stating the Witzke court “reasonably determined that holding the estate liable for an administrator’s fraud was an undesirable reason to reopen the estate”
How later courts described this case
- stating the Witzke court “reasonably determined that holding the estate liable for an administrator’s fraud was an undesirable reason to reopen the estate”
- finding that a “first right of purchase” provided in a will as an option exercisable within the four month term provided for by the will
- stating the Lynch court “noted ‘equitable principles’ favored reopening the estate to prevent the [executor] from profiting from its mistake at the expense of the beneficiaries”
- noting that, on de novo review, weight is given to the trial court’s factual findings, particularly regarding credibility of witnesses
Written by the judges who cited it.
The opinion
IN THE SUPREME COURT OF IOWA
No. 09–1105
Filed August 19, 2011
IN THE MATTER OF THE ESTATE OF RALPH ROETHLER, Deceased,
KENT LEWIS and BECKY LEWIS,
Appellees.
vs.
ANGELA M. KUEHN, CHERYL L. UPTON, JACQUELYN F.
BETSWORTH, DANIEL W. ROETHLER, MARY ANNE JAMES, JAMES
F. ROETHLER, DONALD A. ROETHLER, CONSTANCE L. DUKE,
GERALD E. ROETHLER, KATHLEEN S. GOOD, JOHN M. ROETHLER,
DANIEL LEE HOMAN, and FRANK E. HOMAN,
Appellants.
R. STEPHEN HANKENS,
Intervenor-Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Cherokee County, Nancy L.
Whittenburg, Judge.
Petitioners seek further review of court of appeals decision
reversing district court order to reopen estate. COURT OF APPEALS
DECISION VACATED; DISTRICT COURT JUDGMENT AFFIRMED.
Frank J. Comito of Neu, Minnich, Comito & Neu, P.C., Carroll,
Erin E. McCullough of the Law Offices of Erin E. McCullough, Lake View,
and David P. Jennett, Storm Lake, for appellees.
2
George W. Wittgraf of Sayre, Wittgraf & Meloy, Cherokee, for
appellants.
Steven T. Roth of Roth Law Office, Storm Lake, for intervenor-
appellee R. Stephen Hankens.
3
ZAGER, Justice.
In this appeal, we must determine when the district court can
properly reopen a probate estate under Iowa Code section 633.489
(2009). Becky and Kent Lewis (“Lewises”), plaintiffs, sought to reopen
Ralph Roethler’s estate to allow them to exercise a “first right to
purchase” eighty acres of farmland. The executor of the estate did not
notify the Lewises that the will contained this right during the
administration of this estate. The district court held the Lewises met the
statutory grounds set out in section 633.489 to reopen Ralph Roethler’s
estate. The court of appeals reversed, holding the Lewises’ petition to
reopen was time-barred under section 633.488, which controls when an
estate’s final accounting and settlement agreement may be reopened. On
further review, we find the Lewises’ petition to reopen satisfied the
statutory grounds set forth in section 633.489 to reopen an estate. We
also find the district court properly construed the will to permit the
Lewises to exercise their first right of purchase irrespective of the
executor’s intent to sell the land. Accordingly, the decision of the court
of appeals is vacated, and the district court’s judgment is affirmed.
I. Background Facts and Proceedings.
In 1987, the Lewises entered into a lease to farm two parcels of
property owned by Ralph and Marjorie Roethler. One parcel was eighty
acres owned solely by Ralph. The other parcel was 160 acres owned
solely by Marjorie. The Roethlers lived in a home in Aurelia, owned by
Ralph. The Lewises and their children also rented the farmhouse located
on Marjorie’s parcel. This arrangement continued through 1994. During
this time, the relationship between the Lewises and the Roethlers grew
close. The Roethlers had no children, but Marjorie baked birthday cakes
for the Lewises’ children. Kent Lewis made improvements to the
4
farmstead, and the Roethlers offered the Lewises other considerations
like interest free loans and a discounted vehicle.
On February 1, 1994, Ralph executed his last will and testament.
Attorney Stephen Hankens drafted the will. Paragraph V of the will
provided:
V. I herein give Kent Lewis and Becky Lewis the first right of
purchase to the following described real estate, to-wit:
80 Acres in Diamond Township, Section One; at the
appraised value in the Estate. This right to purchase shall
be given them for a period of four months from my date of
death. Notice of said right to purchase shall be filed in my
Estate in writing.
The eighty-acre parcel of farm real estate listed in section V is the subject
of this dispute. At the time of Ralph’s death, it was valued at $140,600.
The Lewises always intended on purchasing farmland of their own.
Toward the end of 1994, the Lewises purchased ten acres of their own
and informed Ralph and Marjorie they would be moving out of the
farmhouse. After the Lewises moved off the property, they also stopped
farming the Roethlers’ land. On December 13, 1994, the Roethlers
contracted with Neal and Kathleen Pearson to rent, live on, and farm
their two parcels. After the Lewises moved off of the acreage, their
relationship with the Roethlers grew apart.
On July 3, 1999, Ralph died. The Lewises, along with three other
families that had rented from the Roethlers, were listed as an “honorary
family” on the funeral program. The Lewises attended the funeral. The
Lewises testified Kent was a pallbearer, but he was not listed as a
“casketbearer” on the funeral program, and Ralph’s nephew said Kent
was not a pallbearer.
Ralph’s will was admitted to probate on July 19, 1999. The notice
of probate was published in the local newspaper with a second
5
publication date of August 2, 1999. Pursuant to the notice, any claims
against the estate would be barred if not filed within four months. Also,
an affidavit of mailing notice was given to all the residual beneficiaries
(“the beneficiaries”) who are defendants in this appeal. No notice was
mailed to the Lewises despite paragraph V of Ralph’s will, which
specifically named the Lewises. Marjorie was named the executor, and
the will awarded her a life estate in all of Ralph’s real property, with the
remainder to the beneficiaries. Hankens was the attorney for the estate.
Hankens filed the final report in October 1999. The report of referee
approved the final report, subject to a minor tax issue. The final report
was approved on November 22, 1999, prior to the claims-bar date. Title
to the eighty acres of real estate was changed the next day to reflect
Marjorie’s life interest and the beneficiaries’ remainder interest.
The Lewises were not made aware by the attorney for the estate,
the executor of the estate, or any other party that Ralph’s will specifically
named them or that the will was being probated.
Marjorie passed away in 2008. The Lewises did not attend the
funeral. During the probate of her estate, the beneficiaries contracted to
sell Ralph’s eighty acres to Neal and Kathy Pearson for the appraised
value of $408,000. A title opinion performed on the real estate
discovered Ralph’s probate file did not contain a notice showing the
Lewises waived their option to purchase the subject real estate as
required under Ralph’s will. The Pearsons’ attorney sent the Lewises a
letter asking them to waive their option to purchase Ralph’s eighty acres.
This was the first time the Lewises were apprised that Ralph’s will
afforded them a first right to purchase Ralph’s eighty-acre farm. The
Lewises indicated they would have been interested in purchasing the
6
eighty-acre farm and had the financial capacity to purchase the land in
1999.
On June 23, 2008, Kent Lewis filed a petition to reopen Ralph’s
estate. The beneficiaries resisted. After a hearing, the district court
ordered the estate reopened under Iowa Code section 633.489 to
determine whether the Lewises had a valid option to purchase.
Hankens, who was now a defendant in a negligence action filed against
him by the Lewises, was allowed to intervene.
Trial was held on May 27, 2009, to construe Ralph’s will and
determine whether Ralph’s will provided the Lewises a valid first right to
purchase Ralph’s eighty acres. The district court held Ralph’s will gave
the Lewises an option to purchase Ralph’s eighty acres, irrespective of
Marjorie’s decision to sell the land.
The beneficiaries appealed. The case was transferred to the court
of appeals. The court of appeals determined the district court abused its
discretion in reopening the estate because the Lewises were time-barred
under Iowa Code section 633.488. The court of appeals therefore did not
have to reach the will construction issue. The Lewises petitioned for
further review, which we granted.
II. Standard of Review.
A petition to reopen an estate requires the court to engage in a
two-step decision process. First, the district court must make a
preliminary determination whether the plaintiff has asserted a
permissible reason for reopening the estate. In re Estate of Warrington,
686 N.W.2d 198, 202 (Iowa 2004). This determination is governed by
Iowa Code sections 633.487, 633.488, and 633.489. We review the
district court’s preliminary decision as to whether to reopen the estate
under section 633.489 for abuse of discretion. In re Estate of Witzke, 359
7
N.W.2d 183,184–85 (Iowa 1984). The district court abuses its discretion
when it exercises its discretion “on grounds clearly untenable, or to an
extent, clearly unreasonable.” In re Estate of Lynch, 491 N.W.2d 157,
161 (Iowa 1992).
Once reopened, the district court must determine on the merits
whether the plaintiffs are entitled to the relief they seek. Warrington, 686
N.W.2d at 202–04. Probate matters are tried in equity, and the district
court’s ruling on the merits is reviewed de novo. Id. at 202. “Under a de
novo standard of review, we are not bound by the trial court’s
conclusions of law or findings of facts, although we do give weight to
factual findings, particularly when they involve the credibility of
witnesses.” Id.
III. Issues.
First, we must determine whether the district court abused its
discretion in reopening the estate. 1 Second, if the district court properly
reopened the estate, we must review the district court’s holding that the
will provided the Lewises a right to purchase the property within four
months of Ralph’s death. Third, if the Lewises have a right to purchase
the land, we must determine whether they must pay the current value
for the eighty acres, not the land’s value at the time of the initial probate.
IV. District Court Did Not Abuse Its Discretion In Reopening
Estate.
The beneficiaries assert the district court abused its discretion in
reopening the estate because it applied section 633.489 when making its
1The Lewises also allege in their further review materials that time-barring their
claim under section 633.488 violates procedural due process. They did not make this
argument in the district court nor did they argue it on appeal. Only after the court of
appeals’ adverse ruling do the Lewises allege this alternative argument. Accordingly,
the argument is waived. See State v. McCright, 569 N.W.2d 605, 607 (Iowa 1997).
8
determination to reopen the estate. The beneficiaries argue the district
court should have applied section 633.488 that time-bars the Lewises’
claim.
A. Background. Iowa Code sections 633.487, 633.488, and
633.489 govern when an estate can be reopened, but only sections
633.488 and 633.489 are relevant in this matter. Section 633.488
states:
Whenever a final report has been approved and a final
accounting has been settled in the absence of any person
adversely affected and without notice to the person, the
hearing on such report and accounting may be reopened at
any time within five years from the entry of the order
approving the same, upon the application of such person,
and, upon a hearing, after such notice as the court may
prescribe to be served upon the personal representative and
the distributees, the court may require a new accounting, or
a redistribution from the distributees. In no event, however,
shall any distributee be liable to account for more than the
property distributed to that distributee. If any property of
the estate shall have passed into the hands of good faith
purchasers for value, the rights of such purchasers shall
not, in any way, be affected.
Iowa Code § 633.488. Section 633.488 thus allows adversely affected,
interested persons who did not receive notice of the estate’s final report
and accounting, a five-year window to ask for a new accounting,
settlement hearing, or redistribution. We have little case law construing
this provision.
Section 633.489 states:
Upon the petition of any interested person, the court
may, with such notice as it may prescribe, order an estate
reopened if other property be discovered, if any necessary act
remains unperformed, or for any other proper cause
appearing to the court.
9
Iowa Code § 633.489. This provision permits any interested party to
reopen the estate if the party can show (1) new property, (2) a “necessary
act” remains, or (3) “any other proper cause” exists. Id.
There is more case law applying section 633.489. In Witzke, the
plaintiffs sought to reopen the estate to seek rescission of a real estate
sale made during probate because the administrator allegedly
misrepresented the boundaries of the property sold to them. Witzke, 359
N.W.2d at 184. We reasoned “ ‘necessary act’ in section 633.489 refers
to an act that is required by law of the administrator in order to properly
close the estate.” Id. We concluded this ground did not apply, as
rescission of a sale was not needed to close the estate. Id. We also
reasoned “any other proper cause” permits “the district court to exercise
discretion in considering a petition that alleges a cause for reopening
other than the two causes specifically enumerated.” Id. at 185. We
determined the district court did not abuse its discretion by declining to
reopen the estate because the district court reasonably determined that
holding the estate liable for an administrator’s fraud was an undesirable
reason to reopen the estate. Id.
In three subsequent cases, we have reopened the estate under
section 633.489. In Ritz v. Selma United Methodist Church, 467 N.W.2d
266 (Iowa 1991), the plaintiffs sought to reopen the estate after $24,000
in new property was found buried underneath a structure that had been
abandoned by the estate. Ritz, 467 N.W.2d at 268. The district court
concluded the plaintiffs were time-barred under section 633.488. Id. at
269. We reversed, finding the plaintiffs’ claim was governed by section
633.489, which expressly authorizes reopening an estate if new property
is found. Id. at 270. In Lynch, we reversed the district court and
concluded the estate should be reopened to recalculate executor fees.
10
Lynch, 491 N.W.2d at 160–61. The executor, a bank, mistakenly
believed a marital trust was part of the gross estate and subject to Iowa
inheritance tax which thereby increased their fees. Id. We noted
“equitable principles” favored reopening the estate to prevent the bank
from profiting from its mistake at the expense of beneficiaries. Id. We
later cited Lynch for the proposition that “[t]he correction of mistakes
made by an executor may constitute proper cause to reopen an estate.”
Warrington, 686 N.W.2d at 205 (citing Lynch, 491 N.W.2d at 161).
Finally, in Warrington, the deceased’s wife sought to reopen the estate to
sell a remainder interest in real property to generate cash for her
support. Id. at 200–01. We found this was a “proper cause” to reopen
the estate. Id. at 205. We also found the beneficiaries’ argument that
section 633.488 created a statutory bar to plaintiff’s claim “lacking in
merit” and reversed the district court’s decision not to reopen the estate.
Id.
B. Reconciliation of Provisions and Cases. In our only attempt
to distinguish between sections 633.488 and 633.489 we stated:
Section 633.488 contemplates a reopening of matters
which have been previously considered in the final
accounting, distribution, and settlement order. Section
633.489, on the other hand, is aimed at reopening a closed
estate for the purpose of administering property omitted
from the inventory or performing other necessary acts which
were not performed during the original administration.
Ritz, 467 N.W.2d at 270. The provisions seem to concern two distinct
scenarios. Section 633.488 permits distributees, not given notice of the
final report, to have a hearing to reopen the accounting to ensure the
estate was properly accounted, settled, and distributed. Section 633.489
governs when plaintiffs seek to readminister or structurally change the
estate’s administration in a way not contemplated during probate, as
11
evidenced by its application in cases of newly found property. We reach
this conclusion for a number of reasons.
First, the remedy each section affords supports this distinction.
The remedy under section 633.488 is limited: “[T]he hearing on such
report and accounting may be reopened . . . [and] the court may require
a new accounting, or a redistribution from distributees.” Iowa Code
§ 633.488. Section 633.488 only authorizes the court to hold another
final report hearing, order new accounting, or order redistribution
amongst the distributees, but it does not authorize the court to perform
property transactions or other substantial acts. Id. In contrast, section
633.489 broadly authorizes the court “to administer any additional
property or to perform other such acts as may be deemed necessary.” Id.
§ 633.489.
Second, section 633.488’s time bar, and section 633.489’s
indefinite application support the articulated distinction. If section
633.488 applies to previously considered matters in which the final
report was approved and “settled in the absence of . . . and without
notice to” the complaining party, then a five-year statute of limitations is
logical. Id. § 633.488. Conceivably, the complaining party made his
claim, but was not made a party to the resolution at final settlement.
This party would be aware of the probate and on notice, making a five-
year time-bar apposite. Section 633.489 applies where future events
require administration of matters not considered in the final report, and
a time-bar is inconsistent with this purpose.
Third, our cases also support this distinction. In cases applying
section 633.489, the estates were reopened to reinventory property, to
perform acts not considered in the original administration, or to perform
acts more substantial than just distribution amongst distributees—
12
(1) Ritz reopened the estate upon finding $24,000 in new property,
(2) Lynch reopened the estate to reduce improperly awarded executor
fees, and (3) Warrington reopened the estate to sell a remainder property
interest for support of the decedent’s wife. In each of these cases,
plaintiffs sought to perform an act that administrators did not
contemplate in the final accounting, distribution, and settlement order.
Moreover, these actions required more than simply redistributing
property amongst distributees, as contemplated in section 633.488. 2
The court of appeals drew a distinction between sections 633.488
and 633.489 on a different basis—whether the plaintiffs received notice
of probate. Arguably, this inference is supported by Moser v. Brown, 249
N.W.2d 612 (Iowa 1977), as we reasoned that, “[s]ince Moser received no
notice[,] he had five years from the date of the closing to petition for
reopening” under section 633.488. Moser, 249 N.W.2d at 615.
Distinguishing the two provisions on the basis of notice, however,
is not the correct approach in reviewing the statutes. Section 633.489 is
not defined in terms of notice. The provision simply says the district
2In Moser v. Brown, 249 N.W.2d 612 (Iowa 1977), we cited to section 633.488 as
authority for reopening the estate to allow Moser to continue his personal injury lawsuit
against the estate. Moser, 249 N.W.2d at 612. Moser brought suit against Brown who
died shortly thereafter. Id. at 614. Moser substituted the executors of Brown’s estate
as defendants, but the executors closed Brown’s estate without ever providing the
plaintiff notice. Id. We noted Moser’s claim was not cut off by the estate’s closing
because he was entitled to notice of the estate’s closing. Id. at 615. We cited to section
633.488, concluding: “Since Moser received no notice he had five years from the date of
the closing to petition for reopening.” Id. Our conclusory reasoning creates an
inference that the application of section 633.488 is tied solely to notice. This inference
is inappropriate for several reasons. First, Moser petitioned to reopen the estate three
months after the estate closed, making the five-year time-bar inapplicable. Id. at 614.
Therefore, the court had no reason to intensely analyze whether sections 633.488 or
633.489 applied. Second, Moser predates Witzke, Ritz, Lynch, and Warrington which
give the relevant guidance on section 633.489 claims applicability. Third, Moser
involves a factual situation where the claimant made a valid claim against the estate,
but was merely excluded from final settlement—a scenario contemplated in section
633.488 and unrelated to notice. Moser, unlike the Lewises, was aware of his claim
against the estate during the estate’s administration.
13
court “may” reopen an estate “if other property be discovered, if any
necessary act remains unperformed, or for any other proper cause.”
Iowa Code § 633.489. Notice, or the lack thereof, plays no part in this
provision. Section 633.489 simply applies if some future happenstance
or finding, unattended to during probate, requires the estate to be
reopened.
C. Beneficiaries’ Section 633.488 Good-Faith-Purchaser
Argument Is Not Applicable. The beneficiaries argue section 633.488
applies because it states the rights of good faith purchasers for value of
estate property “shall not, in any way, be affected.”
The argument presupposes section 633.488 is applicable in this
case, as section 633.489 does not contain a good-faith-purchaser clause.
The beneficiaries’ argument, however, provides no reason why section
633.488 should apply. The beneficiaries merely state section 633.488
should apply, without giving any reason, and then argue this language
protects the Pearsons as good faith purchasers for value of Ralph’s eighty
acres. This argument puts the cart before the horse. For reasons stated
above, we find the district court properly applied section 633.489 to the
plaintiffs’ request to reopen Ralph’s estate.
Alternatively, the beneficiaries have not shown the Pearsons are
good faith purchasers for value of the eighty acres. “ ‘The rule is well
established that to be a good faith purchaser for value, one must show
that he made the purchase before he had notice of the claim of another,
express or implied.’” Moser v. Thorp Sales Corp., 312 N.W.2d 881, 886
(Iowa 1981) (quoting Janssen v. N. Iowa Conference Pensions Inc. of
Methodist Church, 166 N.W.2d 901, 908 (Iowa 1969); see also Moser v.
Thorp Sales Corp., 256 N.W. 2d 900, 910–11 (Iowa 1977) (citing Raub v.
Gen. Income Sponsors of Iowa, Inc., 176 N.W.2d 216, 219 (Iowa 1970)
14
(defining a bona fide purchaser as “one who takes a conveyance of real
estate in good faith from the holder of legal title, paying a valuable
consideration for it without notice of outstanding equities”)). A real
estate contract has been signed, and the Pearsons’ down payment is in
escrow, but title has not been transferred. The title examiner raised an
issue about the Lewises’ right to purchase which prevented the Pearsons
from closing on the sale. If the sale falls through, the Pearsons get their
money back, and their only prejudice is having a down payment sit in
escrow during the pendency of this litigation. The Pearsons have not
purchased the eighty acres; therefore, they could not qualify as good
faith purchasers for value.
D. No Abuse of Discretion. The district court reopened the
estate under section 633.489. The beneficiaries claim the district court
abused its discretion by not applying section 633.488. We disagree. For
the reasons stated above, the Lewises’ right to purchase, which came to
light years after the estate was closed, was the type of event which falls
within section 633.489.
The district court determined section 633.489 applied because the
plaintiff’s option to purchase had not been previously considered. The
court then looked to the three statutory grounds set forth in 633.489 for
reopening the estate. The court found the “necessary act” and “any other
proper cause” grounds both applied in this case. The district court
found the executor of the estate failed to perform “all necessary acts”
because the executor failed to notify the plaintiffs of the probate of the
will, in violation of Iowa Code section 633.304, which requires all persons
“believed to own or possess a claim” to be notified. The district court also
used its discretion to conclude “the lack of notice to the Lewises
throughout the probate of the will constitutes proper cause for reopening
15
the estate.” Moreover, there are minimal practical difficulties in
exercising the option as the land still remains with the distributees. See
Warrington, 686 N.W.2d at 205 (noting practical difficulties in reopening
estate or deprivation of beneficiaries of testamentary devise are reasons
that might justify not opening an estate).
We concur with the district court’s reasoning on the “necessary
act” ground and the “any other proper cause” ground. A court abuses its
discretion only when its exercise of discretion is “clearly untenable, or to
an extent, clearly unreasonable.” Lynch, 491 N.W.2d at 161. We find
the district court’s determination that this case’s equitable facts
constituted a “proper cause” to reopen the estate under Iowa Code
section 633.489 to be neither untenable nor unreasonable. The district
court did not abuse its discretion in reopening the estate.
V. Will Construction.
The beneficiaries next contend the district court erred in
construing the will.
Ralph’s will states in pertinent part:
II. I give, devise and bequeath to my spouse, Marjorie
Roethler, a life estate in all real estate I may own at the time
of my death upon the condition that she survives me.
III. Subject to a life estate in my spouse, Marjorie Roethler, I
give, devise, and bequeath the remaining interest in the real
estate I own at the time of my death to the following: Angela
Kuehn, Margaret Homan, Cheryll Upton, Jacqueline
Betsworth, Daniel Roethler, James Roethler, John Roethler,
Donald Roethler, Jerald Roethler, Mary Anne James, Connie
Duke, and Kathy Good, share and share alike.
....
V. I herein give Kent Lewis and Becky Lewis the first right of
purchase to the following described real estate, to-wit:
80 Acres in Diamond Township, Section One; at the
appraised value in the Estate. This right to purchase shall
be given them for a period of four months from my date of
16
death. Notice of said right to purchase shall be filed in my
Estate in writing.
....
VII. I give my Executor, hereinafter named, the authority to
sell and to turn into cash any property that I may own at the
time of my death, without appraisal, court approval, or the
giving of bond. I also authorize by Executor to employ, at my
Estate’s expense, professional persons to help in the
administration of my Estate, including, but not limited to a
real estate broker.
The district court construed paragraph V to provide the Lewises an
unqualified first right to purchase the eighty acres within four months of
Ralph’s death. The beneficiaries contend paragraph V only offers the
Lewises the first right to purchase, in the event the executor, Marjorie,
elected to sell the eighty acres within four months after Ralph’s death.
A. Principles of Will Construction. Our principles of will
construction are long-settled:
(1) the intent of the testator is the polestar and must prevail;
(2) this intent, however, must be derived from (a) all of the
language contained within the four corners of the will, (b) the
scheme of distribution, (c) the surrounding circumstances at
the time of the will’s execution and (d) the existing facts;
(3) we resort to technical rules or canons of construction
only when the will is ambiguous or conflicting or the
testator’s intent is uncertain. In determining intent, the
question is not what the testator meant to say, but rather
what is the meaning of what the testator did say.
In re Estate of Rogers, 473 N.W.2d 36, 39 (Iowa 1991) (citation omitted).
The instrument should be considered as a whole, giving each part
meaning and effect. Elkader Prod. Credit Ass’n v. Eulberg, 251 N.W.2d
234, 237–38 (Iowa 1977). The court considers extrinsic evidence only if
there is an ambiguity, and extrinsic evidence cannot vary, contradict, or
add to the will’s terms. Rogers, 473 N.W.2d at 39.
17
B. Will Language and Distribution Scheme.
1. Qualified or unqualified option. The will provisions, taken
together, provide Marjorie “a life estate in all [of Ralph’s] real estate,” the
Lewises “the first right of purchase” to the eighty acres “at the appraised
value . . . for a period of four months” from Ralph’s death, and vests the
executor, Marjorie, “the authority to sell and turn into cash any property
. . . without appraisal, court approval, or the giving of bond.”
The beneficiaries stress this language vests the Lewises with a
contingent first purchase option in the event Marjorie elects to sell the
eighty acres within four months of Ralph’s death. This construction is
problematic.
First, there is no conditional language in paragraph V. It states, “I
herein give [the Lewises] the first right of purchase.” Our case law has
found conditional purchase options when express conditional language
was used to qualify a right of first purchase. See Noel v. Uthe, 184
N.W.2d 686, 689 (Iowa 1971) (finding farm tenant did not have right of
first purchase after the will was probated because it provided the renter a
right of first purchase “in the event my Executor shall determine that any
real estate . . . shall be sold”). The beneficiaries’ advocated construction
is essentially a “right of first refusal”—where the Lewises would be given
the right to buy the land in the event Marjorie intended to sell. But
Ralph’s will contains a first right of purchase, not a right of first refusal.
Paragraph V later refers to the purchase option as “[t]his right to
purchase shall be given them for a period of four months.” This
language is again unqualified. Giving the beneficiaries their advocated
construction would be rewriting the language of paragraph V to give the
Lewises a “right of first refusal.”
18
Second, if the beneficiaries’ construction is adopted, there is a
conflict between Lewises’ first option to purchase the eighty acres at “the
appraised value” and Marjorie’s authority to sell “any property . . .
without appraisal.” If Marjorie had to contemplate selling the eighty
acres in order to trigger the Lewises’ option, then the provisions are
contradictory as to whether Marjorie must sell the land to the Lewises at
the “appraised value” or can sell the property “without appraisal.” These
provisions, however, are entirely consistent if the Lewises’ option is
viewed as an unqualified specific bequest, and Marjorie’s authorization to
sell property is viewed as a general authorization of authority. See Iowa
Code § 633.436 (specific devisees take precedence over general or
residuary devisees in abatement). Under this approach, Paragraph V
would provide the Lewises’ with an unqualified right to purchase the
eighty acres “at the appraised value” within four months. In the event
the Lewises decline, Paragraph VII authorizes Marjorie to sell the eighty
acres at any subsequent date without another appraisal or without
regard to appraised value. Construing Paragraph V as an unqualified
option to purchase therefore gives effect to all the will provisions.
2. Paragraphs II and V. The beneficiaries contend Paragraphs II
and V create ambiguity. These provisions, however, are entirely
consistent with construing the will to providing the Lewises an
unqualified right of first purchase.
Paragraph II provides Marjorie a life estate in all real property
Ralph owned. At Ralph’s death, he owned the eighty-acre farm and their
lot and home in Aurelia. Paragraph V then offers the Lewises the
purchase option for eighty acres. There is nothing facially inconsistent
with these provisions. In re Estate of Hansen, 264 N.W.2d 746 (Iowa
1978), held a testator’s devise to his children to share equally “personal,
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Real estate, Stocks, and Bonds” was not in conflict with a subsequent
devise in his will for his son to have an option to purchase eighty acres.
Hansen, 264 N.W.2d at 747–49. Ralph’s will has a nearly identical set-
up. Paragraph II provides Marjorie a life estate in all of his real estate
and then Paragraph V gives the Lewises an option to purchase a specific
piece of real estate. This specific purchase option simply places a
specific condition into Paragraph II’s general devise to Marjorie. The
paragraphs do not create ambiguity nor undermine our conclusion the
will provides the Lewises an unqualified right to purchase Ralph’s eighty
acres.
C. Extrinsic Evidence and Circumstances Surrounding Will.
Both parties point to extrinsic evidence that favors their construction.3
Irrespective of our conclusion as to whether the will’s plain language is
ambiguous, the extrinsic evidence does little to resolve this dispute.
The beneficiaries point to Hankens’ testimony and his actions in
probate as evidencing Ralph intended to give the Lewises only a qualified
right to purchase. Hankens testified he did not send the Lewises a
probate notice because Marjorie was not intending to sell the acreage,
and he believed Paragraph V only provided the Lewises a purchase
option in the event Marjorie elected to sell. The Lewises testified about
their “close relationship” with Ralph and Marjorie during the years
leading up to Ralph’s will execution. The credibility of the testimony is
questionable, as each party is interested in the outcome—Hankens is
3Thebeneficiaries argue the district court erred in finding the will language plain
and then also considering some “other circumstances” such as the Lewises’ close
relationship with Ralph. Whatever the merits of the district court’s analysis, on our de
novo review we are not reviewing the district court for error, but instead performing our
own independent construction. If we find ambiguity, then we consider extrinsic
evidence and give it whatever weight we deem appropriate. If we do not find an
ambiguity, then we do not consider the extrinsic evidence.
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facing a tort suit for improperly probating Ralph’s will, and the Lewises
will be able to purchase eighty farm acres at below market value if they
prevail in the lawsuit.
D. The Will Vests Lewises with an Unqualified Purchase
Option. The extrinsic evidence is contradictory and does not affect the
construction of the language of the will. The will is unambiguous, and
the will’s plain language provides the Lewises an unqualified first option
to purchase Ralph’s eighty acres because (1) the will contains no
conditional language, and (2) such a construction gives effect to all
provisions of the will and reconciles Paragraphs V and VII. To accept the
beneficiaries’ construction would create an irreconcilable conflict
between the provisions of the will. We find the will provides the Lewises
an unqualified first right to purchase Ralph’s eighty acres.
VI. Acreage Purchase Price.
The beneficiaries finally contend the district court erred by setting
the purchase price of Ralph’s eighty acres at the 1999 appraisal value,
and not the land’s appraisal value when the Pearsons contracted to
purchase the land in 2008. The beneficiaries claim awarding the Lewises
a right to purchase the eighty acres at the 1999 appraised value,
unjustly enriches the Lewises as it provides them, not the beneficiaries,
with the farmland’s increased value over the last decade.
Unjust enrichment is a doctrine that “evolved from the most basic
legal concept of preventing injustice.” State ex rel. Palmer v. Unisys
Corp., 637 N.W.2d 142, 149 (Iowa 2001). For nearly a decade, the
executor, her attorney, and the beneficiaries failed to notify the Lewises
that Ralph’s will specifically provided them a first right to purchase his
eighty farmland acres within four months of his death. Only through
this silence did the beneficiaries gain title to Ralph’s eighty acres. The
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beneficiaries now seek to invoke an equitable doctrine to seize a decade’s
worth of appreciation which was only procured through the failure to
address the purchase option during Ralph’s probate. Equities do not
favor the beneficiaries, and equity entitles the Lewises to specific
performance of the “the first right to purchase” the eighty acres “at the
appraised value in the Estate” which is $140,600. See Simpson v.
Bostwick, 248 Iowa 238, 244, 80 N.W.2d 339, 343 (1957) (noting specific
performance is an equitable remedy and “once equity has obtained
jurisdiction of a controversy, it will determine all questions . . . to
accomplish full and complete justice between the parties”); see also
Whalen v. Connelly, 621 N.W.2d 681, 686–87 (Iowa 2001) (party who
wrongfully delayed transfer of stock certificates bore risk of loss from
change in value). The district court properly determined the purchase
price to be $140,600, the appraised value of the eighty acres at the time
of Ralph’s death.
VII. Disposition.
The district court did not abuse its discretion in reopening the
estate to determine whether the Lewises possessed a valid option to
purchase Ralph’s eighty acres. The Lewises’ first right to purchase was
not addressed during the probate of Ralph’s estate. Ralph’s executor was
required to provide notice to the Lewises so that the estate could be
properly administered. Allowing the Lewises an opportunity to exercise
this option during the probate of Ralph’s estate was a “necessary act,”
and equity regards this case as a “proper circumstance” to reopen the
estate. On our de novo review, we find the will to be unambiguous and
logically construed to provide the Lewises an unqualified option to
purchase the eighty acres at the appraised value at Ralph’s death.
Rewording Ralph’s will to provide the Lewises an option for first refusal,
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rather than an option to purchase, as advocated by the beneficiaries,
would be a misuse of this court’s equitable powers. This court does not
have the power to rewrite a living testator’s will, nor do we have the
power to rewrite a decedent’s. Accordingly, the decision of the court of
appeals is vacated, and the district court order is affirmed.
COURT OF APPEALS DECISION VACATED; DISTRICT COURT
JUDGMENT AFFIRMED.
All justices concur except Mansfield, J., who takes no part.