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Percival v. Bankers Trust Co.
Citations: 450 N.W.2d 860; 1990 Iowa Sup. LEXIS 14; 1990 WL 5286Docket: 89-94
Court: Supreme Court of Iowa; January 24, 1990; Iowa; State Supreme Court
An appeal was made by Michael Percival, Patricia Shors, Mary Brennan, Jeani Prior, and Peter Percival against Bankers Trust Company and Lydia Ann Percival regarding a district court's order that dismissed their case for lack of personal jurisdiction. The Supreme Court of Iowa reversed this decision and remanded for further proceedings. Under Iowa Rule of Civil Procedure 104(a), the court addressed challenges to personal jurisdiction, requiring allegations in the petition and uncontroverted affidavits to be accepted as true. The plaintiffs must establish a prima facie case for jurisdiction, after which the burden shifts to the defendant to provide rebuttal evidence. The court's findings of fact are upheld unless unsupported by substantial evidence, while legal conclusions are not binding.
The case involved the plaintiffs, children of the deceased Wright C. Percival, who were contesting a trust agreement established by their father. The trust was initially meant to provide alimony to his first wife, with provisions for distribution to the children if she remarried or predeceased him. After the first wife remarried, Wright amended the trust in 1977, designating his then-current wife as the beneficiary upon his death, or otherwise the children equally. The jurisdictional issue centered on whether Iowa courts could exercise personal jurisdiction over Lydia Ann Percival, a California resident, consistent with due process, as there were no statutory barriers to jurisdiction.
Alice died, and in April 1984, Wright married Lydia Percival. He subsequently amended an insurance trust to name Lydia as the sole beneficiary, with provisions for his children in the event of her earlier death. Prior to marrying Lydia, Wright created another revocable trust in California, intended to benefit his children upon his death, which he amended five times during his marriage. The final amendment limited each child's share to $5,000, with the remainder allocated to Lydia.
Wright died in November 1987, and his children (plaintiffs) alleged that Lydia unduly influenced him, manipulating his weakened condition due to strokes and near-blindness to coerce him into amending the trusts in her favor. They sought to invalidate the second amendment to the insurance trust, enforce the original trust, and have the assets distributed equally among themselves.
In response, Lydia filed a motion to dismiss, arguing lack of personal jurisdiction in Iowa, stating her residency in California and minimal contact with Iowa. The district court agreed, concluding that Lydia's actions did not establish sufficient contacts with Iowa to warrant jurisdiction and that her influence was directed primarily at Wright, not the plaintiffs. The court noted that the plaintiffs characterized their case incorrectly as in personam, whereas it should be viewed as a declaratory judgment concerning the trust's distribution. The plaintiffs appealed this ruling.
The excerpt references the U.S. Supreme Court's ruling in **Shaffer v. Heitner**, establishing that jurisdiction over a property ("in rem") is fundamentally linked to jurisdiction over persons with interests in that property. Courts must apply the "minimum contacts" standard from **International Shoe** to assess jurisdiction over nonresident defendants. In cases involving property disputes, particularly trusts, the state where the property is located generally has jurisdiction, as it has a vested interest in resolving disputes about property within its borders.
In this case, Lydia Percival is the sole beneficiary of a trust governed by Iowa law, with its assets held by an Iowa trustee, signifying Iowa's strong interest in the trust's administration. Despite Percival's limited contacts with Iowa, the quality of her affiliation as a beneficiary of an Iowa trust justifies jurisdiction. The district court's ruling dismissing the case is deemed erroneous and must be reversed, with the case remanded for proceedings against both defendants. The court notes ambiguity in the district court's dismissal of Bankers Trust, suggesting it may have intended a limited dismissal. All justices concur except Justice Lavorato, who abstains from participation.