Partition in Kind Receives another Blow
Iowa law has been clear, and it is perhaps even more clear today. Unlike most other states, Iowa is “unequivocal in favoring partition by sale." Newhall v. Roll, 888 N.W.2d 636, 640 (Iowa 2016). In December of 2016, the Iowa Supreme Court issued an opinion reversing a partion in kind and ordering the property sold. In Newhall, the Court reviewed Iowa law, stating that under Iowa R. Civ. P. 1.1201(2), the party seeking a partition in kind has the burden to prove it would be both equitable and practicable. In Newhall, the Court ruled that an in-kind partition of a family farm requested by a sister would not be practicable or equitable. Specifically, the Court ruled that the sister's proposed in-kind division had to be rejected "because the division into separate parcels would depreciate their aggregate value."
Today, the Court relied on Newhall to reverse another partition in kind that had been ordered by the Iowa Court of Appeals. In September of 2016, the court of appeals had reversed a district court ruling and ordered a partition in kind in another family squabble. The case involved three siblings, two who wanted a partition by sale, and one (a sister) who requested the partition in kind. A certified appraiser agreed to by all parties testified that the "home place" could be separated from the larger parcel without impacting the sale value of the remainder. An owner of an auction business also testified that separating the sister's requested parcel would have a "limited effect" on the land's total value. A real estate business owner who was not a certified appraiser testified on behalf of the other two siblings that the parcels should be sold together to maximize their sales price. The district court rejected the sister's request for a partition in kind, finding that she failed to prove it would be "equitable and practicable," specifically stating that “the volatile nature of farmland as affected by the crop prices has made a partition in kind merely guesswork when factoring in the nature and qualities of the land.” The court of appeals disagreed with this assessment, holding that the certified appraiser's opnion was well supported with CSR ratings and comparable sales data and that it accounted for current market conditions. The court of appeals found no reason for the district court to reject the concept of a fair appraisal. The court of appeals also found that a partition in kind would be equitable because the property the sister requested was a multi-generational family farm. The sentimental attachment she may have to the property weighed in favor of dividing her interest in kind.
In an unpublished, one-page opinion, the Iowa Supreme Court today vacated the court of appeals opinion and reinstated the district court order directing a partition by sale. In its opinion, the Court merely stated "the defendant failed to meet her burden to prove a partition in kind of the real estate was equitable and practicable" and cited to Newhall and Spies v. Prybil, 160 N.W.2d 505, 508 (Iowa 1968).
It is clear from this latest opinion that it will be very difficult for future litigants to obtain a partition in kind in Iowa, nearly impossible if the trial court rules against you. If property owners desire their children to preserve the "home place" they must act while they are alive to construct a plan to ensure that happens. Otherwise, unless all parties agree, a partition in sale will most likely result.
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