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Here, the Iowa Court of Appeals was asked to determine whether a right of first refusal in a real estate contract is freely assignable or whether it is personal to the party who contracts for it.  In this case, the defendants entered into a contract to sell their farmland to a cattle farmer, but retained the acre of land on which their homestead was located. Under the real estate contract, the farmer had the right of first refusal upon the sale of the one-acre tract. A year after the sale, the farmer turned around and sold the farm to the plaintiffs.

March 1, 2011 | Erin Herbold

Here, a mother and son bought a residential property in 1990 and held the property as “joint tenants with right of survivorship.”  At various times, the mother resided with her son in the house or lived with other relatives.  From 2005 to 2007, the son claimed his mother as a dependent on his income tax returns. In 2003, the property was refinanced and re-titled. However, the new deed indicated that the mother and son were “tenants-in-common.” 

March 1, 2011 | Erin Herbold

The nieces and nephews of a married couple with no children contested their aunt’s last will and testament, claiming that the will should be set aside because the aunt was unduly influenced by her husband and lacked the requisite testamentary capacity to transfer her assets to his intervivos trust.  The husband died in 2006, followed by his wife in 2009.  One of the nieces was named executor.  Anticipating a challenge to the wife’s will, the niece asked the trial court to appoint a bank to assume the executor’s duties.

In this case, a second marriage brought about problems for a husband after his wife’s death. Here, the wife died and her children from a former marriage challenged the husband’s authority with respect to a trust agreement between the couple. The couple executed the revocable trust in 2003, naming themselves as co-trustees and their six children (both had three from a prior marriage) as the alternate trustees and remainder beneficiaries. The wife died in 2008 and the husband became the sole trustee.

The decedent in this case died in 2009 and was survived by three adult children. She was preceded in death by her husband. Before her death, she served as the executor of her husband’s estate and was unhappy with the lack of help given her by the co-executor, a local bank. She expressed an interest in changing the executor designation in her own will before her death, but died before making any change.  Upon her death, but before the estate was opened, the bank made several payments from an “estate account” before being formally appointed as co-executor.  

March 12, 2011 | Erin Herbold

In this case, a 51-year old man died intestate.  To pass the assets, Iowa law requires that the court appoint administrators to administer the intestate estate.  As a result, the decedent’s parents were appointed as administrators. Upon their appointment, the administrators issued the man’s long-time partner and “common-law” spouse a notice to vacate the homestead that she shared with their son. The administrators subsequently moved into the home. The administrators indicated on the estate report and inventory that their son was unmarried at the time of his death.

The Iowa Supreme Court recently recommended a six-month suspension from the practice of law for two attorneys (a husband and wife) licensed to practice in Iowa and Kansas.  In 1998, they moved their family to care for the wife’s bedridden mother. The mother was the beneficiary of a trust account in which her social security benefits were also customarily deposited. The wife was the trustee of her mother’s trust and routinely paid her bills and ordinary expenses from the trust account.

In 2004, a farmer disappeared and was never heard from again.  His son moved back to the farm and began operating the farm, including paying the expenses and personally receiving the farm income.  In 2009, some of the surviving children requested a declaration of their father’s death and asked for the appointment of an administrator. The court declared the father dead and appointed one of the farmer’s daughters as administrator.  Estate proceedings were later begun.  During estate administration, the son filed a claim for farm management fees in the amount of $316,000.

In this case, mom’s only child, a daughter was given a general power of attorney (POA) in 2001.  The POA specifically provided that the daughter could not use the POA to make gifts to herself. Mom owned 120 acres of farm ground, including a homestead where she had lived for nearly 50 years. In 2004, mom personally guaranteed a loan in favor of her daughter and delivered to the bank a signed a mortgage agreement securing a note for $170,000 for her daughter. The farmland was listed as collateral. 

July 16, 2011 | Erin C. Herbold-Swalwell
  1. “If Momma Ain’t Happy, Ain’t Nobody Happy”

In this case, an ex-husband appealed the trial court’s division of property and order of spousal support on the basis that the court didn't treat the parties equitably and failed to recognize the eccentricities of his “non-conventional marriage and non-conventional business.” The couple had a 30-year relationship that began when they were teenagers, but they had only been married about 13 years before being separated. The couple had two children, now adults, during the relationship. The husband’s father ("Big Earl") owned a strip club and his wife worked there periodically as a dancer.

August 11, 2011 | Erin C. Herbold-Swalwell

The plaintiff sued, alleging he had properly exercised an option to purchase Nebraska real estate, but that the title holder refused to honor the option. The fair market value was substantially more than the option price of $5,700,000. The plaintiff asked the court to order specific performance on the option contract. Before the matter was resolved, the plaintiff died. The administrators of the estate continued the litigation with the same law firm. In 2008, the bank filed a claim against the estate based upon an unsatisfied judgment they had obtained against the estate. 

August 11, 2011 | Erin C. Herbold-Swalwell

Here, husband challenged the trial court’s decree dissolving his 18-year marriage, arguing that the court miscalculated the amount he owed his ex-wife as a “cash equalization” payment and that the court wrongly considered his farm rental income when determining his child support obligation. The couple had three children born of the marriage.

August 20, 2011 | Erin C. Herbold-Swalwell

Iowa law provides for the reopening of an estate in circumstances.  For example, Section 633.489 of the Iowa Code provides:

October 5, 2011 | Katie Fiala, Law Clerk, Iowa Third Judicial District

A married couple, without children, held a large amount of their assets in bank accounts as joint tenants with full rights of survivorship.  Both the husband and wife became seriously ill, with wife subsequently moving into a nursing home.  The husband then decided to take complete control of the couple’s assets by withdrawing the couple’s joint funds, and putting them into his personal account.  The husband then made his account payable on death to the wife’s sister. The couple had previously designated their joint account as payable on death to the wife’s brothers.

January 23, 2012 | Erika Eckley

This case involved the distribution of an Iowa estate’s assets to the surviving spouse, adult children, and minors following the lump settlement of a wrongful death case filed in Nebraska. On appeal, the court was asked to determine choice of law for the distribution and the equitable distribution of the settlement proceeds.

Typically, knowledge of, or consent to, improvements on property completed by a lessee does not subject the lessor to a mechanic’s lien for the work done. But, if the work is done “by virtue of a contract” either by an express or implied agreement with the lessee to make the improvements, then the lessor may be subject to a mechanic’s lien for the reasonable value of the labor and materials furnished.

August 1, 2013 | Roger McEowen

At the upcoming Agricultural Law seminar on September 12, 2013 one of the topics to be discussed will involve self-defense issues and liability issues with respect to firearms.  That has become a big issue recently. 

The importance of ensuring the intentions of the parties is clearly spelled out in a prenuptial agreement and subsequent estate planning documents cannot be stressed enough. In the following case, the parties spent years fighting over a decedent’s estate because of unclear language. 

The decedent and his first wife had three children. After the wife’s death, the family experienced “acrimonious intra-family disputes” and litigation involving the wife’s estate. The problems started when the decedent exercised a power of appointment under his late wife’s will. The children squabbled for several years. The family eventually reached a settlement agreement which was read into the court record, reduced to writing, and incorporated into the court’s order enforcing the settlement.

June 9, 2012 | Erika Eckley
The father and his son had a rocky relationship for many years until they made peace and began farming together. The father owned an International 766 tractor.  The tractor was sitting out in a field, unused at the time the father purchased a newer model. After the son repaired the old tractor, his father allowed him to use the tractor for haying and some farming. The tractor eventually was put out to pasture once again where it remained for several years. In the meantime, the father contracted cancer and did not see his son for some time due to his health issues.

In 1987, a trust was created upon the death of the plaintiff’s grandfather. At the time of his death, the grandfather’s wife received one-half of the real estate owned by the grandfather directly and the other half was conveyed into a trust. The wife received the income from the trust during her life with the grandfather’s daughters as residual beneficiaries upon her death.

In order for a will to be executed, there are several actions that must be taken. The testator must put the purported will in writing and state that the document is her declared will. The document must be signed by the testator, which must be witnessed by two persons who have no claim to anything in the will, are of legal age and mental capacity, and are witnessing the signing of will at the request of the testator. The witnesses must also sign the will in front of each other and in the presence of the testator.

(Note:  On August 8, 2012, the Iowa Court of Appeals revised their earlier opinion regarding the amount of the inheritance tax reimbursement. The earlier opinion was vacated and the August 8, 2012 opinion replaces it.) 

August 31, 2012 | Erika Eckley

In Iowa, marital property is to be equitably distributed upon the dissolution of a marriage. Inherited property, however, is normally awarded to the individual spouse who owns the property and distributed to the individual independent from the equitable distribution process. But, under Iowa law, the court does have the power to require distribution of inherited property if equity demands it in light of the particular circumstances of the spouse or children. Several factors are considered, including the following:

June 27, 2006 | Roger McEowen

Installment sale contracts are a popular method to sell real estate, especially farmland. One popular feature is that the downpayment is usually low, quite often less than 20 percent of the purchase price. Beginning farmers and others with minimal amounts of cash like that. But, to be a valid contract all the requirements to have a binding contract must be satisfied - including the requirement that the seller has the authority to convey the real estate. That was the issue in this case.

Many lawsuits have been filed over land deals that have gone bad. A lot of those involve buyers that get cold feet and renege on the deal.   But, what if the seller tries to back out after agreeing verbally to a particular party’s offer to purchase the property? That’s what happened in this case, and it illustrates a fundamental rule of contract law - contracts for the sale of real estate must be in writing to be enforceable. That’s known as the Statute of Frauds. It’s an old rule that date backs to 1677 in England.

February 20, 2007 | Roger McEowen

Iowa law requires certain disputes involving farmers to be submitted to mediation before filing a court action. Disputes subject to mandatory mediation are those involving contracts for the care and feeding of livestock. In this case, the parties entered into an oral contract for the raising and feeding of hogs. The defendant purchased feeder hogs and placed them with the plaintiff to be cared for until they reached market weight.

It’s always a good idea to reduce farm leases to writing. Unfortunately, most farm leases in Iowa (and elsewhere) are oral. But, even if the lease is in writing it is critical to make sure that the lease terms are clear and that both the landlord and the tenant have a common understanding of what the lease terms mean. This case drives those points home.

September 26, 2007 | Roger McEowen

A contract for the sale of goods for $500 or more is generally not enforceable unless there is a written agreement signed by the party against whom enforcement is sought.  But, there are exceptions to the general rule.  For example, under the “Merchant’s Confirmatory Memo Rule,” oral contracts between merchants are enforceable if a written confirmation of the oral agreement is received within a reasonable time, and the recipient doesn’t object to the writing within ten days. The rule often comes into play in the context of grain sales between buyer and sellers of grain.

December 30, 2007 | Erin Herbold

Contracts involving an interest in real estate must be in writing to be enforceable.  That rule is known as the “Statute of Frauds.”  But, there are exceptions to the rule.

The defendant, a real estate developer, purchased 120 acres to develop and resell as residential lots.  The plaintiff purchased a multi-acre lot from the plaintiff for $35,000.  Based on the defendant’s representation, the plaintiff believed that the southern boundary of the lot was located along a terrace, but that later proved to be incorrect with the effect that the plaintiff actually owned about one acre less than what the plaintiff originally thought she had purchased.  That created a problem – the plaintiff would have to change her septic system laterals and relocated her house on the

Consideration is something that is done or promised in return for a contractual promise.  It’s a central concept in the common law of contracts, and is required for a contract to be enforceable.  Essentially, consideration is what must be given up by each party when making an agreement.  It may be means of doing or not doing an act or simply promising to do or not do an act.  It’s a benefit to one party and a detriment to the other party.  In general, for a contract to satisfy the requirement of consideration, the contract must fulfill three elements:  (1) there must be a bargain regarding

With certain purchases, buyers cannot determine whether the purchased items are defective until sometime after the items are purchased and used.  For example, when a farmer buys seed, there is no way that the farmer can determine if the seed is defective (such as by failing to germinate properly) until after the seed has been purchased, planted and begins to produce a crop.  By the time the farmer realizes that the seed is defective, substantial sums may have been expended to not only buy the seed, but also to plant the seed, spray chemicals for weed control and cultivate the soil.

March 17, 2008 | Roger McEowen

In this case, a California couple signed a contract to buy an Iowa home.  The purchase of the Iowa home was not contingent upon the buyer’s selling their California home or obtaining acceptable financing.  The contract provided for inspection of the Iowa home within 10 days, but the buyers waived their inspection right by not filing a written repair request within the ten-day timeframe.  The contract explicitly stated that if the buyers waived their right to inspect, the sellers were not responsible for repairs.  Shortly after signing the contract, the buyers e-mailed the sellers’ real esta

November 21, 2008 | Roger McEowen

A contract involving an interest in land must be in writing to be enforceable.  The rule is known as the “Statue of Frauds” and it applies to contracts for the sale of real estate as well as real estate leases.  With a lease, the interest in land that is involved is not an ownership interest, but possession – the tenant gets exclusive possession of the leased premises for the term of the lease.  So, a farm lease must be in writing to be enforceable.  But, there are a couple of notable exceptions.  Perhaps the biggest of the exceptions is that the rule doesn’t apply to contracts where perfor

January 5, 2009 | Roger McEowen

Oral farm leases present many problems, not the least of which is the question of what happens when either the landlord or the tenant dies during the term of the lease.  This is another reason why it’s always best to get the terms of a farm lease in writing.  But, that didn’t happen here and the landlord died during the lease term.  A lawsuit among family members was filed to sort out the mess – with a very predictable outcome.

Under Iowa’s Uniform Commercial Code (Iowa Code §544.2713(1)), the measure of damages for non-delivery of goods by a seller under a written contract is “the difference between the market price at the time when the buyer learned of the breach and the contract price.” In this case, a grain elevator and grain storage company entered into a written lease agreement, whereby the elevator would rent extra grain storage space from the storage company. Under the lease, the storage company would provide all labor at the facility and would be solely responsible for any grain shortages.

In Iowa, if an agreement is said to be signed by an adverse party in a legal proceeding, that signature is deemed to be genuine unless the adverse party can support their denial of the signature’s authenticity with credible evidence. In that event, the burden shifts to the party claiming the signature is a fake to demonstrate its validity. In the event that a handwriting expert is called in to examine the signature, it is up to the trial court to determine their credibility. This analysis is particularly important in the case of a promissory note or check. 

In many cases involving breach of contract where the amount of damages is an issue, courts seek an outcome that will put the contracting parties in the position they would have been in had the contract been performed according to its terms.  Reaching that outcome often requires a thorough examination of the evidence.  

The dispute in this case goes back to 2002, when a brother and sister entered into a contract for the sale of farm land. In an attempt to help her brother, a sister purchased 150 acres of land from her brother and his wife, subject to her brother’s option to repurchase the land by July 1, 2007.

A key element of contract law is that the terms in a written agreement control.  While limited situations can arise that allow for equitable arguments to be made that might allow conduct contrary to written contract terms, that’s the clear minority of situations.  Those principles were involved in this case.

September 22, 2009 | Erin Herbold

In this case, the buyer of a tractor issued a check for $22,000 to the seller in 1997. The parties agreed, orally, that the seller would not cash the check for 30-60 days and that if the funds were not available within 30 days the buyer would owe 15% interest compounded annually.  Ultimately, the check was not honored. Two years later, the parties entered into a written agreement that allowed the buyer to purchase the tractor at the same purchase price plus interest. Further, the seller agreed to fix the air conditioner in the tractor.

A person that is not a party to a contract may sue a contracting party based on their contract only if the outside party can show that they were an intended beneficiary of the contract.  This concept is known as “privity” - if the contracting parties intended to convey a benefit to another party, then the benefitted party may be deemed in privity.  The privity concept was involved in this case.

December 28, 2009 | Erin Herbold

When negotiating a contract, the parties must ensure that “adequate consideration” has been furnished by the parties for the contract to be validly executed.

Here, the parties entered into a written farm lease of 252 acres for a one-year term. Though the written lease specified a one-year term, the tenant continued to farm the land for the following two crop years. On Aug. 6, 2008, the landlord served notice of termination on the tenant that his tenancy would terminate at the end of the calendar year. The tenant replied by letter, stating that the landlord had not complied with the requirements of Iowa Code §562.5, which requires that the date of termination of a farm lease be specified as March 1 of the following year. 

Farmers routinely engage in the sale of older farm equipment. Having a solid background knowledge of exposure to liability for the seller is a good way to avoid a lawsuit. In this personal injury suit, the plaintiff was seriously injured while using the dump truck he purchased from defendants eight years earlier. The defendant acquired the older dump truck, previously used for grain hauling, in 1995. In an effort to improve his line of equipment, the defendant moved the truck to inside storage and did not use it for two years.

A fundamental principle of contract law is that a party that accepts the delivery of nonconforming goods must pay the full contract price. That’s also the result under Iowa’s version of the Uniform Commercial Code.  Farmers that are merchants are generally subject to the Uniform Commercial Code. 

March 15, 2010 | Erin Herbold

In this case, the parties divorced after 39 years of marriage.  Before their marriage, the couple executed a pre-marital agreement.  Both parties were represented by legal counsel, and it was agreed that the real property in the possession of each party would remain separate property upon a divorce. There was no statement of the real property ownership attached to the document, but both parties agreed that the husband owned 160-acres of farmland before the marriage. Years later, the elderly husband went to the nursing home and was scheduled to be released in May 2008.

A fundamental principle of contract law is that a valid contract requires a “meeting of the minds” between the contracting parties concerning the essential terms of the contract.  There must be mutual assent – the intent of the parties is key.  If the offeror has clearly manifested a willingness to enter into a contract in such a way that the other party, the offeree, knows that assent is all that is necessary to cement the deal, and the offeree accepts, the requisite mutual assent exists.  But, if the offeree changes the terms of the offer in their acceptance, does a contract exist?  That