Opinion
No. 4-418 / 03-1685.
July 14, 2004.
Appeal from the Iowa District Court for JonesCounty, William L. Thomas, Judge.
Steven Bickford appeals from an order authorizing the sale of farm real estate to another in a trust created under the will of Steven's father. REVERSED AND REMANDED.
Nicolas Strittmatter of Strittmatter Law Firm, Monticello, for appellant.
Craig Elliott, Anamosa, for appellee.
Considered by Sackett, C.J., and Huitink and Miller, JJ.
Steven Bickford appeals from an order authorizing the sale of farm real estate to one Brian Weber in a Trust created under the will of Steven's father, Raymond Bickford, who died June 11, 1996. Steven contends that the option to purchase the real estate given to him by his father and modified by prior order has not been honored and the order authorizing the sale of the farm to Weber should be reversed. Steven also contends the trust should be ordered to sell the farm to him. We agree and reverse and remand.
The trust was created at the time of Raymond's death. Raymond's wife, Janet, survived him, and under the terms of his will, the trust received the farm real estate in question and certain other assets. The will provided that the trustee be given discretion to manage and invest the assets, except investments were limited to those approved by the Iowa Probate Code for Trustees. The trustee was directed to pay the net income from the trust properties and investments to Janet as long as she lived. The trust was to terminate at Janet's death and the property was to be distributed to Raymond's five children of which Steven is the only son. The distribution was "subject to the option herein given to my son, Steven Bickford to purchase the said farm . . . at the appraised value within six (6) months of the termination of the trust." Under the circumstances here the trust was to terminate on Janet's death.
In August of 2002 the trustee, one of decedent's four daughters, filed an application to modify the terms of the trust. Janet was still alive, but according to the application the farm was not generating sufficient income to provide for her needs. The trustee sought to sell the farm after having the farm appraised and giving Steven six months to purchase the farm at the appraised value. The trustee had notice of a hearing on the application served on Janet and her four siblings. In a December 9, 2002 order the court approved the trustee's application on the requested terms. The order approving specifically provided:
That prior to selling this property, the Trustee shall first obtain an appraisal by a certified appraiser and that beneficiary Steven Bickford be served notice through ordinary mail of his right to purchase the property for a period of six months at the appraised value. Steven Bickford's six month period to purchase the real estate shall commence upon the service of this notice. If Steven Bickford agrees to purchase the property within this six month time period, as evidenced by a signed Purchase Agreement, the Trustee shall file further application with the court for authority to sell real estate to Steven Bickford.
No appeal was taken from this order. The trust hired and paid for a certified appraiser who, on February 20, 2003, determined his estimated value of the property was $300,000. No written notification in accord with the directive of the December 9 order was given Steven, although apparently the trustee handed him a copy of the appraisal.
The appraiser was Keith J. Westercamp, Iowa State General Certification #CGO1110.
On August 8, 2003 the trustee filed a petition to sell real estate. The trustee stated that the property was appraised for $300,000 but that she had an offer from Brian Weber to purchase the land for $367,950. The trustee contended the value of the farm was reflected in the Weber offer and she believed the property should be offered to Steven for that sum. If he failed to exercise his opinion to purchase at the higher price, then the land would be sold to Weber.
Steven objected, contending the petition was not in accord with the original trust provisions or the modification made by the district court that was to allow him to purchase the property at the appraised price determined by the certified land appraiser obtained by the trustee. Steven contended he stood ready to purchase the land for $300,000 cash and had so notified the trustee and tendered a written offer to purchase for the $300,000.
A hearing was held and the district court found that while the literal terms of the will and order seem to indicate the land must be sold to Steven at the appraised price, an analysis of the language in Raymond's will indicated he intended that his widow and heirs be protected, that Steven have the opportunity to obtain the farm at a fair price, and that to sell the farm to Steven for the appraised price would give Steven a windfall. The court ordered the sale of the land to Weber.
This appeal involves a determination of the parties' rights and obligations in property devised by will. The proceeding is equitable in nature and our review is de novo. Iowa Code § 633.33 (2003); Gustafson v. Fogleman, 551 N.W.2d 312, 314 (Iowa 1996).
Steven first contends the district court should have required the trustee to follow the procedures to sell the farm provided for in the December 9, 2002 order. The trust argues that the trustee needed to raise additional income and Steven would receive a windfall if he were allowed to buy the farm at the appraised price.
At the time the order was entered modifying the provisions of the trust Steven had a right to exercise an option to purchase the farmland six months following his mother's death and that right was lost when the order was modified. The issues of whether the court had the authority to modify the order or whether the modification was wise were decided in the modification order and are not before us.
In saying this we recognize it is not entirely clear that the sale of the farm would provide more income to Janet. It appears that the land was cash rented for $8,250 a year, and taxes and insurance were under $3,000, resulting in a net return of just over $5,000 a year. Other money of the trust is invested in certificates of deposit which currently have a very low rate of return.
Steven had given up a right on the expectation that the sale provision of the December 9 order would be followed. A certified appraisal was obtained by the trustee. There is no contention that the appraiser was not capable of the appraisal or that there was any question as to the appraiser's honesty. As the district court acknowledges, Steven met the terms of the appraisal and the December order.
The trust was modified on notice to all concerned parties, and no appeal was taken from that order. Consequently, whether the trust was properly modified or not is not the issue. In modifying the trust, the provision for Steven to purchase was left intact except that the time within which he was to elect his option was determined by a notice from the trustee, not the death of his mother and the termination of the trust. The order provided Steven could buy at the certified appraiser's price and did not provide for any other method of fixing his purchase price.
Steven contends the district court did not accurately interpret Raymond Bickford's will as to Steven's option to purchase. We are inclined to agree with Steven that the will anticipated his price would be set by the appraisal and not by a bidding war or other method of sale. However, the issue is not what the will provided as to the option, but what the modification order provided as to Steven's option. The order modified the terms of the will.
Even if it had not, we disagree with the conclusions the district court drew from Raymond's will. The court made a finding that, should the sale of the farm be necessary to protect the widow, "I believe that Raymond Bickford would place greater emphasis on his desire to protect his widow — his wife of many years and the mother of his children — than any `right' of Steven to receive the farm at an obviously below market price."
When a will is presented for interpretation, a court will look to the four corners of the will, exploring the language of the will, the scheme of distribution, and facts and circumstances surrounding making of the will. In re Estate of Rogers, 473 N.W.2d 36, 39 (Iowa 1991). The testator's intent is the polestar and must prevail. In Re Estate of Redenius, 455 N.W.2d 295, 297 (Iowa Ct.App. 1990); In re Estate of Eickholt, 365 N.W.2d 44, 46 (Iowa Ct.App. 1985). In ascertaining the intent of a testator, we rely primarily on the language contained in the will; however, the substance and intent, rather than the words, are to control. Russell v. Johnston, 327 N.W.2d 226, 229 (Iowa 1982); Redenius, 455 N.W.2d at 297.
There was no extrinsic evidence, so we look only to the will itself. Raymond's will made two provisions for Janet if she survived him: (1) he gave her his personal and household effects, and (2) he provided that she receive during her lifetime the net income from all trust properties and investments. He made no provision for the invasion of corpus to meet her needs. He made no provision for the sale of the farm prior to her death. The will was clear and unambiguous and the language does not justify a conclusion that it was Raymond's intention to put his wife's needs ahead of his son's option or his desire that his son keep the farm.
We reverse and remand to the district court to order the sale to Steven for $300,000 according to the terms of his written offer.
REVERSED AND REMANDED.