Opinion ID: 1314064
Heading Depth: 1
Heading Rank: 4

Heading: disciplinary hearing

Text: At the disciplinary hearing, Horneber presented evidence that under controlling Iowa law, because the partnership owned the Woodbury property and Ronnie did not own the property personally, Ronnie could not transfer the real estate itself to Barbara. Under Iowa Code Ann. § 486A.501 (West 1999), [a] partner is not a co-owner of partnership property and has no interest in partnership property which can be transferred, either voluntarily or involuntarily. Rather, Ronnie could transfer only his share of the profits and losses of the partnership. Horneber argued that such interest was what the dissolution decree granted Barbara and that any conveyance of the Woodbury property to third parties by the partnership was in no way contrary to the decree. Horneber argued that at the time of the January 14, 2003, quitclaim deed, Ronnie's interest had already been taken away by virtue of the automatic conveyance language of the dissolution decree. However, because she was at a loss for what else she could do to purge Ronnie of contempt, Horneber testified that she prepared the later quitclaim deed to Barbara to make sure that if there was any possible interest anybody could claim he had, then Barb had it. With regard to the quitclaim deed from Ronnie to Lonnie, Horneber reiterated that Ronnie's interest in the business had already been taken away by the automatic effect of the decree. However, Ronnie remained personally liable under a personal guarantee for some $200,000 in debt, and the lender institution had allegedly requested such a deed as just an initial thing so that the lending institution could be talking with this particular person who was willing to maybe take on and shoulder some of these debts. Upon examination by the referee, Horneber indicated that the quitclaim deed to Lonnie was some means of allowing the lending institution to share information with the Schatzes about the business. She admitted that a consent form would have been a more clean way of doing that. Horneber testified that the warranty deed from Lonnie to the Schatzes had not been prepared to convey or attempt to convey the partnership interest in the Woodbury property, but was simply part of ongoing negotiations. In fact, she pointed out that since the warranty deed was issued by Lonnie as an individual and not by the partnership, under Iowa law, it could not be effective as a real estate transfer. Rather, like the deed to Lonnie, she claimed this deed was simply to allow the Schatzes to have the ability to review information and get whatever information they wanted. Horneber claimed that there was an oral agreement with the Schatzes that had never been finalized and that she did not believe the Schatzes understood the deed to have conveyed any actual title to the Woodbury property. However, the contention that the Schatzes did not understand the real estate to have been transferred was challenged with the admission of a letter wherein the Schatzes offered to sell back the Woodbury property for a purchase price something above what they paid for it, but at a reasonable price. To the question as to what the Schatzes had paid for the property, Horneber responded that they had been discussing what might be an appropriate total price, but that there had been no assignment of any price to any particular thing. Several letters were then entered into evidence, apparently to show that the Schatzes were still negotiating with Lonnie as to a final resolution of the performance necessary under [the] draft real estate contract/asset transfer agreement. While these letters describe the fact that a purchase price for the business had not yet been determined, they do not support the idea that the Schatzes did not understand the warranty deed to have conveyed the Woodbury property.