Opinion
No. 4-314 / 03-1083.
July 28, 2004.
Appeal from the Iowa District Court for Franklin County, Bryan H. McKinley, Judge.
A former farm tenant appeals from a district court summary judgment ruling that dismissed his petition against a beneficiary under the former landlord's will. AFFIRMED.
Peter Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellant.
David Dutton, James Hellman, and Carolyn Rafferty of Dutton, Braun, Staack Hellman, P.L.C., Waterloo, for appellee.
Heard by Sackett, C.J., and Huitink and Miller, JJ.
Plaintiff Larry Holtkamp appeals following a district court ruling that granted the summary judgment motion of defendant State University of Iowa Foundation (Foundation), and dismissed Holtkamp's petition. We affirm the district court.
I. Background Facts and Proceedings.
The summary judgment record reveals the following undisputed facts. In late 1989 the Foundation was contacted by Joan Froede, the attorney for Donald Hackbarth. Froede informed the Foundation that an anonymous donor wished to make a testamentary gift. In January 1990 Froede provided a copy of Hackbarth's proposed will to Foundation attorney William Phelan, with all identifying provisions redacted. Froede requested that Phelan ascertain if the document would meet the Foundation's "requirements."
The proposed will indicated that the decedent's property, other than those items specifically bequeathed to family members, would pass into a trust for the benefit of the decedent's children and step-grandchildren. This included four parcels of Iowa farm land, constituting approximately 413 acres. The proposed will further stated that, after the termination of the trust, the trust remainder would be distributed to the Foundation, for the establishment of a "Fund" to benefit the University of Iowa Hospitals and Clinics (Hospital). The will restricted sale of the 413 acres until the death of the decedent's last surviving child. No explanation for the restraint on alienation was provided.
Phelan provided Froede with comments on the will, as well as a specimen form for a testamentary residuary charitable remainder annuity trust. While Froede made some alterations to the will, Hackbarth was not willing to accept all of Phelan's suggested changes. Froede therefore provided Phelan a revised copy of the proposed, redacted will in July 1990.
Froede did not contact Phelan again until February 1995, when she indicated her anonymous client intended to set up a living trust. Phelan provided Froede with a sample trust agreement. Then, in May 1995, Froede provided Phelan with an un-redacted copy of "The Last Will and Testament of Donald I. Hackbarth." The will had been executed in April 1995.
The named beneficiaries under the April 1995 will were Hackbarth's son Daniel, Hackbarth's wife Caroline, and the Foundation. The will now devised the 413 acres of Iowa farm land, along with other items of real property, to the Foundation directly. The will further directed that all property bequeathed to the Foundation be distributed to the Foundation for the establishment of a Fund to benefit the Hospital, specifically to support children's services and the intensive care unit. The will continued to limit the sale of the 413 acres, again without explanation, but now provided that the land could not be sold until ten years after Hackbarth's death.
Some provisions of the will provided that, in the event of Daniels's or Caroline's death, their specific bequests would pass to their respective children.
Donald Hackbarth died in 1997. The will in effect at the time of his death was executed in August 1995. As it relates to the matter before us, there are no pertinent distinctions between the April 1995 will and the August 1995 will. The August 1995 will continued to devise the four parcels of Iowa farmland to the Foundation directly, and continued to limit sale of the property, without explanation, until ten years after Hackbarth's death.
Three of the four parcels of Iowa farmland devised to the Foundation had been rented and farmed by Larry Holtkamp since the 1970s. Each year Holtkamp and Hackbarth would enter into a one-year written lease. Such a lease was in effect at the time of Hackbarth's death. While probate was pending, Hackbarth's estate entered into a one-year written lease with Holtkamp. By its terms the lease expired on February 29, 2000, but would be automatically renewed absent due and timely notice of non-renewal by either party. The estate gave proper and timely notice that it was not renewing the lease agreement, and the lease did in fact terminate on March 1, 2000. Termination occurred after the Foundation had determined it wished to sell all four parcels of the farmland rather than continue to rent it to any tenants, but occurred prior to completion of probate and the Foundations' actual receipt of the land.
The fourth parcel of land, approximately eighty acres, was rented and farmed by Douglas Ellington, also pursuant to consecutive one-year leases.
In December 2001, after the land had passed to the Foundation, Holtkamp filed a petition, naming the Foundation as defendant. The petition sought a declaratory judgment that Holtkamp had standing to enforce the provisions of Hackbarth's will, that the will's gift to the Foundation was the functional equivalent of a transfer to trust, and that the will's ten-year restriction on transferring the farmland was not an unreasonable restraint on alienation. The petition also asserted claims of fraudulent non-disclosure and interference with contract. The claims were based on the Foundation's alleged failure to disclose to Hackbarth, prior to the execution of his will, the Foundation's "intent to sell the land as soon as it obtained title to it, and not honor the provision in the Will" restricting transfer for a period of ten years. Holtkamp asserted that if Hackbarth had been informed of the Foundation's intent, he would have taken steps to insure that Holtkamp would be able to farm the land for ten years following Hackbarth's death. Holtkamp asserted the Foundation's actions interfered with the lease he held with Hackbarth.
In fact Holtkamp alternatively asserted both fraudulent misrepresentation and fraudulent non-disclosure. However, as the only "representation" relied on by Holtkamp is the Foundation's failure to disclose an allegedly material fact, his petition in fact asserts only one claim. See Sinnard v. Roach, 414 N.W.2d 100, 105 (Iowa 1987) ("A representation . . . can arise . . . from a failure to disclose material facts.").
The Foundation filed a motion for summary judgment, requesting that Holtkamp's petition be dismissed. Even though the district court concluded a fact question was generated on the issue of whether the Fund to be established by the Foundation was intended to be a trust, it granted the Foundation's summary judgment request. The court concluded Holtkamp lacked standing to assert any of the claims in the petition. The court also concluded the statute of frauds precluded admission of evidence to establish any intent by Hackbarth that Holtkamp would have the right to rent to the property after Hackbarth's death, "an essential element to any claim" in the petition. Holtkamp appeals.
II. Scope and Standard of Review.
We review a summary judgment ruling for correction of errors of law. Iowa R. App. P. 6.4; Hameed v. Brown, 530 N.W.2d 703, 706 (Iowa 1995). When a motion for summary judgment is made and properly supported, a party resisting the motion may not simply rely upon the pleadings, but must "set forth specific facts showing that there is a genuine issue for trial." Iowa R. Civ. P. 1.981(5). Summary judgment is appropriate when, viewing the record in the light most favorable to the party opposing the motion, no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 1.981(3); Bearshield v. John Morrell Co., 570 N.W.2d 915, 917 (Iowa 1997).
III. Declaratory Judgment.
Holtkamp asserts he has standing to seek a declaratory judgment regarding will terms, as he is a person "interested in" Hackbarth's will. See Iowa R. Civ. P. 1.1102 ("Any person interested in . . . a will . . . may have any question of the construction or validity thereof or arising thereunder determined, and obtain a declaration of rights, status or legal relations thereunder."). However, any "interest" Holtkamp may have in the testamentary disposition of Hackbarth's property rises to the level of standing to bring suit only if it is a "specific, personal, and legal interest in the litigation," and Holtkamp is "injuriously affected." Birkhofer ex rel. Johannsen v. Brammeier, 610 N.W.2d 844, 847 (Iowa 2000).
It is clear that Holtkamp cannot claim an interest derived from the express terms of the will, as he is neither named nor even referred to in the will. Holtkamp claims a qualifying interest is nevertheless derived from the fact that he was a tenant on the land at the time of Hackbarth's death. Holtkamp asserts he has a legal interest as (1) it was Hackbarth's intent that Holtkamp be provided the option of renting the Iowa farm land for a period of time after Hackbarth's death, and the ten year restriction on alienation was intended to preserve this option to Holtkamp; and (2) his lease was terminated to enable the Foundation to sell the farmland, which sale would violate the will's restrain on alienation.
Holtkamp cannot benefit from the assertion that he is the intended beneficiary of the will provision that restrains sale of the farmland. When determining a testator's intent, "the question is not what the testator meant to say, but rather what is the meaning of what the testator did say." In re Estate of Rogers, 473 N.W.2d 36, 39 (Iowa 1991) (citation omitted). Nothing in the will itself indicates any intent that the restraint on alienation was to benefit Holtkamp. The restraint is not itself ambiguous. We will not consider extrinsic evidence, in this case the deposition testimony of Holtkamp and an affidavit from Hackbarth's banker, to establish an intent in addition to, or different from, that which appears on the face of the will. See id.
At his deposition Holtkamp testified that in 1996 Hackbarth informed Holtkamp, "[I]ts wrote in my will that you can farm it for at least ten years after my death." In an affidavit Hackbarth's banker stated that "it was apparent to me that both Don and Larry expected that Larry would farm Don's land as long as Larry wanted to."
Moreover, even if the restraint on alienation was enforceable and intended to benefit Holtkamp, Holtkamp cannot show that he was "injuriously affected." The will does not provide Holtkamp the right to continue renting the land, and we will not resort to extrinsic evidence to add such a term to the will. Id. Indeed, Holtkamp admits that he has no enforceable right to lease the land devised to the Foundation. He nevertheless insists he was injured by the estate's termination of his lease.
Holtkamp seems to overlook the fact that Hackbarth's estate had complete discretion as to whether it would renew Holtkamp's lease. After the completion of probate the Foundation would have had the same discretion. Moreover, nothing in the will requires the Foundation to rent the land to Holtkamp, or to anyone. Thus Holtkamp asserts, at best, a speculative interest contingent upon an exercise of discretion by the holder of the land, whether it be the estate or the Foundation. Such an interest is not adequate to provide Holtkamp standing to seek a declaration regarding the terms of Hackbarth's will. See In re Willcockson, 368 N.W.2d 198, 201, 203 (Iowa Ct.App. 1985) (holding that trust beneficiary's interest was inadequate to provide standing to challenge the termination of a marital trust, as beneficiary's mother could exercise her general power of appointment either in favor of or against the beneficiary's interest).
IV. Tort Claims.
Holtkamp appears to assert that standing is irrelevant to whether he may pursue his tort claims against the Foundation. However, regardless of the nature of the claims in a petition, the plaintiff must always possess "a sufficient personal stake in the outcome of a controversy to insure that the dispute is presented in a concrete adversary context." Elview Const. Co., Inc. v. North Scott Cmty. Sch. Dist., 373 N.W.2d 138, 141 (Iowa 1985). We nevertheless recognize that courts must be careful not to confuse the question of whether a plaintiff has a "sufficient stake in an otherwise justiciable controversy," Birkhoffer, 610 N.W.2d at 847, with the question of whether the plaintiff can establish some or any elements of his claim. We find this matter better resolved by addressing the latter, rather than the former, question.
A. Intentional Interference with Contract. Holtkamp asserts that the Foundation interfered with one of his contractual relationships. To establish intentional interference with a contract, Holtkamp must show:
(1) plaintiff had a contract with a third-party;
(2) defendant knew of the contract;
(3) defendant intentionally and improperly interfered with the contract;
(4) the interference caused the third-party not to perform, or made performance more burdensome or expensive; and
(5) damage to the plaintiff resulted.
Jones v. Lake Park Care Center, Inc., 569 N.W.2d 369, 377 (Iowa 1997). Holtkamp fails to clearly and consistently assert the specific facts that underlie this claim. However, upon review we conclude that Holtkamp cannot establish a claim for contractual interference under any set of asserted facts.
The petition alleged the Foundation interfered with a contract between Holtkamp and Hackbarth, "based upon the lease which was in existence at the time Donald's will was prepared." However, that lease was a one-year written lease, which was replaced by subsequent written one-year leases. Holtkamp has no remaining rights arising from the written leases in effect at the time the will was drafted, executed, or admitted to probate. Moreover, there is no evidence that the Foundation took any action which might have interfered with the relationship that existed at those times.
The only other possible "lease" that could have existed between Holtkamp and Hackbarth would be an oral contract that was open-ended and continued beyond Hackbarth's death. As the district court noted, however, any such understanding was never reduced to writing and is provable, if at all, only through oral testimony. Thus, the court was correct in determining proof of such an agreement would violate the statute of frauds. See Iowa Code § 622.32.
Holtkamp's brief appears to now assert that the Foundation interfered with a contract between Holtkamp and Hackbarth's estate. In other words, Holtkamp now asserts that if the Foundation had respected the will's restraint on alienation, it would not have directed or requested the estate to terminate his tenancy. This claim, however, is not stated in the petition. Moreover, Holtkamp cannot succeed on the merits. He points this court to no evidence in the record that actually ties the Foundation's decision to sell the land to the estate's decision to terminate Holtkamp's tenancy. Moreover, the estate fully performed under the terms of its contract with Holtkamp. As previously noted, the estate had the discretion to serve Holtkamp with a proper and timely notice of non-renewal.
B. Fraudulent Non-Disclosure.
Finally, we turn to Holtkamp's claim of fraudulent non-disclosure. Holtkamp does not allege the Foundation failed to disclose information to him directly, but that it failed to disclose to Hackbarth's attorney an intent to sell the property once received. We agree with Holtkamp that the mere fact he was not a party to the representation or, in this case, nondisclosure, does not automatically preclude his right to assert a claim against the Foundation. See Clark v. McDaniel, 546 N.W.2d 590, 593 (Iowa 1996) (discussing Restatement (Second) of Torts § 533 (1977)). He nevertheless cannot establish a claim of fraudulent non-disclosure.
The elements of fraudulent misrepresentation are:
(1) defendant made a representation to the plaintiff,
(2) the representation was false,
(3) the representation was material,
(4) the defendant knew the representation was false,
(5) the defendant intended to deceive the plaintiff,
(6) the plaintiff acted in reliance on the truth of the representation and was justified in relying on the representation,
(7) the representation was a proximate cause of plaintiff's damages, and
(8) the amount of damages.
Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 400 (Iowa 2001).
A party can be liable for the failure to disclose a material fact only if the party is "`under a duty to communicate the concealed fact.'" Wright v. Brooke Group Ltd., 652 N.W.2d 159, 174 (Iowa 2002) (citing Cornell v. Wunschel, 408 N.W.2d 369, 374 (Iowa 1987)). This liability may extend to a third party who suffers pecuniary loss, but only if the third party acts in justifiable reliance on the misrepresentation, and if the maker of the misrepresentation "has reason to expect that its terms will be repeated or its substance communicated to the other, and that it will influence his conduct in the transaction or type of transaction involved." Clark, 546 N.W.2d at 593 (citing Restatement § 533).
Given this standard, Holtkamp's claim faces several problems. There is no evidence that, at the time the August 1995 will was executed, or any time prior thereto, the Foundation had an intent to sell the property in question. Even if we assume Holtkamp's petition can be read as raising the failure to disclose the Foundation's general policy to liquate gifts of real estate, the record fails to establish any duty by the Foundation to communicate the existence of such a policy to Hackbarth's attorney. Contrary to Holtkamp's assertions, Phelan did not so closely assist Froede with the drafting of Hackbarth's will as to give rise to a relationship of trust and confidence requiring disclosure.
Moreover, Holtkamp cannot show that any such policy was a material fact. The proposed wills provided to the Foundation in 1990 created a trust, and did not devise the land to the Foundation until that trust was terminated. The restraint on alienation in those proposed wills provided that the farmland not be sold until the death of Hackbarth's last surviving child. The proposed wills further contained three conditions under which the trust would terminate. As all three conditions required that Hackbarth's last surviving child be deceased, the proposed wills did not create a restraint on alienation that would bind the Foundation.
Finally, Holtkamp cannot establish that a duty to disclose information to Hackbarth's attorney, if one had in fact existed, would give rise to a liability running to Holtkamp. Even if Phelan had known the Iowa farmland was being rented, there is no evidence he was aware of any alleged expectancy that the tenant's right to rent the land would survive Hackbarth's death. Holtkamp has not shown that Phelan had a "reason to expect" any tenant would be influenced by the non-disclosure. See Clark, 546 N.W.2d at 593 (citing Restatement § 533 cmt.d) (providing one has a "reason to expect" repetition of a representation if he or she has "information that would lead a reasonable man to conclude that there is an especial likelihood that it will reach those persons and will influence their conduct"). Moreover, there is no evidence, and in fact Holtkamp admits, that he did not act in reliance on any representation or non-disclosure by the Foundation.
V. Conclusion.
Holtkamp did not have standing to seek a declaratory judgment regarding the terms of Hackbarth's will. Based upon the undisputed facts in the record, his claims for fraudulent non-disclosure and interference with contract cannot be sustained. We therefore affirm the decision of the district court.
AFFIRMED.