Opinion ID: 1928587
Heading Depth: 1
Heading Rank: 2

Heading: Whether a Contempt Was Established.

Text: Jill challenges the district court's finding of contempt on several grounds, the first being that, as shown by the evidence, no conduct on her part constituted a violation of Judge Hutchison's order. Because we agree with that contention, we need not consider her other arguments. When a contempt is alleged to involve a violation of a court's order, that violation must be found to be willful. Lutz v. Darbyshire, 297 N.W.2d 349, 353 (Iowa 1980). Acting contrary to a known duty may constitute willfulness for this purpose. Palmer College of Chiropractic v. Iowa Dist. Ct., 412 N.W.2d 617, 621 (Iowa 1987); Lutz, 297 N.W.2d at 353. In seeking to determine what duties may be reasonably known by the alleged contemnor with respect to a particular court order, the provisions alleged to have been violated must be clear and definite. Palmer College, 412 N.W.2d at 620; Copic v. Iowa Dist. Ct., 356 N.W.2d 223, 226 (Iowa 1984). Applying the foregoing rules to the present case, we are convinced that Jill's actions, of which Dennis and Debbie complain, were not proscribed by Judge Hutchison's order. The district court's decision that those actions were so proscribed was influenced by its conclusions that Jill had controlled the children's funds and made an investment decision with respect thereto. It is significant in this regard that the relief granted against Dennis and Debbie in this accounting action was not an order for restoration of the res but, rather, a money judgment. The judgment creditor was Jill, as next friend for her minor children. Satisfaction of the judgment thus envisioned payment to Jill in that capacity. She was thus expected to control the funds to some limited extent under the court's order. The order gives no guidance or direction for Jill's interaction with Linda Robel for purposes of placing the funds recovered under the latter's control. It is, of course, implicit in the court's order that this interaction take place with some reasonable dispatch and that Jill should do nothing to jeopardize the res while subject to her control. We are convinced, however, that the record will not support a finding that she failed to meet either of these implicit conditions. Jill's actions in establishing the accounts with Merrill Lynch may not, in our view, be accurately characterized as an investment decision. Those actions were taken as a means to transfer the funds to Robel's control notwithstanding her protracted unavailability. [1] A Merrill Lynch compliance officer testified that, from the instant those accounts were opened, Jill was divested of any control over this res and that the control then existed exclusively in Linda Robel. The documentation of the transactions that was placed in evidence confirmed that view. Robel was free to withdraw the funds from these money market accounts without penalty or service charge and invest them as she chose. It thus appears that any affirmative action taken by Jill concerning the children's funds was to establish Robel's control over the res rather than to deny that control. We find this to be entirely consistent with Judge Hutchison's order. We also disagree with the district court's conclusion that, based on the record evidence, Jill should have known that she was without authority to endorse Robel's name on the back of the check. The judge believed that her answers while testifying to this issue were evasive and that his own rather extended examination of Jill as a witness established her knowing lack of authority to so act. Our review of the record suggests otherwise. It was Jill's contention throughout her testimony that, although she received no express authority from Robel to endorse the check in her name so as to facilitate the opening of the Merrill Lynch accounts, she believed that, in carrying out the order of the court, such authority was implicit. That explanation finds considerable support in the surrounding circumstances. At the time of these transactions, a relevant provision in the Uniform Commercial Code provided: As between the obligor and the obligor's immediate obligee or any transferee the terms of an instrument may be modified or affected by any other written agreement executed as a part of the same transaction.. . . Iowa Code § 554.3119 (1993). [2] We conclude that for purposes of this statute any other written agreement includes the provisions of court orders that are binding on the parties to the instrument. Judge Hutchison's order was binding on Dennis and Debbie and required payment to Jill, as the children's next friend, so that she could act to place the custodial accounts under Linda Robel's control. While we are convinced that the actions of Dennis and Debbie in placing Robel's name on the draft was intended to facilitate that result rather than hinder it, Jill could reasonably believe that she was free to ignore the consequences of that endorsement as long as her actions were consistent with carrying out the court's order. Any problem that existed with the drawee bank concerning Robel's name appearing on the check was obviated by the fact that Merrill Lynch agreed to guarantee all prior endorsements on the instrument. For all of the reasons that we have discussed, we find that the evidence was insufficient to support the district court's finding that Jill was in contempt. We sustain the writ of certiorari and annul the finding of contempt and the order implementing that finding. WRIT SUSTAINED.