George W. Gleason and Theodore Alan Gleason, Trustees of the Theodore Alan Gleason Trust, Partition v. Gayle F. Gleason, Partition ( 2015 )

IN THE COURT OF APPEALS OF IOWA
No. 13-0876
Filed December 23, 2015
GEORGE W. GLEASON and THEODORE ALAN GLEASON,
TRUSTEES OF THE THEODORE ALAN GLEASON TRUST,
Partition Plaintiffs-Appellants,
vs.
GAYLE F. GLEASON,
Partition Defendant-Appellee
________________________________________________________________
Appeal from the Iowa District Court for Pocahontas County, Kurt L. Wilke,
Judge.
Two brothers appeal an order approving the partition and sale of their
deceased mother’s home and ordering distribution of the sale proceeds.
AFFIRMED.
George W. Gleason, Gilmore City, and T. Alan Gleason, Camarillo,
California, appellants pro se.
Dani L. Eisentrager, Eagle Grove, for appellee Gayle Gleason.
Michael N. Gleason, Gilmore City, appellee pro se.
Considered by Vaitheswaran, P.J., and Potterfield and McDonald, JJ.
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VAITHESWARAN, Presiding Judge.
Two brothers appeal an order approving the partition and sale of their
deceased mother’s home and ordering distribution of the sale proceeds. They
take issue with the district court’s decision to reimburse their sister for
improvements she made to the home. They point to prior court orders denying
her request and argue those orders precluded re-litigation of the question.
I. Background Facts and Proceedings
Dorothy Gleason owned a home and farmland. She had six children—
Michael, David, Theodore, Gayle, Margaret, and George—to whom she left the
property on her death. See Gleason v. Korde, No. 12-2025, 2014 WL 4628912,
at *1 (Iowa Ct. App. Sept. 17, 2014).
Discord developed among four of the siblings.1 Gayle and Michael filed a
petition for declaratory judgment seeking the creation of a trust and appointment
of a trustee “to manage and maintain the property.” Theodore and George
resisted and sought a partition sale of the properties. In response, Gayle and
Michael amended their petition to seek reimbursement for various expenses,
including $55,232 in “substantial improvements increasing [the] value of” the
home.
Following trial, the district court granted Theodore and George’s request
for partition and sale of the home and, under a contract theory, denied Gayle’s
request for reimbursement of improvement expenses.
Gayle moved for enlarged findings and conclusions, asserting in part that
the partition action should not have been joined with her petition for declaratory
1
Two siblings passed away.
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judgment and she should have been the one to benefit from the increase in the
home’s value. The court addressed and overruled the joinder portion of the
motion, denied the severance motion for past proceedings, and severed future
proceedings. The court did not specifically address Gayle’s argument
concerning her improvements but “overrule[d] without further discussion the other
issues.”
Only Michael appealed. See Gleason, 2014 WL 4628912, at *1. This
court concluded that Michael conveyed all his rights and interest in the property
to Gayle while his appeal was pending, losing a personal and legal interest in the
dispute. See id. at *2. The court nonetheless addressed and denied his
argument on the merits. Id. at *3-4.
Meanwhile, the severed partition action proceeded in the district court,
with a referee’s issuance of a report of sales and a request for directions to make
a distribution. The report listed a home appraisal value of $48,000 and a sale
price of $91,000 and included a proposed distribution based on each co-owner’s
percentage of ownership, without consideration of the cost of improvements.
Gayle, who was the successful bidder on the home, objected to the report.
She argued the increased value of the home should be distributed to her. A
different district court judge than the judge presiding over the first action
approved the report but agreed Gayle should be reimbursed for the
improvements she made.
Theodore and George filed a motion to enlarge. The district court
summarily denied the motion.
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On appeal, Theodore and George raise a number of arguments, all
centered on the district court’s decision to credit Gayle for the home
improvements. Their primary contention is that the second district court judge
“erred in the severed and later partition action by ignoring the findings, orders
and Decree of the Court in [the] earlier action.” This argument implicates the
doctrine of issue preclusion. See Restatement (Second) Judgments § 27, at 250
(1982) (“When an issue of fact or law is actually litigated and determined by a
valid and final judgment, and the determination is essential to the judgment, the
determination is conclusive in a subsequent action between the parties, whether
on the same or a different claim.”). Our review is de novo. See In re Estate of
Woodroffe, 742 N.W.2d 94, 101 (Iowa 2007) (“Partition actions are equitable
actions which we review de novo.”).
II. Issue Preclusion
“Issue preclusion prevents parties from re-litigating in a subsequent action
issues raised and resolved in [a] previous action.” Emp’rs Mut. Cas. Co. v. Van
Haaften, 815 N.W.2d 17, 22 (Iowa 2012) (internal quotation marks and citation
omitted).
The party invoking issue preclusion must establish four
elements: (1) the issue in the present case must be identical,
(2) the issue must have been raised and litigated in the prior action,
(3) the issue must have been material and relevant to the
disposition of the prior case, and (4) the determination of the issue
in the prior action must have been essential to the resulting
judgment.
Id.5
We begin and end with the first requirement: identity of issues. At first
blush, it would appear this requirement was satisfied. In the first action, Gayle
responded to her siblings’ request for partition as follows:
Over the course of several years, Plaintiff, Gayle F. Gleason
personally made substantial improvements to the residence which
was paid for by herself. Such improvements have added
substantial monetary and aesthetic value to the property that
benefitted all owners. If the Court should determine that this
property be partitioned then it should also determine how much
Gayle F. Gleason is entitled to reimbursement for those
improvements and her share should be proportionally increased
according to the increase in value to the property.
(Emphasis added.) In the second action, she asserted:
4. The auctioneer, Jon Hjelm, appraised the home at $48,000.00.
The house sold for $43,000.00 more than the appraised value and
the value of the home was substantially increased due to the
improvements made and paid for solely by the Plaintiff, Gayle F.
Gleason. These improvements were made at no cost to the other
owners, even though they were afforded the benefits of the
improvements while using the home for many years. Gayle F.
Gleason expended a total sum of $55,000.00 for improvements of
the home which added greatly to the value of the home. The
improvements were meticulous and of exceptional value as they
were in keeping with the original 1908 structure. The additional
$43,000.00 from the appraised value as opposed to the sale value
should be credited to Gayle F. Gleason for her improvements made
to the home. (Exhibits C, D and E)
(Emphasis added.) These assertions establish that Gayle raised the same issue
in both actions and sought the same relief. But our analysis cannot end with
Gayle’s framing of the issue because the framed issue was not the issue decided
by the district court in the first action.
In that action, Gayle made a conditional argument: if the court ordered
partition of the land, then the court should determine by how much her share
should be increased in light of the money she expended to improve the property.
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The district court decided a different issue—whether the co-owners agreed to
reimburse Gayle for her expenditures. The court found and concluded as
follows:
No contract or agreement existed between the co-owners for
these improvements. There is no evidence that all of the owners
were aware of the improvements. Gayle testified that she did not
intend to be reimbursed for these improvements. Her demand is a
response to the partition.
There is no legal or equitable basis for the reimbursement of
these expenses. Gayle was in a semi-fiduciary capacity with some,
if not all, of the co-owners. Until now, no one, including Gayle,
thought that she would demand reimbursement. George testified
that it was unwise to make these improvements to a house of this
age in a small farming community. At a minimum, the co-owners
were entitled to consent to this obligation. There is no proof that
these improvements increased the resale value of the home. The
Court finds that Gayle should not be reimbursed for these
improvements.
The court premised its denial of relief on the absence of a contract and the
absence of co-owner consent to the improvements. Significantly, the court found
Gayle’s request for reimbursement was “a response to the partition.” But, after
ordering partition, the court left the mechanics of partition and distribution for a
separate action.
In the second action, the district court addressed the question of whether
Gayle should receive reimbursement for the improvements in light of the sale of
the home at a significantly greater price than the assessed value of the home.
The court stated:
Gayle still seeks reimbursement in the amount of $55,232.00 for
improvements to the home which she alone paid. She testified that
had the home not been sold in her lifetime, as she expected it
would not, she would have been content and satisfied to enjoy the
improvements without seeking contribution from her siblings, but
since the home has been sold she argues that she should be
reimbursed for her payment for updates, otherwise George is
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unjustly enriched at Gayle’s expense. The assessed value of the
home, even after the improvements, is $28,231.00 (Gleason Exhibit
#1). Subtracting Gayle’s requested $55,232.00 from the net
proceeds of $83,052.20 from the sale of the home leaves a net
balance of $27,820.20 to be divided between the owners.
The court addressed the issue preclusion argument raised by Theodore and
George as follows:
George argues that [the first judge’s] order . . . denying Gayle’s
request for reimbursement is res judicata and that the entire
$83,052.20 should be divided between he and Gayle according to
their ownership interests. This court disagrees. [The first judge’s ]
ruling was based upon the facts presented in Pocahontas County
file #EQCV126201. There, Gayle requested that in the event the
home was sold her share of the sale proceeds should be
“proportionally increased according to the increase in the value to
the property’’ caused by her improvements. In denying her request,
[the judge] found that (1) there was no agreement among the heirs
for contribution to those expenses, and (2) there was no proof that
the improvements increased the value of the home. Now, through
the partition we know that the heirs were all aware of Gayle’s
proposed improvements and no objections were offered and we
know that the improvements added value to the home as it sold for
$62,769.00 above its assessed value. The facts changed since
[the first] decree and equity demands that Gayle be reimbursed for
her out-of-pocket improvement expenses which reimbursement will
not harm George from what his expected return would have been
had the improvements by Gayle not been done.
Although the second court focused on changed facts in declining to apply the
ruling of the first court, we believe the distinction is one of law. In the first action,
the court applied a contract theory to deny Gayle’s request for recovery of
improvement expenses. In the second, the court applied partition principles to
allow her request.
We recognize this is a nuanced distinction. See Restatement (Second) of
Judgments § 27 (1982) (“One of the most difficult problems in the application of
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the [issue preclusion] rule . . . is to delineate the issue on which litigation is, or is
not, foreclosed by the prior judgment.”). But it is one supported by precedent.
In Indra v. Wiggins, 28 N.W.2d 485, 490-96 (Iowa 1947), the court had to
decide how the value of certain real estate improvements should be allocated
between co-owners of the property. There was no dispute one of the co-owners
made all the improvements. Indra, 28 N.W.2d at 488-89. The other co-owner
sought a monetary benefit from the improvements. Id. The Iowa Supreme Court
discussed two rules, one based in law and the other in equity:
Another factor akin to that of good faith is the matter of the
knowledge or consent of other cotenants with respect to the
improvements. Of course, ordinarily, one cotenant cannot
voluntarily improve the common property, and then by direct action,
particularly at common law, compel another cotenant to contribute
his proportionate share thereof. He cannot thus make another
cotenant his debtor against his will, or thereby subject the share of
that cotenant to a charge or a lien therefor. Many decisions hold
that this cannot be done with respect to even necessary repairs,
unless there has been a request and a refusal of the cotenant to
participate. [citations omitted]
But the rule stated just above has no application in the case
before us, or in any case where the question of the allowance of
compensation for repairs or improvement on property held in joint
tenancy or tenancy in common, arises in partition or accounting, in
equity. The argument and citation of authorities by counsel for
appellant indicates an avoidance of this distinction . . . .
....
In 1 A.L.R. 1189 (see also pages to 1225) it is stated:
While at common law a tenant in common could not
claim contribution in an action at law for necessary
improvements on the common property, without the
consent of his cotenants, nevertheless, inasmuch as
an action for partition was essentially equitable in its
nature, a court of equity was required to take
improvements into account when decreeing partition,
and to award the cotenant in possession, who had
necessarily and in good faith improved the common
property and enhanced its value at his own cost, such
equitable compensation as would leave only the value
of the estate, without the improvements to be divided
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among the tenants in common. This relief was
granted in actions in partition in keeping with the
familiar principle of equity jurisprudence, which
requires that one who seeks equity must do equity.
The rule in this behalf has been adopted and applied,
with but rare exceptions, in every jurisdiction where
the action for partition is considered as one calling for
equitable interposition and relief.
Id. at 490-91. The two rules articulated by the court are precisely the rules
implicated here.
The district court in the first action decided there was no agreement
among the co-owners to make the improvements. This conclusion implicates the
first rule summarized in Indra: “ordinarily, one cotenant cannot voluntarily
improve the common property, and then by direct action, particularly at common
law, compel another cotenant to contribute his proportionate share thereof.” Id.
The district court in the second action decided equity demanded a credit in favor
of Gayle. This conclusion implicates the second rule summarized in Indra: “a
court of equity was required to take improvements into account when decreeing
partition.” Id.; see also Mahon v. Mahon, 121 N.W.2d 103, 106 (Iowa 1963)
(“[W]hen improvements built by a cotenant enhance the value of the common
estate and the cotenants are not injured in any way, or hindered from having
partition, they should not be permitted to take advantage of the improvements, to
which they contributed nothing.”). Because the two courts invoked and applied
different rules, the issues decided by the two courts were not identical and the
district court’s ruling in the first action did not preclude the district court in the
second action from crediting Gayle with the cost of the improvements she made
to the property.
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III. Amount of Distribution
Theodore and George’s remaining issues deal with the amount of Gayle’s
distributive share. The district court, acting in equity, chose to credit Gayle with
the entire cost of improvements. The amount finds support in the record. We
see no reason to reduce it.
IV. Michael’s Standing
George filed a motion to strike Michael’s pro se appellee proof brief,
claiming Michael “has no standing in this dispute.” The Iowa Supreme Court
ordered the motion to be considered along with the appeal. This court addressed
the same issue in Michael’s prior appeal and concluded he lacked standing
because he “conveyed all of his rights and interest in the property to Gayle.”
Gleason, 2014 WL 4628912, at *2. The same holds true here, and we therefore
grant the motion to strike.
V. Appellate Attorney Fees
Gayle requests $5000 in appellate attorney fees. She cites no authority
for an award of appellate attorney fees.
Our own research directs us to Iowa Rule of Civil Procedure 1.2225, which
authorizes the court to “fix, and tax as costs, a fee in favor of plaintiff’s attorney,
in a reasonable amount, to be determined by the court.” The provision says
nothing about appellate attorney fees. In the absence of argument on whether a
request for appellate attorney fees may be read into this provision, we decline
Gayle’s request.
AFFIRMED.