Opinion
No. 3-938 / 03-0193.
Filed January 14, 2004.
Appeal from the Iowa District Court for Butler County, Paul W. Riffel, Judge.
Susanne Bolt, as the executor of the estate of Gary Jacobs, appeals the district court's ruling denying her request to amend the answer and granting a claim against the estate. AFFIRMED.
Larry Cohrt of Roberts, Cohrt, Stevens Lekar, P.L.C., Waterloo, for appellant.
Ronald Pepples, Parkersburg, for appellee.
Considered by Vogel, P.J., and Hecht and Vaitheswaran, JJ.
The estate of Gary Jacobs, by its executor, appeals the district court's denial of a request to amend its answer at the close of evidence and the court's grant of Pauline Jacob's claim against the estate. We affirm.
Background Facts.
Gary Jacobs died testate on April 21, 2001. His will dated April 10, 2001, was admitted to probate on April 24 with his friend, Susanne Bolt, appointed as executor. On September 6, Gary's mother, Pauline Jacobs, filed a claim in probate in the amount of $26,445.54 plus interest for monies loaned to Gary. On October 31, after the executor denied the claim, Pauline filed a request for hearing on her claim. The executor did not file an answer to the claim.
A bench trial was held August 29, 2002. On record at trial, counsel for the executor made a general denial of the claim. At the close of all evidence counsel for the executor requested it be allowed to amend her answer to raise the statute of limitations as an affirmative defense. On January 8, 2003, the district court ruled that the executor's proposed amendment to her answer was untimely and therefore should be denied. The district court concluded that Pauline was entitled to recover in the amount of $26,445.54 plus interest. The executor appeals.
Scope of Review.
The review of a claim in probate is tried as a law action. Tierney v. Lantz, 505 N.W.2d 513, 513 (Iowa Ct. App. 1993) (citing In re Estate of Voelker, 252 N.W.2d 400, 402 (Iowa 1977)). Our scope of review is for correction of errors of law. Iowa R. App. P. 6.4. Leave to amend pleadings should be freely given by the court when justice so requires. Iowa R. Civ. P. 1.402(4). The trial court has considerable discretion in granting or denying a motion for leave to amend; we will reverse only when a clear abuse of discretion is shown. M-Z Enter. v. Hawkeye-Security Ins. Co., 318 N.W.2d 408, 411 (Iowa 1982).
Request to Amend Answer.
The executor argues that the district court erred in denying her request to amend the Answer, made at the close of all evidence, to raise the five-year statute of limitations on oral contracts as an affirmative defense. Pauline contends that an amendment would have substantially changed the issues and therefore the district court did not err in denying the proposed amendment.
After Pauline requested a hearing on her claim, the executor did not file an answer as required by the Iowa Code. Iowa Code section 633.444 (2001) provides, "Within twenty days from the filing of the request for hearing on a claim, the personal representative shall move or plead to said claim in the same manner as though the claim were a petition filed in an ordinary action. . . ." Pauline filed her request for hearing on October 31, 2001. The executor's first attorney withdrew from the case on January 29, 2002, and present counsel filed an appearance on January 30. On August 29, at the beginning of the trial proceedings, executor's counsel noted that an answer had not been filed and stated that all allegations were denied. At the close of all evidence, the executor's counsel requested he be allowed to amend the answer to raise the statute of limitations for oral contracts as an affirmative defense because the claim was not brought within five years after the causes accrued. In its ruling the district court found that the proposed amendment was untimely and denied the request.
No attempt was made by counsel to raise an affirmative defense until the close of all evidence, in spite of the fact the claim had been on file for nearly ten months. While the executor asserts there was no indication such a defense would be needed, Pauline replies that the dates on the many exhibits should have put the executor on notice of the age of the various loans. We find Pauline's position persuasive and therefore conclude the district court did not abuse its discretion in denying the proposed amendment.
Sufficiency of the Evidence.
The executor next argues the evidence does not support the district court's finding that Pauline loaned Gary $26,445.54. Attached to the claim in probate and admitted at trial were copies of the checks and other documentation of the purported loans made to Gary. The memo section on the checks described what the money would be going toward. Seven of the fourteen checks indicate they were loans. However, no terms were noted. The remaining seven checks were for wheelchair and expenses, the Dodge van, dental expenses, washer, sewer work, and general expenses. Pauline claims these were all loans as well. Pauline also claimed she loaned Gary insurance premiums on a life insurance policy for the ten years preceding his death.
Pauline testified that the loans were due on demand but interest was never discussed. Pauline stated that she and Gary contemporaneously executed wills which left everything to the other. With this simple estate plan, Pauline understood she would be repaid for the loans, should Gary predecease her. However, eleven days prior to his death Gary executed a new will, leaving much of his estate to the executor.
In its ruling, the district court concluded that Pauline ha[d] shown by requisite proof that she did loan money to her son, Gary, prior to his death as set forth in her claim and she should be allowed to recover on her claim in the amount of $26,445.54 plus interest thereon pursuant to § 535.2 of the Iowa Code at the rate of 5 percent per annum.
The district court further ordered that if Pauline receives the 1991 Dodge Caravan under Gary's will, the estate will be entitled to an offset of $4,500.
The executor supports her argument that the evidence was insufficient to find the funds transferred to Gary were loans by pointing to the lack of terms such as a time for repayment or setting of interest rates. Pauline testified at trial that she did not demand repayment from Gary as he had little money because of his inability to work due to his disability. She loaned Gary the funds as needed from her savings with the understanding that when he died, she would be repaid through Gary's estate. She testified that she never released him from his obligation to eventually repay the loans to her. For whatever reason, Gary changed his will eleven days before he died. Pauline also testified they did not discuss interest on the loans. Pauline's attorney explained in a professional statement at trial that the requested five percent per annum interest rate is the legal rate in the Iowa Code when an interest rate is not specified. See Iowa Code § 535.2.
Gary was a quadriplegic as a result of an accident in 1968 at the age of 21.
Based on the notations on the checks and Pauline's testimony, we conclude substantial evidence supports the district court's ruling granting Pauline's claim for loans in the amount of $26,445.54 plus interest at a rate of five percent per annum from the inception date of each loan.