In this case, the Iowa Court of Appeals was faced with the task of determining the parties’ respective rights to a home purchased in 1987. The original purchaser bought the home and lived in it for only a year until he moved to Florida. The original owner and an acquaintance entered into an agreement at that time. It consisted of a single sentence, “I [home owner] agree to put [the residence] on contract with [acquaintance] on Feb. 1, 1989.” Subsequently, the new resident began paying the mortgage, insurance and property taxes. The lawsuits began in 1990 when the new resident filed a petition with the trial court to determine the parties’ rights to the home. The original owner never responded to the suit, so the court concluded that the contract purchase agreement was binding and that if the new resident continued to make the insurance, property tax, and mortgage payments, he would be the “equitable title holder.”
The original owner attempted to evict the possessor of the home in 2008. He was unsuccessful. In the present suit, the possessor sought, once again, to quiet title to the parcel. The trial court, determined that the original agreement between the parties was void and not a valid real estate contract purchase. The trial court also found that the original owner was not properly notified of the outcome of the 1990 lawsuit.
On appeal, the possessor contended that the trial court did not properly address his claims of unjust enrichment for all of the contributions he had made to the home and that he should be deemed the equitable title holder. The appellate court first dealt with the issue of notice to the original owner of the outcome of the 1990 lawsuit. The court found that the judgment of the trial court in that case was void for lack of notice to the original owner in Florida. Basically, the judgment of the court was served on an agent of the original owner, not the owner himself. Substituted service is only authorized when the legal action is connected with a business or agency, not a personal situation such as this. Iowa Code §617.3 (Iowa’s long-arm statute) does allow other methods of service, but the possessor did not use any of those means of serving the original owner.
The appellate court also dealt with the issue of the original contract between the parties. Was this an agreement to contract “at some time” in the future or was it an oral agreement to transfer title to the home? In this case, the agreement was a single sentence. There was no mention of many essential terms or details. Thus, the oral agreement was not valid (remember that oral agreements for the sale of land violate the statute of frauds) and there simply was not enough evidence to show an intent to transfer the land in writing and signed by the parties. Stockbauer v. Schake, No. 0-405/09-1720 (Iowa Ct. App., Aug. 11, 2010).