JOHN P. SALES and JOYCE E. SALES, Plaintiffs - Appellees, vs. DETLEF SCHELLIN, Defendant - Appellant.
Annotate this Case
Download PDF
IN THE COURT OF APPEALS OF IOWA
No. 8-402 / 06-1350
Filed July 16, 2008
JOHN P. SALES and JOYCE E. SALES,
Plaintiffs-Appellees,
vs.
DETLEF SCHELLIN,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Johnson County, David M. Remley,
Judge.
A seller appeals from a district court ruling ordering specific performance
of a real estate contract and awarding the plaintiffs attorney fees. AFFIRMED
AND REMANDED.
Detlef Schellin, Merritt Island, Florida, pro se.
Charles T. Traw of Leff Law Firm, L.L.P., Iowa City, for appellees.
Considered by Huitink, P.J., and Vogel and Zimmer, JJ.
2
ZIMMER, J.
Detlef Schellin appeals from a district court ruling ordering specific
performance of a real estate contract for the sale of an apartment building to the
plaintiffs, John and Joyce Sales.
He claims the court erred in ordering the
contract to commence on September 1, 2006, and in awarding the plaintiffs trial
attorney fees. We affirm the judgment of the district court and remand for the
limited purpose of determining attorney fees on appeal.
The plaintiffs owned an apartment building in Iowa City, Iowa, which was
destroyed by a fire in March 1999. They were informed by their attorney they
could defer payment of the capital gains tax on their insurance proceeds from the
fire if they reinvested the proceeds in a like kind property by December 31, 2001.
The plaintiffs located an apartment building in Iowa City owned by Schellin
that they were interested in purchasing. They approached Schellin in December
1999, and he agreed to sell them the property for $380,000.
The plaintiffs’
attorney then prepared an “Offer to Buy Real Estate and Acceptance” on their
behalf, which contained the terms originally proposed by Schellin. The contract
provided that the plaintiffs would pay Schellin $10,000 in earnest money to be
held in their attorney’s trust account,1 an additional $66,000 in cash at the time of
closing and delivery of possession, which was scheduled for February 1, 2000,
and the balance in monthly installments amortized over twenty years with a tenyear balloon payment due on January 1, 2010. Schellin accepted the offer on
January 5, 2000.
1
The plaintiffs paid the $10,000 in earnest money on December 31, 1999.
3
The closing was canceled, however, after the plaintiffs’ attorney
discovered problems in the title to the real estate due to potential claims held by
Schellin’s former wife, Ellen. The parties attempted to resolve the title objections
with Ellen, but she instead initiated a lawsuit against Schellin in March 2000,
alleging he had entered into a written contract to sell the property to her.
The plaintiffs remained in contact with Schellin throughout 2000 and 2001.
When it became apparent Ellen’s lawsuit against Schellin would not be resolved
in 2001, the plaintiffs became concerned the sale would not be completed in time
for them to be able to defer the capital gains tax on their insurance proceeds. On
December 4, 2001, their attorney sent Schellin a letter stating, “My clients are still
prepared to perform under the terms of [the] contractual agreement and I hereby
tender in their behalf the down payment . . . of $76,000” to be “placed in an
escrow account, with interest accruing to [Schellin’s] benefit if [he] ultimately [is]
able to deliver good title.” Schellin, however, demanded an additional $10,000
be added to the purchase price and that the down payment be paid directly to
him rather than being placed in an escrow account. The plaintiffs agreed to his
altered terms in a letter dated December 20, 2001, but they did not receive a
response to their letter before the end of that year.
The plaintiffs were able to secure an extension of time from the Internal
Revenue Service within which to procure the property, and they unsuccessfully
continued to attempt to contact Schellin throughout 2002. In March 2003 the
plaintiffs learned that he had failed to inform them that Ellen’s lawsuit had been
dismissed in May 2002. They sent Schellin a letter stating they remained “willing,
able and committed to performing under the Offer to Buy Real Estate and
4
Acceptance accepted by Detlef Schellin on January 5, 2000.” He responded to
their letter with an offer to sell the property for an increased purchase price, down
payment, interest rate, and a reduced amortization period.
The plaintiffs thereafter filed a petition seeking specific performance of the
January 5, 2000 real estate contract. Schellin filed an answer and counterclaim,
admitting the existence of that contract and requesting an order enforcing its
terms.
He also requested the plaintiffs be ordered “to pay all principal and
interest due under the terms of the contract from February 1 2000 to the
present.”
Following a trial, the district court entered an order directing specific
performance of the parties’ real estate contract with possession to be delivered to
the plaintiffs by September 1, 2006. The court denied Schellin’s counterclaim
seeking payment of the principal and interest due under the contract from
February 1, 2000, and ordered him to pay the plaintiffs’ attorney fees.
Schellin appeals. He first claims the district court “erred in providing that
the sales contract would begin on September 1, 2006.” He argues the court
should have instead ordered “that the time frame be restored to its original value”
and directed the plaintiffs to pay the principal and interest accruing since
February 1, 2000, the original closing date. We do not agree.
The plaintiffs elected to allow Schellin to keep the rents and profits he
collected from the apartment building since the conveyance should have been
5
made.2 In Moser v. Thorp Sales Corp., 312 N.W.2d 881, 901 (Iowa 1981), our
supreme court recognized that
[a] purchaser who obtains a decree for specific performance
may elect to pay interest on the purchase price for the time elapsed
since the conveyance should have been made, and take the rents
and profits received by the vendor, or allow the latter to retain
these, and thereby relieve himself of liability for interest.
(Citations omitted.) It is thus “clear that the purchaser can either collect rents
and profits and pay the interest or allow the vendor to keep the rents and profits
but escape payment of interest.”
Id.
This is so because a seller, “having
wrongfully delayed the performance of the contract is not allowed to derive any
advantage from his own fault.” Mitchell v. Mutch, 189 Iowa 1150, 1153, 179
N.W. 440, 441 (1920). The court in Mitchell reasoned that
[h]aving wrongfully withheld from the vendee the possession of the
property, it would be clearly inequitable to permit him to collect
interest upon the [contract] during the period of such wrongful delay
if the vendee elects to claim a remission of interest as his measure
of damage.
Id.
In denying Schellin’s claim for interest, the district court found he
wrongfully delayed performance of the parties’ contract.
novo review of the record, we agree.
Based upon our de
See Passehl Estate v. Passehl, 712
N.W.2d 408, 414 (Iowa 2006) (stating we review an equitable action for specific
performance de novo).
It is clear from the evidence presented at the trial that the plaintiffs were
ready and willing to perform under the contract since its execution but were
2
Schellin collected $52,503 in rent in 2000, $45,955 in 2001, $52,300 in 2002, $50,328
in 2003, $51,035 in 2004, and $44,479 in 2005, although he claimed increasing
expenses in maintaining and repairing the property each year.
6
unable to do so due to Schellin’s inability to deliver good title to the real estate,
his subsequent refusal to honor the terms of the contract as originally executed,
and his rejection of the plaintiffs’ attempts to complete the sale. We therefore
find the district court did not err in denying Schellin’s claim for interest on the
purchase price. See Mitchell, 189 Iowa at 1153, 179 N.W. at 441. Nor did the
court err in ordering that possession of the real estate should be delivered to the
plaintiffs by September 1, 2006. See Recker v. Gustafson, 279 N.W.2d 744, 759
(Iowa 1979) (ordering specific performance of oral real estate contract with
“practical equitable modifications [to the contract as] dictated by the passage of
time since the contract was formed”).
Schellin next claims the district court erred in awarding attorney fees to the
plaintiffs. The parties’ real estate contract provided for the payment of attorney
fees. See Iowa Code § 625.22 (2003) (authorizing payment of attorney fees
when a judgment is recovered on a written contract containing an agreement to
pay for attorney fees). Where a real estate contract provides for attorney fees,
the amount of fees awarded lies within the discretion of the district court.
Beckman v. Kitchen, 599 N.W.2d 699, 702 (Iowa 1999). An award of attorney
fees will not be disturbed on appeal in the absence of an abuse of discretion. Id.
The district court considered the time expended by the plaintiffs’ attorneys
in this protracted litigation, the nature and extent of their services, the amount
involved, the difficulty of the issues, and the results obtained in ordering Schellin
to pay the plaintiffs $28,313.80 in attorney fees. See id. (listing factors relevant
to an award of attorney fees). No abuse of discretion has been shown.
7
The plaintiffs request permission to file an application for appellate
attorney fees. We find no language in section 625.22 or in their real estate
contract that precludes the award of appellate attorney fees. See Bankers Trust
Co. v. Woltz, 326 N.W.2d 274, 278 (Iowa 1982). However, we prefer that the
district court determine the reasonable amount of attorney fees plaintiffs should
be awarded on appeal. Id. We therefore remand the case to the district court for
the limited purpose of an evidentiary hearing on and the fixing of appellate
attorney fees.
In summary, we affirm the judgment of the district court ordering specific
performance of the parties’ real estate contract and awarding the plaintiffs
attorney fees, and remand for the limited purpose of determining attorney fees on
appeal.
AFFIRMED AND REMANDED.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
