RONALD L. WOODS, Plaintiff-Appellant, vs. TAD D. SONNEMAN and JULIE A. SONNEMAN, Defendants-Appellees.
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IN THE COURT OF APPEALS OF IOWA
No. 9-608 / 09-0267
Filed December 17, 2009
RONALD L. WOODS,
Plaintiff-Appellant,
vs.
TAD D. SONNEMAN and JULIE A. SONNEMAN,
Defendants-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Richard G. Blane II,
Judge.
A buyer appeals a district court ruling denying his request for attorney fees
and awarding the sellers attorney fees in a dispute arising from a real estate
contract. AFFIRMED AND REMANDED.
Patrick W. O‟Bryan of O‟Bryan Law Firm, Des Moines, and V. Phillip
Watson of Phil Watson, P.C., Des Moines, for appellant.
Nathan J. Barber and Michael R. Reck of Belin Lamson McCormick
Zumbach Flynn, P.C., Des Moines, for appellees.
Heard by Sackett, C.J., and Vaitheswaran and Danilson, JJ.
2
VAITHESWARAN, J.
In this dispute arising from a real estate contract, a buyer appeals a district
court ruling denying his request for attorney fees and awarding the sellers
attorney fees.
I.
Background Facts and Proceedings
Ronald Woods agreed to purchase 3.7 acres of Des Moines real estate
from Tad and Julie Sonneman. The real estate contract provided that Woods
would purchase the land “subject to the following: . . . any easements of record
for public utilities, roads and highways.” The contract further provided that
Sellers, at their expense, shall promptly obtain an abstract of title to
the Real Estate . . . and deliver it to Buyers for examination. It shall
show merchantable title in Sellers in or conformity with this
contract, Iowa law and the Title Standards of the Iowa State Bar
Association.
(Emphasis added.)
Several days after the closing was to occur, Woods‟s attorney prepared a
title opinion noting the property was subject to “a perpetual easement and right of
way for sewer purposes in favor of the United States of America.”
This
easement, which was granted in 1902, encompassed the entire parcel of land
being sold to Woods. Woods‟s attorney objected to the title as unmerchantable
and “require[d] that a release be obtained from the United States of America and
placed of record.”
The Sonnemans attempted to obtain a release of the
easement but were not immediately successful.
Woods sued the Sonnemans and the United States seeking (1) a
declaratory judgment that the easement rendered the Sonnemans‟ title
unmerchantable; (2) specific performance of the real estate contract with an
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abatement from the purchase price for Woods‟s expenses in removing the
easement; and (3) a decree quieting title to the property in favor of Woods and
against the United States.1
The Sonnemans filed an answer and counterclaim seeking specific
performance of the real estate contract, damages for breach of that contract, and
attorney fees. The United States had the case removed to federal district court
and subsequently filed a disclaimer of interest in the easement. The case was
remanded to the Iowa District Court, where Woods dismissed his quiet title action
against the United States.
Shortly thereafter, the Sonnemans attempted to proceed with the closing,
noting that “[a]ll conditions to closing, including any claim to unmarketable title,
have been satisfied.” Woods responded,
We have the funds in our Trust Account to close this
transaction. Our client has incurred in excess of $10,000.00 in
legal fees to get the easement problem taken care of, and believes
that your client should contribute to payment of that expense.
The Sonnemans moved for summary judgment.
They maintained that
Woods‟s claims against them failed because Woods had agreed to purchase the
property subject to all easements and, in any event, the easement in favor of the
United States was extinguished.
Woods resisted that motion and filed a
summary judgment motion of his own. He sought “an abatement of the purchase
price in an amount sufficient to cover his costs of removing such easement,
1
Woods was president of a corporation known as Easter Lake Estates, Inc. That
corporation filed a similar lawsuit against Adair Holdings, L.L.C. and the United States
with respect to an adjacent piece of property, which was also subject to the same
easement. The two cases were later consolidated. These parties reached a settlement
and are not involved in this appeal.
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which consists of attorney fees, expenses, and court costs.” In the end, the
parties agreed to submit the case to the court based only on the court file,
“including the motion for summary judgment and the affidavits attached and the
exhibits of the parties.”
The district court framed the issue to be decided as follows: “Under the
contract[ ], whether the Plaintiff[ ] [is] entitled to an award of attorney‟s fees from
Defendants.”
The relevant contractual provision stated:
“In any action or
proceeding relating to this contract the successful party shall be entitled to
receive reasonable attorney‟s fees and costs as permitted by law.” (Emphasis
added.) The court concluded that, while Woods might have been the “successful
party” with respect to his claims against the United States, Woods was not the
“„successful party‟ as to his claims against the Sonnemans.” The court denied
Woods‟s claim for attorney fees and dismissed his petition against the
Sonnemans. The court did not address the Sonnemans‟ claim for attorney fees.
Both parties filed motions for enlarged findings and conclusions pursuant
to Iowa Rule of Civil Procedure 1.904(2). Following a hearing, the district court
denied Woods‟s motion in its entirety and granted the Sonnemans‟ request for
specific performance of the real estate contract and attorney fees of $12,170.30.
Woods filed two appeals,2 which were consolidated and transferred to this
court for disposition. As the only issue before us relates to attorney fees, our
review is for an abuse of discretion. See Capital Fund 85 Ltd. P’ship v. Priority
Sys., L.L.C., 670 N.W.2d 154, 157 (Iowa 2003).
2
The order specifying the amount of fees awarded was not issued until after Woods filed
his first notice of appeal, necessitating the filing of a second notice of appeal.
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II. Analysis
A. Trial Attorney Fees
Subject to a rare exception, which Woods does not assert is applicable
here, “[a] party generally has no claim for attorney fees as damages in the
absence of a statutory or written contractual provision allowing such an award.”
Hockenberg Equip. Co. v. Hockenberg’s Equip. & Supply Co., 510 N.W.2d 153,
158 (Iowa 1993). The district court correctly noted that the attorney fee claim
here is governed by contract and the contract authorized an award of attorney
fees to “the successful party.”
Woods was not the successful party vis-à-vis the Sonnemans.
First,
Woods did not prevail on his underlying declaratory judgment and specific
performance claims against the Sonnemans, both of which were dismissed as
moot or without merit. Woods does not challenge the dismissal of those claims
on appeal. See Hyler v. Garner, 548 N.W.2d 864, 870 (Iowa 1996) (“[O]ur review
is confined to those propositions relied upon by the appellant for reversal on
appeal.”). Second, Woods did not prevail on the Sonnemans‟ counterclaim for
specific performance of the contract, as the district court found that Woods failed
to perform under the contract even after the United States disclaimed its
easement. See Wemer v. Long, 185 N.W.2d 243, 247 (Iowa 1971) (“The vendee
of a contract cannot be heard to complain of a defect in the vendor‟s title prior to
the time he is entitled to performance under the contract, particularly where the
defect is one which may be removed. . . .”). For these reasons, Woods was not
entitled to have the Sonnemans pay his attorney fees or to have the fees
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deducted from the purchase price of the real estate.3 Accordingly, the district
court did not abuse its discretion in denying his claim for attorney fees.
We turn to Woods‟s assertion that he should not have been ordered to pay
the Sonnemans‟ trial attorney fees.
With respect to the Sonnemans‟
counterclaim, the district court found that the title dispute resolved itself when the
United States agreed to disclaim its easement and, at that point, the Sonnemans
were entitled to specific performance of the real estate contract. There can be no
question then that the Sonnemans were “the successful party” on their
counterclaim.
Accordingly, the district court did not abuse its discretion in
ordering Woods to pay their attorney fees.
B.
Appellate Attorney Fees
Both parties request an award of appellate attorney fees. The language of
their real estate contract is broad enough to encompass such an award. See
Bankers Trust Co. v. Woltz, 326 N.W.2d 274, 278 (Iowa 1982).
As the
Sonnemans were the successful parties on appeal, they are entitled to an award
3
We agree with the district court that abatement of the purchase price was not an
appropriate remedy in any event. That remedy has been applied where a seller who
agreed to convey good title cannot convey good title, but the buyer is nonetheless willing
to accept defective title. Van Duzer v. Engeldinger, 209 Iowa 150, 155, 227 N.W. 591,
593 (1929) (“[W]here the vendor cannot make a complete title to all the land sold as
agreed . . . the purchaser has an election to proceed with the purchase pro tanto, and to
have an abatement from the purchase price for the deficiency in the title.”). In such a
case, the buyer is entitled to “abatement from the contract price by reason of the failure
to perform in full.” Id.; see also Shell Oil Co. v. Kelinson, 158 N.W.2d 724, 730 (Iowa
1968) (“[T]he vendee may compel the vendor to convey his defective title or deficient
estate, and at the same time have a just abatement out of the purchase price for the
deficiency of title, quantity or quality of the estate to compensate for the vendor‟s failure
to perform the contract in full.”). Here, the Sonnemans were ultimately able to convey
good title to all the land Woods agreed to purchase. Therefore, Woods was not entitled
to “an abatement from the purchase price for the deficiency in the title.” Van Duzer, 209
Iowa at 155, 227 N.W. at 593.
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of appellate attorney fees.
We remand the case to the district court for an
evidentiary hearing to determine an appropriate award of appellate attorney fees.
AFFIRMED AND REMANDED.
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