IN THE COURT OF APPEALS OF IOWA
No. 19-0847 Filed November 4, 2020
KATHLEEN BROWNELL, Plaintiff-Appellee,
vs.
SCOTT M. JOHNSON, Defendant-Appellant. ________________________________________________________________
Appeal from the Iowa District Court for Palo Alto County, Nancy L.
Whittenburg, Judge.
The defendant appeals from the judgment entered against him after a jury
found he intentionally interfered with a contract involving his former stepmother
and her alimony payments. REVERSED AND REMANDED.
William T. Talbot of Newbrough Law Firm, LLP, Ames, for appellants.
Jeremy L. Thompson of Putnam & Thompson Law Office, P.L.L.C.,
Decorah, for appellee.
Gary J. Streit of Shuttleworth & Ingersoll, P.L.C., Cedar Rapids, for amicus
curiae Iowa Academy of Trust and Estate Counsel.
Considered by Doyle, P.J., and Mullins and Greer, JJ. 2
GREER, Judge.
Kathleen Brownell sued Scott Johnson, her former stepson, claiming he
intentionally interfered with a contract. More specifically, she alleged Scott
interfered with the decree1 dissolving her marriage to Scott’s father, Phillip
Johnson, which awarded Kathleen $1600 in alimony each month.2 The jury found
in Kathleen’s favor and awarded her $59,800. Scott appeals that judgment. He
maintains the court should have entered judgment for him—either by granting his
motion for directed verdict or granting his motion for judgment notwithstanding the
verdict—because the court could conclude as a matter of law that his conduct was
not improper given his role as trustee or as agent under power of attorney. In the
alternative, Scott argues the trial court should have granted his motion for new trial
because there was “sufficient irregularity” in the proceedings to warrant a new trial.
The Iowa Academy of Trust and Estate Counsel sought leave to file an
amicus brief, which our supreme court granted before transferring the case to us.
The amicus’s stated purpose in filing an appellate brief is to “assure that [our]
1 “[A] stipulation of settlement in a dissolution proceeding is a contract between the parties, [and] it becomes a final contract when it is accepted and approved by the court.” In re Marriage of Lawson, 409 N.W.2d 181, 182 (Iowa 1987). But once the court enters a decree, the stipulation, as a practical matter, has no further effect. See Bowman v. Bennett, 250 N.W.2d 47, 50 (Iowa 1977). The decree, not the stipulation, determines what rights the parties have. Id.; In re Marriage of Von Glan, 525 N.W.2d 427, 430 (Iowa Ct. App. 1994). Therefore, in ascertaining the rights of the parties after final judgment, it is the intent of the district court that is relevant, not the intent of the parties. In re Marriage of Knott, 331 N.W.2d 135, 137 (Iowa 1983). So, the decree, not the stipulation, is the enforceable instrument. Here, the parties stipulated that a contract—the agreement to pay alimony—met the first element of an interference with a contract claim, and so we do not address the issue of whether a stipulation incorporated by a decree satisfies the element outside of the facts if this case. 2 Kathleen also sued the Johnson Farm Account Trust, but in this appeal, Scott
Johnson is the only defendant-appellant. 3
disposition of the appeal does not result in the adoption of a standard that the
trustee of a trust owes any duty to the creditor of a beneficiary of a trust when the
trustee is making distributions to other beneficiaries of the trust in compliance with
terms of the trust.”
Kathleen asks that we affirm the judgment against Scott and award her
appellate attorney fees.
I. Background Facts and Proceedings.
Kathleen and Phillip married in 1994. They have no shared biological
children; each had children from previous marriages.
During their marriage, Phillip was diagnosed with cognitive impairment,
which Phillip and his family understood to mean that at some point he was likely to
have dementia or Alzheimer’s disease. Phillip understood that he had to have
personal assets of no more than $2000 and monthly income below a threshold to
qualify for Medicaid nursing home coverage. With this in mind and to qualify in the
future, Phillip executed the Johnson Farm Account Trust on June 25, 2012.
Kathleen understood the plan given Phillip’s likely future. So they conveyed all of
his assets to the trust, including all of the farmland he owned.3 Phillip was the
initial trustee, and Scott was the successor trustee. Scott and his two brothers
were the beneficiaries for the trust, but while Phillip remained trustee, he did “not
owe any fiduciary duty or similar obligation to the remainder beneficiaries of the
trust.”
3 Kathleen signed deeds transferring the land to the trust. 4
In July 2012, Kathleen filed for dissolution, and Phillip and Kathleen’s
marriage was dissolved in May 2013 under a stipulated decree. Both parties were
represented by attorneys. As part of the stipulation, Kathleen “surrender[ed] and
disclaim[ed] any and all interest” she may have had in Phillip’s real estate and in
the Johnson Family Account Trust. And Phillip agreed to pay Kathleen $1600 in
alimony each month until one of them died or until Kathleen remarried. He also
agreed to make a cash payment to Kathleen for $30,000 and to assign her his life
insurance policy worth $125,000, except the first $10,000 was to go to his estate.
Kathleen had the responsibility of making the payments on the life insurance policy
going forward.
Phillip made the monthly alimony payments to Kathleen until he suffered a
farm injury in July 2015. The injury coincided with Phillip’s mental decline, and he
transitioned to a nursing home that same month. He continued to live there at the
time of the underlying trial in January 2019. Phillip was at first not eligible for
nursing home compensation through Medicaid because the Johnson Farm
Account Trust had been set up within five years. Phillip became eligible in July
2017—when the five-year lookback period expired.
Scott began managing Phillip’s affairs as his agent under power of attorney
in July 2015. Initially, he made Phillip’s alimony payments to Kathleen, using the
Phillip K. Johnson Farm Account.
In March 2016, Scott—on behalf of Phillip—petitioned to have Phillip’s
alimony obligation terminated or modified. After filing the petition, Scott made only
one more alimony payment to Kathleen—in April 2016. He made no partial
payments or attempted payments after that date. Kathleen made no efforts to 5
collect the past due alimony other than calling Scott on the phone and sending
Scott some personal letters.
More than a year later, in July 2017, Kathleen sued Scott and the trust,
alleging one theory: intentional interference with a contract in failing to make
Phillip’s alimony payments to her.
In September 2017, at the advice of attorneys, Scott signed the document
acknowledging him as trustee of the Johnson Farm Account Trust. He also
created the Johnson Farm Account Trust checking account “[t]o keep money out
of [Phillip’s] personal account so [Phillip] would qualify for Title XIX.”
In April 2018, the district court entered a modified decree, reducing
Kathleen’s alimony to $600 per month and making the ruling retroactively effective
to April 2016.
In June 2018, as trustee, Scott transferred all of the property from the trust
to him and his brothers. He also closed the trust checking account and disbursed
the funds between him and his brothers.
The jury trial on Kathleen’s petition for intentional interference with a
contract began in January 2019. The parties stipulated that she was owed $25,200
in alimony as of the trial. Kathleen testified that she borrowed $2500 from a
daughter, $4500 from another daughter, and $7698 from her son to live on while
she was not receiving her alimony payments. She also testified she incurred about
$19,000 in attorney fees and had taken $15,000 in cash value from the life 6
insurance policy to keep the payments up to date on that policy. Kathleen asked
for $74,000 in damages.4
During his testimony, Scott was asked why he stopped making alimony
payments to Kathleen. Scott testified, “[I]t just cost a lot of money to keep [Phillip]
in the care center.” Before Phillip qualified for Medicaid nursing home coverage,
he was billed about $5500 each month to live in the nursing home. Since Phillip
qualified for Medicaid coverage in July 2017, Phillip’s personal bill for the nursing
home is about $1325 each month. Phillip receives about $1675 from Social
Security monthly. The money from Social Security counts toward the income
threshold Phillip must stay below to qualify for nursing home coverage through
Medicaid. According to Scott, other than his alimony obligation, his father’s only
other personal expenses are “clothes, haircuts and that kind of thing.”
Through Scott’s testimony, Kathleen introduced into evidence the bank
statements of “Phillip K Johnson Farm Account” checking for January 2015
through December 2018.5 This checking account pre-existed the trust account but
became property of the trust once Phillip executed the trust documents. However,
it was not used to hold only funds of the trust. Phillip had personal funds in the
account as well; his personal Social Security checks were deposited in this account
along with the income Phillip received from the trust for farm rents. Both before
4 Kathleen initially asked for punitive damages as well, but she abandoned that claim during trial. 5 The “Farm Account” portion of the title seems to have been removed in December
2017—shortly after Scott opened the Johnson Farm Account Trust checking account. The bank account is the “Phillip K Johnson” checking account on the statements from December 2017 until December 2018, but it appears to be the same account. We refer to this account as the “Phillip K Johnson Farm Account” throughout to avoid confusion. 7
and after Phillip’s accident, this is the account used to make Brownell’s alimony
payments—whether by Phillip or Scott.
During his testimony, Scott agreed that he knew of the dissolution decree
and that it required his father to pay Kathleen $1600 in alimony monthly (until the
district court modified the obligation). He testified that “[b]efore [his] dad went on
Title XIX, there wasn’t enough money to go round to pay all of his bills” and agreed
he made a conscious decision to prioritize “other bills . . . versus paying” Kathleen
alimony. He also agreed that even after Phillip qualified for nursing home coverage
through Medicaid and Kathleen’s alimony was reduced to $600 each month, he
had not “made any effort or attempt to make payment to” Kathleen. When asked,
Scott testified he did not like Phillip’s alimony obligation and did not think it was
“fair.” Kathleen wrote a few notes to Scott inquiring about the delinquent payments
but never resorted to legal avenues of collection until this lawsuit was commenced.
At the close of evidence, Scott moved for a directed verdict. He conceded
that he was aware of the alimony obligation and intentionally stopped making
payments to Kathleen, but he maintained that as a matter of law his conduct was
not improper given his legal obligations to Phillip. The court denied Scott’s motion.
On the verdict form, the jury circled “yes” that it found against the trust but
wrote “0” for the amount of recovery. They jury also found for Kathleen against
Scott and first awarded “$40,800 plus court and attorney fees/costs” to her. The
court asked the jury, “Do you mean—what do you mean by attorney fees? You
wanted to include the $19,000 number?”6 The foreperson responded, “We
6 The district court also answered a jury question about the amount of attorney fees in the case by providing the “testimony” of $19,000. Rather than responding 8
weren’t—They said that that was kind of an estimate. So we just said whatever
attorney fees were incurred.” The court told the jury, “So it is the court’s duty to
tax the costs in this matter. But the amount—you have to determine the amount
of attorney fees and tax them as part of—and include them in part—as part of the
judgment you have entered.” The court then gave the verdict form back to the jury
and sent it back to determine the amount of attorney fees it wanted to award.
When the jury returned and handed the verdict form back in, it had crossed out its
previously written judgment and wrote in “$59,800.00” with the foreperson’s initials
next to the new amount.
Scott filed a motion for judgment notwithstanding the verdict or a new trial,
which the district court denied in its entirety.
Scott Johnson appeals.
II. Discussion.
A. Motion for Directed Verdict and Motion for Judgment
Notwithstanding the Verdict
Kathleen sued Scott for intentional interference with a contract. To succeed
on this claim, the jury instructions stated she had the burden to prove:
1. [Kathleen] had a contract with Phillip Johnson. 2. [Scott] knew of the contract. 3. [Scott] intentionally and improperly interfered with the contract by not making monthly spousal support payments to [Kathleen]. 4. The interference caused Phillip Johnson not to perform the contract. 5. The nature and amount of damage.
with the court’s memory of the evidence, a jury should be told to use their collective knowledge to answer the inquiry. The fear is that juries would tend to accept a court’s note as conclusive evidence. 9
Most of the elements were not disputed at trial. Scott admitted that Kathleen and
Phillip had a contract; that he was aware of the contract; and that he intentionally
stopped making any alimony payments to Kathleen, which caused Phillip to breach
the contract and caused at least some damages to Kathleen.
Yet, Scott maintains the court should have granted either his motion for
directed verdict or his motion for judgment notwithstanding the verdict because the
court should have found, as a matter of law, that his actions were not improper.
“On appeal, an appellate court’s review is limited to those grounds raised in the
defendant’s motion for a directed verdict.” Royal Indem. Co. v. Factory Mut. Ins.
Co., 786 N.W.2d 839, 844 (Iowa 2010). “Error must be raised with some specificity
in a directed verdict motion,” and “[a] motion for judgment notwithstanding verdict
must stand on the grounds raised in the directed verdict motion.” Id. at 845. We
review the district court’s rulings for correction of errors at law. Tomka v. Hoechst
Celanese Corp., 528 N.W.2d 103, 106 (Iowa 1995). The question is whether there
was sufficient evidence to submit the case to the jury, and in reviewing the district
court’s decision, we view the evidence in the light most favorable to Kathleen. See
id.
At the onset of our analysis, we do not address any claim against the trust
itself because that jury verdict has not been appealed.7 Although the jury found it
7In her brief, Kathleen argues Phillip assigned his alimony obligation to the trust under a ratification of contract theory. That issue was not presented to the jury to make findings or made a theory of the case with any jury instruction, so we do not consider it now for the first time on appeal. See Fed. Land Bank of Omaha v. Recker, 460 N.W.2d 480, 482 (Iowa Ct. App. 1990) (“It is axiomatic that we will generally not consider issues raised for the first time on appeal.”). 10
also interfered with the alimony contract, no damages were awarded against the
trust. Kathleen filed no motions related to this potential inconsistency in the verdict.
Related to the issues in her brief, Kathleen moves between her arguments
focused on Scott as a trustee and Scott as Phillip’s agent under the power of
attorney—often confusing those roles and Scott’s actions.8 Yet, in his role as either
a trustee or an agent, Scott was targeted as the third party interfering with the
contract to pay alimony. Scott operated as Phillip’s agent starting in July 2015.
He did not assume the role of successor trustee of the trust until September 2017.
Scott’s arguments are all focused on whether his actions as trustee, agent, or both
were improper. To clarify the issues, we address each role separately to determine
if his actions in either capacity were improper.
1. Role as a trustee.9
To begin, the trust and trustee owed no duty to Kathleen as a creditor of a
trust beneficiary. “Persons who may incidentally benefit in some manner from the
performance of the trust are not beneficiaries of the trust and cannot enforce it.”
Restatement (Third) of Trusts § 48 cmt. a (Am. Law. Inst. Oct. 2020 Update). The
Iowa Academy of Trust and Estate Counsel raised this concern. And the amicus
implores us to find that Scott had no duty to Phillip’s creditors when he, acting in
8 As an example, Kathleen disputes the amicus position by noting that Scott “unilaterally terminated the trust, and disbursed trust property and cash to he and his brothers” but then concluded that “[i]t can reasonably be found that [Scott] conducted himself improperly in his capacity as [an agent], and not as a Trustee.” 9 “A trustee shall administer the trust with the reasonable care, skill, and caution
as a prudent person would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust.” Iowa Code § 633A.4203 (2017). 11
his capacity as trustee in compliance with the terms of the trust, decided what
distributions to make and to whom. The undisputed duty of loyalty of a trustee is
to the beneficiaries of the trust, not the creditor of any beneficiary. Restatement
(Third) of Trusts § 78(1).
First, both Kathleen and Scott confirmed that the trust purpose was two-
fold. One purpose was to qualify Phillip for Medicaid benefits, which required
Phillip to maintain a limited net worth of $2000 and a limited monthly income. The
second purpose was to ensure that Phillip’s sons retained the family real estate.
To effectuate this purpose, Kathleen admits in her brief that after all real estate
was transferred to the trust she “disclaimed and surrendered any and all interest
she may have in the Trust.” Also with those goals in mind, Scott maintains he
fulfilled his obligations as trustee in the manner he was supposed to; he stopped
making income distributions to Phillip so that his father could remain eligible for
Medicaid nursing home coverage. Then after the qualification for Medicaid, he
transferred the trust assets to the beneficiaries to preserve their interests in the
family real estate. Scott notes that he relied on the advice of several attorneys in
taking these actions. At trial, Scott observed:
Q. Okay. In terms of the actual interference with the contract, you would agree with me that it’s been your decision not to make payments? A. Right. Q. And you’re—is it fair to say you kind of had a thought process as to why payments haven’t been made? A. Yes. Before my dad went on Title XIX, there wasn’t enough money to go around to pay all of his bills. Q. So you made a conscious decision to prioritize other bills, such as nursing home or medical expenses, versus paying Kathleen? A. Right. .... Q. I’m going to ask you, if you would, please, Scott, to read the entire first sentence of Section 8 [of the trust]. A. “One of my 12
estate planning goals is to protect the interests of the beneficiaries of this trust from loss or diminution on account of divorce, financial irresponsibility or immaturity, substance abuse, lawsuits, judgments, personal bankruptcy, and other legal process or the claims and demands of real . . . putative creditors, including claims for alimony, maintenance, child support, property division in divorce, et cetera." Q. Is it your understanding from that sentence that you’re supposed to protect the trust assets from any judgment creditor? A. Yes. Q. Is it your understanding that you’re supposed to protect the assets of the trust from alimony claims? A. Yes.
We agree that Scott, acting as the trustee, had to make decisions that were
best for the beneficiaries without concerning himself whether those actions
interfered with Phillip’s ability to make his alimony payments. See, e.g.,
Restatement (Third) of Trusts § 78(1) (“Except as otherwise provided in the terms
of the trust, a trustee has a duty to administer the trust solely in the interest of the
beneficiaries, or solely in furtherance of its charitable purpose.” (emphasis added));
id. § 78 cmt. f (“Actions serving the interests of third persons or non-trust
objectives. In administering a trust, the trustee has a duty to the beneficiaries not
to be influenced by the interest of any third person or by motives other than the
accomplishment of the purposes of the trust.”). Further even Kathleen testified:
Q. The purpose of the Johnson Farm Account Trust, I believe that we agreed earlier, was twofold. And we agreed—tell me if I’m correct or not—that the first purpose was to qualify for Medicaid— A. Uh-huh (yes). Q. —is that correct? A. Correct. Q. Second purpose was to pass the real estate to his sons; is that correct? A. Correct. Q. And Scott has done that perfectly, hasn’t he? A. I probably wouldn’t say perfectly, but he’s done what he’s needed to do. Q. Would you agree with me that, if Scott violated the trust and harmed his brothers, that he would be liable to them? A. I would agree to that. Q. Do we agree then that Scott has a duty as trustee not to harm the beneficiaries? A. Agree. 13
Kathleen acknowledged the trust goals that Scott followed. But at trial and in her
brief, she argues in his role as trustee, his failure to pay her interfered with her
contract between herself and Phillip. But Kathleen is not a creditor of the trust.
Even the jury found the trust owed her nothing. Thus, Scott, operating as trustee,
owed Kathleen no fiduciary duty. See Iowa Code §633A.4202(1) (“A trustee shall
administer the trust solely in the interests of the beneficiaries, and shall act with
due regard to their respective interests.”).
Because, as it relates to Kathleen’s claim for alimony, Scott performed the
duties of trustee according to the directives of the trust instrument, we find he
cannot be held liable under the interference-with-a-contract theory in his role as
trustee as a matter of law. “[C]onduct is generally not improper if it was merely a
consequence of actions taken for a purpose other than to interfere with a contract.”
Green v. Racing Ass’n of Cent. Iowa, 713 N.W.2d 234, 244 (Iowa 2006). “[A] party
does not improperly interfere with another’s contract by exercising its own legal
rights in protection of its own financial interests.” Berger v. Cas’ Feed Store, Inc.,
543 N.W.2d 597, 599 (Iowa 1996). The district court erred by denying the motion
for directed verdict as to Scott’s trustee role in the intentional-interference-with-
contract claim.
Next we look to Scott’s behavior as Phillip’s agent.
2. Role as agent under power of attorney.10
Starting from Phillip’s accident in July 2015, Scott operated as Phillip’s
agent under the power of attorney. Kathleen maintains that in that role, he
10 Power-of-attorney duties are defined under Iowa Code section 633B.114. See also Iowa Code § 633B.201(7) (“An act performed by an agent pursuant to a power 14
interfered with her contract for alimony by refusing to pay her. Once Scott took
over Phillip’s finances, no further alimony payments occurred after April 2016.
Kathleen highlights that when Phillip controlled his finances, he never missed an
alimony payment. But during that time frame Phillip’s expenses did not include
nursing-home care and significant medical bills. So with the focus on whether his
failure to pay Phillip’s alimony debt was improper, we examine Scott’s role as
Phillip’s fiduciary. As agent, Scott, was required to act in Phillip’s best interests.
See In re Estate of Crabtree, 550 N.W.2d 168, 171 (Iowa 1996) (finding decision
by agent that considered the financial interest of the ward over the financial interest
of the ward’s daughter was appropriate). Essentially the agent acting under a
power of attorney steps into the shoes of the principal to act for the best interests
of the principal. See Iowa Code § 633B.114. In that role as agent, disrupting the
alimony contract between Phillip and Kathleen arguably did not involve Scott as a
third party because he acted in a role as if he were Phillip. But the issue framed
on appeal was whether Scott’s conduct as agent was wrongful. Kathleen argues
the wrongful conduct occurred when Scott failed to act in Phillip’s best interest and
acted contrary to his father’s expectations by refusing to pay her alimony. Scott
argues, as agent, his role required him to preserve monies for Phillip’s needs first
and follow his father’s estate plan. See id. § 633B.114(2)(a), (f)(2).11
of attorney has the same effect and inures to the benefit of and binds the principal and the principal’s successors in interest as if the principal had performed the act.”). 11 Scott asserted he paid the farm mortgage, nursing home expense, and medical
expenses over Kathleen’s alimony payment and borrowed $70,000 against the trust assets to meet those obligations. 15
What we glean from Kathleen’s brief and arguments are various actions by
Scott as trustee and as agent that she labeled “improper conduct.” But, drilling
down to the specific improper conduct of Scott as agent, Kathleen argues Scott
“felt entitled to pick and choose which bills ultimately got paid.” It then follows,
under Kathleen’s theme, Scott was not acting on behalf of or in Phillip’s best
interest. And Kathleen emphasizes that Scott testified he did not like that his father
was ordered to pay alimony because he thought it was unfair. So does refusing to
pay the principal’s creditor amount to improper conduct by the agent under an
interference-of-contract claim?
If we step back from this case, we would plow new ground to hold that an
agent acting under a power of attorney must pay all bills of the principal or risk a
claim of interference with a contract by a creditor. An agent, acting for the principal,
might decide to prioritize which bills to pay, and if a creditor finds the action
wrongful, the remedy is breach of contract. The motives of Scott in preserving
assets for his father’s care and upholding the estate plan, which all parties
acknowledged in this case, is not improper under his role as agent. Scott exercised
financial discretion to protect his father’s legal rights, and Kathleen failed to prove
his sole motivation was to defeat the alimony contract. See Hackett v. Gaeta, No.
12-2302, 2013 WL 4011440, at *2-3 (Iowa Ct. App. Aug. 7, 2013) (holding motion
for directed verdict proper in intentional-interference-with-contract claim where the
defendant’s sole motivation was not to inhibit farm sale to buyers but to assert his
position he had a legal right to the farm). Thus, the record does not support a
finding of wrongful conduct against Scott as an agent for Phillip. See Kern v.
Palmer Coll. of Chiropractic, 757 N.W.2d 651, 663–64 (Iowa 2008) (describing 16
wrongful conduct as conduct that is “dishonest, fraudulent, malicious, or otherwise
wrongful”)
Here, as Scott argues, Kathleen’s claim boils down to a breach-of-contract
claim against Phillip. See Klooster v. N. Iowa State Bank, 404 N.W.2d 564, 570
(Iowa 1987) (noting that where the interference alleged involved performance of a
contract between the parties, the plaintiff had an adequate remedy for breach of
contract). Kathleen’s interference claim sought to end run around the position she
placed herself in when she agreed to the trust plan Phillip proposed. The contract
between Phillip and Kathleen remains viable. Kathleen’s contractual rights against
Phillip still exist. It is the full collection of those contract rights that remain
challenging but not impossible.
Again, we find that the district court erred by denying the motion for directed
verdict as to Scott’s power-of-attorney role in the intentional-interference-with-
contract claim. Thus, Kathleen had no basis for an intentional-interference-with-a-
3. Amicus position.
Last, we address the concerns of the Iowa Academy of Trust and Estate
Counsel. Nothing in this ruling should translate into a duty on trustees to consider
the interests of third-party creditors over the interests of the trust beneficiaries. As
noted above, the issues in this case involve the creditor/debtor tensions between
divorced parties. In the end, we narrow this case to a creditor/debtor dispute at its
core. Kathleen still maintains an enforceable judgment against Phillip for alimony.
That “contract” still exists. As Kathleen confirmed in her brief, she “agreed that all
real property in Pocahontas and Palo Alto counties would remain with [Phillip] and 17
further that she disclaimed any and all interest she may have in the Trust.” The
collection of those sums due for alimony is her central issue, but she bears some
of the responsibility for the difficulty in collection given her choices during the
divorce proceedings and after.
B. Appellate Attorney Fees.
As a part of her appeal, Kathleen asks that we award her appellate attorney
fees; she cites Iowa Rule of Appellate Procedure 6.1207 in support of this request
and asks that we remand for separate hearing for appellate attorney fees to be
determined.
Rule 6.1207 provides, “All appellate fees and costs shall be taxed to the
unsuccessful party, unless otherwise ordered by the appropriate appellate court.”
But “[a]ppellate costs do not include appellate attorney fees.” In re Marriage of
Hoffman, 891 N.W.2d 849, 852 (Iowa Ct. App. 2016) (considering rule 6.1207).
And there is no written contract here that allows for the recovery of fees. See Iowa
Code § 625.22 (2017) (“When judgment is recovered upon a written contract
containing an agreement to pay an attorney fee, the court shall allow and tax as a
part of the costs a reasonable attorney fee to be determined by the court”). So we
have no authority to award appellate attorney fees here. See W.P. Barber Lumber
Co. v. Celania, 674 N.W.2d 62, 66 (Iowa 2003) (“As a general rule, an award of
attorney fees is not allowed unless authorized by statute or contract.”).
Additionally, because Kathleen is not the successful party, on that basis, she is not
entitled to fees. 18
III. Conclusion.
The district court should have granted Scott’s motion for directed verdict
regarding Kathleen’s claim. The law does not support the jury verdict, so it is
improper and the verdict should be vacated. Finally, Kathleen is not entitled to
appellate attorney fees in this case. We reverse and remand for the district court
to enter an order vacating the judgment and dismissing Kathleen’s petition with
prejudice and assess costs to the Kathleen.
REVERSED AND REMANDED.
Doyle, P.J., concurs; Mullins, J., concurs specially. 19
MULLINS, Judge (concurring specially). I concur in the result of the majority opinion. It addresses the claims and
defenses asserted by the parties in the trial of the case, preserved for appellate
review and properly raised on appeal. The limitations of our role in an appellate
review—to consider only the issues raised—poses a potential problem here in that
the majority opinion may be interpreted by some readers to recognize a cause of
action even though the opinion really only addresses the issues based on how the
case was presented to us. Consequently, I respectfully write separately to call into
question the viability of Kathleen’s theory of the case.
In this case, the petition sought damages claiming: “[T]he Defendants have
intentionally and improperly interfered with a contract between the Plaintiff,
Kathleen Brownell, and . . . Phillip Johnson; namely the Decree of Dissolution of
Marriage and Stipulation and Agreement filed on May 29, 2013” in the dissolution-
of-marriage case involving Kathleen Johnson and Phillip Johnson. The decree of
dissolution of marriage “ordered that the stipulation and agreement of the parties
is approved and is by this reference incorporated herein and made the order and
decree of this court.”
When a contract is approved and incorporated into a decree of dissolution
of marriage, can a claim of interference with the contract be actionable? Or, are
the only remedies those that are available for enforcement of judgments?
Our supreme court has explained:
In accord with request made by the parties thereto an executed copy of the stipulation was attached to and by reference made a part of the decree as though set forth therein verbatim. Thus the stipulation became a part of the official record. This means, absent any expression in the stipulation to the contrary, it merged in and 20
constituted an operable part of the decree, even though embodied therein by reference. Consequently, the stipulation was superseded by the decree. Thus attendant rights or obligations were those imposed by the decree, not the stipulation, and enforceable as such.
Bowman v. Bennett, 250 N.W.2d 47, 50 (Iowa 1977) (citations omitted) (emphasis
added).
Twenty-five years later, the supreme court restated and elaborated on the
same conclusion:
Because there appears to be some confusion with respect to the effect of the parties’ stipulation in this case, we briefly discuss the role of a stipulation in a dissolution proceeding. A stipulation and settlement in a dissolution proceeding is a contract between the parties. Therefore, it is enforceable like any other contract, and a party may not withdraw or repudiate the stipulation prior to entry of judgment by the court. Nonetheless, the parties’ stipulation is not binding on the court, as the court has the responsibility to determine whether the provisions upon which the parties have agreed constitute an appropriate and legally approved method of disposing of the contested issues. Accordingly, if the stipulation is unfair or contrary to law, the court has the authority to reject the stipulation. . . . In fact, once the court enters a decree, the stipulation, as a practical matter, has no further effect. The decree, not the stipulation, determines what rights the parties have. Therefore, in ascertaining the rights of the parties after final judgment, it is the intent of the district court that is relevant, not the intent of the parties.
In re Marriage of Jones, 653 N.W.2d 589, 593–94 (Iowa 2002) (emphasis added)
(citations and internal quotations marks omitted). This has long been the law in
Iowa. See, e.g., Belding v. Huttenlocher, 159 N.W. 191, 194 (Iowa 1916)
(“[W]hatever stipulation was made between the parties prior to the entering of the
decree was merged in the decree and deed subsequently executed. No rights can
be acquired by either as against the other, based upon the stipulation. . . . The
rights thereafter rested upon the decree and the deeds, and not upon the 21
stipulation, which, as said before, became merged in these subsequent
proceedings.”).
Based on the foregoing, it is the decree that determines what the rights of
the parties are, not the stipulation and agreement or any purported contract rights.
Iowa has not recognized the tort of interference with contract rights arising out of
a settlement agreement that has been approved and incorporated into a decree
dissolving a marriage, and we do not do so in the majority opinion.
Under current case law, Kathleen’s rights to enforcement of the terms of the
agreement that were approved by the court and incorporated into the decree arose
from the judgment as decreed, and only from that judgment, once the agreement
was approved and incorporated into the decree.