Court Opinion

ID: 4347415
Source: CourtListenerOpinion
Date Created: 2018-12-05 17:10:09.098622+00
Date Added: 2024-06-11T14:48:35.874171
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 17-1129
                            Filed December 5, 2018

IN THE MATTER OF THE TERESA KASPARBAUER REVOCABLE LIVING
TRUST,

MARIE EISCHEID, MARGUERITE NIELSEN, TERESA SMITH, ANNETTE
FIRKUS, KATHLEEN KASPARBAUER, and MARY SMITH,
     Defendants-Appellants.
________________________________________________________________

      Appeal from the Iowa District Court for Carroll County, Gary L. McMinimee,

Judge.

      The defendants appeal from the district court’s grant of partial summary

judgment in favor of the plaintiffs. AFFIRMED.

      R. Scott Rhinehart of Rhinehart Law, PC, Sioux City, for appellants.

      James R. VanDyke of Law Office of James R. VanDyke, PC, Carroll, and

Aaron W. Ahrendsen of Eich, Werden & Steger, PC, Carroll, for appellees.

      Heard by Danilson, C.J., and Potterfield and Doyle, JJ.
                                            2

POTTERFIELD, Judge.

       The six named appellants are siblings and beneficiaries of their deceased

mother’s trust—the Teresa Kasparbauer Revocable Living Trust. In a previous

action, three of Teresa Kasparbauer’s grandchildren—the children of a seventh

sibling, Shirley Kerber—sued the six siblings1 for a 1/7 share of the trust. The

district court awarded them the share, and we affirmed. See Kerber v. Eischeid,

No. 15-1249, 2016 WL 1696929, at *10 (Iowa Ct. App. Apr. 27, 2016).

       Our supreme court denied the siblings’ request for further review, and

procedendo issued. The grandchildren then filed a second action in district court,

asking the court to take jurisdiction of the trust, remove siblings Marie and

Marguerite as trustee and successor trustee respectively, order an accounting, and

stay further distributions or spending of trust assets (unless court approved). The

district court granted each of the requests when it granted their motion for partial

summary judgment. The trust and siblings then filed this appeal.

       Here, the trust and siblings argue: (1) the trust’s due process rights were

violated because the trust was not a named party and did not have notice of the

first action, (2) the statute of limitations in Iowa Code section 633A.3108 (2017)

prevents the grandchildren from bringing the second action, (3) the district court

violated the constitutional rights of the trust when it granted the grandchildren’s

motion for partial summary judgment, and (4) the doctrine of collateral estoppel

1
  Originally, the grandchildren also sued their uncle Paul. He moved to be dismissed from
the first action, and the grandchildren did not resist it. Paul is not party to the second
action.
                                             3

and res judicata prevents the grandchildren from raising claims against the trust

that they initially raised against the siblings in the first action.

I. Background Facts and Proceedings.

          The grandchildren filed the action at issue in this appeal in February 2017.

They advised the court they had been declared 1/7 beneficiaries of the Teresa

Karparbauer Trust and asked the court to invoke jurisdiction over the trust pursuant

to Iowa Code section 633A.6101(1); to order a full accounting of the trust, to require

Marie and Marguerite to reimburse the trust all of the assets they spent

themselves—including the more than $100,000 in legal fees paid for the first

action; to remove Marie and Marguerite as trustee and successor trustee; and to

compel distribution and resolution of the trust, which, by its terms, was meant to

be distributed within two years from the date of Teresa’s death.

          The siblings and trust responded by filing a motion to dismiss the petition.

They asserted that the grandchildren’s claims were barred by the statute of

limitations in sections 633A.3108 and .3109. They also maintained that collateral

estoppel and res judicata barred the grandchildrens’ claims, as they “have

previously attempted to establish their rights to damages against Marie Eischeid

and Marguerite Nielson but failed to prove damages at trial.”

          The court set a hearing on the motion to dismiss, and the grandchildren

resisted the motion. They argued that they were not challenging the validity of the

trust but rather the internal affairs of the trust; they maintained their petition was

timely.
                                             4

         Following the hearing,2 the district court denied the trust and siblings’ motion

to dismiss.

         The siblings and trust then filed a motion for summary judgment, making

substantially the same arguments as they had in the motion to dismiss.

         The court denied their motion, ruling the statute of limitations found in

section 633A.3108 was not applicable, as the grandchildren’s petition—rather than

challenging the validity of the trust—related to the administration of the trust. The

court ruled the siblings had not shown issue or claim preclusion, as they had

neither identified an issue previously decided that would prevent the grandchildren

from prevailing on their petition nor did they establish the claims from the first and

second action were the same.

         In July 2017, the grandchildren filed a motion for partial summary judgment.

In it, they urged the court to invoke jurisdiction over the trust and order an

accounting of the trust, to remove Marie and Marguerite as trustees for violating

their fiduciary duties, and to appoint a special trustee for the purpose of wrapping

up and distributing the trust.

         The court took judicial notice of the first proceeding and the ruling that the

grandchildren were 1/7 beneficiaries of the trust. It then concluded that, pursuant

to Iowa Code section 633A.6101, the grandchildren were interested parties who

could invoke the jurisdiction of the district court with respect to the internal affairs

of the trust. Additionally, based on the ruling in the first action that Marie and

Marguerite had violated their fiduciary duties as co-conservators by amending the

2
    The hearing was reported, but we do not have a transcript of the proceedings.
                                             5

trust to remove the grandchildren,3 the court removed both women as trustees.

Teresa Smith, who was named by the trust, was then appointed as trustee. Finally,

Marie was ordered to file her final report and accounting within thirty days of the

court’s ruling. The siblings appeal.4

II. Standard of Review.

       The parties disagree about the appropriate standard of review. “Even in an

equity case we cannot finds facts de novo in an appeal from a summary judgment

motion. Accordingly, our scope of review is on error.” Farm & City Ins. Co. v.

Anderson, 509 N.W.2d 487, 489 (Iowa 1993) (citation omitted).

III. Discussion.

       A. First Action.

       The siblings and trust maintain that the ruling of our court in the first action,

see Kerber, 2016 WL 1696929, at *10, violated the due process rights of the trust,

as it was not a named party.

       First, they argue that the trust’s rights were violated by lack of notice

regarding the first action. The siblings do not provide any argument or supportive

authority to establish they may collaterally attack the constitutionality of the first

ruling now on appeal of the second action, after procedendo has issued in the

3
  Technically, they removed their sibling, Shirley, but as she was deceased, it effectively
removed Shirley’s children—the grandchildren—who were to receive her portion.
4
  The siblings and trust first filed an appeal from the denial of their motion for summary
judgment. Later, they filed an appeal from the grandchildren’s meritorious motion for
partial summary judgment. Our supreme court issued an order stating the appeal from
the ruling granting the grandchildren’s motion for partial summary judgment was an appeal
as a matter of right and “[a]ssuming without deciding the appeal [of the denial of the
sibling’s and trust’s motion for summary judgment] is interlocutory and not appealable as
of right, this court grants the appellants’ application for interlocutory appeal.” The court
consolidated the two appeals and transferred the case to us.
                                           6

appeal of the first ruling. See, e.g., Sanford v. Manternach, 601 N.W.2d 360, 364

(Iowa 1999) (“Our prior case law is clear that a judgment is not subject to collateral

attack except on jurisdictional grounds.”). They also fail to include the necessary

statement regarding error preservation.        See Iowa R. App. P. 6.903(2)(g)(1)

(requiring the appellant, in their argument section, to include “[a] statement

addressing how the issue was preserved for appellate review, with references to

the places in the record where the issue was raised and decided”). The trust

concedes the district court did not issue a ruling on this argument. See Peters v.

Burlington N. R.R. Co., 492 N.W.2d 399, 401 (Iowa 1992) (“Ordinarily, issues must

be raised and decided by the trial court before they may be raised and decided on

appeal.”). Moreover, they have provided no authority to support their underlying

assumption that a trust has due process rights. The case they cite, a United States

Supreme Court case, Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306,

307 (1950), contemplated whether a New York banking statute providing that

notice could be given to beneficiaries by publication in a local newspaper was

incompatible with the Fourteenth Amendment. It does not address the rights of a

trust. The siblings failed to pursue any interests of the trust in the first action; they

sought further review of our ruling and were denied. The trust then failed to file a

post-ruling motion in the second action, and it did not obtain a ruling on this issue

from the district court.

       Next, they maintain the court lacked personal jurisdiction over the trust. But

personal jurisdiction can be waived. See In re Estate of Falck, 672 N.W.2d 785,

789 (Iowa 2003) (“Unlike personal jurisdiction, a party cannot waive or vest by

consent subject matter jurisdiction”). “[W]here subject matter jurisdiction exists, an
                                          7

impediment to the court’s authority can be obviated by consent, waiver, or

estoppel.” State v. Mandicino, 509 N.W.2d 481, 483 (Iowa 1993) (emphasis

removed). A ruling made without personal jurisdiction is voidable, not void. Falck,
672 N.W.2d at 790. And “[a] voidable judgment is not subject to a collateral attack.”

Id. at 791.

       The siblings also assert the district court and our court lacked subject matter

jurisdiction in the first action. We acknowledge that issues involving subject matter

jurisdiction may be raised at any time. Id. at 789. But the siblings and trust do not

offer any supportive authority or facts for their claim that the court lacked subject

matter jurisdiction. “‘Subject matter jurisdiction’ refers to the power of a court to

deal with a class of cases to which a particular case belongs. A constitution or

legislative enactment confers subject matter jurisdiction on the courts.” Id. (citation

omitted). “The district court has exclusive, general, and original jurisdiction of all

actions, proceedings, and remedies, civil, criminal, probate, and juvenile, except

in cases where exclusive or concurrent jurisdiction is conferred upon some other

court, tribunal, or administrative body.” Iowa Code § 602.6101.

       We do not consider this argument further.

       B. Statute of Limitations.

       The siblings and the trust maintain the grandchildren are barred from any

interest or portion of the trust because they had to contest “the validity of the final

trust as drafted . . . within one year.” They maintain sections 633A.3108 and .3109

preclude the grandchildren’s 2017 petition.

       We agree with the district court that the claimed statute of limitations are not

applicable here. Section 633A.3108 requires that an action “to contest the validity
                                           8

of a revocable trust” be brought “no later than one year following the death of the

settlor.” Section 633A.3109 provides a limitation on a creditor’s rights against a

revocable trust. The grandchildren are neither contesting the validity of the trust

nor are they creditors.

       Rather, in this action, the grandchildren sought judicial intervention in the

administration of the trust. See Iowa Code §§ 633A.6201 (“The administration of

trusts shall proceed expeditiously and free of judicial intervention, except to the

extent the jurisdiction of the court is invoked by interested parties or other

exercised as provided by law.”), .6202 (providing a number of actions a trustee or

beneficiary can petition the court concerning). Such intervention can be sought at

any time. See id. §§ 633A.6101(1) (“The district court sitting in probate has

exclusive jurisdiction of proceedings concerning the internal affairs of a trust . . .

and other actions and proceedings involving a trust and third persons. Such

jurisdiction may be invoked by any interested party at any time.”); .1102(10)

(including “a beneficiary” in the definition of “interested person”).

       C. Due Process Rights.

       Next, the siblings and trust argue, “The Iowa district court ignored Iowa law

and violated the constitutional due process rights of the Teresa E. Kasparbauer

Trust when it ordered that the [grandchildren] were entitled to a 1/7th share of the

[trust] in granting appellees’ motion for summary judgment.”

       While they characterize this as an argument against the court’s rulings in

this second action, we understand this to be an attempt at another collateral attack

of the first ruling. And again, they have not included an explanation of how error

was preserved on this issue. See Iowa R. App. P. 6.903(2)(g)(1). They have also
                                         9

failed to include any legal authority to support their arguments. Insofar as the

siblings and trust have raised a cognizable claim, we consider it waived. See Iowa

R. App. P. 6.903(2)(g)(3) (“Failure to cite authority in support of an issue may be

deemed waiver of that issue.”); see also Baker v. City of Iowa City, 750 N.W.2d
93, 102 (Iowa 2008) (refusing to consider an issue when a party cited no authority

because “[i]n order to address this issue under these circumstances, we would be

obliged ‘to assume a partisan role and undertake the appellant’s research and

advocacy.’” (citation omitted)).

       D. Collateral Estoppel and Res Judicata.

       The siblings and trust argue that the doctrine of collateral estoppel and res

judicata bar the grandchildren from bringing their second action.

       The doctrine of collateral estoppel, sometimes also called issue preclusion,

“prevents parties from relitigating issues previously resolved in prior litigation if

certain prerequisites are established.” Comes v. Microsoft Corp., 709 N.W.2d 114,

117 (Iowa 2006). “In general, collateral estoppel prevents parties to a prior action

in which judgment has been entered from relitigating in a subsequent action issues

raised and resolved in the previous action.” Id. at 117–18. And while the “doctrine

may be utilized in either a defensive or offensive manner, see id. at 118, here it is

the siblings and trust that have a problem due to collateral estoppel.

       They continue to argue that the grandchildren are not entitled to 1/7 of the

trust, but a final ruling by this court has determined otherwise. See Spiker v.

Spiker, 708 N.W.2d 347, 353 (Iowa 2006) (citing Restatement (Second)

Judgments § 27 at 250 (1982) (“When an issue or fact of law is actually litigated

and determined by a valid and final judgment, and the determination is essential
                                          10

to the judgment, the determination is conclusive in subsequent action between the

parties, whether on the same or a different claim.”)). Rather than asking the court

to relitigate their rights in relation to the trust, the grandchildren have based this

second action—asking the district court to intervene in the administration of the

trust—upon the prior ruling that they are, in fact, beneficiaries. Moreover, they rely

upon the court’s ruling in the first action that Marie and Marguerite breached their

fiduciary duties as co-conservators to have them removed as trustees.

       “The general rule of claim preclusion holds that a valid and final judgment

on a claim bars a second action on the adjudicated claim or any part thereof.”

Pavone v. Kirke, 807 N.W.2d 828, 835 (Iowa 2011). “Therefore, a party must

litigate all matters growing out of the claim, and claim preclusions will apply not

only to matters actually determined in an earlier action but to all relevant matters

that could have been determined.” Id. (altered for readability) (citations omitted).

“Claim preclusion may preclude litigation on matters that parties never litigated in

the first claim.” Id.

       The siblings and trust characterize the first lawsuit as a damages action

brought by the grandchildren. They have repeatedly urged that the grandchildren

failed to establish damages in their first action and that this second lawsuit is their

attempt to get a second chance to do so. However, this second action does not

involve a tort claim. Instead, the grandchildren—who after the first action are

beneficiaries of the trust—are using the statutory power given to interested parties

to involve the court in the administration of the trust. Part of this action includes

asking the court to wrap up and distribute the assets of the trust—as the trust itself
                                           11

provided—which will result in the grandchildren’s receipt of some assets; but this

does not make the second action one for damages.

       Neither collateral estoppel nor claim preclusion prevent the grandchildren

from bringing this second action.

IV. Conclusion.

       Having considered each of the trust and sibling’s claims insofar as we could

ascertain they were properly preserved for our review and supported by legal

authority, we find no error with the district court’s ruling granting the grandchildren’s

motion for partial summary judgment and denying the sibling’s motion for summary

judgment.5 We affirm.

       AFFIRMED.

5
 We received an affidavit of attorneys fees from the attorney for the siblings and trust.
We do not award appellate attorney fees.