Russell L. Newhall v. Marcia Elaine Newhall Roll
2016 Iowa Sup. LEXIS 113
| Iowa | 2016Background
- Siblings Russell Newhall and Marcia Roll own two farms as tenants in common: a 315.30-acre Butler County tract (row crops, pasture, timber, buildings; contains grain bins Russell installed) and a 162.92-acre Hardin County tract (primarily tillable).
- Russell farmed the Butler tillable ground for decades and uses grain facilities there; both tracts are partially leased.
- Russell filed partition actions seeking sale of both tracts; Marcia requested partition in kind (preferably receiving the Butler tract). The district court ordered sale of both tracts; the court of appeals reversed.
- At trial experts offered differing appraisals; the district court found both credible. The district court concluded Marcia failed to prove an in-kind partition would be equitable and practicable and ordered sale.
- On further review the Iowa Supreme Court vacated the court of appeals and affirmed the district court, holding Marcia did not meet her burden to obtain partition in kind.
Issues
| Issue | Plaintiff's Argument (Roll) | Defendant's Argument (Newhall) | Held |
|---|---|---|---|
| Whether Marcia met burden to show partition in kind is equitable and practicable | Proposed two in-kind plans: (1) award Hardin tract + 70-acre parcel from Butler to Russell and remainder to Marcia; (2) award Butler to Marcia and Hardin to Russell with an equalization payment | Partition by sale preferred; Butler parcel division is impracticable and would reduce aggregate value; Russell should receive Butler if in-kind ordered | Marcia failed to meet burden; proposed division impracticable and would depreciate aggregate value; sale affirmed |
| Practicality of Alternative 1 (70-acre split from Butler) | Appraiser said parceling is feasible; access/fencing issues surmountable | Russell’s long farming experience showed access, flooding, water, fencing, and economic viability problems for the proposed parcel | Court credited Russell’s practical farming testimony; Alternative 1 impracticable and rejected |
| Use of owelty (equalization payment) to allow in-kind split (Alternative 2) | Owelty is equitable common-law remedy to equalize unequal in-kind allocations and avoid sale | Owelty not recognized under Iowa rules; rules allow only sale or in-kind; recognizing owelty would undercut statutory preference for sale | Court declined to decide whether Iowa recognizes owelty because Marcia failed to show superior equitable entitlement to Butler; Alternative 2 rejected on equity grounds |
| Effect of tax basis concerns on partition choice | Sale would create significant tax liability (Marcia claimed disproportionate harm) | Both parties share same low tax basis; tax consequence does not favor awarding Butler to Marcia | Court held tax consequences do not alter equity analysis; not persuasive to require in-kind allocation to Marcia |
Key Cases Cited
- Spies v. Prybil, 160 N.W.2d 505 (Iowa 1968) (Iowa rules favor partition by sale and place burden on objection party to show why sale should not be ordered)
- Murphy v. Bates, 276 N.W. 29 (Iowa 1937) (in-kind partition improper if division would depreciate aggregate value)
- Branscomb v. Gillian, 7 N.W. 523 (Iowa 1880) (historic recognition that in-kind partition should not diminish total value)
- Nehls v. Walker, 244 N.W. 850 (Iowa 1932) (sale required where division in kind is impracticable or causes sacrifice in value)
- Martin v. Martin, 720 N.W.2d 732 (Iowa 2006) (standard of review in equitable partition actions)