Court Opinion

ID: 4686218
Source: CourtListenerOpinion
Date Created: 2021-05-12 17:08:07.271986+00
Date Added: 2024-06-11T08:04:32.303109
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                 No. 20-0336
                             Filed May 12, 2021

MIDSTATES BANK, N.A.,
     Plaintiff-Appellee,

vs.

LBR ENTERPRISES, LLC,
     Defendant-Appellee,

and

EDWARD A. TOMAS and BARBARA E. TOMAS,
     Defendants-Appellants.
________________________________

EDWARD A. TOMAS and BARBARA E. TOMAS,
    Cross-Claim Plaintiffs-Appellants,

vs.

LBR ENTERPRISES, LLC,
     Cross-Claim Defendant-Appellee.

      Appeal from the Iowa District Court for Ringgold County, Bradley McCall,

Judge.

      A husband and wife appeal the grant of reformation of a warranty deed

based on an alleged scrivener’s error. AFFIRMED.

      Brett T. Osborn, West Des Moines, for appellants.

      Aimee K. Cizek and Travis J. Marr, Omaha, Nebraska, for appellee.

      Heard by Bower, C.J., and Tabor and Ahlers, JJ.
                                          2

TABOR, Judge.

       This case involves a dispute over the reformation of a warranty deed that

reserved to the sellers, Edward and Barbara Tomas,1 a life estate in 234 acres of

farmland. That deed was the product of a purchase agreement that specified the

life estate was only in “the house which they currently reside.” Midstates Bank

financed the purchase from the Tomases and took a mortgage on the property to

secure its loan.    Upon discovery of the discrepancy between the purchase

agreement and the deed, Midstates petitioned for reformation. The mortgagee

bank alleged the deed contained a scrivener’s error and did not reflect the true

intent of the parties. Agreeing with that contention, the district court reformed the

deed to reflect the life estate as described in the purchase agreement.

       The Tomases now appeal, raising five issues: (1) the mortgagee lacked

standing to seek reformation; (2) the mortgagee did not offer sufficient proof that

the deed contained a scrivener’s error; (3) the doctrine of merger should have

precluded reformation; (4) the district court erred in allowing the buyer to testify on

behalf of the mortgagee; and (5) the mortgagee was not entitled to rental income

from the farm. Finding no merit in these contentions, we affirm.

    I. Facts and Prior Proceedings

       The Tomases owned two tracts of Ringgold County farmland as joint

tenants.   The real estate consisted of a 202-acre farm and a thirty-two-acre

homestead.2 Their oldest son, Eddie, farmed the land for the first year. After that,

1We will refer to the couple as the Tomases.
2The Tomases designated the thirty-two-acre tract as their homestead in April
2019, six months before trial.
                                         3

the Tomases leased their farmland for rental income. Eddie provided custom

farming services in the area and operated a small trucking business.

      Eddie met Steve Berendes in 2011 while working on a farm that Berendes’s

company had financed. That year, Berendes and three partners had formed LBR

Enterprises, LLC, to contract with farmers around Ringgold County and finance

their operations. After crossing paths on different farms, Eddie and Berendes

developed a close working relationship. Later, after becoming LBR’s sole owner,

Berendes hired Eddie. With Eddie’s help, Berendes converted LBR into a cattle-

feeding business.

      In early 2013, the Tomases were searching for a new farming tenant.

Knowing his parents relied on rental income, Eddie asked Berendes if he would be

interested in renting his parents’ farmland to expand LBR’s operations. Within a

few months, the conversation evolved from renting the Tomases’ farmland to

buying it. When asked what prompted the change, Berendes explained:

      I really didn’t have any interest in purchasing any ground over there
      per se, but in getting to know [Eddie] and stuff, he made me aware
      that his parents really needed to sell the ground, that they were
      having difficulty making the payments, that they were late on their
      taxes, and that the current renters on the property sure weren’t doing
      the property any good.

So Eddie and Berendes discussed a deal. Eddie explained his parents were willing

to sell their property but with a caveat—they wanted to continue living on the farm.

Berendes responded, “All we have to do is give them a life estate in that

farmhouse, and so long as they’re able to live on their own out in the country, they

can have it.” The Tomases agreed to this arrangement.
                                          4

       Berendes and Eddie negotiated a purchase price of $655,200, notably less

than the appraised value of $971,200. Barbara explained she was willing to accept

the lower offer because her end goal was to help Eddie buy the farm when he

acquired an ownership interest in LBR. She added: “And at that point, the life

estate would not be—I don’t know what the word is I want—would not be enforced,

but we’d still be able to live there because Eddie’s not going to kick us off.”

       According to Berendes, Barbara visited his office once that summer to go

over their agreement. They had never met before to discuss the transaction

because Eddie acted as an agent for his parents. Berendes recalled reassuring

Barbara that she could stay in her home as a life estate holder. Berendes

continued:

       And I also mentioned that there might be a possibility that maybe we
       should get [the life estate] measured off so that we knew exactly, you
       know, how much around the house, she had a garden there and stuff,
       was included in that so we didn’t have any problem and that we get
       right of way to go and feed our livestock on the main lane.

During that same conversation, Berendes said he offered to conduct a survey of

the anticipated life estate, but she declined. He estimated the life estate would

span two acres. Barbara denied having that conversation.

       In August 2013, Berendes drafted the purchase agreement. The first

paragraph provided:

       Property consists of 234 acres more or less in two tracts. The offer
       is for 655,200.00. This is to be paid first to current mortgage holders
       to pay off that debt, then to satisfy all taxes currently owed and due,
       as well as any prorated taxes paid by seller of property to the date of
       transfer, and then an amount to cover current capital gains taxes due
       to this sale. Any remaining balance will be put on a promissory note
       which will be a second Mortgage equal to the amount owed after the
       heretofore debts have been satisfied.
                                            5

         The second paragraph addressed the life estate:

         LBR Enterprises agree to grant a life estate to Edward and Barbara
         Tomas in the house which they currently reside on the property until
         such time as they decide to move, at which time the house will then
         revert to the ownership of LBR Enterprises. Edward and Barbara
         Tomas will pay for the electric and water utilities to said residence
         until they move.

         Berendes signed the agreement, and then Eddie delivered it to his

parents. They each signed it the same day. The Tomases did not object to the

agreement as written.       But Barbara later said she had different terms in

mind. When asked what she believed the life estate entailed, Barbara replied: “My

understanding was it meant that we had the right to live on the thirty-two acres, get

the income off of it and have it until we both had passed.” Berendes insisted those

terms were not in the purchase agreement because he and Eddie never discussed

the thirty-two acres as part of the deal.

         Later that fall, Eddie and Berendes met with David Klasna, an agricultural

loan officer and senior vice president of Midstates Bank.3 Berendes asked for a

loan amount that could pay off the Tomases’ mortgage on the property, as well as

delinquent property taxes. Berendes and Eddie also described the details of the

purchase agreement. Based on their conversation, Klasna approved a loan for

$655,000. In an October 2013 credit approval memorandum, Klasna summarized

the transaction:

         Steve Berendes has offered to purchase the land for LBR from the
         [Tomases] at a price of $655,200. The land appraised for
         $971,200. LBR will pay the $565,600 plus all transfer costs
         immediately, which will retire all the debt on the property currently
         owed by the [Tomases]. The remaining $89,600 will be applied to
         the LBR operating loan and paid to [the Tomases] over time to

3   Berendes had financed some of LBR’s prior operations through Midstates.
                                        6

      spread out the capital gains. [The Tomases] may file a mortgage for
      that amount to secure the future payments (junior to mortgage of
      MSBNA). In addition, LBR will grant a life estate in the home that is
      on this property to the [Tomases] so they have a place to live for as
      long as they want.

Klasna recalled both Berendes and Eddie made it clear that the life estate “only

included the house.”

      After Midstates approved the loan, it engaged the services of a title

company to prepare the warranty deed. Michelle Fowler, then-employee of the

title company, received the order. Ordinarily, she would review the purchase

agreement and enter the names of the parties, the lender, and a legal description

of the property into the company’s computer database. But a belated title search

pressured Fowler to enter that information in “a complete rush.” While frantic, she

neglected to review the purchase agreement before drafting the deed. As a result,

the deed did not match the life estate description in the purchase

agreement. Fowler attested to her mistake at trial, acknowledging her oversight

created inconsistencies between those two documents. Attorney Aimee Cizek

asked Fowler at trial: “And so in your estimation should a warranty deed’s language

always match the language of the purchase agreement?” Fowler replied, “Yes.”

      The warranty deed prepared by Fowler stated:

      For the consideration of One and 00/100 Dollar(s) and other valuable
      consideration, Edward A. Tomas and Barbara E. Tomas, husband
      and wife as joint tenants . . . do hereby Convey to LBR Enterprises,
      LLC, with a life estate interest in Edward A. Tomas and Barbara E.
      Tomas . . . whether one or more the following described real estate
      in Ringgold County, Iowa[.]

Missing was the qualifying language “in the house which they currently reside on

the property.” Fowler testified that if she had reviewed the purchase agreement
                                           7

like usual, the deed would have included that language. Neither Midstates, nor the

Tomases, nor Berendes discovered the variance.

       In December 2013, the parties executed the warranty deed. The Tomases

and Berendes separately reviewed the closing documents. Two weeks later,

Midstates secured its loan to LBR by obtaining a mortgage on the 234-acre

farm. The Tomases were not a party to the mortgage instrument. Klasna testified

that the Tomases’ interest was a nonissue “[b]ecause [Midstates] understood that

all they had was a life estate in the house, and [it] could live with that.”

       After the closing, Midstates settled the Tomases’ outstanding debt on the

property and issued a check for the difference of $134,000. The check was issued

to both the Tomases and LBR. According to Klasna, Eddie and Berendes agreed

from the onset that “[LBR] could use those funds to improve the property, and it

would be like equity for Eddie” when he acquired the farm. Barbara expressed a

different view.   She said under the purchase agreement, the proceeds were

supposed to be held in an escrow account for Eddie.              She explained: “And

[Berendes] said we could get all of it or any part of it at any time we needed, and

he would pay us [five] percent on the remainder principal; like if we used some of

it, he would pay on the remainder.” But according to Barbara, they modified that

provision of the purchase agreement before the December closing. She claimed

Berendes orally agreed to expand their life estate from 32 acres to all 234 acres,

in exchange for LBR’s use of the proceeds. She added: “But we would still be able

to get that money at any time, he said, plus he’d still pay the 5 percent interest.”

       By contrast, Berendes said he promised Barbara a second mortgage on the

property as security for borrowing the proceeds. He insisted he never agreed to
                                         8

modify the life estate under the purchase agreement. Nor did he mention an

escrow account. Neither Barbara’s nor Berendes’s version was reduced to writing.

       For the next two years, LBR farmed the land and made improvements to

the real estate. No issues arose until 2016 when LBR defaulted on its loan

payments to Midstates. After liquidating LBR’s assets, Berendes procured a willing

buyer to transfer title. But the title company blocked the sale, noting the deed

named the Tomases as the life estate holders of the entire property.

       In May 2017, Midstates petitioned for reformation against LBR and the

Tomases. Midstates claimed the deed did not reflect the true intent of the parties

because of mutual mistake and a scrivener’s error. In their answer, the Tomases

raised the affirmative defense that Midstates lacked standing to seek reformation.

The Tomases also filed a cross-claim against LBR and Berendes, in his individual

capacity, alleging they breached the purchase agreement and owed them

$134,000. But the court automatically stayed the proceedings against Berendes

after he filed a notice of bankruptcy.

       Following a contentious trial, the district court granted Midstates’s request.

The court reformed the deed executed by the Tomases in December 2013 to

reflect that their life estate was only “in the house in which they currently

reside.” The Tomases moved to reconsider, but the court denied their motion. The

Tomases appeal.

   II. Scope and Standard of Review

       Because reformation of a deed is an equitable remedy, we review the

district court’s ruling de novo. Iowa R. App. P. 6.907; see Orr v. Mortvedt, 735

N.W.2d 610, 613 (Iowa 2007).         We give weight to the court’s fact findings,
                                          9

especially when considering the credibility of witnesses, but they do not bind

us. Iowa R. App. P. 6.904(3)(g).

    III. Analysis

    A. Standing

       Reprising their argument from the district court, the Tomases urge

Midstates lacked standing to seek reformation. They rely on the two-prong test for

standing, requiring the plaintiff to show (1) a specific personal or legal interest in

the litigation and (2) injury in fact. See Godfrey v. State, 752 N.W.2d 413, 418

(Iowa 2008). On the first prong, the Tomases argue the bank was not a party to

the deed and was never in “privity of contract” with them. On the second prong,

they argue any injury to Midstates resulted from the bank’s own negligence.

       To counter, Midstates insists that because it has a mortgage on the real

estate, it has standing to bring this action. It cites Hosteng Concrete & Gravel, Inc.

v. Tullar for the proposition that a reformation action is not limited to the original

parties to an instrument, but may also be brought “by a real party in interest

claiming privity with a party to the instrument, such as a purchaser at an execution,

judicial or foreclosure sale.”4 524 N.W.2d 445, 449 (Iowa Ct. App. 1994). As the

mortgagee, Midstates claims it has privity with LBR, a party to the deed. On the

second prong, Midstates asserts “that the difference in the value of the Real Estate

4 In their reply brief, the Tomases rely on Hosteng in claiming that a real party in
interest claiming privity with a party to the instrument only includes “purchasers,
not lenders or anyone with a secondary interest in property.” But Hosteng singled
out purchasers because that was the nonparty seeking reformation in that
case. Contrary to the Tomases’ assertion, the supreme court cited a list of
secondary sources that include a broader list of possible privies. See, e.g., 66 Am.
Jur. 2d Reformation of Instruments §§ 59–63 (2d ed. West 2021 update).
                                          10

(with the encumbrance of the life estate being on the entire 234 acres versus it

being only in the house) is substantial, thus making [its] security interest in the farm

‘injuriously affected’ by the Deed without reformation.”

       We start with the first element. In effect, both parties recognize that privity

with a party to the deed qualifies as a “legal interest” that would allow that real

party in interest to seek reformation.      Privity means “a mutual or successive

relationship to the same rights of property.” In re Estate of Richardson, 93 N.W.2d

777, 781 (1958). Relying on Hosteng, Midstates claims it was a real party in

interest because LBR “conveyed and mortgaged” the entire property to the bank

as collateral for the bank’s loan.5 The Tomases counter that Midstates’s security

interest did not place it in privity with the parties to the deed. In their view, “[t]he

relationship from purchaser to purchaser is successive, but the one from purchaser

to lender is not.”

       On privity, the Tomases have the more persuasive argument. Under our

case law, “a mortgagee has no estate in the land but simply a specific lien or

charge thereon to secure his debt.” Miles Homes, Inc. v. Grant, 134 N.W.2d 569,

699 (Iowa 1965) (citing Johnson v. Bd. of Supervisors, 24 N.W.2d 449 (Iowa

1946)); see Burns, 11 N.W.2d at 465 (noting a mortgage “is merely a lien” that

does not reduce the mortgagor’s interest in the land). Because Midstates was no

more than a lienholder, it did not possess the same rights to the property as LBR,

the legal title holder by transfer of the deed. See Iowa Code § 557.14 (2017) (“In

5 In common law, “a mortgage was considered a conveyance of the land or a pro
tanto disposition of the property by the mortgagor.” Burns v. Burns, 11 N.W.2d
461, 465 (Iowa 1943). But Iowa has abrogated the common law rule. Id.
                                          11

absence of stipulations to the contrary, the mortgagor of real estate retains the

legal title and right of possession thereto.”).

       Yet the absence of privity does not end our analysis.6 As discussed, being

in privity with a party to the deed is one way to establish a legal interest under the

first prong of the standing test. But it is not the only way. To meet that first prong,

Midstates must “allege some type of injury different from the population in general.”

DuTrac Cmty. Credit Union v. Hefel, 893 N.W.2d 282, 289 (Iowa 2017) (quoting

Hawkeye Foodserv. Distrib., Inc. v. Iowa Educators Corp., 812 N.W.2d 600, 606

(Iowa 2012)).     No doubt Midstates had a specific legal interest in seeking

reformation—to settle the unpaid debt owed by LBR. Because the deed made it

appear that the Tomases had a life estate in the entire 234 acres, Midstates could

not take immediate possession of the property.          And if Midstates brought a

foreclosure action due to LBR’s default, any party obtaining the land through that

process would take title subject to the Tomases’ claimed life estate. Plus, if LBR

tried to sell the land to avoid foreclosure, LBR could not transfer title to a

subsequent purchaser unless the purchaser agreed to take the property subject to

the claimed life estate. Because Midstates paid off the existing mortgage and

6 A Texas appellate court undertook a similar tack. In Kidwell v. Black, 104 S.W.3d
686 (Tex. Ct. App. 2003), the court found that a mortgagee had standing to reform
several deeds despite not being a party to any of them. The most recent purchaser
of the real estate, Kidwell, argued the mortgagee, Black, lacked standing because
of the lack of privity between them. Kidwell, 104 S.W.3d at 690. The court, without
deciding the privity issue, applied the state’s general standing test requiring (1) a
real controversy between the parties, and (2) the resolution of that controversy
depend on the judgment sought. Id. The court held Black had standing because
the lender had an interest in the deed of trust, which depended on the validity of a
prior purchaser’s interest and conflicted with Kidwell’s interest as the most recent
purchaser.
                                         12

attached its security interest to the real estate, it had first priority upon default.

Thus, its inability to pursue appropriate remedies provided by law is specific to

Midstates and different from the population in general.7 We find the first element

of standing satisfied.

         We turn to the second element, injury in fact, which has “much in common”

with the first element. Godfrey, 752 N.W.2d at 419 (acknowledging these elements

are often considered together). To prove injury in fact, Midstates must show harm

that is “concrete” and “actual or imminent” rather than “conjectural” or

“hypothetical.”   See Hawkeye Foodserv., 812 N.W.2d at 606.             But it is not

conjecture or hypothesis that bothers the Tomases. Instead, they allege that any

injury to the bank was its own doing. The Tomases point to Midstates’s failure to

have them, as life tenants, sign the mortgage. They argue Midstates is bringing

this reformation action only to “subvert” its mistake and “not because there was

any true error with the Warranty Deed.” This contention puts the cart before the

horse.

         By contesting the bank’s standing to seek reformation, the Tomases want

us to reverse without reaching the merits. See Hefel, 893 N.W.2d at 289 (“The

question of standing is separate from the merits of the case, and we address it

first.”). Yet their argument presupposes they win on their substantive claims. Put

7  The mortgage instrument listed possible remedies upon default.               For
example: “Subject to these limitations, if any, Lender may accelerate the Secured
Debt and foreclose this Mortgage in a manner provided by law if this Mortgagor is
in default. Upon a default by the Mortgagor, the Lender may take possession of
the Property itself or through a court appointed receiver . . . and may operate the
Property and collect the rents and apply them to the costs of operating the Property
and/or to the unpaid debt.”
                                          13

another way, to find Midstates was negligent, we would have to accept (1) that the

Tomases did in fact retain a life estate in the entire property, and (2) the bank knew

about that modification when executing the mortgage. We decline to accept those

facts as part of the standing analysis. The extent of the life estate is the crux of

this appeal. And its resolution must await our consideration of the merits.

       What we can find now is that Midstates met the injury-in-fact requirement.

The district court reasoned: “While there was no specific testimony as to the

difference in value of a parcel to which individuals in their 70s have a life estate

and the same parcel without such an encumbrance, there is little question the

difference is substantial.” Based on that reasoning, the court held “[Midstates’s]

security interest in the farm [was] ‘injuriously affected’ by reason of a life estate on

the entire 234-acre parcel.”     We agree.      And we amplify the district court’s

reasoning under Iowa Code chapter 450. That chapter prescribes the method for

calculating the value of life estates and remainder interests for inheritance tax

purposes. Section 450.51 provides that a life estate should be valued “by the use

of current, commonly used tables of mortality and actuarial principles pursuant to

regulations prescribed by the director of revenue.”8 Those tables reflect “the

present worth of remainder interests subject to a life estate of a person” based on

the life tenant’s age. In re Millard’s Estate, 105 N.W.2d 95, 98 (Iowa 1960).

       So our calculus considers that Barbara was seventy-two years old at the

time of trial. The appraised value of the real estate was $971,200. Thus, according

to the standard mortality tables for life estates and remainders, the value of her life

8We rely on this statute to the extent that it relates to the general valuation of real
property interests.
                                         14

estate was $364,520, leaving a remainder interest of $606,680. See Iowa Admin.

Code r. 701-86.7(6) (2021) (using 2001 tables). Because Midstates’s security

interest equaled the appraised value under the mortgage instrument, its interest

was diminished by nearly 38 percent.          That diminution supports Midstates’s

position that it had an actual or imminent injury sufficient to support standing. For

these reasons, we conclude Midstates had standing.

    B. Reformation of the Warranty Deed

       1. Scrivener’s Error

       Moving to the merits, the Tomases argue the district court should have

denied Midstates’s request for reformation, alleging the bank did not meet its

burden of proving (1) a scrivener’s error created a mistake in the deed,9 (2) the

deed did not reflect the true intent of the parties, and (3) the purchase agreement

did not merge into the subsequent deed.

       Conversely, Midstates contends it offered sufficient proof of mistake

through the testimony of “the unbiased scrivener who actually made the error.”

Relying on the testimony of Fowler, the title company employee, Midstates claims

the deed would have matched the language in the purchase agreement but for her

admitted error. Midstates maintains the parties’ agreement did not change after

they signed the purchase contract. Thus, Midstates argues the deed did not reflect

9 “A scrivener is (or, better, was) a transcriber of documents. In the literal sense,
then, a ‘scrivener’s error’ is a mistake of transcription, which is to say a mismatch
between original (e.g., spoken word, manuscript) and copy.” Goche v. WMG, L.C.,
No. 18-0793, 2019 WL 1057105, at *2 n.5 (Iowa Ct. App. Mar. 6, 2019) (quoting
Ryan D. Doerfler, The Scrivener’s Error, 110 Nw. U. L. Rev. 811, 816 (2016)). A
scrivener’s error is a proper basis for reformation if, as a result of the error, “the
written agreement does not accurately reflect the intent of the parties.” Id. (quoting
66 Am. Jur. 2d Reformation of Instruments § 19).
                                        15

the true intent of the parties, and the doctrine of merger did not apply. We will

address each contention in turn.

       Reformation is an equitable remedy available to a challenger who can prove

an instrument does not reflect the parties’ true agreement. Timmer v. New York

Life Ins. Co., 270 N.W.2d 421, 422 (Iowa 1936). The party seeking reformation

must establish that contention by clear, satisfactory, and convincing proof. Kufer

v. Carson, 230 N.W.2d 500, 503 (Iowa 1975). Reformation of a deed may be

appropriate if the party seeking relief shows “the deed does not reflect the true

intent of the parties, either because of fraud or duress, mutual mistake of fact,

mistake of law, or mistake of one party and fraud or inequitable conduct on the part

of the other.” Kendall v. Lowther, 356 N.W.2d 181, 187 (Iowa 1984). But “[t]he

requirement of mutuality of mistake does not apply to a mistake of a scrivener in

reducing an agreement to writing.” Gouge v. McNamara, 586 N.W.2d 710, 713

(Iowa Ct. App. 1998) (citing Schuknecht v. W. Mut. Ins. Co., 203 N.W.2d 605, 609

(Iowa 1973)). Also, the party seeking reformation must show that the true intent

of the parties would be reflected in a reformed document. Kendall, 356 N.W.2d at

187. The right to reform an instrument is not absolute; rather, it lies within the

discretion of the equity court and must be essential to achieving justice. Kufer,

230 N.W.2d at 504 (holding party seeking reformation of deed did not show clear

and convincing evidence, in part, because he did not present any disinterested

witness’s testimony).

       Unlike the party seeking reformation in Kufer, Midstates did offer proof that

the deed contained an error through the testimony of Fowler, a disinterested
                                        16

witness. The Tomases contest whether Fowler was a neutral party.10 But we find

that she was.    Fowler worked for a third-party title company, which was not

affiliated with LBR or Midstates. Her job was to type information into an automated

system that created the deed by template. Fowler testified that she made a

mistake in not including the language from the purchase agreement that limited

the life estate. As a result of her oversight, the deed did not match the purchase

agreement.

       The Tomases tell a different story. They contend the purchase agreement

was purposely modified to grant them a life estate in the entire property. According

to the Tomases, LBR’s alleged failure to satisfy the terms of the purchase

agreement was proof that their original agreement changed. But they shed no light

on how that modified agreement slid into the warranty deed. If Berendes agreed

to significantly expand the life estate before the closing, we see no reason why the

Tomases did not seek to amend the purchase agreement and protect their

interests.   After the alleged modification, neither the Tomases nor Berendes

notified the bank or the title company. Nor did they reduce the new agreement to

writing or exchange consideration. Although the Tomases claim the sale proceeds

constituted consideration, other witness accounts and the bank’s credit approval

memorandum show that LBR’s use of the proceeds were part of the original

10 As a side issue, the Tomases also argue that Fowler, by creating the warranty
deed, engaged in the unauthorized practice of law. The Tomases did not argue
this issue before the district court, though their counsel alluded to it when asking
questions during Fowler’s cross-examination. But merely raising the issue is
insufficient to preserve error. See Meier v. Senecaut, 641 N.W.2d 532, 540 (Iowa
2002). Because the district court did not decide whether Fowler engaged in the
unauthorized practice of law, we decline to address the issue on appeal. See id.
                                         17

agreement. Thus, the only evidence to suggest this modification occurred was

Barbara’s own self-serving testimony.

       Moreover, Berendes and loan officer Klasna testified that the agreement to

purchase the property from the Tomases depended on the life estate being limited

to the house. In other words, LBR would not have agreed to purchase the farm

and Midstates would not have financed its purchase.              According to their

testimonies, that would have been true even if the Tomases had asked to retain a

life estate in the 32-acre homestead, let alone the entire 234 acres. On our de

novo review of the record, we find clear and convincing proof that the deed did not

reflect the agreement of the parties because of a scrivener’s error.

       2. Intent of the Parties

       We must also decide whether Midstates proved that a reformed deed would

reflect the parties’ true intentions. As the district court noted, the Tomases did not

act as though they had a life estate in all 234 acres. After the conveyance, the

Tomases received no rents or profits; they did not contribute to the farm’s upkeep;

and they did not pay property taxes or insurance. Moreover, when Klasna visited

the Tomases to discuss the discrepancy in the deed years later, they still did not

mention having a life estate in the entire property. According to Klasna, their only

concern upon LBR’s default was recovering the proceeds.

       Beyond the Tomases’ conduct, the purchase agreement revealed the

parties’ intent. When determining whether to grant reformation, a key factor is

whether there is a prior agreement between the parties “furnishing the basis for

rectification or to which the instrument can be conformed.” Sun Valley Lake Ass’n

v. Anderson, 551 N.W.2d 621, 636 (Iowa 1996) (citing 66 Am. Jur. 2d Reformation
                                         18

of Instruments § 4, at 529 (1973)). The purchase agreement clearly stated that

the Tomases would retain a life estate in the house in which they currently reside.

We find clear and convincing evidence that the deed left out that limitation because

of a scrivener’s error—not because the parties changed their agreement. Thus,

reforming the deed to include the language from the purchase agreement would

reflect the parties’ true intentions.

       3. Merger Doctrine

       Even if Midstates met its burden of proving a scrivener’s error and intent,

the Tomases argue a presumption that the purchase agreement merged into the

deed precluded reformation. They claim Midstates could not rely on the purchase

agreement “as the only evidence that the Warranty Deed did not reflect the

intentions of the part[ies].”     In the same vein, the Tomases challenge the

evidentiary value of the purchase agreement, asserting “the terms of the purchase

agreement had clearly altered for both parties.”11

       As a rule, “a contract for conveyance of real estate, absent any showing to

the contrary, is deemed to have merged in a subsequent deed.” Lovlie v. Plumb,

250 N.W.2d 56, 62 (1977). In other words, if a conflict exists between the two, “the

deed speaks and the contract is silent.” Huxford v. Trustees, 185 N.W. 72, 74

11To support their contention, the Tomases refer to this paragraph of the purchase
agreement: “Any remaining balance will be put on a promissory note which will be
a second Mortgage equal to the amount owed after the heretofore debts have been
satisfied.” In the district court, the Tomases argued the purchase agreement no
longer reflected the parties’ agreement because Berendes never executed a
promissory note for a second mortgage. The court disagreed. The court found
that although no promissory note existed, “retention of the excess proceeds after
payment of expenses was contemplated at the time the agreement was
signed.” We agree with the district court on this point.
                                         19

(Iowa 1921). But there are exceptions to this rule. See id. One recognized

exception is mistake. “If a mistake in the deed be alleged and reformation be

sought, the contract becomes competent as evidence on that question.”

Id. Because Midstates sought to reform the deed based on a scrivener’s error, the

district court could consider the purchase agreement as competent evidence

whether a mistake occurred.

       The Tomases do not dispute the purchase agreement was competent

evidence.    Instead, they urge the district court gave it too much weight in

concluding the deed did not reflect the true intent of the parties.               We

disagree. Because the merger doctrine assumes the deed was the final

expression of the parties’ agreement, the question boils down to whether the

parties agreed to modify the life estate from “the house which they currently reside”

to the entire property.   Because neither party presented proof of any written

modification, the district court’s conclusion hinged on witness accounts and

credibility determinations.

       The district court expressly found Barbara and Eddie were not credible. In

refusing to enlarge the ruling on the scope of the life estate, the court explained:

       In fact, the Court specifically found clear and convincing evidence
       supports the conclusion the parties intended for Mr. and Mrs. Tomas
       to retain a life-estate only “in the house.” In reaching this conclusion
       the Court specifically rejected the testimony by Barbara and Eddie
       Tomas to the effect that the intention of the parties was for Mr. and
       Mrs. Tomas to retain a life-estate in either the 32 acre parcel or the
       entire 234 acre farm.

We defer to these credibility findings. See Weinhold v. Wolff, 555 N.W.2d 454,

458 (Iowa 1996). Plus, Klasna corroborated Berendes’s version of events. Klasna
                                         20

testified that Eddie and Berendes confirmed the life estate was to be only in the

house at a meeting two months after the parties signed the purchase agreement.

       On top of that, the district court found that the Tomases’ actions after the

transfer were inconsistent with holders of a life estate in the farmland, similar to

the facts in Koehn v. Koehn Bros. Farms, LLC, No. 13-1036, 2014 WL 4230200,

at *12 (Iowa Ct. App. Aug. 27, 2014) (rejecting claim that life estate spanned entire

property when holders went three years without collecting rent, paying taxes, or

funding improvements). Discounting the testimony of Barbara and Eddie, based

on the district court’s credibility findings, no other evidence suggests the deed as

written was accurate. Like the district court, we find the parties did not intent for

the purchase agreement to merge into the deed.

     C. Admission of Opposing Party’s Witness

       The Tomases next attack the admission of Berendes’s testimony.12 They

argue it was “self-serving and inconsistent with the facts of the case.” But the

Tomases fail to cite legal authority to support their allegations. Likewise, they do

not elaborate on their assertion that Berendes’s testimony was inadmissible.13 We

conclude they waived these issues. See Iowa R. App. P. 6.903(2)(g)(3).

12 The Tomases also challenge the court’s refusal to rule on their quiet title action
against LBR. Because the reformation action defeats their claim to title, we need
not address that contention.
13 The record shows the Tomases filed a motion for sanctions against LBR for

violating a discovery order. As a sanction, the Tomases asked the court to prevent
Berendes from testifying at trial. Midstates resisted the motion because it intended
to call Berendes as a witness. The court denied the motion, finding it could not
sanction Midstates for LBR’s lack of compliance. Thus, Berendes testified as a
witness for Midstates, not on LBR’s behalf. The Tomases do not challenge this
ruling on appeal.
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   D. Rental Income

       Finally, the Tomases assert the district court wrongly denied them access

to rental income collected during the proceedings. They received an $18,750 rent

check from a tenant after entering into a new lease agreement in April 2019.

Midstates asked the court to terminate the farm lease and to deposit the funds until

the final ruling. The Tomases stipulated to termination of the lease but resisted

the deposit request, claiming the funds were being held in their attorney’s trust

account. They also added that they were “entitled to the income and profits of the

land” as the life tenants of the property. The court allowed the funds to remain in

counsel’s trust account.

       After the final decree, the Tomases moved for an immediate release of the

$18,750 in their favor. They urged they needed the money to pay off delinquent

property taxes. In resistance, Midstates informed the court that it had paid all

delinquent taxes in January 2020, so the issue was moot. The court denied the

Tomases’ request.        In awarding Midstates the rental income, the court

reasoned: “In light of this Court’s conclusion that [the Tomases] retained a life-

estate only ‘in the house’, it is clear [they] are not entitled to receive rental income

for farm land in which they have no interest.” We agree with the court’s conclusion

based on our affirmance of the other issues.

       AFFIRMED.