Opinion
No. 1-1023 / 01-0249
Filed March 26, 2003
Appeal from the Iowa District Court for Sioux County, James D. Scott, Judge.
Plaintiffs appeal from the district court's ruling granting a defendant's motion to dismiss and other defendants' motions for summary judgment in an action alleging interference with inheritance. AFFIRMED.
Theodore Sporer, Des Moines, for appellants.
Karrie Hruska and Maurice B. Nieland, Sioux City, for appellees JoAnn and Edwin T. Winterfield.
Michael Leahy, Omaha, Nebraska, for appellee Roger Evans.
Heard by Vogel, P.J., and Miller and Vaitheswaran, JJ.
Carroll Winterfeld, Merlyn Winterfeld, and Marlene Wegner (collectively "plaintiffs") appeal from the district court's rulings granting JoAnne Winterfeld's motion to dismiss and granting Roger Evans's and Edwin Winterfeld's motions for summary judgment in the plaintiffs' action that alleged, in relevant part, interference with inheritance. They contend the trial court erred in (1) considering facts outside the petition in ruling on the motion to dismiss, (2) concluding that the statute of limitations had expired prior to their filing suit, (3) concluding that Iowa does not recognize a claim for interference with inheritance by means of inter vivos fraud, duress, or coercion applied by one set of beneficiaries under a will against the remaining beneficiaries under a will, (4) concluding the interference with inheritance claim was barred by the doctrine of issue preclusion, (5) concluding the interference with inheritance claim was barred by the doctrine of claim preclusion, (6) applying both issue and claim preclusion where the earlier probate court lacked subject matter jurisdiction to consider the instant tort claim, and (7) concluding their tort claim was a collateral attack on the underlying probate judgments. We affirm.
I. BACKGROUND FACTS AND PROCEEDINGS.
Edna Winterfeld died in January 1997. She had six children, Julius, Edwin, Duane, Carroll, Merlyn, and Marlene Wegner. It appears Edna had loaned each of her children some money at some point in time. For quite some time she had rented her farmland to her children or grandchildren at a rate below market value.
Prior to Edna's death, she established a voluntary conservatorship for herself, with Julius and Edwin as conservators. Carroll filed a petition for removal of conservators, alleging that Julius and Edwin engaged in self-dealing by renting farmland to themselves at rates below market value and that they failed to list debts they owed to Edna on the conservatorship inventory. Edna filed an affidavit, acknowledging that (1) she intentionally rented farmland below the market value, (2) she had forgiven any indebtedness for back rent, and (3) Duane, Julius, and Edwin had paid all money owed to her. She also filed a petition to terminate the conservatorship. Carroll, Merlyn, and Marlene filed a resistance to Edna's petition, alleging Julius and Edwin were dissipating Edna's estate by leasing land from Edna at prices below market value. These three also filed an objection to the final report, alleging Julius and Edwin engaged in self-dealing and committed fraud resulting in a loss to Edna's estate. Merlyn and Marlene filed a document in which they indicated they felt Julius and Edwin did not attempt to collect back rent and collect on notes and that they engaged in self-dealing by renting farmland to themselves at rates below market value.
The probate court entered a ruling as to the final report of the conservators, finding that the conservators did not act fraudulently in failing to collect notes allegedly owed to Edna, as these notes were executed in 1967 and were therefore barred by the statute of limitations. It also concluded that Edna had approved the below-market-value leases prior to the establishment of the conservatorship, and that Edna remained of sound mind when the conservatorship was established. It therefore held the conservators had no duty to change the terms of the leases absent an indication from Edna that she desired for such leases to end.
After Edna's death, Edwin, Julius, and Duane were appointed as executors of her estate. Carroll, Merlyn, and Marlene filed a petition to remove the fiduciaries, alleging that the executors failed to file an accurate initial inventory, breached their fiduciary duty by not collecting reasonable amounts of rent and not collecting rents due the estate, and undertook a course of dealing by renting estate farmland to themselves at below market price. The probate court entered an order on the final report of the executors. The court found that there was no evidence the executors mismanaged the estate by not collecting reasonable rents due. It refused to address Edna's alleged incompetency, the enforceability of the 1967 promissory notes, and the alleged self-dealing by renting farmland, because these issues had all been previously addressed and determined adversely to Carroll, Merlyn, and Marlene. The court dismissed the plaintiffs' petition to remove the fiduciaries and approved the final report. Carroll, Merlyn, and Marlene filed a petition to vacate the ruling on the final report, but failed to serve it until more than a year after that ruling. SeeIowa R.Civ.P. 1.1013(1). The court subsequently dismissed the petition.
On July 20, 2000, Carroll, Merlyn, and Marlene filed the current action against Julius, Edwin, and Roger Evans, who had served as the attorney for Julius, Edwin, and Duane in the conservatorship and estate proceedings. The action alleged, among other things, tortious interference with inheritance. Julius died prior to being served with the petition, and JoAnne Winterfeld as executor of his estate was substituted as a defendant.
JoAnne filed a pre-answer motion to dismiss, which the court granted. The court determined that the plaintiffs' claims against Julius's estate were barred by claim preclusion, issue preclusion, and the statute of limitations. Edwin and Evans filed motions for summary judgment. During oral argument on the motions, the plaintiffs dismissed all claims other than interference with inheritance. The court granted the motions for summary judgment. It declined to expand the tort of interference with inheritance to include depletion of an estate. It concluded (1) the claim against Evans was barred by issue preclusion, (2) the claim against Edwin was barred by issue preclusion and claim preclusion, (3) the plaintiffs cannot now raise claims that the defendants used fraud and deceit to prevent the plaintiffs from litigating their claims in the conservatorship or estate cases, and (4) the claims are time barred. The plaintiffs appeal from the rulings granting JoAnne's motion to dismiss and Edwin's and Evans's motions for summary judgment.
II. SCOPE OF REVIEW.
We review the grant of a motion to dismiss for the correction of errors at law. Sanford v. Manternach, 601 N.W.2d 360, 363 (Iowa 1999). A motion to dismiss is sustainable only when it appears to a certainty the pleader has failed to state a claim upon which any relief may be granted under any state of facts provable under the allegations. Curtis v. Board of Supervisors of Clinton County, 270 N.W.2d 447, 448 (Iowa 1978). A motion to dismiss waives any ambiguity or uncertainty in the petition. Salsbury Labs. v. Iowa Dep't of Envtl. Quality, 276 N.W.2d 830, 833 (Iowa 1979). For purposes of testing the sufficiency of the petition, it is construed in the light most favorable to the pleader and its allegations are accepted as true. Id. The motion cannot aid itself with factual allegations not part of the petition. Id. Nor can the movant rely on facts supplied by an evidentiary hearing. Id.
A ruling on a motion for summary judgment is reviewed for the correction of errors at law. LeMars Mut. Ins. Co. v. Joffer, 574 N.W.2d 303, 306 (Iowa 1998). We review summary judgment rulings to determine the existence of any genuine issue of material fact and whether the law was correctly applied. Hegg v. Hawkeye Tri-County REC, 512 N.W.2d 558, 559 (Iowa 1994). The burden rests on the movant to establish the right to summary judgment. Enochs v. City of Des Moines, 314 N.W.2d 378, 380 (Iowa 1982). We review the record in the light most favorable to the party opposing summary judgment. Smith v. CRST Int'l, Inc., 553 N.W.2d 890, 893 (Iowa 1996).
III. MERITS.
The plaintiffs claim the trial court erred by considering facts outside the petition in ruling on the motion to dismiss. They contend the court erred in concluding that the statute of limitations had expired prior to their filing suit. They maintain the court erred in concluding that Iowa does not recognize a claim for interference with an inheritance by means of inter vivos fraud, duress, or coercion applied by one set of beneficiaries under a will against the remaining beneficiaries under a will. They assert the court erred by finding the interference with inheritance claim was barred by issue and claim preclusion. They contend the court erred in applying both issue and claim preclusion where the earlier probate court lacked subject matter jurisdiction to consider the instant tort claim. They maintain the court erred in concluding their tort claim was a collateral attack on the underlying probate judgments.
As a preliminary matter, we dispose of the claim the court erred by considering facts outside the petition, namely the conservatorship and estate files, when ruling on JoAnne Winterfeld's motion to dismiss. Her counsel requested that the court take judicial notice of those two cases, there was no objection, and the court agreed to do so. Our error preservation rules require that issues be presented to and passed upon by the district court before they can be raised and decided on appeal. Metz v. Amoco Oil Co., 581 N.W.2d 597, 600 (Iowa 1998). Thus, because the issue raised on appeal was neither presented to nor passed upon by the district court, we conclude that the plaintiffs have failed to preserve error on this issue.
Although we have serious reservations about expanding the tort of interference with inheritance to include the depletion of an inheritance, we need not reach this issue, as we determine that the doctrine of issue preclusion is dispositive of this appeal.
The doctrine of issue preclusion strives to protect litigants from "the vexation of relitigating identical issues with identical parties or those persons with a sufficient connective interest to the prior litigation." State ex rel. Casas v. Fellmer, 521 N.W.2d 738, 740-41 (Iowa 1994). By stemming unnecessary litigation, the doctrine also promotes judicial economy. Id.at 741. There are four prerequisites to the application of the doctrine of issue preclusion, as follows:
the issue concluded must be identical; the issue must have been raised and litigated in the prior action; the issue must have been material and relevant to the disposition of the prior action; and the determination made of the issue in the prior action must have been necessary and essential to the resulting judgment.
United Fire Cas. Co. v. Shelly Funeral Home, Inc., 642 N.W.2d 648, 655 (Iowa 2002).
On appeal, the plaintiffs contend the issues raised in the previous probate actions and the instant tort action are not identical. They argue some of the facts are identical but the legal issues are different. They assert the tort action involves claims wherein specific monetary damages are alleged, and argue the defendants have not shown that the probate court ever ruled plaintiffs are not entitled to the damages they seek in this case. They conclude that the facts necessary to sustain their prior actions are therefore not the same facts necessary to recover damages based on the acts alleged in their petition. They also claim the district court erred in applying issue preclusion where the earlier probate court lacked subject matter jurisdiction to consider the instant tort claim.
We reject the idea that any lack of jurisdiction or inability to award money damages by the probate court precludes application of the doctrine of issue preclusion in a related, subsequent civil tort action. See Brown v. Monticello State Bank, 360 N.W.2d 81, 84 (Iowa 1984) (holding district court in tort action correctly used issue preclusion to eliminate relitigation of claims made and rejected in prior probate proceedings); see also Plough v. West Des Moines Cmty. Sch. Dist., 70 F.3d 512, 516 (8th Cir. 1995) (holding requested remedies need not be the same as in an earlier adjudication in an administrative proceeding in order for issue preclusion to apply); Gardner v. Hartford Ins. Accident Indem. Co., ___ N.W.2d ___, ___ (Iowa 2003) (holding that adjudication of an issue by an administrative agency had preclusive effect in a subsequent civil tort action).
We conclude the trial court did not err in determining issue preclusion barred the present action. Although the plaintiffs here seek different relief, money damages, their claim is bottomed on underlying claims of misconduct identical to those raised and adjudicated against them in the prior conservatorship and estate proceedings. Their present claim of interference with inheritance relies and depends on proof of the same factual claims upon which their previous claims were grounded, claims that Julius and Edwin leased land from Edna at below market value, failed to pay rent, and failed to pay loans from Edna, all before they were fiduciaries, and then after they became fiduciaries continued to lease the land at below market value, failed to collect rent they should have paid, and failed to collect on the loans from Edna. These issues have been resolved against the plaintiffs with a full exploration of facts in the several probate hearings and rulings. Furthermore, we note the district court found in the prior probate proceedings that there had been no breach of fiduciary duty, a duty at least as high as any involved in this case. All four prerequisites to application of issue preclusion are satisfied. Thus, we conclude the district court did not err in deciding issue preclusion prevents litigation of the claim presented in this case.
IV. CONCLUSION AND DISPOSITION.
We affirm the trial court's rulings granting JoAnne's motion to dismiss and Edwin's and Evans's motions for summary judgment on issue preclusion grounds. We need not and do not consider whether the trial court was correct in also sustaining the defendants' motions on statute of limitations and claim preclusion grounds.