Opinion
No. 5-537 / 04-1729
Filed August 17, 2005
Appeal from the Iowa District Court for Polk County, Robert J. Blink, Judge.
Purchasers challenge the vendor's forfeiture of a real estate contract. AFFIRMED IN PART AND REVERSED IN PART.
Phil Watson and David Coco of Phil Watson, P.C., and Patrick O'Bryan, Des Moines, for appellants.
Dustin D. Smith of Brown, Winick, Graves, Gross, Baskerville and Schoenenbaum, PLC, West Des Moines, for appellee.
Considered by Sackett, C.J., and Huitink and Vaitheswaran, JJ.
Geraldine Watson and Kenneth Fairfax, who are married, signed a real estate contract with Oaks Development, Inc., which provided for monthly payments of $977.23 and a late charge of $50.00. After Watson and Fairfax defaulted on a monthly payment, Oaks Development served a notice of forfeiture, demanding payment of $1027.23 within thirty days. Watson and Fairfax did not tender this amount within the time allotted and responded with a petition to set aside the notice. Following trial on their petition, the district court granted Oaks Development immediate possession of the real estate and entered a judgment against Watson and Fairfax for $3,908.92, representing three months of payments.
Oaks Development counterclaimed and also filed a forcible entry and detainer action, which was dismissed at the beginning of trial.
On appeal, Watson and Fairfax assert (1) the sellers failed to properly serve both of them with the notice of forfeiture, (2) the notice of forfeiture was defective on its face, and (3) the district court should not have awarded damages in addition to forfeiting the contract. Our review of these issues is de novo. See Sheeder v. Lemke, 564 N.W.2d 1, 2 (Iowa 1997).
I. Service of Notice of Forfeiture
In pertinent part, Iowa Code section 656.3 (2003) provides that notices of forfeiture of real estate contracts may be served personally or by publication, on the same conditions, and in the same manner as is provided for the service of original notices. . . ." Oaks Development's notice of forfeiture was addressed to "Kenneth J. Fairfax and Geraldine Watson-Fairfax." The process server's proof of service showed that two types of service were being accomplished: "Personal" and "Dwellings/Substitute." The proof of service also indicated that a "true and correct copy" of the notice was delivered to both Geraldine Watson and Kenneth Fairfax by delivering a copy to "Geraldine Watson Fairfax."
At trial, Watson testified her husband did not receive his own copy of the notice, as only one copy was served. The district court concluded this fact did not render the service defective. The court relied on the process server's testimony that he accomplished service on both parties by serving Watson. On appeal, Watson and Fairfax reiterate that "the failure to give both parties notice by serving each party with the Notice" renders the forfeiture "null and void."
The question before us is whether personal service may be obtained on two persons by service of one paper. Cf. Peterson v. Little, 74 Iowa 223, 37 N.W. 169 (1888) (noting copy was read to husband and wife and copy was delivered to wife). In Lehman v. Napier, 101 F. Supp. 313 (S.D. Iowa 1951), a federal district court wrote: "Service upon [Napier] as a general partner in Iowa was effective to confer jurisdiction on the Iowa court as to both the partnerships and him as a member and as an individual." Lehman, 101 F. Supp. at 314 (emphasis added); cf. American Spiritualist Ass'n v. Ravkind, 313 S.W.2d 121, 124 (Tex.Civ.App. 1958) (holding corporation not properly served with process where constable served one copy on individual who was not party to one of lawsuits at issue); Useni v. Boudron, 662 N.W.2d 672, 676-77 (Wis.Ct.App. 2003) ("Neither Wis. Stat. § 801.02(1) nor § 801.11 allows a defendant who is being sued in a dual capacity (personally and officially) to be served in only one of those capacities."). We agree with the district court that service was properly accomplished in this case. The process server stated he effectuated service upon Fairfax through his wife, a mode of service that is expressly authorized by our rules of civil procedure. See Iowa R. Civ. P. 1.305(1) (allowing service upon another household member over the age of eighteen). That was sufficient under the particular circumstances of this case.
For purposes of this discussion, we will assume that service of the notice of forfeiture is "jurisdictional." Compare Symonds v. Green, 493 N.W.2d 801, 803 (Iowa 1993) (stating that service of proper notice to pay unpaid rent under Iowa Code chapter 562A is "jurisdictional") with Rudolph v. Davis, 237 Iowa 1383, 1390, 25 N.W.2d 332, 336 (1946) (stating that service of notice of termination of a lease under Iowa Code chapter 562 is not jurisdictional and is not "process").
II. Sufficiency of the Notice.
Watson and Fairfax next argue: "Because the notice does not provide specific notice of each and every alleged default, namely, which month's rent was delinquent, it was null and void."
Iowa Code section 656.2(1)(b) states that the forfeiture notice shall "specify the terms of the contract with which the vendee has not complied." The forfeiture notice satisfied this requirement. The notice set forth the contract provision that the purchasers breached and the amount required to cure the breach. Cf. Brown v. Nevins, 499 N.W.2d 736, 738-39 (Iowa Ct.App. 1991) (finding forfeiture notice inadequate where it required party to "pay the reasonable costs of serving this Notice" but did not specify costs, and where remaining default was cured).
III. Entry of Money Judgment
Watson and Fairfax argue Oaks Development elected its remedy when it chose to forfeit the contract. In their view, therefore, the company could not also obtain money damages. We agree. See Risse v. Thompson, 471 N.W.2d 853, 858 (Iowa 1991) ("A seller may not elect to pursue inconsistent remedies by proceeding with an action based on affirmance of the contract, such as a suit for damages, and then use a theory based on disaffirmance of the contract, such as forfeiture."); Gray v. Bowers, 332 N.W.2d 323, 325 (Iowa 1983) ("[W]hen a vendor exercises a right of forfeiture against a defaulting vendee, the liability of the latter for the unpaid purchase money is extinguished."); Abodeely v. Cavras, 221 N.W.2d 494, 498 (Iowa 1974) ("When [a vendor] exercises the option given him under the contract to declare a forfeiture and thus terminate the contract, the vendor cannot, in respect to this same default, thereafter change his position and at the same time or at another time proceed on a theory based on affirmance by suing for damages for breach of the contract or for specific performance since one is precluded from pursuing inconsistent remedies.").
IV. Disposition
We affirm the district court's ruling as to the effect of serving a single copy of the forfeiture notice and the adequacy of the notice. We reverse the district court's award of damages. We deem the purchasers' final argument, that the court had no authority to issue a writ of removal, waived for lack of citation to authority. Iowa R. App. P. 6.14(1)( c).
The clerk shall tax one-half of the costs of this appeal to the appellants and one-half to the appellee.
AFFIRMED IN PART AND REVERSED IN PART.
Huitink, J., concurs; Sackett, C.J., partially dissents.
I concur in part and dissent in part.
Defendant Oaks Development Co. sought to terminate a real estate contract under Iowa Code section 656.2(2) wherein plaintiffs Geraldine Watson and Ken Fairfax, husband and wife, were buyers. The basis of the forfeiture was a past due payment. Plaintiffs argued defendant failed to follow the provisions of the above chapter, in that defendant did not serve on both Ken Fairfax and Geraldine Watson, buyers and parties in possession, a notice of forfeiture. The majority has held that the delivery of a single notice to Geraldine Watson satisfied giving notice to both parties. I disagree.
Iowa Code section 656.3 provides in relevant part that, "Said notice may be served personally or by publication, on the same conditions, and in the same manner as is provided for service of original notices. . . ."
The question then becomes, whether personal service under "the same conditions and the same manner as provided for the service of original notices" is accomplished on both the husband and the wife who live in the same household by delivering a single copy of the notice to the wife.
Iowa Rule of Civil Procedure 1.305 provides in part, "Original notices are `served' by delivering a copy to the proper person. . . . The service can be made by serving the individual personally; or by serving, at the individual's dwelling house . . . any person residing therein. . . ." (Emphasis supplied).
The process server could achieve proper service on Geraldine Watson by handing her a copy of the notice. And as the majority has correctly noted the process server could achieve proper service on Ken Fairfax by handing Geraldine Watson a copy of the notice for Fairfax. However here there was only one notice and because the process server indicated both parties were served by the delivery of a single copy it is unclear which party actually was served and at most only one party was served. And while I recognize, as the majority states, there are no Iowa cases on the issue, I would suggest the reason there are not is because the rule of civil procedure provides for individual service and the legal community in Iowa has long recognized each named party to a suit, when there is personal service, is entitled to his or her own copy of the notice. See Peterson v. Little, 74 Iowa 223, 225, 37 N.W. 169, 170 (1988). In Peterson a notice from a justice of the peace was read to husband and wife, but only the wife received a copy. Id. The court noted that, "The plaintiff appears to concede that the return does not show service as to G.B. Little [the husband]."
In saying this I recognize that notice served was one of forfeiture not of suit. But we are interpreting Iowa Rule of Civil Procedure 1.305 which refers to notice of suit.
Upon this notice a return was indorsed, which is as follows:
The within notice came into my hands on the 2d day of February, 1885, and I duly served the same on the 2d day of February, 1885, by reading the within notice to the within-named defendant G.B. Little, and Mrs. G.B. Little, his wife, a member of the family over fourteen years old, and delivering her a true copy of the same. Done in Lee township, Polk county, Iowa, this 2d day of February, 1885.
I would reverse the district court on this issue and set aside the forfeiture. Having done so on this basis, I find it unnecessary to address plaintiffs' additional challenge to the forfeiture notice.
While I am in total agreement with the majority that the district court was in error in entering the money judgment if in fact the contract had been forfeited under Iowa Code chapter 656, for the reason stated above I do not believe there was a forfeiture. However, like the majority I would reverse the damage award. The district court has failed to state either a legal or factual basis for entering a money judgment. The defendant contends the damage award is the result of plaintiffs' pattern of delinquent and late payments and a court sitting in equity has the power to fashion a remedy as long as the remedy is essential to the ends of justice. In making this argument defendant makes no reference to where in the record there are facts supporting this legal argument or facts supporting the amount of the award. The defendant also argues that if the forfeiture is overturned the damage award must be upheld to make it whole "for Plaintiffs' clear breach of the terms of the real estate contract." This argument is made without any reference to where in the record there is factual support for the amount of the damage award. Consequently, I too would reverse the damage award.