Opinion
No. 1-997 / 00-1255.
Filed April 24, 2002.
Appeal from the Iowa District Court for Pottawattamie County, CHARLES L. SMITH III, Judge.
Defendants appeal from the denial of motions for directed verdict and judgment notwithstanding the verdict following a jury verdict finding an oral contract existed between Claude Robert Davenport and Norma Kidwell for the sale of real estate. AFFIRMED.
Anthony Tauke of Porter, Tauke Ebke, Council Bluffs, for appellants.
Bruce Green of Wilson Pechacek, Council Bluffs, for appellee.
Considered by HUITINK, P.J., and ZIMMER and VAITHESWARAN, JJ.
Defendants, Robert and Gerry Davenport, appeal a jury verdict which found an oral contract for the sale of real estate existed between Robert and his sister, Norma. The defendants contend the trial court erred in denying their motion for directed verdict and in denying their motion for judgment not withstanding the verdict (JNOV). The defendants also argue the statute of limitations should apply to bar the plaintiff's action. We affirm.
I. Background Facts and Proceedings .
Norma Kidwell and Claude Robert Davenport are brother and sister. They enjoyed a close and friendly relationship prior to the dispute which is the source of this appeal. At the time of trial, Norma, the older of the two siblings, was seventy-three years old.
In 1974, Norma was renting an apartment in Council Bluffs after a divorce. She had saved some money working at a grocery store and was interested in buying a small house. At the same time, her brother Robert and his first wife, Merry Anne, were living in Council Bluffs in a house they owned on Fleming Street. Robert and Merry Anne had recently adopted a child and were looking for a larger home. They found a suitable house on Kathy Lane in Council Bluffs and approached Norma about borrowing money for a down payment. The agreement the parties reached is the basis for this litigation.
According to Norma, she agreed to pay $6,500 to Robert as a down payment on the house he owned on Fleming Street. She would move into the home and assume his house payments until the mortgage was satisfied. At that time, Robert would convey the property to Norma and she would own the home. Robert, in the meantime, would use Norma's $6,500 as a down payment on the Kathy Lane residence.
Robert provides a very different account of the parties' agreement. He acknowledges that Norma gave him $6,500. However, he characterizes this money as a loan. Robert contends that in exchange for the $6,500 loan, he agreed to let Norma live in and rent the Fleming Street residence at below market value. According to Robert, the difference in the market value rent, and the rent he charged his sister would eventually satisfy his debt to her.
The parties' agreement was never reduced to writing. Robert used most of the $6,500 he received from Norma as a down payment and moved into the house on Kathy Lane. Norma moved into the Fleming Street house and assumed the monthly mortgage payments. Initially, she paid the bank directly, but after the bank sold the mortgage, she gave monthly checks to Robert and he applied them to the mortgage.
From time to time, Robert increased Norma's monthly payments on the Fleming Street residence. Norma did not question the increases, assuming they were directly related to the home's taxes, insurance and interest.
In June of 1998 Norma learned the mortgage on the Fleming Street residence had been satisfied. A short time later, she received a letter from Robert informing her he was raising the "rent." Norma responded with a letter reminding Robert of the oral agreement they reached in 1974. Robert denied the agreement and refused to convey the property to Norma.
Norma filed suit in October 1998 requesting that she be established as the fee simple owner of the property. She also sought damages based on Robert's alleged breach of their oral contract. In the alternative, Norma made claims of estoppel, conversion, intentional infliction of emotional distress, restitution, value of improvements and adverse possession.
In June 2000, the case was tried to a jury. At the close of the plaintiff's case, the defendants moved for a directed verdict. The court denied the motion. The jury found a contract existed between the parties, that Norma had performed her obligations under the contract, and that Robert breached the contract. The jury also awarded Norma $1,500 in damages for overpayments under the contract. Based on the jury's verdict, the district court entered judgment quieting title to the Fleming Street residence in Norma. The defendants' motion for judgment notwithstanding the verdict was denied. The defendants appeal. They argue plaintiff's evidence was insufficient to support the finding of an oral contract for the sale of real estate. They contend the district court erred by failing to grant their motion for directed verdict and motion for judgment notwithstanding the jury verdict. Norma filed a cross appeal.
II. Motion for Directed Verdict and Motion for JNOV .
Scope of Review .
We review the denial of a motion for directed verdict for correction of errors of law. Top of Iowa Coop. v. Sime Farms, Inc., 608 N.W.2d 454, 466 (Iowa 2000). When ruling on the motion, the court must consider the evidence in the light most favorable to the party against whom the motion is directed. McClure v. Walgreen Co., 613 N.W.2d 225, 230 (Iowa 2000). If each element of the claim is supported by substantial evidence in the record, the court must overrule the motion. Id. Moreover, if reasonable minds could deduce different inferences from the evidence presented, the court must submit the issue to the jury. Id.
Similarly, in reviewing rulings on a motion for judgment notwithstanding the verdict, we determine whether there was substantial evidence to generate a jury question. Condon Auto Sales Serv., Inc. v. Crick, 604 N.W.2d 587, 593 (Iowa 1999). In reviewing the district court's decision, we view the evidence as the trial court did in ruling on the motion, that is, in the light most favorable to the party against whom the motion was directed. Johnson v. Dodgen, 451 N.W.2d 168, 171 (Iowa 1990). We afford the nonmovant every legitimate inference that can reasonably be drawn from the evidence. Top of Iowa Coop., 608 N.W.2d at 466. If reasonable minds could differ on the resolution of the issue, it was correctly submitted to the jury. Id.
The jury's findings of fact are binding on appeal if they are supported by substantial evidence. Iowa R. App. P. 6.14(6)(a). "Evidence is substantial when a reasonable mind would accept it as adequate to reach a conclusion." Johnson, 451 N.W.2d at 171.
Formerly Iowa R. App. P. 14(f)(2).
Merits .
In order for Norma to prevail here, she was required to prove by a preponderance of clear, satisfactory, and convincing evidence, that the alleged oral contract to sell real estate existed. Sun Valley Iowa Lake Ass'n v. Anderson, 551 N.W.2d 621, 630 (Iowa 1996). To prove the existence of an oral contract, the terms must be sufficiently definite for a court to determine with reasonable certainty the duties of each party, the conditions relative to performance, and a reasonably certain basis for a remedy. Where a contract appears to exist, courts are reluctant to find it too uncertain to be unenforceable. However, when the terms are not definite, courts are reluctant to impose reasonable terms on contracting parties. Gallagher, Langlas, Gallagher v. Burco, 587 N.W.2d 615, 617 (Iowa Ct.App. 1998).
The existence of a contract does not depend on words alone. The understanding between the parties can be determined by the surrounding circumstances, acts, and conduct of the parties. LaFontaine v. Developers Builders, Inc., 261 Iowa 1177, 1183,156 N.W.2d 651, 655-56 (1968).
Based on our review of the record, we conclude substantial evidence supports the jury's verdict. Norma testified that she gave her brother Robert $6,500 as a down payment on the Fleming residence. Robert, in turn, used Norma's down payment as a down payment on another, larger home for his family. Norma testified she assumed Robert's monthly mortgage payments on the Fleming residence after occupying the residence in 1974. Initially, she made these payments directly to the bank. Later, when the bank sold the mortgage, she made the payments to her brother with the understanding he was using her payments to satisfy the outstanding mortgage. Norma testified it was her understanding that when Robert's mortgage on the Fleming residence was satisfied, he would convey the property to her, and she would own the home. Norma maintained the property, paid for repairs, and paid all the utilities on the home.
The record reveals Norma made many significant improvements to the property at her expense. She installed central air one month after moving into the property in 1974. She replaced the furnace in 1978 and the water heater in 1979. Norma installed new carpeting in 1980, a new shower in 1983, and another air conditioner in 1985. She installed a new garage door and garage door opener in 1988. She installed a retaining wall in 1991 at a cost of $4,000. She made other repairs and improvements which need not be repeated here. Robert did not reimburse her for any of these improvements. Viewing the evidence in a light most favorable to Norma, we conclude a fact issue was generated regarding the existence of an agreement to sell the property. Therefore, we find the trial court did not err in denying the defendants' motion for directed verdict and motion of judgment notwithstanding the verdict.
Robert argues the trial court should have refused to recognize the jury's verdict due to the uncertain terms of the alleged contract. He argues that in the course of their negotiations Norma never used the word "sell," and failed to ask many pertinent questions regarding the details of their arrangement. He points out that Norma often referred to her house payments as "rent," rather than "mortgage." Robert presented evidence that throughout the arrangement, his name remained on the mortgage as well as the utility bills.
To contradict this evidence, Norma testified as to her understanding of the arrangement between the parties. She also presented evidence regarding the surrounding circumstances, acts, and conduct of the parties which supports the existence of an oral contract for the sale of real estate.
In its ruling on Robert's motion for judgment notwithstanding the verdict, the district court found the jury had been properly instructed that in order to find for Norma there must be "clear, satisfactory and convincing evidence that an oral contract to purchase defendant's real estate existed." The jury found Norma had met the standard of proof required, and the trial court refused to disturb the jury's judgment. We find no error in the district court's decision.
III. Statute of Limitations .
Robert argues Norma's action should be barred by the five-year statute of limitations for oral contracts found in Iowa Code section 614.1(4) (1997). He claims the parties' contract was a rental agreement. He argues that any breach of the rental agreement occurred in 1984 when he increased Norma's payments from $150 to $250 per month. Norma argues Robert breached their oral contract for the sale of real estate in July of 1998 when he refused to convey the Fleming residence to her after she satisfied the mortgage.
Based on the record presented for our review, we conclude the defendants' breach of the parties' contract occurred in July of 1998 when the Fleming mortgage was satisfied and Robert refused to convey the property to Norma. At this time he also denied the existence of their oral agreement. Norma's petition alleging breach of the oral real estate contract, filed in October 1998, was timely.
IV. CONCLUSION .
Viewing the evidence in a light most favorable to Norma, we conclude there was substantial evidence to support each element of Norma's claim that an oral contract existed between the parties for the purchase and sale of the Fleming Street residence. The trial court did not err in denying the defendants' motions for directed verdict and judgment notwithstanding the verdict. We also conclude Norma's action based on an oral contract was not barred by the statute of limitations. In view of these conclusions, the issues presented by Norma's cross appeal are moot.
AFFIRMED.