RICHARD F. VERSCHOOR and PATRICIA A. VERSCHOOR , Plaintiff s - Appell ants , vs. AUTO CENTRAL, L.L.C., THOMAS RIDDER, BOJI AUTO FINANCE, INC., UNITED COMMUNITY BANK, and their known heirs, devises, grantees, assignees, successors in interest and the unknown claimants of the following described real estate situated in Dickinson County, Iowa: Lots One (1), Two (2), Three (3), and Four (4), Block Nine (9), Meyers Addition to the Town of North Milford, Dickinson County, Iowa , Defendant s - Appell ees .
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IN THE COURT OF APPEALS OF IOWA
No. 8-538 / 07-2176
Filed December 17, 2008
RICHARD F. VERSCHOOR and
PATRICIA A. VERSCHOOR,
Plaintiffs-Appellants,
vs.
AUTO CENTRAL, L.L.C., THOMAS
RIDDER, BOJI AUTO FINANCE, INC.,
UNITED COMMUNITY BANK, and
their known heirs, devises, grantees,
assignees, successors in interest
and the unknown claimants of the
following described real estate
situated in Dickinson County, Iowa:
Lots One (1), Two (2), Three (3),
and Four (4), Block Nine (9), Meyers
Addition to the Town of North Milford,
Dickinson County, Iowa,
Defendants-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Dickinson County, Nancy L.
Whittenburg, Judge.
Richard and Patricia Verschoor appeal a district court ruling dismissing
their action to quiet title. AFFIRMED.
Michael H. Johnson of Stoller & Johnson, Spirit Lake, for appellants.
Michael J. Chozen of Chozen & Saunders, Spirit Lake, for appellees Auto
Central and United Community Bank.
Michael Bovee of Montgomery, Barry & Bovee Law Offices, Spencer, for
appellee Auto Central.
Heard by Huitink, P.J., and Vaitheswaran and Potterfield, JJ.
2
VAITHESWARAN, J.
Richard and Patricia Verschoor appeal a district court ruling dismissing
their action to quiet title.
I. Background Facts and Proceedings
In 1996, Richard and Patricia Verschoor contracted to sell six parcels of
real estate to Boji Auto Finance, Inc. Under the terms of the real estate contract,
Boji Auto was to make monthly payments until August 2011.
In late 1999, a warranty deed was executed purporting to convey Parcels
5 and 6 from the Verschoors to Boji Auto. The deed was recorded on February
23, 2000.1 Five years after the recording, the Verschoors sued to quiet title in the
two parcels. They alleged their signatures on the 1999 warranty deed were
forgeries.
While several defendants were sued, only two participated at trial.2 Those
two entities, United Community Bank and Auto Central, L.L.C., asserted that Boji
Auto transferred a portion of Parcels 5 and 6 to United Community Bank, which
in turn, transferred title to Auto Central.
These defendants sought summary
judgment, claiming, in part, that Auto Central was a bona fide purchaser. The
1
Parcels 5 and 6, referred to as “the 4-plex,” bore the following legal description: “Lots
One (1), Two (2), Three (3) and Four (4), Block Nine (9), Meyers Addition to the Town of
North Milford, Dickinson County, Iowa.” One month after signing the real estate contract
with the Verschoors, Boji Auto subdivided the 4-plex into two parcels, designated “Parcel
A” and “Parcel B.” The Verschoors denied knowledge of this action. Boji Auto sold
parcel A to Lora and Eric Bilney who, in turn, mortgaged the parcel to Farmers Trust and
Savings Bank. Parcel B is the subject of this litigation. As it is part of Parcels 5 and 6,
we will refer to the contested property as “Parcels 5 and 6.”
2
Defendants Thomas Ridder and Boji Auto were served notice by publication, but never
participated in the proceedings. The Bilneys and Farmers Trust and Savings Bank were
later added as indispensable parties, but the Verschoors dismissed with prejudice their
claim against them prior to trial.
3
district court denied the motion after concluding that there existed genuine issues
of material fact as to whether the Verschoors’ signatures on the 1999 deed were
forged and whether an inspection of the deed would have revealed the forgery.
At trial, Richard Verschoor testified that he and his wife did not sign the
1999 warranty deed. Patricia Verschoor similarly testified that the signature on
the 1999 warranty deed was not hers. She also stated she would not have
signed such a document until the contract price was paid off.
An expert for the Verschoors testified that their signatures on the 1999
deed were forged. An expert for the defendants essentially found a probability or
high probability that the signatures on the deed were produced by the same
individuals who produced other handwriting samples provided to her.
The district court made extensive findings concerning the handwriting
analyses performed by the experts. The court determined that the Verschoors
failed to prove forgery. The court further concluded that, absent a forgery, the
defendants were entitled to the protections due bona fide purchasers. The court
dismissed the Verschoors’ petition and subsequently denied their motion for
expanded findings and conclusions.
The Verschoors appealed.
Our review is de novo.
Fencl v. City of
Harpers Ferry, 620 N.W.2d 808, 811 (Iowa 2000).
II. Analysis
As noted, the district court determined that the 1999 deed was not forged.
The Verschoors contend this determination is not supported by the record. On
our de novo review, we disagree.
4
The district court made detailed findings of fact on this question, analyzing
the credentials of both expert witnesses, their methodologies, and their
conclusions. The court found the Verschoors’ expert unpersuasive, stating his
“skill, experience and knowledge does not compare to that of the expert witness
for the defendants.” The court concluded the Verschoors failed to show that their
signatures on the deed were forged.
After “a careful examination of the entire record,” we are convinced the
court’s findings have factual support. See Bibler v. Bibler, 205 Iowa 639, 647,
216 N.W. 99, 102 (1927); Amish v. Amish, 196 Iowa 685, 689, 195 N.W. 359,
361 (1923) (“It is putting the case very mildly to say it falls far short of that
reasonable certainty which is properly required to invalidate a deed of land which
has been followed by the unbroken and unchallenged possession of the grantee
for many years . . . .”). Therefore, we affirm the district court’s determination that
the 1999 deed was not forged.
This brings us to the question of whether the defendants were bona fide
purchasers. “A bona fide purchaser is one who takes a conveyance of real
estate in good faith from the holder of legal title, paying a valuable consideration
for it without notice of outstanding equities.” Raub v. Gen. Income Sponsors of
Iowa, Inc., 176 N.W.2d 216, 219 (Iowa 1970). A land purchaser has the burden
to establish the status of bona fide purchaser. Sun Valley Iowa Lake Ass’n v.
Anderson, 551 N.W.2d 621, 638 (Iowa 1996). To do so, the purchaser must
show the purchase was made without either actual or constructive notice of
existing rights in the property. Id.
5
The Verschoors contend United Community Bank had actual notice of
their claim to Parcels 5 and 6.
They rely on the testimony of a bank vice-
president, Steve Feld. He, in fact, testified that, when the bank lent money to
Boji Auto and secured a mortgage on a portion of Parcels 5 and 6, he had no
knowledge that the Verschoors were making a claim to that property.
He
additionally testified that, to the extent there were filings in bankruptcy court that
might have disclosed the Verschoors’ claim, he could not “say for sure” whether
his attorney informed him of those filings.3 Finally, Feld testified that he was not
informed of the Verschoors’ claim that the 1999 deed was forged until early May
of 2004, several months after Boji transferred title to the bank and the bank, in
turn, transferred title to Auto Central. We conclude the bank did not have actual
notice of the Verschoors’ claim to Parcels 5 and 6.
On the question of constructive notice, Feld testified that the bank
performed a lien search in 2002, prior to lending money to Boji Auto. The search
disclosed the 1999 deed transferring Parcels 5 and 6 from the Verschoors to Boji
Auto. The bank relied on this abstracting. Feld testified that nothing from the lien
search would have disclosed that the Verschoors had an interest in any portion
of Parcels 5 and 6. Based on this record, we conclude the bank did not have
constructive notice of the Verschoors’ claim to Parcels 5 and 6.
We further agree with the district court that United Community Bank was a
bona fide purchaser, as was Auto Central, the entity to which the bank
3
The principal of Boji Auto, Thomas Ridder, filed a bankruptcy petition listing the
Verschoors’ interest in Parcels 5 and 6. It is undisputed that the 1999 warranty deed
conveyed the property to Boji Auto, not to Ridder.
6
transferred the property. See Raub, 176 N.W.2d at 220; Govern v. Russ, 125
Iowa 188, 189-90, 100 N.W. 325, 325 (1904).
The Verschoors also argue that, if the defendants were bona fide
purchasers, they were only bona fide purchasers of a portion of Parcels 5 and 6
and some of the balance belonged to them. It is clear, however, that the 1999
deed transferred all of Parcels 5 and 6 to Boji Auto. As we have already affirmed
the determination that the deed was not a forgery, we conclude that the deed
divested the Verschoors of an interest in Parcels 5 and 6.
The Verschoors finally note that documents transferring portions of
Parcels 5 and 6 from Boji Auto to United Community Bank and Auto Central
contained inaccurate legal descriptions. These documents do not implicate the
Verschoors’ claim because after they transferred Parcels 5 and 6 to Boji Auto in
1999, their right to that property was extinguished.
We affirm the district court’s dismissal of the Verschoors’ quiet title action.
AFFIRMED.
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