Roger Halvorson and Constance Halvorson, plaintiffs/counter-claim v. Allen Bentley and Dixie Bentley, defendants/counter-claim plaintiffs/cross-claim Plaintiffs-Appellees/ and Kerndt Brothers Savings Bank, defendant/cross-claim defendant-appellant/cross-appellee. ( 2016 )

IN THE COURT OF APPEALS OF IOWA
No. 15-0877
Filed December 21, 2016
ROGER HALVORSON and CONSTANCE HALVORSON,
Plaintiffs/Counter-Claim Defendants-Appellees,
vs.
ALLEN BENTLEY and DIXIE BENTLEY,
Defendants/Counter-Claim Plaintiffs/Cross-Claim Plaintiffs-Appellees/
Cross-Appellants,
and
KERNDT BROTHERS SAVINGS BANK,
Defendant/Cross-Claim Defendant-Appellant/Cross-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Clayton County, Andrea J. Dryer,
Judge.
Seller Kerndt Brothers Savings Bank appeals and land purchasers Allen
and Dixie Bentley cross-appeal the order of the district court finding that the Bank
breached its warranty under its deed to the Bentleys because it represented the
easement on the adjoining land it sold to Roger and Constance Halvorson
permitted parking when the language of its contract with the Halvorsons only
expressly mentioned “access.” JUDGMENT VACATED IN PART, AFFIRMED
IN PART, AND REMANDED WITH DIRECTIONS.
2
Dennis G. Larson of Larson Law Office, Decorah, and James A. Garrett of
James A. Garrett Law Office, Waukon, for appellant/cross-appellee Kerndt
Brothers Savings Bank.
J.K. Robison and Anne E.H. Kruse of Allen, Vernon & Hoskins, P.L.C.,
Marion and McGregor, for appellees/cross-appellants Bentley.
Alan T. Heavens of McClean & Heavens Law Offices, Elkader, for
appellees Halvorson.
Heard by Danilson, C.J., and Doyle and McDonald, JJ.
3
DOYLE, Judge.
The dispute in this case concerns an easement on land Kerndt Brothers
Savings Bank (Bank) sold to Roger and Constance Halvorson. The easement
was granted for the benefit of the adjoining lot of land, which the Bank sold to
Allen and Dixie Bentley. The central issue is whether or not the easement grants
the Bentleys parking privileges. Following trial on the Halvorsons’ petition for
declaratory judgment, along with the Bentleys’ cross-claims against the Bank, the
district court concluded the easement only granted the Bentleys “access” to their
land—meaning ingress and egress only, not parking. Because the warranty
deed the Bank delivered to the Bentleys does not limit the easement to access
only, the court found the Bentleys were entitled to the consideration they paid to
the Bank for the easement they thought they were getting—one that allowed
parking, and awarded the Bentleys $7500 in compensatory damages. The court
also awarded the Bentleys their attorney fees for defending the Halvorsons’
action. The court then entered a judgment against the Bank in favor of the
Bentleys for $21,757.28.
The Bank now appeals the district court’s ruling in favor of the Bentleys,
arguing both the Bentleys and the Halvorsons received the easement they
bargained for with the Bank and, therefore, it did not breach any warranty deed.
The Bentleys cross-appeal, challenging the court’s determination the easement
was for ingress and egress only.
I. Background Facts.
The facts of the case are essentially undisputed. In 2009, after its
mortgagee defaulted on a loan, the Bank acquired title to the real estate that
4
secured the mortgage loan. The property consisted of several lots in the
picturesque river town of Marquette. A two-level duplex was located on one of
the lots. A house that was in “very bad shape” was located on an adjoining lot to
the west. The two buildings were situated on a steep hill on the south side of the
west end of North Street. The house and the duplex were separated by a path
that was used as a driveway (Driveway), shown in the aerial photo below.1 The
Driveway inclines from North Street at a grade of approximately ten to fifteen
percent and flattens out near its southern terminus.
In making the duplex conversion, the mortgagee “cut the roof off and
raised it up so [he] could have an upstairs.” He then “added on to make it a
1
Though there was some disagreement at oral argument as to whether the path had
been used as a driveway prior to this dispute, it does not appear that information was
challenged at trial beyond the Bank’s statute-of-frauds and parol-evidence-rule
objections, which we address later in this opinion. We note that the Halvorsons’
purchase offer, which was accepted by the Bank, expressly referred to the path as “the
existing driveway” when describing where the easement would be placed. Moreover,
several witnesses testified at trial that the path had been used as a driveway, including
James Garrett, the Bank’s attorney who prepared its title opinion; James Kerndt, the
Bank’s representative; and Roger Halvorson.
5
duplex,” and he “took the [interior] stairs out of the house.” Without interior stairs,
there was no access between units inside the duplex. To provide access to the
upper unit, the mortgagee installed an exterior door on the south side of the unit
and built a walkway from that exterior door to the southern terminus of the
Driveway. Because of the incline and the topography, the walkway was built in a
southwest direction where it eventually met the Driveway at an acute angle. The
mortgagee lived in the upper-level unit of the duplex and parked his vehicle at the
end of the Driveway near the walkway. The mortgagee made the lower level of
the duplex into a rental unit. Another driveway, which could hold two or three
vehicles, existed on the north side of the lower level of the duplex. Parking in
front of the duplex on North Street would obstruct the driveway to the house.
After the Bank acquired the property, it decided to sell the property in
separate lots, with the house and duplex each in its own separate lot. To that
end, the Bank hired Roger Mohn, a civil engineer and professional land surveyor,
to identify the exterior lot lines of the property so it could divide the property into
lots accordingly.
Based upon the boundaries of the existing lots, which can be seen in the
aerial photo above, the Driveway and most of the walkway fell within the house
lot—not the duplex lot. The Bank determined an easement would be established
on the house lot to allow the future owners of the duplex lot to reach the entrance
of the duplex’s upper-level unit. Based upon the topography of the house lot, the
existing Driveway path and walkway were used for determining the placement of
the easement. After the surveyor informed the Bank’s representative James
6
Kerndt that easements were normally between ten to twelve feet wide, it was
decided the easement would be twelve feet wide.
On February 2, 2010, the plat of the lots prepared by the surveyor was
recorded—without the easement shown or described therein. Though the
surveyor provided to the Bank a metes and bounds description of the centerline
of the proposed easement, the Bank did not have that description recorded with
the plat. The proposed easement’s written description stated, in relevant part: “A
twelve (12) [sic] wide easement located in Lot Ten (10) of Block Five (5) and in
vacated Third Street . . . .” The description went on to set forth the metes and
bounds of the centerline of the easement. The proposed easement did not
include the terms “access,” “ingress,” “egress,” or “parking”; in fact, no purpose
for the easement was given in the written description.
Roger Halvorson contacted Kerndt at the Bank about buying some of the
lots on the property. The Halvorsons live three blocks from the property, and
they operate a winery on North Street near the property. Roger wanted to
preserve the hillside where the house was located and “had strong feelings about
preventing anyone from developing that hillside.” Roger was advised that if he
did not purchase both the house lot and the duplex lot, an easement across the
house lot would be necessary to allow the future owners of the duplex lot access
to the duplex’s upper-level unit. On February 20, 2010, the Halvorsons made
and the Bank accepted a written offer to purchase several lots of land, including
the house lot but not the duplex lot. The offer stated on the first page that it was
subject to “an easement to be placed approximately in existing driveway for
access to adjacent house upper level.” Handwritten next to the above quoted
7
sentence were the words “Exhibit C.” Exhibit “C” was attached to the agreement
and set forth the metes and bounds description of the centerline of the easement
exactly as drafted by the surveyor.
The Bank listed the duplex lot for sale with a realtor. Allen and Dixie
Bentley contacted another realtor, who was with the same realty agency as the
Bank’s realtor, to view the duplex lot, and they and their realtor viewed the
property together. The Bentleys liked the property but were concerned about the
parking situation for the upper-level unit of the duplex. The Bentleys’ realtor
expressed the Bentleys’ concerns about the parking situation to the Bank’s
realtor, and the Bank’s realtor clarified with Chad Curtain, a representative of the
Bank, that an easement would be drawn up “to amend the problem.” The Bank’s
realtor believed that “parking was involved in the negotiations,” though it “did not
end up being in the easement description.” The Bank’s realtor believed the
purpose of the easement was for parking. Ultimately, the Bentleys decided to
purchase the duplex lot and the closing occurred sometime around the beginning
of July 2010. The warranty deed for the duplex lot was recorded on July 12,
2010, and it sets forth the metes and bounds description of the easement exactly
as proposed by the surveyor. The easement’s description lacks any explicit
reference to “access,” “parking,” or purpose.
It appears the Halvorsons never had a formal closing. The Bank had quit-
claimed some of the property the Halvorsons intended to purchase “to provide
[them] basically with possession while the [Bank] continued its efforts to foreclose
on the property.” The Halvorsons received a warranty deed for the house, as
well as other land they purchased from the Bank. The deed was signed by the
8
Bank’s representatives July 14, 2010 and recorded July 19, 2010. The
Halvorsons’ warranty deed makes no reference to the easement.
After their purchase, the Bentleys used the Driveway as a driveway. They
parked their vehicles at the end of the driveway near the walkway. At some
point, the Halvorsons had the house torn down, creating more open area by the
Driveway. Sometime thereafter, a neighbor contacted Roger and told him, “You
better come up here. You got a parking lot up here.” Roger went to investigate
and found “there were four cars up there. There was the Bentleys’
pickup, . . . and a car, and a couple other pickups. So there [were] a number of
people parked . . . on the lots up there.” And the battle began.
When the parties could not reach an agreement, the Bentleys contacted
the surveyor and requested that he draw a plat of the easement based upon the
metes and bounds set forth in their deed. The surveyor then platted the
easement and lots. That platting is distilled into the following illustration:
II. Proceedings.
In July 2011, the Halvorsons filed a petition “in equity” and “for declaratory
judgment” against the Bentleys and the Bank. The Halvorsons requested the
9
district court declare “the nature and scope of the easement [was] limited to
ingress and egress only and that it may not be used by the Bentleys for any other
purpose,” declare the “size and dimensions of the easement [were] limited to the
narrowest possible [twelve]-foot strip of land,” and find the Bank negligent and
award the Halvorsons damages. The Bank admitted in its answer that its
“understanding and intent with respect to the [Bentleys’] easement” was that the
Bentleys could come and go across the easement but had no right to park there.
The Bank denied it was negligent and affirmatively asserted it did not owe the
Halvorsons any duty with respect to the Bentleys’ easement “in that the Bentley
transaction was fully consummated prior to the [Halvorsons’] acquisition” of the
house lot that was subject to the easement.
The Bentleys answered and asserted counterclaims against the
Halvorsons, including a claim that the Halvorsons intentionally damaged the
Bentleys’ property. The Bentleys also asserted cross-claims against the Bank for
breach of warranty and breach of contract. The Bank answered the Bentleys’
cross-claims and admitted “that no express limitation on the scope of the
easement [was] set forth on the face of the deed,” but it affirmatively stated “the
real estate description for the easement [made] it clear that motor vehicle access
[was] not included within its scope.” The Bank denied that “there was a meeting
of the minds between [the] Bentleys and the [Bank], through its employed real
estate agent, that the easement would be used for travel over and across the
servient estate, and for parking a vehicle thereon.”
A bench trial was held in May 2014. At the trial’s outset, the court noted it
had before it “a blend of legal and equitable claims,” and it advised the parties it
10
was “going to try this as if the whole [was] in equity,” but that when evidence was
offered to which there was an objection, each party should “state your objection”
and “the basis for your objection so that it’s in the record.” The court stated it
would admit the evidence subject to the objections and explained it would not
consider irrelevant or inadmissible evidence with respect to each claim in making
its decision.
At trial, Roger Halvorson admitted he read the legal description of the
easement, but he testified he “just assumed that the easement was going to go
closer to the property line rather than . . . meandering back through the other two
lots.” Roger did not know the prior owner/mortgagee had been parking in the
Driveway; Roger testified he had “never visualized the driving and parking
situation” and believed “[a]ccess was by foot traffic primarily.” Curtain testified he
told the Bank’s realtor that he “believed there was going to be an easement,” but
he did not “have any specifics.” The Bank’s realtor testified she did not
remember Curtain expressly using the word “parking,” but she believed it was
Curtain’s understanding that the purpose of the easement was for parking,
testifying “[t]hat was the purpose of the easement.”
Following trial, the court entered its decree on March 3, 2015, finding the
easement created by the Bank was for “access” only, meaning the right to
ingress and egress and not for parking. The court noted that the Bentleys’ deed
does not define any purpose for the easement, and it relied upon the Halvorsons’
purchase agreement which only references “access.” The court found the
easement was intended to be twelve feet wide. Additionally, the court found this
11
easement was what the Halvorsons bargained for, so the Bank was not negligent
in this respect.
As to the Bentleys, the court found the easement set forth in their warranty
deed was not accurate because the easement omits the “access” limitation
language that is included in the Halvorsons’ purchase agreement, which
predated the Bentleys’ deed. Since the Bank chose to include the easement’s
description in the warranty deed it gave to the Bentleys, the court found the Bank
had a duty to defend the Bentleys in the Halvorsons’ declaratory-judgment action
concerning the easement, and it awarded the Bentleys attorney fees of
$14,257.28. The court also found the Bank was liable “for the amount of
consideration that [the Bentleys] paid for the easement described in their
warranty deed rather than the easement that was created” in the purchase
agreement between the Bank and the Halvorsons. The court found $7500 was
“approximately what the Bentleys paid in the expectation that they would receive
the easement described in their warranty deed rather than the more limited
easement that they actually received.” The court concluded the Bentleys did not
prove any breach of contract separate from the warranty deed, and it entered a
final judgment in favor of the Bentleys for $21,757.28 against the Bank. The
court also denied the Bentleys’ counterclaims against the Halvorsons.
III. Post-Trial Proceedings.
On March 9, 2015, the Bank filed a motion pursuant to Iowa Rule of Civil
Procedure 1.1007 requesting additional time to file post-trial motions. It stated it
intended “to file one or more motions pursuant to [rule] 1.904 and/or 1.004 (sic)”
and gave reasons it asserted were good cause for the extension. Neither the
12
Bentleys nor the Halvorsons filed a resistance, and the court on March 17, 2015,
entered its order granting the motion, extending the deadline for post-trial
motions for all parties to April 17, 2015.
On April 17, 2015, the Bank filed its rule 1.904(2) motion challenging the
court’s findings and conclusions.2 Among other things, it argued the court erred
in ignoring its evidentiary objections under the parol evidence rule and “in
imposing a warranty of an easement upon the parties which the parties at the
time of the [warranty deed] did not agree upon.” The Bentleys filed their
resistance to the motion on April 27, 2015, which asserted, among other things,
that the Bank’s motion was “a poorly written, hurried and confused scattergun-
shot of supposed judicial errors, presenting no persuasive argument to change
the basis for the [district court’s] award of damages.” The Halvorsons did not
respond. On May 1, 2015, the court denied the Bank’s motion.
The Bank filed its notice of appeal on May 20, 2015. The Bentleys filed
their notice of appeal the next day. On its own motion, the Iowa Supreme Court
determined the Bentleys’ notice should be treated as a notice of cross-appeal. It
subsequently transferred the case to this court in May 2016, and it was submitted
following oral argument in November 2016.
IV. Scope and Standard of Review.
“Whether the district court tried a declaratory judgment proceeding in
equity or at law is determinative of our scope of review on appeal.” Ernst v.
Johnson Cty., 522 N.W.2d 599, 602 (Iowa 1994). Generally, “the determination
2
The docket shows the Bank faxed a copy of its rule 1.904(2) motion to the Clayton
County Clerk of Court on April 17, 2015, and another copy of the motion was received
and file stamped on April 21, 2015.
13
of easement rights is equitable,” Gray v. Osborn, 739 N.W.2d 855, 860 (Iowa
2007), prompting a de novo review, see Ernst, 522 N.W.2d at 602. However, “an
action on contract is treated as one at law.” Van Sloun v. Agans Bros., 778
N.W.2d 174, 178 (Iowa 2010). Additionally, “we review a decision by the district
court to admit oral evidence of a contract under an exception to the statute of
frauds for correction of errors at law.” Pavone v. Kirke, 801 N.W.2d 477, 491
(Iowa 2011).
“If both legal relief and equitable relief are demanded, the action is
ordinarily classified according to what appears to be its primary purpose or its
controlling issue.” Van Sloun, 778 N.W.2d at 179 (internal quotation marks and
alterations omitted). If “an action at law and an action in equity are consolidated
and tried in equity, our review of both matters is de novo.” In re Marriage of
Tigges, 758 N.W.2d 824, 826 (Iowa 2008) (citing Knigge v. Dencker, 72 N.W.2d
494, 495 (Iowa 1955)). “Where there is uncertainty about the nature of a case, a
litmus test we use in making this determination is whether the trial court ruled on
evidentiary objections. In addition, where the trial court labels its ruling a
‘decree,’ this is an indication it tried the matter in equity.” Ernst, 522 N.W.2d at
602.
Here, the district court heard all evidence, subject to objections, but did
not expressly rule upon the objections. Additionally, it issued a “Judgment and
Decree” following trial. We believe the relevant factors considered together
indicate the court tried this matter in equity, and our review is therefore de novo.
See id. “This means that the district court’s findings of fact are not binding, but
we will ‘give deference to those findings because the district court had the
14
opportunity to assess the credibility of the witnesses.’” Horsfield Materials, Inc. v.
City of Dyersville, 834 N.W.2d 444, 452 (Iowa 2013) (citation omitted).
V. Discussion.
The Bank appeals the district court’s ruling finding it owed a duty to the
Bentleys concerning the easement, asserting the court considered impermissible
evidence in reaching that decision. The Bentleys cross-appeal, arguing the court
erred in finding the easement does not include parking but correctly determined
the Bank owed them a duty based upon their warranty deed. The Halvorsons
responded to the Bank’s appeal requesting the district court’s ruling be affirmed
in all respects. They also responded to the Bentleys’ cross-appeal, asserting the
Bentleys’ appeal was untimely. Alternatively, they argued the court correctly
found the easement was created for access only and not parking.
A. Timeliness.
The Halvorsons concede the Bentleys filed “a timely notice of cross-
appeal.” However, because some of the issues the Bentleys raise on appeal
were not raised by the Bank in its direct appeal and in its rule 1.904(2) motion,
the Halvorsons assert the Bentleys were required to appeal their claims within
thirty days of the district court’s March 3, 2015 decree. Because the Bentleys’
appeal was not filed within that time, the Halvorsons believe we must dismiss the
Bentleys’ appeal on those claims for lack of appellate jurisdiction. The Bank joins
the Halvorsons’ claim that the Bentleys’ appeal was untimely, arguing the
Bentleys’ “new issues constitute a ‘direct appeal’ disguised as a ‘cross appeal.’”
In response, the Bentleys argue they had thirty days from the time the district
court filed its ruling denying the Bank’s rule 1.904(2) motion to file their notice.
15
“The timeliness of the filing of a notice of appeal is a jurisdictional
question.” Homan v. Branstad, ___ N.W.2d ___, ___ 2016 WL 6650114, at *2
(Iowa 2016). If the notice of appeal is not filed within the proper time period,
appellate courts “do not have subject matter jurisdiction over the appeal.” McKee
v. Isle of Capri Casinos, Inc., 864 N.W.2d 518, 525 (Iowa 2015). Consequently,
“[a]n appeal taken after the deadline must normally be dismissed.” Concerned
Citizens of Se. Polk Sch. Dist. v. City Dev. Bd. of State, 872 N.W.2d 399, 402
(Iowa 2015); see also Explore Info. Servs. v. Court Info. Sys., 636 N.W.2d 50, 54
(Iowa 2001) (stating the “rule is mandatory and jurisdictional” and requires
appellate courts “to dismiss a case not meeting these deadlines even if the
parties do not raise the issue”).
Iowa Rule of Appellate Procedure 6.101(1)(b) requires a notice of appeal
be filed within thirty “days after the filing of the final order or judgment” unless a
proper post-trial motion was “timely filed under [rule] 1.904(2) or [rule] 1.1007,” in
which case “the notice of appeal must be filed [thirty] days after the filing of the
ruling on such motion.” See Homan, ___ N.W.2d at ___. Rule 1.904(2) requires
that a motion brought under it be filed “within the time allowed for a motion for a
new trial.” Rule 1.1007 provides that motions brought under rule 1.1004, which
governs the requirements for filing a motion for a new trial, “be filed within fifteen
days after filing of the verdict . . . unless the court, for good cause shown and not
ex parte, grants an additional time not to exceed [thirty] days.”
Here, the district court was permitted to extend the deadline for filing post-
trial motions upon the Bank’s rule 1.1007 motion for good cause, which was not
challenged by the Halvorsons or the Bentleys. The court pushed out the
16
deadline for filing post-trial motions thirty days from the date it filed its order
granting the motion, expressly extending the deadline for filing post-trial motions
for all parties to April 17, 2015. Because the Bank filed its rule 1.904(2) motion
on April 17, 2015, its motion was timely filed. See also Blessum v. Howard Cty.
Bd. of Sup’rs, 295 N.W.2d 836, 840-41 (Iowa 1980) (“Because the order
extending time to file post-trial motions was valid . . . under rule 247, defendant’s
post-trial motions filed thirty days after verdict were timely and notice of appeal
therefrom was timely, giving us jurisdiction of this appeal.”).
Yet, if its motion was not proper, the time to file its notice of appeal would
not have been tolled.3 See Baur v. Baur Farms, Inc., 832 N.W.2d 663, 669 (Iowa
2013). A rule 1.904(2) motion is proper when it seeks “to obtain a ruling on an
issue that the court may have overlooked, or to request the district court enlarge
or amend its findings when it fails to comply with rule 1.904(1).” Id. It is not
proper if it merely “amounts to nothing more than a rehash of legal issues
previously raised.” Id.The Bank’s rule 1.904(2) motion is not a model of clarity. Nevertheless, it
highlighted at least one legal issue not explicitly addressed in the district court’s
decree—whether certain evidence was admissible considering the parol
evidence rule, an issue it challenges on appeal. Consequently, we conclude that
the Bank’s rule 1.904(2) motion was proper and tolled the time for it to file its
3
We note the Iowa Supreme Court recently adopted amendments to Iowa Rule of Civil
Procedure 1.904, effective March 1, 2017, which eliminates the need to determine if the
rule 1.904(2) motion was “proper.” See Iowa Supreme Ct. Order, Amendments to Iowa
Rule of Civil Procedure 1.904 and Iowa Rule of Appellate Procedure 6.101 (Nov. 18,
2016) (“[N]ew provisions in [rule 1.904] allow that a timely rule 1.904(2) motion will
extend the appeal deadline, subject to an exception for successive motions.”).
17
appeal. See, e.g., Sierra Club Iowa Chapter v. Iowa Dep’t of Transp., 832
N.W.2d 636, 642 (Iowa 2013) (finding rule 1.904(2) motion timely filed where
legal issue raised was not addressed by district court); In re Estate of Hord, 836
N.W.2d 1, 5 (Iowa 2013) (same). Accordingly, the Bank’s notice of appeal was
timely filed.
Though neither the Bank nor the Halvorsons challenge the timeliness of
the Bank’s appeal, both argue the Bentleys’ appeal was required to be filed
within thirty days of the court’s March 2015 decree, essentially because the
Bentleys raised new issues in their cross-appeal. Both cite Harvey v. Leonard,
268 N.W.2d 504, 517 (Iowa 1978), in support of their argument. That case
presented the following procedural posture:
Defendants William C. and Eugene Daubendiek appealed
from the judgment and decree of the trial court, and the original
plaintiff Ruth Harvey cross-appealed as to all of the defendants[,
including defendants F.W. Daubendiek and Letha Leonard]. F.W.
Daubendiek and Letha Leonard have not appealed, and filed a
motion to dismiss the cross-appeal against them, since it was not
filed within [thirty] days after the final decree was entered and was
not a cross-appeal as to them because they did not appeal.
....
The final judgment in this case was entered on July 3, 1975.
Defendants William C. and Eugene Daubendiek filed timely notice
of appeal on August 4, 1975, in accordance with [the Iowa Rules of
Civil Procedure].
Harvey, 268 N.W.2d at 511, 517. At that time, the rules stated “that a party may
appeal within [thirty] days of a final judgment and may cross-appeal within the
same [thirty]-day period or within five days of an appeal.” Id. at 517 (discussing
the rule, then numbered 335). The court stated Harvey filed a notice of cross-
appeal on August 7, 1975, “which was within the time for a cross-appeal but not
for a direct appeal.” Id. Because “Leonard and F.W. Daubendiek did not
18
appeal,” the court held Harvey’s “cross-appeal against them was not timely under
[the rule]” and granted the motion to dismiss. Id.Though Harvey has not been expressly overruled on this point, we think
later cases demonstrate Harvey is no longer good law for this proposition. In
State ex rel. Iowa Department of Transportation v. General Electric Credit Corp.,
448 N.W.2d 335 (Iowa 1989) (“General Electric”), the Iowa Supreme Court was
presented with the following scenario:
The Iowa Department of Transportation (IDOT) filed an action
against three separate corporate entities regarding their failure to
register and pay statutorily-required fees for the operation of an
aircraft within the state. The district court granted summary
judgment in favor of the IDOT against two of the defendants,
Heritage and G.E. Delaware, but refused to pierce the corporate
veil and granted summary judgment in favor of the third defendant,
G.E. Capital.
Heritage and G.E. Delaware filed a notice of appeal on the
twenty-ninth day after the district court’s judgment. IDOT filed a
notice of cross-appeal more than thirty days after the district court
judgment, seeking to appeal from that portion of the district court’s
ruling which granted summary judgment on behalf of G.E. Capital.
G.E. Capital sought to dismiss the cross-appeal as untimely,
claiming that because G.E. Capital was not a party to the original
appeal, the filing of the IDOT was not a cross-appeal but in fact
should be treated as an original appeal.
Stew-Mc Dev., Inc. v. Fischer, 770 N.W.2d 839, 845 (Iowa 2009) (citations
omitted) (summarizing Gen. Elec., 448 N.W.2d at 338-40). The IDOT argued the
relevant rule “specif[ying] the time within which a cross-appeal may be taken,”
then Iowa Rule of Appellate Procedure 5(a), permitted “a cross-appeal against
any party to the judgment appealed from, whether appellant or non-appellant.”
Gen. Elec., 448 N.W.2d at 338 (citation omitted).
Ultimately, the court agreed with the IDOT without mentioning Harvey,
only stating it found “no Iowa case on point.” See id. 338-40. Instead, the court
19
noted the rule did not define the term “cross-appeal,” “designate the parties
against whom a cross-appeal may be filed,” or “extend or restrict the right of
cross-appeal to any particular litigants.” Id. at 338-39. Rather, the rule “merely
direct[ed] that a cross-appeal—an undefined term—must be taken within the
specified time.” Id. at 339. Finding the rule ambiguous on the point, and
construing the rule “liberally so that [the controversy could] be fairly and
efficiently determined,” the court reasoned:
Allowing cross-appeals of this type would streamline the
appellate process by making “precautionary appeals” by a party
that prevailed at the trial level against some, but not all, adverse
parties unnecessary. The risk of any party suffering injustice
because of a last-minute appeal would be minimized, because a
party’s stake in the litigation could still be protected by cross-appeal
if portions of the judgment favorable to it are put in jeopardy by
appeal.
In this case, for example, the [IDOT] may well have chosen
not to appeal the judgment in favor of G.E. Capital only because it
believed that the judgment against Heritage and G.E. Delaware
was surely collectible. That judgment was finally appealed one day
before the time limit for appeal expired. Were we to adopt the
defendants’ construction of [the rule], the [IDOT] would have been
left with only one day to appeal the portions of the judgment
adverse to it so as to protect its rights in the event the portions of
the judgment favorable to it were reversed on appeal. We refuse to
place such a high premium on the gamesmanship likely to occur
under such a rule.
Moreover, litigants in the position of G.E. Capital in this case
would not be unfairly burdened by allowing cross-appeals of this
type against them under the Iowa rules. After all, [the rule] allows a
cross-appeal only if it is filed—at the very latest—no more than five
days beyond the thirty day time limit for an initial appeal. The
advantages of our court considering a judgment in its entirety
outweigh any inconvenience suffered by non-appellants who, like
G.E. Capital, are joined in the fray by cross-appeal within the short
time allowed for cross-appeals under the Iowa rules.
We hold that for purposes of appeal under Iowa Rule of
Appellate Procedure 5, an action involving multiple parties will be
considered to result in a single judgment, so that where one of the
several parties to the action appeals and jeopardizes any part of
the judgment, a party may cross-appeal against any other party to
20
the litigation within the time allotted for cross-appeals. The [IDOT’s]
cross-appeal, therefore, is properly before the court.
Id. at 339-40 (citations omitted).
The court revisited General Electric in Stew-Mc Development, where a
similar claim was raised:
Stew-Mc Development asserts that the Fischers seek to appeal
issues separate and apart from the issues appealed by the
Schmitts and that, as a result, their action should properly be
classified as an appeal, not a cross-appeal. If the Fischers’ filing is
characterized as an appeal it is untimely because it was not filed
within thirty days of the final judgment. If classified as a cross-
appeal, however, it complies with the rule because it was filed
within five days of the Schmitts’ appeal.
770 N.W.2d at 845. Stew-Mc Development argued General Electric was
distinguishable because, in General Electric, “the party bringing the cross-appeal
was a litigant with respect to the claims challenged in the original appeal.” Id. at
846. Unlike the cross-appellant in General Electric, “the Fischers [were]
attempting to file a cross-appeal against a party that was not part of the original
appeal.” Id. at 846. Stew-Mc Development also argued the Fischers’ claim in
their cross-appeal was “factually and procedurally independent of the claims
appealed in the Schmitt’s original appeal.” Id. The Iowa Supreme Court was not
persuaded, quoting its holding in General Electric and finding “no reason to
depart from this holding now.” Id. Again, without any reference to Harvey, the
court found the Fischers’ cross-appeal was timely filed. See id.The rules now provide “any notice of cross-appeal must be filed within the
[thirty]-day limit for filing a notice of appeal, or within [ten] days after the filing of a
notice of appeal, whichever is later.” Iowa R. App. P. 6.101(2). Here, the district
court’s ruling on the Bank’s 1.904(2) motion was filed May 1, 2015. The Bank
21
filed its timely notice of appeal on May 20, 2015. Irrespective of the issues raised
by the Bentleys or the parties they appeal against, General Electric and Stew-Mc
Development establish that once the Bank timely filed its notice of appeal, the
Bentleys had ten days thereafter to file their own notice of appeal. The reasoning
of those cases make sense; perhaps the Bentleys would have stood upon the
judgment entered in their favor against the Bank had the Bank not appealed. But
once the Bank appealed and required them to defend the appeal, there was no
harm in filing their own appeal.
The Bentleys filed their notice of appeal on May 21, 2015, one day after
the Bank filed its notice. Thus, the Bentleys’ notice of appeal was timely filed.
See also Blessum, 295 N.W.2d at 841 (“Because defendants’ appeal was timely,
plaintiff may cross-appeal in accordance with [the rules]. Plaintiff properly filed
his notice of cross-appeal within five days after the appeal. The cross-appeal
also was taken from the trial court’s final judgment on count V, as well as from
the denial of his post-trial motions. Because the cross-appeal was properly taken
from the final judgment on count V, we find that we also have jurisdiction to
entertain plaintiff’s cross-appeal.”).
B. Evidentiary Issues.
We turn to the Bank’s evidentiary claims concerning the statute of frauds
and parol evidence rule. Application of these rules must be discussed in context,
given the Bentleys’ challenge of the district court’s determination the easement is
for ingress and egress only, not parking.
22
1. Statute of Frauds.
[A]n easement is a liberty, privilege, or advantage in land
without profit existing distinct from ownership of the soil and
because it is a permanent interest in another’s land with the right to
enter at all times and enjoy it, it must be founded upon a grant by
writing or prescription.
Indep. Sch. Dist. of Ionia v. De Wilde, 53 N.W.2d 256, 261 (Iowa 1952).
Because an express easement must be founded upon a grant by writing, it falls
within the statute of frauds. See Gray, 739 N.W.2d at 861 (citing Iowa Code
§ 622.32 (2007)). “The statute of frauds, which is no more than a rule of
evidence, ‘governs, not the validity of a contract, but only the manner in which
one may be proven.’” Garland v. Branstad, 648 N.W.2d 65, 71 (Iowa 2002)
(citation omitted). Iowa’s statute of frauds provides:
Except when otherwise specially provided, no evidence of
the following enumerated contracts is competent, unless it be in
writing and signed by the party charged or by the party’s authorized
agent:
....
3. Those for the creation or transfer of any interest in lands,
except leases for a term not exceeding one year. . . .
Iowa Code § 622.32 (2010). “The Iowa statute of frauds does not render oral
promises invalid. Rather, the statute is a rule of evidence that renders
incompetent oral proof of such promises.” Pavone, 801 N.W.2d at 491.
Here, the written warranty deed between the Bank and the Bentleys
contains an easement that is legally described. The Bank does not dispute there
is an easement. Clearly the statute of frauds has been satisfied here, and the
Bank’s argument concerning the statute of frauds is without merit.
23
2. Parol Evidence.
“In the construction of written contracts, the cardinal principle is that the
intention of the parties must control; and except in cases of ambiguity, this is
determined by what the contract itself says. This rule is applicable to
construction of easement grants.” Wiegmann v. Baier, 203 N.W.2d 204, 208
(Iowa 1972) (internal citation omitted). “Ambiguity exists if, ‘after the application
of pertinent rules of interpretation to the face of the instrument, a genuine
uncertainty results as to which one of two or more meanings is the proper one.’”
Cairns v. Grinnell Mut. Reins. Co., 398 N.W.2d 821, 824 (Iowa 1987) (citation
omitted). “The parol evidence rule is not violated when extrinsic evidence is
received to assist the trial court in determining the meaning of contractual
language. The rule does not come into play until by interpretation the meaning of
the writing is ascertained.” Westway Trading Corp. v. River Terminal Corp., 314
N.W.2d 398, 402 (Iowa 1982) (citations omitted).
Here, we essentially have three contracts at issue—the two warranty
deeds given by the Bank and the purchase agreement between the Bank and the
Halvorsons. Each describes the easement in different terms, and there is
uncertainty as to which meaning controls. Because of the ambiguity between the
three contracts, we conclude the court’s admission and use of parol evidence
was permissible. We find no error by the district court in this respect.
C. Interpretation.
The district court found the easement “was created in the Offer to Buy
Real Estate and Acceptance that Halvorson and [the Bank] signed on February
20, 2010.” Though the purchase agreement came first in time, we do not agree
24
that its reference to the creation of an easement determines the meaning of the
easement set out in the Bentleys’ deed. First, “an instrument affecting real estate
is of no validity against subsequent purchasers for a valuable consideration,
without notice . . . unless the instrument is filed and recorded in the county in
which the real estate is located, as provided in [chapter 558].” Iowa Code
§ 558.41(1). However:
Existing rights in property may exist apart from filings in the
recorder’s office:
Absent express notice given, a land purchaser
generally has three established sources of information
to which he should turn for ascertainment of existing
rights in any property he proposes to buy: (1) the
records in the County Recorder’s office where basic
rights involved are recorded; (2) other public records,
to discover existence of rights not always disclosed in
the County Recorder’s office, i.e., judgments, liens
and taxes; and (3) an inspection of the land itself, to
determine by observation any rights which may exist
apart from our recording system by virtue of
occupancy, use or otherwise.
Nat’l Props. Corp. v. Polk Cty., 351 N.W.2d 509, 511 (Iowa 1984) (quoting
Bartels v. Hennessey Bros., Inc., 164 N.W.2d 87, 94 (Iowa 1969)). Thus “notice,”
as referred to in section 558.41(1), may be either actual or constructive. Id.“Constructive notice is given by compliance with the recording statutes,” whereas
“[a]ctual notice depends upon the purchaser having either actual knowledge of
the easement or knowledge of sufficient facts to charge him or her with a duty to
make inquiry that would reveal the existence of the easement.” Id. If a prudent
person had inquired with ordinary diligence and found actual notice of rights
claimed adversely by another, the land purchaser is charged with having that
notice. See id.; see also 25 Am. Jur. 2d Easements and Licenses § 81 (2016).
25
The Bank, as owner and seller of both lots, had the right to grant future
owners of the duplex lot an express easement over the house lot. See 25 Am.
Jur. 2d Easements and Licenses § 12. Though its purchase agreement with the
Halvorsons occurred first in time, the purchase agreement was not recorded.
Moreover, the Bentleys’ inspection of the land revealed that the mortgagee was
using the Driveway and parking his vehicles near the walkway. This led them to
inquire what rights they would have over the house lot if they purchased the
duplex lot, and they were never told by the Bank their rights would be limited to
“access” only nor were they given a copy of the purchase agreement between
the Bank and the Halvorsons. Consequently, though that purchase agreement
came first in time, it does not change the easement created by the Bank in the
warranty deed it gave to the Bentleys.
There is no dispute that the Bentleys’ deed with the express easement
was properly recorded before the official sale to the Halvorsons took place. It
was the Halvorsons responsibility to investigate—or perhaps the Bank’s burden
to inform the Halvorsons of—the existence and scope of the easement and
determine what rights it afforded the duplex-lot owners before they purchased the
property. Had they reviewed the Bentleys’ recorded deed, or even asked the
Bank about the easement Roger knew the Bank was creating, they would have
had notice the easement was established by the Bank on the house lot without
any limitation or express purpose. For these reasons, we conclude the Bentleys’
deed, given by the Bank, created the easement and controls the outcome.
The Bentleys’ deed states there is an easement and gives the metes and
bounds of the easement. However, besides the obvious omission of the word
26
“foot,” the Bentleys’ deed does not state any purpose for the easement. It does
not even contain the word “access.” Does that mean the easement is
ambiguous? We think not.
Where the existence of an easement is in general terms, it
implies a grant of unlimited reasonable use such as is reasonably
necessary and convenient and as little burdensome as possible to
the servient owner. The holder of an easement may make the way
as useable as possible for the purpose of the right owned so long
as he or she does not increase the burden on the servient
tenement or unreasonably interfere with the rights of the owner
thereof. A court’s easement overburdening analysis will evaluate
whether it is reasonable to conclude that a particular use was within
the contemplation of the parties to the conveyance and, in that
context, whether the contested use made of the servient estate by
the dominant estate exceeds the rights granted to the user.
Id. § 62 (footnotes omitted); see also Jon W. Bruce & James W. Ely, Jr., The Law
of Easements & Licenses in Land § 8:3 (2016) (“Despite the professed emphasis
on the binding effect of precise language, the parties are deemed to have
contemplated the easement holder’s right to do whatever is reasonably
convenient or necessary in order to enjoy fully the purposes for which the
easement was granted. What constitutes reasonable usage is a question of
fact.” (footnotes omitted)).
And it is the general rule that where a right of way is granted it may
be used for any purpose to which the land accommodated thereby
may reasonably be devoted, unless the grant contains specific
limitations and the grantee can avail himself of modern inventions,
if by so doing he can more fully exercise and enjoy or carry out the
object for which the easement was granted.
Wiegmann, 203 N.W.2d at 208. Given the general terms of the easement, we
think a grant of unlimited reasonable use as is necessary and convenient was
intended, which included parking.
27
We would also reach the same result if we found the language to be
ambiguous. As noted above, “the intention of the parties is of paramount
importance.” Gray, 739 N.W.2d at 861 (citing Restatement (Third) of Property:
Intent to Create a Servitude § 2.2 cmt. d (Am. Law Inst. 2000)).
When the purpose of an express easement is not clear, a court
must ascertain the objectively manifested intention of the parties to
the original conveyance in light of the circumstances in existence at
the time the easement was made, as well as the physical condition
of the premises, and the use of the easement and acts acquiesced
to during the years shortly after the original grant.
25 Am. Jur. 2d Easements and Licenses § 63 (footnotes omitted). Furthermore,
“a grant or reservation of an easement will ordinarily be construed in favor of the
grantee.” Id. § 17.
Here, the Bank included the easement in the warranty deed it delivered to
the Bentleys before it finalized the sale of the house lot to the Halvorsons. The
Bank could have limited the scope of the easement in the Bentleys’ deed, but it
did not. The Bentleys were left in the dark as to any pre-existing agreement
between the Bank and the Halvorsons. Moreover, what became the easement
was a driveway used for parking before the Bank sold either lot of land. The
Driveway is not an alleyway or through street; it leads directly to a walkway to the
duplex’s upper unit’s front door. At the time of the sale, that was the only way to
access the upper-level unit. To presume it would be used to drop a person off
(and whatever goods they may have to take in), and then require the driver to
drive back down and park, then walk back up the easement to go into the upper-
level unit makes no sense. The mortgagee’s historical use of the Driveway as a
driveway with parking was evident before the Bank sold the lots. Considering the
28
parties’ intent, along with the realtors’ testimony, the odd and steep location of
the Driveway and its prior use, and construing any ambiguities against the Bank,
a reasonable person in the Bentleys’ position would believe the easement’s
purpose includes not only ingress and egress to the upper unit of the duplex but
also parking. We reverse the district court on this issue.
D. Remaining Issues.
1. Bentleys’ Appellate Claim for “Turnabout.”
For the first time on appeal, the Bentleys argue the width of the easement
should be expanded to allow them to turn around at the south end of the
Driveway. However, they conceded at oral argument that this claim was not
raised before or decided by the district court. “It is a fundamental doctrine of
appellate review that issues must ordinarily be both raised and decided by the
district court before we will decide them on appeal.” Meier v. Senecaut, 641
N.W.2d 532, 537 (Iowa 2002). We therefore conclude error was not preserved
on this claim.
2. Bentleys’ Judgment Against the Bank.
Because we conclude the easement established by the Bank in the
Bentleys’ warranty deed is not limited to mere access but includes parking, we
reverse and vacate the district court’s award of $7500 to the Bentleys for the cost
of the easement it found they were sold but did not receive. However, we also
must address the district court’s award of trial attorney fees.
Attorney fees are generally not allowable in the absence of statute or an
agreement by the party to be charged. See Van Sloun, 778 N.W.2d at 182. But,
the Iowa Supreme Court “has long allowed the recovery of attorney fees incurred
29
in defending title as an element of damages for breach of the covenant of title.”
Gaede v. Stansberry, 779 N.W.2d 746, 749 (Iowa 2010). A covenant of
warranty, the principal covenant found in most deeds, constitutes an agreement
by the grantor that upon the failure of the title which the deed purports to convey,
either for the whole estate or part only, the grantor will pay compensation for the
resulting loss. See Kendall v. Lowther, 356 N.W.2d 181, 189-90 (Iowa 1984).
Here, the warranty deed given to the Bentleys by the Bank stated the Bank
“covenants to Warrant and Defend the real estate against the lawful claims of all
persons . . . .”
Generally:
A party is entitled to recover of the covenantor all reasonable
costs attending a litigation of the question of title. Thus, when the
covenantee in good faith defends the title, recovery of the taxable
costs and expenses paid by him or her in that action is allowed. In
fact, in an action for breach of covenant of warranty, the
covenantee may recover for the damages and costs and expenses
of suits brought against him or her, but also for the costs and
expenses of suits brought by him or her, affecting the title to the
estate; this is so because each suit may have been part of the
means by which the title was sought to be defended. In some
jurisdictions, in an action against the covenantor for breach of
covenant, only the taxable costs incurred by the covenantee in
defending the title may be recovered.
20 Am. Jur. 2d Covenants, Etc. § 139 (footnotes omitted). However, “before a
covenantee may recover the expenses attending the defense of the title to the
property, the covenantor must be given notice of the proceeding in which the
validity of the title is attacked and have failed to or chosen not to defend.”
Gaede, 779 N.W.2d at 750 (citation omitted).
Here, the Halvorsons filed suit against the Bentleys concerning the
easement, and the Bentleys requested the Bank defend them in the suit pursuant
30
to the warranty deed. The Bank refused. Given the Bank’s warranty to the
Bentleys, its refusal to defend them, and its contrary position in the underlying
suit against them, we conclude that the district court’s award of trial attorney fees
to the Bentleys was proper. Accordingly, we affirm that award of $14,257.28 for
trial attorney fees and costs.
3. Bentleys’ Request for Appellate Attorney Fees.
Finally, we address the Bentleys’ request for appellate attorney fees.
“Generally, attorney fees are not allowable unless authorized by statute or
contractual agreement.” FNBC Iowa, Inc. v. Jennessey Grp., L.L.C., 759 N.W.2d
808, 810 (Iowa Ct. App. 2008) (citing W.P. Barber Lumber Co. v. Celania, 674
N.W.2d 62, 66 (Iowa 2003)). However, courts are authorized “to award attorney
fees in an action where ‘judgment is recovered upon a written contract containing
an agreement to pay an attorney’s fee.’” Id. (quoting Iowa Code § 625.22).
Given the terms of the Bentleys’ warranty deed issued by the Bank and the
circumstances of the case, the Bentleys are entitled to reasonable appellate
attorney fees.
VI. Conclusion.
The Bentleys’ appeal was timely filed. They also proved the easement
established by the Bank on the house lot is not merely for access, i.e. ingress
and egress, but also includes parking for the upper unit of the duplex. We
reverse the district court on this issue. We deny the claims raised by the Bank
on appeal.
In light of our conclusion, we vacate the district court’s award of damages
to the Bentleys. We affirm the award of trial attorney fees and costs to the
31
Bentleys. Additionally, we find the Bentleys are entitled to reasonable appellate
attorney fees and costs. Accordingly, we remand to the district court to enter
judgment consistent with this opinion and to determine the reasonable amount of
appellate attorney fees and costs to be awarded to the Bentleys.
Costs are taxed to the Bank.
JUDGMENT VACATED IN PART, AFFIRMED IN PART, AND
REMANDED WITH DIRECTIONS.