CARGILL, INCORPORATED, A Delaware Corporation , Plaintiff - Appell ee , vs. MARVIN R. MITCHELL and MARLENE M. MITCHELL , Defendants, MAURICE D. MITCHELL, SR., Defendant - Appell ant .
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IN THE COURT OF APPEALS OF IOWA
No. 8-515 / 07-0778
Filed October 29, 2008
CARGILL, INCORPORATED,
A Delaware Corporation,
Plaintiff-Appellee,
vs.
MARVIN R. MITCHELL and
MARLENE M. MITCHELL,
Defendants,
MAURICE D. MITCHELL, SR.,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Dallas County, William H. Joy,
Judge.
Surety Maurice Mitchell appeals a ruling dismissing his claims against the
proceeds of a supersedeas bond posted on an appeal from a fraudulent
transaction action. AFFIRMED.
Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellant.
Jacob D. Bylund, Kimberly J. Walker, Ross W. Johnson, and Todd P.
Langel of Faegre & Benson, L.L.P., Des Moines, for appellee.
Heard by Vogel, P.J., and Mahan and Miller, JJ.
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VOGEL, P.J.
Surety Maurice Mitchell appeals a ruling dismissing his claims against the
proceeds of a supersedeas bond posted on an appeal from a fraudulent
transaction action brought by Cargill, Inc., against Marvin and Marlene Mitchell.
We affirm.
Background Facts and Proceedings.
This litigation began in 2004 when Cargill attempted to collect a judgment
against Marvin Mitchell. Cargill filed an action against Marvin, his wife Marlene,
and his father Maurice Mitchell, seeking, among other things, (1) a declaration
that Marvin‟s transfer of all his farming assets to Marlene for the sum of one
dollar was fraudulent, and (2) a note and financing statement from Marvin and
Marlene to Maurice was fraudulent, thus entitling Cargill to the proceeds of
Marvin‟s 2004 crop. Cargill also sought a declaration that its interests in Marvin‟s
farm products or their proceeds was senior to that of Maurice. Prior to trial, the
district court granted Cargill‟s summary judgment motion as to Maurice,
concluding Cargill‟s interest in Marvin‟s 2004 crops was senior to any interest
held by Maurice. Maurice did not appeal that ruling, and he was dismissed from
the action by Cargill.
Later, the case proceeded to trial on the only remaining issue—whether
the transfer from Marvin to Marlene was fraudulent. Following a trial, the court
ruled on June 3, 2005, that the transaction was fraudulent and set it aside, thus
permitting Cargill to levy upon Marvin‟s 2004 crop. In so ruling, the court found
that Maurice had conceived of the fraudulent plan in order to place his son‟s
farming operation out of the reach of Cargill‟s judgment.
Cargill immediately
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submitted a praecipe for execution and execution was issued to the Madison and
Wayne County Sheriffs, who seized Marvin‟s 2004 crops. Preparations were
made for the sale of the grain. In light of the impending sale, Maurice deposited
$139,479.68 in cash with the Dallas County Clerk of Court as security and posted
a supersedeas bond, pending the outcome of the appeal.
Marvin and Marlene appealed from the June 3, 2005 ruling. This court
affirmed, rejecting claims that the district court erred in (1) denying their motion to
dismiss or for a directed verdict and (2) denying their motion to amend their
answer to conform to the proof. Cargill, Inc. v. Mitchell, No. 05-0993 (Iowa Ct.
App. April 26, 2006).
Following issuance of procedendo, Cargill filed a motion for judgment on
Maurice‟s appeal bond with the district court.
On August 1, 2006, the court
granted the motion; however, on October 9, 2006, the court partially set aside its
order and allowed Maurice the opportunity to state his unlitigated claims to his
alleged interest in Marvin‟s 2004 crop, as it related to the proceeds of the appeal
bond.
In doing so, Maurice claimed (1) he had a perfected security interest in
Marlene‟s interest in the crops transferred to her by Marvin, (2) he is a protected
transferee under Iowa Code section 684.8 (2005), and (3) he is entitled to
expenses for harvesting and care of the crop.
Cargill responded by filing a
motion to dismiss. The court granted Cargill‟s motion, concluding that Maurice
was precluded from recovering on his statement of claims. Maurice appeals from
this ruling.
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Scope of Review.
The parties disagree on whether the district court treated Cargill‟s motion
as a motion to dismiss or as a motion for summary judgment. While the court
primarily cited to motion-to-dismiss case law, it also noted that when relying on
matters outside the pleadings, as it did here, the proper procedure is to treat the
motion as one for summary judgment. See Troester v. Sisters of Mercy Health
Corp., 328 N.W.2d 308, 311 (Iowa 1982). Regardless, our review is for the
correction of errors at law. LeMars Mut. Ins. Co. v. Joffer, 574 N.W.2d 303, 306
(Iowa 1998) (summary judgment); Estate of Ryan v. Heritage Trails Assocs., Inc.,
745 N.W.2d 724, 728 (Iowa 2008) (motion to dismiss).
Supersedeas Bond.
As noted, this matter comes before this court from proceedings on the
proceeds of a supersedeas bond following an affirmance on appeal in the main
action. On appeal, Maurice would like to frame this case as one involving a
judgment holder (Cargill) against a secured creditor (Maurice). We believe this
action, as it is currently procedurally situated, is more appropriately viewed as
one involving a judgment holder against a surety.
The cash bond provided by Maurice on behalf of Marvin and Marlene, was
to forestall execution on the 2004 crop, pending outcome of the appeal of the
June 3, 2005 ruling, judgment having been rendered in favor of Cargill in the sum
of $139,479.68. In a July 14, 2005 ruling regarding the bond, the district court
ordered
that said amount, $139,479.68, will remain in the possession of the
Clerk of Court pending appeal and will serve as the primary source
of security and to guarantee payment of the judgment and ruling
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appealed from (this Court‟s order of June 3, 2005) if and when said
judgment is affirmed or if said appeal is dismissed.
As noted, this court affirmed the district court and procedendo issued on July 20,
2006.
Following the issuance of procedendo, a hearing was held on September
21, 2006, to discuss the appropriate extent of issues to be raised on Cargill‟s
motion for judgment on the appeal bond.
Throughout the hearing, Cargill
remained adamant that the “collateral issues” raised by Maurice were
inappropriate in the context of a motion for judgment on an appeal bond. Cargill
maintained that, procedurally, Maurice stood only as a surety and that it was not
appropriate for him to raise additional claims against the proceeds of the bond.
Despite Cargill‟s clear position, the court proceeded to allow Maurice to raise a
number of substantive claims, holding the proceeds of the bond at bay.
Subsequently, in granting Cargill‟s motion for judgment on the bond, the court
rejected each of the substantive claims Maurice raised and which are noted
earlier in this opinion.
Iowa Rule of Appellate Procedure 6.7 provides for the filing of a
supersedeas bond in order to “stay proceedings under a judgment” on the
condition that the appellant “will satisfy and perform the judgment if affirmed
. . . .”
As our supreme court has stated, “[i]t is apparent from the express
language of these rules that a supersedeas bond guarantees payment of and is
available to satisfy only a judgment that is „appealed from‟ and „affirmed.‟” Iowa
State Bank & Trust v. Michel, 683 N.W.2d 95, 101 (Iowa 2004). Further, rule 6.9
provides that upon affirmance from an appellate court, the case may be
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remanded “to the district court for the determination of such damages and costs
and entry of judgment on the bond.”
We believe that following issuance of procedendo the only additional
proceedings allowed, pursuant to the rule, would be for the “determination of
such damages and costs . . . .” Iowa R. App. P. 6.9. After such, an entry of
judgment on the bond should have been made. Here, Maurice managed to shift
the focus from the simple motion for judgment on the bond to distinctly different
issues. Thus, Maurice was allowed to improperly bootstrap his separate claims
into the bond hearing in hopes of recouping some or all of the cash bond he had
posted as surety on Melvin and Marlene‟s appeal. This is neither contemplated
nor authorized by the rules. Accordingly, we conclude the court should not have
delayed judgment on the appeal bond aside from the resolution of “damages and
costs.” Id. However, because the court eventually dismissed Maurice‟s claim on
other grounds, we find no error in the final result and therefore affirm. By virtue
of this ruling, we need not address the remainder of the claims presented in
Maurice‟s appeal.
AFFIRMED.
Vogel, P.J. and Mahan, J. concur. Miller, J. concurs specially.
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MILLER, J. (concurs specially)
I concur in the result.
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