Freedom Financial Bank v. Estate of Edward J. Boesen
805 N.W.2d 802
| Iowa | 2011Background
- Maureen Boesen and the Boesen Estate challenged Freedom Financial Bank's foreclosure on a commercial property after Edward Boesen's death; Edward's purchase-money mortgage was signed by him with a forged Maureen signature alleged; bank sought priority over Maureen's dower and estate debts; district court granted summary judgment recognizing purchase-money priority and surplus to estate; court of appeals affirmed foreclosure but reversed surplus ruling; Iowa Supreme Court affirmed the court of appeals and reversed in part, remanding for surplus to Maureen.
- The promissory note and mortgage were executed for $232,000 to purchase the Ankeny real estate, with a purchase-money mortgage recital; the mortgage deed stated it was a purchase-money mortgage and Maureen allegedly did not sign; Edward died intestate in 2008 leaving Maureen as surviving spouse with four children; the foreclosure petition claimed Freedom Financial's mortgage was superior to all other claims; the district court held the dower interest subordinate to the mortgage; the appellate court held dower free from estate debts but kept mortgage priority intact.
- Maureen and the estate argued the dower interest attaches at time of decedent's purchase and cannot be divested by Edward; they also argued the mortgage recording could be defective due to forged signature; Freedom argued the purchase-money mortgage has priority over dower under Iowa law.
- The opinion holds that a purchase-money mortgage has priority over a surviving spouse's dower interest and preexisting judgments, based on Thomas v. Hanson and Iowa Code § 654.12B; it also rejects the defective-acknowledgement argument as not preserved and, even if preserved, lacks relief; the surviving spouse's real property dower under § 633.211 attaches free and clear of the decedent's debts and charges; the court harmonizes § 633.211, § 633.218, and § 633.350, holding real property dower is exempt from the estate's debts; the matter is remanded for disposition of the foreclosure sale surplus to Maureen.
- The final holding: Freedom Financial's purchase-money mortgage has priority over Maureen’s dower; Maureen’s dower is free and clear of the estate's debts; Maureen is entitled to the foreclosure sale surplus; decision of the court of appeals affirmed; district court judgment affirmed in part and reversed in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Priority between purchase-money mortgage and dower | Freedom: mortgage priority; Maureen/estate: dower superior | Maureen/estate: dower attaches before mortgage or at least cannot be divested | Purchase-money mortgage prevails; dower subject to mortgage |
| Effect of allegedly forged signature on recording | Recording valid despite forgery; priority preserved | Forgery invalidates acknowledgment and recording | Error not preserved; even if preserved, recording not voided; no relief |
| Dower real property vs estate debts and charges | Dower should be free and clear; estate debts payable from nonexempt property | Estate debts should attach to dower property | Dower real property is free and clear of the estate’s debts and charges; surplus goes to Maureen |
| Interpretation of sections 633.211, 633.218, 633.350 | Dower outcome compatible with historical precedents | Code sections must subordinate dower to debts | 633.211 controls; dower free of debts; harmonize statutes |
| Disposition of foreclosure sale surplus | Surplus to estate | Surplus to dower or apply to debts | Surplus to Maureen; remand for proceedings consistent with opinion |
Key Cases Cited
- Mock v. Watson, 41 Iowa 241 (Iowa 1875) (dower priority free of decedent's debts)
- Thomas v. Hanson, 44 Iowa 651 (Iowa 1876) (purchase-money mortgage priority over dower)
- Warner v. Trustees of Norwegian Cemetery Ass’n, 139 Iowa 115 (Iowa 1908) (dower cannot be divested by husband's conveyance)
- Westergard v. Klepper, 229 N.W.2d 236 (Iowa 1975) (dower interest priority over leasehold conveyed without wife's approval)
- Keefe v. Cropper, 196 Iowa 1179 (Iowa 1923) (purchase-money mortgage priority over previous judgments)
- Haynes v. Rolstin, 164 Iowa 180 (Iowa 1914) (dower subject to mortgage priority)