TIM RAYL and DONNA RAYL, Plaintiff s - Appellees, vs. JOSHUA PARISE and CHRISTY PARISE, Defendant s - Appellants.
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IN THE COURT OF APPEALS OF IOWA
No. 8-1051 / 08-0931
Filed March 11, 2009
TIM RAYL and DONNA RAYL,
Plaintiffs-Appellees,
vs.
JOSHUA PARISE and
CHRISTY PARISE,
Defendants-Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Linn County, William L. Thomas,
Judge.
Defendants appeal the denial of their motion for dismissal of plaintiffs’
forcible entry action. AFFIRMED.
Gregory J. Epping of Terpstra & Epping, Cedar Rapids, for appellants.
R.L. Sole of Sole, McManus, Pearson & Willems, P.C., Cedar Rapids, for
appellees.
Considered by Vogel, P.J., and Mahan and Miller, JJ.
2
MAHAN, J.
Joshua and Christy Parise appeal the denial of their motion for dismissal
of Tim and Donna Rayl’s forcible entry action.
I. Background Facts and Proceedings.
On January 22, 2008, the Rayls and Parises entered into a
“Purchase/Sale Contract” under which Parises were to purchase Rayls’ house.
Throughout the transactions, Rayls were represented by Jean Perkins and
Parises were represented by Karen Feltman, realtors employed by Skogman
Realty. All transactions between the parties were made through Perkins and
Feltman, under a dual agency agreement.
Because Parises still owned a house in Wisconsin they had not sold,
Rayls agreed to extend the closing date on the their house for a long period of
time, with closing to occur no later than January 31, 2009. The parties also
entered into an “Interim Occupancy Agreement,” under which Parises would live
in the house before closing and make monthly rental payments to Rayls,
beginning on February 1, 2008. Rayls, Perkins, and Feltman understood the
parties’ agreement to be a lease/purchase agreement, under which the buyers
lease and occupy the house with an agreed upon price and closing date. 1
Joshua Parise alleges he believed the agreement was a lease with an option to
purchase.2 Joshua Parise admitted at hearing, however, that he had not read
1
In contrast, a lease with an option to purchase agreement is an agreement under which
a lessee occupies the house and has the option to purchase the house at the end of the
lease term or within a specified period of time.
2
As the district court noted, Joshua Parise believed the terms of the parties’ agreement
to be that “he and Mrs. Parise could move into the house and live there for awhile, and if
3
the parties’ “Purchase/Sale Contract” or “Interim Occupancy Agreement.” The
court specifically found it was a lease/purchase agreement.
As early as January 27, 2008, Joshua Parise began to express concerns
to Feltman about the house and stated he was unsure whether he and his wife
would want to purchase the house at the end of the lease term. Feltman testified
it was her understanding that Joshua Parise did not want her to say anything
prior to Parises moving in because Rayls would probably say Parises should not
move in. Parises moved into the house around February 1, 2008. Joshua Parise
continued to share concerns with Feltman throughout February and March, but
did not formally indicate to Rayls whether he and his wife intended to purchase
the house.
Feltman testified that she realized there was a problem on February 26,
2008, when Joshua Parise again indicated he was unsure he and his wife would
purchase the house. However, he still did not want to do anything in writing and
told Feltman not to say anything to Rayls. In her testimony, Feltman agreed that
the Rayls were “basically in the dark as to what was going on.” According to
Feltman’s testimony:
they did not like the house, they could walk away and forfeit their earnest money.” As
Joshua Parise testified:
Our intention was to have a property we could lease it with the option to
purchase it at the end of the lease. . . . My understanding was that we
would be able to pay rent payments to a seller, be able to collect some of
that money back towards the purchase of the house if we wanted to buy .
. . the house at the end of the lease.
We note, however, that Parises now contradict those statements in their brief to this
court. In their brief, Parises specifically state that the agreement was not for Parises to
lease the house and then have the option to purchase the house at the end of a lease
term. Parises now rely on the district court’s determination that the parties did not
establish a landlord-tenant relationship to bolster their arguments on appeal.
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He wasn’t sure what they were going to do. My hands were tied. I
mean he didn’t want to do anything in writing. He didn’t want me to
say anything. He went back and forth between say something,
don’t say something, I didn’t know what to do.
Feltman further testified that she advised Parises as follows:
I told them that all I could do was if you wanted to put something in
writing, the sellers’ right were stated in the Interim Occupancy that
said if . . . the purchase of the property has not occurred by 1-31-09
or sooner, in the event of a contingency in the Purchase/Sale
Contract has not or cannot be met, buyers agree to immediately
vacate the premises upon ten days written notice from sellers. I
said that was—I said that was the possibility. Whether or not they
would choose to exercise that was up to the sellers. However, that
was their right in the Interim Occupancy Agreement.
Eventually, in mid-March, Feltman shared Parises’ reluctance to Perkins.
Perkins requested something in writing indicating Parises’ intentions with regard
to the house, but Parises refused. As Feltman testified:
He did not put anything in writing to me. . . . [Ms. Perkins] asked for
a written cancellation of the contract, and he said his answer was
yes, but not yet, he didn’t want to do anything in writing . . .
In an email to Feltman on March 14, 2008, Joshua Parise wrote:
Putting something in writing is . . . what we did not want to do, until
we knew how they were reacting. I know we have to put something
in writing at some point, but if I did right now, wouldn’t I be giving up
all control of the process and negotiation of the terms we left on?
Although they had determined they were not going to purchase the house,
Parises were avoiding a paper trail and the possibility that Rayls could order
them to vacate the house. In an email to Feltman on March 25, 2008, Joshua
Parise wrote, “They could sue us right now (you can sue anyone, anytime, for
anything) and they would be laughed out of court. The only false evidence they
have is hearsay.”
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After consulting legal counsel, Rayls determined Parises’ actions
constituted an anticipatory breach of the Purchase/Sale Contract. On April 3,
2008, Rayls served Parises with a notice to quit. Parises remained in the house.
On April 21, 2008, Rayls filed a petition in equity for forcible entry, asserting that
Parises were holding over after the termination of the parties’ agreement. Rayls
requested the court issue an order for writ of possession requiring Parises to
vacate the house.
On April 30, 2008, Parises filed a motion to dismiss,
contending the grounds Rayls relied upon in their petition were not valid under
Iowa Code chapter 648.
On May 8, 2008, after a hearing, the district court
granted Rayls’ petition for forcible entry and directed the clerk to issue a writ of
possession requiring Parises to vacate the house.
Parises now appeal the
district court’s denial of their motion to dismiss.3
II. Scope and Standard of Review.
We review a district court’s ruling on a motion to dismiss for errors at law.
Iowa R. App. P. 6.4; State v. Finders, 743 N.W.2d 564, 548 (Iowa 2008); Palmer
v. Hoffman, 745 N.W.2d 745, 746 (Iowa Ct. App. 2008). A motion to dismiss
should only be granted if there is no state of facts conceivable under which a
plaintiff might show a right of recovery. Kingsway Cathedral v. Iowa Dep’t of
Transp., 711 N.W.2d 6, 7 (Iowa 2006). In determining whether to grant the
motion to dismiss, a court views the well-pled facts of the petition, but not the
conclusions. Turner v. Iowa State Bank & Trust Co., 743 N.W.2d 1, 3 (Iowa
2007); Kingsway, 711 N.W.2d at 8. The purpose of the motion is to test the legal
3
Notice of appeal was filed on June 3, 2008. On April 30, 2008, Joshua Parise testified
that he and his wife planned to move out of the house on June 1, 2008. The issue of
mootness, however, was not addressed in either party’s brief.
6
sufficiency of the petition. Turner, 743 N.W.2d at 3. Where an issue presents a
question of statutory interpretation, our review is for correction of errors at law.
State v. Garcia, 756 N.W.2d 216, 219 (Iowa 2008).
III. Merits.
Parises contend the district court erred in failing to grant their motion to
dismiss. They assert Rayls’ action should have been dismissed for failure to
state a claim upon which relief can be granted under Iowa Code chapter 648.
Parises argue the district court lacked authority under chapter 648 to issue a writ
of possession based on an anticipated breach of a real estate purchase
agreement. According to Iowa Code section 648.1:
A summary remedy for forcible entry and detainer is allowable:
1. Where the defendant has by force, intimidation, fraud, or
stealth entered upon the prior actual possession of another
in real property, and detains the same.
2. Where the lessee holds over after the termination of the
lease.
3. Where the lessee holds contrary to the terms of the lease.
4. Where the defendant continues in possession after a sale by
foreclosure of a mortgage, or on execution, unless the
defendant claims by a title paramount to the lien by virtue of
which the sale was made, or by title derived from the
purchaser at the sale; in either of which cases such title shall
be clearly and concisely set forth in the defendant’s
pleading.
5. For the nonpayment of rent, when due.
6. When the defendant or defendants remain in possession
after the issuance of a valid tax deed.
Parises claim that because ouster of a contract vendee is not an
enumerated ground under chapter 648, the statute is unavailable to Rayls as a
means to recover possession. Specifically, Parises claim the Rayls and Parises
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did not have a landlord-tenant relationship, and therefore the district court did not
have authority under chapter 648 to evict Parises.
This court has stated that “[t]he intent of the forcible entry and detainer
statute is to prevent people from resorting to self-help and violence and, instead,
provide legal process for regaining possession of real property.”
Price, 692 N.W.2d 44, 49 (Iowa Ct. App. 2004).
Crawley v.
The supreme court has
recognized that “a vendor who has forfeited a real estate contract can bring a
forcible entry and detainer action only if the contract expressly or impliedly
creates a landlord-tenant relationship upon forfeiture.” Robinson v. Black, 607
N.W.2d 676, 648 (Iowa 2000). A contract may expressly create a landlord-tenant
relationship if it provides that, in the event of default, the vendee is to be treated
as a tenant holding over unlawfully after the expiration of the lease and can be
ousted and removed as such. See Robinson, 607 N.W.2d at 648; Warren v.
Yocum, 223 N.W.2d 258, 262 (Iowa 1974) (finding landlord-tenant status
expressly created by a contract stipulating that upon forfeiture of the contract, the
“[vendees] may be treated as tenants holding over unlawfully after the expiration
of a lease, and may be ousted and removed as such”); Spangler v. Misner, 238
Iowa 600, 609-10, 28 N.W.2d 5, 9-10 (1947) (“[U]nder the terms of the contract of
purchase, one of the terms agreed upon was that in the event [vendee] defaulted
in his obligations he was to be treated as a tenant holding over unlawfully after
the expiration of a lease and could be ousted and removed as such.”).
Parises contend that prior to commencing an action for forcible entry,
Rayls needed to forfeit or rescind the contract in order to establish a landlord-
8
tenant relationship. Parises further point out that forfeiture cannot be enforced
without the service of thirty days’ written notice of the forfeiture on the buyer.
See Iowa Code § 656.2(1)(c). Rayls argue, however, that forfeiture is not a
prerequisite for standing under chapter 648.
Due to the unique facts and circumstances of this case, we do not find it
necessary to decide whether forfeiture of a contract is a condition precedent to
filing an action for forcible entry. We note that, in the facts of the cases Parises
cite, forfeiture of the contract did occur prior to the filing of forcible entry actions.
Nevertheless, the cases and Iowa law do not seem to mandate forfeiture prior to
the commencement of such actions.
See Iowa Code § 648; Robinson, 607
N.W.2d at 648; Warren, 223 N.W.2d at 262; Spangler, 238 Iowa at 609-10, 28
N.W.2d at 9-10. Section 648.3 does require, however, that three days’ notice to
quit be given in writing before an action for forcible entry may be brought. In this
case, Rayls served Parises with a notice to quit on April 3, 2008, and filed a
petition for forcible entry on April 21, 2008.
The express language of the “Purchase/Sale Contract” supports the
availability of an action for forcible entry and detainer in this case.
“Purchase/Sale Contract” provides as follows:
If the Buyer(s) fails to fulfill this Contract, Seller(s) may forfeit the
same as provided in Chapter 656 of the Code of Iowa, and all
payments made so far shall be forfeited, or the Seller(s) may
proceed by an action at law or in equity. . . . If Buyer(s) or any other
person or persons shall be in possession of this property or any
part thereof, Buyer(s) will peaceably remove himself and his
possessions and abandon all claims to any right, title and interest in
and to said property or in and to this Contract, or in default thereof
he may be treated as a tenant holding over unlawfully after the
expiration of a lease and may be ousted and removed.
The
9
(Emphasis added.)
Furthermore, based on the intentional and deliberate actions of Parises,
we feel it would be inequitable to deny Rayls’ action for forcible entry.
As
Parises’ real estate agent testified and as shown by emails from Joshua Parise,
Parises knew for several months they were not going to purchase the house, but
kept Rayls in the dark about what they intended to do. Parises also would not
allow Feltman to share their concerns with Rayls. Parises did not put anything in
writing in an effort to avoid a paper trail and with the knowledge that Rayls could
order them to vacate the house. Furthermore, Parises completely changed their
argument on appeal. To the district court, Joshua Parise testified he believed the
parties’ agreement was a lease, under which he and his wife were renting the
house with an option to purchase the house at the end of the lease. In contrast,
on appeal, Parises argue the parties did not intend to establish a landlord-tenant
relationship and their agreement was not for Parises to lease the house with an
option to purchase at the end of the lease.
Upon
our review,
we
determine
the
express
language
of
the
“Purchase/Sale Contract,” in addition to the intentional and deliberate actions of
Parises to keep Rayls in the dark, as testified to by their realtor, lead us to
conclude forcible entry and detainer was appropriate in this case. We find no
reversible error here. As such, we affirm the court’s denial of Parises’ motion to
dismiss.
AFFIRMED.
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