IN THE MATTER OF THE ELMER VITALIS RESI DUARY TRUST SHERRY NURMELA and DENNIS VITALIS, Appellants.
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IN THE COURT OF APPEALS OF IOWA
No. 6-330 / 05-1762
Filed July 26, 2006
IN THE MATTER OF THE ELMER
VITALIS RESIDUARY TRUST
SHERRY NURMELA and DENNIS
VITALIS,
Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Michael Huppert,
Judge.
Two of the remainder beneficiaries of a trust appeal from district court
orders approving annual reports and accountings and extraordinary fees.
AFFIRMED.
Kathryn Barnhill, West Des Moines, for appellants.
Jack Hilmes and Eric Hoch of Finely, Alt, Smith, Scharnberg, Craig,
Hilmes & Gaffney, P.C., Des Moines, for appellee trustees.
Christine B. Long and Lynn M. Gaumer of Duncan, Green, Brown &
Langeness, Des Moines, for appellee beneficiaries.
Considered by Vogel, P.J., and Zimmer and Vaitheswaran, JJ.
2
ZIMMER, J.
Sherry Nurmela and Dennis Vitalis, two of the remainder beneficiaries
under the Elmer Vitalis Residuary Trust (Under Will), appeal from district court
orders in a probate proceeding, TR 2416, which approved the “Tenth and
Eleventh Annual Reports and Accountings” (Tenth and Eleventh Reports),
awarded extraordinary fees, and assessed those fees against Sherry’s and
Dennis’s shares of the trust. The sole issue Sherry and Dennis raise in this
appeal is whether the district court retained jurisdiction to enter such orders in
light of the fact a summary judgment ruling in a related matter, CE 48852, was
then on appeal. We affirm the district court.
We have fully set forth the extensive factual background of these matters
in two recently filed opinions. See In re Estate of Elmer Vitalis Residuary Trust,
No. 04-1319 (Iowa Ct. App. May 24, 2006); Nurmela v. Elmer Vitalis Residuary
Trust, No. 05-0946 (Iowa Ct. App. May 24, 2006). For purposes of this appeal,
we note only the following relevant facts.
The district court entered an order in TR 2416 approving the trustees’
“Ninth Annual Report and Accounting” (Ninth Report) and request for
extraordinary fees and expenses.
The court rejected Sherry and Dennis’s
objections to the Ninth Report, including allegations that the individual trustees
breached their fiduciary duties in the operation of a company for which the trust
was the sole shareholder, and that the corporate trustee breached its fiduciary
duty by colluding in these actions and failing to conduct independent oversight.
Sherry and Dennis appealed.
3
The trustees’ requests to approve the Tenth and Eleventh Reports and for
extraordinary fees, also made in TR 2416, were transferred for hearing to a civil
proceeding, CE 48852, in which Sherry and Dennis had alleged a breach of
fiduciary duty by the trustees: they asserted the individual trustees had engaged
in self-dealing and that the corporate trustee had colluded and acquiesced in this
conduct. Following transfer, the district court entered summary judgment against
Sherry and Dennis in CE 48852, and dismissed their claims for breach of
fiduciary duty by the trustees “which are reported in the 10th and 11th Annual
Reports respectively.” Sherry and Dennis also appealed from this ruling.
While the appeals in TR 2416 and CE 48852 were both pending, the
trustees again sought, in TR 2416, court approval for the Tenth and Eleventh
Reports and for an award of extraordinary fees. The court set a hearing on the
request, which was resisted by Sherry and Dennis on the basis the district court
had been deprived of jurisdiction because “this matter,” the “underlying litigation”
that involved “claims of breach of fiduciary duty in the internal affairs of the trust
as reflected in the tenth and eleventh annual reports,” was on appeal.
The district court entered orders approving the Tenth and Eleventh
Reports, awarding extraordinary fees, and assessing those fees against Sherry’s
and Dennis’s shares of the trust. In relevant part, the court articulated Sherry
and Dennis’s claim as an assertion “the 2004 appeal regarding the ninth annual
report divests this court from taking any further action regarding subsequent
annual reports,” and stated the issue before it was “whether this court retains
jurisdiction following the appeal . . . of a prior order approving the ninth annual
report . . . .” The court concluded “the issues regarding approval of the tenth and
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eleventh reports are collateral to the approval of the ninth report, and this court
retains jurisdiction over them.” No post-ruling motion was filed by Sherry and
Dennis.
On appeal, Sherry and Dennis assert the district court erred “as a matter
of law” because it did not retain jurisdiction over approval of the Tenth and
Eleventh Reports and extraordinary fee request “while these very issues are on
appeal.” See Landals v. George A. Rolfes Co., 454 N.W.2d 891, 897 (Iowa
1990) (providing a filed appeal deprives the district court of jurisdiction except for
those issues “collateral to and not affecting the subject matter of the appeal”). A
review of Sherry and Dennis’s brief indicates the only appeal on which they rely
in support of this jurisdictional challenge is the one they filed in CE 48852.
However, the district court never addressed or ruled on the issue of whether it
was deprived of jurisdiction by the filing of an appeal in CE 48852.
Our rules of error preservation are well established. Before an issue may
be raised and determined on appeal, it must have been raised before and
decided by the district court. Benavides v. J.C. Penney Life Ins. Co., 539 N.W.2d
352, 356 (Iowa 1995). When the district court fails to rule on an issue properly
raised by a party, that party must file a post-ruling motion bringing the omission
to the court’s attention. Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002). If
the party fails to do so, error will not be preserved. Id. Here, the district court did
not rule on a claim that the appeal in CE 48852 deprived it of jurisdiction, and
Sherry and Dennis did not bring the omission to the court’s attention via a postruling motion. Accordingly, error on this issue has not been preserved.
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In addition, we perceive no error in the ruling the district court actually
made—that it was not deprived of jurisdiction by the appeal from its order
approving the Ninth Report.
The prior probate appeal was directed towards
actions allegedly performed by the trustees at an earlier time, as reflected in an
earlier report. We accordingly agree the trustees’ request to approve the Tenth
and Eleventh Reports and for fees, and the objections thereto, were collateral to
the issues in the then-pending probate appeal. See Waterhouse v. Iowa Dist.
Court, 593 N.W.2d 141, 142 (Iowa 1999) (noting limitation on the district court’s
authority following an appeal applies to its ability “to revisit and decide differently
issues already concluded by [the] judgment” on appeal). Finally, although Sherry
and Dennis do not challenge the underlying merits of the district court’s decision
to approve the Tenth and Eleventh Reports and award extraordinary fees, we
note that both the prior appeal in TR 2416 and the appeal in CE 48852 have
been resolved adversely to them. 1
In light of all the foregoing, we affirm the district court’s orders approving
the Tenth and Eleventh Reports, and awarding and assessing extraordinary fees.
AFFIRMED.
1
Procedendo issued in both In re Estate of Elmer Vitalis Residuary Trust, No. 04-1319
(Iowa Ct. App. May 24, 2006), and Nurmela v. Elmer Vitalis Residuary Trust, No. 050946 (Iowa Ct. App. May 24, 2006), on June 23, 2006.
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