Opinion
No. 2-833 / 02-0313
Filed February 12, 2003
Appeal from the Iowa District Court for Linn County, William L. Thomas, Judge.
Intervenors appeal a district court order granting defendant a judgment lien on property they purchased. AFFIRMED.
D. J. Smith of King, Smith Boresi, Cedar Rapids, for appellants.
Pamela J. Lewis of Lewis Law Office, Cedar Rapids, for appellee.
Considered by Huitink, P.J., and Mahan and Vaitheswaran, JJ.
Intervenors appeal a district court order granting defendant a judgment lien on property they purchased. They claim the court erred by: (1) imposing a retroactive judgment; (2) not giving them an opportunity to present evidence; and (3) entering a judgment against Countrywide for David Ballsteadt's debt. We affirm.
I. Background Facts Proceedings
Sheila Ballstaedt, now known as Sheila Stark, was formerly married to David Ballstaedt. See In re Marriage of Ballstaedt, 606 N.W.2d 345, 347 (Iowa 2000). Sheila obtained a judgment against David for delinquent child support and alimony payments. David is the sole shareholder of Mount Vernon Motor Coach, Inc. In 1997 Mount Vernon Motor Coach, by its president, David, transferred certain property in Mt. Vernon, Iowa, to Countrywide, Inc.
In April 1998 Countrywide filed a quiet title action against Sheila regarding the Mt. Vernon property. The quiet title action sought to show Sheila's judgment against David for delinquent child support and alimony payments did not operate as a judgment lien on the property in question. Sheila counterclaimed, alleging David had transferred all of his assets to Countrywide without consideration and for the sole purpose of hiding assets to avoid the payment of child support. She sought damages from Countrywide for conspiring with David to hide his assets.
Jerry and Marilyn Patterson filed a motion to intervene in July 1999. They purchased the Mt. Vernon property in May 1998 from Countrywide. They claimed they were good faith purchasers because they did not have any notice of the quiet title action at the time of their purchase.
The Pattersons filed a motion for summary judgment. Sheila filed a motion for sanctions against Countrywide. These motions were consolidated. The district court determined the Pattersons were not entitled to summary judgment because they were "unable to establish that they did not have notice of an encumbrance at the time of closing of the subject property." The court also determined Countrywide had not complied with discovery requests. As a sanction, the court dismissed Countrywide's action and entered judgment by default on Sheila's counterclaim. The matter of damages awarded to Sheila was to be considered at a separate hearing.
Thereafter, in October 2001 the Pattersons filed a motion to voluntarily dismiss their petition to intervene under Iowa Rule of Civil Procedure 1.943 (formerly rule 215). Sheila objected, claiming the Pattersons' rights and responsibilities regarding the Mt. Vernon property would be affected by the court's order regarding damages.
On February 5, 2002, the district court ruled the motion to intervene was dismissed. The court noted, however, that the Pattersons had knowledge of the quiet title action and of Sheila's judgment for unpaid support. The court determined Sheila had a valid judgment lien on the Mt. Vernon property, and the lien would date from the filing of the action, April 8, 1998. The court also entered a judgment against Countrywide for the amount of David's unpaid support obligations. The Pattersons appealed.
II. Standard of Review
This action was tried in equity, and our review is de novo. Iowa R.App.P. 6.4. In equity cases, especially when considering the credibility of witnesses, the court gives weight to the fact findings of the trial court, but is not bound by them. Iowa R.App.P. 6.14(6)( g).
III. Retroactive Judgment
The Pattersons contend the district court improperly made the judgment lien on the Mt. Vernon property retroactive to the date the quiet title action was filed. They assert that under Iowa Code section 624.24 (1997), the lien did not attach until the date of the judgment in this case, February 5, 2002.
A district court judgment is a lien upon the real estate owned by the defendant at the time of such rendition. Iowa Code § 624.23(1). A judgment for unpaid child support creates a lien under this statute. Schuling v. Tilley, 454 N.W.2d 899, 901 (Iowa Ct.App. 1990). Section 624.24 provides that if the real estate lies in the county where the judgment was entered, "the lien shall attach from the date of such entry of judgment . . . ."
A dissolution decree awarding support does not automatically create a judgment lien. Slack v. Mullenix, 245 Iowa 1180, 1185, 66 N.W.2d 99, 101-02 (1954); In re Marriage of Hettinga, 574 N.W.2d 920, 922 (Iowa Ct.App. 1997). On the other hand, a judgment for unpaid child support will create a lien. Schuling, 454 N.W.2d at 900-01.
This case has centered on the question of whether there was a lien on the Mt. Vernon property due to Sheila's previous judgment against David for unpaid support. Thus, the judgment in question is Sheila's previous judgment. Although not entirely clear from the record before us, this judgment was apparently entered on February 27, 1998. We find the district court did not improperly create a retroactive judgment lien, but merely recognized a lien which had previously been created by the judgment for unpaid child support.
IV. Opportunity to Offer Evidence
The Pattersons ask for a new hearing, claiming they "have never been given an opportunity to offer evidence on their intervention petition and show that they were bona fide purchasers of the Mt. Vernon property." Of course, the Pattersons could have sought a trial on their claims, but instead they voluntarily dismissed their petition to intervene in October 2001. A party is entitled to voluntarily dismiss its case without prejudice for any reason. Venard v. Winter, 524 N.W.2d 163, 168 (Iowa 1994). By voluntarily dismissing their case, the Pattersons precluded themselves from introducing evidence to support their claims.
V. Interest in Property
The Pattersons claim the district court erred by finding that Sheila's judgment against David created a lien on property owned by Countrywide. They state there has never been a judicial finding that Countrywide and David are indistinguishable from one other. They point out that in Ballstaedt, 606 N.W.2d at 349, the supreme court remanded the case for more specific findings on whether Ballstaedt and another corporation, Dave Ballstaedt Ford, Inc. were one and the same. The Pattersons assert the specific findings needed to pierce the corporate veil were not made in this case either.
No specific findings were needed in this case because the district court entered a default judgment against Countrywide due to its failure to participate in discovery. A default judgment as a discovery sanction precludes a trial on the merits. See In re Marriage of Williams, 595 N.W.2d 126, 129 (Iowa 1999). As the district court noted, by entering a default judgment against Countrywide in this case, the court found Sheila's judgment for child support was a lien on the Mt. Vernon property.
We affirm the decision of the district court.