text:
    Roger K. MENDENHALL and Edwin L. Mendenhall, Jr., Appellees, v. Marilyn Mendenhall JUDY, Appellant.
    No. 02-0940.
    Supreme Court of Iowa.
    Nov. 13, 2003.

      Thomas M. Walter of Johnson, Hester, Walter, Breckenridge & Duker, L.L.P., Ottumwa, for appellant.
    Kenneth L. Keith and Joni L. Keith of Keith Law Firm, P.C., Ottumwa, for appel-lees.
   LAVORATO, Chief Justice.

Two brothers, Edwin L. Mendenhall, Jr. and Roger K. Mendenhall, brought this equity action against their sister, Marilyn Mendenhall Judy. The brothers sought to set aside a transfer of stock in a family corporation that the children’s mother, Gladys Mendenhall, made to Marilyn while Gladys was still alive. The district court set aside the transfer of stock on the grounds that the transfer resulted from undue influence that Marilyn had exerted over Gladys. Subject to two modifications, we affirm the judgment of the district court and remand the case for further proceedings consistent with this opinion.

I. Scope of Review.

Because this action is in equity, our review is de novo. Iowa R.App. P. 6.4. In equity cases, especially when considering the credibility of witnesses, we give weight to' the fact findings of the district court, but we are not bound by them. Id. R.6.14(6)(^).

II. Applicable Law.

To set aside a transfer on the ground of undue influence, one must show “such persuasion as results in overpowering the will of the [grantor] or prevents him from acting intelligently, understandingly, and voluntarily — such influence as destroys the free agency of the grantor and substitutes the will of another person for his own.” Leonard v. Leonard, 234 Iowa 421, 429, 12 N.W.2d 899, 903 (1944). Undue influence must be present at the very time the transfer is made. Arndt v. Lapel, 214 Iowa 594, 603, 243 N.W. 605, 609 (1932). Proof of undue influence must be by evidence that is clear, convincing, and satisfactory. Else v. Fremont Methodist Church, 247 Iowa 127, 139, 73 N.W.2d 50, 57 (1955). Evidence is clear, convincing, and satisfactory when there is no serious or substantial uncertainty about the conclusion to be drawn from it. Raim v. Stancel, 339 N.W.2d 621, 624 (Iowa Ct. App.1983). Direct proof of undue influence is not required. In fact, undue influence may be and usually is proven by circumstantial evidence. Estate of Cory v. Ankeny State Bank, 169 N.W.2d 837, 842 (Iowa 1969).

Four elements are necessary to establish undue influence:

(1) The [grantor] must be susceptible to undue influence, (2) opportunity [on the part of the grantee] to exercise such influence and effect the wrongful purpose must exist, (3) a disposition [on the part of the grantee] to influence unduly for the purpose of procuring an improper favor must be present, and (4) the result must clearly appear to be the effect of undue influence.

Estate of Herm v. Henderson, 284 N.W.2d 191, 200-01 (Iowa 1979). Weakened mental condition of the grantor, relationship of the grantor and the grantee, inequality of distribution, and activity of the grantee are all factors that bear on the question of undue influence. Wilson v. Wilson, 240 Iowa 26, 33, 34 N.W.2d 911, 915 (1948).

A transfer to a grantee standing in a confidential or a fiduciary relationship to the grantor is presumptively fraudulent and therefore presumptively the product of undue influence. Marron v. Bowen, 235 Iowa 108, 112, 16 N.W.2d 14, 16-17 (1944). If such a relationship is found to exist, the burden of proof shifts to the grantee to negate a presumption of undue influence by clear, convincing, and satisfactory evidence. Herm, 284 N.W.2d at 200. We have recognized that this “rule is particularly applicable where one of the parties has a dominating influence over the other by reason of the affection, trust, and confidence of the latter in the former.” Id.

A fiduciary relationship includes a relationship in which one is under a duty to act for the benefit of the other as to matters within the scope of the relationship. Merritt v. Easterly, 226 Iowa 514, 517-18, 284 N.W. 397, 399 (1939).

We have referred to several principles in determining the existence of a confidential relationship:

Confidential relationship is a very broad term and is not at all confined to any specific association of the parties to it. In law it has been defined or described as any relation existing between parties to a transaction wherein one of the parties is duty bound to act with the utmost good faith for the benefit of the other party. In its broadest connotation the phrase embraces those multiform positions in life wherein one comes to rely on and trust another in his important affairs.
A confidential relationship arises whenever a continuous trust is reposed by one person in the skill and integrity of another, and so it has been said that all the variety of relations in which dominion may be exercised by one person fall within the general term “confidential relation.”

Herm, 284 N.W.2d at 199 (citation omitted). Such a relationship is particularly likely to exist where there is a family relationship. McGaffee v. McGaffee, 244 Iowa 879, 888, 56 N.W.2d 36, 39 (1953). Moreover, a confidential relationship may exist although there is no fiduciary relationship. Oehler v. Hoffman, 253 Iowa 631, 635, 113 N.W.2d 254, 256 (1962).

III. Facts.

With the foregoing principles in mind, we turn to the record in this case. On our de novo review, we find the following facts.

Gladys and Edwin Mendenhall, Sr. (Ed, Sr.) had three children: Edwin Menden-hall, Jr. (Ed, Jr.), Roger Mendenhall, and Marilyn Mendenhall Judy. Gladys and Ed, Sr. lived in Ottumwa, Iowa. Ed, Sr. owned and operated Hardsocg Pneumatic Tool Company. Hardsocg was founded in 1904, and its original business included contract machine work, engineering, assembly, and heat-treating. At one time, the company employed approximately forty-five people and made parts for M-47 tanks and jet engines. At the times material to this lawsuit, the company was an owner and lessor of real property, principally for warehouse and office space.

Roger has lived in California most of his adult life. He graduated from the University of Iowa with a B.S. degree in mechanical engineering and received an M.B.A. degree in 1984. Since 1956, Roger has worked for several companies in California.

Ed, Jr. has a B.A. degree in social science. Beginning in 1953, he worked with his father in the Hardsocg Company for about ten years, beginning in 1953. He had a purchasing background and filled such a need in the company at his father’s request. Ed, Jn left the company when it changed from a manufacturing business to a rental property operation. He moved to West Des Moines and regularly saw his parents on holidays.

Marilyn lived in California for several years and returned to Iowa in 1991. She has lived continuously in Ottumwa since 1993. She has worked in clerical and administrative positions. She began helping Ed, Sr. with Hardsocg in 1995.

On June 19,1995, Gladys executed a will that left all of her property in equal shares to her three children. On the same day, Gladys executed a general power of attorney that named Marilyn as Gladys’s attorney-in-fact with Ed, Jr. as successor to Marilyn if Marilyn became unable to act. The power of attorney prohibited Marilyn from making gifts to herself.

In October 1995, Ed, Jr. and Marilyn opened a conservatorship for Ed, Sr. in Wapello County because he was having problems managing his business and other affairs. What led to the conservatorship was the fact that some woman was apparently “scamming” Ed, Sr. of large sums of money.

On August 1, 1997, Ed, Sr. died, leaving to Gladys an estate worth $417,241.22. The estate included 500 shares of Hard-socg stock valued at $296,193.79. The estate had debts totaling $42,000. Hard-socg’s assets consisted primarily of three parcels of real estate. Ed, Jr. and Marilyn were appointed co-executors of the estate rather than Gladys because the three children believed Gladys, who was ninety-one years old at the time, did not have the ability to act as executor.

Following Ed, Sr.’s funeral, Gladys made known her desire that her estate be divided equally among her three children. At about the same time, Marilyn suggested to Ed, Jr. — -in Gladys’s presence — that they should figure out some way to disinherit Roger because he was wealthy and did not need anything. Ed, Jr. refused to go along with this suggestion.

Gladys suffered from many illnesses, some of which were attributed to old age. She had a severe hearing problem, poor eyesight, hypertension, chronic dizziness, gout, breast cancer, glaucoma, degenerative joint disease, skin conditions, and a bowel condition. She also suffered from depression and progressive dementia. A hospital discharge summary dated October 14, 1996 covered a period of hospitalization from October 5 through October 14. The discharge summary included a final diagnosis of malignant hypertension, dementia with delirium, primary and degenerative. An October 8, 1996 consultation prepared by a psychiatrist concluded that Gladys had primary dementia with senile onset. A neurologist who examined Gladys noted in his report dated October 8, 1996 that Gladys had short-term memory deficits and cognitive deficits, but he also noted that her memory deficit “[d]oes not seem that bad for 90 years of age but clearly is impaired.” Gladys took numerous daily medications.

After Ed, Sr.’s death, the three children discussed a guardianship for Gladys because of her health problems. Marilyn objected and nixed the idea.

Thereafter, Marilyn grew very close to her mother, calling on her five to six times a day to check on her and running Gladys’s household as far as hiring caretakers. Gladys in turn became more and more dependent on Marilyn.

On October 5, 1997, the three children and Gladys had a telephone conference to discuss Gladys’s assets, that is, where the money was, how much money there was, and what was to be done with it. Marilyn suggested that Gladys needed $1000 per month for living expenses and that she— Marilyn — needed more than the $125 per week she was receiving in wages from Hardsocg. Marilyn proposed taking Hardsocg as her third of Gladys’s estate and she and her brothers could balance any difference as necessary. No agreement was reached on this proposition.

Following this conversation, Marilyn contacted attorney Rich Gaumer to prepare a trust that would in effect direct the trustee to distribute all stock in Hardsocg to Marilyn. Gladys rejected the trust draft because it named a bank as trustee, something that Gladys did not want.

On November 10,1997, Marilyn engaged attorney Vern Ball, an experienced probate lawyer, concerning Gladys’s legal work, primarily relating to Gladys’s gift of her Hardsocg stock to Marilyn. Ball’s billing records for this work are in evidence, and they identify the meetings and phone calls he had with Marilyn and Gladys. Ball and Marilyn went to great lengths to document Gladys’s intentions and competency even to the point of tape-recording at least one meeting.

Ball saw to it that the general power of attorney, which prohibited Marilyn from making gifts to herself, was amended. Tammy S. Huddleston of South Ottumwa Bank was added to the document as attorney-in-fact to allow gifts to Marilyn. There was considerable confusion in the testimony about whether Gladys actually signed the amended general power of attorney.

Ed, Sr.’s estate included the 500 shares of Hardsocg stock valued at $296,193.79. Because of the expense, the co-executors decided against an appraisal of the stock and used the tax assessment to establish the value. Unbeknownst to her two brothers, Marilyn hired an independent appraiser to determine the value of the shares for the transfer to her. The appraiser.determined the value to be $207,919.10.

Ball recognized the potential issues that might arise with any gift of stock to Marilyn that was to the detriment of her two brothers. So Ball went to what the district court described as “extraordinary and careful lengths to determine and document Gladys’s competency to execute the gift.” To that end, Ball wrote a letter to Gladys’s treating physician, Dr. Steven R. Ellison, to determine Gladys’s “testamentary capacity” to make the gift. In the letter, Ball explained to the doctor that Gladys had to have sufficient mental capacity to (1) understand the nature and extent of the instrument she has executed; (2) know and understand the nature and extent of her property; (3) understand the gift she desires to make; and (4) remember the natural.objects of her bounty.

Ed, Sr.’s estate was closed on June 22, 1998. Three days later, Gladys signed a declaration of gift document that transferred all of her shares of stock in Hard-socg to Marilyn. The gift was conditioned upon (1) Gladys receiving $1000 per month from Hardsocg or Marilyn for the remainder of Gladys’s life and (2) payment by Marilyn or Hardsocg of all of Ball’s fees. Gladys1 signed the document in Dr. Ellison’s office. Dr. Ellison also signed the document, stating that the gift' to Marilyn was voluntary and not a result of undue influence. Dr. Ellison however did not thoroughly question Gladys about, or investigate the issues, of undue influence as Ball had requested.

Ball informed the two brothers of the stock transfer after it was made. The record is clear that neither brother knew what was happening until after the transfer was completed.

Shortly thereafter, Ball sent Tammy Huddleston instructions for completing the stock transfer to Marilyn provided that Huddleston believed “Gladys still has sufficient mental capacity and present desire to do so.” On July 17 Gladys transferred the 500 shares of Hardsocg stock to Marilyn. Gladys executed the assignment on the shares of stock with Huddleston signing the assignment as attorney-in-fact. At the time of the transfer, Gladys was just short of her 92nd birthday.

Either on July 21 or July 29 Ball met with Gladys and Marilyn to determine what to do with the remainder of Gladys’s estate. No decision was made on that date. However, later, Ball drafted a trust document dividing the remaining assets among the three children. On August 26 Gladys executed the trust document, which named her as trustee.

Marilyn paid for Ball’s services. His time records show that he spent eighteen hours with Marilyn and seven hours with Gladys.

Hardsocg was generating at least $2500 per month in profit. Because the $1000 per month to Gladys was not enough to meet her needs, assets from the trust were used to supplement Gladys’s care.

On September 29 Marilyn was named durable power of attorney for health care decisions on behalf of Gladys. Ball also prepared this document. On October 29 Gladys executed a codicil to her June 19, 1995 will. In the codicil, Gladys directed the transfer of her assets to the revocable trust and named Ed, Jr. and Marilyn as co-executors. Ball also prepared the codicil.

On May 13, 2001, Gladys was admitted to the hospital because of a bowel obstruction. The hospital records stated the following:

She was kept comfortable with analgesics on a p.r.n. basis. She was not considered to be a surgical candidate as per her previous Advanced Directives and her daughter’s wishes. Her condition continued to slowly deteriorate and she expired on May 21, 2001.

Gladys’s final diagnosis included, among other things, dementia.

Before Gladys died, Marilyn told Roger, who was in the eastern part of the United States on vacation, that there was neither an urgency nor need to return home. Roger later learned from Ed, Jr., whose wife had contacted the hospital, that Gladys was terminal. Marilyn told neither brother of the possibility of surgery to correct the blockage. The brothers did not learn of Marilyn’s recommendation against surgery until after this suit was filed.

Before Gladys died, Marilyn took all of her mother’s jewelry, claiming that Gladys had given the jewelry to her. The gift was made without the approval of Tammy Huddleston as provided by the amended power of attorney. Marilyn neglected to tell her brothers that Gladys had given her the jewelry.

IY. Proceedings.

On July 25, 2001, Ed, Jr. and Roger filed this lawsuit against Marilyn, alleging that the stock transfer was ineffective because of undue influence, misuse of a confidential relationship, and a breach of a fiduciary duty. In her answer, Marilyn denied these allegations. Additionally, she asserted the stock was effectively transferred and that a gift was completed. She admitted she had a fiduciary relationship with Gladys. In a response to a request for admission, Marilyn admitted the existence of a confidential relationship with Gladys to the extent Gladys had granted her a power of attorney.

Following a bench trial, the district court concluded that clear, convincing, and satisfactory evidence established that Marilyn had exerted undue influence over Gladys relative to the stock transfer. The court set aside the transfer, ordered a full accounting to the brothers of all financial transactions occurring since the date of the transfer, and directed that the stock certificates be delivered to the district court clerk pending further order of the court.

Additionally, the court ordered that if Marilyn wished to retain the stock, she had to pay each brother $84,731.26 within sixty days of the ruling. The $84,731.26 represented one-third of the stock value at the time of the transfer. The court entered judgment in favor of each brother for $84,731.26. If Marilyn failed to make such payments, the court ordered the stock sold within six months of the court’s ruling. Proceeds from the sale would be applied to the costs of the action and to the judgments awarded to the two brothers. The balance of the proceeds would be paid to Marilyn.

Marilyn appealed and later applied for a supersedeas bond. The district court stayed the proceedings upon the posting of a supersedeas bond of $211,828.15. Later, Ed, Jr. and Roger, each subsequently filed a satisfaction of judgment stating the judgment “is paid and satisfied in full.”

Ed, Jr. and Roger then moved to dismiss the appeal, contending that Marilyn’s payment of the judgments resulted in her becoming the sole owner of the company, a substantial benefit. Because she received a substantial benefit, the brothers argued that Marilyn waived her right to appeal.

Marilyn resisted the motion, asserting that she made the payments involuntarily to avoid sale of the company’s assets, she could not raise sufficient funds for the supersedeas bond, and she received no benefit by satisfying the judgments. Therefore, she concluded, she did not waive her right to appeal. We ordered the parties to brief and argue the appellate-waiver doctrine with the substantive issues raised on appeal.

V.The Issues.

On appeal, Marilyn raises two issues. First, she contends the district court erred in setting aside the stock transfer on grounds that the transfer was procured by undue influence. Second, she contends that her payment of the judgments in lieu of posting a large and unobtainable super-sedeas bond did not constitute a waiver of her right to appeal. We will consider the waiver issue first and then proceed to the undue influence issue.

VI. The Appellate-Waiver Issue.

Pursuant to the appellate-waiver doctrine, “[o]ne who accepts material and substantial benefits under a judgment or decree may not ordinarily challenge the provisions under which such benefits are awarded.” In re Bruce, 522 N.W.2d 67, 73 (Iowa 1994). To be effective, the waiver must be made voluntarily, intentionally, and with knowledge of the circumstances. Johnson v. Johnson, 301 N.W.2d 750, 752 (Iowa 1981). We have retreated from our strict application of the doctrine in earlier cases because of the potential for harsh results. Id. The burden of proof is on the party claiming waiver to show facts supporting such claim. Id. at 753.

We view the payments here were made under compulsion of court order. According to the order, Marilyn’s failure to make the payments would result in a sale of the company’s assets. In view of the order, we can hardly say that Marilyn “voluntarily” made the payments. Hegtvedt v. Prybil, 223 N.W.2d 186, 188 (Iowa 1974) (“Payment is not voluntary when it is made under compulsion of court order.”).

The motion to dismiss the appeal is denied.

VII. The Undue Influence Issue.

The district court found that clear, convincing, and satisfactory evidence established that a confidential and fiduciary relationship existed between Marilyn and Gladys. As to these relationships, we agree with and adopt the following district court findings:

The evidence establishes by clear, convincing, and satisfactory evidence that a confidential relationship existed between Gladys and Marilyn. Marilyn managed the Hardsocg business interests, in one degree or another, in an increasingly dominant manner, from 1993 to the time of Gladys’s death. In addition, Marilyn either personally took care of or saw that Gladys’s daily physical needs were met. A very close, loving, and confidential relationship existed between Marilyn and Gladys at the time of the gift of Hardsocg on June 25, 1998, and prior thereto.
It is established by clear, convincing, and satisfactory evidence that a fiduciary relationship existed between Gladys and Marilyn. Marilyn held a power of attorney from Gladys since at least June 19, 1995. Clearly, Marilyn was under a duty to act for and advise Gladys pursuant to her duties as attorney-in-fact. Gladys placed her complete confidence in Marilyn and was subject to Marilyn’s domination and influence.

In addition, as mentioned, Marilyn admitted in her answer that she had a fiduciary relationship with Gladys and admitted in a response to a request for admissions that she had a confidential relationship with Gladys.

Our review of the district court ruling convinces us that although the court found that Marilyn breached her fiduciary and confidential relationship with Gladys relative to the stock transfer, the court did not shift the burden of proof to Marilyn. Rather without the benefit of the presumption, the court found that clear, convincing, and satisfactory evidence established that Marilyn exerted undue influence on Gladys regarding the transfer. In making that determination, the court went through the earlier mentioned four factors necessary to establish undue influence. We set out those findings, which we adopt as our own.

A. A person is susceptible to undue influence. As to this factor the court found:

The evidence establishes by clear, convincing, and satisfactory evidence that Gladys was susceptible to undue influence by Marilyn. Gladys, born July 24, 1906, was 91 years of age at the time of the gift of Hardsocg stock on June 25, 1998. Gladys had been diagnosed with primary degenerative dementia, senile onset, by psychiatrist Ronald R. Berges, D.O., on October 8,1996. A diagnosis of dementia with delirium, primary and degenerative, was made by Dr. Macalalad, M.D. in October of 1996. Although Gladys was a strong-willed and opinionated woman, she was clearly susceptible to undue influence by Marilyn.

Several witnesses, including her attending physician Dr. Ellison, testified that Gladys was a strong-willed and opinionated person. These same witnesses testified that Gladys was mentally competent. From their testimony, it appears that Gladys was a very nice and decent person who had opinions about what she wanted to do. She was also described as high average in intelligence. She received her teaching certificate from Drake University.

Notwithstanding this evidence, the medical records we have mentioned and the medical opinions the district court referred to leave no doubt in our minds that Gladys’s mental and physical condition was weakened during the critical period of time leading up to the transfer of the stock to Marilyn. By the time of Ed, Sr.’s death, all three children questioned Gladys’s ability to serve as executor of her husband’s estate. The children even discussed the idea of a guardianship for Gladys because of her health problems. Because of her weakened condition, Gladys was readily subject to influence. Such a condition “has a direct bearing on the issue of undue influence.” Herm, 284 N.W.2d at 200; see also Monahan v. Roderick, 183 Iowa 1, 6, 166 N.W. 725, 727 (1918) (“Conduct which might be insufficient to unduly influence a person of mental strength might be sufficient to so operate upon a failing mind”).

Moreover, Dr. Ellison did not adequately question Gladys to determine her “testamentary” capacity to make the transfer and whether she was making the transfer because of Marilyn’s undue influence over her. Additionally, the testamentary standard that Ball instructed the doctor to use was inadequate for purposes of the transfer. A higher degree of mental competency is required for transactions of ordinary business than is necessary for testamentary disposition of property. Costello v. Costello, 186 N.W.2d 651, 654-55 (Iowa 1971).

B. There is opportunity to exercise undue influence and a disposition to influence. Relative to these two factors, the district court found:

Marilyn had the opportunity to exercise undue influence over Gladys. Marilyn returned to Ottumwa, Iowa in 1993 and lived there continuously through the date of Gladys’s death on May 21, 2001. Gladys’s other two children, Ed and Roger, lived in West Des Moines and Huntington Beach, California, respectively, and were not in as frequent contact with Gladys in her later years. Marilyn is to be commended for her loving care of Gladys in Gladys’s declining years. Ironically, that very care also carried with it the opportunity for Marilyn to exercise undue influence over Gladys. Marilyn had a disposition to unduly influence Gladys for the purpose of procuring the gift of the Hardsocg stock. As noted, Marilyn started the legal work on the stock transfer through attorney Vern Ball in November of 1997, while a co-executor with Ed, concerning Mr. Mendenhall’s Estate. Three days after Mr. Mendenhall’s Estate was closed on June 22,1998, Gladys executed the declaration of gift of Hardsocg stock to Marilyn. The Court does not conclude that Marilyn’s only intent concerning Gladys was to unduly influence her for the purpose of obtaining the gift of Hardsocg stock. Marilyn clearly loved and eared for her mother and spent countless hours providing for her welfare. Even so, Marilyn clearly influenced Gladys as concerns the gift of Hardsocg stock.

There is other evidence bearing on these two factors. For example, Gladys had executed a will in June 1995 that left her property in equal shares to her three children. Shortly after Ed, Sr. died Gladys talked about dividing her estate equally among her three children. Ball testified that at his first meeting with Gladys in December 1997 Gladys wanted Marilyn to have the company, but as far as her whole estate was concerned she wanted “to treat her boys ... evenly.” Ball was concerned about the issue of undue influence because he was aware Marilyn was in a confidential or fiduciary relationship with Gladys. It was that concern that prompted Ball to have Gladys’s family physician examine Gladys and attest that Gladys was competent and that the transfer of the Hardsocg stock was not the result of undue influence.

Thereafter, Ball met with Gladys on February 12, April 21, and the latter part of July 1998. At the February 12 and April 21 meetings, Gladys was still considering transferring the stock to Marilyn but dividing her entire estate evenly among her three children.

The July meeting took place after the transfer of stock to Marilyn. Ball tape-recorded that meeting. It is clear from the recording that Gladys was unsure on how to divide the balance of her estate. One month later, Gladys executed a trust in which she was the trustee and in which she divided her remaining assets among her three children. Marilyn would therefore receive in value approximately half of the estate by virtue of the stock transfer and one-third of the balance of the estate by virtue of the trust. In total, Marilyn stood to receive two-thirds of Gladys’s estate. See Miller v. Doan, 233 Iowa 315, 317, 6 N.W.2d 318, 320 (1942) (“If there is some direct or substantive evidence of undue influence, the fact that the last will differs from a previous one, that it is unnatural or inequitable, may be considered as tending to show the influence operated on the mind of the testator.”).

From all of this evidence, we find that Marilyn was on a mission to make sure that her mother transferred the Hardsocg stock to her. Her intention was clearly apparent from the telephone conversation that took place among the mother and three children shortly after Ed, Sr. died. In that conversation, Marilyn proposed taking the Hardsocg stock as her third of Gladys’s estate. One month later Marilyn hired Ball and together they not only accomplished this mission but more: Rather than ending up with one-third of Gladys’s estate, Marilyn stood to end up with two-thirds.

Ball was not Gladys’s attorney; rather he was Marilyn’s attorney. Marilyn hired him and paid him. This leads to another disturbing fact. No one saw fit to have Gladys seek proper independent advice of her own choosing. In addition, Marilyn and Ball did not inform the brothers of the transfer until after it was completed, thereby depriving Gladys of the brothers’ advice.

Proper independent advice in these circumstances means “showing that the donor had the benefit of conferring fully and privately upon the subject of his intended gift with a person who was not only competent to inform him correctly as to its legal effect, but who was furthermore so disassociated from the interests of the do-nee as to be in a position to advise with the donor impartially and confidently as to the consequences to himself of his proposed benefaction.” Merritt, 226 Iowa at 528, 284 N.W. at 404 (citation omitted); see also Luse v. Grenko, 251 Iowa 211, 219, 100 N.W.2d 170, 175 (1959) (holding that independent advice to the transferor is an important consideration where there is a confidential relation between grantor and grantee who is in position of dominance; no showing that siblings were made aware of plan to make defendant joint payee of mother’s bank account and bonds); McGaffee, 244 Iowa at 887, 56 N.W.2d at 39-40 (grantor’s lack of independent advice material on question of undue influence by grantee in suit by grantor against grantee for cancellation of instruments assigning grantor’s businesses to grantee). A lack of independent advice is sometimes sufficient in and of itself to set aside conveyances and contracts executed under such circumstances. Marrón, 235 Iowa at 113, 16 N.W.2d at 17.

Clearly, the transfer was materially beneficial to Marilyn while at the same time materially disadvantageous to Gladys. The company was earning $20,000 per year, all of which would go to Gladys absent the stock transfer. The stock transfer limited Gladys’s access to the company’s income to just $12,000 per year. Gladys was giving up at least $8,000 per year to help with her living expenses. As it turned out, $12,000 per year was not enough to meet Gladys’s needs; assets from the trust were used to supplement her care.

C. Result must clearly appear to be the effect of undue influence. As to this last factor, the district court found:

The result (gift of Hardsocg stock) clearly appears to be the effect of undue influence by Marilyn over Gladys. The timing of the gift as noted above, the fact that her brothers Ed and Roger were not advised of the gift ahead of time, the extraordinary lengths that attorney Vern Ball went to establish Gladys’s competency at the time of the gift, and much of the other evidence produced in this case established the undue influence by Marilyn over Gladys.

To this we add some additional evidence. Apparently, Gladys had the notion that if she transferred the stock to Marilyn, Marilyn would keep her out of a nursing home. Marilyn knew this, and we are satisfied she used this knowledge to her advantage to convince Gladys to transfer the stock to her.

In sum, four significant factors that this court has said bear on the question of undue influence are present here: weakened mental condition of the grantor, relationship of the grantor and the grantee, inequality of distribution, and activity of the grantee. See Wilson, 240 Iowa at 33, 34 N.W.2d at 915. To this we add the stealthy way in which the transfer was made, that is, concealing the transfer from the brothers until after it was completed. See Telsrow v. Telsrow, 237 Iowa 672, 680-81, 22 N.W.2d 792, 798 (1946). We are satisfied the evidence clearly, convincingly, and satisfactorily establishes that Marilyn exerted undue influence over Gladys concerning the stock transfer. The decision to make the transfer was not Gladys’s but Marilyn’s.

VIII. Disposition.

Although we agree with the district court, we think its judgment should be modified as follows. Because Marilyn has paid for the stock and now owns it, we think the accounting the district court ordered should conclude with the date Marilyn paid for the stock. If the clerk of the district court of Wapello County has not already done so, the clerk shall release the stock to Marilyn. With those modifications, we affirm the judgment of the district court and remand the case to that court for further proceedings consistent with this opinion.

AFFIRMED AS MODIFIED AND CASE REMANDED WITH DIRECTIONS.

All justices concur except WIGGINS, J., who takes no part.


source: Caselaw Access Project

author: LARSON, Justice.

license: Public Domain

text:
    In the Matter of the ESTATE OF Philip T. KELLY, Deceased, David C. Bauer, Executor of the Estate of Philip T. Kelly, Appellant, v. Robert H. Forrester, Appellee.
    No. 02-1578.
    Supreme Court of Iowa.
    Nov. 13, 2003.

      James M. Heckmann of James M. Heek-mann Law Offices, P.C., Dubuque, for appellant.
    Thomas C. Verhulst of Gallagher, Lang-las, Gallagher, P.C., Waterloo, for appellee.
   LARSON, Justice.

The executor of the estate of Philip Kelly challenges the district court’s denial of his motion for summary judgment against a claimant in the estate. The claimant, Robert Forrester, challenges the court’s failure to grant his cross-motion for summary judgment. We affirm the denial of the estate’s motion for summary judgment and remand for entry of a judgment in favor of the claimant.

I. Facts and Prior Proceedings.

Forrester sued Philip Kelly in a federal district court in Connecticut. During the pendency of the suit, Kelly died, and For-rester successfully moved under federal procedure to substitute Kelly’s executor as defendant. At the conclusion of the case, Forrester was awarded a judgment for $1,603,194.47. Forrester attempted to collect the judgment by filing a claim in Kelly’s estate, which was pending in Iowa. The estate denied the claim and filed a motion for summary judgment on the ground the claim was untimely. Forrester filed a cross-motion for summary judgment asking the court to order the estate to pay the judgment. The court denied the estate’s motion for summary judgment, but did not rule on Forrester’s cross-motion.

Forrester requested the court to rule on his cross-motion by filing a motion to expand under Iowa Rule of Civil Procedure 1.904. The estate resisted that motion on the ground the estate had appealed the court’s order, thereby depriving the district court of jurisdiction. The court entered an order denying “all pending motions,” presumably including Forrester’s motion to expand the earlier ruling. For-rester did not seek a remand to allow the district court to rule on the cross-motion. Apparently, the district court still has not ruled on the cross-motion. This places the appeal in an interesting procedural posture because the case was not finally resolved in district court — an issue we address later.

II. The Issue.

The only issue in this case is whether Forrester’s claim in the Iowa estate was timely. Under Iowa Code section 633.415 (1997),

[a]ny action pending against the decedent at the time of the decedent’s death that survives, shall also be considered a claim filed against the estate if notice of substitution is served upon the personal representative as defendant within the time provided for filing claims in section 633.410....

(Emphasis added.) The “time provided for filing claims” referred to in this section, Iowa Code 633.410, provides:

All claims against a decedent’s estate ... are forever barred against the .estate ... unless filed with the clerk within the later to occur of four months after the date of the second publication of the notice to creditors or, as to each claimant whose identity is reasonably ascertainable, one month after service of notice by ordinary mail to the claimant’s last known address.

The estate’s second notice to creditors was published on December 18, 1997. The estate mailed notice to Forrester on February 2, 1998. Iowa Code section 633.410 requires claims to be filed within the later of four months after the date of the second publication of the notice to creditors (which was April 19, 1998) or one month after service by ordinary mail to the claimant’s last known address (which was March 2, 1998). Forrester filed his claim in the Dubuque County estate on April 10, 1998, which was well before the April 19, 1998 expiration of the claims period.

The executor, however, makes an interesting argument: the claim was not timely because section 633.415 requires it to be “served upon the personal representative as defendant within the [claims period].” (Emphasis added.) The executor’s argument is that the probate claim served on April 10, 1998, could not have been served on the executor “as defendant” under section 633.415 because the executor was not yet a defendant in the federal ease. (Substitution in the federal case was ordered on April 19,1998.)

In making this argument, the executor has confused his status as a “defendant” in section 633.415 with his status as a defendant in the prior federal suit. He was a defendant in the federal case because the federal court ordered it. He was a defendant, for claims purposes, under section 633.415 because our statutes require that the executor be named as the defendant in a probate' claim. The two concepts have no connection. Under Iowa probate procedure, all claims against an estate are to be filed against the personal representative as “defendant.” Iowa Code section 633.420, applying to all estates, provides:

All claims filed against the estate shall he entitled in the name of the claimant against the personal representative as such, naming the estate, and in all further proceedings thereon that title shall be preserved.

(Emphasis added.) While section 633.420 does not state the personal representative is to be named as a “defendant,” our cases have interpreted that statute to require it. See, e.g., Voorhies & Co. v. Eubank, 6 Iowa 274, 278 (1858) (personal representative to be named as defendant); see also In re Estate of Steinberg, 443 N.W.2d 711, 714 (Iowa 1989) (personal representative, not estate, to be named as defendant; however, naming. estate, as defendant not fatal error); Wise v. Outtrim, 139 Iowa 192, 199, 117 N.W. 264, 267 (1908) (same).

Voorhies explained why the personal representative, not the estate, is named as the defendant in a probate claim. If an estate is named as defendant, it is thought this leads to confusion about who takes responsibility on behalf of the estate. Also, at least in early years, an adjudication could not be entered against an artificial entity such as an estate. See Voor-hies, 6 Iowa at 278.

The executrix, and not “the estate ...,” should have been the defendant in the suit. No judgment or adjudication could have been made against “the estate” as defendant, as against a natural person. It is a confusion of terms, as well as of ideas, to adopt such a form of expression. This confusion is most notably exemplified in the present record. A judgment is rendered in the county court, against “The Estate...” as defendant, and the executrix takes an appeal to the district court. In that court, the proceeding is carried on against “the estate...,” as defendant; but judgment is rendered against [the]... executrix..., and “The Estate ...” takes the appeal to this court. As the parties have taken no exception to this form of entry and proceeding, in the district court, but have permitted it to pass unquestioned, we have perhaps gone aside in making this much comment upon it. We take occasion, however, while the subject is up, to express our strong disapprobation of the practice of making up the records of the county and district courts, in such carelessness and confusion.

Id.

We believe the same rationale underlies the requirement in section 638.415 that the executor be named as defendant. We reject the executor’s argument that the timing of his substitution as defendant in the federal case controls. In fact, the executor’s lack of status as a defendant in the federal case when the probate claim was filed is irrelevant in applying section 633.415. Service of the probate claim was timely.

III. Disposition.

We affirm the district court’s denial of the estate’s motion for summary judgment. The only issue raised by either party is whether Forrester’s claim was timely under section 633.415. We have concluded as a matter of law that it was. This leaves the question of how to resolve the case in view of the apparent lack of finality in the district court’s order. Our conclusion that the notice of claim was timely disposes of the issues raised by both parties. Our holding on that point would be binding as the law of the case on any remand that might be ordered by us for the purpose of allowing the district court to enter a final ruling. See Ahls v. Sherwood/Div. of Harsco Corp., 473 N.W.2d 619, 623 (Iowa 1991) (applying principles of pragmatic finality). There are, therefore, no remaining issues to be tried on remand. In view of our disposition, it is unnecessary to address Forrester’s claim that the issue has been resolved in his favor, under res judicata principles, by the federal court’s actions.

We affirm the district court’s denial of the estate’s motion for summary judgment and remand for entry of an order granting Forrester’s cross-motion for summary judgment.

AFFIRMED AND REMANDED.

All justices concur except WIGGINS, J., who takes no part.


author: TERNUS, Justice.

text:
    In re the NAME CHANGE OF Logan Jon REINDL, a Minor Child. Jessica Lynn Benjegerdes, Appellant, v. Joshua Reindl, Appellee.
    No. 02-1322.
    Supreme Court of Iowa.
    Nov. 13, 2003.

      Michael G. Byrne of Winston & Byrne, P.C., Mason City, for appellant.
    Douglas Krull, Northwood, for appellee.
   TERNUS, Justice.

The appellant, Jessica Benjegerdes, appeals the district court’s denial of her request to change the surname of her minor child, Logan Reindl. The trial court refused to order the name change because the biological father of the child, appellee, Joshua Reindl, objected. Because we conclude that Joshua’s consent is not required under Iowa Code section 674.6 (2001), we reverse.

I. Background Facts and Proceedings.

Jessica Benjegerdes and Joshua Reindl are the natural parents of Logan Reindl, born on December 18, 2000. Jessica and Joshua have never been married. Consequently, at the time of Logan’s birth, only Jessica was named on the birth certificate as Logan’s parent. Pursuant to Iowa Code section 144.13(3), Jessica was prohibited from naming Logan’s father on the certificate because there had not been a determination of paternity under Iowa Code section 252A.3.

At the time of Logan’s birth, Jessica harbored the hope that she and Joshua would marry. Consequently, she gave Logan his father’s last name. Although Jessica, Joshua, and Logan lived together with Joshua’s parents for a few months after Logan’s birth, the couple eventually separated. Jessica has provided for Logan’s support since that time. Until a few months before the name-change petition was filed, Joshua provided some assistance by buying baby formula, baby food, and diapers.

In June 2002 Jessica filed a petition for change of name, seeking to have Logan’s last name changed from “Reindl” to “Ben-jegerdes.” She stated in her petition that a name change was in Logan’s best interest because he resided with his mother “and having a different last name will cause difficulty for the child in social relationships and development.” At the hearing subsequently held on her petition, Jessica testified that she grew up with a name different from other family members in her household and “it was hard” to answer questions from outsiders about “whose child [she was].” She did not want her son to suffer through the “social confusion” caused by having a last name different from her last name.

Although Jessica acknowledged in her petition that Joshua was Logan’s father, she attached a copy of Logan’s birth certificate showing that Joshua was not named as the child’s father on the certificate. She asserted, therefore, that Joshua’s consent was not required, relying on Iowa Code section 674.6. That statute provides:

If the petition [for name change] includes or is filed on behalf of a minor child under fourteen, both parents as stated on the birth certificate of the minor child shall file their written consent to the name change. If one of the parents does not consent to the name change, a hearing shall be set on the petition on twenty days’ notice to the nonconsenting parent pursuant to the rules of civil procedure. At the hearing the court may waive the requirement of consent as to one of the parties if it finds:
1. That the parent has abandoned the child;
2. That the parent has been ordered to contribute to the support of the child or to financially aid in the child’s birth and has failed to do so without good cause; or
3. That the parent does not object to the name change after having been given due and proper notice.

Iowa Code § 674.6 (emphasis added).

Notwithstanding her contention that Joshua’s consent was unnecessary, Jessica served him with the petition. Joshua answered, resisting the name change. He claimed that to the best of his knowledge he was named as the father on Logan’s birth certificate, and if he was not named on the birth certificate, it was due to the actions of Jessica. At the hearing on the petition Joshua testified that he had asked Jessica to include him on Logan’s birth certificate but she had informed him that it was his responsibility to accomplish this. He acknowledged that he had never investigated what he needed to do, nor taken any other steps to have his name recorded on the birth certificate as Logan’s father, even after having received notice of the name-change petition.

In the trial court’s subsequent ruling, the court rejected Jessica’s assertion that Joshua’s consent was not required under section 674.6. The court stated it disagreed with “this strict interpretation” because it contradicted the “general intent” of section 674.6 that there be a hearing if one parent does not consent to determine whether the requirement for that parent’s consent should be waived. The court then considered whether any of the circumstances listed in section 674.6 as a basis for waiving consent existed. Finding they did not, the court denied the petition for name change based on Joshua’s objection.

Jessica filed a notice of appeal, which brings the matter before our court. We review this equity case de novo. See In re the Name Change of Quirk, 504 N.W.2d 879, 881 (Iowa 1993); In re Name of Staros, 280 N.W.2d 409, 410 (Iowa 1979).

II. Discussion.

The only issue on appeal is whether the district court correctly interpreted section 674.6 in requiring Joshua’s consent to the name change notwithstanding he was not named on the birth certificate as Logan’s father. We apply well-established rules of statutory construction in deciding this issue:

Our ultimate goal in interpreting statutes is to discover the true intention of the legislature. In searching for legislative intent, we consider not only the language- of the statute, but also its subject matter, the object sought to be accomplished, the purpose to be served, underlying policies, remedies provided, and the consequences for various interpretations ....
We do not search for meaning beyond the express terms of a statute when the statute is plain and its meaning is clear. We resort to rules of statutory construction only when the explicit terms of a statute are ambiguous. “A statute is ambiguous if reasonable minds could differ or be uncertain as to the meaning of the statute.”

State v. Albrecht, 657 N.W.2d 474, 479 (Iowa 2003) (citations omitted). As these rules indicate, this court must apply the law as it was written by the legislature and so we adhere to the rule that we are guided “by what the legislature said, rather than what it should or might have said.” Consol. Freightways Corp. v. Nicholas, 258 Iowa 115, 124, 137 N.W.2d 900, 906 (1965).

With these principles in mind, we have no difficulty in concluding that Joshua’s consent to Logan’s name change was not necessary under section 674.6. The legislature specifically limited the required consent to “parents as stated on the birth certificate.” To allow parents who are not named on the birth certificate to object would be tantamount to reading the language, “as stated on the birth certificate,” out of the statute. See Am. Legion v. Cedar Rapids Bd. of Review, 646 N.W.2d 433, 439 (Iowa 2002) (stating court will not interpret a statute in a way that makes any portion of it superfluous).

Moreover, we think limiting parental consent to parents listed on the birth certificate is consistent with the summary nature of a name change proceeding. Chapter 674 anticipates that ordinarily a name change will be granted without hearing any time after thirty days from the filing of the petition. See Iowa Code § 674.4. To inject paternity disputes into this process changes the nature and complexity of the entire proceeding. In addition, the only hearing contemplated under chapter 674 is one to determine whether the requirement of parental consent should be waived. See id. § 674.6. There is no similar provision for a hearing to determine paternity.

Although the trial court concluded it was contradictory to provide for a hearing to determine whether the consent requirement should be waived for one of the parents and yet conclude that the objection of the child’s acknowledged parent was inconsequential, we find no incongruity in this statutory scheme. The legislature may well have believed that a father who had not made the effort to be listed on the birth certificate, thereby avoiding responsibility for the financial support of his child, should not be allowed to play a role in choosing the child’s name. Similarly, the legislature may have thought that a parent who has abandoned his child or failed to pay ordered support likewise has no right to participate in naming the child even though he is listed on the child’s birth certifícate. Parents in these two situations are actually quite similar in that neither has shouldered the responsibility of being a parent so as to earn the rights associated with that position. Thus, the legislature’s decision to limit the necessity of consent to those parents listed on the birth certificate is very consistent with the overall approach taken by the legislature in defining the rights of parents under this statute. We conclude, therefore, that only the consent of parents who are named on the child’s birth certifícate is needed to change the child’s name.

III. Conclusion and Disposition.

Joshua’s consent to the requested name change was not required under section 674.6 because he was not recorded as Logan’s father on Logan’s birth certificate. The district court erred in ruling otherwise.

In view of this conclusion, we reverse the district court’s ruling and remand this case for entry of an order granting the requested name change.

REVERSED AND REMANDED WITH DIRECTIONS.

All justices concur except WIGGINS, J., who takes no part.

      . Iowa Code section 144.13(3) provides in pertinent part:
      If the mother was not ’married at the time of conception, birth, and at anytime during the period between conception and birth, the name of the father shall not be entered on the certificate of birth, unless a determination of paternity has been made pursuant to section 252A.3, in which case the name of the father as established shall be entered by the department [of public health]. Section 252A.3 sets forth four alternative methods for establishing paternity. See Iowa Code § 252A.3(8). Once one of these alternatives has been satisfied, the father’s name can be added to the birth certificate by the department of health. See id. § 144.13(3). The establishment of paternity also has the consequence of making the father "severally liable for the support of the child.” Id. § 252A.3(8).


author: CADY, Justice.

text:
    IOWA SUPREME COURT BOARD OF PROFESSIONAL ETHICS AND CONDUCT, Complainant, v. Thomas P. FRERICHS, Respondent.
    No. 03-1030.
    Supreme Court of Iowa.
    Nov. 13, 2003.

      Norman G. Bastemeyer and Charles L. Harrington, Des Moines, for complainant.
    Clemens A. Erdahl, Cedar Rapids, for respondent.
   CADY, Justice.

The Iowa Supreme Court Board of Professional Ethics and Conduct charged Thomas P. Frerichs with numerous violations of the Iowa Code of Professional Responsibility for Lawyers stemming from an attorney fee contract in a criminal case and his conduct in representing a client in a business transaction, as well as his dealings with the Board in responding to notice of the complaints. The Grievance Commission of the Supreme Court of Iowa found that Frerichs violated the Code of Professional Responsibility as charged by the Board. It recommended Frerichs receive a public reprimand. On our review, we find Frerichs violated the Code of Professional Responsibility and impose an indefinite suspension of not less than four months.

I. Background Facts and Proceedings.

Thomas Frerichs is a lawyer in Waterloo. He was admitted to the practice of law in Iowa in 1990. He primarily engages in trial work, mostly involving criminal cases and civil rights litigation. He is a legal liaison for the NAACP and handles many cases each year on a pro bono basis. He was privately admonished in 1999 for failing to provide an accounting of a retainer fee from a client.

The evidence presented at the hearing before the Commission centered on the conduct of Frerichs in two separate cases. In one matter, Frerichs entered into a written attorney fee contract with Alice Smith on March 8, 2000. Smith’s son had been charged with drug and firearms crimes in two counties, and Smith agreed to pay his legal fees. The contract provided for a minimum fee of $10,000, with a $20,000 retainer. One-half of the retainer was due upon execution of the contract, and the remaining portion of the retainer was due ten days later. The $10,000 minimum fee was deemed earned under the terms of the contract upon execution of the agreement. The contract provided:

The minimum fee is based upon the time, skill involved, the experience, reputation and ability of the lawyers, how this case may impact on other cases that cannot be taken because of time commitments required herein, time limitations imposed by the client or the case itself and other proper factors. It is not the desire of the attorney to impact the Client’s absolute right to freely discharge Client’s attorney or to in anyway impede client[’]s rights to discharge attorney. ... Although client will receive credit against the minimum fee based upon rates of $150.00 [per hour] for Thomas P. Frerichs ... a minimum fee will be deemed earned upon execution of this contract.

Smith paid the $20,000 retainer required under the contract, in addition to an earlier retainer of $1500.

Frerichs and his firm performed work in both criminal cases, which were ultimately resolved by plea bargains. The cases were completed in June and August 2000. Smith’s son was sentenced to a term of incarceration. Frerichs did not return any portion of the retainers to Smith. He also did not provide an accounting.

Smith died on March 2, 2001. On March 29, a trustee of a living trust Smith had established telephoned Frerichs’ office to inquire about the retainer and to request an accounting. Frerichs did not return the telephone call. The trustee made numerous other attempts to contact Fre-richs and obtain an accounting during the following months, but was unsuccessful. The trustee eventually hired a lawyer, who wrote Frerichs and demanded he provide an accounting by October 19, 2001. When Frerichs failed to meet the deadline, the attorney prepared a petition for a court-ordered accounting.

On November 14, 2001, prior to the time the petition was filed, Frerichs provided an accounting. He also returned the unearned portion of the retainer of approximately $11,000, with a check written on his office account.

After the trustee filed a complaint with the Board, the Board sent Frerichs a notice of the complaint by restricted certified mail. After Frerichs failed to claim the notice, the Board personally served him with the notice. This notice informed Fre-richs he was required to respond to the Board. Frerichs failed to respond to this notice, as well as a second notice that informed him that the failure to respond was a violation of the ethics code.

The evidence concerning the second complaint against Frerichs arose out of his representation of an individual named Kurtis Meredith. In January 2000, Meredith hired Frerichs to set up a not-for-profit corporation. Meredith owned an education consulting business and sought the nonprofit status to enhance the company’s eligibility for grants. Meredith delivered a variety of papers to Frerichs to enable him to perform his legal work. Frerichs assured Meredith he could complete the work by June, as Meredith requested.

Frerichs failed to complete the work and was unable to locate and return the papers Meredith had delivered to him when requested. Over a period of several months, Frerichs repeatedly failed to return telephone calls from Meredith and failed to meet with him concerning the status of his legal work. Meredith’s business lost revenue due to Frerichs’ failure to perform his services in a timely manner.

In December 2000, the Board sent Fre-richs notice of a complaint filed by Meredith. Frerichs failed to respond. He eventually filed a response after the Board sent him two additional notices.

Frerichs did not contest the core facts presented at the hearing concerning the two complaints. He testified, however, that he originally placed the second $10,000 retainer from Smith into his trust account and later mistakenly transferred it into his general account. He placed the first $10,000 retainer into his general account because he considered it to be earned when he received it under the contract.

Frerichs further testified that he learned he had cancer in March 2001, re-suiting in two surgeries and treatment. Frerichs also suffered from depression and anxiety. He has been placed on medication and his prognosis is good.

II. Board Complaint.

The Board charged Frerichs with numerous violations of the rules of professional responsibility. In the first count of the petition, it claimed Frerichs violated Code of Professional Responsibility Disciplinary Rule (DR) 1 — 102(A)(4), (5), and (6) (conduct involving dishonesty, deceit, or misrepresentation, conduct prejudicial to the administration of justice, and conduct reflecting adversely on one’s fitness to practice law); DR 2-106(A) (charging a clearly excessive fee); DR 9-102(A) (failure to place client funds in a trust account); DR 9-102(B)(3) and (4) (failure to provide accounting and failure to properly return funds to client); and DR 9-103(A) (failure to maintain records to show compliance with DR 9-102). In the second count of the petition, the Board charged Frerichs violated DR 1-102(A)(5) and (6); DR 6-101(A)(3) (neglect of client matter); DR 7-101(A) (failure to seek client’s lawful objectives and failure to carry out employment); and DR 9-102(B)(3) and (4). The Board also claimed Frerichs violated DR 1-102(A)(5) and (6) by failing to cooperate with its investigation.

The Commission found the Board established the violations as set forth in the complaint and recommended a public reprimand.

III. Scope of Review.

“We review attorney disciplinary proceedings de novo.” Iowa Supreme Ct Bd. of Prof l Ethics & Conduct v. Bernard, 653 N.W.2d 373, 375 (Iowa 2002). “We are not bound by the findings of the Commission, but give them weight.” Id.

IV.Violations.

We begin by considering the ethical considerations of a minimum fee contract. We have previously held that it is unethical for a lawyer to enter into a fee contract providing for a nonrefundable advance fee unless the advance fee constitutes a general retainer. See Iowa Supreme Ct. Bd. of Prof l Ethics & Conduct v. Apland, 577 N.W.2d 50, 58 (Iowa 1998). Thus, contracts providing for nonrefundable special retainers and nonrefundable “flat” fees are void as well as unethical. Id.; see Iowa Code of Prof 1 Responsibility DR 2-106(A). All advance fee payments other than general retainer fees are refundable, despite contractual language to the contrary, and must be placed in a client trust account. Apland, 577 N.W.2d at 55-56. Furthermore, these fees may not be withdrawn until earned. See id. at 56. A lawyer misappropriates client funds in violation of DR 1-102(A)(3), (4), (5), and (6) when special retainers and flat fees paid in advance are treated as money belonging to the lawyer and not maintained in a trust account until the fee has been earned. See id. at 55-56.

These principles gleaned from Ap-land tell us that whether Frerichs’ conduct surrounding the fee charged in this case was unethical hinges on the nature of the advance fee he received. Thus, we must consider the type of fee at issue in this case.

In Apland, we observed that advance fees could be categorized as general retainers or special retainers. Id. at 54-55. A general retainer is money paid to an attorney in return for making legal services available as needed during a specific period of time. Id. at 54. It is the nature of an option contract that the client may exercise, and provides compensation to the attorney for agreeing to make legal services available and for foregoing the opportunity to be hired by the client’s adversary or other potential clients based on a conflict of interest. See id. at 57. Under general contract analysis, the general retainer fee is earned when paid because the payment is given in consideration for the lawyer’s availability, not as compensation for other services. See Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers Revisited, 72 N.C. L. Rev. 1, 25 (1993). Thus, the attorney is entitled to the money even if no services are actually performed for the client. Apland, 577 N.W.2d at 54. This means the lawyer has no obligation to later refund the money. Moreover, the attorney is entitled to retain the fee even if discharged by the client. Brickman & Cunningham, 72 N.C. L. Rev. at 25.

In contrast, a special retainer is money paid to an attorney in advance of performing a specific service. Apland, 577 N.W.2d at 55. Under this arrangement, the attorney typically withdraws money pursuant to an agreed hourly fee from the advance funds as legal services are rendered. See id. However, the advance funds can also consist of a fixed or flat fee, representing the total compensation for all the work to be done in the case. Id. Nevertheless, the fee advanced under either arrangement is considered to be a special retainer. Id. at 56. As opposed to general retainers, special retainers represent money that still belongs to the client after it is paid to an attorney and must be deposited in a client trust account. Id. at 55-56. Analytically, the advance fee is earned once the service is performed, and is either paid over time or after the service is completed. If the fee arrangement provides for the fee to be drawn from the retainer amount as services are performed, any unearned amount of the retainer must be returned to the client. If the retainer was a fixed or flat fee under the contract, it is still possible the retainer, or a portion of the retainer, would need to be refunded to the client in the event the attorney-client relationship is terminated before the services are rendered. Therefore, under both advance and flat fee arrangements, the special retainer must be placed in a client trust account. Otherwise, the client’s right to discharge an attorney at any time would be undermined because clients would be reluctant to exercise the right if an advance fee was nonrefundable. See id. at 57. A nonrefundable retainer would also undermine the fiduciary nature of an attorney-client relationship. Id.; Brickman & Cunningham, 72 N.C. L. Rev. at 8-12.

We recognized in Apland that the distinction between general and special retainers can be less than clear, and some retainers can be in the nature of a hybrid between the two. Apland, 577 N.W.2d at 57. In considering where the line will be drawn and how hybrid arrangements will be treated, we do not rely upon contract terminology, but will scrutinize the agreements with the presumption that the advance fee was a special retainer and was not given for attorney availability that justifies a general retainer. Id.

The contract in this case specifically provided that the $10,000 minimum fee reeog-nized that the attorney may be required to forego taking other cases due to the time commitment required by the case, as well as the time limitations the case would impose on the lawyer. It further provided that the minimum fee was not intended to impede the client’s right to terminate the attorney-client relationship at any time.

Although this contract language mentioned factors characteristic of a general retainer, it was clearly insufficient to overcome the presumption of a special retainer. The contract addressed availability, but not in the manner used to justify a general retainer. The stated elements of compensation for the nonrefundable minimum fee in the contract included both the time limitations imposed on the lawyer by the case, as well as how the time commitments of the case would inhibit the ability of the lawyer to accept cases from other clients. However, availability in this context amounted to nothing more than the ethical obligation imposed on all lawyers when they agree to provide legal services to a client. Brickman & Cunningham, 72 N.C. L. Rev. at 24. A lawyer who agrees to perform legal services also necessarily agrees to be available to perform those services. Id. Thus, this type of availability is unrelated to the type of availability of a general retainer and is insufficient to justify a nonrefundable minimum fee. Id. at 24-27. Moreover, informing a client that the imposition of a minimum fee is not intended to alter their Ghent’s right to freely discharge the attorney does not lessen the penalty imposed for exercising the right, or alleviate the inconsistency between a nonrefundable advance fee and the trust-based aspect of the absolute right to discharge an attorney. See Apland, 577 N.W.2d at 57.

In practice, we believe it would be very difficult to properly characterize a nonrefundable advance minimum fee to represent a client in a specific case as a general retainer. See Brickman & Cunningham, 72 N.C. L. Rev. at 25-26. As a special retainer, the advance fee must be placed in a client trust account and withdrawn only for completed services. We emphasize that this is an area of the law that is subject to overreaching, and it is critical for lawyers to comply with the rules of ethics and scrupulously maintain the trust and confidence of the attorney-client relationship.

We conclude Frerichs entered into an illegal fee agreement in violation of DR 2-106(A). He also failed to place the advance fee in a trust account and misappropriated client funds in the process in violation of DR 9-102(A) and-DR 1-102(A)(4). The evidence also supports a finding that Frerichs failed to account for and properly deliver client funds in violation of DR 9-102(B) and DR 9-103(A). Frerichs violated these disciplinary rules when he stonewalled efforts by the trustee to obtain an accounting.

Regarding the representation of Meredith, we conclude Frerichs neglected client matters and failed to properly safeguard client property in violation of DR 6-101(A)(3), DR 7-101(A), and DR 9-102(B). Such conduct also reflects adversely on the fitness of an attorney to practice law. See DR 1-102(A)(6). Frerichs also compounded matters in both complaints by failing to cooperate with the Board investigation in violation of DR 1-102(A)(5) and (6). We turn to consider the discipline to impose.

Y. Discipline.

Our general principles governing attorney discipline have been recited in prior decisions. See Iowa Supreme Ct. Bd. of Prof l Ethics & Conduct v. Walters, 646 N.W.2d 111, 113-14 (Iowa 2002). Along with these considerations, personal circumstances such as depression and health problems are also considered. See Iowa Supreme Ct. Bd. of Profl Ethics & Conduct v. Grotewold, 642 N.W.2d 288, 295 (Iowa 2002); Comm, on Profl Ethics & Conduct v. Robinson, 458 N.W.2d 393, 394 (Iowa 1990). We also give consideration to the recommendations of the Commission. Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Adams, 623 N.W.2d 815, 818 (Iowa 2001). Additionally, we do not overlook an attorney’s devoted service to the profession. See Comm, on Profl Ethics & Conduct v. Conzett, 476 N.W.2d 43, 45-46 (Iowa 1991). Yet, in the end, the discipline imposed in each case is based on its own facts, viewed in light of our recognized factors and considerations. Bernard, 653 N.W.2d at 376.

The circumstances in this case involve three basic categories of unethical behavior: charging an unethical and illegal fee, neglect, and failure to cooperate with the Board. The neglect embraces trust account violations, failure to complete client work, and failure to safeguard client property. Considering we explained how advance fee payments must be handled two years prior to the time Frerichs entered into the illegal contract, his conduct in charging an illegal fee constitutes a serious breach of professional ethics. See Apland, 577 N.W.2d at 60 (fee violation considered less serious because attorney was without advance court guidance).

Although each case is viewed individually, we recently considered a disciplinary case that bears some resemblance to this case. See Adams, 623 N.W.2d 815. In Adams, we determined that unethical conduct involving neglect of a client matter, failure to deposit a retainer and advances into a trust account, failure to account for client property, and misrepresentations to a client to cover up neglect, warranted a three-month suspension, particularly in light of a prior reprimand, notwithstanding evidence that the attorney was suffering from depression. Id. at 818-19. Although Adams had received a prior reprimand, while Frerichs’ prior proceeding resulted in an admonition, both prior actions concerned some of the same conduct involved in the more recent actions. See id. at 819; see also Iowa Supreme Ct. Bd. of Profl Ethics & Conduct v. Lemanski, 606 N.W.2d 11, 14 (Iowa 2000) (prior private admonition considered in imposing sanctions); Comm, on Prof'l Ethics & Conduct v. Liles, 430 N.W.2d 111, 113 (Iowa 1988) (admonitions are a less severe disposition than reprimands).

In many ways, the ethical violations committed by Frerichs were more serious than those documented in the Adams case. Unlike Adams, the unethical conduct in this case included an illegal or unethical fee arrangement and involved two separate clients who were harmed in two different ways by the conduct. Moreover, Frerichs repeatedly failed to cooperate with the disciplinary process in two separate cases.

In view of all the relevant factors and the aggravating and mitigating circumstances, we conclude that Frerichs should be indefinitely suspended from the practice of law in this state with no possibility for reinstatement for four months. This suspension applies to all facets of the practice of law. Iowa Ct. R. 35.12(3). Upon application for reinstatement Frerichs shall have the burden to prove that he has not practiced law during the period of suspension and that he meets all the requirements of Iowa Court Rule 35.13. Costs of this action shall be taxed to Fre-richs pursuant to rule 35.25(1).

LICENSE SUSPENDED.

All justices concur except WIGGINS, J., who takes no part.

      . It is also possible that a portion of a lump sum "flat” fee in a criminal case would need to be refunded as excessive. Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers Revisited, 72 N.C. L. Rev. 1, 31-32 n. 121 (1993). Lump sum fee arrangements in criminal cases can not only give rise to the same ethical concerns as nonrefundable advance fees, but can also present other conflicts founded in attorney overreaching and other conduct contrary to effective representation. Id. at 31-32. A criminal defense lawyer must be careful to ensure that the lump sum fee does not suggest self-interest or overreaching.


text:
    L. David WILSON, Appellant, v. GOOD WILL PUBLISHERS and Cincinnati Companies, Appellees.
    No. 00-2066.
    Supreme Court of Iowa.
    Nov. 13, 2003.
    William D. Scherle and Aaron T. Oliver of Hansen, McClintock & Riley, Des Moines, for appellant.
    David L. Jenkins of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellees.
   LARSON, Justice.

David Wilson suffered a heart attack while on a road trip for his employer, Good Will Publishers, Inc. Believing his heart attack arose out of his employment, Wilson filed a claim against Good Will for workers’ compensation benefits. The industrial commissioner and the district court denied benefits. The court of appeals reversed, concluding that Wilson had proved a sufficient nexus to his job to recover benefits. We vacate the decision of the court of appeals and affirm the judgment of the district court.

I. Facts and Prior Proceedings.

David Wilson worked as a sales trainer for Good Will, traveling across the country from his home in Tabor, Iowa. Good Will publishes “Judeo-Christian material,” sponsored by private advertisers and distributed primarily through hospitals and doctors’ offices. Wilson left home on the afternoon of Sunday, April 16, 1995, to meet a trainee in Dexter, Missouri, at 8 a.m. the next day. He planned to travel partway, sleep for a few hours, and resume the trip. He drove as far as Columbia, Missouri, where he rented a motel room. He awoke between 1 and 2 a.m. with what he thought was indigestion, the result of having eaten a “nice Easter meal with his family” on the day he left Tabor. Apparently unable to sleep any longer, Wilson left the motel, stopping for antacids on the way to Dexter. Immediately after he checked into a motel in Dexter, he sought medical attention. At a local clinic, a nurse diagnosed a possible heart attack, and he was transported to a hospital in Poplar Bluff, Missouri. He was then flown to St. Louis, where he ultimately had open-heart surgery. Wilson had a history of “significant underlying coronary artery disease,” largely due to his heavy cigarette smoking.

Following his surgery, Wilson filed this claim for workers’ compensation benefits. Good Will resisted on the ground it was not an injury that arose out of and in the course of his employment. A deputy workers’ compensation commissioner denied benefits on the ground the claimant failed to establish his work was the legal or medical cause of his heart attack, as required by our cases. This decision was affirmed by the commissioner. The district court affirmed the denial of benefits but substituted its own findings for those of the agency as to the question of legal causation: whether Wilson was “impelled to continue” worldng after experiencing the first symptoms of a heart attack. The district court nevertheless affirmed the commissioner on the ground the claimant did not show medical causation.

The court of appeals reversed on the basis that Wilson produced substantial evidence on both legal and medical causation and remanded to the commissioner to determine benefits.

II. Legal Principles.

Heart attack eases may be compensated under Iowa’s workers’ compensation statute under special rules adopted by this court. The parties agree that a claimant must prove both “legal” and “medical” causation. Riley v. Oscar Mayer Foods Corp., 532 N.W.2d 489, 492 (Iowa App. 1995) (citing Briar Cliff College v. Campolo, 360 N.W.2d 91, 94-95 (Iowa 1984); Sondag v. Ferris Hardware, 220 N.W.2d 903, 905-06 (Iowa 1974)).

We review rulings by the commissioner under Iowa Code chapter 17A. See Iowa Code § 86.26 (2001); Cargill, Inc. v. Conley, 620 N.W.2d 496, 500 (Iowa 2000). Review by the district court, and by this court, is limited to correction of legal errors. Second Injury Fund v. Shank, 516 N.W.2d 808, 812 (Iowa 1994). The findings of the commissioner are treated like jury verdicts, and we construe them broadly to uphold the commissioner’s decision. Id.

Although a claimant must establish both legal and medical causation, we limit our discussion to the legal-causation issue because the claimant’s failure to establish that element determines the outcome. Legal causation may be shown when (1) heavy exertions ordinarily required by the job are superimposed on a defective heart, aggravating or accelerating the previous condition; (2) unusually strenuous employment exertion is superimposed on a preexisting diseased condition; or (3) damage results from continued exertion required by the employment after the onset of the heart attack symptoms. Sondag, 220 N.W.2d at 905-06.

While Wilson relied in his initial claim on all three bases of legal causation under Sondag, his judicial review petition and this appeal are limited to the third: continued exertion required by his employment after the onset of symptoms. Specifically, he relies on this language from Sondag:

“The most obvious relevance of this [third] element (continuing exertion after symptoms) is in showing causal connection between the obligations of the employment and the final injury; for if the workman, for some reason, feels impelled to continue with his duties when, but for these duties, he could and would have gone somewhere to lie down at once, the causal contribution of the employment to the aggravation of the condition is clear.”

220 N.W.2d at 906 (emphasis added) (quoting 1A Arthur Larson, Larson’s Workmen’s Compensation Law § 38.64(c), at 7-145). In Riley, 532 N.W.2d at 493, we described this motivation as being “driven to work.” Wilson contends he was impelled to continue traveling in order to reach his destination in Dexter to continue training Good Will’s new representative. This objective, according to Wilson, was so important it was his primary focus, motivated by this language in Good Will’s training manual:

ABOVE ALL ... REMEMBER!
During your new reps first four (4) weeks of his training, he and his family must be the most important thing in your life.
You have a responsibility to this newest member of the Good Will Family. He and his entire family will be looking to you to teach and lead them to a successful future.
DON’T LET THEM DOWN!

Wilson stated that he continued driving to Dexter to meet his trainee because

[y]ou have a schedule. The training manual tells you that these people are more important than your own family. You have a sense of obligation, a sense of urgency. It’s almost like putting a guilt trip on you, and I took the situation at hand, I followed the company procedure. ...

Wilson agreed, however, that he did not feel that he would have lost his job or been disciplined if he stopped to seek medical attention.

The commissioner rejected Wilson’s “impelled to continue” argument:

Contrary to claimant’s contentions, there is no evidence in the record to support a finding that defendant employer required claimant to continue working after his initial symptoms began. The claimant was free to seek medical attention whenever he felt ill. Claimant was not under orders to continue working after his symptoms began ....
The evidence does not support a conclusion that the claimant was required to keep working. There is no doubt that the claimant is a conscientious worker who wanted to do the best by defendant employer. However, that in and of itself does not establish that the employer demanded or expected claimant to continue working when experiencing a medical condition or medical discomfort or symptoms requiring medical attention.

Wilson’s own statements support the commissioner’s finding that he was free to seek medical attention whenever he felt ill. Wilson believed, at least until he reached Dexter, that he only had indigestion. When he arrived there and realized his condition might be more serious than that, he immediately suspended his work and sought medical help.

While the language of the commissioner’s findings did not use the ‘.‘impelled to continue” language of Sondag, the gist of the findings is clear: because Wilson was free to seek medical attention without employment restraints, he did not meet the Sondag test. We will construe the commissioner’s findings broadly to support his conclusion, i.e., that Wilson failed to meet the third legal-causation test of Sondag. See Shank, 516 N.W.2d at 812 (court to apply broadly commissioner’s findings to support its decision).

The district court substituted its fact-finding for that of the industrial commissioner on this issue, finding that Wilson was impelled to continue working. We conclude this was error; a district court is not free to substitute its findings of fact for that of the commissioner if the commissioner’s findings are supported by substantial evidence. However, the district court denied benefits on the ground the claimant had failed to establish medical causation. We therefore affirm its decision, although on a different ground.

While the parties argue about whether the claimant had established medical causation, we need not address that issue because a claimant must establish both legal and medical causation. Riley, 532 N.W.2d at 492. This claim must fail for lack of proof of legal causation. We also decline to address the parties’ argument on appeal about whether the “impelled to continue” standard of Sondag is judged on a subjective or objective basis because the court of appeals, not the parties, interjected that issue. It was therefore waived.

We vacate the decision of the court of appeals and affirm the judgment of the district court.

DECISION OF COURT OF APPEALS VACATED; JUDGMENT OF DISTRICT COURT AFFIRMED.

All justices concur except WIGGINS, J., who takes no part.

      . Although Sondag and the parties to this appeal refer to the three bases for legal causation as "elements,” suggesting they are jointly necessary conditions, they are actually individually sufficient bases for finding legal causation.