In the Matter of the Estate of Helen L. Burge

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 19-1881 Filed March 17, 2021

IN THE MATTER OF THE ESTATE OF HELEN L. BURGE, Deceased.

KEITH BURGE, Appellant/Cross-Appellee,

ALEX BURGE and ELLIS BURGE, Appellants,

vs.

JOAN BURGE, LINDA FREESE, ERIN FREESE GRIGG, BRIAN FREESE, and GUTHRIE BURGE, Appellees/Cross-Appellees,

and

KEATON BURGE, Cross-Appellant.

________________________________________________________________

Appeal from the Iowa District Court for Linn County, Sean W. McPartland,

Judge.

The beneficiaries under a will appeal and cross-appeal from the court’s

order deciding objections to the executor’s final report. AFFIRMED ON APPEAL;

AFFIRMED ON CROSS-APPEAL.

Guy P. Booth, Cedar Rapids, and Darrel Morf and Chad Brakhahn of

Simmons Perrine Albright & Ellwood, Cedar Rapids, for appellant Keith Burge. 2

Kevin C. Rigdon and Jase H. Jensen of Howes Law Firm, P.C., Cedar

Rapids, for appellants Alex Burge and Ellis Burge.

Ann M. Klostermann McCrea and Crystal L. Usher of Nazette, Marner,

Nathanson & Shea, LLP, Cedar Rapids, for appellees Linda Freese, Brian Freese,

and Erin Freese Grigg.

Joseph W. Younker and Janice J. Kerkove of Bradley & Riley PC, Cedar

Rapids, for appellee Joan Burge.

Keaton Burge, Mount Vernon, self-represented cross-appellant.

Guthrie Burge, Mount Vernon, self-represented appellee.

Heard by Vaitheswaran, P.J., and Tabor and Ahlers, JJ. 3

AHLERS, Judge.

Following Helen Burge’s death, her executor sought to probate her will,

which left her estate to her children and grandchildren. Certain beneficiaries

objected to the final report, and, after hearing, the probate court entered an order

resolving those objections. Some of the beneficiaries appeal and cross-appeal

from that order, arguing the court had no authority or jurisdiction to resolve certain

disputes and the court erred in distributing particular assets. We reject these

challenges and affirm.

I. Background Facts and Proceedings.

Helen1 died on January 9, 2015. Because Helen’s husband predeceased

her, her will left her estate to her descendants: her three children—Keith Burge,

David Burge, and Linda Freese; Keith’s four children—Alex Burge, Ellis Burge,

Guthrie Burge, and Keaton Burge; and Linda’s two children—Erin Freese and

Brian Freese.2 Keith and David, as executors of Helen’s estate, filed a petition for

probate of Helen’s will. David later died on April 15, 2017. Thereafter, David’s

surviving wife, Joan, participated in these proceedings as the executor and sole

beneficiary of David’s estate.

Helen’s will first distributed $30,000.00 to David “if [David] is surviving on

the death of the survivor” of Helen and her husband. The will then directed

distribution of the remaining residue to Helen’s descendants, with half of the

1 Because Helen and most beneficiaries share the last name Burge, we will refer to these persons by first and last name on first reference and by first name only on subsequent references. 2 As used throughout this opinion, “the children” refers to Keith, David, and Linda;

“the Farming Grandchildren” refers to Alex, Ellis, Guthrie, and Keaton; and “the Freese beneficiaries” refers to Linda, Erin, and Brian. 4

residue left to the three children in equal shares, and the other half of the residue

left to the six grandchildren in equal shares, with some additional provisions.

Relevant to these proceedings, Helen’s will contained two provisions to

accomplish her stated wish of ensuring her farmland would continue to be owned

“by those members of my family who are engaged in farming.” First, the will

granted the Farming Grandchildren an option to purchase the entirety of Helen’s

farmland. If the Farming Grandchildren exercised this option, the will directed the

Farming Grandchildren to pay a penalty if they sold the farmland within fifteen

years. Any such penalty would be “distributed in equal shares to [the] children per

stirpes.”3 This option expired three years after Helen’s death. Second, Keith could,

“in lieu of his receiving his share of [the] estate in the same fashion as [the two]

other children, . . . elect to take his share in the form of farmland, provided he and

[the] Farming Grandchildren can agree upon an appropriate farm division which

would facilitate such transfer.”

The Farming Grandchildren provided timely written notice of their intent to

exercise their option to purchase the farmland. Keith provided timely written notice

of his intent to receive farmland as his distributive share. On February 7, 2018,

Keith, acting as sole executor of Helen’s estate after David’s death, filed a final

report. This filing included a copy of a real estate installment contract (the first

proposed contract) signed4 January 8, 2018, which sought to effectuate the

3 The penalty would be the amount by which the sale price exceeded the Farming Grandchildren’s purchase price. In other words, any profit on the sale of the farmland within the fifteen-year period after the Farming Grandchildren’s purchase would go to the children, not to the Farming Grandchildren or anyone else. 4 The signatories to the contract are Keith as executor and the four Farming

Grandchildren. 5

Farming Grandchildren’s purchase5 of Helen’s farmland and the transfer of part of

that farmland to Keith.

Joan filed an objection—and the Freese beneficiaries filed a separate

objection—asserting numerous issues with the final report and with Keith’s actions

as executor. The probate court set a hearing on the objections, but on Keith’s

motion the court continued the hearing so the parties could engage in settlement

discussions. A little over one month later, Joan filed a motion—which the Freese

beneficiaries later joined—seeking to enforce a settlement agreement the parties

purportedly reached. Alex and Ellis resisted Joan’s motion, and the settlement-

enforcement issue proceeded to a hearing. Following the hearing, the court issued

an order finding, although the beneficiaries who participated in the settlement

negotiations reached a settlement, the settlement was not enforceable because

Guthrie and Keaton did not participate in negotiations or agree to the terms.

On December 12, 2018, Keith filed an amended final report, which included

a proposed amended contract (the second proposed contract) to effectuate the

transfer of Helen’s farmland to Keith and the Farming Grandchildren. All

outstanding issues proceeded to a hearing on January 9, 2019. After a period

allowed for post-hearing briefing, the probate court entered the order at issue here.

The court’s order addressed all remaining issues, including memorializing Keith’s

interest and the Farming Grandchildren’s interest in the farmland, declaring the

required terms of any contract for the sale of the farmland to effectuate the options

5 The Farming Grandchildren formed a limited liability company to own and operate the farmland, as permitted under the will. For simplicity, we will refer to the Farming Grandchildren as the purchaser of the farmland. 6

exercised by Keith and the Farming Grandchildren, and denying a request by Alex

and Ellis for attorney fees. The court’s order included direction that, if Keith

continued with the exercise of his option to take farmland, it would be in lieu of his

receiving his share of the estate such that he would not be entitled to a share of

any penalty associated with the Farming Grandchildren’s future sale of the

farmland.

Alex and Ellis appeal, arguing the probate court improperly modified the first

proposed contract, interfered with their inheritance of the residue, and should have

awarded attorney fees. Keith also appeals, arguing the court should not have

removed him as a residual beneficiary. Keaton filed a cross-appeal, arguing the

court should have excluded Joan as a beneficiary and from participating in the

proceeding.6 Joan filed a brief as appellee/cross-appellee, which the Freese

beneficiaries joined.

II. Standard of Review.

We review objections to an executor’s final report de novo. In re Estate of

Johnson, 387 N.W.2d 329, 332 (Iowa 1986); see also Iowa Code § 633.33 (2015)

(stating all matters in probate, other than actions to set aside or contest wills, are

tried in equity); Iowa R. App. P. 6.907 (“Review in equity cases shall be de novo.”).

“Although we give deference to the district court’s findings of fact, we are not bound

by them.” Johnson, 387 N.W.2d at 332.

6 Keaton’s self-represented cross-appeal raises numerous other issues that are either duplicative of the issues raised on appeal or not properly before us. To the extent he raises issues the other beneficiaries raised on appeal, we consider his arguments with the appropriate issue on appeal. We do not consider arguments not properly raised. 7

In Iowa, the cardinal rule of will construction is that “the intent of the testator is the polestar and must prevail.” In determining the testator’s intent, we consider “(a) all of the language contained within the four corners of the will, (b) the scheme of distribution, (c) the surrounding circumstances at the time of the will's execution[,] and (d) the existing facts.” The court considers the instrument as a whole and tries to give each part meaning and effect.

Roll v. Newhall, 888 N.W.2d 422, 426 (Iowa 2016) (alteration in original) (quoting

In re Estate of Rogers, 473 N.W.2d 36, 39 (Iowa 1991)).

III. Terms of the Real Estate Contract.

Alex and Ellis—two of the Farming Grandchildren—attack the probate

court’s order requiring the contract to sell the farmland to include terms different

from those in the first proposed contract on multiple grounds. Before addressing

these contentions, it is important to recognize what the court’s order did and did

not do. The court ordered any contract for the sale of the farmland to include two

provisions that differed from the terms of the second proposed contract. The

provisions (1) barred Keith from sharing in profits from sale of the farmland during

the contract term, as discussed in section VI below, and (2) barred the contract

sellers from participating in the Farming Grandchildren’s operation and

maintenance of the farm during the contract term. Otherwise, the court approved

the second proposed contract in full. Alex and Ellis appear to seek reinstatement

of the terms of the first proposed contract filed with the February 7, 2018 final

report. However, any differences between the first proposed contract and the

second proposed contract were the result of settlement negotiations between the

beneficiaries, not the result of a court order. Thus, we have nothing to review to

the extent Alex and Ellis object to differences between the first proposed contract

and the second proposed contract. We can properly review Alex and Ellis’s 8

objection to the contract terms imposed by the district court based on the court’s

interpretation of the will.

A. Authority to Order Terms of the Contract.

Alex and Ellis argue Keith, as executor, “has the sole right, without court

oversight, to sell real estate because the [w]ill provides an unrestricted power of

sale.” They note the will authorizes the executor “[t]o sell, convey, auction, lease

or mortgage any property . . . upon such terms and conditions as shall seem best

to” the executor.

The will, when read as a whole, specifically does not give the executor

unchecked power to dispose of the farmland. In granting the Farming

Grandchildren an option to purchase the farmland, Helen established numerous

terms and conditions on the sale in her will, including price per acre and limits on

the purchasers’ ability to resell the farmland. Helen directed the executor to

“establish reasonable terms and conditions” to implement the sale, and she

explicitly authorized the courts to resolve “any dispute as to the reasonableness of

any such terms or conditions.” Nothing in the will limits who can dispute the terms

or conditions of the proposed sale contract. As parties entitled to receive sale

proceeds from the sale and entitled to receive funds in the event the farmland was

sold for a profit within the fifteen-year period following the Farming Grandchildren’s

purchase, Joan and the Freese beneficiaries certainly had an interest in the terms

of the contract and the right to dispute terms they viewed as unreasonable. Thus,

the court ordering the terms and conditions that must be included in any contract

of sale to resolve any objections to “reasonableness” is authorized by the will. 9

B. Jurisdiction Over the Contract.

Alex and Ellis argue the first proposed contract was enforceable. They

assert the probate court’s involvement in setting the terms of the contract

constituted a modification of the first proposed contract and the court lacked

jurisdiction to do so. In making their argument, they appear to conflate jurisdiction

with authority. See Alliant Energy-Interstate Power & Light Co. v. Duckett, 732

N.W.2d 869, 874–75 (Iowa 2007) (“Subject matter jurisdiction refers to the

authority of a court to hear and determine cases of the general class to which the

proceedings in question belong, not merely the particular case then occupying the

court's attention. A court may have subject matter jurisdiction but for one reason

or another may not be able to entertain a particular case. In such a situation we

say the court lacks authority to hear that particular case.” (citations omitted)).

To the extent Alex and Ellis question the court’s jurisdiction, the Iowa Code

explicitly authorizes the court to hear probate matters and construction of wills.

See Iowa Code § 633.10(1)–(2). The probate court also “has plenary jurisdiction

to determine matters essential to probate business before it.” In re Guardianship

of Matejski, 419 N.W.2d 576, 578 (Iowa 1988).

To the extent Alex and Ellis question the court’s authority, they claim the

court’s actions should be limited to resolving disputes in the executor’s final report,

not to the terms of the first proposed contract. However, the objections to the final

report specifically extended to any terms of a contract to effectuate the options

exercised by the Farming Grandchildren and Keith. Given the court’s broad

jurisdiction to hear probate matters and the nature of the objections, the district

court had the authority to establish the terms of any contract effectuating the 10

options. See In re Estate of Ballstadt, No. 03-2117, 2004 WL 1899949, at *2 (Iowa

Ct. App. Aug. 26, 2004) (“Certainly, a district court sitting in probate has jurisdiction

to approve sales of real estate, so one must conclude the court had the power to

hear and determine a case of this general class.”).

C. Modification of the First Proposed Contract.

Finally, Alex and Ellis assert there is no authority and there are no facts to

justify what they claim was a modification of the first proposed contract. Their

central argument here appears to be that the first proposed contract was a binding

contract that the probate court was bound to accept without modification. In

support of this contention, they cite Estate of Randeris v. Randeris, arguing it

stands for the proposition that the probate court’s authority in ruling on objections

to a final report are limited to resolving questions surrounding the executor’s

accounting and “does not invoke the court’s general jurisdiction to actually

adjudicate title.” 523 N.W.2d 600, 604 (Iowa Ct. App. 1994).

We find Randeris inapplicable. Randeris involved a challenge to the

executor’s failure to attempt to set aside transfers of land completed prior to the

testator’s death. Id. at 603. In this context, the court noted the probate court’s

authority in ruling on an objection to a final report did not extend to actually

adjudicating title to the previously conveyed land. Id. at 604. As a result, the court

concluded the probate court improperly set aside the predeath transfers of

property. Id.

Here, unlike in Randeris, we are not dealing with predeath transfers or

actions by Helen prior to her death. Instead, we are dealing with the actions of the

executor in fulfilling his obligations under the terms of Helen’s will, which included 11

effectuating the sale of farmland to the Farming Grandchildren pursuant to the

exercised option, but only under the terms and conditions set in the will. As

explained above, the executor’s power to sell the farmland was subject to the terms

and conditions in the will and court review for reasonableness. The probate court

was within its authority to rule on objections to the manner in which the executor

was effectuating the sale of the farmland by making sure any contract correctly

included required terms. Furthermore, the attorney for Alex and Ellis conceded at

the January 9, 2019 hearing that the first proposed contract could not simply be

ratified because it did not provide for Keith’s share of the farmland. For these

reasons, we agree the first proposed contract was not binding or enforceable and

the probate court’s establishment of required terms of the contract for sale was not

a modification of an existing contract.

IV. Lien on the Farmland.

The second proposed contract contains the following provision: “Sellers and

it [sic] successors and assigns shall have a lien against the Farming

Grandchildren’s Land for purposes of enforcing all rights under this contract,

including, but not limited to, rights of forfeiture or foreclosure.” The probate court’s

order approved of a lien and directed the executor “to recognize, memorialize and

record a lien or liens on . . . the farmland until the contract is paid in full.” Alex and

Ellis argue the court should not have ordered the lien, characterizing the lien as

“divest[ing] the Farming Grandchildren of their interests in the residuary.”

However, the lien does not affect each Farming Grandchild’s one-twelfth interest

in the residuary. The lien only affects the Farming Grandchildren’s option to

purchase the farmland, which the will subjects to “reasonable terms and 12

conditions.” The Farming Grandchildren are free to decline the option if they

disagree with the terms and conditions of the sale. Because the lien will protect

the sellers in the event of forfeiture or foreclosure of the farmland, we agree the

lien is a reasonable condition of the contract as ordered by the probate court.

V. Attorney Fees.

Alex and Ellis appeal the district court’s denial of their request for attorney

fees.7 “Generally, a party has no claim for attorney fees as damages in the

absence of a statutory or written contractual provision allowing such an award.”

Williams v. Van Sickel, 659 N.W.2d 572, 579 (Iowa 2003). Alex and Ellis do not

seek an award of attorney fees under statute or contract. Instead, they seek an

award of attorney fees under the common law. We review a common law request

for attorney fees de novo. Id.

“To obtain common law attorney fees, a party must prove ‘that the culpability

of the [opposing party’s] conduct exceeds the willful and wanton disregard for the

rights of another’ standard required to prove punitive damages.” Id. (quoting

Hockenberg Equip. Co. v. Hockenberg’s Equip. & Supply Co., 510 N.W.2d 153,

159 (Iowa 1993)). “The opposing party’s conduct ‘must rise to the level of

oppression or connivance to harass or injure another.’” Id. (quoting Hockenberg,

510 N.W.2d at 159–60). In requesting attorney fees, Alex and Ellis repeat their

7In addition to their common law claim for attorney fees, Alex and Ellis requested attorney fees under Iowa Rule of Civil Procedure 1.413. This “rule is intended to discourage parties and counsel from filing frivolous suits and otherwise deter misuse of pleadings, motions, or other papers.” Barnhill v. Iowa Dist. Ct., 765 N.W.2d 267, 273 (Iowa 2009). For the same reasons expressed in this section, we find the probate court did not abuse its discretion in denying the request for sanctions under rule 1.413. See id. at 272 (reviewing a request for sanctions for abuse of discretion). 13

arguments on the issues from above and other issues before the probate court,

and they assert the objectors acted contrary to authority. The court found the

parties “have engaged in some conduct, and taken some positions, which may

easily be characterized as beyond zealous advocacy for positions based upon

facts and principles at law.” However, the court concluded the objectors’ actions

did “not rise to the level of culpability exceeding the willful and wanton disregard of

other parties.” As noted above, we reject all of Alex and Ellis’s arguments on

appeal. On our de novo review of the record, we agree with the probate court that

the objectors’ conduct does not rise to the level justifying a common law award of

attorney fees.

VI. Keith’s Interest.

To effectuate the will’s penalty for early sale of the farmland, if such a future

sale were to occur, the second proposed contract required the Farming

Grandchildren to pay an amount in equal shares to Keith, Linda, and Joan (as

David’s successor) for each acre sold. Because Keith elected to take his share of

the estate as farmland, the probate court ordered Keith removed from this

provision so any penalty would be paid in equal shares to Linda and Joan only.

Keith argues this modification is contrary to the intent of the will.

Keith correctly notes the will requires the penalty “be distributed in equal

shares to [the] children per stirpes.” However, the will also mandates that Keith’s

election to receive farmland is “in lieu of his receiving his share of [the] estate in

the same fashion as [the] other children.” Thus, by electing to receive his share of

the estate in farmland, Keith forfeited his right to further inherit under the will “in

the same fashion as [the] other children.” This includes forfeiting his right to 14

receive any penalty for early sale of the farmland. We agree with the probate court

that excluding Keith from any penalty for early sale of the farmland is a correct

VII. David’s Interest.

Helen died on January 9, 2015. Thereafter, David died on April 15, 2017.

Keaton argues David’s death bars Joan and David’s estate from inheriting under

the will. He bases this argument on the following provision in the will:

The remainder of the residue shall be distributed as follows: ... One-half thereof to be distributed in equal shares to my three children, Keith Burge, David Burge and Linda Freese. If any of my children shall not be then surviving such child’s share shall be distributed to such child’s descendants per stirpes, or if none are then surviving, then added to shares of any other children as aforesaid. Such bequests shall be subject to the option provisions of Division B hereof.

(Emphasis added.) Keaton argues “then surviving” refers to the date the Farming

Grandchildren exercised their option to purchase the farmland or the date the

option expired, whichever occurred first. Keaton asserts the will shows a clear

intent for Helen’s estate to remain with her children and grandchildren. However,

there is nothing in the terms of the will that supports Keaton’s contention. In fact,

the will shows Helen intended to identify the beneficiaries at the time of her death.

The bequest of $30,000.00 to David specifically occurs “if [David] is surviving on

the death of the survivor” of Helen and her spouse (who predeceased Helen).

Helen’s will does not contain any alternate bequests if a beneficiary dies after the

testator. See, e.g., Marlin M. Volz, Jr., Iowa Practice Series: Methods of Practice

§ 20:18 (Aug. 2020 update) (providing an example of a bequest if the beneficiary 15

“dies within 60 days after” the testator). Due to the fact David survived Helen, we

agree David is a full beneficiary under Helen’s will, and Joan, as the sole

beneficiary of David’s estate, is entitled to receive David’s share of the inheritance.

VIII. Conclusion.

The probate court properly directed the required terms of the contract for

the Farming Grandchildren to purchase the farmland, including placing a lien on

the farmland until final payment. Additionally, Alex and Ellis are not entitled to

attorney fees, Keith is properly excluded from receiving any penalty payment from

early sale of the farmland, and Joan, as sole beneficiary of David’s estate, is

entitled to receive David’s inheritance under the will.

AFFIRMED ON APPEAL; AFFIRMED ON CROSS-APPEAL.