IN THE COURT OF APPEALS OF IOWA

No. 22-1801

Filed November 8, 2023

IN THE MATTER OF THE ESTATE OF JOHN EUGENE JOHNSTON, Deceased.

PEGGY JOHNSTON,

Appellant.

________________________________________________________________

Appeal from the Iowa District Court for Wapello County, Greg Milani, Judge.

Peggy Johnston appeals an adverse grant of a directed verdict on her claim 

against her deceased husband’s estate. REVERSED AND REMANDED.

Richard J. Gaumer of Gaumer, Emanuel, Carpenter & Goldsmith, P.C., 

Ottumwa, for appellant.

Randall C. Stravers of Stravers Law Firm, Oskaloosa, and Greg Life, 

Oskaloosa, for appellees.

Heard by Tabor, P.J., Badding, J., and Blane, S.J.*

*Senior judge assigned by order pursuant to Iowa Code section 602.9206 

(2023).
2

BADDING, Judge.

After John Johnston died in March 2018, his wife, Peggy Johnston, filed a 

claim against his estate for “[o]ne-half of the joint accounts held by” them. The 

claim alleged funds from the joint accounts were transferred to John’s daughter 

from a prior marriage—Rebecca Askeland. At the close of Peggy’s evidence at 

the hearing on the claim, Rebecca and the estate moved for a directed verdict. 

The court granted the motion, analyzing Peggy’s claim under the elements for the 

tort of conversion. Peggy appeals, claiming the court “applied the incorrect law to 

the facts presented.” We agree. The court’s directed verdict for Rebecca and the 

estate is reversed, and we remand for completion of the hearing on the claim.

I. Background Facts and Proceedings

John and Peggy married in 1980. Rebecca is John’s daughter from a prior 

marriage. John and Peggy held joint checking and savings accounts throughout 

their marriage. They both used the accounts and deposited money into them, 

though most of the deposits were from John’s retirement benefits and investments. 

John and Peggy would normally deposit their money into the savings account, 

which was interest-bearing, and then make transfers to their checking account to 

cover “household bills, groceries, any other things that came up.” Peggy agreed 

that neither she nor John made “an attempt to distinguish in the accounts what 

was [hers] and what was his”—“it was all kind of bunched together as a joint 

account like married people often do.” 

This appeal involves two certificates of deposit purchased by John before 

his death with funds that Peggy contends came from, or went through, their joint 

accounts. Peggy testified that she did not know about the transactions involving 
3

the certificates of deposit until after John’s death. She explained that she and John 

would discuss some financial decisions, like building a house, for example. But, 

generally, if John “wanted to do something, you know money-wise, he would go 

and shuffle money and withdraw money and not say anything about it.” Peggy 

testified this behavior increased as the marriage went on, and she didn’t see the 

bank statements later in the marriage because John would get the mail. 

The first certificate—in the amount of $40,000.00—was issued on June 26, 

2015, to John and Rebecca jointly with survivorship. Peggy testified the money 

for that certificate came from her joint savings account with John, although a letter 

from the bank that issued the certificate stated it “was purchased in 2015 after 

closing a CD with John as the only owner.” A deposit slip, admitted into evidence 

as Exhibit 8, was dated the same day as the new certificate of deposit was issued. 

It listed a closed certificate of deposit in the amount of $45,736.05 in the deposit 

column and a “New CD” of $40,000 under the “less cash” column. The remaining 

$5736.05 went into the joint savings account shared by John and Peggy. At the 

hearing, the parties seemed to agree that all the money from the closed certificate 

of deposit went through the couple’s savings account before the new $40,000 

certificate of deposit was purchased.1 Once that certificate matured, John 

1 On redirect examination by her attorney, Peggy testified: “Q. Ms. Johnston, that 

$40,000 if you look back at Exhibit No. 8, the source of that CD, that $40,000 that 

was just in John’s name, that money came from your joint account as shown on 

Exhibit 8? A. Yes.” Later, when Peggy’s attorney asked her, “Was there a plan 

to take $40,000 from the joint account and open John’s own account?” Rebecca’s 

attorney objected, arguing: “It’s a misstatement of the record. The money came 

from this other CD. It didn’t come from the joint account. It went through it, but the 

money came from this other CD.” (Emphasis added.) Peggy later agreed “the 

$40,000 . . . went through the joint account.”
4

deposited the proceeds of $40,331.82 into a new checking account that he opened 

in his name only on January 3, 2017. 

The second certificate—in the amount of $70,000.00—issued on 

September 6, 2016, to John and Rebecca jointly with survivorship. A bank 

statement from the savings account shared by John and Peggy shows a 

withdrawal of $70,000.00 from the account on September 7, 2016. Peggy agreed

the $70,000.00 that was used for this certificate came from the sale of real property 

owned solely by John, but the evidence shows that sale occurred roughly five 

years earlier.2 This certificate of deposit was to mature in March 2017 at a value 

of $70,052.07. That exact sum was deposited into John’s separate checking 

account on March 9. 

John executed his last will and testament in December 2017. His will left 

all his property to his three daughters, including Rebecca, either directly or through 

a testamentary trust. John died on March 11, 2018. According to the joint account 

report issued by the bank, the combined value of the joint checking and savings 

accounts shared by John and Peggy was $722.15 when John died, with Peggy as 

the surviving owner. As for the checking account that John opened with the 

proceeds of the first certificate of deposit, the bank’s report form listed Rebecca as 

the surviving owner and noted the value at death was $79,761.12.

2 The parties do not dispute that the $70,000.00 in proceeds from the 2011 sale of 

real property went into the joint accounts. However, a June 2015 bank statement 

for the savings account indicates that not all the funds from that sale were left in 

the account since its balance was in the $20,000.00 range. But by the end of April 

2016, the savings account balance was at $228,565.48. 
5

Rebecca petitioned to probate John’s will shortly after his death. Peggy 

filed a notice of her election to receive her share of the estate as John’s surviving 

spouse. In time, Peggy filed a claim against the estate for $94,500.00 attributable 

to “[o]ne-half of the joint accounts held by John Johnston and Peggy Johnston 

which were transferred to Rebecca Askeland,” as reflected by “a certificate of 

deposit of $70,000, a certificate of deposit of $40,000 and a joint checking account 

of $79,000.” After Peggy requested a hearing, see Iowa Code § 633.443 (2018), 

the estate denied the claim. An attorney for Rebecca entered an appearance 

before the hearing on the claim.

In a prehearing brief, Peggy argued that she was entitled to one-half of the 

money John used from joint accounts to buy the certificates of deposit, which 

would be $55,000.00.3 She likened her claim to one discussed by this court in 

Kettler v. Security National Bank, 805 N.W.2d 817, 823 (Iowa Ct. App. 2011), 

which held that “[i]n a case where a joint tenant makes a valid withdrawal of more 

than his proportional share,” the remedy is “a suit between the joint tenants to 

recover the funds taken in excess of the withdrawing joint tenant’s proportional 

share.” Peggy concluded her brief by “seeking recover[y] for John’s removal of 

excess funds from the joint tenant account, plus interest from the date of 

conversion.” 

At the hearing, Peggy’s evidence was limited to her testimony and stipulated 

exhibits from the parties. Once Peggy rested, Rebecca and the estate moved for 

3 Peggy also asked for one-half of the funds John used to buy a new truck before 

his death. That issue is not raised in this appeal. And she abandoned her claim 

to the $79,000 in the checking account John had at his death that was payable to 

Rebecca. 
6

a directed verdict, arguing that “the testimony is clear there was no attempt by the 

parties to keep track of the monies in those accounts as my account, your account.” 

They continued by challenging Peggy’s contention that the funds used to buy the 

certificates of deposit came from her and John’s joint accounts: 

[W]e have a source of funds for the $40,000 as a prior CD in the 

name of John only. That’s in a letter from the bank. It’s undisputed. 

That $40,000 did not come from the money in a joint account. It 

came through. The money was transferred through because it had 

to go through the account, but it didn’t originate there. It was from a 

prior CD and that’s what the record shows.

Same thing with the $70,000. The claimant’s own testimony 

is that $70,000 was from the proceeds from the sale in real estate. 

Real estate just in the name of the decedent, John Johnson.

In response, Peggy contended that under Kettler, 

a cotenant may not withdraw from the account in excess of his 

interest. If he has done so, he’s liable to the other joint [cotenant] for 

the excess so withdrawn. It’s a joint account. There is no document 

that has been produced by anyone to show that this was other than 

an equal 50-50 division account. 

Ruling from the bench, the court granted the motion for directed verdict:

The Court finds that for conversion there has to be ownership by the 

plaintiff or other possessory right in the plaintiff greater than that of 

the defendant. There was no evidence of that in this case.

Also has to show dominion or control over titles by the 

defendant inconsistent with or derogation of the plaintiff’s possessory 

rights. There’s limited evidence of that and limited evidence of 

damages. There’s no evidence to prove this was anything other than 

estate planning done by the decedent. And there’s also great 

evidence that th[e] account transfers were made and done with the 

knowledge of the plaintiff and with her consent.

When you consider the sources of the funds, particularly all 

the income apparently to the account came from income, retirement 

income, and earnings of the decedent. And therefore, the Court rules 

case dismissed.[4]

4 The supreme court has stated that when actions are tried to the court without a 

jury, the motion should be designated as a motion to dismiss instead of a motion 

for a directed verdict, although “[t]he misnomer is not material . . . because a motion 
7

The court then entered an order dismissing the claim “[f]or the reasons set 

forth on the record.” Peggy appeals.

II. Standard of Review

Review of the district court’s grant of a motion for directed verdict is for legal 

error. Rumsey v. Woodgrain Millwork, Inc., 962 N.W.2d 9, 20 (Iowa 2021). 

We review the evidence in the light most favorable to the party 

against whom the motion was sustained. The movant is considered 

to have admitted the truth of all evidence offered by the adversary 

and every favorable inference that fairly and reasonably may be 

deduced from it. An order sustaining such a motion rests on legal 

grounds and does not find facts. Sustention is warranted only when 

the evidence is insufficient as a matter of law to permit the adverse 

party to recover.

Rodgers v. Baughman, 342 N.W.2d 801, 803–04 (Iowa 1983) (internal citations 

omitted).

III. Analysis

We start and end with Peggy’s claim that the district court “applied the 

incorrect law to the facts.” More specifically, she argues the court “analyzed [her] 

claims as a conversion case in tort and not a contract case” raising “a claim based 

upon a loss of a proportional interest of the bank accounts.” 

As laid out above, the district court did find Peggy failed to establish that her 

ownership or other possessory right over the funds was greater than the 

defendants’ rights in the same. And Peggy is correct that this is an element of a 

conversion claim sounding in tort. See Larew v. Hope Law Firm, P.L.C., 977 

N.W.2d 47, 60 (Iowa 2022) (noting conversion plaintiff must prove, among other 

to dismiss during trial is equivalent to a motion for directed verdict.” Iowa Coal 

Mining Co., Inc. v. Monroe Cnty., 555 N.W.2d 418, 438 (Iowa 1996).
8

things, “that his ownership or other possessory right in certain property exceeded 

the defendants’ rights in the property”). But that is not the type of claim Peggy 

brought.

Instead, Peggy sought recovery of her proportional interest in a joint bank 

account. That type of conversion claim—which Peggy addressed in her 

prehearing brief—is different in that it is controlled by contract law and does not 

require the establishment of a greater ownership or possessory right. As the court 

in Kettler explained, “Joint tenancy property is property held by two or more parties 

jointly, with equal rights to share in the enjoyment of the whole property during their 

lives, and a right of survivorship which allows the surviving party to enjoy the entire 

estate.” 805 N.W.2d at 821 (emphasis added) (citation omitted). The parties’ 

shares of “a joint bank account are determined by the rules of contract law, and 

the intent of the parties . . . is controlling.” Anderson v. Iowa Dep’t of Human 

Servs., 368 N.W.2d 104, 109 (Iowa 1985). The starting point is the presumption 

that each joint tenant owns an equal share in the joint account, although this 

presumption is rebuttable. Id. When the presumption of equal shares prevails and 

one joint tenant makes a valid withdrawal of more than his or her proportional 

share, then he or she is liable to the other joint tenant for the excess.5 See Kettler, 

5 We note this case is not really about severance or termination of the joint tenancy 

like Kettler was. A withdrawal of funds can support termination or severance of a 

joint tenancy. See Kettler, 805 N.W.2d at 823. But severance or termination only 

affects the survivorship interest, not the proportional share. See id. at 823, 825. 

There is no dispute that Peggy has a survivorship interest in the funds remaining 

in the accounts, so the joint tenancy in the accounts themselves was not 

terminated. While withdrawal of funds would terminate or sever joint tenancy as 

to the withdrawn funds, the other joint tenant may still recover those funds based 

on their proportional interest. See id. at 825. 
9

805 N.W.2d at 823, 825; see also Anderson, 368 N.W.2d at 110; In re Est. of 

Klingaman, No. 10-0095, 2010 WL 3894264, at *3 (Iowa Ct. App. Oct. 6, 2010) 

(“Withdrawal in excess of one’s real interest may create a liability to the other joint 

tenant.”).

The district court missed the mark by requiring Peggy to prove a greater 

ownership or possessory right to the funds in the joint account, though we can see 

why it did so given the use of the term “conversion” by Peggy and the court in 

Kettler. See also In re Est. of Nickles, No. 15-1317, 2016 WL 4384687, at *2 (Iowa 

Ct. App. Aug. 17, 2016) (describing the claim in Kettler as one for conversion). 

And, as Peggy contends on appeal, estate planning was not a valid reason for the 

court to grant the motion. Under Kettler, even though John had a right to withdraw 

the funds and put them under his control for estate-planning purposes, “he did so 

at the risk of [Peggy] claiming her proportionate share.” 805 N.W.2d at 825. 

So Peggy is correct that the district court applied an improper legal standard 

and resulting burden. From there, Peggy argues that she prevails under the 

correct legal framework, submitting that “[i]n this case there is no evidence that 

ownership was other than equal.” In other words, Peggy contends the evidence 

conclusively established that the presumption of equal ownership was not 

rebutted, so we should enter judgment in her favor. On the flip side, Rebecca and 

the estate contend the presumption of equal ownership “was clearly overcome” 

because (1) neither John nor Peggy “attempt[ed] to distinguish what funds in the 

accounts were hers and what funds in the account[s] were his” and (2) the disputed 

funds were proceeds from the liquidation of other assets owned solely by John.
10

On the first point, the critical intent question in examining whether the 

presumption was overcome is “the intent of the parties in creating the joint tenancy 

account[s],” not their use of the accounts over the years.6 Anderson, 368 N.W.2d 

at 110; accord Grout v. Sickels, 985 N.W.2d 144, 152 (Iowa 2023) (discussing 

Frederick v. Shorman, 147 N.W.2d 478, 481–83 (Iowa 1966) and explaining the 

relevant intent to overcome the presumption of equal shares is the intent existing 

at the time the joint tenancy was created); In re Est. of Kirk, 591 N.W.2d 630, 634 

(Iowa 1999) (“The proportional interest is the joint tenant’s interest which comes 

from the creation of the joint tenancy . . . .”); 48A C.J.S. Joint Tenancy § 22 (Aug. 

2023 update) (“[T]he rights of the joint tenants are fixed and vested at the time of 

the creation of the joint tenancy.”).

7

 There was no evidence presented on that 

question, meaning at the point when the directed verdict was granted, the 

presumption of equal shares prevailed. See Anderson, 368 N.W.2d at 109 (noting 

the burden to rebut the presumption is on the party who contends the joint account 

was not equally owned); accord Frederick, 147 N.W.2d at 483–84; Iowa R. App. 

6 Assuming the parties’ use of the accounts was relevant to the intent question, if 

both had free rein over the accounts as Rebecca and the estate assert, then there 

would not have been an agreement contrary to equal shares and the presumption 

would prevail. 

7 One unpublished decision does say that “[t]he co-owners’ intent may be inferred 

from their purpose for creating the joint account as well as the pattern of deposits 

and withdrawals,” which suggests that the parties’ use of the account can shed 

light on the intent of the parties in creating it. Nickles, 2016 WL 4384687, at *2. In 

support of that statement, Nickels cites, among other cases, Schroeder v. Todd, 

86 N.W.2d 101, 104 (Iowa 1957), which explained unequal contributions, i.e. 

deposits, to a “tenancy in common, overcomes presumption that they take equal 

shares, and raises presumption they intended to share in proportion to amounts 

contributed by each.” The supreme court has since said Schroeder does not apply 

to property acquired as a joint tenancy with rights of survivorship. Grout, 985 

N.W.2d at 152–53.
11

P. 6.904(3)(e) (“Ordinarily, the burden of proof on an issue is upon the party who 

would suffer loss if the issue were not established.”).

The evidence on the second point was conflicting, at least as to the $40,000 

used to buy the certificate of deposit in June 2015. Peggy testified the $40,000 

came from the joint savings account, though when confronted with bank records 

that did not support that assertion, she clarified the $40,000 went “through the joint 

account.” Rebecca and the estate seemed to agree, arguing “[t]hat $40,000 did 

not come from the money in a joint account. It came through. The money was 

transferred through because it had to go through the account, but it didn’t originate 

there.” See Bellville v. Farm Bureau Mut. Ins. Co., 702 N.W.2d 468, 473 

(Iowa 2005) (“[T]he trial court was required to view the evidence in the light most 

favorable to the plaintiff, ‘regardless of whether it was contradicted.’” (citation 

omitted)). They likewise agreed the $70,000 withdrawal that was made to buy the 

second certificate of deposit in September 2016 came from the joint savings 

account. See Anderson, 368 N.W.2d at 109 (discussing New York law with 

approval and observing a New York court reversed a conclusion that the 

presumption of equal shares was rebutted when there was no evidence that 

depositor “did not intend to confer a beneficial interest in the account by making a 

gift to her nephew of one-half of the sums on deposit” (quoting Coughlin v. Comm’r 

of Soc. Servs., 75 A.D.2d 895, 896 (N.Y. App. Div. 1980))); see also Kettler, 805 

N.W.2d at 824 n.7 (observing that, under New York law, “[w]hen a joint tenant 
12

deposits funds into the account, one-half of the funds are presumed to be a gift to 

the other joint tenant”).8 

The district court did not address this evidence or its implications, focusing 

instead on the elements for the tort of conversion. As our supreme court explained 

in Papillon v. Jones, 892 N.W.2d 763, 773 (Iowa 2017), 

If we find an incorrect legal standard was applied, we remand 

for new findings and application of the correct standard. Although an 

omitted ruling on an issue of law may sometimes be cured by this 

court’s ruling on that issue, this is not possible with respect to an 

omitted finding of fact in a law-tried case. 

(Cleaned up.) Unless we determine there is insufficient evidence as a matter of 

law, we must remand to the district court. Id. at 773; accord Rodgers, 342 N.W.2d 

at 804. 

Upon viewing the evidence in the light most favorable to Peggy, assuming 

its truth and every favorable inference that can be deduced from it, we cannot say 

the evidence was insufficient as a matter of law to sustain her claim. See 

Rodgers, 342 N.W.2d at 803; see also Bellville, 702 N.W.2d at 473. We 

accordingly reverse the court’s directed verdict and remand for completion of the 

hearing on the claim and adjudication on the merits, applying the correct legal 

framework as laid out above. See Rodgers, 342 N.W.2d at 807; accord Double H 

Livestock, Inc. v. Gathman, No. 02-0191, 2003 WL 289270, at *3 (Iowa Ct. App. 

Feb. 12, 2003) (concluding the district court “committed error in granting 

defendant’s motion for directed verdict” where the evidence was conflicting and 

8 As noted, Anderson discussed New York law with approval. Kettler did state that 

“the ‘New York rule’ is not consistent with Iowa law,” but that statement appears to 

be limited to severance of joint tenancies and does not apply to the rule about the 

presumption of equal shares. See 805 N.W.2d at 824.
13

remanding for adjudication of this case on the merits); Terukina v. Gazelle Vill., 

Inc., No. 05-1109, 2006 WL 782749, at *3 (Iowa Ct. App. Mar. 29, 2006). 

REVERSED AND REMANDED.