supplemental motion to void and enlarge, arguing the ruling on summary judgment is void
as to all defendants because Jesse engaged in the unauthorized practice of law.
The court denied the earlier filed motion to dismiss and the two post-judgment
motions, finding the post judgment motions were untimely.
Buysman and the Braaksmas appeal, now appearing through counsel and without
separate argument on the differing positions of the parties.
II. Discussion.
A. Timeliness.
We first must determine whether the defendants’ appeal is timely, as we lack
jurisdiction to decide untimely appeals. See Hays v. Hays, 612 N.W.2d 817, 818 (Iowa
Ct. App. 2000). We review questions of jurisdiction for correction of errors at law. Yulin
Li ex rel. Lee v. Rizzio, 801 N.W.2d 351, 357 (Iowa 2011).
Here, the estate maintains the defendants’ appeal is untimely because the district
court entered its ruling on January 11, 2017, and the defendants then waited sixteen days
to file their motion to void or enlarge the ruling. The estate maintains, and the district
court concluded, that the defendants’ motion was a motion to enlarge or amend pursuant
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to Iowa Rule of Civil Procedure 1.904(2), which must be filed within fifteen days of the
court’s ruling. See Iowa Rs. Civ. P. 1.904(2) (requiring motion to enlarge or amend to be
filed “within the time allowed for a motion for new trial”), 1.1007 (requiring motion for new
trial to be filed “within fifteen days after filing of the verdict, report or decision”). If the
motion was untimely, the time to file an appeal of the ruling was not tolled. Hays, 612
N.W.2d at 819 (“An untimely motion under rule [1.904(2)] will not toll the running of the
thirty-day period within which an appeal must be taken.”). Thus, the defendant’s April 25
notice of appeal was untimely. See Iowa R. App. P. 6.101(2) (providing that a “notice of
appeal must be filed within 30 days after the filing of the final order or judgment”).
In response, the defendants urge us to find their appeal is timely. They maintain
the district court wrongly concluded their January 27 motion was a rule 1.904(2) motion
to amend or enlarge when it, and their supplemental February motion, were actually
motions to have the district court’s January 11 ruling voided. The district court then ruled
on the defendants’ motion (and their supplemental motion to void and enlarge) on March
28. Less than thirty days later, on April 25, the defendants filed this appeal.
Buysman and the Braaksmas’s January 27 motion claims that the district court’s
ruling was void for failing to rule on the defendants’ pending motion to dismiss and their
February supplemental motion claims that the district court’s ruling was void because of
Jesse’s unauthorized practice of law. A party moving to void a judgment “is not limited to
any time within which to file or present [a] motion.” Williamson v. Williamson, 161 N.W.
482, 485 (Iowa 1917); see also Rizzio, 801 N.W.2d at 358 (“[A] void judgment may be
attacked at any time.”). Though we determine a motion by its substance, see Zimmer v.
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Vander Waal, 780 N.W.2d 730, 732 (Iowa 2010), here, both the caption and the
substance of the motions attacked the court’s ruling as void.
The estate argues the defendants do not have unlimited time to file motions
attempting to raise collateral issues, but “[a] void judgment is subject to collateral attack”
and the issue can be raised at any time. In re Estate v. Falck, 672 N.W.2d 785, 789 (Iowa
2003). “While an application to set aside a voidable judgment must be filed within one
year under rule [1.1013], a judgment may be vacated at any time if it is void.” Johnson v.
Mitchell, 489 N.W.2d 411, 414 (Iowa Ct. App. 1992). “A void judgment is no judgment at
all, and no rights are acquired by virtue of its entry of record.” Id.The estate also takes issue with the form of the defendants’ motions. Our case
law provides little guidance on what form an attack against an allegedly void judgment
should take, and we will not place form over substance. In Rizzio, after the trial was
completed and judgment had been entered, the guardian ad litem (GAL) of a child who
had been represented by his parent in a legal proceeding filed a “report” contending the
father’s unauthorized practice of law in the previous trial entitled the child to a new trial
with a licensed attorney. 801 N.W.2d at 354. The defendant in the previous trial resisted,
arguing the district court could not reach the merits because the issue had not been raised
within the time permitted for post-trial motions. Id. The district court then held a hearing
on the motion for new trial. Id. After the hearing, the GAL filed a second document, in
which the GAL abandoned its earlier claim and instead argued that the judgment that was
adverse to the child was “null and void.” Id. The district court declined to grant a new
trial or to void the judgment, opining the issue was not properly before it because the
claim was raised in a report to the court rather than a motion. Id. at 355. Our court
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determined the issue of whether the trial judgment was void was preserved for our review
even though “the GAL brought this claim before the [district] court relatively late in the
proceedings [and] in a document captioned ‘Reply to Defendant’s Response to Report of
Guardian Ad Litem,” because the district court had a chance to rule on the issue and did
so. Id. at 358.
Because the substance—and the caption—of the defendants’ motions attacked
the district court’s judgment as void and an attack on a judgment as void can be raised at
any time, and the ruling on the motions was an appealable final ruling, we proceed to the
merits of the defendants’ appeal.
B. Merits.
Next, we must determine whether the district court’s failure to rule on a pending
motion before entering judgment or Jesse’s alleged unauthorized practice of law voids
the district court’s summary judgment ruling, and, if it does, to which defendants the ruling
is void. We review for correction of errors at law. See id. at 357–58 (citing In re Marriage
of Engler, 532 N.W.2d 747, 748 (Iowa 1995) (stating questions of jurisdiction, authority,
and venue are legal issues reviewed for correction of errors at law.)).
1. Pending Motion.
It is undisputed that the defendants filed a “joint motion to dismiss” on April 22,
2016, which the court did not rule on before its January 11 ruling. “Where undisposed of
motions are on file an order of the trial court finding defendant to be in default is erroneous
and must be set aside.” Theis v. James, 184 N.W.2d 708, 709–10 (Iowa 1971). “[T]he
refusal of the court to aside the default and judgment rendered thereunder must be
reversed.” Pedersen v. Thorn, 137 N.W.2d 588, 590 (Iowa 1965). Here, no default
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judgment was entered; the court ruled on the merits of the estate’s summary judgment
motion.
Additionally, while the defendants argue “[t]here should be no difference in the
responsibility of the trial court to rule on existing and pending motions in a summary
judgment case as opposed to a default judgment matter,” they have provided no authority
to support their position. We do not consider this argument further.
2. Unauthorized Practice of Law.
Next, we determine to what extent Jesse engaged in the unauthorized practice of
law and how that affects the court’s summary judgment ruling as to each of the
defendants.
Buysman. “Our supreme court is vested with the ‘inherent authority to define and
regulate the practice of law’ in Iowa.” Rizzio, 801 N.W.2d at 358 (quoting Iowa Supreme
Ct. Comm’n on Unauthorized Practice of Law v. Sturgeon, 635 N.W.2d 679, 681 (Iowa
2001)). In an exercise of that authority, the supreme court adopted “the general rule that
a corporation may not represent itself through nonlawyer employees, officers, or
shareholders.” Hawkeye Bank & Trust, Nat’l Ass’n v. Baugh, 463 N.W.2d 22, 26 (Iowa
1990). The practice of law includes exercising professional judgment and representing
another before the courts. Rizzio, 801 N.W.2d at 358 (citing Bergantzel v. Mlynarik, 619
N.W.2d 309, 312–13 (Iowa 2000)).
Here, it is clear Jesse engaged in the unauthorized practice of law when he
purported to represent Buysman throughout the proceedings. In at least one case in
which we have found the unauthorized practice of law, we have determined the judgment
against the unrepresented party was void. See Rizzio, 801 N.W.2d at 362 (determining
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the “unauthorized practice of law itself renders the judgment in this case void”). However,
in other cases involving the apparent unauthorized practice of law and corporations,
where there was no objection by the opposing party, we have not ruled so severely. See,
e.g., Alexander Techs. Europe, Ltd. v. MacDonald Letter Serv., Inc., No. 05-2023, 2007
WL 1827472, at *1 n.1 (Iowa Ct. App. June 27, 2007) (considering briefs from a nonlawyer
when plaintiff did not contest nonlawyer appearing on behalf of a corporation); Crompton
Corp. v. All Star Feeds, Inc., No. 04-0003, 2005 WL 1224592, at *1 n.1 (Iowa Ct. App.
May 25, 2005) (“[Plaintiff] did not raise the status of [defendants]’ president either before
the district court or before our court. Therefore, we deem the matter waived.”).
Buysman had notice—both through case law and in the actual proceedings—that
it needed to hire an attorney. See Hawkeye Bank, 463 N.W.2d at 26 (adopting “the
general rule that a corporation may not represent itself through nonlawyer employees,
officers, or shareholders”). The estate raised the issue a number of times in filings with
the court, and the court itself instructed Buysman in March 2016 that it needed to get
counsel employed “as soon as possible.” Yet an attorney never filed an appearance for
the corporation until after the court decided the motion for summary judgment, and the
district court allowed Jesse to continue to engage in the unauthorized practice of law. 5
In this situation, we agree with the district court that the estate was entitled to a
default judgment against Buysman, since any pleadings or motions filed on the
corporation’s behalf by Jesse Braaksma should have been stricken and considered void.
5The district court should have played a more active role in preventing Jesse, a non-lawyer, from
repeatedly representing the corporation. See Rizzio, 801 N.W.2d at 361 (ruling the district court
did not have the discretion to permit the unauthorized practice of law, as the court is bound by the
rules and pronouncements of our supreme court); see also Iowa Ct. R. 37.2 (requiring persons
who practice law to be attorneys).
13
See Wetzel v. Schlenvogt, 705 N.W.2d 836, 840–41 (N.D. 2005); see also In re Estate of
Nagel, 950 P.2d 693, 694 (Colo. App. 1997) (“Subject to certain exceptions, proceedings
commenced or prosecuted and pleadings filed by a corporation without an attorney are a
nullity and will be stricken.”); Lloyd Enters., Inc. v. Longview Plumbing & Heating Co., 958
P.2d 1035, 1038 (Wash. 1998) (ruling the district court properly struck documents signed
by a non-attorney on behalf of a corporation).
However, the district court did not formally enter a default judgment against
Buysman, instead including the corporation in its determination of damages in its
summary judgment ruling against the Braaksmas. The corporation did not appear by
counsel in the summary judgment proceedings, nor was any resistance filed by Jesse
Braaksma to be considered on behalf of the corporation. The appropriate remedy here
is to void the adverse summary judgment ruling as to the corporation. See Rizzio, 801
N.W.2d at 362. We reverse the district court’s denial of the post-judgment motion as to
the corporation and void the entry of summary judgment against the corporation.
Dale and Danna. The defendants, in their appellate brief, maintain that Jesse
engaged in the unauthorized practice of law on behalf of Dale and Danna as well as on
behalf of the corporation. However, the record does not support that assertion. Rather,
it appears that Dale and Danna represented themselves in the action, as they are allowed
to do. See, e.g., Metz v. Amoco Oil Co., 581 N.W.2d 597, 599 (Iowa 1998) (“A litigant
has a right to appear in court pro se.”). After Dale and Danna were served with the original
notice on March 17, 2016, the estate’s certificates of service state that copies of all filings
were mailed to Dale and Danna. More importantly, each filing made to the court contained
Dale and Danna’s signature lines. We presume their signatures are valid. See Iowa Ct.
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R. 16.305(6)(a). Moreover, Dale and Danna had thirty days after each “knew or should
have known the signature was not authentic or valid” to dispute the authenticity of the
signatures by filing an objection. See Iowa Ct. R. 16.305(7). Neither Dale nor Danna has
done so.
Because the record supports the conclusion that Dale and Danna represented
themselves in the action, we will not void the district court’s summary judgment ruling as
it pertains to them.
Jesse. Jesse concedes that a civil litigant may, as he did here, represent himself
or herself. However, he argues we should void the district court’s ruling as it pertains to
him because his rights are tied to those who were “jeopardized by the pro se litigant’s
legal judgments.” But there is not one set of rules for represented parties and another for
pro se litigants; unrepresented individuals must suffer the consequences of adverse
rulings the same way represented litigants do. See Kubik v. Burk, 540 N.W.2d 60, 63
(Iowa Ct. App. 1995) (“The law does not judge by two standards, one for lawyers and
another for lay persons. . . . If lay persons choose to proceed pro se, they do so at their
own risk.”).
Because Jesse chose to represent himself in the action, we will not void the district
court’s summary judgment ruling as it pertains to him.
III. Conclusion.
Because a ruling may be attacked as void at any time, the defendants’ appeal is
timely, and we deny the estate’s motion to dismiss. In considering the merits of the
defendants’ appeal from the denial of the post-judgment motion, we void the judgment as
to the corporation, Buysman. We affirm the district court’s summary judgment ruling
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as to all three individual defendants: Jesse, Dale, and Danna Braaksma. We remand for
entry of a corrected order.
AFFIRMED IN PART, VOIDED IN PART, AND REMANDED.