In the Matter of the Estate of Glen A. Waterman, Jingles Ti-Okay Waterman

IN THE SUPREME COURT OF IOWA

No. 12–0800

Filed June 6, 2014

IN THE MATTER OF THE ESTATE OF GLEN A. WATERMAN, Deceased

JINGLES TI-OKAY WATERMAN,

Appellant.

Appeal from the Iowa District Court for Clayton County, Richard D.

Stochl, Judge.

A surviving spouse appeals a district court ruling on her claim for

recognition of her homestead interest in property sold by administrators

of decedent’s estate. AFFIRMED AS MODIFIED AND REMANDED

WITH INSTRUCTIONS.

John W. Hofmeyer III, Oelwein, for appellant.

Alan T. Heavens of McClean, Heavens, & Vorwald Law Offices,

Elkader, for intervenor-appellees.

Mary Jane White, Waukon, for former estate administrators-

appellees.

2

HECHT, Justice.

The administrators of an estate listed residential real estate for

sale. The decedent’s common law spouse objected to the proposed sale

of the property, contending the property was her home. The district

court nonetheless authorized the sale of the property and the transaction

was closed. The buyers took possession and made substantial

improvements during the pendency of an appeal from the district court’s

order authorizing the sale. The court of appeals reversed the district

court’s order and remanded to the district court for consideration of the

homestead interest of the surviving spouse.

The district court concluded on remand that the surviving spouse

should, at her election, receive either the proceeds from the estate’s sale

of the real estate or the real estate itself upon payment to the buyers of a

substantial part of the cost of the improvements made by them. In this

second appeal, we must resolve the clash between the surviving spouse’s

homestead interest under Iowa Code chapter 561 and the interests of the

buyers who claim the status of occupying claimants under Iowa Code

chapter 560. We also address the surviving spouse’s claim for loss of the

rental value of the homestead for the period during which she was

deprived of possession.

I. Background Facts and Proceedings.

Jingles Waterman (formerly known as Debra Voss) began living

with Glen Waterman in a house Glen owned in Mederville, Iowa, in

March 2000. Glen passed away on May 10, 2008, leaving no will.

Although Glen and Jingles had been longtime companions and had lived

together for eight years, they had never married.

3

On May 20, the district court appointed Glen’s parents, Verdeen

and Loretta Waterman, as administrators of his estate. 1 On May 29, the

administrators served Jingles with a notice to quit, which required her to

vacate within thirty days the home she and Glen had shared for the

previous eight years. Jingles complied with the notice, moving out in

June, and the administrators moved into the home shortly thereafter. 2

Jingles filed a claim in probate on October 10, seeking

reimbursement for her “joint survivor ownership interest in assets of the

estate” and a lien “for improvements made to the estate” while she and

Glen had cohabited. She also filed a document stating she was Glen’s

surviving spouse and noting she would elect to take “her intestate share”

of Glen’s property. On November 6, the administrators filed notices

disallowing these reimbursement and spousal election claims.

After hearings on Jingles’s disputed claims, the district court

determined in August 2009 that Jingles was Glen’s common law spouse 3

at the time of his death and her property interests were therefore

protected under Iowa Code section 633.211. 4 Under that provision,

1For convenience, we refer to Verdeen and Loretta collectively as “the

administrators.”

2The move out process involved significant strain between Jingles and the

administrators, due in part to already strained relations and in part to personal

property ownership disputes that persist today.

3This finding is not disputed by the parties and has not been appealed.

4Section 633.211 of the probate code provides:

If the decedent dies intestate leaving a surviving spouse and

leaving no issue or leaving issue all of whom are the issue of the

surviving spouse, the surviving spouse shall receive the following share:

1. All the value of all the legal or equitable estates in real

property possessed by the decedent at any time during the marriage,

which have not been sold on execution or by other judicial sale, and to

which the surviving spouse has made no relinquishment of right.

2. All personal property that, at the time of death, was, in the

hands of the decedent as the head of a family, exempt from execution.

4

Jingles was entitled as Glen’s surviving spouse to “[a]ll the value of all

the legal or equitable estates in real property possessed by the decedent

at any time during the marriage,” that had “not been sold on execution or

by other judicial sale,” and to which she had “made no relinquishment of

right.” See Iowa Code § 633.211(1) (2007). In addition, Iowa Code

section 561.11 granted Jingles, as Glen’s surviving spouse, certain

homestead rights, which allowed her to “continue to possess and occupy”

the marital home until it was “otherwise disposed of according to law.”

Id. § 561.11.

Soon after the district court recognized her as Glen’s common law

spouse in August, Jingles expressed a desire to return to the marital

home. By March 2010, however, the parties had failed to reach a

resolution of Jingles’s possessory interest in the homestead, and Jingles

continued to live elsewhere. Frustrated with the estate’s inattention to

her claims, Jingles wrote a letter to the district court reporting no

progress had been made in the months since the court’s August 2009

ruling and informing the court the administrators had listed the home for

sale in November 2009.

In early 2010, Daniel and Chasity Bushaw learned the

administrators had listed the home for sale and became interested in

purchasing it, despite their concerns about its condition and the

possibility that Glen’s former wife, Nancy, retained a property interest in

the home. The Bushaws made an offer to purchase the home for the

administrators’ listed price of $20,000. The administrators filed a

petition with the district court in April 2010 seeking approval of the

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3. All other personal property of the decedent which is not

necessary for the payment of debts and charges.

Iowa Code § 633.211 (2007).

5

proposed sale. 5 The court held a hearing on the petition on May 4.

Jingles attended the hearing without counsel. The administrators

contended the real estate should be sold to pay funeral bills, real estate

taxes, and utility bills totaling in excess of $14,000. Jingles objected to

the sale, asserting the utility bills would not have been incurred by the

administrators had they not evicted her from the residence. The

administrators presented evidence tending to prove the fair market value

of the home was $20,000.

Based on the evidence presented at the hearing on the

administrators’ petition, the district court approved the sale of the

residence to the Bushaws. The Bushaws received a deed to the property

on May 21 and took possession.

Jingles appealed the district court’s order on June 4, contending

the court erred in failing to recognize her homestead interest and in

failing to prevent the administrators from engaging in self-dealing in their

handling of the estate. 6 Soon after taking possession, the Bushaws

began making extensive improvements to the roof, septic system,

plumbing, wiring, and other aspects of the property, at a cost of over

$65,000. An appraisal of the residential property—accounting for the

Bushaws’ improvements—assigned to the property a fair market value of

only $41,000.

5The petition sought court approval of proposed sale of the home to the Bushaws

for $20,000 and the sale of an uninhabitable storage building on a separate lot to the

administrators for $4000. The parties do not contest the ownership or possession of

the storage building in this appeal.

6As the Bushaws were not parties in the estate proceedings at the time, there is

no indication in the record tending to establish they received actual notice of Jingles’s

appeal from the order authorizing the sale. We transferred the appeal to the court of

appeals.

6

On June 15, Jingles filed an application requesting the

administrators be required to post a bond in the amount of $100,000.

The motion asserted Jingles had not waived the bond requirement as the

estate’s beneficiary and requested a court order requiring the bond as a

condition of the administrators’ continued service as administrators. A

week later, Jingles filed a petition seeking removal of the administrators,

asserting they were unsuitable under Iowa Code section 633.63(1)(b)

because of their hostility toward her as the estate’s sole beneficiary.

The district court entered an order on July 14, continuing the

hearing on the application to remove administrators. The court noted

that although the administrators had not objected to their removal,

neither party had been able to identify a proposed successor. A

successor was soon identified, however, and on July 29 an order

approved by counsel for the administrators and counsel for Jingles was

entered removing the administrators, ordering them to file a final report.

The administrators filed their final report on August 13, listing

Jingles as the sole heir and beneficiary of the estate, and also listing the

homestead as an asset sold during the administration. Jingles filed an

objection to the final report, contending the sale of the home was in

contravention of her homestead rights.

On March 7, 2011, the court of appeals reversed the district court

order authorizing the sale of the home and remanded the case to the

district court for consideration of Jingles’s homestead interest in

determining a proper disposition of the property. The former

administrators filed an amended final report on March 21. Jingles again

objected and requested payment of fair rental value for the time the

administrators had wrongfully withheld possession.

The Bushaws’ real estate agent, Owen Sylvester, notified the

Bushaws of this development and informed them it might affect their

7

ownership interest in the home. Upon receiving this notice, the Bushaws

stopped making improvements to the home. In April 2011, after Jingles

served them with a notice to quit, the Bushaws filed an appearance in

the estate and moved for a declaration they were the rightful possessors

and owners of the property. 7 Jingles filed a “Statement of Position” on

May 4, asserting her entitlement to “immediate possession of her

homestead, and to reasonable rent for the time that she was wrongfully

dispossessed.”

Cross-motions for summary judgment were thereafter filed by

Jingles and the Bushaws, each asserting entitlement to ownership and

possession of the property. The motions were denied, however, and the

district court held a hearing in April 2012 on the parties’ competing

interests in the real estate. 8 The Bushaws contended they were bona fide

purchasers with no notice of Jingles’s adverse interest, they had made

improvements to the homestead property in good faith, and they were

therefore occupying claimants under Iowa Code section 560.1. Jingles

responded, asserting her homestead rights were superior to any interests

of the Bushaws, the Bushaws were not occupying claimants under Iowa

Code chapter 560 because they had not purchased the property from a

true “judicial sale as required under Iowa Code section 560.2(1),” the

Bushaws had not acted in good faith when purchasing the home and

making their improvements, and she was entitled to rent for the period

during which she had been wrongfully dispossessed of the property.

After an evidentiary hearing on the merits, the district court

determined neither the Bushaws nor Jingles had “acted in bad faith” and

7In October 2011, the Bushaws formally intervened in the estate proceedings,

asserting they were occupying claimants with rights under Iowa Code section 560.1.

8Although the court had appointed a new administrator by the time of the

hearing, the former administrators appeared and were represented by counsel at the

hearing.

8

“[n]either deserve[d] to suffer the inequity” of being ousted from the home

or being saddled with the costs exceeding the appraised value of the

home incurred by the Bushaws in making their improvements. The

court therefore gave Jingles the option of taking possession of the home

upon paying the Bushaws $53,500 9 as compensation for their

improvements, or receiving $20,000—the purchase price of the

unimproved home—from the estate in exchange for relinquishing to the

Bushaws her ownership interest in the property. The court’s order found

the property had no rental value and therefore denied Jingles’s damage

claim for lost rent during the period she was wrongfully denied

possession. Jingles appealed again and we retained the appeal.

II. Scope of Review.

We review probate matters tried in equity de novo. In re Estate of

Whalen, 827 N.W.2d 184, 187 (Iowa 2013); see also Iowa R. App. P.

6.907. Although actions under Iowa Code chapter 560 “must be tried as

in ordinary actions,” see Iowa Code § 560.3, the district court and the

parties expressly stated in the record their belief the trial of this matter

was in equity. Thus our review of the facts in this case is de novo, in

conformity with the manner in which the case was tried below. See Molo

Oil Co. v. City Of Dubuque, 692 N.W.2d 686, 690 (Iowa 2005). Our review

of the district court’s interpretation of statutory provisions, however, is

for correction of errors at law. Whalen, 827 N.W.2d at 187; In re Estate

of Myers, 825 N.W.2d 1, 3–4 (Iowa 2012).

9The district court chose $53,500 based on its calculation of the midpoint

between the total cost of the Bushaws’ improvements and the postimprovement fair

market value of the property.

9

III. Discussion.

A. Positions of the Parties. Jingles first contends her homestead

interest under Iowa Code chapter 561 is superior as a matter of law to

any interest of the Bushaws as occupying claimants under chapter 560.

As Glen’s surviving spouse, Jingles posits she was entitled to “continue

to possess and occupy” the marital home until it was “otherwise disposed

of according to law.” Iowa Code § 561.11. She contends that because

the prior court of appeals decision in this case had the effect of voiding

the sale to the Bushaws, the property has not been disposed of according

to law, and she therefore remains entitled to immediate possession.

Jingles further asserts a homestead is exempt from judicial sale, and she

therefore cannot lawfully be deprived of her possessory interest or her

ownership interest as a consequence of any judgment compensating

occupying claimants for improvements. The district court judgment

cannot stand, she posits, because it would effect an unauthorized

judicial sale of her homestead. See id. § 561.16 (providing a homestead

is “exempt from judicial sale where there is no special declaration of

statute to the contrary”). The option allowed her under the district court

ruling to retain the property if she pays the Bushaws $53,500 for their

improvements, Jingles contends, amounts to a judicial sale because this

record does not support a finding she is able to finance such a

transaction.

Jingles insists the general assembly has made it abundantly clear

the only special declarations of statute authorizing the sale of a

homestead for the satisfaction of debts are found in Iowa Code section

561.21—a section making no reference to the claims of occupying

claimants in its enumeration of the classes of debts for which a

homestead may be sold at judicial sale. See id. § 561.21.

10

Jingles further urges the claim of the Bushaws cannot qualify as a

debt “incurred for work done or material furnished exclusively for the

improvement of the homestead” under Iowa Code section 561.21(3)

because the improvements were not made with her knowledge or

consent. See id. § 561.21(3). Emphasizing that the district court order

authorizing the sale to the Bushaws was reversed by the court of appeals

in the prior appeal, Jingles contends her homestead interest was not

“disposed of according to law” and she is therefore entitled to “continue

to possess and occupy the whole homestead.” See id. § 561.11.

Even if this court were to reject her argument that homestead

interests protected under chapter 561 are always superior to the claims

of occupying claimants, Jingles argues the Bushaws are not entitled to

protection as occupying claimants under Iowa Code chapter 560. First,

Jingles maintains the Bushaws failed to establish color of title because

they did not purchase the real estate at a “judicial sale.” See id. § 560.1

(protecting occupants of real estate having color of title); id. § 560.2(1)

(including purchasers at judicial or tax sales among those deemed to

have color of title within the meaning of chapter 560). Second, Jingles

contends the Bushaws failed to establish they occupied and improved

the property in good faith as required by Iowa Code section 560.1

because they had notice of her adverse claim when they purchased and

subsequently improved it.

The Bushaws contend there is no sound construction of chapters

560 and 561 precluding enforcement of their claims as occupying

claimants under the circumstances presented here. Acknowledging

chapter 561 controls whether a homestead may be sold to satisfy debts,

the Bushaws posit that chapter 560 provides protection for occupying

claimants making good faith improvements in the event the homestead is

11

sold, even if the sale itself is set aside after the improvements have been

made. The Bushaws further assert the compensation owed to them for

work done and materials furnished by them during their occupation

exclusively for the improvement of the subject homestead clearly

qualifies as a debt “incurred for work done or material furnished

exclusively for the improvement of the homestead.” Id. § 561.21(3).

Accordingly, the Bushaws contend their claims as occupying claimants

are neither inferior to, nor defeated by, Jingles’s homestead interest.

The Bushaws further contend the administrators’ sale of the home

with court approval should be characterized as a judicial sale, and thus

their purchase vested them with color of title under Iowa Code section

560.2(1). Even if the sale cannot be characterized as a judicial sale,

however, the Bushaws contend they should be deemed to have occupied

the property under color of title because Jingles knew they were in

possession and making improvements, and she therefore implicitly

consented to the improvements by failing to notify the Bushaws of her

objections. Finally, the Bushaws assert they had no notice of Jingles’s

adverse claims, and therefore their purchase and improvements were

made in good faith, as required by chapter 560.

B. Overview of Relevant Statutory Provisions.

1. Protection of the homestead interest. The purpose of homestead

statutes “is ‘to provide a margin of safety to the family, not only for the

benefit of the family, but for the public welfare and social benefit which

accrues to the State by having families secure in their homes.’ ” Brown

v. Vonnahme, 343 N.W.2d 445, 451 (Iowa 1984) (quoting In re Marriage of

Tierney, 263 N.W.2d 533, 534 (Iowa 1978)). The general assembly has

“chosen to provide special procedures to protect homestead rights, and

has defined this protection in a comprehensive manner.” Martin v.

12

Martin, 720 N.W.2d 732, 738 (Iowa 2006). Recognizing the important

public purpose of the protections established for the homestead interest,

we construe our homestead statute broadly and liberally to favor

homestead owners. In re Estate of Tolson, 690 N.W.2d 680, 682 (Iowa

2005); Elliott v. Till, 219 Iowa 649, 656, 259 N.W. 460, 464 (1935); Hunt,

Hill & Betts v. Moore, 219 Iowa 451, 453, 258 N.W. 114, 115 (1934).

Iowa Code chapter 561 protects the homestead interest of spouses

through carefully crafted limitations on conveyances. See Iowa Code

§ 561.13. Applying the provisions of section 561.13, we have held the

homestead statute invalidated a deed conveying a homestead from a son

to his father when the son’s wife did not join the conveyance, even

though the son and his wife were separated and seeking a divorce.

Martin, 720 N.W.2d at 738–39. Similarly, we recognized the homestead

rights of a surviving spouse when her husband conveyed their

homestead to a third party before his death without her assent. Thayer

v. Sherman, 218 Iowa 451, 456–57, 255 N.W. 506, 509–10 (Iowa 1934).

In furtherance of its purpose of protecting the homestead interest,

the general assembly has expressly limited the circumstances in which a

homestead may be vulnerable to judicial sales for the satisfaction of

debts. Section 561.16 generally provides “[t]he homestead of every

person is exempt from judicial sale where there is no special declaration

of statute to the contrary.” Iowa Code § 561.16. Section 561.21—

enumerating special declarations to the contrary—lists four classes of

debt against which the homestead exemption from judicial sale must

yield. 10

10The four classes of debt recognized in section 561.21 are:

1. Those contracted prior to its acquisition, but then only to

satisfy a deficiency remaining after exhausting the other property of the

debtor, liable to execution;

13

We have previously prescribed a framework for analyzing

homestead exemption claims asserted in the context of judicial sales. In

re Property Seized from Bly, 456 N.W.2d 195, 198 (Iowa 1990). First, we

must determine whether the challenged disposition of the homestead was

a judicial sale “from which homestead property is generally exempt.” Id.

Although “judicial sale” is not defined in the Iowa Code, “[t]he term

generally refers to a sale by authority of a court of competent

jurisdiction, carried out by a person legally appointed and commissioned

by the court for that purpose, and subject to confirmation by the court.”

Id.

In Bly, we noted “it is judicial participation which gives a sale the

character of a judicial sale.” Id. Yet, the meaning of the term is

somewhat elastic in our homestead jurisprudence. We noted in Bly that

one could fairly say “in the absence of statutory definition, the term

‘judicial sale’ is always given a meaning dependent upon the context in

which it is used and the policies to be furthered or frustrated by the

meaning assigned the term.” Id. As illustration of that principle, we note

we have held a judicial sale can occur even in the absence of actual court

proceedings. See id. (citing Sturdevant v. Norris, 30 Iowa 65, 71–72

(1870) (nonjudicial foreclosure sale)); Lucas v. Purdy, 142 Iowa 359, 367–

69, 120 N.W. 1063, 1066–67 (1909) (tax sale); see also Stidger v. Evans,

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2. Those created by written contract by persons having the power

to convey, expressly stipulating that it shall be liable, but then only for a

deficiency remaining after exhausting all other property pledged by the

same contract for the payment of the debt;

3. Those incurred for work done or material furnished exclusively

for the improvement of the homestead; and

4. If there is no survivor or issue, for the payment of debts to

which it might at that time be subjected if it had never been held as a

homestead.

Id. § 561.21.

14

64 Iowa 91, 93, 19 N.W. 850, 851 (1884) (holding an assignment was a

judicial sale though a court neither ordered the sale nor approved it).

Indeed, we noted in Bly that although a forfeiture action did not

technically result in “a sale” because the State paid no consideration,

“the benevolent purposes of the homestead statute would be frustrated

by giving the term ‘judicial sale’ . . . a narrow or technical construction

dependent upon finding a true ‘sale.’ ” Bly, 456 N.W.2d at 199. We have

therefore broadly construed the term for purposes of chapter 561 as

encompassing “any judicially compelled disposition of the homestead,

whether denominated a ‘sale’ or not.” Id.

Under the Bly framework, if a judicial sale of a homestead has

occurred, the court must next determine whether it has been authorized

by a “special declaration of statute.” Iowa Code § 561.16. We turn to a

brief overview of the occupying claimants’ statute as we consider whether

a judicial sale has occurred, and if so, whether it may have been

authorized by the requisite special declaration.

2. Protection of occupying claimants under chapter 560. Under

Iowa Code chapter 560, occupants of real estate with color of title who

are later “adjudged not to be the owner” of the real estate may be

compensated for the value of improvements they have made in good

faith. Id. §§ 560.1, .4. Alternatively, if the true owner elects not to pay

the value of the improvements and retake the property, the occupying

claimant may pay the true owner “the value of the property exclusive of

the improvements and take and retain the property together with the

improvements.” Id. § 560.4.

Occupants may establish color of title in this context if they have,

among other statutory possibilities, purchased the property “in good faith

15

at any judicial or tax sale.” Iowa Code § 560.2(1). 11 The purchaser at a

judicial or tax sale made by a proper officer may be found to have acted

in good faith regardless whether the officer had sufficient authority to

make said sale “unless want of authority in such officer was known to

the purchaser at the time of the sale.” Iowa Code § 560.2(1). Thus, as

long as occupying claimants have purchased in good faith, they may

acquire color of title even at an unauthorized sale. See Parsons v. Moses,

16 Iowa 440, 442 (1864). Occupying claimants may also achieve color of

title if, during an occupancy lasting less than five years, they have made

valuable improvements to the land with the true owner’s express or

implied knowledge or consent. See Iowa Code § 560.2(3).

The rights of occupying claimants under Iowa Code chapter 560

are based on equitable principles of restitution. Although the statute

provides protection for the interests of occupying claimants, we cannot

adequately consider equitable issues of this kind solely by reference to

the statute. As the Restatement (Third) of Restitution explains, “a

problem of mistaken improvement cannot be comprehensively considered

. . . without reference to the broader principles of restitution that the

betterment acts incorporate.” Restatement (Third) of Restitution &

Unjust Enrichment § 10 cmt. b, at 113 (2011) [hereinafter Restatement

11At trial the Bushaws asserted they also had color of title under Iowa Code

section 560.2(4), which deals with tax payments and owner reimbursements. They

have not briefed that issue on appeal. We therefore deem this argument waived and

need not consider it further here. See Travelers Indem. Co. v. D.J. Franzen, Inc., 792

N.W.2d 242, 251 (Iowa 2010) (“Franzen has not asserted the timeliness issue on appeal.

It is therefore waived.”); City of Asbury v. Iowa City Dev. Bd., 723 N.W.2d 188, 198 (Iowa

2006) (“Asbury failed to articulate this [due process] claim in its brief . . . . Accordingly,

Asbury has waived this argument and we do not address it further.”). We note

occupants may also obtain color of title under the statute if they have occupied the

property for five continuous years or if they have occupied the property under “state or

federal law or contract.” Iowa Code § 560.2(2), (5). Those alternatives are inapplicable

here.

16

(Third) of Restitution]. Yet, we must be cautious in this inquiry, because

“[t]hose who venture into the restitution thicket not infrequently become

lost.” Snider v. Dunn, 160 N.W.2d 619, 628 (Mich. Ct. App. 1968) (Levin,

P.J., dissenting).

Examining applicable general principles of restitution, we note

under the common law doctrine of accession, improvements made to real

estate generally “lose their separate identity . . . and become a part of the

land.” Kelvin H. Dickinson, Mistaken Improvers of Real Estate, 64 N.C. L.

Rev. 37, 38–39 (1985) [hereinafter Dickinson]; see also Parsons, 16 Iowa

at 444 (“Improvements annexed to the freehold, the law deems part of

it[.]”). If the improvements are made by someone who occupies land but

is not the true owner, however, there exists a danger “the owner of the

land may be enriched unjustly if the improver is ejected without

requiring compensation from the owner.” Dickinson, 64 N.C. L. Rev. at

39; see also Read v. Howe, 49 Iowa 65, 67 (1878) (“It is eminently proper

that . . . the owner of the land [be] prevented from gaining what he has

not paid for.”). This danger is particularly acute when “the value of the

improvements greatly exceeds the value of the unimproved property.”

Restatement (Third) of Restitution § 10 cmt. a, at 111. To avoid this

danger of unjust enrichment, the Restatement explains, “effective relief to

the improver may require subjecting the landowner to an involuntary

exchange.” Id.

C. Analysis of the Application of the Homestead Protections

and Occupying Claimants’ Protections in This Case. As we have

already noted, we construe chapter 561—the homestead statute—broadly

and liberally to favor homestead owners and protect homestead rights.

See Martin, 720 N.W.2d at 738; Tolson, 690 N.W.2d at 682. Similarly,

because chapter 560, the occupying claimants’ statute, is based on

17

equitable principles, we also construe it broadly and liberally “ ‘so as to

do, as far as possible under its provisions, complete justice between the

parties.’ ” Betz v. Sioux City, 239 Iowa 95, 100, 30 N.W.2d 778, 780

(1948) (quoting Stump v. Hornback, 18 S.W. 37, 39 (Mo. 1891)); see also

Meyers v. Canutt, 242 Iowa 692, 696–97, 46 N.W.2d 72, 75–76 (1951);

Benton v. Dumbarton Realty Co., 161 Iowa 600, 605, 143 N.W. 586, 588

(1913) (holding the occupying claimant provisions are “remedial in

character [and] should be construed as to effectuate the objects

intended”); Restatement (Third) of Restitution § 10 cmt. a, at 112

(“Modern decisions allow restitution for mistaken improvements more

liberally than in the past because the tendency of modern law is to judge

the equities between the parties on a case-by-case basis.”). In Meyers,

for example, we held an occupying claimant was entitled to

compensation for valuable improvements, because allowing the true

owner to reap the benefits at no cost would have been inequitable. 242

Iowa at 700, 46 N.W.2d at 77.

Both statutes were codified very early in Iowa’s history. See Iowa

Code § 1233 (1851) (occupying claimant); id. § 1245 (homestead). Both

came before us in very early cases. See Bridgman v. Wilcut, 4 Greene

563, 565–66 (Iowa 1854) (discussing the enactment of the homestead

exemption); Wright v. Stevens, 3 Greene 63, 65 (1851) (“[The occupying

claimant statute] is an equitable statute. It is entitled to such a

construction as will make it effective, and subservient to the object of its

equitable provisions.”).

With the foregoing legal principles in mind, we examine the

competing interests of Jingles and the Bushaws here. We begin with the

question of whether the district court’s ruling on remand effected a

18

judicial sale in violation of Jingles’s rights under chapter 561. 12 The

ruling gave Jingles a choice of alternative remedies. The first alternative

gave her the opportunity to accept $20,000—the sale proceeds paid by

the Bushaws to the estate—in consideration for conveying title to the

Bushaws. If Jingles had rejected this cash option, the framework of the

district court’s ruling permitted an alternate choice, allowing her to

retain ownership of the property and compensate the Bushaws for the

improvements they made to the property.

We conclude we need not decide whether either or both of these

alternatives effected a judicial sale under section 561.16 and this court’s

prior decisions applying it because, as more fully explained below,

recognition of Jingles’s homestead interest does not—as a matter of law—

dispose of the Bushaws’ interests as occupying claimants. As noted,

both statutes are to be construed broadly, and any dispute involving the

occupying claimants must be analyzed with the occupying claimants’

12We note the right of homestead occupancy under Iowa Code section 561.11 is

not of indefinite duration. Rather, we have explained it is intended to be temporary.

See Wadle v. Boston Market Co., 195 Iowa 46, 49–50, 191 N.W. 528, 529–30 (1923). We

have said:

[T]he right to continue and occupy[] has its limitations, and ceases when

the property is otherwise disposed of according to law, and it is so

disposed of when the survivor elects to take a distributive share in the

entire property of the deceased spouse. On such election the right to

continue in the occupancy of the homestead ceases.

Voris v. West, 180 Iowa 138, 142, 162 N.W. 836, 837 (1917). Disposition according to

law, in other words, may occur when a surviving spouse decides to take a share of the

decedent’s property. Here, Jingles has done exactly that. She claimed her intestacy

share and the district court found in her favor in August 2009. Under Iowa Code

section 633.211, her intestacy share was the entire value of Glen’s estate. See Iowa

Code § 633.211. The August 2009 order therefore “otherwise disposed of [the property]

according to law,” vesting title in Jingles and ending her temporary right to occupancy

under section 561.11. See Iowa Code § 561.11 (providing that “setting off of the

distributive share of the survivor in the real estate of the deceased shall be such a

disposal of the homestead as is herein contemplated”). Jingles’s right to occupy the

home was thus made permanent under chapter 633 and succeeded her temporary right

of possession under § 561.11.

19

statute’s equitable origins in mind. Neither statute makes specific

reference to the other, and extending appropriate protection to Jingles’s

homestead interest here need not require us to extinguish the Bushaws’

interest as improvers. Thus, for purposes of our analysis, we assume,

without deciding: (1) the district court order did effect a “judicial sale” as

that term is defined for purposes of chapter 561, (2) no special

declaration of statute authorized such sale, and (3) Jingles’s homestead

interest was therefore exempt from sale under section 561.16. 13 Having

made these assumptions, we turn to the questions of whether and to

what extent the Bushaws are entitled to protection under chapter 560 as

occupying claimants.

The parties dispute whether the Bushaws established color of title

through the purchase of the real estate at a judicial sale for purposes of

chapter 560. See Iowa Code § 560.1 (protecting occupants of real estate

having color of title); id. § 560.2 (including purchasers at judicial or tax

sales among those deemed to have color of title within the meaning of

chapter 560). We conclude the district court order authorizing the sale

of the property to the Bushaws clearly resulted in a judicial sale within

the meaning of section 560.2(1). 14 The Bushaws took possession only

13We reject the Bushaws’ contention that they are owed a debt “for work done or

material furnished exclusively for the improvement of the homestead.” Iowa Code

§ 561.21(3). Section 561.21(3) surely cannot be read in a manner exposing the

homestead to judicial sale for the value of improvements made without the consent of

the owner after she has been wrongfully evicted from the property. The structure of

chapter 561 supports our conclusion on this point. A homestead is defined as “the

house used as a home by the owner.” Id. § 561.1(1) (emphasis added). This usage

suggests the homestead is presently used as a home by the owner; implying, in other

words, that the owner is the person currently occupying the homestead. Given this

framework, “the homestead” in section 561.21 must refer not only to the real property

as a location, but also to the property’s use.

14We reject, however, the Bushaws’ assertion they made the improvements with

Jingles’s express or implied knowledge or consent. See Iowa Code § 560.2(3)

(recognizing color of title of person who has occupied for fewer than five years if

improvements are made with knowledge or consent of the real owner). Although Jingles

20

after receiving a court officer’s deed from the administrators who had

been granted authorization to make the conveyance. Yet, the imprimatur

of the court’s authorization of the purchase is not, standing alone,

enough to bestow status as an occupying claimant under chapter 560.

The Bushaws are entitled to protection as occupying claimants only if

they acted in good faith both as to the purchase and in making the

improvements. Id. §§ 560.1, .2(1).

“The good faith standard under the occupying claimant statute is a

lesser standard of ‘goodness’ than that involved in bona fide purchaser

status[.]” Moser v. Thorp Sales Corp., 312 N.W.2d 881, 894 (Iowa 1981).

“[W]e are not disposed to put upon the words good faith, as used in the

statute, any technical construction. We think that they are to be taken

in their ordinary acceptation.” Read, 49 Iowa at 67–68. We note this

conception of good faith under chapter 560 differs from the conception

we have applied in the quiet title context. In quiet title scenarios, the

good faith standard requires a purchaser to “show the purchase was

made without either actual or constructive notice of existing rights in the

property.” Sun Valley Iowa Lake Ass’n v. Anderson, 551 N.W.2d 621,

638 (Iowa 1996) (emphasis added). By contrast, in the improvement

context, the good faith standard has a different threshold. See Moser,

312 N.W.2d at 894; Meyers, 242 Iowa at 698, 46 N.W.2d at 76.

Accommodation of this different threshold requires us to avoid defining

good faith in this case with any “narrow or technical meaning,” because

“[t]o do so would not give to chapter 560 the broad and liberal

interpretation we have held it should receive.” Meyers, 242 Iowa at 698–

______________________________

knew the Bushaws were occupying the premises, she persistently objected to their

occupancy and maintained she was the real owner whose homestead interest had been

wrongfully invaded.

21

99, 46 N.W.2d at 76; see also Read, 49 Iowa at 67–68; Dickinson, 64

N.C. L. Rev. at 60 (“Carried to an extreme [a requirement that good faith

improvers lack constructive notice] could eliminate most claims for

mistaken improvement. . . . Fortunately, the courts have not been too

literal or rigid in their application of these principles.”).

Accordingly, we have said the good faith of occupying claimants is

measured by “the actual, existing state of mind, whether so from

ignorance, sophistry, or delusion, without regard to what it should be

from given legal standards.” Meyers, 242 Iowa at 698, 46 N.W.2d at 76;

accord Read, 49 Iowa at 66 (concluding occupying claimants act in good

faith if they have an honest belief and “had no actual notice of an adverse

claim”). In other words, actual notice of a lack of authority precludes

good faith; mere constructive notice does not. We further observed in

Read that “if constructive notice of an adverse claim excludes good faith

within the meaning of the statute, there would be no case in which an

occupying claimant” could recover. Id. at 67 (emphasis added). The test

for good faith in chapter 560 for occupying claimants is therefore clearly

a subjective—not an objective—test. See Sieg Co. v. Kelly, 568 N.W.2d

794, 804 (Iowa 1997) (compiling various cases’ definitions of good faith

and including Meyers in the “subjective” category). As one authority has

explained, “the improver must have an honest belief in his or her

ownership of the land.” Dickinson, 64 N.C. L. Rev. at 59; see also

Meyers, 242 Iowa at 698, 46 N.W.2d at 76 (defining good faith in the

improvement context to include only “the actual, existing state of mind”).

Constructive notice cannot, therefore, negate an improver’s good faith as

it can for purported bona fide purchasers. See Restatement (Third) of

Restitution § 10 cmt. e, at 116 (“Standing by itself, the fact that an

appropriate search of the record would have disclosed the improver’s

22

mistake does not automatically bar relief to the improver . . . .

Knowledge, or what is often called ‘actual notice,’ is fatal to the

improver’s claim.”).

Although the good faith test for occupying claimants is subjective,

it does not permit a stubborn claimant to insist his genuine but clearly

baseless belief entitles him to compensation. Instead, “[g]ood faith at

least requires some reasonable basis for the belief” the improver has title.

Resnick v. City of Fort Madison, 259 Iowa 578, 581, 145 N.W.2d 11, 13

(1966). In other words, reliance on naiveté will not constitute good faith.

Cf. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wright, 840 N.W.2d 295,

299–301 (Iowa 2013) (disciplining an attorney despite the fact he

“honestly believed—and continues to believe—that one day a trunk full of

. . . one hundred dollar bills” would appear at his office, in part because

several documents of purported foreign origin, which were “facially of

doubtful validity,” formed the basis for his belief). We look to several

factors as bases for good faith in other contexts, including, for example

reliance on the advice of counsel, payment of taxes, and improvement of

land at personal expense. See City of Riverdale v. Diercks, 806 N.W.2d

643, 657 (Iowa 2011) (advice of counsel); Resnick, 259 Iowa at 581, 145

N.W.2d at 13 (taxes); Meyers, 242 Iowa at 698–99, 46 N.W.2d at 76–77

(taxes and improvements). Here, as we have noted, the Bushaws relied

on both the court’s approval of the sale and an attorney’s title opinion.

With respect to reliance on court approval, we note section

560.2(1) establishes color of title in a purchaser at judicial sale whether

the officer authorizing or making the sale “had sufficient authority to

make said sale or not, unless want of authority in such officer was

known to the purchaser at the time of the sale.” Id. § 560.2(1). Jingles

contends the Bushaws cannot establish their good faith at the time of

23

their purchase under this standard because they had notice of her

adverse claim. More specifically, Jingles asserts her presence at the

court hearing on the proposed sale of the property and her objection to

the sale constituted sufficient notice to the Bushaws of the

administrators’ lack of authority to sell the property. The record does

not, however, establish the Bushaws were in the courtroom at the time of

the hearing. Moreover, Jingles’s objection to the sale could not, by itself,

have established conclusively for purposes of notice that the

administrators lacked authority. The district court, after all, had rejected

her opposition and authorized the sale. Based on the court’s approval of

the sale, we believe, the Bushaws reasonably harbored a subjective belief

the sale was valid. See Dickinson, 64 N.C. L. Rev. at 60 (“An improver

who learns that he or she definitely is not the owner . . . should be

denied recovery.” (Emphasis added.)).

The Bushaws also cannot establish good faith, Jingles adds,

because an appeal from the order authorizing the sale was pending when

they obtained their deed. The Bushaws note the transaction closed on

May 21, 2010, and Jingles did not file a notice of appeal until June 4.15

We acknowledge the window for filing an appeal had not expired at the

time the conveyance occurred, and we have previously explained “one

cannot be a good-faith purchaser who relies upon a judgment or decree

which is subject to appeal and reversal by a higher tribunal.” Rine v.

Wagner, 135 Iowa 626, 629–30, 113 N.W. 471, 472–73 (1907), overruled

on other grounds by Nat’l Bank of Burlington v. Huneke, 250 Iowa 1030,

1037, 98 N.W.2d 7, 12 (1959). Rine, however, was a quiet title case, and

as noted above, we may have good reason to diverge from straightforward

15The record does not indicate the notice of appeal was served on the Bushaws

or their attorney, but the notice was of course public record as a court filing.

24

application of our quiet title principles in scenarios involving occupying

claimants.

The Bushaws also “actively ignored signs and direct statements,”

Jingles contends, that would have alerted them to the administrators’

lack of authority to sell the property. Among these signs and statements,

she includes: her pro se letter to Judge Bauercamper in March 2010

complaining of the administrators’ failure to relinquish possession of the

property, a letter from Jingles’s attorney to the Bushaws in March 2011

asserting the Bushaws were not bona fide purchasers for value, and

several documents filed by Jingles’s attorney between October 2011 and

commencement of the trial in February 2012. With the exception of the

pro se letter, however, none of these documents were created or filed

until 2011 or 2012, well after the sale in May 2010. We cannot find,

therefore, these documents would have alerted the Bushaws to the

administrators’ lack of authority at the time of their purchase. As for the

March 2010 letter, we find no evidence tending to prove it was filed in the

probate or that the Bushaws had actual knowledge of it.

Jingles also asserts the Bushaws must be deemed to have had

knowledge of the selling officers’ want of authority because agents

representing the Bushaws in the real estate transaction had actual

notice of Jingles’s homestead interest. The agents with such knowledge,

Jingles contends, were Ray Peterson, Dan Bushaw’s step-father; Owen

Sylvester, the Bushaws’ realtor; and the attorney who prepared the title

opinion for the Bushaws.

Jingles had, prior to the conveyance, informed Peterson of her

opposition to the sale. Peterson acted as the Bushaws’ agent, Jingles

contends, because Peterson “saw Dan Bushaw ‘every day during the

week’ and [was his] step-father and boss.” We decline to find, however,

25

this recurring contact and familial relationship alone created an agency

relationship. An agency relationship is not generally established in the

absence of some indication by the principal to the agent “that the agent

shall act on the principal’s behalf and subject to the principal’s control.”

Restatement (Third) of Agency § 1.01, at 17 (2006); see also Peak v.

Adams, 799 N.W.2d 535, 546 n.2 (Iowa 2011).

Evaluating the record for evidence of an agency relationship

between Peterson and the Bushaws, we note evidence indicates Peterson

had informed Dan Bushaw the house was for sale. Peterson also

testified he spoke on the telephone with Sylvester and suggested the

Bushaws might be interested in buying the property, but there is no

evidence supporting a finding the Bushaws had asked him to have this

conversation. Similarly, although the record contains evidence

suggesting Peterson contacted Jingles to inquire about the availability of

the property, no evidence establishes he did so at the Bushaws’ direction.

Because we find no manifestation of the Bushaws’ intent Peterson would

act as their agent, we cannot conclude an agency relationship or

authority arose in connection with the judicial sale, and we cannot

conclude the Bushaws should be charged with Peterson’s knowledge of

Jingles’s homestead interest or her related claim the officers selling the

property lacked authority to sell it.

With respect to Sylvester, the Bushaws’ realtor, we note his

testimony indicated he knew of Jingles’s objection to the sale given his

presence at the hearing. His testimony also indicated, however, he had

observed Judge Bauercamper approve the sale, and he had relayed to the

Bushaws only the fact that the sale had been approved by the court.

Similarly, the title attorney’s title opinion prepared for the Bushaws in

March 2010 does not mention Jingles’s claim. And although the abstract

26

of title included an entry revealing the district court’s determination in

2009 that Jingles was Glen’s common law surviving spouse and was

entitled to an interest in the estate pursuant to our probate laws, there is

no evidence tending to prove the Bushaws had knowledge of this

information at the time of conveyance. Thus, although the Bushaws’ title

may have been defective, we conclude their receipt of the court officer’s

deed to the property provided a reasonable basis for their good faith

belief they had title. See Resnick, 259 Iowa at 580–82, 145 N.W.2d at

13–14 (finding, by contrast, no good faith where occupiers paid taxes on

property but knew they “were paying rent to the city and recognized the

right of the city to lease the land”).

Jingles also argues Peterson, acting as the Bushaws’ agent, had

knowledge destroying the Bushaws’ good faith during the period after the

purchase in which they made their improvements. Jingles asserts, for

example, Peterson “was also [the] Bushaws’ agent in completing some of

the improvements to the property,” and that he knew of Jingles’s adverse

claim while performing in this capacity. But Peterson’s assistance with

and completion of improvements, we conclude, merely made him an

employee or contractor for the purpose of completing those tasks—any

agency relationship that may have arisen pertained to the construction.

If an agency relationship developed on those facts, in other words, its

scope was apparently limited to the purchase of materials and

performance of construction work, and had no bearing on the Bushaws’

color of title. See, e.g., Soults Farms, Inc. v. Schafer, 797 N.W.2d 92, 100

(Iowa 2011) (“Logically, the scope of an agency relationship must have

boundaries.”). In a principal–agent relationship, the agent has authority

only to “take action designated or implied in the principal’s

manifestations to the agent and acts necessary or incidental to achieving

27

the principal’s objectives.” Restatement (Third) of Agency § 2.02(1), at

89. Agents generally maintain a duty to act only within the scope of their

authority. Id. § 8.09(1), at 354. Any knowledge Peterson possessed

regarding Jingles’s adverse claim was immaterial to his duty accruing as

an agent at the time the improvements were being made—as it was at the

time of the purchase. In short, we find no record evidence indicating the

Bushaws were made aware, or should have been made aware, of the

knowledge possessed by Peterson.

We therefore conclude the Bushaws were good faith purchasers at

a judicial sale for purposes of chapter 560, entitling them to

compensation for their improvements. 16 We turn to the determination of

appropriate remedies. 17

D. Remedies. As we have noted, the district court ruling gave

Jingles the opportunity to choose between two alternatives: she could

16Having determined the Bushaws are occupying claimants entitled to protection

under chapter 560, we need not decide whether they might be entitled to restitution for

added value under a common law unjust enrichment theory. See Restatement (Third)

of Restitution § 10, at 111; id. § 27, at 396–97; see also McIntosh v. Borchers, 266

N.W.2d 200, 203 (Neb. 1978). We note, however, the Restatement (Third) of Restitution

contemplates a scenario much like the one presented here and concludes restitution

should generally be available to the improver: “A builds a house on land purchased at a

judicial sale from the estate of B. It is subsequently determined that the sale was

altogether void and that [the property] belongs to C, B’s devisee. B’s estate has been

dissolved. A has a claim in restitution against C.” Restatement (Third) of Restitution

§ 10 cmt. c, illus. 1, at 115.

17Iowa Code section 560.4 provides as follows:

The owner of the land may thereupon pay to the clerk of the

court, for the benefit of the occupying claimant, the appraised value of

the improvements and take the property and an execution may issue for

the purpose of putting the owner of the land in possession thereof.

Should the owner fail to make such payment within such reasonable

time as the court may fix, the occupying claimant may pay to the clerk of

the court, within such time as the court may fix, for the use of the owner

of the land, the value of the property exclusive of the improvements and

take and retain the property together with the improvements.

Iowa Code § 560.4.

28

accept $20,000 in consideration for the relinquishment of her ownership

and possessory interests, or she could retain ownership and pay the

Bushaws $53,500. We agree with Jingles that the district court erred in

its formulation of the second alternative. Iowa Code section 560.4 grants

the owner of improved land the option of paying the occupying claimant

“the appraised value of the improvements.” As the property had a value

of $20,000 before the improvements were made, and an appraised value

of $41,000 afterward, we conclude Jingles may retake possession upon

payment to the clerk of district court in the amount of $21,000 less any

credit to which she may be entitled from the Bushaws for rent during the

period Jingles has been dispossessed. See Iowa Code § 560.4.

With respect to the question of rental credit, 18 we have previously

examined similar questions in cases interpreting early versions of our

occupying claimants’ statute. See, e.g., Childs v. Shower, 18 Iowa 261,

274–75 (1865); Dungan v. Von Puhl, 8 Iowa 263, 271–72 (1859). In

Dungan we explained:

The owner is entitled to rents and profits according to the

value of the land, for the purpose to which it is devoted by

the occupant. The occupant is to pay what the use of the

land is worth to him. In such a rule, we think, there will

nothing be found inequitable. It does not require the

occupant to pay rent on improvements made by himself.

But it does require him to pay rent according to the

increased adaptation of the land for the purpose for which it

is used, though such adaptation has been brought about by

the occupant’s own labor. It is difficult to lay down a rule

that will work alike fairly and equitably in all cases . . . . All

that we can say is, that the occupant is to be charged for the

rents, whatever the use of the property has been worth to

him . . . .

18We note that while Jingles expressly asserted a claim for rent against the

former administrators in the district court, the portion of her appeal brief requesting

rent as relief makes specific reference only to rent due from the Bushaws. We address

only that issue here and give no further consideration in this appeal to the question of

what, if any, rent Jingles may be entitled to from the administrators.

29

....

Under our statute, the occupant of land under color of

title, who is found not to be the rightful owner thereof, is to

be paid for valuable improvements, made by him in good

faith; and their value is to be ascertained by their worth at

the time the appraisement is made. As resulting from this

rule, we think he should not be charged with the rent of the

improvements made by him, but should pay whatever the

land has been worth to him.

Dungan, 8 Iowa at 269–71. The purpose for awarding rent, we recognize,

is “to avoid undue prejudice to the owner” when the remedy for mistaken

improvements “subjects the owner to a forced exchange.” Restatement

(Third) of Restitution § 10, at 111. Application of those principles here

indicates Jingles is entitled to back rent for the period during which she

has been excluded from the homestead.

Here, we note the district court has found the home had no rental

value because it was in dire need of repair—“dirty, unke[m]pt and

scattered with cobwebs,” with slanted floors, an attic full of bat

excrement, no functioning bathtub or shower, and no potable water. The

district court declined to award Jingles a rent offset against the

appraised value of the Bushaws’ improvements as a result of these

findings. Jingles contends, however, the district court’s finding of no

rental value was not supported by the evidence and asserts fair rental

value should be assessed at $250 or $300 per month.

In other contexts, where property has been located adjacent to a

nuisance, or has otherwise presented less than optimal occupancy

conditions, we have generally concluded the property nevertheless has

some nonzero rental value. See, e.g., Gacke v. Pork Xtra, L.L.C., 684

N.W.2d 168, 171, 185 (Iowa 2004) (explaining trial court could award

diminished rental value for property located 1300 feet from hog

confinement facilities); Schlotfelt v. Vinton Farmers’ Supply Co., 252 Iowa

30

1102, 1114–15, 109 N.W.2d 695, 701–02 (1961) (finding substantial

evidence supporting property rental value of $90 per month in absence of

nuisance, or $25 in presence of nuisance); Franke v. Kelsheimer, 180

Iowa 251, 259–60, 163 N.W. 239, 242–43 (1917) (concluding untillable

farmland, which was “thickly covered with Russian thistles, cockleburs,

and sunflowers” nevertheless had rental value of $1 an acre, while noting

rental value would have been $5 or $6 per acre in the absence of those

conditions). On the other hand, we have explained if the party seeking

rent makes “no showing as to what the reasonable rental value was,”

there is no basis upon which damages can be established. See Ditch v.

Hess, 292 N.W.2d 397, 398 (Iowa 1980).

At least one court has addressed the question of whether property

in a state of deplorable disrepair may nevertheless retain some rental

value. See Simon v. Mock, 331 S.E.2d 300, 302–03 (N.C. Ct. App. 1985).

In Simon, the trial judge below had denied a rental claimant any

recovery, on the ground the claimant had failed to adequately prove fair

rental value, despite testimony supporting a rental value of about $150 a

month. See id. The appellate court reversed, noting:

While the trial judge had the authority to believe all,

any or none of plaintiff’s testimony . . . he did not have the

authority to refuse to assign any rental value to the land at

all. Even if the house on the property were fallen down or

demolished, the land would still have a rental value. We do

not believe that the judge reasonably could have inferred

from defendant’s evidence that the house was in such poor

condition that the property had no value whatsoever.

Id. at 303. Although the Simon court did not convey much description of

the house’s condition, the analysis suggests real estate will generally

retain some rental value, regardless the condition of the fixtures. See id.;

see also Laughlin v. Laughlin, 229 P.3d 1002, 1007 (Alaska 2010)

(upholding, in divorce case, lower rental value for marital home based on

31

state of significant disrepair, but concluding value was to be reduced

rather than eliminated).

In the habitability context, courts have also ordered rent amounts

reduced—but not eliminated—when dwellings are in very poor condition.

See, e.g., Berzito v. Gambino, 308 A.2d 17, 18–19, 21, 24 (N.J. 1973)

(reinstating a trial court’s determination that a property’s rental value

was $75/month despite findings that the “screens and storm windows

were either broken or missing, a number of windows were boarded up

where the panes had been broken, several radiators were not to be

found, there were holes in the floors and wall, plaster was falling, several

electric fixtures were inoperable, there was a sewage backup in the cellar

and the premises were infested with roaches and rodents”); C.F. Seabrook

Co. v. Beck, 417 A.2d 89, 91–92, 99 (N.J. Super. Ct. App. Div. 1980)

(examining whether rental value of $75/month was inappropriately low,

despite “sewage problem[s], drainage problems, exposed wires and rotted

wood in the foundation”); Samuelson v. Quinones, 291 A.2d 580, 581,

583 (N.J. Super. Ct. App. Div. 1972) (per curiam) (approving rental value

of $60/month for a property with “defective conditions relating to the gas

range [and] kitchen sink, pipe leakage, broken window[s], cracked walls,

[a] hanging bathroom door, [and] cracked and chipped plaster”).

Based on these principles, we find Jingles is entitled to rent from

the Bushaws at the same rate of $250 per month for the period

beginning when they took possession of the property and running until

they pay Jingles the value of the property exclusive of the improvements,

or until Jingles pays the Bushaws the appraised value of the

improvements less any rental value. This finding allocates to Jingles the

rental value of the property as it existed before the Bushaws began

improving it. The finding is consistent with the proposition that

32

occupants of land under color of title “should not be charged with the

rent of the improvements made by [them], but should pay whatever the

land has been worth to him.” Dungan, 8 Iowa at 271–72; see also Childs

v. Shower, 18 Iowa 261, 274–75 (1865). Although we recognize this may

appear a harsh remedy, we believe the Bushaws are not left without

other prospects for remedy, as they may assert claims against any

persons having legal responsibility for their damages.

IV. Conclusion.

We therefore affirm as modified the district court’s ruling and

remand with instructions. The district court shall enter judgment as

provided by one of the following formulas: (1) If Jingles elects not to pay

the Bushaws the appraised value of the improvements and elects instead

to transfer title to the Bushaws, the amount of the judgment in her favor

against the estate and the Bushaws shall be determined by adding the

sum of $20,000 plus the sum of $250 per month times the number of

months from the date of the conveyance by the estate to the Bushaws

until the date of judgment; or (2) If Jingles elects to retain the property

and pay the Bushaws the appraised value of the improvements, the value

of the judgment against Jingles shall be determined by subtracting from

$21,000 the amount of $250 per month multiplied by the number of

months having elapsed since the conveyance from the estate to the

Bushaws. The costs of this appeal shall be taxed one-half to Jingles and

one-half to the Bushaws.

AFFIRMED AS MODIFIED AND REMANDED WITH

INSTRUCTIONS.