Wednesday, December 30, 2009

New Land Law Cases

It's been a while since I revisited this site but updates are always in order particularly when there's something interesting to talk about. The Court of Appeals has, it seems, delivered the goods.

Mitchell v. Holliday, no. 08-1461 (Iowa Ct. App. Dec. 30, 2009)

This is but the latest chapter in the doings of the litigious Mitchells, pere et fils. See, Debruce Grain, Inc. v. Mitchell, no. 05-1934 (Iowa Ct. App. July 25, 2007). There may be others, including what was, for a short while, the biggest overweight truck ticket in Iowa.

On February 9, 2005, Mitchell leased 1,000 acres of Adair County farmland from Wendel and Janet Holliday and Douglas and Jodi Holliday for a period of five years. At the time the leases were executed, the Hollidays were in default of promissory notes with the First National Bank in Creston and under the gun to conclude a settlement. The bank and the Hollidays ultimately reached an agreement wherein they would keep two ten acre plots with the homesteads secured by mortgages, the remainder of the ground to be sold at auction in full settlement at which point the bank would release the mortgages on the homestead plots.

The Hollidays neglected to disclose to the bank the existence of the leases, and they platted their ten acre plots in a manner that would decrease the auction value of the whole. The Mitchell leases were also at below market rates. When the bank got wind of these shenanigans it brought a foreclosure action and a sale resulted at which Mitchell was the high bidder.

Mitchell then filed a suit for specific performance of the settlement agreement between the bank and the Hollidays and a crossclaim seeking specific performance of the contracts to purchase the farmland. The bank resisted.

At a jury trial it was held that the Mitchells and the Hollidays had entered into a conspiracy to defraud the bank, and punitive damages against Douglas Holliday were levied in the amount of $140,000. The settlement agreement was rescinded, and the court granted a judgment of foreclosure. The district court found that the terms of the leases were intended to discourage bidding at auction and also tied up the land for five years, giving Mitchell an advantage in the bidding.

Next, Mitchell sued the Hollidays seeking damages for breach of the lease agreements and the court dismissed his action, finding that the doctrine of in pari delicto barred him from recovery and this appeal followed.

The Court of Appeals affirmed, finding that the doctrine of in pari delicto is meant to deter misconduct by denying relief to one whose losses were substantially caused by his own misconduct. The Court also found that the doctrine of issue preclusion was satisfied, prohibiting Mitchell from relitigating the issue of the underlying conspiracy to defraud the bank.

Tool v. Nolin, no. 08-2012 (Iowa Ct. App. Dec. 30, 2009).

This is the latest chapter in a long running range war between the Tools and the Nolins over the ownership of a triangular piece of land of less than 1/3 acre that was previously part of a railroad line.

In an earlier iteration the Nolins claimed their right to the plot through an 1877 grant that provided that if the railroad did not build the line or abandoned it, that the right of way would revert to the grantee. The county bid and bought the land at a tax sale in 1956 and then sold it to the Hewitts, who sold it to Nolin.

The Tools argued that they were the assigns of the original grantees.

In the prior appeal, the case was remanded to determine title by adverse possession of the last 20 feet of the property. The court found that the Tools had established adverse possession of most of the property but as to the last twenty feet, their possession was not exclusive since they had allowed the Nolins to access property and did not plow it up until 2002.


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