Christina Myers v. Michael J. Myers and Krisanne L. Myers

CourtCourt of Appeals of Iowa
DecidedNovember 4, 2020
Docket20-0122
StatusPublished

This text of Christina Myers v. Michael J. Myers and Krisanne L. Myers (Christina Myers v. Michael J. Myers and Krisanne L. Myers) is published on Counsel Stack Legal Research, covering Court of Appeals of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Christina Myers v. Michael J. Myers and Krisanne L. Myers, (iowactapp 2020).

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 20-0122 Filed November 4, 2020

CHRISTINA MYERS, Plaintiff-Appellee,

vs.

MICHAEL J. MYERS and KRISANNE L. MYERS, Defendants-Appellants. ________________________________________________________________

Appeal from the Iowa District Court for Dallas County, Elisabeth

Reynoldson, Judge.

A son and his wife appeal the district court’s judgment for his mother,

allowing recovery of her down payments on their home despite gift letters stating

no repayment was expected. AFFIRMED.

Amanda L. Green of Takekawa & Green, PLLC, Ankeny, for appellants.

James R. Hinchliff of Shindler, Anderson, Goplerud & Weese, P.C., West

Des Moines, for appellee.

Considered by Vaitheswaran, P.J., and Tabor and Schumacher, JJ. 2

TABOR, Judge.

Christina Myers brought an equitable action against her son, Michael, and

her daughter-in-law, Krisanne, to recoup $89,900 she paid to help them purchase

a larger house.1 As part of their arrangement, Christina remodeled and lived in the

walkout basement. Michael and Krisanne argued Christina had no right to

repayment because she signed three gift letters to facilitate Michael securing a

mortgage on the house. Those letters stated, “[N]o repayment of this gift is

expected or implied in either form of cash or services of the recipient.”

The district court ruled for Christina, allowing her to recover the $89,900 in

contributions. Michael and Krisanne appeal, contending the gift letters were

enforceable contracts prohibiting Christina from recovering the gifted amounts. As

part of that claim, they argue the court misapplied the equitable theories of unjust

enrichment and promissory estoppel. They also contend the court violated the

parol evidence rule by considering extrinsic proof of a prior oral agreement

between the parties.

Like the district court, we find the gift letters are not enforceable because

their terms do not meet the elements of a contract. That finding means the parol

evidence rule does not preclude our consideration of extrinsic evidence

surrounding Christina’s gift. Applying the proper framework for inter vivos gifts,2

we affirm.

1 Because the parties share a surname, for clarity we will use their first names in this opinion. 2 Iowa law recognizes two kinds of gifts: inter vivos and causa mortis. Vosburg v.

Mallory, 135 N.W. 577, 578 (Iowa 1912). The first takes place during the donor’s lifetime and the second at the donor’s death. Id. 3

I. Facts and Prior Proceedings

Christina is the mother of three adult children—Michael, Jennifer, and

William. For many years, Christina lived alone in Arizona, working full-time as the

co-owner of a dog-boarding business. After being hospitalized twice for serious

health issues, she decided it was time to move closer to her children.

In August 2013, Christina sold her business, receiving close to $115,000 in

proceeds. Seeking to invest the money, she looked into real estate. Because the

market was “volatile” in Arizona, Christina entertained moving to Iowa, where

Michael and Krisanne lived with their five children. Knowing Michael and Krisanne

resided “in a very small home,” Christina offered to use the proceeds from the sale

of her business to help them buy a bigger house.3 She testified she “wanted to

give them the opportunity to live in a beautiful home” and “to be with them,” calling

it a “win/win” situation.

Christina told her friend and former business partner, Margaret Brown, that

“she decided to buy a home with Michael, her son, in Iowa.” Brown understood

that Christina would own one-third of the home. Brown testified that, after hearing

Christina’s plans, she was “nervous” that her friend would end up wishing she had

her own space. Similarly, Christina’s niece, Laurie Graham King, testified that,

based on conversations with her aunt before the purchase, she believed Christina

was “a one-third owner in the home.”

3The parties offered conflicting testimony about whether Christina intended to be a co-owner of the new home. Christina testified it was her understanding she would have a one-third ownership interest in the home. But Michael testified he and his mother never had a conversation about joint ownership. 4

With the understanding that Christina would help finance the home and live

with them, Michael and Krisanne began house-hunting that fall. In December,

Michael and Krisanne found a three-story home in Cumming with enough space

for their children and Christina. Michael shared the listing with Christina, who was

still living in Arizona. The house had a walkout basement—finished with two

bedrooms, a bathroom, and a kitchen—which the parties agreed Christina would

occupy as her private living quarters. Christina thought the arrangement was fair

because the basement constituted nearly one-third of the property’s total square

footage. Michael referred to the space as a “mother’s suite.” Because the

basement was set up as a recreation room, Christina anticipated making some

renovations. She also planned to use the basement’s unfinished space as a

laundry room.

With that arrangement in mind, Michael and Krisanne made an offer of

$490,000 on the Cumming house in January 2014. The seller requested an

earnest-money deposit of $1500 at the time of the offer, which Michael paid. A

day later, the seller made a counteroffer of $525,000 and requested another $3500

deposit due at acceptance. That same day, Michael accepted the deal and paid

the deposit. Although the payments came from his personal bank account, he

asked Christina to help pay for the deposits. Of the total $5000 earnest-money

payments made by Michael, Christina contributed $4900.4

4 At the time of the initial offer, Christina gave Michael $900 for the first earnest- money deposit. Christina transferred another $4000 the same day Michael paid the second earnest-money deposit. 5

Under the purchase agreement, two things had to occur before the March

closing date. First, Michael and Krisanne had to obtain a mortgage by early

February. Second, they had to make a down payment of around $105,000, which

was twenty percent of the purchase price. As promised, Christina planned to

contribute $85,000 from her business-sale proceeds toward the down payment.

Michael applied for a mortgage as the sole borrower.5 But because Michael

was relying on Christina for financial support, he did not qualify for the mortgage

on his own. The lender told Michael that Christina needed to submit gift letters

memorializing her contributions.6 The contributions totaled $89,900, including the

$900 and $4000 earnest-money payments and the anticipated $85,000 partial

down payment. At the lender’s request, Michael sent Christina three standardized

gift letters, informing her the letters were necessary to obtain the mortgage.7

On February 1, February 11, and February 12, 2014, Christina signed three

separate gift letters for $900, $85,000, and $4000 respectively. Christina testified

she had no direct communications with the mortgage company but did what

Michael asked her to do because he was “the hands-on person” with the mortgage.

5 The record shows both Krisanne and Christina had marks on their credit histories that would have limited their abilities to qualify for a mortgage. 6 Mortgage companies may require a borrower to execute a gift letter as an

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