Opinion
No. 2-242 / 01-1044
Filed November 25, 2002
Appeal from the Iowa District Court for Linn County, DAVID S. GOOD, Judge.
Francis Pruss appeals the district court order granting plaintiffs specific performance on the parties' real estate contract. AFFIRMED.
Francis J. Pruss, Cedar Rapids, pro se.
Susan L. Hense of Lynch, Dallas, Smith Harman, P.C. Cedar Rapids, for appellees.
Considered by SACKETT, C.J., and HUITINK and HECHT, JJ.
Francis Pruss appeals the district court order granting plaintiffs specific performance on the parties' real estate contract. He claims: (1) he did not breach the contract; (2) the court should have granted rescission, instead of specific performance, as a remedy in this case; and (3) plaintiffs were awarded excessive attorney fees. We affirm.
I. Background Facts and Proceedings
On December 8, 1998, Pruss entered into a contract to sell certain real property in Linn County to Michael Parnell and Mary Benge. The contract was for the sale of a 1.93 acre lot on which Parnell and Benge planned to build a house. Parnell and Benge paid $1000 down, with the remainder to be paid January 15, 1999. Prior to the payment of the full purchase price, the attorney for Parnell and Benge found there were defects in the title, and the sale was not completed.
The defects in title arose from the fact that in 1872, the previous owner, J.W. McLeod, transferred one acre of the property to the District Township of Monroe, "so long as used for school purposes." Pruss claimed the schoolhouse site reverted to the adjacent property owners, Clay and Ada Peck, in 1954, after the land was no longer being used as a school. Parnell and Benge asserted the abstract of title did not show the schoolhouse site had been transferred to the Pecks. A contract between Ada Peck and Pruss, entered into in 1965, included the schoolhouse site, but the warranty deed Pruss received in 1975 specifically excepted the one-acre schoolhouse site. Pruss has been in possession of the property since 1965 or 1966.
Prior to the date of the real estate contract between Ada Peck and Pruss, Clay Peck died and Ada Peck received his interest in the subject property.
Parnell and Benge requested that Pruss file a quiet title action in order to clear up the defects in the title. Pruss refused, but on January 25, 1999, offered to obtain a quit claim deed from the Cedar Rapids Community School District. Parnell and Benge did not accept this offer. In April 1999, they filed a petition for specific performance, asking that Pruss provide them with marketable title to the property. In the alternative, they sought damages for breach of contract. Pruss responded that he did have marketable title, and in the alternative, he sought a rescission of the contract.
The Cedar Rapids School District is the successor in interest to the District Township of Monroe.
Both parties filed motions for summary judgment. On March 28, 2000, the district court granted summary judgment to plaintiffs on the issue of liability. The court found the abstract of title did not contain any record showing transfer of the schoolhouse site to the Pecks. The court determined Pruss needed to resolve any title problems with the school district. The court concluded Pruss did not have marketable title on January 15, 1999, as required by the parties' contract, and therefore, he breached the contract. There was a genuine issue of material fact concerning damages, so further proceedings were necessary on that issue. Pruss's motion for summary judgment was denied.
Pruss appealed on April 26, 2000, but on May 15, 2000, voluntarily dismissed the appeal without prejudice on the ground the district court's ruling was interlocutory. The Clerk of the Iowa Supreme Court issued procedendo on June 1, 2000, stating, "you are hereby directed to proceed with diligence and according to law in the same manner as if there had been no appeal."
The case proceeded with a hearing on the issue of damages. In a ruling filed January 17, 2001, the district court noted plaintiffs refused the offer of a quit claim deed from the school district, and concluded, "A quit claim deed would accomplish the same end as the quiet title action as it relates to the Cedar Rapids Community School District." Pruss was directed to record the quit claim deed and update the abstract at his expense. Plaintiffs were awarded attorney fees of $4000.
Both parties filed motions pursuant to Iowa Rule of Civil Procedure 1.904(2) and motions for a new trial. The district court denied all of these motions. The court determined that under the purchase agreement, Pruss should be responsible to pay attorney fees of $15,000, instead of $4000. Pruss appeals.
II. Scope of Review
This action was tried in equity, and our review is de novo. Iowa R.App.P. 6.4. In equity cases, especially when considering the credibility of witnesses, the court gives weight to the fact-findings of the trial court, but is not bound by them. Iowa R.App.P. 6.14(6)(g).
III. Error Preservation
Pruss contends the district court improperly granted summary judgment to plaintiffs on the issue of liability. Plaintiffs respond that Pruss failed to preserve error on this claim because he voluntarily dismissed his previous appeal, which they assert constitutes a final adjudication with prejudice, citing Iowa Rule of Appellate Procedure 6.12(6).
It is clear that Pruss's first appeal was from an interlocutory order. The summary judgment order of March 2000, did not dispose of all of the issues in the case and thus was not a final order or judgment. See Carroll v. Martir, 610 N.W.2d 850, 857 (Iowa 2000); Recker v. Gustafson, 271 N.W.2d 738, 739 (Iowa 1978). There is no requirement that Pruss appeal the partial summary judgment in order to preserve error on the issues determined in that judgment. See Iowa Rules App. P. 6.1(3), 6.5(3).
Under Iowa Rule of Appellate Procedure 6.1(4), the notice of appeal would be considered an application for interlocutory appeal under rule 6.2. Hamilton v. Mercantile Bank of Cedar Rapids, 621 N.W.2d 401, 409 (Iowa 2001). The supreme court may grant an application for interlocutory appeal, and obtaining permission to bring such an appeal is jurisdictional. IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 627 (Iowa 2000).
Here, Pruss voluntarily dismissed his appeal before the supreme court considered it as an application for interlocutory appeal and before the appeal was docketed pursuant to rule 6.12(1). The provision in rule 6.12(6) that after voluntary dismissal of a case, "[t]he issuance of procedendo shall constitute a final adjudication with prejudice," only applies to appeals which have been docketed. In the circumstances of this case, the supreme court never even accepted jurisdiction and we conclude the issuance of procedendo had no effect on the case in regard to error preservation.
IV. Breach of Contract
As noted previously, Pruss continues to maintain that he had marketable title to the property, and he claims the district court erred in granting summary judgment to plaintiffs on their breach of contract claim.
The general rule is that merchantable title, which a vendor must furnish under an executory contract for the sale of land, must be furnished on the date required under the contract. Risse v. Thompson, 471 N.W.2d 853, 857 (Iowa 1991); Wilson Close, Ltd. v. Crane, 499 N.W.2d 732, 734 (Iowa Ct.App. 1993). A title is merchantable if a person of reasonable prudence would accept the title in the ordinary course of business. Wilson v. Fenton, 312 N.W.2d 524, 526-27 (Iowa 1981).
The abstract of title does not show the schoolhouse site reverted to the Pecks after it was no longer used as a school. The statute in effect at that time provided:
Any real estate owned by a school corporation . . . and heretofore used as a schoolhouse site, and which, for a period of two years continuously has not been used for any school purpose, shall revert to the then owner of the tract from which the same was taken, provided that said owner of the tract last aforesaid shall, within the time hereinafter prescribed, pay the value thereof to such school corporation.
Iowa Code § 297.15 (1954). This section applied to the party who owned the tract at the end of the two-year period during which the schoolhouse site was not used for any school purpose. Rouse v. Union Township, 530 N.W.2d 714, 717 (Iowa 1995). The schoolhouse site reverts to such owner provided such owner pays the value for the site to the school district. Id.; Calamus Cmty. Sch. Dist. v. Rusch, 299 N.W.2d 489, 490 (Iowa 1980).
Under section 297.15, the Pecks would be considered the "then owners" of the tract, because they owned the tract from which the schoolhouse site was taken two years after the site was last used for school purposes. The abstract does not show any evidence the Pecks paid the value of the site to the school district. The supreme court has stated:
The parties concur that the Pecks needed only to pay the amount the school district originally paid for the land, $1.00.
If the "then owner" conveys the tract from which the school site was taken without paying the value of such site to the school district, the owner forfeits the reversionary interest. Any subsequent owner then has no reversionary interest under section 297.15.Rouse, 530 N.W.2d at 717. Therefore, the Pecks forfeited their reversionary interest, and Pruss does not have a reversionary interest under section 297.15.
Because the Pecks did not obtain title to the schoolhouse site, Ada Peck could not convey the same to Pruss. See Suck v. Benton Township, 246 Iowa 1, 7, 66 N.W.2d 434, 437 (1954) (holding the attempted conveyance of a schoolhouse site was illegal and ineffective where the seller had not obtained title under chapter 297). We conclude Pruss did not have merchantable title on January 15, 1999, as required by the parties' contract. We determine the district court properly granted summary judgment to plaintiffs on their breach of contract claim.
V. Rescission
Pruss asserts plaintiffs' failure to accept his offer of a quit claim deed means they did not try to timely resolve this conflict. The contract contained a "time is of the essence" clause, and Pruss contends plaintiffs' failure in this regard should allow him to rescind the contract.
Rescission is a restitutionary remedy which attempts to restore the parties to their positions at the time the contract was executed. Potter v. Oster, 426 N.W.2d 148, 151 (Iowa 1988). Rescission is ordinarily not available to a litigant as a matter of right but only when, in the discretion of the court, is it necessary to obtain equity. Id.
After waiving a "time is of the essence" clause in a contract, a party must demand performance within a reasonable time before the party is entitled to rescind the contract on that basis. Beckman v. Kitchen, 599 N.W.2d 699, 701 (Iowa 1999). Pruss did not demand the plaintiffs' performance on a specific date, therefore, he is precluded from rescinding the contract on the ground the plaintiffs failed to timely perform. See id. Because time was not made of the essence, any defect in title that could be cured would not be fatal to the action for specific performance. Slack v. Mullenix, 245 Iowa 1180, 1187, 66 N.W.2d 99, 102 (1954).
VI. Specific Performance
Pruss also challenges the district court's finding that plaintiffs were entitled to specific performance. The supreme court has stated:
Specific performance of a contract is not a remedy which is available as a matter of right; rather, its availability rests in the sound discretion of the court. It will not be granted where to do so would result in hardship or injustice, and any inequitable conduct on the part of the plaintiff will justify its denial. Thus, the remedy is not available to one who is in default on the contract.Youngblut v. Wilson, 294 N.W.2d 813, 817 (Iowa 1980) (citations omitted).
Pruss has not shown the requirement of specific performance in this case will cause him hardship or injustice. The evidence showed Pruss had already obtained a quit claim deed from the Cedar Rapids Community School District, and needed only to record it and update the abstract in order to fulfill his responsibilities under the district court's ruling. The district court did not abuse its discretion in choosing the remedy of specific performance in this case.
VII. Attorney Fees
Pruss contests the increase of attorney fees awarded to plaintiffs. In a post-trial ruling, the district court increased the award of attorney fees from $4000 to $15,000.
Where a real estate contract provides for attorney fees, the amount of fees awarded lies within the discretion of the district court. Beckman v. Kitchen, 599 N.W.2d 699, 702 (Iowa 1999). An award of attorney fees will not be disturbed on appeal in the absence of an abuse of discretion. In re Marriage of Romanelli, 570 N.W.2d 761. 765 (Iowa 1997). Factors for the court to consider in making an award include: time spent, the nature and extent of the service, the amount involved, the difficulty of handling and importance of issues, responsibility assumed, and the results obtained. Beckman, 599 N.W.2d at 702; Sunrise Dev. Co. v. Iowa Dep't of Transp., 540 N.W.2d 465, 468 (Iowa Ct.App. 1995). The fee must be reasonably and rationally related to the whole case. Sunrise Dev., 540 N.W.2d at 469.
Plaintiffs' attorneys and staff spent more than 120 hours on this case between December 1998 and November 1999. Complex title issues were involved and plaintiffs were successful in proving Pruss breached their contract. The award of $15,000 is rationally related to the whole case. We conclude the district court did not abuse its discretion.
VIII. Damages
In their brief, plaintiffs argue they are entitled to money damages because Pruss has not performed under the contract. Plaintiffs, however, did not file a cross-appeal in this case. A party that neither appeals nor cross-appeals is entitled to no greater relief than it was accorded by the district court. Federal Land Bank v. Dunkelberger, 499 N.W.2d 305, 308 (Iowa Ct.App. 1993). We do not consider plaintiffs' claims on this issue.
We affirm the decision of the district court.