Opinion
No. 3-031 / 02-0849
Filed March 26, 2003
Appeal from the Iowa District Court for Appanoose County, Annette J. Scieszinski, Judge.
Appellants Patrick Conner and Alicia Lewis, heirs of the deceased, appeal from the district court's ruling which ordered specific performance of a family settlement agreement. AFFIRMED.
Robert Kohorst of Kohorst, Early, Gross Louis, Harlan, for appellants.
John Pabst of Pabst Law Firm, Albia, for appellees.
Considered by Sackett, C.J., and Zimmer and Vaitheswaran, JJ.
Patrick Conner and Alicia Lewis are the children and heirs of the deceased, Joseph Conner. They appeal from a district court ruling which ordered Joseph Conner's estate to specifically perform a family settlement agreement Joseph entered into in 1995. We affirm.
Joseph married Wanda Hayes in 1993. Joseph entered the marriage with two children from a prior marriage, Patrick Conner and Alicia Lewis. Wanda entered the marriage with two sons from a previous marriage, Jeffrey and Larry Hayes.
Wanda died intestate in June of 1995 leaving Joseph, Jeffrey, and Larry as her heirs. Jeffrey and Larry were appointed as co-administrators of Wanda's estate. The three heirs subsequently negotiated an amicable settlement of their interests, focusing on a 203-acre farm in Appanoose County which Wanda owned at the time of her death. Joseph, Jeffrey, and Larry each paid one-third of the attorney's fee for preparation of the written settlement agreement. The heirs executed the agreement on September 20, 1995.
Under the terms of the agreement, Joseph owned one-half of the farm with Jeffrey and Larry each owning a fourth. The agreement permitted Joseph to move his mobile home onto the farm and reside there. The agreement also provided that farm rent would be deposited into a farm account. All expenses for maintenance, repairs, taxes and insurance were to be paid from the farm account. However, the agreement provided that when there were insufficient funds in the farm account to cover farm expenses, the shortfall would be paid by the farm owners in equal one-third shares. Finally, in numbered paragraph five of the agreement, Joseph agreed to execute a will leaving his undivided interest in the farm to Jeffrey and Larry in equal shares.
On May 15, 1999, Joseph died intestate. Prior to Joseph's death, Jeffrey and Larry complied with all the terms of the settlement agreement. Joseph complied with the terms of the agreement, except for paragraph five. Despite several reminders, Joseph never executed a will leaving his interest in the farm to Jeffrey and Larry. Joseph did not make any provisions contrary to the agreement, either.
The Hayes brothers attempted to have Patrick Conner and Alicia Lewis probate Joseph's estate. Their efforts were unsuccessful. On September 14, 2000, Jeffrey filed a notice of appointment of administrator and notice to creditors in Appanoose County. He later filed a report and inventory for the estate on November 20, 2000. On December 4, 2000, Larry and Jeffrey filed a claim in probate seeking specific performance of the family settlement agreement. The matter proceeded to trial on April 18, 2002. The district court specifically enforced the family settlement agreement. Joseph's heirs appeal.
An action for specific performance is an equitable action. Our review of equitable actions is de novo. Iowa R.App.P. 6.4; Breitbach v. Christenson, 541 N.W.2d 840, 843 (Iowa 1995). Specific performance is an equitable remedy requiring exact fulfillment of a contract in the specific form it was made or according to the precise terms agreed upon. Black's Law Dictionary 1138 (6th ed. 1990). The decision to grant specific performance rests within the trial court's sound discretion; it is not to be granted as a matter of right. Breitbach, 541 N.W.2d at 843. Specific performance may be denied on the following grounds:
hardship, an unconscionable or oppressive result, inequitable consideration, mistake, inequitable conduct or innocent misrepresentations. Bauman v. Nutter, 328 N.W.2d 354, 356 (Iowa Ct.App. 1982). The proponents of specific performance of a real estate contract must establish their claim through clear, satisfactory, and convincing evidence.
James v. James, 252 Iowa 326, 329, 105 N.W.2d 498, 499 (Iowa 1960).
Settlement agreements are favored in law. See Waechter v. Aluminum Co. of Am., 454 N.W.2d 565, 568 (Iowa 1990). Voluntary settlement of legal disputes should be encouraged with the terms not inordinately scrutinized. Wright v. Scott, 410 N.W.2d 247, 249 (Iowa 1987). With these principles in mind, we turn to the merits.
The fighting issue on this appeal is the adequacy of consideration underlying the settlement agreement entered into by Joseph, Larry, and Jeffrey. A valid and enforceable agreement, of course, must be supported by a good and sufficient consideration. Dullard v. Schafer, 251 Iowa 274, 280, 100 N.W.2d 422, 427 (1960). Joseph's heirs contend the agreement lacked any valuable consideration for Joseph. The children point out that Wanda died intestate and, pursuant to Iowa Code section 633.212 (1995), Joseph was entitled to one-half of her interest in her real estate assets. His heirs claim, by operation of the agreement, Joseph received nothing more than that to which he was already entitled.
Our de novo review of the record reveals the settlement agreement contained adequate consideration. Although not dispositive, we note the written agreement states that it is based on consideration. See Hubbard Mill. Co. v. Citizen's State Bank, 385 N.W.2d 255, 258-59 (Iowa 1986). The agreement recites it is subject to "good and valuable mutual considerations." The contracting parties were legally competent adults under no duress or improper influences. Their agreement established Joseph's one-half interest in the 203-acre parcel of farmland pursuant to section 633.212. It also established the one-fourth interests of both Larry and Jeffrey. The agreement permitted Joseph to move a mobile home onto the farm property and live there rent-free. In exchange for Joseph's future devise, Larry and Jeffrey each agreed to pay one-third of any farm expenses that farm rental income did not cover. Obviously, this is a greater obligation than their respective one-fourth interests in the real estate would require.
After the family settlement agreement was signed, Joseph, Jeffrey, and Larry enjoyed the benefits and bore the burdens of the agreement they negotiated. We conclude the district court properly held Joseph's estate to the bargain Joseph had struck. See Breitbach, 541 N.W.2d at 843-44 ("Although the grant of specific performance is equitable, this court will not remake or revise a contract the parties have freely agreed to; we will give the parties the benefit of the contract they have made as far as possible."). Real estate possesses a unique quality such that mere monetary damages may not always constitute an adequate remedy for a breach of contract. Id. at 843. Under the record before us, we find clear, satisfactory, and convincing evidence to support specific performance of the family settlement agreement. We agree with the district court's conclusion that specific performance of the agreement is necessary to do equity. Accordingly, we affirm.