Opinion ID: 2210826
Heading Depth: 1
Heading Rank: 4

Heading: The Alleged Oral Agreement.

Text: Finally, the Coles ask us to find that they established an oral agreement between the bank and them. According to the Coles, the bank orally agreed to sell them six acres, including the house and building, for $10,000 if the bank was the highest bidder at the foreclosure sale. The Coles took the position that in reliance on this alleged oral agreement they did not request that the homestead be sold separately from the other property at the sheriff's sale. Among other things, the Coles ask us to order the Steeres to comply with the alleged oral agreement by selling the six acres to them for $10,000. The bank contends no such promise was made. As it did in the district court, the bank asserts the statute of frauds as to the alleged oral agreement. Following a bench trial, the district court first considered the Coles' evidence without regard to the statute of frauds. See Iowa Code § 622.32 (excluding evidence of oral agreements regarding transfer of any interest in land). In other words the court assumed, without deciding, that the evidence regarding the oral promise was admissible. The evidence from the Coles and from the bank conflicted on the question whether there was such an agreement. The court found that the bank's evidence was more credible and concluded that the Coles had not established an oral agreement. In equity cases, especially when considering credibility of witnesses, we give weight to fact-findings of the district court, but we are not bound by them. Iowa R.App.P. 14(f)(7). This rule has special significance when we review conflicting evidence. Schnabel v. Display Sign Serv., Inc., 219 N.W.2d 546, 549 (Iowa 1974). In our de novo review of the record, we agree that the bank's evidence is more credible and adopt the district court's findings of fact. The court found that the bank did not experience any problems with the Coles' line of credit until December 1985. At that time the bank gave the Coles until April 1986 to secure financing to pay off the bank. The Coles, for the most part, ignored the bank's request to do something on their loans. The court found that the Coles and their two sons met with a bank official in October 1986. The bank official expressed the bank's concern about the Coles' nonpayment of loans at this meeting. In an effort to resolve the matter quickly, the official told the Coles that if they would deed the property to the bank, the bank would sell them the six acres for $10,000 and would finance the sale. The Coles did not respond to this offer. The bank and the Coles did not discuss any specific terms such as the legal description of the land to be sold, the terms of financing, or an interest rate on the unpaid balance. Like the district court, we find this October 1986 discussion was nothing more than preliminary negotiations and not an agreement. The Coles had the burden to prove the alleged agreement by clear, satisfactory, and convincing evidence because they were asking for specific performance. See Vaston v. Rupe, 244 Iowa 609, 618, 57 N.W.2d 546, 551 (1953). They failed to do so. Other independent evidence supports the bank's evidence about its offer to sell and finance in exchange for a deed to avoid further litigation expenses. For example, the Coles' lawyer wrote to the Coles about a month before the October 1986 meeting. In that letter, the lawyer informed the Coles that the bank would be more willing to consider settlement if settlement could be obtained without litigation. In addition, evidence of the Coles' lack of response in other dealings with the bank tends to support the bank's evidence that the Coles took no action on the bank's offer. For example, the Coles did not attend mediation nor did they take any action to cure the default on their note. The Coles never contacted the bank about redeeming the property or buying the six acres from the time of the sheriff's sale until the commencement of this suit.