                  IN THE COURT OF APPEALS OF IOWA

                             No. 3-1165 / 13-0491
                             Filed March 12, 2014


JERRY WESTCOTT and DARLENE WESTCOTT,
    Plaintiffs-Counterclaim Defendants-Appellees,

vs.

ROGER MALLI,
     Defendant-Counterclaimant-Appellant.
________________________________________________________________


      Appeal from the Iowa District Court for Winneshiek County, Richard D.

Stochl, Judge.



      Roger Malli appeals the district court’s finding that Jerry Westcott and

Darlene Westcott are the legal title holders to 2.9 acres of disputed land.

AFFIRMED.



      Kevin E. Schoeberl of Story & Schoeberl Law Firm, Cresco, for appellant.

      Erik W. Fern, Decorah, for appellees.



      Heard by Vogel, P.J., and Tabor and McDonald, JJ.
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VOGEL, P.J.

       Roger Malli appeals the district court’s finding that Jerry Westcott and

Darlene Westcott are the legal title holders to 2.9 acres of disputed land. Malli

argues the Westcotts failed to prove by clear and convincing evidence they

adversely possessed the property, and consequently, the district court erred in

dismissing Malli’s counterclaims of trespass and conversion. Malli further argues

the district court erred in admitting testimony of a statement made by a deceased

realtor. Finally, Malli claims the court should have awarded him attorney fees.

Because we conclude the Westcotts proved their adverse possession claim, the

district court properly admitted the realtor’s statement, as well as properly denied

Malli attorney fees, we affirm.

I. Factual and Procedural Background

       On November 5, 1988, Jerry and Darlene Westcott entered into a real

estate contract with Malli to buy “80 acres, more or less, and buildings on land

legally described as: The South One-half (S ½) Southwest Quarter (SW ¼) of

Section Thirty (30), Township 100 North, Range Nine (9), West of the 5th P.M.,

Winneshiek County, Iowa.” At the time of the contract, Malli owned a 2.9 acre

parcel of land described as: “Lot 1 of the Northwest Quarter of the Southwest

Quarter of Section 30, Township 100 North, Range 9 West of the 5th P.M., in

Winneshiek County, Iowa.”

       The eighty plus acres was listed by Malli with the real estate company of

Erickson-Prohaska, and Dick Cummings was the real estate agent. Cummings

advised the Westcotts the property encompassed everything within the fence

line, which included the 2.9 acres.      No survey was ever done, though the
                                         3


Westcotts received a plat map from Cummings, which was highlighted to include

the 2.9 acre parcel. The Westcotts testified they believed they purchased the

disputed parcel along with the eighty acres.           Consequently, they made

improvements on the parcel, such as replacing and repairing the fencing,

constructing new gates, grading an unimproved road and putting gravel on its

surface. They have also used the land for grazing their cattle and horses. They

have cut down trees, removed a dilapidated shed, and mowed and sprayed the

grass on the property. Additionally, between 1989 and 2010, the Westcotts have

leased out their land—including this parcel—and the tenants have used the

parcel to access other pastures on the property as well as graze their livestock.

       A pole barn, constructed by Malli in 1978 and sold as part of the Westcott

purchase, sits on the eighty acres with approximately forty-six inches sitting

across the property line of the 2.9 acres. This encroachment was not described

in the original deed. A corral is also located on the 2.9 acres, north of the barn.

The Westcotts replaced the corral’s fencing. Both the barn and the corral for the

cattle and horses have been used by the Westcotts since they purchased the

property from Malli.   The Westcotts believed they were paying taxes on the

disputed land because of the irregular shape of the property, as well as the fact

their tax statement indicated they were paying taxes on 82.3 acres.

       To correct a prior deed, Malli received a quit claim deed to the 2.9 acres

from Michael and Carolyn Junk in 1993.1 The deed was recorded on February


1
  In 1988 Herb and Naomi Gossman sold the property to Michael Junk and Caroline
Junk, who sold to Richard Janechek and Dennis Janechek in 1993. Upon selling a 150
acre tract of land to the Janacheks, the Junks learned from Herb Gossman that the 2.9
acre parcel had been conveyed by the Gossmans in the mid 1980’s to Malli. As there
                                              4


24, 1994. Since 1988, Malli has only been on the parcel two to three times2 and

has never interfered with the Westcotts’ use of the property. However, Malli has

paid the property taxes for the parcel since 1993.

       In July of 2011, the Westcotts were informed by the Farm Service Agency

that they did not have legal title to the 2.9 acres. Consequently, they filed suit to

obtain title through adverse possession. Malli resisted, filing counterclaims of

trespass and conversion. Trial was held on February 27, 2013. On February 28,

the district court issued an order finding the Westcotts had proven the elements

of adverse possession, such that they had established legal title to the property.

Malli appeals.

II. Standard of Review

       We review this action brought in equity de novo. Rubes v. Mega Life &

Health Ins. Co., 642 N.W.2d 263, 266 (Iowa 2002). We are not bound by the

district court’s factual findings but we may give them weight, particularly with

regard to the credibility of witnesses. Id.

III. Statement by Cummings

       We begin by addressing an evidentiary issue. Malli asserts the district

court erred in admitting the statement of Cummings—now deceased—to the

Westcotts that the land they were about to purchase included the 2.9 acre parcel.

Malli argues the statute of frauds, see Iowa Code section 622.32 (2013),

was no dispute over the ownership of the parcel, the Junks issued a quit claim deed to
Malli.
2
  There is some dispute as to how often Malli visited the property. Malli asserts he
visited the property on numerous occasions, though the Westcotts claim Malli has only
been on the parcel once, after the suit was filed. In its findings of fact, the district court
stated: “Malli has been on the 2.9 acre parcel twice since 1988. Each occurred after this
action was filed. He did not step foot on the land once in over ten years and only did so
when he faced a claim adverse to his.”
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prevents the use of parol evidence in interpreting the parties’ real estate contract.

Additionally, the fact the real estate contract was a fully integrated document

precludes the admission of any parol evidence in interpreting the contract. Malli

also claims the statement was inadmissible based on relevance and hearsay.

       We review the admissibility of evidence for an abuse of discretion and

hearsay evidence for correction of errors at law. State v. Dullard, 668 N.W.2d

585, 589 (Iowa 2003). Hearsay must be excluded as evidence unless admitted

as an exception or exclusion under the hearsay rule or some other provision. Id.

       The district court admitted the testimony of Jerry Westcott, who stated:

“We come back down to the north fence, and Dick Cummings said that

everything that you see inside of the fences is the property.” 3 In admitting the

statement, the following exchange occurred:

               The Court: But the question is: Are you offering this
       testimony to prove the matter asserted, that, in fact, this 2.9 acres
       is included within the 80 acres, not based on adverse possession
       but that he was correct in his assertion that the 2.9 acres is
       included? If the 2.9 acres, in fact, was not a part of the 80 acres,
       you’re not offering his testimony to prove that, in fact, it was.
               Counsel: Oh, correct, Your Honor.
               The Court: Then you’re not offering it to prove the matter
       asserted and it, therefore, does not become hearsay.
               Counsel: That is correct, Your Honor, yes.
               The Court: So all you’re offering it for is they heard him say
       that and they believed it. Is that why you’re offering the evidence?
               Counsel: Yes, and to show their—basically show their belief
       and their occupancy.
               The Court: Based on that clarification, the objection is
       overruled.


3
  We note this statement is corroborated both by the aerial map showing that the
property included the 2.9 acres as well as the testimony of Keith Hansen, who stated:
“[Cummings] said that the north corner was from here pretty much straight back . . . but it
was from that corner post to—on the road and then it—of course, it comes out into the
center of the road which the county maintains.”
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       We agree with the district court’s interpretation that this statement was not

admitted for the truth of the matter asserted. Rather, it was offered to show the

Westcotts’ understanding they owned the 2.9 acre parcel because they believed

it was sold as part of the “eighty acres more or less,” as reflected on their

contract and deed in satisfaction of the contract.      See Iowa R. Evid. 5.802.

Consequently, the statement is not hearsay, and because it is also relevant, see

Iowa R. Evid. 5.402, the district court properly admitted the statement.

       Moreover, as demonstrated by the record, this evidence was not admitted

to interpret the real estate contract. Therefore, the statute of frauds and the parol

evidence rule do not apply. See Garland v. Branstad, 648 N.W.2d 65, 69 (Iowa

2002) (stating the parol evidence rule forbids the use of extrinsic evidence to

vary, add to, or subtract from a written agreement).         Consequently, Malli’s

arguments in this regard are without merit.

IV. Adverse Possession Claim

       A. Adverse Possession

       “A party claiming title by adverse possession must establish hostile,

actual, open, exclusive and continuous possession, under claim of right or color

of title for at least ten years.” Garrett v. Huster, 684 N.W.2d 250, 253 (Iowa

2004). This doctrine is strictly construed. Id.

       “Although ‘mere use’ is insufficient to establish hostility or claim of right,

certain acts, including substantial maintenance and improvement of the land, can

support a claim of ownership and hostility to the true owner.”         Louisa Cnty.

Conservation Bd. v. Malone, 778 N.W.2d 204, 208 (Iowa Ct. App. 2009). Here,

the Westcotts maintained the land by improving and maintaining the pole barn
                                           7


and fencing, grading the road, constructing new gates, removing a shed, and

mowing and spraying the grass. Malli, in contrast, never used nor maintained the

land and, as the district court found, did not even venture onto the property

during the Westcotts’ use of the disputed parcel until after this action was filed.

Furthermore, Malli did not describe the pole barn’s forty-six inch encroachment

onto the 2.9 acres in the deed to the Westcotts, indicating Malli believed he was

selling all of the property within the fence line.

       Malli claims, however, that he gave the Westcotts permission to use the

land in this manner, thereby negating the hostile element. In assessing Malli’s

credibility, the district court stated: “Malli claims he informed the Westcotts of his

ownership and allowed them free use of the property. The Westcotts deny any

such conversation occurred. The court finds the Westcotts far more credible and

concludes no such conversation occurred.” We lend significant weight to the

district court’s determination of credibility because the court is in the best position

to observe the witnesses and establish the veracity of their testimony.           See

Rubes, 642 N.W.2d at 266. Therefore, we rely on the district court’s conclusion

that Malli did not in fact give permission to the Westcotts to use the parcel.

       Furthermore, no evidence corroborates Malli’s claim he gave the Wescotts

permission to use the land. Malli did not pay taxes on to the property until 1993,

which indicates he did not believe he owned the property. Without knowledge of

ownership, no permission would have been granted.              Therefore, given the

Westcotts’ substantial maintenance and improvement of the land, as well as the

fact they did not have Malli’s permission to use the land in such a manner, the

hostile element is satisfied.
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       The Westcotts must also establish their possession was under claim of

right or color of title.   The claim of right element may be satisfied when the

plaintiff takes and maintains the property in the manner of an owner, that is, the

plaintiff’s conduct must evidence ownership. Louisa Cnty. Conservation Bd., 778

N.W.2d at 208. Since 1988, the Westcotts have made many improvements as

well as maintained the disputed parcel. They have leased out their land, which

included the 2.9 acres, between 1989 and 2010, and the tenants used the parcel

in a manner consistent with the Westcotts’ exclusive ownership of the land.

Additionally, the Westcotts have used the parcel to graze their own livestock.

This use, which is consistent with the ownership of the parcel, is sufficient to

establish the claim of right element.

       The Westcotts have also been able to satisfy the remaining elements of

adverse possession. Their use of the land has been continuous since 1988,

satisfying the ten-year requirement. As evidenced by the manner in which they

used and maintained the land, their possession has also been actual, open, and

exclusive. Other than the tenants and the Westcotts, no one else has used the

disputed parcel, and had Malli ever ventured onto the property, he would have

had notice of the Westcotts’ open use of the land. See Lawese v. Glaha, 114

N.W.2d 900, 904 (Iowa 1962) (“If possession is originally acquired in

subordination to the title of the true owner, there must be a disclaimer of the title

from him, an actual hostile possession of which he has notice or which is so open

and notorious as to raise a presumption of notice.”). Therefore, the Westcotts

proved by clear and convincing evidence all the elements necessary to establish
                                         9


their claim of adverse possession, and the district court properly found title of the

2.9 acres was with the Westcotts.

       B. Easement by Prescription Claim

       Malli asserts the Westcotts’ easement by prescription claim, pled in the

alternative, suffers from the same defects as their adverse possession claim.

However, as discussed above, the Westcotts proved by clear and convincing

evidence they adversely possessed the 2.9 acre parcel.               Therefore, the

easement by prescription claim is moot, and we decline to address the merits of

Malli’s alternative argument.

       C. Malli’s Counterclaims

       Malli further argues the district court erred in dismissing his counterclaims

of trespass and conversion. However, the district court correctly concluded the

Westcotts established their adverse possession claim, thus obviating Malli’s

counterclaims.     Consequently, the district court properly dismissed the

counterclaims of trespass and conversion, and we affirm.

V. Attorney Fees

       Malli’s final argument asserts the district court erred in declining to award

him attorney fees because the Westcotts breached the real estate contract and

engaged in trespass and conversion. Malli also requests he be awarded attorney

fees and costs associated with this appeal.

       We review the decision of whether or not to award attorney fees for an

abuse of discretion. Boyle v. Alum-Line, Inc., 773 N.W.2d 829, 832 (Iowa 2009).

Reversal is warranted only when the court rests its ruling on grounds that are

clearly unreasonable or untenable. Id.
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       Malli has no right to attorney fees based either on statutory or contractual

grounds. NevadaCare, Inc. v. Dep’t of Human Servs., 783 N.W.2d 459, 469

(Iowa 2010) (“As a general rule, unless authorized by statute or contract, an

award of attorney fees is not allowed.”). Therefore, the district court did not

abuse its discretion in not awarding attorney fees, and we decline to award

attorney fees on appeal.

       Having considered all arguments presented by Malli, we affirm the

decision of the district court.

       Costs of this appeal are assessed to Malli.

       AFFIRMED.
