Arlin George Riley, plaintiff-appellee/cross-appellant v. Matthew Riley, defendant-appellant/cross-appellee. -------------------------------------------------------- Arlin George Riley, plaintiff-appellee/cross-appellant v. Denise Riley, defendant-appellant/cross-appellee.
15-1250
Iowa Ct. App.Feb 8, 2017Background
- After his wife died in July 2012, Arlin (age >60) suffered depression and family members questioned his financial decision-making; in Dec 2012 he twice withdrew $80,000 cash (total $160,000).
- Between Feb–May 2013 Arlin purchased three rental properties (322 Carroll St, 222 State St, 2811 Warford) via LLCs; Matt prepared LLC documents and later prepared and recorded transfers of Arlin’s membership interests in three LLCs to Denise.
- Matt obtained a broad POA from Arlin (Jan 2013) authorizing access to accounts and gifts; Matt later, acting under POA, withdrew funds from Arlin’s account in Aug 2013 after discovering Arlin had wired money to an overseas scam.
- Arlin filed an elder-abuse petition under Iowa Code chapter 235F (Mar 2015), seeking return/accounting of funds, transfer/return of LLC interests, and injunctive relief; court entered temporary protective order and later held an evidentiary hearing.
- District court found Arlin a “vulnerable elder,” concluded Matt and Denise financially exploited him, ordered transfer of three LLCs back to Arlin, required full accountings, enjoined Matt and Denise from harming the LLCs, ordered limited documentary disclosures about the fourth LLC (1402 Willis), and awarded district-court attorney fees.
- This appeal: Matt and Denise challenge vulnerability finding, burden-shifting, and financial-exploitation ruling; Arlin cross-appealed denial of final relief re: 1402 Willis LLC (court treated that portion as interlocutory and dismissed the cross-appeal).
Issues
| Issue | Plaintiff's Argument (Arlin) | Defendant's Argument (Matt & Denise) | Held |
|---|---|---|---|
| Whether Arlin was a “vulnerable elder” under Iowa Code § 235F.1(17) | Arlin: grief-driven depression and impaired decision-making after wife’s death left him unable to protect himself from financial exploitation | Matt & Denise: Arlin was competent (counselor’s letter), not incapable due to age or mental condition | Court: Arlin was a vulnerable elder at the time of the transfers due to depression and related impairment; affirmed |
| Whether the district court impermissibly shifted burden to defendants to prove transfers were voluntary (undue influence issue) | Arlin: once vulnerability and suspicious transfers shown, court may require explanation and accounting | Matt & Denise: court improperly required them to affirmatively prove absence of undue influence | Held: On de novo review, court’s findings stand — defendants failed to produce affirmative evidence transfers were freely and voluntarily done; transfers set aside |
| Whether Matt and Denise financially exploited Arlin (transfer of three LLCs and control over funds) | Arlin: transfers were the product of undue influence, deception, and misuse of position of trust; he never intended or completed the gifts reflected in LLC documents | Matt & Denise: claimed gifts/receipt document and that transactions were legitimate business/investment decisions; denied knowing disposition of the $160,000 | Held: Preponderance supports financial exploitation by undue influence/deception; court ordered transfer of three LLCs back to Arlin and full accountings; injunction affirmed |
| Appealability / interlocutory nature of relief re: 1402 Willis LLC and source of funds (Arlin’s cross-appeal) | Arlin: order was final and cross-appeal proper | Matt & Denise: appealed final parts; court must determine finality | Held: Court characterized relief as final for three LLCs and injunction, but order was interlocutory as to 1402 Willis LLC and source-of-funds inquiry; Arlin’s cross-appeal treated as application for interlocutory appeal and dismissed for efficiency |
Key Cases Cited
- River Excursions, Inc. v. City of Davenport, 359 N.W.2d 475 (Iowa 1984) (interlocutory vs. final-order analysis; appellate jurisdiction)
- Rowen v. LeMars Mut. Ins. Co., 357 N.W.2d 579 (Iowa 1984) (final judgment conclusively adjudicates all rights)
- Green v. Advance Homes, Inc., 293 N.W.2d 204 (Iowa 1980) (exceptions to nonappealability of interlocutory orders)
- Lyon v. Willie, 288 N.W.2d 884 (Iowa 1980) (orders that cannot be undone may be final)
- In re C.S., 516 N.W.2d 851 (Iowa 1994) (interlocutory order characterization)
- Buechel v. Five Star Quality Care, Inc., 745 N.W.2d 732 (Iowa 2008) (sparingly grant interlocutory appeals)
- Mason City Prod. Credit Ass’n v. Van Duzer, 376 N.W.2d 882 (Iowa 1985) (piecemeal appeals and judicial efficiency)
- Passehl Estate v. Passehl, 712 N.W.2d 408 (Iowa 2006) (factors distinguishing law vs. equity for standard of review)
- Knight v. Knight, 525 N.W.2d 841 (Iowa 1994) (equitable review de novo principles)
- Bacon ex rel. Bacon v. Bacon, 567 N.W.2d 414 (Iowa 1997) (distinguishing law and equity trials)
- Van Sloun v. Agans Bros. Inc., 778 N.W.2d 174 (Iowa 2010) (labels and primary purpose in classifying actions)
- Schaffer v. Frank Moyer Constr., Inc., 628 N.W.2d 11 (Iowa 2001) (statutory attorney-fee awards may include appellate fees absent limitation)
- Bankers Trust Co. v. Woltz, 326 N.W.2d 274 (Iowa 1982) (statutory right to fees extends to appeals when statute contemplates fees)
- Meier v. Senecaut, 641 N.W.2d 532 (Iowa 2002) (preservation of error—issues must be raised and decided below)