Opinion
No. 1-625 / 00-1306.
Filed February 20, 2002.
Appeal from the Iowa District Court for Scott County, BOBBI M. ALPERS, Judge.
Plaintiffs appeal from a district court ruling granting the defendants' motion for judgment on the pleadings and dismissing the plaintiffs' petition with prejudice in the plaintiffs' action requesting damages following a transfer of real property.
REVERSED AND REMANDED.
Jack E. Dusthimer, Davenport, for appellants.
Stephen P. Wing of Dwyer Wing, P.C., Davenport, for appellees.
Considered by HUITINK, P.J., and ZIMMER and VAITHESWARAN, JJ.
Six siblings entered into litigation over their dead mother's property. On a motion for judgment on the pleadings, the district court ruled that a deed delivered by the mother to one of the siblings defeated claims filed by four of the other siblings. We disagree and, accordingly, reverse the district court's grant of judgment on the pleadings and remand for further proceedings.
I. Background Facts and Proceedings
The petition reveals the following facts. Candace Dilley owned real estate in Scott County. She lived on the property with one of her six children, Nancy Groth. Three years before her death, Dilley executed a deed in favor of Groth. The deed specified that Dilley and Groth would hold the property as joint tenants with right of survivorship. After the deed was executed but before it was recorded, Dilley wrote a letter to her children expressing her intent to transfer the property to Groth so that Groth could claim a tax deduction, but directing that, in the event of a sale of the property, proceeds were to be equally divided among the siblings.
On Dilley's death, Groth did not honor her mother's wishes. She sold the land to one of her brothers at less than fair market value. The four remaining siblings sued, alleging the property was held for them in constructive trust, in a resulting trust, or as a trust of convenience, and seeking a partition of the property and rents. Groth and the other named defendants did not file an answer. When the plaintiffs moved for entry of a default judgment, the defendants responded by seeking judgment on the pleadings. The district court granted the defendants' motion and dismissed the petition with prejudice after concluding as a matter of law that the deed defeated the plaintiffs' claims.
Groth's husband, the sibling to whom Groth transferred the property, his spouse, and a mortgage holder were also named defendants.
The plaintiffs filed a Rule 179(b) motion for enlarged findings and conclusions and sought leave to amend their petition and supplement their filings. The court denied the motions and this appeal followed. We review the grant of judgment on the pleadings for errors of law. Roush v. Mahaska State Bank, 605 N.W.2d 6, 8 (Iowa 2000).
II. Judgment on the Pleadings
Iowa Rule of Civil Procedure 222 governing judgment on the pleadings states:
Any party may, at any time, on motion, have any judgment to which that party is entitled under the uncontroverted facts stated in all the pleadings, or on any portion of that party's claim or defense which is not controverted, leaving the action to proceed as to any other matter of which such judgment does not dispose.
For purposes of deciding a motion for judgment on the pleadings, the facts alleged in the petition are accepted as true. Roush, 605 N.W.2d at 9. Additionally, the petition need only "give notice of the incident giving rise to the claim and the general nature of the action. . . ." Id. at 10. "If the prima facie elements of the claim are stated, and this statement is fair notice to a defendant, the petition is sufficient." Lamantia v. Sojka, 298 N.W.2d 245, 247 (Iowa 1980). However, if the facts of the case do not support the theory pled, the defendants are entitled to judgment on the pleadings. Roush, 605 N.W.2d at 9; Werner's Inc. v. Grinnell Mut. Reinsurance Co., 477 N.W.2d 868, 870 (Iowa Ct. App. 1991).
The district court determined that the deed overrode Dilley's intent as expressed in her letter and precluded the plaintiffs from contesting Groth's ownership interest in the property. Specifically, the court stated:
From the pleadings and the quit claim deed, it is clear that the property solely owned by Candace M. Dilley was properly and legally transferred by a valid deed to herself and to Nancy A. Groth as joint tenants with right of survivorship. Under the facts as alleged in the petition when Candace Dilley died, the property ownership was transferred to Nancy A. Groth as the surviving joint tenant of the property. The quit claim deed is plain and clear in its terms and cannot be impeached by extrinsic evidence, including the letter written by Candace Dilley.
While we agree with the court's conclusion that Dilley legally and validly transferred her property to Groth, we are not convinced this conclusion forecloses the plaintiffs' causes of action. The plaintiffs do not contest the validity of the deed or its recording or delivery. Cf. Avery vs. Lillie, 260 Iowa 10, 16, 148 N.W.2d 474, 477 (1967) (holding duly executed and recorded deed ordinarily raises rebuttable presumption of delivery and intent to pass immediate title, and presumption was overcome). Rather, the plaintiffs concede the deed effected a valid transfer of the property but allege that, having received the property, Groth had a fiduciary duty to disburse the proceeds from its sale as instructed by her mother. The plaintiffs rely on various theories they contend afford them a remedy. We will examine each theory in light of the Rule 222 principles set forth above.
A. Constructive Trust . A constructive trust is a remedial device under which the holder of legal title to property is found to be a trustee for the benefit of another who in good conscience is entitled to the beneficial interest. Benson v. Richardson, 537 N.W.2d 748, 760 (Iowa 1995). Actual fraud, constructive fraud, and equitable principles other than fraud such as abuse of confidence may justify imposition of a constructive trust. Berger v. Cas' Feed Store, 577 N.W.2d 631, 632 (Iowa 1998).
The plaintiffs pled that Groth was acting as a fiduciary with respect to the property. They claimed she had notice of their mother's wishes, yet failed to abide by those wishes. Given our notice pleading standards, we conclude the plaintiffs have alleged the key constructive trust components. We further conclude the allegations are more than sufficient to apprise the defendants of the nature of their claim. See Sojka, 298 N.W.2d at 247. Therefore, the defendants were not entitled to judgment on the pleadings as to the constructive trust theory.
B. Resulting Trust . The foundation of a resulting trust is the payment of consideration. In re Mahin's Estate, 161 Iowa 459, 461, 143 N.W. 420, 423 (1913). A resulting trust ordinarily arises when a seller, at the purchaser's request, conveys title to a third person who pays no consideration. Todd v. Todd, 250 Iowa 1084, 1092, 96 N.W.2d 436, 441 (1959). A "resulting trust" also may arise when the nature or circumstances of consideration involved in the transaction are such that only one person has legal title but is obligated in equity to hold title for the benefit of others. Newell v. Tweed, 241 Iowa 90, 97, 40 N.W.2d 20, 24 (1949). A resulting trust will be imposed under these circumstances even in the absence of actual or constructive fraud. Id.
Dilley's letter to her children was attached to the petition and, therefore, became a part of the uncontroverted facts. That letter expresses Dilley's intent to place legal title in the hands of Groth for the short-term benefit of Groth, but for the long-term benefit of all the siblings. The letter alone states sufficient facts to withstand the defendants' motion for judgment on the pleadings as to this count.
C. Trust of Convenience . The plaintiffs allege that the facts outlined above created a "trust of convenience" within the meaning of Iowa Administrative Code § 86.5(8)(c). That provision states:
If the record ownership of bank accounts, certificates of deposit, and other kinds of property are held in the form of joint tenancy, but in fact are held by the decedent and another person or persons who have a confidential or fiduciary relationship with the decedent, the property is not held in joint tenancy but is held in constructive or resulting trust by the survivor for the decedent.
We are not convinced this administrative code provision furnishes an independent basis for suit or a separate remedy. The provision does furnish additional authority to support the plaintiffs' constructive and resulting trust theories and, to that extent, should remain in the petition.
D. Partition . Our rules of civil procedure authorize partition of real or personal property by equitable proceedings. See Iowa R. Civ. P. 270. The rules also prohibit joinder of a partition action with any other claim. Iowa R. Civ. P. 275. The remedy for misjoinder, though, is not dismissal of the claim but separate docketing of the action. See Rousch, 605 N.W.2d at 10. We conclude the facts as pled are sufficient to warrant the filing of a partition action, but further conclude the action should be separately docketed on remand.
E. Action for Rent . The plaintiffs' action for rent is premised on Iowa Code sections 557.15 and .16, which authorize tenants in common who are not in possession of real estate to recover their proportionate share of the rental value of the property from the tenant in possession. The facts here do not reflect an intent on Dilley's part to have all the siblings hold the property as tenants in common. However, in light of the plaintiffs' claims that Dilley's letter gave them a beneficial interest in the property, we believe sufficient facts have been pled to withstand a motion for judgment on the pleadings as to this count.
III. Disposition
We reverse the district court's grant of judgment on the pleadings and remand for further proceedings consistent with this opinion.
REVERSED AND REMANDED.