In Re The Marriage Of Tanya Lynn Ginsberg And John D. Ginsberg Upon The Petition Of Tanya Lynn Ginsberg ( 2008 )

IN THE SUPREME COURT OF IOWA
No. 35 / 06–0615
Filed May 16, 2008
IN RE THE MARRIAGE OF TANYA LYNN
GINSBERG AND JOHN D. GINSBERG
Upon the Petition of
TANYA LYNN GINSBERG,
Appellee,
And Concerning
JOHN D. GINSBERG,
Appellant.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Donald C.
Nickerson, Judge.
Appellee appeals court of appeals’ decision raising claim preclusion
sua sponte. DECISION OF THE COURT OF APPEALS VACATED;
DISTRICT COURT JUDGMENT AFFIRMED.
Alexander R. Rhoads of Babich, Goldman, Cashatt & Renzo, P.C.,
Des Moines, for appellant.
Jeanne K. Johnson, Des Moines, for appellee.
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PER CURIAM.
Tanya and John Ginsberg ended their marriage in 2004. Their
dissolution decree ordered John to pay the debt the parties owed to
Tanya’s father and hold Tanya harmless from any liability. Because the
parties could not agree on how much was owed, the decree stated the
amount of the debt was “disputed.” John did not repay Tanya’s father.
Tanya eventually repaid the loan herself and brought this action seeking
indemnification from John under the terms of the decree. The district
court ordered John to pay Tanya $121,000. John appealed. The court
of appeals held claim preclusion barred Tanya’s action and remanded the
case to the district court to dismiss. On further review, we hold claim
preclusion does not bar an action to enforce the decree. We vacate the
decision of the court of appeals and affirm the decision of the district
court.
I. Facts and Prior Proceedings.
Tanya and John Ginsberg were divorced on March 22, 2004. The
district court entered a decree based upon the parties’ stipulation. See
Iowa Code § 598.8(2)(a) (2003). The decree contained a provision
regarding debt the parties owed to Tanya’s father, Ron Daniels: “[John]
shall pay the debt, the amount of which is disputed, to Ron Daniels and
hold [Tanya] harmless therefrom.”
Daniels provided the parties substantial financial assistance
during the marriage. In September 1991, Daniels loaned the parties
$124,561.28 for the purchase of a home in Elkhart, Iowa. The loan was
to be repaid within ninety days through a mortgage on the property. The
parties chose instead to make periodic payments to Daniels. Between
1991 and 1998, the parties paid him $34,893.71. During May 1999,
Daniels loaned the parties $180,000 for a down payment on a home in
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Des Moines. The parties repaid Daniels $180,000 five months later when
they sold their Elkhart home. Additionally, the parties borrowed $70,000
from Daniels in August 2001. The parties made payments to Daniels
totaling $38,398 between October 2001 and May 2003. The payments
stopped after Tanya filed for divorce. In summary, Daniels loaned the
parties a total of $374,561.28 and received $253,291.71 in payments for
a balance of $121,269.57.
After the divorce was finalized, Daniels repeatedly asked Tanya
when John was going to pay him. Tanya testified she grew tired of her
father’s questioning and paid Daniels $121,000. Thereafter, she filed a
“Motion to Enforce the Decree, or in the Alternative, Application for
Declaratory Judgment” in order to recover from John the amount she
paid.
The district court held a hearing and found the amount of the
disputed debt to Daniels was $121,269.57. The court ordered John to
pay Tanya $121,000 because she “is the real party in interest in as much
as she paid her father.” The court also ordered John to pay Daniels
$269.57. The court denied Tanya’s request for interest because Daniels
testified it was not his custom to charge family members interest. The
court also denied Tanya’s request for fees.
John appealed, arguing there was insufficient evidence to support
the ruling. The court of appeals sua sponte raised the issue of claim
preclusion in its ruling. It stated:
Either party could have insisted the district court decide the
debt issue prior to the entry of the decree; but instead, they
chose to go forward and allowed the issue to remain
“disputed” as part of the court’s final order. As Tanya and
John willingly relinquished their right to litigate a disputed
issue, we conclude that subsequent litigation on the
identical issue is barred.
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The court of appeals also denied Tanya’s request for attorney fees on
appeal.
Thereafter, Tanya applied for further review, which we granted.
She argues the court of appeals erred by raising an issue not presented
to or addressed by the district court. See DeVoss v. State, 648 N.W.2d
56, 63 (Iowa 2002) (holding “we will not consider a substantive or
procedural issue for the first time on appeal, even though such issue
might be the only ground available to uphold a district court ruling”).
For the reasons that follow, we vacate the decision of the court of appeals
and affirm the district court.
II. Scope of Review.
We review cases tried in equity de novo. Iowa R. App. P. 6.4.
However, we review the construction of a dissolution decree as a matter
of law. In re Marriage of Goodman, 690 N.W.2d 279, 282 (Iowa 2004)
(citing Sorensen v. Nelson, 342 N.W.2d 477, 479 (Iowa 1984)).
III. Merits.
A. Claim Preclusion. “[C]laim preclusion is a bar to further
litigation of a claim following a final adjudication or judgment on the
merits.” Penn v. Iowa State Bd. of Regents, 577 N.W.2d 393, 398 (Iowa
1998). “[A] party must litigate all matters growing out of the claim, and
claim preclusion will apply ‘not only to matters actually determined in an
earlier action but to all relevant matters that could have been
determined.’ ” Id. (quoting Shumaker v. Iowa Dep’t of Transp., 541
N.W.2d 850, 852 (Iowa 1995)).
We need not decide whether a court may raise claim preclusion
sua sponte because we find the doctrine inapplicable in this case. The
court of appeals held that by leaving the amount owed to Daniels
“disputed,” the parties “relinquish[ed] the right to litigate any and all
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issues they had” regarding the debt. We disagree. Claim preclusion does
not prevent the enforcement of the decree as it was written. Here, Tanya
was not attempting to relitigate who should repay her father for the
money he loaned the couple during their marriage. That issue had been
decided. Tanya was merely asking the district court to enforce the “hold
harmless” provision of the decree. Such an action is always permissible.
See In re Marriage of Butterfield, 500 N.W.2d 95, 98 (Iowa Ct. App. 1993)
(holding a stipulation of settlement in dissolution proceeding is a
contract between the parties that becomes final and binding when it is
accepted and approved by the court). Moreover, even if the decree had
stated the amount the parties owed, Daniels would not be estopped from
proving the loan was for a different amount because he was not a party
to the decree. In a sense, Tanya stepped into Daniels’ shoes when she
paid the debt and then turned to John for reimbursement.
B. Indemnification. According to the decree, John agreed to
hold Tanya “harmless from any liability” stemming from the debt owed to
Daniels. “Hold harmless” is synonymous with “indemnify.” Black’s Law
Dictionary 749 (8th ed. 2004). “In an indemnification contract, one party
promises to reimburse or hold harmless another party for loss, damage,
or liability.” Maxim Techs., Inc. v. City of Dubuque, 690 N.W.2d 896, 900
(Iowa 2005).
Since Tanya is seeking indemnification, she has the burden of
proving she is entitled to the relief requested. Mineke v. Fox, 256 Iowa
256, 263, 126 N.W.2d 918, 921 (1964). The measure of relief “is the
actual amount the person, who is secondarily liable, has been compelled
to pay as a natural consequence of the [indemnitor]’s negligence or other
wrong.” Howell v. River Prods. Co., 379 N.W.2d 919, 921 (Iowa 1986)
(quoting 42 C.J.S. Indemnity § 24, at 602 (1944)). Tanya paid Daniels
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$121,000 to satisfy the amount owed to him. Certainly her payment is
evidence of the amount owed. But because these loans were between
family members, the amount paid is not nearly as compelling as the
amount paid in an arms-length transaction. Nevertheless, we find Tanya
proved the amount owed was $121,269.57 and she was entitled to
$121,000 (the amount she paid).
Daniels and his office manager, who handled both his business
and personal finances, testified regarding the amounts loaned and the
amounts repaid. John did not dispute the dollar amounts provided. He
claims the parties only owed Daniels the balance due for the $70,000
loan ($31,602) because the $124,561.28 for the Elkhart house in 1991
was really a gift. John did not explain what basis he had for believing
the money was a gift other than he claimed the parties never made
payments on that particular loan. Tanya offered evidence the parties
paid Daniels $34,893.71 between 1991 and 1998. John testified this
money was payment for a Lexus vehicle he bought from Daniels. The
only evidence he offered in support of this claim was a check for $11,000
John made to Daniels. John wrote in the memo line “1st Lexus pymt.”
However, the check was dated June 13, 2000, and the amount was not
included in any of Tanya’s calculations. Thus, John did not disprove
$34,893.71 was paid toward the $124,561.28 loan. Moreover, he offered
no evidence to suggest the balance of the loan was transformed into a
gift. Daniels testified the money was unequivocally a loan. The district
court implicitly found Daniels and Tanya more credible than John. We
find them more credible too.
IV. Conclusion.
The court of appeals erred by applying claim preclusion to Tanya’s
indemnification action. Tanya proved she was entitled to $121,000 from
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John. The district court properly ordered John to pay Daniels $269.57.
Tanya’s request for appellate attorney fees is denied.
DECISION OF THE COURT OF APPEALS VACATED; DISTRICT
COURT JUDGMENT AFFIRMED.