Opinion
No. 3-742 / 02-2046.
Filed January 14, 2004.
Appeal from the Iowa District Court for Bremer County, Paul W. Riffel, Judge.
LPP Mortgage, Ltd., appeals the district court ruling finding certain real estate owned by Robert Meurer was his homestead. AFFIRMED.
Michael Cunningham and Jeffrey Kelso of Howe, Cunningham, Lowe, P.L.C., Des Moines, for appellant.
Ivan Ackerman of Engelbrecht, Ackerman Hassman, Waverly, for appellee.
Considered by Vogel, P.J., and Mahan and Zimmer, JJ.
LPP Mortgage, Ltd. (LPP), appeals the district court ruling finding certain real estate owned by Robert Meurer was his homestead and thus exempt from execution. We affirm.
Background Facts and Proceedings.
On October 6, 1992, the United States District Court for the Northern District of Iowa entered a judgment against Robert Meurer and in favor of the United States Small Business Administration (SBA). Meurer's liability arose from a personal guarantee given to the SBA upon a note to Skitec Corporation, which was subsequently foreclosed.
On January 28, 2002, SBA assigned its judgment to LPP. LPP later filed a notice of assignment in Bremer County as well as a "Praecipe for Issuance of Writ of Special Execution" against certain real estate owned by Meurer in Waverly. Following a hearing on the matter, the district court determined the real estate was Meurer's homestead, and therefore exempt from execution. LPP appeals this ruling.
Scope of Review.
This was tried as a case at law before the district court. Our review therefore is for correction of errors at law. Iowa R. App. P. 6.4.
Issue Preclusion.
In December of 2001, the Iowa District Court for Bremer County entered a decree of foreclosure in favor of Commercial Federal Mortgage Corporation (Commercial Federal) against Meurer and his ex-wife. The decree foreclosed the mortgage lien upon the Waverly residence in question. The court found the "premises is not the residence of the debtors, . . . [is] not agricultural land, . . . [and is not] used for agricultural purposes. . . ."
At the hearing on its Praecipe for Issuance of Writ of Special Execution, LPP asserted this ruling barred Meurer's homestead defense by operation of issue preclusion. The court rejected this assertion. On appeal, LPP contends the district court erred in this regard.
In general, the doctrine of issue preclusion prevents parties to a prior action in which judgment has been entered from relitigating in a subsequent action issues raised and resolved in the previous action. Hunter v. City of Des Moines, 300 N.W.2d 121, 123 (Iowa 1981). 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. Id. Before issue preclusion may be employed, four prerequisites must be established: (1) the issue concluded 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 action; and (4) the determination made of the issue in the prior action must have been necessary and essential to the resulting judgment. Id.
We affirm the court's conclusion issue preclusion did not bar Meurer's assertion of the homestead exemption. The precise conclusion in the previous action was that the premises is not the "residence" of Meurer. This issue is not identical to the issue presented in the instant action: whether the property is entitled to the protection afforded to homes with a homestead status under Iowa Code section 561.16 (2001). Another issue presented in the present case, whether Meurer abandoned the property, was not presented in the previous action.
Homestead Exemption.
As noted, LPP contests the district court's conclusion the property retained its status as Meurer's homestead and was thus exempt from execution. Evidence and testimony presented at the hearing and relevant to this question was as follows. Meurer and his wife purchased the real estate in 1973 and constructed a home on it. This remained their marital residence until their marriage was dissolved in 1994. Meurer was awarded the house in the dissolution decree. In 1995, he was terminated from his job in Waverly. Shortly thereafter he secured employment in Shorewood, Minnesota, and purchased a condominium there in which to reside. He remained in the condominium for approximately three years, but commuted and was in the Waverly home "almost every weekend." During the next several years, he transferred three times to different locations for a job with Executive Jet. At the time of trial, he lived in Hillsboro, Oregon, flying a jet for Intel.
Iowa Code section 561.16 provides that every person's homestead is exempt from judicial sale. In this state, homestead statutes are broadly and liberally construed in favor of exemption. Millsap v. Faulkes, 236 Iowa 848, 852, 20 N.W.2d 40, 42 (1945). "Regard should be had to the spirit of the law rather than its strict letter." Id. All presumptions are in favor of preservation and retention of the homestead. In re Estate of McClain, 220 Iowa 638, 644, 262 N.W. 666, 669 (1935). The policy of our law is to jealously safeguard homestead rights. Merchants Mut. Bonding Co. v. Underberg, 291 N.W.2d 19, 21 (Iowa 1980).
The general rule is that a homestead, once acquired, is presumed to continue. See Estate of McClain, 220 Iowa at 644, 262 N.W. at 669. Removal from the homestead property with no intention to return to it operates as an abandonment of the homestead. Id. at 644, 262 N.W. at 668. Where the homestead property is physically abandoned and a new home purchased and occupied, such showing constitutes a prima facie case, and the burden then of going forward with proof is upon the person claiming that the homestead right was not lost to show that there was an intention to return. Id. Our supreme court has recognized the difference between the evidence necessary to show the establishment of a homestead and the evidence necessary to show the continuance of one previously established. Id. at 644, 262 N.W. at 669. Intention to occupy in the future, while insufficient to establish a homestead originally, is sufficient to continue a homestead previously established. Id. The homestead does not lose its status if merely left for a temporary purpose. Davis, Moody Co. v. Kelley, 14 Iowa 523, 523 (Iowa 1863).
Based on the foregoing considerations, we conclude the district court correctly determined Meurer had not abandoned the Waverly home as his homestead. The evidence in the record supports the district court's conclusion that Meurer's actions and testimony exhibit the requisite intent to return to the Waverly residence and thus carry the presumption of continuance of the homestead. See Estate of McClain, 220 Iowa at 644, 262 N.W. at 670. Meurer testified the home remains in his name and he has never attempted or intended to sell it. With varying frequency and for various lengths of time, he has returned to the home since leaving Iowa due to his sudden employment change from his long term job. After he moved out, only family members have occupied the house. Other indicia of his intent not to abandon his homestead and return to Waverly are apparent. He maintains his Iowa driver's license and is registered to vote in Waverly. Moreover, he testified to his intention to return to Iowa and again occupy the Waverly home. He hopes to continue to fly for Executive Jet, which has plans to open a base in either Cedar Rapids or Des Moines. Accordingly, we affirm.
The district court made findings that Meurer "continued to vote and pay income taxes in" Iowa. We conclude these findings are not supported by the record. Meurer merely testified that he is registered to vote in Iowa and that he has not "filed state income taxes in any state other than Iowa." We do not necessarily read this testimony to establish he votes and actually pays taxes in Iowa.