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20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville SCHEDULE – WEDNESDAY, OCTOBER 30 8:00 - 8:30 AM – Registration 8:30 - 9:00 – Healthcare Speaker: Mark Hudson 9:00 - 9:30 – Collection Law 101 Speaker: Christopher Pech 9:30 – 10:30 - Ethics Speaker: Trinity Braun-Arana 10:30 – 10:45 - Break 10:45 - 11:45 – Divorce 101 Speaker: Caitlin Slessor 11:45 – 12:30 – Lunch (not provided with registration) LITIGATION TRACK 12:30 – 1:30 - ADR Speaker: David Baker 1:30 – 2:30 – Juvenile Law 101 Speaker: Ellen Ramsey-Kacena 2:30 – 3:30 – Work Comp 101 Speaker: Tim Semelroth 3:30 – 4:15 – Dos and Don'ts for Indigent Defense Attorneys Speaker: Sam Langholz 4:15 – 4:30 - Break 4:30 – 5:00 – Post-Conviction Relief Speaker: Brian Farrell TRANSACTIONAL TRACK 12:30 – 1:30 – Business Formation Speaker: David Bright 1:30 – 2:45 – Real Estate Speaker: Matt Hektoen 2:45 – 3:45 – Estate Planning Speaker: Janice Kerkove 3:45 – 4:00 - Break 4:00 – 5:00 – Intellectual Property Speaker: Ryan Carter Stand Out from the Crowd with ARAG®.

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20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

Healthcare Reform

8:30 a.m.-9:00 a.m.

Presented by Mark Hudson Shuttleworth & Ingersoll PLC 115 Third St SE, Suite 500 Cedar Rapids, Iowa 52406 Phone: 319-365-9461

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 Health Care Reform—Update Mark Hudson, [email protected] 10/29/2013

Health Care Reform—Update Mark Hudson, [email protected]

The contents of this update are intended for general informational purposes only and should not be construed as legal advice. Readers are urged not to act upon the information contained in this publication without first consulting an attorney.

Outline

• Delay—what does it mean? • Trends • Exchanges • Responsibility of Individuals • Penalties (Individuals; Employers)

1 10/29/2013

Pay or Play—Delayed until 2014

• Surprise! • Asst. Sec. for Tax Policy at the U.S. Treasury Department Mark Mazur stated, “We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so. We have listened to your feedback. And we are taking action.”

Pay or Play—Delayed until 2014

• “We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015.”

Pay or Play—Delayed until 2014

• Many ACA provisions were not delayed. – A ban on annual dollar limits on essential benefits – A 90-day limit on eligibility waiting periods – New out-of-pocket limits maximum – Elimination of preexisting conditions exclusions for adults – Coverage of clinical trial participant costs

2 10/29/2013

Pay or Play—Delayed until 2014

• Many ACA provisions were not delayed. – Still have recommended preventative care, including contraceptive services for women with no cost-sharing – Employers still required to provide written notices about government-run exchanges to each employee and all new hires by 10/1/13

Marketplace Notice

• Who? Any company that employs one or more employees and is engaged in interstate commerce with annual business of not less than $500,000 • To whom? Each part- or full-time employee, regardless of enrollment or eligibility to participate status,

Marketplace Notice

• What: – Information regarding the existence of the marketplace, a description of the services provided by the marketplace and how the employee may contact the marketplace to request assistance – Information that the employee may be eligible for a premium tax credit if the employee purchases qualified health benefits through the marketplace: An employee will be eligible for a premium tax credit if either coverage under the employer's plan does not satisfy the "minimum value" standard set by the ACA, or the cost of employee- only coverage under the employer's plan exceeds 9.5 percent of the employee's household income.

3 10/29/2013

Marketplace Notice

• What: – A statement that if the employee purchases qualified health benefits through the marketplace, the employee may lose any employer contribution to any health benefits plan offered by the employer, as well as the ability to exclude employer and employee contributions from his or her income; in other words, while employer coverage may be provided on a pretax basis, coverage purchased through the marketplace is paid for on an after-tax basis.

Pay or Play—Delayed until 2014

• Important things to consider: – Still need to meet the minimum value requirement for 2014 plan year because that information is required for your summary of benefits and coverage provided in connection with coverage beginning on or after Jan. 1, 2014.

Trends

• What is going on? – Confusion – Are we shifting to a part-time employment society? – Family coverage?

4 10/29/2013

Trends--Resources

• Lawyer Caveat: We did not create the calculators or other resources listed in the following page and thus, do not guarantee their accuracy or validity. Use them at your own risk and understand that health care reform changes daily. Likewise, it is unwise to solely rely upon a single resource for all healthcare reform compliance. Moreover, the tools listed hereafter are just that tools that should be used in conjunction with your legal counsel, accountant, insurance broker, or other adviser.

Trends--Resources

• Subsidy Calculator: http://kff.org/interactive/subsidy-calculator/ • The calculator was created by the Kaiser Family Foundation, a non-profit research organization, for use by the general public. The Kaiser Family Foundation is solely responsible for the tool. • S&I does not warrant or guarantee the accuracy of estimates provided by the calculator.

Trends--Resources

• Actuarial Value Calculator: http://tiny.cc/ACCaculator • The calculator was created by CMS, for use by the general public. CMS is solely responsible for the tool. • S&I does not warrant or guarantee the accuracy of estimates provided by the calculator.

5 10/29/2013

Trends--Resources

• Minimum Value Calculator: http://tiny.cc/MVCalculator • The calculator was created by CMS, for use by the general public. CMS is solely responsible for the tool. • S&I does not warrant or guarantee the accuracy of estimates provided by the calculator.

Trends--Resources

• Employer Penalty Calculator: http://tiny.cc/EmployerPenalty • The calculator was created by the International Franchise Association, for use by the general public. IFA is solely responsible for the tool. • S&I does not warrant or guarantee the accuracy of estimates provided by the calculator.

Trends--Resources

• DOL Self-Compliance Tool: http://www.dol.gov/ebsa/pdf/part7-2.pdf

• Employers with up to 50 employees: http://www.sba.gov/content/employers-with-up-to-50- employees

• Employers with fewer than 25 employees: http://www.sba.gov/content/employers-with-fewer-25- employees

6 10/29/2013

Trends--Resources

• Employers under 50 employees: https://www.healthcare.gov/blog/a-new-way-to-shop- for-small-business-coverage-and-get- help/?utm_medium=email&utm_source=govdelivery& utm_campaign=hcgov_SHOPQuestions&utm_conten t=08_07_13 • Employers with 50 or more employees: http://www.sba.gov/content/employers-with-50-or- more-employees • Self-employed: http://www.sba.gov/content/self-employed

Exchanges

•Iowa – CoOportunity Health – Gunderson Health Plan – Avera Health Plans – Health Alliance Midwest – Sanford Health – Coventry Health Care of Iowa

Exchanges

• CoOportunity Health • Will provide statewide individual insurance coverage • Plans to offer statewide small group plans too • Gunderson – Will provide both individual and small group plans in specific regions • Avera – Will offer both individual and small group plans in specific regions

7 10/29/2013

Exchanges

• Sanford Health • Will offer small group plans only • Health Alliance Midwest – Will offer small group plans only • Coventry – Plans to offer statewide coverage for individuals health care coverage – Coventry has pulled out of three other states’ exchanges this week; however, spokesman said his company currently intends to compete on Iowa’s exchange

Exchanges

• Coventry • If Coventry declines to participate, the only carrier offering individual policies on a statewide basis would be CoOportunity Health. • However, don’t forget two groups plan regional offerings. Lt. Gov. Reynolds, in a recent DM Register article, commented that the regions would be northeast and northwest Iowa. How that is defined is unknown.

Exchanges

• Dental Plans (Stand alone) • Guardian Life Insurance Company of America • Dentegra Insurance Company • Delta Dental Plan of Iowa • BEST Life and Health Insurance Company

8 10/29/2013

Exchanges--Prices

• Unknown right now • What do we know? • Dominant health insurer, Wellmark Blue Cross & Blue Shield will not participate in 2014 • However, Wellmark Blue Cross & Blue Shield stated it intends to join in 2015 • Unknown effect of delay of employer’s pay or play provisions

Individual Responsibility

• Must buy health insurance unless one of the following applies: – You are part of a religion opposed to acceptance of benefits from a health insurance policy. – You are an undocumented immigrant. – You are incarcerated. – You are a member of an Indian tribe. – Your family income is below the threshold for filing a tax return ($10,000 for an individual, $20,000 for a family in 2013). – You have to pay more than 8% of your income for health insurance, after taking into account any employer contributions or tax credits.

Individual Responsibility

• Requirement to have health insurance is satisfied if: – You were insured for the whole year through a combination of any of the following sources: • Medicare. • Medicaid or the Children’s Health Insurance Program (CHIP). • TRICARE (for service members, retirees, and their families). • The veteran’s health program. • A plan offered by an employer. • Insurance bought on your own that is at least at the Bronze level. • A grandfathered health plan in existence before the health reform law was enacted.

9 10/29/2013

Penalties

• Individual •Employer

Penalties--Individual

• If you are required to have health insurance and fail to do so, the penalties are as follows: – 2014 Penalty is $95 per adult and $47.50 per child (up to $285 for a family) or 1.0% of family income, whichever is greater. – 2015 Penalty is $325 per adult and $162.50 per child (up to $975 for a family) or 2.0% of family income, whichever is greater. – 2016 and Beyond Penalty is $695 per adult and $347.50 per child (up to $2,085 for a family) or 2.5% of family income, whichever is greater.

Penalties--Individual

• Income is defined as total income in excess of the filing threshold ($10,000 for an individual and $20,000 for a family in 2013). The penalty is prorated by the number of months without coverage, though there is no penalty for a single gap in coverage of less than 3 months in a year. The penalty cannot be greater than the national average premium for Bronze coverage in an Exchange. After 2016 penalty amounts are increased annually by the cost of living.

10 10/29/2013

Penalties--Employer

• Employer with greater than or equal to 50 FTEs that fails to offer coverage or offers coverage that does not meet minimum coverage or is not affordable (cost for single coverage exceeds 9.5% of family income) – No coverage=$2000 X # of full-time employees (minus 30) – Coverage, but not minimum or not affordable: the lesser of: $3000 per individual who obtains subsidy from Exchange or $2000 per FTE (minus 30)

Thank you!

Mark Hudson [email protected]

11 The contents of this update are intended for general informational purposes only and should not be construed as legal advice. Readers are urged not to act upon the information contained in this publication without first consulting an attorney. Outline

• Delay—what does it mean? • Trends • Exchanges • Responsibility of Individuals • Penalties (Individuals; Employers) Pay or Play—Delayed until 2014

• What is going on? – Confusion – Are we shifting to a part-time employment society? – Family coverage? Trends--Resources

• DOL Self-Compliance Tool: http://www.dol.gov/ebsa/pdf/part7-2.pdf

• Employers with up to 50 employees: http://www.sba.gov/content/employers-with-up-to-50- employees

• Employers with fewer than 25 employees: http://www.sba.gov/content/employers-with-fewer-25- employees Trends--Resources

•Iowa – CoOportunity Health – Gunderson Health Plan – Avera Health Plans – Health Alliance Midwest – Sanford Health – Coventry Health Care of Iowa Exchanges

• CoOportunity Health • Will provide statewide individual insurance coverage • Plans to offer statewide small group plans too • Gunderson – Will provide both individual and small group plans in specific regions •Avera – Will offer both individual and small group plans in specific regions Exchanges

• Dental Plans (Stand alone) • Guardian Life Insurance Company of America • Dentegra Insurance Company • Delta Dental Plan of Iowa • BEST Life and Health Insurance Company Exchanges--Prices

• Individual •Employer Penalties--Individual

Thank you!

Mark Hudson [email protected] 20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

Collection 101

9:00 a.m.-9:30 a.m.

Presented by Christopher E. Pech Pech, Hughes & McDonald P.C. With Offices in Iowa, Missouri and Nebraska PH: 319-362-3000

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 CHRISTOPHER E. PECH President Pech, Hughes & McDonald, P.C. Established 1997

Christopher Pech is the principal of Pech, Hughes & McDonald, P.C. headquartered in Cedar Rapids, Iowa with offices in Missouri and Nebraska. The practice is devoted exclusively to collections. Pech has a decade of experience with collections and the Fair Debt Collection Practices Act.

Pech graduated from the University of Montana with a BS in Financial Management, from St. Ambrose University with a Master of Business Administration and received his Juris Doctorate from the University of Iowa College of Law. He is licensed to practice law in the State of Iowa and Missouri.

Pech is a member of ACA International, the National Association of Retail Collection Attorneys (NARCA), the State Bar of Missouri, and the Iowa State Bar Association. He has been the past president of the Iowa Creditors Bar Association.

Pech has been a frequent lecturer collection issues. He has also served on the Board of Directors for the Federal Employees Credit Union served as a Planning and Zoning Commissioner, City of Coralville, Iowa.

Collection Law

 Pre-Lawsuit Strategies

o Are you a debt Collector

o Determining Whether a Debtor is Worth Pursuing

o Locating and Notifying the Debtor

o The Effective Demand Process: Getting the Debtor's Attention

 How to Find Debtors and Their Assets

o How to Locate Debtors

o How to Discover Assets

 Filing a Lawsuit and Obtaining a Judgment

o Where to File the Lawsuit

o Construction the Petition

o Procedures and Documents to File

o Being Prepared for Debtor Defenses, Default Judgments and Counterclaims

 Collecting a Judgment

o Post-Judgment Discovery

o Judgment Liens

o Wage and Bank Account Garnishment

o Debtor Exemptions

o Dealing with Fraudulent Transfers

 Creditors' Rights when a Debtor Files for Bankruptcy

o The Automatic Stay

o Preference Payments

Pre-Lawsuit Strategies Are you a debt Collector?

15 USC § 1692 – otherwise known as the FDCPA controls the collection of debts by debt collectors.

Heintz v. Jenkins (94-367), 514 U.S. 291 (1995) The Act must be read to apply to lawyers engaged in consumer debt-collection litigation for two rather strong reasons. First, a lawyer who regularly tries to obtain payment of consumer debts through legal proceedings meets the Act's definition of "debt collector"; one who "regularly collects or attempts to collect, directly or indirectly, [consumer] debts owed ... another," 15 U. S. C. § 1692a(6). Second, although an earlier version of that definition expressly excluded "any attorney-at law collecting a debt as an attorney on behalf of and in the name of a client," Congress repealed this exemption in 1986 without creating a narrower, litigation-related, exemption to fill the void. Heintz's arguments for nonetheless inferring the latter type of exemption-(l) that many of the Act's requirements, if applied directly to litigation activities, will create harmfully anomalous results that Congress could not have intended; (2) that a postenactment statement by one of the 1986 repeal's sponsors demonstrates that, despite the removal of the earlier blanket exemption, the Act still does not apply to lawyers' litigating activities; and (3) that a nonbinding "Commentary" by the Federal Trade Commission's staff establishes that attorneys engaged in sending dunning letters and other traditional debt-collection activities are covered by the Act, while those whose practice is limited to legal activities are notare unconvincing. Pp.294-299.

Are you required to comply with HIPPA.

See 78 FR 5565 for Updates regarding the All HIPAA covered entities (CE) must comply with the Security Rule. In general, the standards, requirements, and implementation specifications of the Security Rule apply to the following covered entities: healthcare providers, health plans and healthcare clearinghouses.

When acting as a business associate (BA)(e.g.,billing provider,collection agency) of a CE, the BA must protect the EPHI it creates, receives, maintains or transmits on the CE’s behalf. BAs are required to comply with the Security Rule’s requirements in much the same way as the CE, pursuant to the Health Information Technology for Economic and Clinical Health Act (HITECH Act). The specific provisions that apply to BAs under the Security Rule are provided under 45 C.F.R. §§164.308, 164.310, 164.312, and 164.316. Determining Whether a Debtor is Worth Pursuing Using Credit Reports

Pintos v. Pacific Creditors Association (9th Cir 2007) 504 F.3d 792 Ninth Circuit Court of Appeals held that a collection agency does not have a permissible purpose under the Fair Credit Reporting Act to obtain a credit report to collect a debt if the consumer did not voluntarily initiate the underlying transaction by seeking credit. Pintos v. Pacific Creditors Ass'n, 504 F.3d 792 (9th Cir. 2007) opinion withdrawn and superseded, 565 F.3d 1106 (9th Cir. 2009) opinion amended and superseded on denial of reh'g, 605 F.3d 665 (9th Cir. 2010). As a result examples of Debt Collection activities in which a credit report would likely be improper. Subrogation claims, Bad Check Cases, Medical Debt?? Locating and Notifying the Debtor

State Specific Laws A number of states require commercial debt collectors to be licensed and/or follow the same collection laws and regulations as consumer debt collectors. Generally, states that require commercial collectors to obtain a license to collect debt also require commercial collectors to comply with state debt collection laws. The Effective Demand Process: Getting the Debtor's Attention Circle Back to Are you a debt collector. Under § 809(a) [15 U.S.C. 1692g (a)], a debt collector must provide a consumer with notice of certain rights afforded to the consumer under the Fair Debt Collection Practices Act (FDCPA). The Federal Trade Commission (FTC) staff and courts have stated that if the debt collector’s first communication with the consumer is oral (e.g., a telephone conversation), the debt collector may make the required disclosure at that time and the debt collector need not send a written notice. If such disclosure is made orally, the collector must be able to document that such disclosure was provided, should the collector ever be asked to prove the disclosure was, in fact, made. If the notice is not included in the initial communication with the consumer, the notification must be provided in writing within five days after the initial communication with the consumer. Contents of Notice The required validation notice must include the following information:

(1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector ; (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of the judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and (5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor Iowa Code 537.5110 CURE OF DEFAULT.

537.5110 (7) If a creditor in a consumer credit transaction commences an action for money judgment prior to giving the customer notice of right to cure as required by this section and fails to follow the procedures set out in this section, the court shall dismiss the action without prejudice

How to Find Debtors and Their Assets How to Locate Debtors 1) Most Effective – A Creditor with personal knowledge 2) Large Scale – TLO http://www.tlo.com, Lexis Nexis http://www.lexisnexis.com/en-us/products/public-records.page SmartLinx

Asset Discovery Methods 1) Simple Tools - http://www.iowaassessors.com/ 2) Bigger Scale Tools - Transunion Collections Prioritization Engine 3) Most effective – A Creditor with knowledge of the Debtor.

Filing a Lawsuit and Obtaining a Judgments Where to File the Lawsuit

Choice of Venue Clause in Contracts. Generally available for commercial claims but Creditors cannot take advantage of consumer debtor by filing lawsuits in any county but where the consumer resides.

Mueller v. Midwest Collection Services (Iowa District Court 1989). Debtors were sued in Marshall County, often far away from their home counties, and fees were added in excess of those allowed by law; in settlement, over 1,500 people had their debts wiped out.

Constructing the Petition Account Stated, Contract Enforcement, Note, Oral Agreement Doctrine of Necessities The reasonable and necessary expenses of the family and the education of the children are chargeable on the property of both husband and wife, or either of them, and they may be sued jointly or separately. Iowa Code Ann. § 597.14

Interest runs from the time money becomes due and payable; interest generally will not run until the claim is liquidated or is certain and known. Ezzone v. Riccardi, 525 N.W.2d 388, 1994 Iowa Sup. LEXIS 210 (Iowa 1994), amended by 525 N.W.2d 403, 1994 Iowa Sup. LEXIS 263 (Iowa 1994).

Procedures and Documents to File Iowa Code 537.5110 and 537.5111 NOTICE OF RIGHT TO CURE

537.5114 Complaint — proof. 1. In an action brought by a creditor against a consumer arising from a consumer credit transaction, the complaint shall allege the facts of the consumer’s default, the amount to which the creditor is entitled, and an indication of how that amount was determined. 2. No default judgment shall be entered in the action in favor of the creditor unless the complaint is verified by the creditor, or unless sworn testimony, by affidavit or otherwise, is adduced showing that the creditor is entitled to the relief demanded.

Being Prepared for Debtor Defenses, Default Judgments and Counterclaims Different causes of action have different requirements of proof.

ITT Financial Services v. Zimmerman, 464 N.W.2d 486 (Iowa App.,1990). A creditor must list in a small claims petition the facts of a default, the amount of money the creditor is entitled to, and how the amount was determined; in obtaining a default judgment, the creditor must include a verified statement and how the amount claimed was calculated. Monetary Protestors Various Theories why money is not real. Fun Stuff.

The “No Money Lent” argument was used by debtors in the case of Alcorn and Allen v. Washington Mutual Bank, F.A., 2003 Tex. App. Lexis 5656, (Texas Court of Appeals, 6th District). In its decision, the court stated, “Alcorn and Allen take the position that, when they executed and delivered the home equity note to Long Beach Mortgage Company, the note did not evidence a debt from them to the mortgage company, but instead ‘created’ money belonging to them that they do not owe to anyone. This is a legally erroneous concept ... .” Internet scams frequently cite Federal Reserve publications entitled, “Modern Money Mechanics” and “The Two Faces of Debt.”3 Both articles were published by the Chicago branch of the Federal Reserve Bank years ago and are no longer in publication. Internet scams reach ridiculous conclusions from these publications by misinterpreting the articles and ignoring other relevant laws.

Internet scams often rephrase the “No Money Lent” argument by stating there was no consideration given by the credit grantor to create a contract. The argument is that if only credit was lent to the debtor via the debtor’s promissory note, then the credit grantor did not risk any of its own funds and there was no consideration to form a contract. The absurdity of the no consideration argument is obvious. Federal law defines a loan and extension of credit as all direct or indirect advances of funds to a person made on the basis of any obligation of that person to repay the funds.4 The fact a creditor lent credit and not money directly to the consumer does not affect the liability of the debtor. By paying merchants for purchases made by a cardholder, creditors provide the necessary consideration to create an enforceable contract.

Collecting a Judgments Post-Judgment Discovery

630.1 DEBTOR EXAMINED. When execution against the property of a judgment debtor, or one of several debtors in the same judgment, has been issued from the district court or an appellate court to the sheriff of the county where such debtor resides, or if the debtor does not reside in the state, to the sheriff of the county where the judgment was rendered, and execution issued thereon is returned unsatisfied in whole or in part, the owner of the judgment is entitled to an order for the appearance and examination of the debtor. 630.5 WITNESSES EXAMINED. Witnesses may be required by order of the court or by subpoenas from the referee, to appear and testify upon any proceedings under this chapter, in the same manner as upon the trial of an issue. 630.11 DEBTOR FAILING TO APPEAR -- CONTEMPT. Should the judgment debtor fail to appear after being personally served with notice to that effect, or should the debtor fail to make full answers to all proper interrogatories propounded to the debtor, the debtor will be guilty of contempt, and may be arrested and imprisoned until the debtor complies with the requirements of the law in this respect. If any person, party, or witness disobey an order of the court, judge, or referee, duly served, such person, party, or witness may be punished as for contempt.

Judgment Liens 624.23 LIENS OF JUDGMENTS -- REAL ESTATE -- HOMESTEADS -- SUPPORT JUDGMENTS. 1. Judgments in the appellate or district courts of this state, or in the circuit or district court of the United States within the state, are liens upon the real estate owned by the defendant at the time of such rendition, and also upon all the defendant may subsequently acquire, for the period of ten years from the date of the judgment.

Wage and Bank Account Garnishment

As a general principle of law, a joint bank account may be garnished by the creditors of one of the depositors. American Oil Co. v. Falconer, 8 A.2d 418 (Pa. Super. Ct. 1939). A joint account where the defendant had at least the legal ability to use the funds as he saw fit, makes the account subject to garnishment.

“Garnishment is a species of attachment. Citation omitted. It is a proceeding whereby a plaintiff-creditor (garnishor) seeks to subject to his or her claim the property or money of a third party (garnishee) owed by such party to defendant-debtor (principal defendant). Citation omitted. The demand upon the garnishee must be such that the principal defendant could have maintained an action in his or her own right against the garnishee for it. Citation omitted. Garnishment is effective only to the extent of the debtor's interest in the property attached.” Citation omitted. Van Maanen v. Van Maanen, 360 N.W.2d 758, 761 (Iowa, 1985).

It would appear one exception to this rule is if an Intervenor can demonstrate the funds in questions were a special deposit and not simply a general deposit. Dolph v. Cross, 153 Iowa 289 (Iowa, 1911).

Debtor Exemptions

642.21 EXEMPTION FROM NET EARNINGS. 1. The disposable earnings of an individual are exempt from garnishment to the extent provided by the federal Consumer Credit Protection Act, Title III, 15 U.S.C. § 1671--1677 (1982). The maximum amount of an employee's earnings which may be garnished during any one calendar year is two hundred fifty dollars for each judgment creditor, except as provided in chapter 252D and sections 598.22, 598.23, and 627.12, or when those earnings are reasonably expected to be in excess of twelve thousand dollars for that calendar year as determined from the answers taken by the sheriff or by the court pursuant to section 642.5, subsection 4. When the employee's earnings are reasonably expected to be more than twelve thousand dollars the maximum amount of those earnings which may be garnished during a calendar year for each creditor is as follows: a. Employees with expected earnings of twelve thousand dollars or more, but less than sixteen thousand dollars, not more than four hundred dollars may be garnished. b. Employees with expected earnings of sixteen thousand dollars or more, but less than twenty-four thousand dollars, not more than eight hundred dollars may be garnished. c. Employees with expected earnings of twenty-four thousand dollars or more, but less than thirty-five thousand dollars, not more than one thousand five hundred dollars may be garnished. d. Employees with expected earnings of thirty-five thousand dollars or more, but less than fifty thousand dollars, not more than two thousand dollars may be garnished. e. Employees with expected earnings of fifty thousand dollars or more, not more than ten percent of an employee's expected earnings.

3. For the purpose of this section: a. The term "earnings" means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program. b. The term "disposable earnings" means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld.

Dealing with Fraudulent Transfers Iowa Code CHAPTER 684 FRAUDULENT TRANSFERS

Creditors' Rights when a Debtor Files for Bankruptcy The Automatic Stay Preference Payments

20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

The Grievance Process

9:30 a.m.-10:30 a.m.

Presented by Trinity M. Braun-Arana Asst. Director for Boards and Commissions Office of Professional Regulation 1111 E. Court Avenue Des Moines, Iowa 50319 Phone (515) 725-8100 Fax (515) 725-8032

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 (Understanding and avoiding…)

2013 Nuts & Bolts Seminar Coralville October 30 Des Moines October 31

Attorney Supreme Grievance Disciplinary Court Review Commission Board & Action

1  appointed by the Supreme Court

 receives complaints of unethical conduct by Iowa attorneys

 can initiate an investigation or action on it’s own

 Rule 32:8.3 –your duty to report unethical conduct

 ADB investigates the complaint, meets quarterly to make determinations

. can dismiss meritless complaints

. can issue certain types of discipline

. can order mental or physical examination or treatment

. files complaints with the Grievance Commission

Complaints Filed 700 600 500 400 300 200 100 0 2006 2007 2008 2009 2010 2011 2012

2  Iowa Court Rule 34.4(1) . Assistant Director for attorney discipline has discretion not to open an investigation when the information provided by the complainant:

1. if true would not constitute misconduct or incapacity, or 2. if the complaint is facially frivolous, stale, lacking in adequate factual detail, duplicative, or outside the board’s jurisdiction, or 3. does not otherwise reasonably warrant investigation

 Disposition of complaints reaching Board determination during 2012: . 64.7% dismissed . 17.6% private admonition . 7.7% public reprimand . 10% referred for filing with Grievance Commission

 holds fact‐finding hearings on ethical complaints not able to be resolved through the ADB process

 physically and operationally separate from the Attorney Disciplinary Board

 accepts complaints only from the ADB ethics counsel

 does not:

• accept complaints directly from the public • reimburse victims of theft or conversion by Iowa attorneys • handle complaints of non‐lawyers practicing law

3 Makeup of the Grievance Commission

 Membership is geographically‐ and gender‐balanced

 25 lawyers from 5C, 15 lawyers from 5A, 10 lawyers from 6, 5 lawyers from each other judicial election district

 35 lay members

 Members are unpaid volunteers appointed by the Supreme Court

. Clerk of the Grievance Commission maintains the case docket, serves as “trial court” clerk

. Chair of the Grievance Commission appoints a Division (5 members + 2 alternates) to hear the case, designates a President

. Division President rules on motions, issues orders

. hearings are closed, filings are confidential *

. Parties may agree to waive formal hearing

. Commission can accept stipulation or decide to move forward with hearing

. If statement of proposed discipline is included, Commission must consider but is not limited by the statement

4 . Division may dismiss; issue private admonishment; or recommend public reprimand, suspension or revocation of license

. May recommend additional sanctions consistent with the purposes of lawyer discipline

. Report is filed with the Grievance Commission Clerk

. Division dismisses the complaint or issues a private admonition? no report is made to the Supreme Court except at the request of the respondent

 If neither party appeals, Supreme Court will review case de novo without oral argument, briefs or further notice

 If either side appeals, Rules of Appellate Procedure apply, with abbreviated time limits; see Rule 35.11(3)

 Court may impose a lesser or greater sanction than recommended by the division

 Circumvents the Grievance Commission stage

 Requires affidavit from respondent with specific contents

 If suspension or disbarment is ordered‐ Order, supporting affidavit, and response of ADB are publicly disclosed

5  Lori Falk –Goss

 Brian Stowe

 Craig Schoenfeld

 Susan Hense

 High percentage of disciplinary cases involve lawyers with substance abuse or mental health issues  Iowa Lawyer Assistance Program . Funded primarily with fees paid to support disciplinary system . Confidential assistance to Iowa lawyers . Contact: Hugh Grady, Director (800) 243‐1533, cell (515) 360‐1011 http://www.iowalap.org

 Interim suspensions

 Consent disbarments

 Stipulations

 Processing time

6 Shenanigans

Shenanigans

Failing to respond to a complaint

Shenanigans

Failing to respond to a complaint

Ignoring your clients

7 Shenanigans

Failing to respond to a complaint

Ignoring your clients

Neglect/ Incompetence

Shenanigans

Failing to respond to a complaint

Ignoring your clients

Neglect / Incompetence

Mishandling Client Monies

 Iowa Rule of Professional Conduct 32:1.15

 Chapter 45 of Iowa Court Rules

8  Interest On Lawyer Trust Account (IOLTA) program

 IOLTA produces interest income from pooled trust accounts previously non‐interest bearing

 Annual grants approved by Court support legal services to the poor, law‐related education

 Historically receipts of over $1 million annually have been distributed

 Bricks and mortar  Account must be properly titled  May need a separate trust account for some clients  Deposits must be federally insured  Service charges and fees ?  Must supplement or amend your Client Security report

 BEFORE: only a lawyer admitted to the practice of law in Iowa or a person who is under the direct supervision of the lawyer

 NOW: as before + ability to designate successor attorney

 Going to allow a paralegal to sign or authorize electronic transfers?

 The lawyer remains personally and professionally liable for all transactions

9 1.Do not commingle your own funds in the trust account (except for the limited exception for service charges). 2.Each client’s funds in a pooled account must be treated as a separate subaccount. 3.A client can only spend his or her subaccount monies. 4.A client subaccount never should show a negative balance. 5.Only make disbursements from known good funds. 6.You must account to the penny at all times. 7.The end result for any client subaccount must be zero. 8.An audit trail is essential.

What funds must be deposited in the trust account?

All funds of clients, regardless of size, including advances for costs and expenses and excluding only “general retainer” fees

 Fees payable to the credit card institution are the lawyer’s responsibility  Interest must be paid to IOLTA program on the full face value of any retainer based on a credit card charge  Ensure credit card‐based retainer is credited by the bank and is ineligible for charge‐back before writing any checks against the retainer  print and retain verification, on a monthly basis

10  No funds belonging to the lawyer or the law firm may be deposited in the trust account; common examples include: . Fees already billed for and earned . Funds an attorney holds that are not related to the practice of law

 Exception: Funds reasonably sufficient to pay service charges  Exception: Funds belonging in part to a client and in part to the lawyer or law firm

 Fees may and should be withdrawn as soon as they are earned and undisputed

 Costs or expenses incident to services performed may be paid based on agreement with the client

 * Don’t forget the accounting to the client

 Can ethically take a fee only to the extent that work is actually performed on a client’s case  An advance fee is earned once the service is performed

11  Client must be given notice and an accounting regarding any withdrawal of trust funds for fees or expenses  Notice and accounting must be provided no later than the date the withdrawal is made  Advance fees and expenses must be refunded if the fee is not earned or the expense is not incurred

 Deposit in the trust account

 Withdraw only as incurred

 Authority in attorney fee agreement

 Notice and accounting

 Record of each and every electronic transfer

 Electronic transfers from trust accounts are specifically contemplated by Iowa Ct. R. 45.2(3)  Lawyer must keep a record of this and other electronic transfers showing: . 1. date . 2. amount . 3. trust account name or number from which withdrawn . 4. name of recipient . 5. name of person authorizing transfer

12  Every deposit must be allowed to clear through the banking process before disbursement  Cash deposits, verified electronic transfers and bank certified checks support same day disbursement  Cashier’s checks should be allowed to clear completely  Personalized checks, drafts and money orders should be allowed to clear completely

And the big one…

 Maintain books and records . sufficient to show compliance with rule 32:1.15 and chapter 45 . for at least six years after completion of the employment they relate to  New Iowa Court Rule 45.2(3) lists specific record requirements

13  Designed to address developments in technology and provide uniform guidelines  Change incorporates Model Rules with a few differences to reflect Iowa practice *  New Rules have greater specificity  Client Security has been informally recommending this approach for some time

 Receipts for all cash fee payments, preferably countersigned by the client

 Memo describing each electronic, ACH, or wire transfer transaction, signed by the responsible attorney

 Property record for all property other than cash

 Perform a monthly reconciliation of checkbook balance, sub‐account ledger balance total, and adjusted bank statement balance

 Model Rule requires monthly reconciliations and quarterly 3‐way reconciliations

 Iowa kept a requirement of monthly reconciliations and monthly 3‐way reconciliations *

14  Trust account auditors perform regular periodic and on‐demand special audits of lawyer trust accounts

 Attorneys annually report compliance with client security and trust account rules

 Auditors Verify Answers During Trust Account Audits

 Improper Handling of Retainers

 Failure to Take Fees When Earned

 Stale Outstanding Checks

 Unintentional Overdrafts  Shortages or Overages in Account Balance

No response to 15‐day notice? Bank sends notice No response to of overdraft to IOLTA sends letter? account holder letter to account Attorney’s and to IOLTA holder IOLTA issues a 15‐ license may be day notice temporarily suspended

15  Administrative –call OPR at 515‐725‐8029  Substantive . Trust Account Outline . Current set of Iowa Court Rules: ▪ http://www.legis.iowa.gov/IowaLaw/courtRules.aspx . Advisory Opinions: ▪ http://www.iabar.net/ethics.nsf . Formal Disciplinary Opinions: ▪ Westlaw, Lexis, FastCase ▪ http://www.iacourtcommissions.org/icc/SearchDiscipline.do

 Don’t jeopardize your law license with shenanigans

 >2/3 of complaints to the ADB are dismissed, BUT

 Organization is key, discretion is the better part of valor

 It’s not your money until…

 Make time to re‐read the “new” recordkeeping rules

Office of Professional Regulation Iowa Judicial Branch Building 1111 E. Court Avenue Des Moines, Iowa 50319

(515) 725‐8029

 Fax: (515) 725‐8032  Email: [email protected]  Web Site: http://www.iowacourts.gov/Professional_Regulation

16 Lawyer Trust Accounts in Iowa March 2013

Paul H. Wieck II Office of Professional Regulation

Authority

Iowa Rule of Professional Conduct 32:1.15 addresses the duty to safeguard property of clients and third persons. Chapter 45 of the Iowa Court Rules provides substantial detail regarding trust account operations. Notably, chapter 45 addresses proper handling of client advances for fees or expenses, and requires notice to clients when advances are applied to earned fees or expenses. Chapter 45 also lists the specific trust account records that must be maintained for at least six years after termination of any representation.

Establishing an Account

Need for a Trust Account:

Not every lawyer needs a trust account. The key issue is whether you accept funds of the kind that must be placed in a trust account. (See the discussion regarding required trust account deposits under “Operating the Account,” below.) Government attorneys or corporate counsel generally will not need to maintain a trust account. Most private practitioners will need to maintain a trust account. Iowa R. of Prof’l Conduct 32:1.15; Iowa Ct. R. 45.1.

What Kind of Trust Account is Required:

For most client funds, the appropriate account is the pooled, or IOLTA account, in which funds belonging to multiple clients or third parties are pooled in a single account. Interest earned on a pooled trust account (net of allowable service charges for that type of account) is paid by the depository institution to the Lawyer Trust Account Commission (LTAC). LTAC distributes grants annually as approved by the Iowa Supreme Court for legal services for low-income persons and law-related education. Iowa Ct. R. 45.4(1).

Court rules also authorize establishment of a separate interest- bearing account for an individual client or third party. When a separate interest-bearing account is established for an individual client or third party, the interest earned on the account (net of account costs) is payable to the client or third party for whom the account was established. Iowa Ct. R. 45.4(2)(a).

Court rules also authorize establishing a pooled trust account with subaccounting, wherein the interest owed to each individual client is computed and paid, net of pro rata account costs, to the individual client. These accounts seldom are used due to the administrative overhead associated with interest computation and the generally insignificant amount of interest actually payable to any particular client after deduction of costs. Iowa Ct. R. 45.4(2)(b).

In determining whether to deposit client or third-party funds into an IOLTA account or a separate account for the individual client, the lawyer must assess whether the funds to be invested could produce a positive net return for the client. The lawyer should consider the following factors:

The amount of the funds to be deposited

The expected duration of the deposit, including the likelihood of delay in the matter for which the funds are held;

The rates of interest or yield at the financial institution in which the funds are to be deposited;

The cost of establishing and administering the account, including service charges, and the cost of preparing any tax reports required for interest accruing to a client’s benefit;

The depository institution’s ability to calculate and pay interest to individual clients;

Any other circumstances that affect the ability of the client’s funds to earn a net return for the client.

Iowa Ct. R. 45.4(3).

Tip: This is not a one-time analysis. Every client balance in a pooled trust account should be considered in light of these factors on a recurring basis. An excellent time to consider this issue is incident to the monthly reconciliation of client balances with the trust account checkbook and bank statement.

What Institutions May Serve as Trust Account Depositories:

A bank, savings bank, trust company, savings and loan association, credit union, or federally regulated investment company may serve as a depository institution, provided the institution is authorized to do business in Iowa, and is FDIC/NCUSIF insured. However, trust monies may be deposited at credit unions only to the extent that each individual client’s funds are eligible for insurance. Iowa Ct. R. 45.3.

Other factors the attorney should consider when selecting a depository institution:

Amount of deposit insurance available and likely client balances Institutional stability Convenience Bank interest rate and fees Return of cancelled checks or facsimiles thereof

Location of the Account:

Although the ABA model rule allows maintenance of a lawyer trust account in the state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person involved, this language is omitted from the Iowa rule. In contrast, Iowa Court Rules 45.1 and 45.3 require placement of trust accounts in Iowa financial institutions for all matters arising out of the practice of law in Iowa.

Tip: Lawyers practicing in Iowa from offices outside the state generally meet this requirement by opening their Iowa trust account at an Iowa branch of a multistate bank, and then performing their day to day banking operations at a branch location of that multistate bank located near their office.

Deposit Insurance:

So long as a trust account at a bank is properly titled (“trust account”) and the attorney maintains current records regarding the interest of each client (subaccount ledger cards), deposit insurance limits will be applied per client. If a trust account is located at a credit union, the foregoing requirements must be met, and in addition the client personally must qualify to be a depositor at the credit union, to qualify for deposit insurance.

The standard insurance amount is $250,000 per depositor. The $250,000 limit formerly was set to revert to $100,000 per depositor on 3

January 1, 2014, but now has been extended permanently by Congress. You likely will encounter the situation of client deposits exceeding the FDIC insurance limits. The key considerations are first, that you owe your clients a high duty of care as a fiduciary, but you are not an insurer or guarantor. Second, it is acceptable to discuss the deposit insurance issue with your clients and let them help formulate a strategy.

Tip: With the foregoing considerations in mind, here are some recommendations:

1. Choose a strong bank to do business with. It is a good idea to monitor the bank watch lists to ensure your bank is not on the list, for example.

2. For deposits that will be on deposit for an extended period of time, you will want to split the funds over two or more banks to get coverage for the amount in its entirety. It is likely that the client would be entitled to the interest in this situation, under the provisions of Iowa Court Rule 45.4(3)(accounts generating positive net earnings).

3. If a deposit is not going to be on deposit long enough to make splitting it up over several banks practical, get the money in and out as soon as possible. Speed is your ally, in this situation. Verified electronic or wire deposits and transmittals are best for this purpose.

4. If you routinely have deposits in excess of the insurance limit, you might consult with your banker regarding commercial deposit insurance. This is an expense that could be passed along to the clients, so long as you disclose it to your clients and address it in your fee or engagement agreement.

5. Some clients will have their own deposits at the same bank where your trust account is located. It is imperative that you discuss the insurance issue with them to ascertain if their personal deposits will affect coverage for what you maintain for them in the trust account.

Nature of the Account to be Established:

The account agreement must allow withdrawals and transfers without delay whenever the deposited funds are required, subject only to any notice period the institution is required to impose by law or

4 regulation. In practice, this means a checking account or the functional equivalent thereof. Iowa Ct. R. 45.3.

A lawyer trust account must include in the title of the account the words “Trust Account." Iowa Ct. R. 45.1. This account identification is required to ensure coverage for each client’s monies under federal deposit insurance rules.

Bank Duties With Respect to IOLTA Accounts:

The lawyer is responsible for directing the institution to perform the interest payment and reporting tasks required of IOLTA depositories no less often than quarterly. These tasks include remitting interest or dividends earned on the account, net of allowable service charges, to LTAC, along with a copy of the account statement. Iowa Ct. R. 45.4(4). If the allowable monthly service charge exceeds the IOLTA interest payable and the institution does not waive the excess, the law firm is responsible for paying the excess service charge. Charges associated with law firm activities with the account such as wire transfer fees or check printing charges may not be netted against IOLTA interest, and are a law firm responsibility also. Iowa Ct. R. 45.5. LTAC asks that depository institutions also prepare and send a summary report form with the statement. Copies of the report form and an instruction document for new IOLTA depository institutions are included in the forms portion of this outline.

Iowa Court Rule 45.4(4) allows a depository institution to collect an “allowable monthly service charge” from the interest earned on a pooled lawyer trust account. For purposes of chapter 45 of the Iowa Court Rules, “allowable monthly service charge” is defined as a monthly fee “customarily assessed by the institution against a depositor solely for the privilege of maintaining the type of account involved.” Approximately two-thirds of the banks and credit unions serving as depositories for trust accounts in Iowa do not assess a service charge on these accounts. Of those institutions that do assess a service charge, most simply assess a small flat monthly fee, which is considered permissible under the rule.

Recently, a few institutions have begun assessing an “activity- based” service charge, computed on the basis of account activity such as credit and debit transactions. These activity-based charges sometimes are assessed in addition to a flat minimum monthly service charge. Iowa Court Rule 45.5 provides that charges assessed for transactions involving the account are a lawyer or law firm responsibility, and may not be paid from interest or dividends otherwise payable to LTAC. Based on this rule, the LTAC policy is that these activity-based charges may not be collected from interest due LTAC under the IOLTA (Interest on Lawyer Trust 5

Account) program. If an institution chooses to assess these activity-based charges, and the lawyer or law firm continues to house the trust account at that institution, the lawyer or law firm is responsible for paying the activity-based charges.

The federal tax identification number for LTAC is 42-1245104. This number must be used in connection with any IOLTA trust account established pursuant to Iowa Court Rule 45.4(1).

Overdraft Notification Program:

With respect to any account established under Iowa Court Rule 45.4(1), the lawyer is required to direct the depository institution to report to the Client Security Commission any time an overdraft condition exists. This rule is modeled after a similar provision adopted in Minnesota in 1990. Most states have adopted a similar provision requiring that banks immediately notify the lawyer and the state disciplinary office whenever an overdraft occurs in a lawyer trust account. The experience in those states that have adopted such a rule is that early intervention following reporting of an overdraft helps prevent additional losses to clients that would occur absent a timely inquiry by the disciplinary authority. Iowa Ct. R. 45.4(c).

More than One Trust Account:

A lawyer or law firm may maintain more than one trust account. However, because a single IOLTA trust account can hold funds for multiple clients, most lawyers only need to maintain one IOLTA trust account. Multiple accounts create additional record-keeping overhead and increase the chance that mistakes will be made depositing and disbursing funds. Multiple trust accounts most often are used where circumstances dictate opening a trust account for an individual client under the provisions of Iowa Court Rule 45.4(2)(a) in addition to the IOLTA trust account normally maintained by the lawyer or firm.

Signature Authority on Trust Accounts:

Only a lawyer admitted to practice in Iowa or a person under the direct supervision of a lawyer may be an authorized signatory on a trust account. Iowa Ct. R. 45.2(3)(b). The Client Security Commission recommends that lawyers carefully evaluate whether non-lawyer staff members should be authorized to sign checks or authorize transfers. The responsibility and accountability for client funds is non-delegable, and the attorney will be personally responsible for any staff defalcation.

Tip: If signature or transfer authority is delegated to non-lawyer staff, the Client Security Commission recommends procuring employee dishonesty insurance coverage.

Provision for Stand-by Signature Authority:

Iowa Court Rule 45.11 allows a sole lawyer signatory to designate another Iowa lawyer as a stand-by signatory on his or her trust account, with that authority to become effective upon the occurrence of an event or events described in the instrument, which might include death, disappearance, abandonment of law practice, temporary or permanent incapacity, suspension, or disbarment. The new rule facilitates planning by sole practitioners for administration of their law practice in the event of their death or disability.

Tip: Planning for death or disability is required on the part of most sole practitioners, based on comment 5 to Iowa Rule of Professional Conduct 32:1.3. An outline on planning, with sample forms, is available at the Client Security Commission web page: http://www.iowacourts.gov/Professional_Regulation/Attorney_RegulationCommissions/Client_Security/

Operating an Account

Principles of Trust Account Operations:

Do not Commingle Your Own Funds in the Trust Account, except for the limited exception provided by Iowa Rule of Professional Conduct 32:1.15(b) and Iowa Court Rule 45.1(1).

Each Client’s Funds in a Pooled Account Must Be Treated as a Separate Subaccount

A Client Can Only Spend His or Her Subaccount Monies

A Client Subaccount Never Should Show a Negative Balance

Only Make Disbursements from Known Good Funds

You Must Account to the Penny at All Times

The End Result for Any Client Subaccount Must be Zero

An Audit Trail is Essential

What Funds Must Be Deposited in the Trust Account:

All funds of clients, regardless of size, paid to a lawyer or law firm, including advances for costs and expenses and excluding only “general retainers” (a defined term), must be deposited in an interest-bearing trust account located in Iowa. Iowa R. Prof’l Conduct 32:1.15(a); Iowa Ct. R. 45.7(3), 45.9(1) and 45.10(2). The decision on where to place funds is based on ownership at the time the funds are received—not how quickly ownership will change from client to the lawyer. Common examples:

Any advance fee or retainer except a “general retainer.” Iowa Ct. R. 45.7(7)(3)(advance fees and expenses), 45.9(1)(special retainers), and 45.10(2)(flat fees); Board of Professional Ethics and Conduct v. Apland, 577 N.W.2d 50 (Iowa 1998)

Advances from the client for costs and expenses

Settlement proceeds that include a portion that is the attorney’s fee

Real estate loan proceeds prior to closing and disbursement

Funds from the sale of property belonging to the client

Funds and Property of Third Parties:

The rules make clear that the obligation to safeguard and account extends to the property of third persons that comes into the lawyer’s possession in the course of practice, in addition to client property. Iowa R. of Prof’l Conduct 32:1.15(a); Iowa Ct. R. 45.1.

Requirement to Inform Client or Third Party Regarding Effect of Deposit in IOLTA Trust Account:

If the funds of a client or third person are deposited in a pooled account established under the provisions of Iowa Court Rule 45.4(1), the lawyer must inform the client or third person that interest accruing on the account, net of allowable monthly service charges, will be paid to LTAC under the IOLTA program described in chapter 45 of the Iowa Court Rules. Iowa Ct. R. 45.4(1). The rule does not require that this be done in writing.

Tip: Your law firm operating procedures should include this notice as a matter of course any time you accept monies from anyone— client or third party—that will be placed in your IOLTA account. Possible places you might put a written notice include your law firm 8

brochure; your written fee agreements; and the receipt or acknowledgement you give a client when you accept monies for deposit in the trust account. At a minimum, you probably will want to make it standard operating procedure to advise the clients verbally regarding the IOLTA program whenever you accept these kinds of funds.

What Funds May NOT Be Deposited in the Trust Account:

No funds belonging to the lawyer or the law firm may be deposited in the trust account. Common examples of funds that should not be placed in the trust account include:

Fees already billed for and earned

Funds an attorney holds that are not related to the practice of law (e.g., the monies belonging to the county bar association for which the attorney is treasurer)

Exception: Funds reasonably sufficient to avoid or pay service charges may be deposited in the trust account. Iowa Ct. R. 45.1(1). Where a minimum balance requirement exists for the account, it is permissible to deposit funds sufficient to maintain the minimum balance. A separate subaccount ledger should be maintained for such deposits.

Exception: Funds belonging in part to a client and in part to the lawyer or law firm (presently or potentially) must be deposited in the trust account. This rule applies even if the funds will be disbursed to the parties entitled thereto on the same day they are received. However, the lawyer or law firm’s portion must be withdrawn promptly when due, unless entitlement to that portion is disputed by the client. Disputed portions must remain in trust until the dispute is resolved. Iowa Ct. R. 45.1(2).

What Payments or Disbursements May be Made from the Trust Account:

No payments for personal or office expenses of the lawyer should be made from a trust account. If some portion of the money in a trust account belongs to the lawyer because it is his or her earned fee, the lawyer should write a check on the trust account payable to the lawyer, deposit it in the lawyer’s business account and pay his or her expenses from the business account.

Fees may and should be withdrawn as soon as they are earned and undisputed. An accounting to the client for the fees deemed earned should be provided the client no later than contemporaneously with the withdrawal for such fees or expenses. Iowa Ct. R. 45.7(4). 9

Costs or expenses incident to services performed may be paid based on agreement with the client. An accounting to the client for costs and expenses paid from the client’s subaccount should be provided the client no later than contemporaneously with the withdrawal for such expenses. Iowa Ct. R. 45.7(4).

Disbursements requisite to closing of a real estate transaction or settlement of an injury claim may be made from the client subaccount. An accounting to the client for all the disbursements should be provided to and approved by the client incident to the disbursements.

If two or more parties dispute entitlement to funds held by a lawyer in trust, the lawyer should retain those funds in trust until such time as the dispute is resolved. Iowa R. of Prof’l Conduct 32:1.15(e). The disputed funds should be placed in an account that will bear interest for the benefit of the parties if the considerations of Iowa Court Rule 45.4(3) indicate the funds could generate positive net earnings for the parties ultimately found entitled to the funds.

When Disbursements May be Made Based on a Deposit:

Every deposit to a lawyer trust account must be allowed to clear through the banking process before disbursement is made based on that deposit. If this procedure is not observed, the likely eventual result will be wrongful disbursement of other clients’ funds when a check or draft deposited to the trust account is dishonored.

Cash deposits and verified electronic transfers are reliable enough to support same day disbursement. Bank certified checks are reliable enough to support same day disbursement provided authenticity of the check is known to the lawyer or verified with the issuing bank. If authenticity is not known to the lawyer, verification should be sought from the issuing bank. (See the discussion under the heading Schemes Intended to Divert Trust Account Balances, below, regarding the risk of counterfeit certified checks.)

Cashier’s checks, personalized checks, and drafts should be allowed to clear completely through the issuing institution. Your own bank institution can provide guidance regarding normal clearance times and can verify clearance of individual instruments at the issuing bank.

If a same-day closing or settlement is desired, the best solution generally will be to require that the deposit to your trust account be made by wire transfer or verified bank certified check.

Form of Disbursements:

Disbursements from a trust account now must be made by check or by authorized bank transfer. Iowa Ct. R. 45.2(3)(b)(3). Any check drawn on the trust account must be payable to a named payee, and never to cash. Cash withdrawals from a trust account are not permitted. An authorized bank transfer contemplates the common forms of electronic banking transactions, including an authorized wire transfer, electronic fund transfer, or debit transaction.

Handling of Retainers and Advances for Fees and Expenses:

In Board of Professional Ethics and Conduct v. Apland, 577 N.W.2d 50 (Iowa 1998) the Court ruled that all advance fee payments must be placed in the client trust account until earned. The Court also characterized so-called flat fees and special retainers as advance fees, and stated that they also must be placed and held in trust until earned. The Court distinguished a true general retainer, in which the consideration is paid in exchange for a commitment of future availability to provide services, as earned at the time it is paid.

The Apland requirements regarding handling of advance fees, general retainers, special retainers and flat fees now are specifically set out in Iowa Court Rules 45.7 through 45.10. The requirement for trust account deposit specifically applies to advances for expenses as well as any kind of advance fee. Iowa Ct. R. 45.7(2).

When a lawyer withdraws funds from the trust account to pay earned fees or expenses, the client must be provided written notice of the time, amount and purpose of the withdrawal, along with a complete accounting. This notice and accounting must be transmitted no later than the date the withdrawal is made. Iowa Ct. R. 45.7(4).

Tip: It appears these rules dictate that a law firm handle advances for fees and expenses one of two ways. The first, and most cumbersome way, is to place the funds in your trust account, open a client subaccount ledger card, pay the fee or expense by check or debit drawn on the trust account, and then send the client a notice and accounting no later than the day you make the deduction for fees or expenses. The second, and less cumbersome way, is to place the funds in your trust account, open a client subaccount ledger card, pay the fee or expense from the law firm business account or by law firm credit card on behalf of the client, and then include the fees and expenses owed by the client in your periodic billing cycle, with your statement showing the amounts owed for fees and 11

advanced expenses, and the amount you intend to deduct from the client’s trust account balance.

What You Must Not Do:

You must not deposit advances for unearned fees or advances for expenses in your business account.

You must not pay anything from a client’s monies in your trust account until you provide notice and accounting for the deduction or payment.

Conflicting Claims to Funds in Trust:

If a lawyer has possession of funds or other property to which there are conflicting claims, the property should be separately maintained until the dispute is resolved. Iowa R. of Prof’l Conduct 32:1.15(e). This may include third party claims against client funds in the trust account. If the third party claims are not frivolous, the lawyer must refuse to surrender the property to the client until the claims are resolved. Iowa R. of Prof’l Conduct 32:1.15, comment [5].

What Books and Records Must be Maintained:

Every lawyer engaged in private practice of law must maintain books and records sufficient to demonstrate compliance with Iowa Rule of Professional Conduct 32:1.15(a). Books and records relating to funds or property of clients are to be maintained for at least six years after termination of the representation to which they relate. Iowa Ct. R. 45.2(3). A certification regarding this responsibility is included in the annual report filed with the Client Security Commission each year. Iowa Ct. R. 45.6. Upon dissolution of a firm or practice or sale of a firm or practice, arrangements must be made for maintenance of the books and records for the required six year period. Iowa Ct. R. 45.2(3)(d), (e).

Implementation of the Record Keeping Duty:

Effective February 20, 2012, Iowa Court Rule 45.2 was amended to describe in detail the financial records a lawyer must maintain for a client trust account. Records required by the rule may be maintained by electronic, photographic, computer, or other media, so long as they otherwise comply with the rules and that printed copies can be produced. Iowa Ct. R 45.2(3)(c).

For each account maintained, records should identify the name of the depository, account number, account name, and date the account was 12 opened. The records should also show the type of each such account, whether pooled with net interest paid to the Lawyers Trust Account Commission (IOLTA account), pooled with allocation of interest, or individual, including the client name. In addition to this basic record for each account, the following records must be maintained:

Receipt and disbursement journals containing a record of deposits to and withdrawals from client trust accounts, specifically identifying the date, source, and description of each item deposited, as well as the date, payee and purpose of each disbursement;

Ledger records for all client trust accounts showing, for each separate trust client or beneficiary, the source of all funds deposited, the names of all persons for whom the funds are or were held, the amount of such funds, the descriptions and amounts of charges or withdrawals, and the names of all persons or entities to whom such funds were disbursed;

Copies of retainer and compensation agreements with clients as required by Iowa Rule of Professional Conduct 32:1.5;

Copies of accountings to clients or third persons showing the disbursement of funds to them or on their behalf;

Copies of bills for legal fees and expenses rendered to clients;

Copies of records showing disbursements on behalf of clients;

The physical or electronic equivalents of all checkbook registers, bank statements, records of deposit, pre-numbered canceled checks, and substitute checks provided by a financial institution;

Records of all electronic transfers from client trust accounts, including the name of the person authorizing transfer, the date of transfer, the name of the recipient, and the trust account name or number from which money is withdrawn;

Copies of monthly trial balances and monthly reconciliations of the client trust accounts maintained by the lawyer, and

Copies of those portions of client files that are reasonably related to client trust account transactions.

A record showing all property, specifically identified, other than cash, held in trust from time to time for clients or others. Routine files, documents and items such as real estate abstracts that are not expected to be held indefinitely need not be so recorded but should be 13 documented in the files of the lawyer as to receipt and delivery. A suggested form for recording property held in trust is included in the forms portion of this outline.

Monthly Reconciliations Required:

Monthly reconciliations of the main trust account ledger, client subaccount ledgers, and adjusted bank statement, the so-called “three- way reconciliation,” are required by rule 45.2(3)(a)(9). The Client Security Commission’s experience is that failure to perform trial balances and reconciliations of client subaccounts on a monthly basis is a key contributor to loss of accountability for client monies.

Tip: A monthly statement from your bank is a vital part of the reconciliation process. If your bank normally provides statements on a quarterly basis instead of monthly, you will need to make arrangements to receive monthly statements or access monthly statement information electronically.

Use of Computer Accounting Systems:

Lawyers or law firms may use computer systems to maintain trust account records. A number of functional software programs are available for this purpose. For an example of guidelines for use of a general accounting software program, and information regarding just a few of the many trust-account specific software modules available, see the following web pages: http://lprb.mncourts.gov/LawyerResources/TADocuments/Maintaining Trust Accounts Using Quicken (2006).pdf http://www.lsba.org/2007Solo/ClientTrustAcc.doc http://law.lexisnexis.com/back-office-pclaw http://www.easysoft-usa.com http://www.abacuslaw.com/products/trustaccounting.html http://www.tabs3.com http://www.lawyertrustaccount.com http://www.esilaw.com 14

An attorney who maintains trust account records by computer should print and retain, on a monthly basis, the checkbook register, the balances of the subaccount ledgers, and the reconciliation report. Electronic records should be regularly backed up by an appropriate storage device. The frequency of the back up procedure should be directly related to the volume of activity in the trust account.

Accounting to the Client:

The lawyer must render appropriate accounts to the client regarding all funds, securities and other properties of a client coming into the possession of the lawyer. Iowa Ct. R. 45.2(2). Prompt payment or delivery must be made to the client of all such items the client is entitled to when the client so requests. Iowa Ct. R. 45.2(2).

Simply stated: When clients ask you how much money you’re holding for them or what you’ve done with the money while you’ve had it, you must tell them. You must advise the client every time something is added to the client’s subaccount, and every time something is taken from the client subaccount.

Client Payments By Credit Card:

Three key issues must be addressed if you want to accept credit card payments of retainers or billed fees. First, you must address the surcharge imposed by the credit card company. The full face value of a retainer or payment against an outstanding bill paid by credit card must be credited to the client. Ordinarily, your credit card merchant agreement will prohibit assessing the surcharge to the client, so the law firm will have to pay the surcharge. The authority provided by Iowa Court Rule 45.1(1) may be used to establish a law firm subaccount with a small, periodically refreshed balance, within the trust account, to pay the service charges associated with retainers paid by credit card. A better alternative, if the credit card issuer is willing, is to assess the service charges against the law firm’s general business account.

Second, you must be careful not to make disbursements based on a credit card deposit in your trust account until there is no possibility the charges can be reversed. Normally there is an initial delay until the bank actually credits a credit card payment to the trust account, and there is a further period during which the client may object and reverse the charge on the card. You should ascertain from the credit card issuer how quickly it actually credits such deposits, and when these deposits become ineligible for charge back by the credit card holder. Once again, you may be able to arrange with your credit card issuer for charge-backs to be made against your firm operating account rather than your trust account. 15

Third, if you will be accepting credit card payments of both retainers and earned fees, and you only want to set up one account to accept the credit card payments, you should set up your trust account to accept the credit card payments, rather than your operating account. Put all credit card payments in your trust account, and keep the retainers there until earned and the contingencies have passed. Keep the earned fee payments there until the contingencies have passed, and then transfer them over to your business account for disbursement.

At least one credit card issuer now offers lawyers a product that assesses all service charges and charge-backs against the law firm business account, but allows the lawyer to direct each credit card payment to the trust account or the business account, as appropriate, depending on the nature of the receipt. This type of product appears to best address the issues associated with acceptance of payments by credit card.

How to Handle Electronic Payment of Fees:

With the advent of electronic filing of pleadings in cases, electronic payment of filing fees now is possible, and in fact is required in some courts. Electronic transfers from (and to) trust accounts are permitted by Iowa Court Rule 45.2(3)(b)(3), but proper handling of electronic fee payments on behalf of clients requires observance of several rules pertaining to trust accounts:

Client advances for expenses, including filing fees, must be deposited in a trust account, and withdrawn only as the expenses are incurred. Iowa R. Prof. Conduct 32:1.15(c), Iowa Ct. R. 45.7(3).

The engagement agreement with the client must provide authority to pay the filing fee from the funds advanced and placed in the trust account. Iowa R. Prof. Conduct 32:1.5(b).

When an expense is paid from the trust account, the lawyer must provide notice and an accounting to the client no later than the day the withdrawal is made. Iowa Ct. R. 45.7(4).

The lawyer must keep a record of every electronic transfer from the trust account, showing the date, amount, trust account name or account number, the name of the recipient, and the name of the person authorizing the transfer. Iowa Ct. R. 45.2(3)(a)(8).

Tip: One key consideration is whether the lawyer wants to provide a notice and accounting under Iowa Court Rule 45.7(4) each time an expense is paid, or on a periodic, consolidated basis, such as during a monthly billing process. A second key consideration is whether the lawyer wants to pay filing fees directly from the trust account, or would rather advance fees on behalf of the client (subject to reimbursement) as allowed by Iowa Rule of Professional Conduct 32:1.8(e)(1). A third key consideration is what form of electronic payment the lawyer is willing and able to use, and what form of payment the court will accept. The possibilities generally include a credit card, a debit card, a prefunded “pay down” card, or E*check. With these considerations in mind, the rules appear to dictate one of the following two general approaches:

Direct Debit of Trust Account: The first approach is to place the advance for fees in your trust account, open a client subaccount ledger card, and make appropriate entries on the main trust account ledger and the client subaccount ledger. The filing fee then may be paid by debit card transaction or E*check drawn on the trust account. The lawyer will need to procure or create a record of the debit deduction from the trust account, and will need to send the client a notice and accounting regarding the payment no later than the date of the debit transaction. The deduction also would need to be recorded on the main trust account ledger and the client’s subaccount ledger.

Advance of Fee with Reimbursement from Trust Account: The second approach is to place the advance for fees in your trust account, open a client subaccount ledger card, and make appropriate entries on the main trust account ledger and the client subaccount ledger. The filing fee may be paid using a law firm credit card, prefunded “pay down” card, or a debit card transaction or E*check drawn on the law firm business or operating account. The advance of the filing fee then may be included in your periodic billing cycle, with your statement showing the amounts owed for fees and advanced expenses, and the amount you intend to deduct from the client’s trust account balance. Once the periodic statement and accounting has been provided the client, the law firm may withdraw the amount of the advanced filing fee from the trust account. The withdrawal might be performed by ACH transfer from the trust account to the business or operating account, or by trust account check payable to the business or operating account. The withdrawal also could be performed by trust account check direct to the credit card company, if the credit card is used only for advanced expenses. The deduction also would need to be recorded on the main trust account ledger and the client’s subaccount ledger. 17

What Should be Done with Funds Owed a Client Who No Longer Can be Located? (“Stale Funds Procedure”):

A lawyer or law firm must exercise due diligence to locate and communicate with the client or clients to whom stale or excess funds might rightfully belong. What constitutes reasonable due diligence will vary depending on the amount of the funds involved. Reasonable efforts might include, for example, corresponding with possible owners by mail, searching for possible owner addresses through the Social Security Administration if you have a Social Security Number for them, or employing one of the firms that conducts searches for heirs.

If it is impossible to make proper disposition of the monies to the client using the steps outlined above, then the monies should be considered subject to the provisions of Iowa Code section 556.7. If the time period specified in section 556.7 has not passed, the monies may be deposited in a separate, interest-bearing account under the provisions of Iowa Court Rule 45.4(2)(a). If the time period specified in section 556.7 has passed, or when the time period specified in section 556.7 does pass, the lawyer or firm then may follow the procedures specified in Iowa Code sections 556.11 and 556.13, regarding notice and tender of the monies to the Treasurer of the State of Iowa.

Closing an Account

Moving Your Trust Account to a New Depository Institution:

A lawyer is not required to notify anyone before transferring a trust account to a new depository institution. However, care should be taken to ensure that all outstanding checks on the existing trust account are accounted for, and that interest owed the Lawyer Trust Account Commission will be properly disbursed by the institution. Moving a trust account likely will result in a change in information previously reported to the Client Security Commission, and will warrant an interim report to the commission within thirty days after the change.

Closing the Trust Account:

Once again, a lawyer is not required to notify anyone before closing a trust and leaving practice. However, here also care should be taken to ensure that all outstanding checks on the trust account are accounted for, and that interest owed LTAC will be properly disbursed by the institution. All monies owed clients must be returned to the clients entitled thereto so that no remaining client monies exist in the trust account. If a particular client cannot be found, it may be necessary to complete the “stale funds” 18 procedure before closing the account. Closing a trust account likely will result in a change in information previously reported to the Client Security Commission, and will warrant an interim report to the commission within thirty days after the change. Records for the account must be retained for a minimum of six years, even if the law firm is sold or dissolved. Iowa Ct. R. 45.2(3(d), (e).

Audit Program, Client Security Commission

The director of the Office of Professional Regulation is responsible for conducting audits and investigations of attorneys’ accounts and office procedures to determine compliance with Iowa Rule of Professional Conduct 32:1.15 and chapter 45 of the Iowa Court Rules. Iowa Ct. R. 39.2(3)(c). Attorneys are required to cooperate fully with these audits and investigations as a continuing condition of their license to practice. Iowa Ct. R. 39.10, 39.12.

The director is assisted in the performance of audits and investigations by part-time trust account auditors. The general goal of the Client Security Commission is to conduct an unannounced periodic audit of each lawyer trust account in Iowa no less than every three to four years. Special audits or investigations are conducted on an as-needed basis. Possible causes for special audits include claims against the Client Security Trust Fund, unexplained overdrafts of trust accounts, and some types of ethics complaints.

Schemes Intended to Divert Trust Account Balances

In recent years, would-be thieves have identified trust accounts as potentially lucrative targets. The schemes used to target trust accounts have become more sophisticated as electronic banking and international transactions have become more common.

Counterfeit Checks: Lawyers should be cautious regarding checks drawn on out-of-state or foreign banks, including certified checks and cashier’s checks drawn on such institutions. In recent years, the number of counterfeit or fraudulent checks presented to Iowa lawyers has increased. The common theme in these schemes is inducing you to deposit the counterfeit check in your trust account and make an immediate disbursement of a portion of the deposit back to the thief, before the counterfeit check is returned by your bank. Clearance times, particularly for checks drawn on foreign banks, are quite long. Some confidence artists provide an initial check drawn on a foreign (often Canadian) bank, and then follow up with another, more substantial check drawn on the same bank when the first check appears to have been honored due to the long clearance times on checks drawn on foreign banks. Soon after the second 19 check has been deposited, the client’s circumstances change and they demand that the bulk of the second check be wired back to them expeditiously.

Tip: A countermeasure for this threat is to wait until the out-of-state or foreign check actually clears through the banking system. If same-day disbursement is necessary the best approach is to require deposit of funds in your trust account electronically, and verify the presence of the funds before making any disbursement.

Counterfeit Checks Drawn on An Out-of-State Law Firm Trust Account: An alternate scheme is to tender a check that appears to be drawn on the trust account of a lawyer in another state, but actually is counterfeit, as part of a business transaction that involves disbursement the same day the counterfeit check is deposited.

Tip: One possible countermeasure for this threat is to require an electronic deposit to your account if same day settlement is desired, and verify the deposit has occurred. An alternative countermeasure is to independently access the contact information for the law firm involved and call that firm to verify that the trust account check is authentic.

Keystroke Recording Implanted via Social Media: Social media sites are used by some thieves as a tool to implant keystroke logging or recording programs in the background on the computer used to access the social media site. The keystroke logging program communicates in real-time over the Internet with the thieves. When the user of the computer infected with the virus accesses an electronic banking web site using that computer, the thieves are alerted. The thieves note the bank web site address and login data and quickly raid the bank account, transferring funds to an off-shore account.

Tip: A countermeasure for this threat is adoption of a law firm policy against accessing any social media site from any computer on the law firm network, but especially from any computer used for electronic banking. You may want to consider segregating the computer used for electronic banking from the remainder of the computers on your office network. You also may want to discuss with your bank the anti-fraud features the bank has available. It may be possible also to place your trust account at a bank that uses a second level of authentication based on an RSA token before allowing you to create electronic transfers online.

Common Issues

Improper Handling of Retainers: The Court has specified how retainers of various kinds must be handled in Iowa. Virtually all the commonly used variants of the retainer initially must be placed in the trust account.

Failure to Provide Notice and Accounting: When a withdrawal is made from a client’s trust account balance to pay an expense or to pay fees, notice of the withdrawal and an accounting regarding the client’s trust account balance must be provided the client no later than the day of the withdrawal.

Failure to Take Fees when Warranted: Lawyers are responsible for removing fees from retainers placed in the trust account on a timely basis when they are earned. An accounting should be provided the client no later than the time when the earned fee is withdrawn from the retainer. Failure to remove earned fees on a timely basis constitutes commingling, and over time can be the cause of unexplained excess funds in a trust account.

Outstanding Checks: Frequently clients or other payees will fail to promptly negotiate checks drawn on the trust account. The lawyer or law firm should have an established procedure for periodically following up on these outstanding checks, to clear them from the end of month reconciliations and aid in placing client subaccounts in zero status when warranted.

“Unintentional” Overdrafts: Overdrafts carry considerable risk of inadvertently using funds in one client’s subaccount to subsidize operations with respect to another client’s subaccount. Common causes of overdraft situations include failure to make trust account deposits in a timely manner; failure to ensure that a deposited check clears the bank upon which it is drawn before issuing trust account checks based on it; asking clients to “wait until tomorrow” to cash a settlement check.

Contact Information:

Mail: Office of Professional Regulation, Iowa Judicial Branch Building, 1111 E. Court Avenue, Des Moines, Iowa 50319 Telephone: (515) 725-8029 Voice, (515) 725-8032 Facsimile E-Mail: client.security @iowacourts.gov WebSite: http://www.iowacourts.gov/Professional_Regulation/Attorney_Regulation Commissions/Client_Security/ 21

References

Grateful acknowledgement is made of the following resources, from which principles, concepts, tips and narrative have been readily adapted in the foregoing outline. Particular credit is noted for Opinion Number 9 of the Minnesota Lawyers Professional Responsibility Board, now appearing at Appendix 1 of the Minnesota Rules of Professional Conduct, which substantially provides the analysis regarding record keeping duties.

Appendix 1, Minnesota Rules of Professional Conduct (Maintenance of Books and Records); http://lprb.mncourts.gov/LawyerResources/Pages/TrustAccounts.aspx

The ABA Guide to Lawyer Trust Accounts, Jay G. Foonberg (ABA Section of Law Practice Management, 1996)

Trust Accounts – Everything You Ever Wanted to Know but Were Afraid To Ask (Minnesota State Bar Association Continuing Legal Education, April 2002)

Client Trust Accounting for Delaware Attorneys (Lawyers’ Fund for Client Protection of the State Bar of Delaware, November 23, 1998), http://courts.delaware.gov/lfcp/publications.htm

Illinois Client Trust Account Handbook (Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois, July 2011), http://www.iardc.org/toc_main.html

Temporary Unlimited Coverage for Non-Interest Bearing Transaction Accounts (but specifically including IOLTA accounts), http://www.fdic.gov/deposit/deposits/insured/temporary.html

Forms

NOTICE TO FINANCIAL INSTITUTION TO ESTABLISH NEW INTEREST-BEARING ACCOUNT

My law firm, as required by rules of the Iowa Supreme Court, is participating in the Interest on Lawyer Trust Accounts program. Under this program, please open an account subject to negotiable orders of withdrawals paying the highest rate of interest available for which the account qualifies.

Interest on this account should be remitted to the Lawyer Trust Account Commission, Judicial Branch Building, 1111 East Court Avenue, Des Moines, Iowa 50319. The tax identification number for the Commission is 42-1245104 and must be used in connection with this account.

Interest on the account, computed in accordance with your standard accounting practice (net of any service charge or fee you charge for the bare privilege of maintaining this kind of account) must be remitted by check mailed to the Commission preferably monthly but not less than quarterly. You are not permitted to deduct from interest any activity-based charges, or charges for transactions involving this account such as stop payment fees, wire transfer fees or check printing fees. These fees are the responsibility of the law firm to pay. With each remittance to the Commission, please transmit a completed remittance report along with a copy of the trust account statement for the reporting period. Remittance report forms are available from the Commission.

Should an overdraft condition ever exist with respect to this account, you are required to provide the Client Security Commission a copy of any notice issued the law firm regarding the overdraft condition. The mailing address of this commission is Judicial Branch Building, 1111 E. Court Avenue, Des Moines, Iowa 50319.

PRESENT ACCOUNT NAME

PRESENT ACCOUNT NO.

ALL ACCOUNT SIGNATORIES

______DATE

LAWYER TRUST ACCOUNT COMMISSION INTEREST REMITTANCE REPORT FOR POOLED INTEREST-BEARING TRUST ACCOUNTS

TO BE COMPLETED BY FINANCIAL INSTITUTION AND SUBMITTED WITH EACH REMITTANCE

FINANCIAL INSTITUTION: Name: ______Office or Branch: ______Address:______Telephone:______Contact Person:______(Name and Title) Alternate Contact Person:______(Name and Title) Report Period: through ______(MM/DD/YY) (MM/DD/YY)

ATTORNEY/LAW FIRM POOLED INTEREST-BEARING TRUST ACCOUNT:

Name:______Address:______Account Number:______Rate of Interest Applied: % Interest Earned for Period $ ______Less: Service Charges and Fees (if any) ( ) Net Amount Remitted $ ______

NOTES: Attach this report to a copy of the depositor statement. If remitting a lump sum payment for multiple attorneys/firms, please submit a separate Interest Remittance Report for each pooled interest-bearing trust account. Even if no interest was earned in a quarter, this report is to be submitted for such account. Interest should be remitted by check payable to the Lawyer Trust Account Commission, and mailed to:

LAWYER TRUST ACCOUNT COMMISSION Iowa Judicial Branch Building 1111 E. Court Avenue DES MOINES, IOWA 50319

Voice (515) 725-8029 Fax (515) 725-8032

TRUST ACCOUNT RECONCILIATION ______, 20___

BEGINNING BALANCE $______TOTAL RECEIPTS THIS MONTH $______SUBTOTAL $______LESS CHECKS WRITTEN THIS MONTH $______BALANCE $______

ITEMIZATION OF SUBACCOUNT BALANCES ______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______$______TOTAL $______

BANK STATEMENT CONFIRMATION

BANK BALANCE PER STATEMENT $______PLUS OUTSTANDING DEPOSITS $______LESS OUTSTANDING CHECKS $______BALANCE $______LESS INTEREST $______RECONCILED BALANCE $______

Trust Safe Deposit Receipt

Received this _____day of _____, 20__, by ______.

______(Description of item(s) being placed into safe deposit box -- if items are numbered such as stocks or bonds, specify numbers.)

Item(s) being held in trust for: ______

Firm Name: ______

Client Name:______

Item(s) being placed into safe deposit box by:______

Any questions regarding contents should be addressed to: ______

Name and Address of Bank Where Safe Deposit Located: ______

Safe Deposit Box ID Number: ______

Anticipated period item(s) will be held:______

Excerpt from Iowa Rules of Professional Conduct and Other Applicable Iowa Court Rules, As Amended February 20, 2012

RULE 32:1.15: SAFEKEEPING PROPERTY

(a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of six years after termination of the representation.

(b) A lawyer may deposit the lawyer's own funds in a client trust account for the sole purpose of paying bank service charges on that account, but only in an amount necessary for that purpose.

(c) A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.

(d) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.

(e) When in the course of representation a lawyer is in possession of property in which two or more persons (one of whom may be the lawyer) claim interests, the property shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute.

(f) All client trust accounts shall be governed by chapter 45 of the Iowa Court Rules.

Comment

[1] A lawyer should hold property of others with the care required of a professional fiduciary. Securities should be kept in a safe deposit box, except when some other form of safekeeping is warranted by special circumstances. All property that is the property of clients or third persons, including prospective clients, must be kept separate from the lawyer's business and personal property and, if monies, in one or more trust accounts. Separate trust accounts may be warranted when administering estate monies or acting in similar fiduciary capacities. A lawyer should maintain on a current basis books and records

27 in accordance with generally accepted accounting practice and comply with any recordkeeping rules established by law or court order. See, Iowa Ct. R. ch 45.

[2] While normally it is impermissible to commingle the lawyer's own funds with client funds, paragraph (b) provides that it is permissible when necessary to pay bank service charges on that account. Accurate records must be kept regarding which part of the funds are the lawyer's.

[3] Lawyers often receive funds from which the lawyer's fee will be paid. The lawyer is not required to remit to the client funds that the lawyer reasonably believes represent fees owed. However, a lawyer may not hold funds to coerce a client into accepting the lawyer's contention. The disputed portion of the funds must be kept in a trust account and the lawyer should suggest means for prompt resolution of the dispute, such as arbitration. The undisputed portion of the funds shall be promptly distributed.

[4] Paragraph (e) also recognizes that third parties may have lawful claims against specific funds or other property in a lawyer's custody, such as a client's creditor who has a lien on funds recovered in a personal injury action. A lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client. In such cases, when the third-party claim is not frivolous under applicable law, the lawyer must refuse to surrender the property to the client until the claims are resolved. A lawyer should not unilaterally assume to arbitrate a dispute between the client and the third party; but when there are substantial grounds for dispute as to the person entitled to the funds, the lawyer may file an action to have a court resolve the dispute.

[5] The obligations of a lawyer under this rule are independent of those arising from activity other than rendering legal services. For example, a lawyer who serves only as an escrow agent is governed by the applicable law relating to fiduciaries even though the lawyer does not render legal services in the transaction and is not governed by this rule.

[6] A lawyers’ fund for client protection provides a means through the collective efforts of the bar to reimburse persons who have lost money or property as a result of dishonest conduct of a lawyer. Such a fund has been established in Iowa, and lawyer participation is mandatory to the extent required by chapter 39 of the Iowa Court Rules.

CHAPTER 45

CLIENT TRUST ACCOUNT RULES

Rule 45.1 Requirement for client trust account Rule 45.2 Action required upon receiving funds, accounting, and records Rule 45.3 Type of accounts and institutions where trust accounts must be established Rule 45.4 Pooled interest-bearing trust account Rule 45.5 Definition of “allowable monthly service charges” Rule 45.6 Lawyer certification Rule 45.7 Advance fee and expense payments Rule 45.8 General retainer Rule 45.9 Special retainer Rule 45.10 Flat fee Rule 45.11 Designation of Successor Signatories

CHAPTER 45 CLIENT TRUST ACCOUNT RULES

Rule 45.1 Requirement for client trust account. Funds a lawyer receives from clients or third persons for matters arising out of the practice of law in Iowa shall be deposited in one or more identifiable interest-bearing trust accounts located in Iowa. The trust account shall be clearly designated as “Trust Account.” No funds belonging to the lawyer or law firm may be deposited in this account except: 1. Funds reasonably sufficient to pay or avoid imposition of fees and charges that are a lawyer’s or law firm’s responsibility, including fees and charges that are not “allowable monthly service charges” under the definition in rule 45.5, may be deposited in this account; or 2. Funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited in this account, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which event the disputed portion shall not be withdrawn until the dispute is finally resolved. Other property of clients or third persons shall be identified as such and appropriately safeguarded. [Court Order April 20, 2005, effective July 1, 2005]

Rule 45.2 Action required upon receiving funds, accounting, and records. 45.2(1) Authority to endorse or sign client’s name. Upon receipt of funds or other property in which a client or third person has an interest, a lawyer shall not endorse or sign the client’s name on any check, draft,

29 security, or evidence of encumbrance or transfer of ownership of realty or personalty, or any other document without the client’s prior express authority. A lawyer signing an instrument in a representative capacity shall so indicate by initials or signature. 45.2(2) Accounting and returning funds or property. Except as stated in this chapter or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and shall promptly render a full accounting regarding such property. 45.2(3) Maintaining records. a. A lawyer who practices in this jurisdiction shall maintain current financial records as provided in these rules and required by Iowa R. of Prof’l Conduct 32:1.15 and shall retain the following records for a period of six years after termination of the representation: (1) Receipt and disbursement journals containing a record of deposits to and withdrawals from client trust accounts, specifically identifying the date, source, and description of each item deposited, as well as the date, payee and purpose of each disbursement; (2) Ledger records for all client trust accounts showing, for each separate trust client or beneficiary, the source of all funds deposited, the names of all persons for whom the funds are or were held, the amount of such funds, the descriptions and amounts of charges or withdrawals, and the names of all persons or entities to whom such funds were disbursed; (3) Copies of retainer and compensation agreements with clients as required by Iowa R. of Prof'l Conduct 32:1.5; (4) Copies of accountings to clients or third persons showing the disbursement of funds to them or on their behalf; (5) Copies of bills for legal fees and expenses rendered to clients; (6) Copies of records showing disbursements on behalf of clients; (7) The physical or electronic equivalents of all checkbook registers, bank statements, records of deposit, prenumbered canceled checks, and substitute checks provided by a financial institution; (8) Records of all electronic transfers from client trust accounts, including the name of the person authorizing transfer, the date of transfer, the name of the recipient, and the trust account name or number from which money is withdrawn; (9) Copies of monthly trial balances and monthly reconciliations of the client trust accounts maintained by the lawyer; and (10) Copies of those portions of client files that are reasonably related to client trust account transactions. b. With respect to trust accounts required by Iowa R. of Prof’l Conduct 32:1.15: (1) Only a lawyer admitted to practice law in this jurisdiction or a person under the direct supervision of the lawyer shall be an authorized signatory or authorize transfers from a client trust account; (2) Receipts shall be deposited intact and records of deposit should be 30 sufficiently detailed to identify each item; and (3) Withdrawals shall be made only by check payable to a named payee and not to cash, or by authorized bank transfer. c. Records required by this rule may be maintained by electronic, photographic, computer, or other media provided that the records otherwise comply with these rules and that printed copies can be produced. These records shall be accessible to the lawyer. d. Upon dissolution of a law firm or of any legal professional corporation, the partners shall make reasonable arrangements for the maintenance of the records specified in this rule. e. Upon the sale of a law practice, the seller shall make appropriate arrangements for the maintenance of the records specified in this rule. [Court Order April 20, 2005, effective July 1, 2005; February 20, 2012]

Rule 45.3 Type of accounts and institutions where trust accounts must be established. Each trust account referred to in rule 45.1 shall be an interest-bearing account in a bank, savings bank, trust company, savings and loan association, savings association, credit union, or federally regulated investment company selected by the law firm or lawyer in the exercise of ordinary prudence. The financial institution must be authorized by federal or state law to do business in Iowa and insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund. Interest-bearing trust funds may be placed in accounts at credit unions only to the extent that each individual client’s funds are eligible for insurance. Interest-bearing trust funds shall be placed in accounts from which withdrawals or transfers can be made without delay when such funds are required, subject only to any notice period which the depository institution is required to observe by law or regulation. [Court Order April 20, 2005, effective July 1, 2005; April 25, 2008]

Rule 45.4 Pooled interest-bearing trust account. 45.4(1) Deposits of nominal or short-term funds. A lawyer who receives a client’s or third person’s funds shall maintain a pooled interest-bearing trust account for deposits of funds that are nominal in amount or reasonably expected to be held for a short period of time. A lawyer shall inform the client or third person that the interest accruing on this account, net of any allowable monthly service charges, will be paid to the Lawyer Trust Account Commission established by the supreme court. 45.4(2) Exceptions to using pooled interest-bearing trust accounts. All client or third person funds shall be deposited in an account specified in rule 45.4(1) unless they are deposited in: a. A separate interest-bearing trust account for the particular third person, client, or client’s matter on which the interest, net of any transaction costs, will be paid to the client or third person; or

31 b. A pooled interest-bearing trust account with subaccountings that will provide for computation of interest earned by each client’s or third person’s funds and the payment thereof, net of any transaction costs, to the client or third person. 45.4(3) Accounts generating positive net earnings. If the client’s or the third person’s funds could generate positive net earnings for the client or third person, the lawyer shall deposit the funds in an account described in rule 45.4(2). In determining whether the funds would generate positive net earnings, the lawyer shall consider the following factors: a. The amount of the funds to be deposited; b. The expected duration of the deposit, including the likelihood of delay in the matter for which the funds are held; c. The rates of interest or yield at the financial institution in which the funds are to be deposited; d. The cost of establishing and administering the account, including service charges, the cost of the lawyer’s services, and the cost of preparing any tax reports required for interest accruing to a client’s benefit; e. The capability of financial institutions described in rule 45.3 to calculate and pay interest to individual clients; and f. Any other circumstances that affect the ability of the client’s funds to earn a net return for the client.

45.4(4) Directions to depository institutions. As to accounts created under rule 45.4(1), a lawyer or law firm shall direct the depository institution: a. To remit interest or dividends, net of any allowable monthly service charges, as computed in accordance with the depository institution’s standard accounting practice, at least quarterly, to the Lawyer Trust Account Commission; b. To transmit with each remittance to the Lawyer Trust Account Commission a copy of the depositor’s statement showing the name of the lawyer or law firm for whom the remittance is sent, the rate of interest applied, the amount of allowable monthly service charges deducted, if any, and the account balance(s) for the period covered by the report; and c. To report to the Client Security Commission in the event any properly payable instrument is presented against a lawyer trust account containing insufficient funds. In the case of a dishonored instrument, the report shall be identical to the overdraft notice customarily forwarded to the depositor, and shall include a copy of the dishonored instrument, if such a copy is normally provided to depositors. In the case of instruments that are honored when presented against insufficient funds, the report shall identify the financial institution, the lawyer or law firm, the account number, the date of presentation for payment and the date paid, and the amount of overdraft. If an instrument presented against insufficient funds is not honored, the report shall be made simultaneously with, and within the time provided by law for, any notice of dishonor. If the instrument is

32 honored, the report shall be made within five banking days of the date of presentation for payment against insufficient funds. [Court Orders April 20, 2005, and July 1, 2005, effective July 1, 2005]

Rule 45.5 Definition of “allowable monthly service charges.” For purposes of this chapter, “allowable monthly service charges” means the monthly fee customarily assessed by the institution against a depositor solely for the privilege of maintaining the type of account involved. Fees or charges assessed for transactions involving the account, such as fees for wire transfers, stop payment orders, or check printing, are a lawyer’s or law firm’s responsibility and may not be paid or deducted from interest or dividends otherwise payable to the Lawyer Trust Account Commission. [Court Order April 20, 2005, effective July 1, 2005]

Rule 45.6 Lawyer certification. Every lawyer required to have a client trust account shall certify annually, in such form as the supreme court may prescribe, that the lawyer or the law firm maintains, on a current basis, records required by Iowa R. of Prof’l Conduct 32:1.15(a). [Court Order April 20, 2005, effective July 1, 2005]

Rule 45.7 Advance fee and expense payments. 45.7(1) Definition of advance fee payments. Advance fee payments are payments for contemplated services that are made to the lawyer prior to the lawyer’s having earned the fee. 45.7(2) Definition of advance expense payments. Advance expense payments are payments for contemplated expenses in connection with the lawyer’s services that are made to the lawyer prior to the incurrence of the expense. 45.7(3) Deposit and withdrawal. A lawyer must deposit advance fee and expense payments from a client into the trust account and may withdraw such payments only as the fee is earned or the expense is incurred. 45.7(4) Notification upon withdrawal of fee or expense. A lawyer accepting advance fee or expense payments must notify the client in writing of the time, amount, and purpose of any withdrawal of the fee or expense, together with a complete accounting. The attorney must transmit such notice no later than the date of the withdrawal. 45.7(5) When refundable. Notwithstanding any contrary agreement between the lawyer and client, advance fee and expense payments are refundable to the client if the fee is not earned or the expense is not incurred. [Court Order April 20, 2005, effective July 1, 2005]

Rule 45.8 General retainer. 45.8(1) Definition. A general retainer is a fee a lawyer charges for agreeing to provide legal services on an as-needed basis during a specified time period. Such a fee is not a payment for the performance of services and is earned by the lawyer when paid.

45.8(2) Deposit. Because a general retainer is earned by the lawyer when paid, the retainer should not be deposited in the trust account. [Court Order April 20, 2005, effective July 1, 2005]

Rule 45.9 Special retainer. 45.9(1) Definition. A special retainer is a fee that is charged for the performance of contemplated services rather than for the lawyer’s availability. Such a fee is paid in advance of performance of those services. 45.9(2) Prohibition. A lawyer may not charge a nonrefundable special retainer or withdraw unearned fees. [Court Order April 20, 2005, effective July 1, 2005]

Rule 45.10 Flat fee. 45.10(1) Definition. A flat fee is one that embraces all services that a lawyer is to perform, whether the work be relatively simple or complex. 45.10(2) When deposit required. If the client makes an advance payment of a flat fee prior to performance of the services, the lawyer must deposit the fee into the trust account. 45.10(3) Withdrawal of flat fee. A lawyer and client may agree as to when, how, and in what proportion the lawyer may withdraw funds from an advance fee payment of a flat fee. The agreement, however, must reasonably protect the client’s right to a refund of unearned fees if the lawyer fails to complete the services or the client discharges the lawyer. In no event may the lawyer withdraw unearned fees. [Court Order April 20, 2005, effective July 1, 2005]

Rule 45.11 Designation of Successor Signatories. A lawyer who is the sole lawyer signatory on an attorney trust account may designate, in an instrument acceptable to the depository for the trust account, a successor signatory, who shall be a member of the bar in good standing and admitted to the practice of law in Iowa, and whose authority shall become effective upon the occurrence of an event or events described in the instrument. The event or events described in the instrument may include death, disappearance, abandonment of law practice, temporary or permanent incapacity, suspension, or disbarment. [Court Order December 10, 2012]

20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

Divorce 101

10:45 a.m.-11:45 a.m.

Presented by Caitlin Slessor Nazette, Marner, Nathanson & Shea, LLP 615 2nd Street SW Cedar Rapids, IA 52404 Phone: 319-366-1000 Email: [email protected]

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 Divorce 101

Caitlin Slessor Nazette, Marner, Nathanson & Shea, LLP, Cedar Rapids, IA 319-366-1000 [email protected] A few notes about this presentation:

-This is meant to be a very basic outline of Divorce Law in Iowa. The Family Law Committee of the Iowa State Bar Association puts on a two day seminar every year that goes into depth on specific topics -At the end of the outline is an appendix with forms and statutes that are referred to throughout the presentation -These forms are meant to be a starting point for those creating their own forms and should be modified by the user to apply to their particular district and client. Preliminary Matters  Iowa’s divorce statute is Chapter 598. It’s not long and you should give it a full read if you’re going to practice divorce law.  Also of interest:  Chapter 252 for child support questions  595: the marriage statute. Who, how, etc.  596: premarital agreements.  597: the “husband and wife” statute Preliminary Matters  Iowa is a “no fault” divorce state, as all states are. New York was the lone holdout but finally adopted no fault in 2010.  Historically, parties who wanted a divorce had to prove wrongdoing or breach of the marital contract. Infidelity or cruelty were the most common.  With no fault divorce, this is no longer necessary. This is sometimes referred to as unilateral divorce: only one party has to want it and doesn’t have to have a particular reason  Studies have shown that no fault divorce leads to lower incidence of female suicide and domestic violence. 1  In Iowa, you must simply assert that “the legitimate objects of matrimony have been destroyed and there 1 http://www.freakonomics.com/2010/06/16/divorce-reform-hits-remains no reasonable likelihood that the marriage new-york/can be preserved.” Preliminary Matters  A marriage is a legal contract between two people  A divorce is a dissolution of that contract  The statute is referred to as the Dissolution of Marriage chapter THE BASIC PARTS OF A DIVORCE CASE  1. Pre-filing  2. Filing  3. Discovery, i.e., information gathering  4. Evaluation  4 a. Temporary orders  5. Negotiation  6. Resolution  6 a. Settlement  6 b. Trial  7. Post-Decree *I have left appeals out of this outline. This is far too specialized to cover in today’s time 1. Pre-filing- Dissolution of Marriage Questionnaire  Create a dissolution of marriage questionnaire for potential divorce clients. It will help you get much of the information you need in one place.  Giving clients a questionnaire also helps them see what kind of information you will need from them and what will be relevant to their case  Clients have busy lives and much of your job will be to remind them of what their obligations are 1. Pre-filing- Practice Tips  It’s never too soon to lay the foundation for a healthy family law attorney- client relationship  Talk to clients about finding a support person in their life: counselor, minister, sister, friend  Let them know that you are there to help with the legal issues but that many of the questions they will encounter will not be of a legal nature. Those should be discussed with a support person.  Set up realistic expectations. Keep in mind that you are only hearing one side of the story and that their spouse is unlikely telling the same story. 1. Pre-Filing- Practice Tips

 From the very first meeting, listen for the problem areas and try to get the client used to the reality of the situation:  Look for flags like the client saying they will never pay alimony, won’t divide their retirement, just want primary care  Sometimes using language like “family law disputes can be unpredictable” or “ keep in mind that a judge may see it differently” can be a gentler way of telling someone something that they don’t want to hear.  It is rarely going to help the client in the long-run if you mindlessly promise to get whatever they are asking for. 99% of clients appreciate candor and will have better things to say about you if you give it to them straight.  Be realistic and up front about costs: if clients say things that indicate they will need a lot of service, let them know how that will affect their bills. Give clients an idea of the range of costs they can expect and tell them that you will help them plan for this. This will improve your relationship with the client, prevent arguments about bills later if the case gets expensive and help ensure you get paid.  Keep in mind that many people do not have thousands or tens of thousands in savings. They may rely on a 401(k) loan or a tax refund to pay their bills. If you quote them a retainer but don’t explain the circumstances that might lead to exceeding the retainer, they may be frustrated because they would have saved/borrowed more if you just would have told them. 1. Pre-Filing- Common Jurisdictional Questions  Before you file a dissolution of marriage case in Iowa, make sure you can.  The Respondent must be an Iowa resident and be personally served OR the Petitioner must have resided here for at least one year  There are endless combinations of facts that can potentially occur, but here are a few basics that come up: 1. Pre-Filing- Common Jurisdictional Questions  I just moved here from Hawaii because I missed the winter. Can I get divorced in Iowa?  No, not until you’ve been here a year, or if your spouse moves here and you have him/her personally served.  I just moved to Hawaii because I hate winter but I want to get divorced in Iowa. That’s where my wife and children live. Can I do that?  Yes, spouse is an Iowa resident 1. Pre-filing- Venue  Venue is proper in any county where either spouse lives  If cost is an issue, consider filing in the county where the attorney works, if that is an option  For example, client lives in Vinton (Benton Co), spouse lives in Cedar Rapids. Client hires Linn County lawyer: much cheaper to walk two blocks to the courthouse than to drive 45 minutes to Vinton. 1. Pre-filing- a note about domestic abuse  It is important to determine whether domestic abuse is an issue. If so, discuss the option of filing for a 236 protective order.  It is equally important to discuss domestic abuse in the context of not doing it. This can be an awkward conversation, but get comfortable doing it.  Once your client has perpetrated abuse, certain things might be very difficult for them- getting custody or shared care and remaining in their homes, for example. 2. Filing The Case: The Petition

 Now that you know this is the proper state and you’ve decided on a proper venue, draft your petition.  Iowa Code Section 598 has a subsection that describes what to include in your petition. See the Appendix. 2. Filing The Case- Injunctions  Consider whether an injunction against the dissipation of assets is necessary.  In the Sixth Judicial District, you can get a “standard peacekeeping” injunction pretty easily at the beginning of a case if it is mutual and follows a certain format. (See Injunction in the Appendix).  Requires a sworn statement (affidavit) from client on the necessity and you must follow the Iowa Rules of Civ. Pro. for injunctions (Division XV). 2. Filing the case- some notes

Your client must sign the petition Must also include an original notice, confidential information form and cover sheet Include a $185 filing fee Serve the opposing party- ask your client whether personal service or an acceptance is better It is helpful to establish a checklist for your case to keep track of tasks. See Appendix-Divorce checklist. Remind your clients to take their Children in the Middle class. 3. Discovery  Tell your client to begin gathering their financial information.  In fact, some areas have mandatory discovery, like in the 6th Judicial District. (See Appendix for Family Law Case Requirements Order).  Spend some time drafting a really good overview letter that you can use in most cases. It will cut down on getting the same question over and over. Hint: do separate form letters for case with/without children. (See Appendix for Initial Dissolution Letter). 3. Discovery  Find out if mediation is required in your district.  Find out if the local convention is for attorneys to go to mediation or not.  Even if it’s not required, evaluate whether it will be helpful and whether an attorney presence will also be helpful.  Calendar some follow up dates: when to hound your client about financial documents, when the 90-day waiting period expires, any court ordered dates or deadlines. 3. Discovery- Formal Discovery  Evaluate whether this is necessary.  Often, it is not. You can get information from the source directly:  It is lying around the house.  Joint bank accounts- have your client obtain the information.  Joint tax returns- your client can request copies.  Subpoenas if you know where the information is located.  Just ask- the other attorney may provide it willingly. Both sides are often under pressure to be cost-effective. 3. Discovery- Formal Discovery  Same tools of discovery as any other civil case (Iowa Rule Civ. Pro. Division XII (1.701 and subsequent)  Depositions  Interrogatories  Requests for Production  Requests for Admissions  Use judiciously- five good questions will be answered more thoroughly than thirty form questions. 4. Case evaluation  When you have all the information you need, begin thinking about your resolution.  Have a list of issues that you provide your client (See Appendix-Settlement worksheet) or use for yourself.  Kids  Property (real estate, debts, cars, bank accounts, retirement)  Support (alimony)  Misc. (name change, court costs, attorney fees) 4.a. Temporary Orders  Evaluate whether any temporary orders are necessary. Here is what I say to clients:  Because a divorce may take over a year in our district to go to trial, the court can enter orders for custody and support while the case is pending so that you and your spouse know what your obligations are to each other and so that you’re not having disagreements about the kids’ schedule and finances. Do you think you will be able to work out these issues on your own by agreement or that you will need a court order during this time?  It can be quite expensive to have a temporary matters hearing, as well as divisive for spouses to have to take stances against one another early in a case 4.a. Temporary Orders  Let people know they can file a request for temporary orders any time. The decision doesn’t have to be made at the time of filing.  In contentious cases, recommend requesting a temporary hearing right away.  Know whether the court’s schedule is something that a client should be aware of: for ex., in Linn County, the wait on a temp. hearing is about 8 weeks right now. 4.a. Temporary Orders

 So, you think you need them. What can be decided at a temporary matters hearing?  Look at the statute:

598.10 TEMPORARY ORDERS. 1. a. The court may order either party to pay the clerk a sum of money for the separate support and maintenance of the other party and the children and to enable such party to prosecute or defend the action. The court may on its own motion and shall upon application of either party or an attorney or guardian ad litem appointed under section 598.12 determine the temporary custody of any minor child whose welfare may be affected by the filing of the petition for dissolution. b. In order to encourage compliance with a visitation order, a temporary order for custody shall provide for a minimum visitation schedule with the noncustodial parent, unless the court determines that such visitation is not in the best interest of the child. 2. The court may make such an order when a claim for temporary support is made by the petitioner in the petition, or upon application of either party, after service of the original notice and when no application is made in the petition; however, no such order shall be entered until at least five days' notice of hearing, and opportunity to be heard, is given the other party. Appearance by an attorney or the respondent for such hearing shall be deemed a special appearance for the purpose of such hearing only and not a general appearance. An order entered pursuant to this section shall contain the names, birth dates, addresses, and counties of residence of the petitioner and respondent.  At least in the sixth judicial district, the court does not typically grant possession of the marital home to one party or another at a temporary hearing. 4.a. Temporary Orders  Preparing your client  Don’t reinvent the wheel: spend the time to write a good set of instructions that you can use for every client. Everyone has the same questions. (See Appendix).  Create a letter or instructions for witnesses (See Appendix). Give witnesses padded deadlines.  Reiterate deadlines and let clients know that your ability to do your best depends on them meeting their deadlines. It may take a few experiences to learn this, but a rushed affidavit is never as good as one that has been carefully prepared.  Figure out whether your client will personally testify and prepare them. Even if clients don’t normally personally testify, let them know that it may be a possibility (if that’s true).  Again, set up reasonable expectations 4.a. Temporary Orders  Preparing yourself:  Consider filing a “requested relief” statement.  Have some alternative child support guidelines if child support is an issue.  Have a list of your best points to argue in chambers or to examine your client about (if an in-person hearing is held).  Talk to opposing counsel about what is agreed upon. Make sure you share this with the judge so it ends up in the order. 4.a. Temporary Orders  After the hearing:  No, you can’t really appeal it. You can do an interlocutory appeal, but in our office this has resulted in clients just paying more attorney fees.  No, you can’t modify it because of some small change. But, yes, if something serious occurs you can apply to modify it. This doesn’t mean it will be modified.  Yes, you have to follow this for a year (or so).  Yes, it sets up a status quo that may be hard to get changed at trial. 4. Evaluation- property  The law: We are striving for an “equitable division of the marital property.”  Does not require “equal” but often gravitates that way.  Think: “fair,” not “equal” when you describe to clients.  Read Iowa Code Section 598.21. It tells you what to consider.  Well developed case law on issues like pensions, premarital property, etc.  But not terribly helpful for issues like what to do with the photo albums. 4. Evaluation

 For property issues:  Create a property division worksheet:  List each piece of property/debt that each party could receive and do some math.  Play with the math. Explore minimums and maximums.  Share the math with your client.  Some people have a very hard time understanding financial information. Figure out if you have one of those clients and explain it until they get it. A few issues I see:  The client who doesn’t understand that an encumbered asset, no matter how big, is really only worth it’s “equity.”  The client who highly values the cash property settlement (i.e., she had to pay me money! I must have won!).  The client who has trouble calculating the cost of trial into their equation. 4. Evaluation- children  For cases involving children  Get comfortable talking about “legal custody” and “physical custody.”  Explain “primary” physical custody versus “joint” physical custody.  Be thorough when you analyze how custody and support work together.  Sometimes, a parent is better off agreeing to shared custody and split expenses rather than primary custody and greater child support.  There is plenty of case law regarding custody. Read it and get a feel for the cases.  At least know these cases well: - In RE Marriage of Winter 223 N.W.2d 165 (Iowa, 1974): Discusses factors relevant to a custody determination.

-In re Marriage of Hansen, 733 N.W.2d 683, 695 (Iowa 2007): Discusses the factors for determining whether a shared care schedule is appropriate. 4. Evaluation- children  Practice tips  Print out some blank Google calendars. Use colors for a visual  Ask for a budget for the kids: include daycare, dance, car insurance, school lunches, school registration, band instrument rental, etc. Don’t include “in home costs” like dinner, hot water bill, clothing  Explore what your client really wants. A lot of people say, “I just want primary care, I don’t care about anything else,” or, “I just want my kids to live with me. Find out why. They may just be parroting what a friend has told them. 4. Evaluation- children  For cases involving children, cont’d  I actually draw out a picture of what people are fighting about in custody cases: What you are paying me to fight about

Client has 0 Exactly equal Spouse has days with time with kids 0 days with children children

 The client need not (usually) be concerned about spending 0 days with their children 4. Evaluation- children  For cases involving children, cont’d  Best interest of the child is the prevailing standard.  Do not forget to explore legal custody- sole legal custody is rarely granted but make sure you are evaluating this issue.  If your client asks “can we bring up x?” the answer is almost always “yes.”  The more important question is whether you should. But read the statute for yourself to determine what you “can bring up,” and what you should bring up: 598.41 is the relevant section. 4. Evaluation- children  For cases involving children, cont’d  Practice Tip:  Every once in a while the super-agreeable client can be a problem. The most common problem I see is that when someone wants the divorce to be over right away, they will urge you to stop requesting so much detailed information about their custody arrangement. They just want to “keep it open.”  This is a bad idea. Resist the urge! It leaves people with an unusable document when they inevitably need it in the future.  I throw myself under the bus: “just humor me and let’s at least put in some sort of default because I’m so obsessive about this sort of thing.” Or you could try “you’ll thank me when you’re older.” 4. Evaluation- child support  For cases involving children, cont’d  Child support: Apply the Child Support Guidelines.  Located here: http://www.iowacourts.gov/wfdata/files/Childsupport/ Chapter9.pdf  And in your Iowa Court Rules book.  If you do a lot of divorces/custody cases, invest in Iowa Support Master software  Located here: https://www.awism.com/I  If you want to deviate from the guidelines, spell out why in your stipulation of settlement. 4. Evaluation- Alimony  Alimony can often be the most difficult issue.  This is because the law does not provide certainty.  Start by looking at whether there is an income disparity. If so, keep going.  Look at the length of the marriage.  Look at earning capacity, non-monetary contributions to the marriage, moving for one spouse’s career, asset division.  Consider what effect child custody and support decisions have on the alimony analysis.  Read some recent court of appeals decisions.  Look for alimony calculators- from the American Academy of Matrimonial Lawyers, other states, etc. These are not controlling but can give you some ideas.  Consider property settlements in lieu of alimony where appropriate. 5. Negotiation  Once you have evaluated your case and provided your client with a reasonable set of expectations, you are ready to begin negotiating your case.  You have a variety of techniques at your disposal.  Think of easier/less expensive techniques versus more involved/more expensive techniques.  Level 1 (easier) techniques:  Pick up the phone and talk to the other attorney.  Consider e-mail- this provides a written record of agreements and makes drafting easier. It also allows clients to see the negotiations directly. It also ensures that nothing is forgotten.  Letter writing- just as a note, sometimes it can be hard for a client to receive a strongly worded letter in the mail from the opposing attorney without warning. Consider calling to give them advance warning or putting a cover letter with it. 5. Negotiation  Level 2 negotiation techniques  Mediation- required in many districts.  Consider having attorneys attend and have a stipulation of settlement circulated prior to mediation.  Settlement conferences- both attorneys and both clients, meet at an office and try to work it out.  This is far more effective for an initial divorce than any subsequent modification actions as both parties will probably want the case to be over.  Judge-led settlement conference- this varies from district to district. 6.a. Resolution- Settlement  If you have utilized negotiating techniques that have led to settlement, get it finalized right away.  Even sitting on an agreement overnight can mean the agreement will fall through.  Be careful in your drafting. Learn from your experiences in contempt cases and modifications.  Practice tip- if you use forms or re-use stipulation language, make sure that it is a blank document and has no names in it. It can be easy to miss these changes when you are down to the wire on a settlement. 6.a. Resolution- Settlement  Set parameters for yourself for settlement and stick to them.  I like to tell clients that I want to know whether their case will likely settle or go to trial by about four months from the trial date. This is padded as I really only need about two months to get ready for most trials, but it helps them stay on task.  Some clients vastly prefer to put their head in the sand and it can be easy not to look at a case if a client isn’t bothering you.  Don’t mistake their lack of contact for intent to agree. 6.a. Resolution- Settlement  BUT- You are dealing with people and families, not insurance companies, and this doesn’t always work. Still, try to make last minute settlements an exception, not the rule.  Request trial retainers by a certain date and use that as a tickler to check in on how a client wants to proceed.  Don’t avoid trying to settle just because a case is contentious- some of the most contentious cases do settle. There is a difference between the chatter of disagreement and real, fundamental disagreement. 6.b. Resolution-Trial  This could be a presentation all of its own. But here are some tips:  Some cases must be tried. Get a retainer. Do not be afraid to try a case.  Prepare well in advance. Create a checklist that you use in every case and follow it.  Go over everything again and again. Knowing the case like the back of your hand will be your most powerful tool at trial. This enables you to maximize your presentation.  Be well organized: use trial binders and sub-dividers.  Don’t miss deadlines.  Stick to only essential witnesses and only ask them what they need to add to the relevant issues.  Ensure that your client knows that his/her credibility is the most important thing about the trial. 6.b. Resolution-Trial  Instruct your client about body language/sighing/furious whispering.  Manage your time: I tell my clients that if the biggest deal to them is custody, I will spend the bulk of our time on that. If they only care a little about the retirement accounts, I will spend relatively little time on that.  Make sure you are utilizing exhibit binders. Piles of papers that get disorganized are distracting.  Practice tip- explain to your client what to expect after the trial and prepare them for post-trial deadlines. 7. Post-Decree  Consider available post-trial motions  Consider appealing adverse rulings (30 days to file notice of appeal)  Figure out whether you have to do anything pursuant to the decree. Do everything you are supposed to do:  Deeds  Qualified Domestic Relations Orders  Income withholding Orders, etc.  Make sure your client understands the ruling.  Tell them to pay their court costs. If you don’t, they will be mad at you when they try to register their car and are told they can’t. 7. Post-Decree  Consider withdrawing from cases when you’ve completed the case. This prevents you from being noticed on future contempt filings, modifications, etc.  Return photos, tax returns, etc. to client.  Learn from your experiences and change how you do things in the next case.  Ask your clients for constructive feedback. We are in a service industry and should be striving to provide satisfactory service to our clients. A final note…  Family law is stressful. No one going through a divorce is happy to spend thousands of dollars on your services.  Remember, the clients have created their own circumstances. It was not you who locked the other spouse out of the house/said something mean to the kids/etc.  Keep this in mind when you are talking to the opposing counsel. Fight zealously for your client but try not to take on the controversies personally.  Figure out what the legal issues are and make the case about that. Keep it professional, not personal.  Don’t do it if you hate it. Divorce 101 Appendix Dissolution of Marriage Client Questionnaire

Instruction~: complete all applicable sections with as much information as possible. This form is . confidential. Call if you have imy questions. Attach additional pages if necessary. Return ·this form _witl1in 10 days from your initial attorney consultation. Date: -----~--~ Client Information FULL LEGAL NAME: DATE OF BIRTH:

MAIDEN NAME: STATE OF BIRTH:

CURRENT RESIDENTIAL ADDRESS: SOCIAL SECUI

DRIVER'S LICENSE NO.

MAILING ADDRESS: HOME PHONE: WORK PHONE: . CELL PHONE: .. EMAIL: EMPLOYER NAME AND ADDEESS: CURRENT JOB SUPERVISOR:

CURRENT JOB START DATE:

--- HIGHEST LEVEL OF STATISTICAL INFORMATION FOR EDUCATION/COURSE OF STUDY: DEPT OF PUBLIC HEALTH:

NO. OF YEARS OF COLLEGE (DEGREE): RACE:

NO. OF THIS MARRIAGE: ' HOW OTHERS ENDED (CIRCLE ONE)

DISSOLUTION DEATH ANNULMENT

EMERGENCY CONTACT IF NECESSARY:

Do you have a criminal record? If yes, please give the date, charge and outcome.

l Spouse Information FULL LEGAL NAME: .. DATE OF BIRTH:

MAIDEN NAME: STATE OF BIRTH: --~ ' CURRENT RESIDENTIAL ADDRESS: SOCIAL SECURITY NO.

DRIVER'S LICENSE NO . . MAILING ADDRESS: HOME PHONE: WORK PHONE: qLLPHONE: , ' EMAIL: EMPLOYER NAME AND ADDRESS: CURRENT JOB SUPERVISOR:

CURRENT JOB START DATE: - HIGHEST LEVEL OF STATISTICAL INFORMATION FOR EDUCATION/COURSE OF STUDY: DEPT OF PUBLIC HEALTH:

NO. OF YEARS OF COLLEGE (DEGREE):. RACE:

NO. OF THIS· MARRIAGE:

HOW OTHERS ENDED (CIRCLE ONE)

DiSSOLUTION DEATH ANNULMENT ..

Spouse's attorney -~--·------~----- Does your spouse have a Cl'iminal record? If yes, please giye the date, charge and outcome:------~-'----· Marriage Information DATE OF MARRIAGE: DATE OF SEPARATION: PLACE OF MARRIAGE: HOW LONG HAVE YOU LIVED IN IOWA? Husband: Wife: If divorced before, please list the date and locahon of the dtvorce: ______~ Did you sign a prenuptial agreement? Name of attorney for prenuptial agreement:

2 Children Information CHILDREN WITH YOUR CURRENT SPOUSE: NAME: NAME: DOB: DOB: SSN: SSN: SCHOOL:. SCHOOL: GRADE:· GRADE: TEACHER/PRINCIPAL: TEACHEt

NAME/ ADDRESS/PHONE OF NAME/ ADDRESS/PHONE OF DAYCARE PROVIDER: DAYCARE PROVIDER:

NAME: NAME: DOB: DOB: SSN: SSN: SCHOOL: SCHOOL: GRADE: GRADE: TEACHER/PRINCIPAL: TEACHER/PRINCIPAL:

NAME/ ADDRESS/PHONE OF NAME/ ADDRESS/PHONE OF DAYCAREPROVIDER: DAYCAREPROVIDER:

.: Who has physical care of the children? ----'------

.. Do you pay or receive support for the children? 0 Yes .DNo

.If so, how much? ..------ls there a _visitation schedule with the children? ______

Describe: ------Do the children reside in the family dwelling? ______Will terr{poriu-y child support and visitation be im issue?_·______If yes, explain: ______

3 CHILDREN OUTSIDE OF CURRENT MARRIAGE: NAME: NAME: DOB: DOB: SSN: SSN:. PARENTS: .. ·· PARENTS: Who has custody? Who has custody?

Who pay~ child support? Who pays child sqpport? . Child support amount: Child support amount:

Client's medical infol'mation 1. Are you currently receivipg any treatment from a doctor or taking any medication for a health condition? If so, please provide the following: Physical health conditions and type of care received:

PRESCRIPTION MEDICATIONS TREATING PHYSICIANS:

2. Have you ever been treated £or mental health or substance ·abuse problems? If so, please provide the following information: DESCRIBE PROBLEM: ..

·DATES OF TREATMENT: STATUS OFTREATMENT:.

PRESCRIPTION MEDICATIONS PHYSICIANS OR COUNSELORS:

. 4 3. Have you ever been the victim of physical or domestic abuse during this relationship? If so, please provide the following information: . INDENTIFY THE TYPE OF ABUSE: PERPETRATOR:

DESCRIBE ABUSE: DATES:

.- .

., WERE POLICE EVER CALLED: WAS ANYONE ARRESTED?

DID YOU RECEIVE MEDICAL DID LEGAL ACTION FOLLOW? TREATMENT? .(When, where, etc.) . (When, where, result)

5 Spouse's medical infonriation .1. Is your spouse currently receiving any treatment from a doctor or taking any mediCation for a health condition? If so, please provide the following; Physical health conditions and type of care received: .. .. PRESCRIPTION MEDICATIONS:. TREATING PHYSICIANS: .

. . 2. Has your spouse ever been treated for mental health or substance abuse problems? If · so, please provide the following information: DESCRIBE PROBLEM: .

DATES OF TREATMENT: STATUS OF TREATMENT:

PRESCRIPTION MEDICATIONS PHYSICIANS OR COUNSELORS:

3. Has your spouse ever been the victim of physical or domestic abuse dming this relationship? If so, please provide the following in£ormation: IDENTIFY THE TYPE OF ABUSE: PERPETRATOR:

DESCRIBE ABUSE: DATES:

WERE POLICE EVER CALLED? WAS ANYONE ARRESTED?

DID YOU RECEIVE MEDICAL DID LEGAL ACTION FOLLOW? TREATMENT? (When, where, etc.) (Where, when, result)

6 Client's income information Job #1 INCOME SOURCE: GROSS MONTHLY INC:OME:

SALARY QR HOURLY RATE: . PAY PERIOD:

PAYCHECK DEDUCTIONS: PAYCHECK DEDUCTIONS: Health Insuranc~: Federal taxes: Union dues: State taxes: Manda tory retirement: · FICA: .. Non-mandatory retirement:

1. Do you ever work overtime?."If so, please describe the frequency and overtime· compensation.

Job #2 ·· INCOME SOURCE: GROSS MONTHLY INCOME:

SALARY OR HOURLY RATE: PAY PERIOD:

PAYCHECK DEDUCTIONS: PAYCHECK PEDUCTIONS: Health Insurance: Federal taxes: Union dues: State taxes: Mandatory retirement: FICA: Non-mandatory retirement:

1: D~ you ever work overtime? If so, please describ~ the frequency and overtime . compensation.

7 INSURANCE·

Do you' have health insurance?~~~~~~------~--~~~

Is it·offered through your employer?__:___---~------~

.If so, please identify the iilsUl'ance company: _· ---~------What is the cost for a si.ngle person? ______._;__:__ Are your chil.dren from this marriage included on this insurance coverage? --- Does your spouse have health insurance offered through employer? -'------

Ifso, please i<:Ientify the insurance company: ~~------What is the cost to insure the family? ___ Are your children from this marriage included on this insurance coverage? ____

8 Spouse's income information Job #1 Il':JCOME SOURCE: GROSS MONTHLY INCOME:

SALARY OR HOURLY RATE: PAY PERIOD:

PAYCHECK DEDUCTIONS: .PAYCHECK DEDUCTIONS: Health Insurance: Fe~eral taxes: Union dues: · State taxes: ~ Mandatory retirement: FICA: N:on-mandatory retirement:

1. Does yolll' spouse ever work ovet;lime? If so, please describe the frequency and overtime co.tnpensation.

Job#2 INCOME SOURCE: GROSS MONTHLY INCOME:

SALARY OR HOURLY RATE: PAY PERIOD:

PAYCHECK DEDUCTIONS: PAYCHECK DEDUCTIONS: Health Insurance: Federal taxes: Union dues: State taxes: Mandatory retirement: FICA: Non-mandatory retirement:

1. Does your spC!use ever work overtime? If so, please describe the frequency and overtime compensation.

9 Real Estate Information 1. Do you rent or own yo!fl' marital home? ____ If you own, please complete the following: .. NAME OF OWNERS: ADDRESS OF MARITAL HOME:

PATE OF PURCHASE: PURCHASE PRICE:

CURRENT BALANCE OF MORTGAGE CURRENT ASSESSED VALUE: PRINCIPLE:

NAME AND ADDRESS OF MORTGAGE . MONTHLY PAYMENT: COMPANY: Does this include taxes. and insuranc.e?

2. Has your marital home been sold in the last 12 months? ------3. Do you have plans to sell the marital home as a result of tlus dissolution? ___ . ' . . 4. Do you own other real estate (land or buildings) in addition to the marital home?_

If so, please complete the following:

NAME OF OWNERS: ADDRESS OF PROPERTY:

PROPERTY USE:

DATE OF PURCHASE: PURCHASE PRICE:

CURRENT BALANCE OF MORTGAGE CURRENT ASSESSED VALUE: PRINCIPLE: .. NAlYIB AND ADDRESS OF MORTGAGE MONTHLY PAYMEl\IT: COMPANY:

DOES PAYMENT INCLUDE TAXES AND INSURANCE? 10 Financial Information

' ' 1,' Have you or yout· spouse ever filed for bankruptcy? If so, please complete the following: WHO FILED? NAME OF BANKRUPTCY ATIORNEY:

TYPE OF-BANKRUPTCY (chapter) DATE FILED:

CURRENTSTATUSOFBANKRUPTCY TOTAL VALUE OF DEBTS AT TIME 0!1 FILING: -

BANKS· Please complete the following information for each bank account held by you or your spouse: TYPE OF ACCOUNT: NAME AND ADDRESS OF BANK

NAME ON ACCOUNT: CURRENT BALANCE:

RETIREMENT ACCOUNTS/PENSIONS: Please complete the following information for each investment maintained by EITHER spouse. Include all retirement accounts from past and present employers. TYPE OF ACCOUNT: NAME AND ADDRESS OF '],'HE INSTITUTION MANAGING THE ACCOUNT:

EMPLOYER (if applicable):

NAME ON ACCOUNT: CURRENT TOTAL BALANCE:

CURRENT VESTED BALANCE:

11 INVESTfyfENTS: Please complete the following information for each inves!ment rmiintained by EITHER. spouse. TYPE OF INVESTMENT: NAME/ ADDRESS OF INSTITUTION MANAGING THE INVFSTMENT:

NAME ON ACCOUNT: CURRENT BALANCE: ·

AUTOMOBILES: Please complete. the .following information for .each auto111obile owned by either spouse. --··--- YEAR, MAKE MODEL, COLOR: OWNER:

PURCHASE DATE: PURCHASE PRICE:

CURRENT LOAN PRINCIPLE: NAME AND ADDRESS OF LENDER: ...... MONTHLY PAYMENT: ..

CURRENT MARKET VALUE: APPROXIMATE MILEAGE:

SPECIAL FEATURES: DESCRIBE CURRENT CONDITION: .

LIFE INSURNCE PERSON INSURED: NAME AND ADDRESS OF INS. CO.:

POLICY NUMBER: VALUE OF DEATH BENEFIT:

BENEFICIARY: DOES THE POLICY HAVB A CASH VALUE? If yes, what is that value?

12 Miscellaneous

1. Do you have assets, property or debts thatwere gifted or inherited or are pre-marital property? This includes any inheritance from a will m• estate or a gift from a Jiving person. If so, please identify each asset, property or debt:

2. List other assets with a value in excess of $1,0QO such· as furniture, collectibles, guns, tools. Please identify the estimated value and identify the owner of the assets (husband, wife, joint).

3. Excluding the assets Ji~ted immediately above, what is the estimated value of your househ.old contents?

Debts Please complete the following for all debts of BOTH spouses.

Debt ltl Type of Debt/Name of Creditor:_~~------~---- . Name ofDebtor: ______~--~------Debt acquired before or after maniage? ______

Balance Due:------'------

Monthly Payment:_~--~------ Estimated pay off date:------

I ·I ! 13 Debt#2 Type of Debt/Name of Creditor: ______~--

Name ofDebtor: _____c______Debt acquired before or after marriage? ______

B~anceDue: ______~------Monthly Payment:------;------

Estimated pay off date:-~------;;~------..:. Debt#3 ·Type of Debt/Name ofCreditor: ______~------

Natne of Debtor:------,-----,-~------'-~------

Debt acquired before or after rnarriage? ______----c---~------Balance Due:-:--"----:----'------_:_____ -:- Monthly Paymenti __--'------~------ Iistimated pay off date:_------ Debt_#4 _ Type o£ Debt/Name of Creditor: ______:_ ____

Name ofDebtor:_~~------ Debt acquired before or after marriage?_------Balance Due:------· ______:_ Monthly Payment: ______

Estimated pay off date:------ Debt#S Type o£ Debt/N~e of Creditor: ______Name of Debtor: ______Debt acquired before or after matTiage? ______

B~anceDue: ______~------

MonthlyPayment: ____~------Estimated pay off date:-'------ (Attach other sheets if necessary for answering any of the questions)

14 Please complete the following list of monthly expenses for financial affidavit: Type of Expense .Amount ···- 1. House payment or rent· 2. Household insurance 3 .. Real estate taxes 4. Repairs and maintenance -- 5. Meals and .food: 6. Clothing ' 7. Gas for car 8. Car insurance · 9. Car license 10. Other car e~penses / maintenance 11. Health insurance 12. Medical - 13. Dental 14. Prescriptions 15. Elech·icity '16. .Gas I heat· . . 17. Wateri g<~_i'aP.'e/ sewer 18. Telephone 19. Cell phone 20. Cable 21. internet 22. School lunches 23. School activities 24. Child Care 25. Child support payments 26. tife insurance 27. Laundry arid dry cleaning 28. Recreation and entertainment 29: Papers and magazines 30. Incidentals (personal care tobacco, alcohol, gifts) 31. Donations .. 32. Pet·care 33. Hobbies 34. Other

Total:

15 Client expectations It can be helpful to know what you are expecting as a result of this case so we can be sure to discuss the issue.s that are important to you. Please answer the following questions as best you can. · 1. Have you talked to the other party aboutthis case?______

2. Have you and the other party discussed any informal agreement regarding custody/visitation? If so, please describe the agreement:

3. Describe the custody and visitation agreement you would prefer:

4. Share any specific issues you anticipate in yoUl' case (i.e., how the other parent will feel about your proposed arrangement, what the "fighting issues" may be, etc.)

5. Anything else?

*Please attach extra pages if necessary

16 The following is .a Hst of financial documents to collect and provide your attomey. Please contact us if you \lave trouble getting any of the documents.

o Current paystubs or other documentation showing income from all sour~es, including all deductions for federal and. state taxes, health insurance' premiums, union dues, mandatory pension withholdings, etc., for the past 6 months. . . 0 Federal and state income tax returns, including all schedul~s and W-2' s for the last 5 years and the W-2' sand 1099's for last year if those tax returns are not yet filed. o The legal description, current tax valuation statement and all appraisal and/ or market analyses for all real estate, owned jointly or separately. (Legal description can be found on mortgage and deed). o Most ;ecent bank statements fmm all financial institutions, and a list of safety deposit box. contents. · o Current value statements on all inveshnents, including butnot limited to IRA's, 401K plans, pension plans, stocks, bonds, .mutual funds, CD' s; money markets accounts and life insurance policieS: o Retirement or pension plan booklets or materials. o Doc11rnentation of assets or debts that are gifted or inherited property or are pre-mal'ital property. o 'Any prenuptial agreement o Documentation on tl1e current value of any other assets or debts not specifically requested above. o Documentation describing health hlsurance coverage available. to you through your employer. o Copies of court orders for support of children from this marriage or children from another relationship. o Any temporary support or visitation order. o Any financial statement given to a bank in application for a loan. o ·current credit card statements and any other debt statements. o Statements of current loan balances o Life jnsurance statements.

17 598.5 CONTENTS OF PETITION -- VERIFICATION - EVIDENCE. 1. The petition for dissolution of marriage shall: a. State the name, birth date, address and county of residence of the petitioner and the name and address of the petitioner's attorney. b. State the place and date of marriage of the parties.

c. State the name, birth date 1 address and county of residence, if knO\'ln, of the respondent. d. State the name and age of each minor child by date of birth whose \'lelfare may be affected by the controversy. e. State whether or not a separate action for dissolution of marriage or child support has been commenced and whether such action is pending in any court in this state or elsewhere. State whether the entry of an order would violate 28 u.s.c. § 1738B. If there is

an existing child support order 1 the party shall disclose identifying information regarding the order. f. Allege that the petition has been filed in good faith and for the purposes set forth therein. g. Allege that there has been a breakdown of the marriage relationship to the extent that the legitimate objects of matrimony have been destroyed and there remains no reasonable likelihood that the marriage can be preserved. h. Set forth any application for temporary support of the petitioner and any children without enumerating the amounts thereof.

i. Set forth any application for permanent alimony or support, child custody, or disposition of property, as well as attorneys' fees and suit money, without enumerating the amounts thereof. j. State whether the appointment of a conciliator pursuant to section 598.16 may preserve the marriage. k. Except where the respondent is a resident of this state and is served by personal service, state that the petitioner has been for the last year a resident of the stater specifying the county in which the petitioner has resided and the length of such residence in the state after deducting all absences from the state, and that the maintenance of the residence has been in good faith and not for the purpose of obtaining a dissolution of marriage only. 2. The petition shall be verified by the petitioner. 3. The allegations of the petition shall be established by competent evidence. Divorce Checklist

Document Filed or provided to OP Deadline Date filed/provided Cover

Petition

Confidential information Original Notice

Acceptance of Service

Return of Service

Engagement letter

Fee Agreement

. Directions for service

Acceptance of service letter Financial affidavit

Child support worksheet Financial discovery

Temporary Affidavits

Responsive Affidavits

Explanation of temporary orders Income withholding order CIM certificate

Mediation certification Interrogatories Request for Document production Answers to Interrogatories Answers to requests for documents Stipulation Decree Addendurns Final Child support worksheet Health Dept. form SAMPLE INITIAL DISSOLUTION LETTER First of all, thank you for retaining me to assist with your case. I have filed the enclosed petition and accompanying documents. I am also sending them your spouse with a request for an" acceptance of service."

Now that you are a party to an open dissolution case, there are several things you need to note: CASE DEADLINES

1. Emoll in the class for separated parents. (see your brochure about class times and locations) . I'm worried that you may not have received that brochure so I'm including a copy in this mailing. 2. Provide me with the financial information listed in the Family Law Case Requirements Order. This is mandatory and failure to comply could result in court-ordered sanctions against you. While the order says to provide this to me within 60 days, the sooner I get it, the sooner I can begin to analyze your case.

3. Let me know if you and your spouse reach any agreement on settlement provisions so that I may work toward preparing the proper paperwork. 4. Note all deadlines in the Family Law Case Requirements Order. Your deadlines and important dates are as follows: a. Class for divorcing parents- 45 days from [insert] b. Discovery Deadline (exchange of financial information)-60 days from [insert]. c. Mediation- must be complete by: [insert]. Your assigned mediator is [insert]. You do not have to use this person for mediation, however, if you and your spouse can't agree on another mediator, this mediator is your "default."

d. Pre-trial conference- will be at the Linn County Courthouse on: [insert date and time] e. Trial setting conference- (you do not need to attend) will be held over the phone on: [insert date and time]. This is the time the court will contact the attorneys to choose an available trial date. You will get a letter and order shortly thereafter regarding the h·ial.

When I receive your financial documentation, I will prepare a financial affidavit and asset/liability worksheet for us to review. Please do this as soon as possible. ( (

IOWA DISTRICT COURr IN AND FOR !Jtzt7 COUNTY

Uppn the Petition,,.pf

Petitioner, I'AMILY LAW CASE And Concerning REQUIREMENTS ORDER (without minor children) ,.,.. ::::: g ~ ~ !:;] Respondent ~ c..·~ ::><~ c:r" /22 -,.,a I t::>'lJ ' . . . . ~ ~ This Order tells eac~ person In .Ill is case what .must be done to get final'iilrders ::.t!;;-- frorn the Court. These reqUirements apply to both parties, whether you hire a l:i\fye@r 3?D not. In general, you are both required to; · . · . ~ ':? ;: 1. Complete a Mediation Education Class within .45 days from the~atei"ihe i.? ~~fil~ ~ 2. Give certain financial informatiol] to yqur lawyer, if you have one, and to the othar person or their lawyer not tnore than 60 days from the date the case is·filed; ·· 3. Attend together a mt>diation session with !J mediator wlthli1 90 days from the date the case is f) led; 4. Participate In a pretrii:d conference with the other party and the other party's.attorney to complete the.Assets and Liabilities and Pretrial Report within 120 days from the date the case Is filed; and 5. Participate in a trial setting conference if you have not settled your case after 130 days. from the dale of filing arid you want the case set for trial. These requirements are designed to .enCjlurage you and the other person in the case to exchange Information ahd to discuss possible settlement of your case before going to trial before a jUdge, These requirements are also Intended to make trials available more quickly for those-who cannot settle their case.

JT JS THEREFORE ORDERED AS FOLLOWS: .) I. Mediation J:ducation Class Requirement. You must complete ihls class within 45 days of the date you filed the case or were notified that a case h.as been filed. If you do.not attend this class by the deadline; this may 1) delay the entry offinal orders in your case until you have completed the class; 2) hurt your chances of getting what you want if there is a hearing or trial; and/or 3) possibly result in a fine payable to the court or the other person.

Yo11 are responsibieHor the class fee and for making arrangements to attend the class by calling and registering with an approved agency presenting the class. There is

1 ( (

a sheet with this order which provides you with the names of class providers and class schedules. II. Financial Information Exchange; Not more than 60 days from the date the case was filed, you shall give your lawyer, if you have one, and to the other person or his/her lawyer the following information: 1. Paystubs or other documentation showing income from all sources, including all deductions for federal and state taxes, health insurance premiums, union dues, mandatory pension withholclings for the past six (6) months: 2. Federal and State income tax returns, including all schedules and W-2's for the last five (5) years; 3. The legal description and all appraisal and/or market 101nalyses for ail real estate owned jointly and separately; 4. Current value statements on all investments, including but not necessarily limited to stocks, bonds, mutual funds, life insurance policies, bank accounts held jointly or individually; 5. Copies of JRA accounts, retirement plans, 401k's, deferred compensation, savings plans and any other similar plan documents;

6. Current statements or other documentation of all indebtedness Incurred individually or jointly; ·

7. Any documentation establishing a claim that assets or debts are gifted or inherited property or are premarital property; 8. Any prenuptial agreements between· the parties; 9. Documentation on the value of any other assets or the amounts of any other indebtedness not specifically requested above, whether individually or jointly owned or owed.

1D. An affidavit of financial status. If you are involved in a modification case or an unmarried custody case, you only have to provide the information contained in numbers 1, 2, an<:! 10. If you are involved in a dissolution of marriage proceeding, you must provide ail the information listed. If you do not provide this information on time, you may not be able to dispute any financial information presented by the other person In the, case. You could also be fined by the court. Under the Iowa Rules of Civil Procedure, you and the other person have the right to request additional information from each other if you wish to do so;

Ill. Mediation Requirement. In agreement with Iowa Code Section 598.7A,~ b~th. you and the other pe.rson m. us! p. articipate in ·a.·mediatlon.ses.:-Co·n· with a.. mediator Within 90 days from the date your case was filed, or by r.J).-:'-/- /1-- . The· mediator will help you discuss your concerns and possible settlement options in your case, buf the mediator will NOT give you legal adviee or make any decisions for you. One mediation session Is required, blit you may find that attending additional sessions will help you resolve your case.

2 (

Mediation may not be appropriate when there has been physical or emotional abuse, If mediation is not appropriate, you can request a waiver or excuse from the Court. Please discuss any concerns about this with your attorney or with your mediator. No Contact Orders can be changed to permit attending mediation, if mediation is appropriate. An application for waiver of mediation can be obtained from the Clerk of Court.

You and the other person may, and are· encouraged to, choose your own mediator. If you cannot agree on a mediator before any required mediation session, your mediator will be the default mediator whose· name Is checked on the attached mediator list. Each of you snail individually call the mediator you have chosen together or the default mediator, if you do not agree, to make a joint appointment. You both shall directly call the mediator you agree upon or the default mediator to make. an appointm~mt before the date listed above. You must attend an initial mediation session by the above date set by the Court, unless you ask the Court in writing to reset the date, You are free to continue mediation after the initial session. You are not legally bound by ;my agreements made in mediation until the agreements are revieWed by your attorneys, If you have them, have been put in a written document signed by both parties, and is thereafter approved by th!il Court. The Court has the final authority to approve or not approve all or any part of a settlement. The cost of the mediation is to be divlded·between you and the other person in the case, but if you believe you cannot afford to pay a mediator, you cali ·ask the Court to allow you to pay on a reduced fee basis by filing an Application for Appointment of Pro Bono Mediator. This form is available at the Clerk of Court's office. Useful Information about mediation and mediators, including fee information, can be obtained from the website medlateiowa.org. Failing to attend mediation by the dale set by the Court could result in a delay in having your case set for hearing or trial. It could also cause you to be fined by the Court . . IV. Pretrial Conference. A pret • I conference is sat for /(~ (p - I 2 . (120 days after case filing) at .loo "- .m. The parties and their attorneys, if any, will m·eat at the LA 1\ M C unty Courthouse or at a mutually agreed upon location to discuss the status of their case. At this conference, the parties will fill out a form called 'Stipulation of Assets.arid Liabilities and Pretrial Report." This form can be obtained from the-Clerk of. Court. In this form, the parties will list and value all of their assets and liabilities and they will identify the lssues.they have agreed upon and the issues still in dispute. They will also estimate the time they Will need for trial. At the conclusion of the pretrial conference, the parties· will file their completed Stipulation of Assets and Liabilities and Pretrial Report With the Clerk of Court. If the parties. have complied with all the requirements specified in Sections I, II, and Ill of!his order,"they may report to Court Administration to obtain a trial dale without the necessity of a trial setting conference. V. Trial Setting Conf1frence. A trial setting conference with a member of the District Court Adll)inistrator's staff is set for I 2c - '2- /2.. (130 days after case filing) at . ·f; 'i 7 ~· .-m~ The conference will be conducted by telephone. and· the District Court Adminisrator's staff will initiate the conference call unless otherwise

3 I -~------( ( ·-

arranged. Any parties appearing pro se (without an attorney) must contact the Court Administrator's Office at least 7 days before the trial setting conference with a phone number· where they can be reached. At the· tnaf setting conference, you, the other person, or your lawyers (if you and/or the other person are represented by a lawyer}, must report on the following: A. Whether you have attended the mediation education class; B. Whether you have provided each other with the required financial information; C. Whether you have attended a mediation session With a mediator; D. Whether you have participated in the pretrial conference;

E. Whether there are any issues that have been agreed to and which issues you and the other person do not agree to; F. The true estimate of time you believe you need for trial. If you have done what you have been ordered to do, a trial date for your case will be assigned. · ·If you have not met the requirements ofthis Order, you wiU be. referred to a District Court Judge for a status conference to discover why you have not met these requirements. Any Individual who does not meet the requirements may be penalized and/or fined by the Court. VI. If you believe you cannot fulfill any of the requirements listed in this order, you may seek a waiver of the requirements by written application to a District Court Judge. The requirements are waived only after the judge has signed an order waiving them,

Dated:------.,..--

':---!1 Clerk to notify all interested parties. ,___...Jl This order to be ser\led with the Petition and Original Notice.

---·------~~~ -·-~------(

DEFAULT MEDIATORS IN LINN COUNTY (5/3/2012) If you are unable to agree on a mediator, you are both required to contact the mediator checked below no more than thirty days after the case has been filed.

This defaUlt mediator was assigned on a rotatlng·basis, without Information on the names of your attorneys. If the mediator Indicated Is one of your attorneys, or if this default mediator is unable to mediate for you and you are unable to decide on another mediator yourselves, please contact Court Administration at 319 398-3920, ext. 1100,.and ask them to assign another default mediator. For more information, go to mediateiowa.org

Your Mediator Roster Mediators Telephone Number Adams, Morrie 319 351•6654 A'Hearn, Blair 319 899-3913 Booth Himschoot, Ginna 319 398-4042 Braddock, Maurine 319 351-8100 Brandes, Matt 319 366-7641 Bryner, Carrie 319 389,0880 Chicchelly, Mary ''319 377-9770 Conroy, Stephen 319 535-0899 Crilley, Christine 319 363-5606 Daufeldt, John 319 662-4282 Davis, Lillian Lyons 319 351-8181 Den Beste, Curtis 319 396-2410 Eg;omhouse, Michael 319. 533-3705 Elmore, Lisa 319 572-4843 Fagen, Brian 319 366-7641 Fisher, Mark 319 369-0000 Ghabel, Ann Mills 319 338-1396 Gleason, Cindy 319 234-1213 Goettsch, Loria 319 363-1 040 Johnston, Joseph 319 354-1712 Kamienski, Laura 319. 393-9090 Kaska, Sondra 319 358-6690 Kepros, Chad 319 338-7968 Knoll, Mona 319 364-0124 Koller, Jacob 319 366-7641 Kromphardt, Roger &63 323 7B166k'-">·CZ1~- &!{F Lemos, Laura 319 378-9544 Long, Dawn 319 396-2410 Manatt, Janet 319 362-8791 Muli-8hort, Tricia 515 318-8316 NideV, Frank 319 369"0000 Ralston, Christine 319 400"7007 Ruyle, Kathleen 319·337-3357 Schulte, Sherrv 319 364-0171 Seidl, Phillip 319 377-9770 Stroud, .Raody 31.9 931-2099 Swift, Stephen 319 395"7400 Iucker, Annie 319 541-9434 Tucker, Laura Melton 319 621-7244 Walker, Ella 319 325-2451 I Waterman, Paul 319 351-1065 Wenzel, David 319 365"9101 I Willems, Daniel 319.366-0811 t/' Willman. Randv 319•338-7551 I; I ---~-----·-----·--- IN THE DISTRICT COURT OF IOWA IN AND FOR ___ COUNTY

IN RE: THE MARRIAGE OF

UPON THE PETITION OF ) ) NO. CDDM ____ ) ) Petitioner, ) ) ORDER RE:. TEMPORARY AND CONCERNING, ) WRIT OF INJUNCTION ) ) ) Respondent. )

In order to promote civility between the parties, preserve the parties' property, and to prohibit placing the children in the middle of any marital conflict, IT IS HEREBY ORDERED:

That the clerk of coutt shall issue a temporary writ ofinjunction without bond directed to both Petitioner and Respondent enjoining them from:

1. Liquidating, disposing, damaging, convetting or· dissipating marital property without written consent signed by, both patties except for the payment of regular and ordinary living expenses, reasonable legal fees 'and expenses for this case and incuning new debt. . Each party may make exp~nditures or incur debt for ordinary expenses in the nonnal of the course ofthe parties' business.

2. Being violent or physically abusive to each other or harassing, assaulting, intimidating, threatening, or harming each other in any manner.

3. [If the parties are Iiv~ng separately: Coming to the home of the other without permission, except in connection with any visitation involving any minor child.]

4. Removing the parties' minor child[ren] fi·om the general area of the family home nor fi·om their present schools or daycare providers unless agreed to by the other patty or allowed by Court Order.

5. Concealing any minor child's[ren's] location from the other party.

6. Removing the other party or the child[ren] fi'om any health or dental insurance policies.

7. Cancelling any insurance policies or changing the beneficiary on any of the parties' individual or joint assets. A copy of this Order shall be personally served upon the and shall be as effective as if a Writ of Injunction, based upon this Order, had been served upon the ---=----·· This Order does not supercede any civil or criminal domestic abuse Order entered pursuant to Chapter 236 of the Iowa Code (20_) nor does it prevent any party fi·om obtaining a Chapter 236 Order.

The [Petitioner, Respondent] is notified, pursuant to Iowa Rule of Civil Procedure 1.1509, that he/she may move the Court at any time to dissolve, vacate or modify this injunction. A copy of any such Motion shall be served by ordinary mail on the opposing party or the opposing patty's attorney, if the opposing party is represented. In the event such a Motion is file, a hearing will be held within ten (10) days of the filing of the Motion.

Clerk to notify.

Dated:

JUDGE OF THE SIXTH JUDICIAL DISTRICT OF IOWA

2 TEMPORARY CUSTODY HEARING INSTRUCTIONS

Your tempora1y matters hearing is scheduled for: . In our county, all temporary matters hearings are conducted by affidavit only. You are allowed to file your affidavit and the affidavits of up to three (3) witnesses. These must all be filed three business days in advance of the hearing. In order for me to meet this deadline, you must provide me with the affidavits no later than: ______

Your personal affidavit My clients all have different preferences as to how they want to prepare their own affidavits. Your options are as follows: 1. Write it up yourself and drop it off to me for filing. 2. Write a draft yourself and provide me with an elech·onic copy of it so that I can review it and provide editing feedback. 3. Make an appointment to meet with me so that we can prepare it together. Regardless of which option you choose, it is important that you are mindful of the deadlines so that we don't run out of time to provide the court with your best affidavit possible. In addition, we are required to submit a financial affidavit as well as proposed child support guidelines. This means that you have to get me your financial information well in advance of the hearing, but no later than that deadline.

Witness Affidavits I have instructions and signature pages for witness affidavits that I am enclosing for you. Please provide each of your potential witnesses with a set of instructions.

Responsive Affidavit After we receive copies of the affidavits filed by the other side in the case, you will have up until the day before the hearing to file a response to that. This response should only include new information or responses to information that you did not anticipate. Again, you are free to meet with me to prepare this or to prepare it on your own and forward it to me for filing. Keep in mind that this is a very last-minute event and scheduling can be difficult. I will do my best to accommodate you if you would like to meet with me to do this. Mediation If custody is a disputed issue, you are required to mediate your case in advance of the hearing. Please call the mediator immediately to schedule this. Your default mediator is _____ with a phone number of . This is the person you should use for mediation if you and the other party to the case cannot reach agreement on another mediator. Attorneys do not ordinarily attend mediation, but there are exceptions to this. Let me know if you have questions or concerns about mediation. The day of the hearing The day of the hearing, you should appear at the courthouse about 15 minutes early. You are free to bring a supportive friend or family member with you. You will not likely see or meet the judge who will be deciding your case. Ordinarily, you will wait outside the courtroom while the attorney go into the judge's office, or "chambers." We usually do not receive a decision immediately; it may take a week or more. However, the court does prefer to rule as quickly as possible. Instructions for Temporary Affidavits Thank you for agreeing to provide an affidavit for our pending temporary hearing. Below are some tips and guidelines for preparing an effective affidavit. This is meant to be a general guideline and some cases may call for an exception to these suggestions.

1. Typed affidavits are preferred. Electronic information is even better (in Word format, or by e-mail). 2. All witnesses providing an affidavit must sign the attached affidavit form to be included with their statement. Only documents with original signatures can be filed in court. 3. Witnesses should talk about the following: a. Who they are (name, employment, family, residence, etc)

b. How they know the parties to the case and for how long. c. Specific events they have witnessed or impressions they have gained by personal experience. Details are important but some details are irrelevant. Dates should be included where remembered. d. Information about both parties and the children are most helpful. e. It's unusual for a witness affidavit to be more than 3-5 pages. One page is often fine. 4. Witnesses should avoid: a. Relying heavily on "hearsay," or information that they receive from third parties. b. Clear bias c. Making conclusory statements without further detail (i.e.," she is a great mother" without explaining why you say that). d. Providing opinions on topics on which they are unqualified (i.e., making mental health diagnoses)

Caitlin Slessor, Attorney NAZETTE, MARNER, NATHANSON & SHEA LLP615 Second St. SW PO Box 74210Cedar Rapids, Iowa 52407 Tel: (319) 366-1000; Fax (319) 364-6111 Email: [email protected] I certify under penalty of perjury and pursuant to the laws of the state of Iowa that the preceding is true and correct.

SIGNATURE OF AFFIANT:

PRINTED NAME OF AFFIANT: SETTLEMENT WORKSHEET: Issues to be addressed by dissolution decree

Below is a list of possible issues in a divorce case with no minor children. Please note in detail the agreement that you believe you have reached with your spouse. If you cannot agree right now, please note in detail the outcome you would like to propose.

1. Real estate/mortgage______

2. Personal property______

3. Vehicles, ______

4. Other items (businesses, collections, boats, etc. ______

5. Debts, ______

6. Alimony/ support, if any______~ 7. Retirement accounts, pensions, 401(k), annuities______

8. Life insurance ______

9. Health insurance ______

10.Courtcosts,______

11. Name change, if desired (for wife, if a married name was taken) ______

If one of the items does not apply to your case, for example, you do not have real estate, simply note that you do not have that item. This worksheet is just meant to be a guide to help you and your spouse discuss settlement. If you need legal advice or suggestions regarding the issues, please ask me.

Caitlin Slessor, Attorney NAZETTE, MARNER, NATHANSON & SHEA, L.L.P. 615 2nd St. SW, PO Box 74210 Cedar Rapids, Iowa 52407-4210

Tel: (319) 366-1000; Fax (319) 364-1116 Email: [email protected] 10/27/2013

Divorce 101

Caitlin Slessor Nazette, Marner, Nathanson & Shea, LLP, Cedar Rapids, IA 319-366-1000 [email protected]

A few notes about this presentation:

Preliminary Matters  Iowa’s divorce statute is Chapter 598. It’s not long and you should give it a full read if you’re going to practice divorce law.  Also of interest:  Chapter 252 for child support questions  595: the marriage statute. Who, how, etc.  596: premarital agreements.  597: the “husband and wife” statute

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Preliminary Matters  Iowa is a “no fault” divorce state, as all states are. New York was the lone holdout but finally adopted no fault in 2010.  Historically, parties who wanted a divorce had to prove wrongdoing or breach of the marital contract. Infidelity or cruelty were the most common.  With no fault divorce, this is no longer necessary. This is sometimes referred to as unilateral divorce: only one party has to want it and doesn’t have to have a particular reason  Studies have shown that no fault divorce leads to lower incidence of female suicide and domestic violence. 1  In Iowa, you must simply assert that “the legitimate objects of matrimony have been destroyed and there 1 http://www.freakonomics.com/2010/06/16/divorce-reform-hits-remains no reasonable likelihood that the marriage new-york/can be preserved.”

Preliminary Matters  A marriage is a legal contract between two people  A divorce is a dissolution of that contract  The statute is referred to as the Dissolution of Marriage chapter

THE BASIC PARTS OF A DIVORCE CASE  1. Pre-filing  2. Filing  3. Discovery, i.e., information gathering  4. Evaluation  4 a. Temporary orders  5. Negotiation  6. Resolution  6 a. Settlement  6 b. Trial  7. Post-Decree *I have left appeals out of this outline. This is far too specialized to cover in today’s time

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1. Pre-filing- Dissolution of Marriage Questionnaire  Create a dissolution of marriage questionnaire for potential divorce clients. It will help you get much of the information you need in one place.  Giving clients a questionnaire also helps them see what kind of information you will need from them and what will be relevant to their case  Clients have busy lives and much of your job will be to remind them of what their obligations are

1. Pre-filing- Practice Tips  It’s never too soon to lay the foundation for a healthy family law attorney- client relationship  Talk to clients about finding a support person in their life: counselor, minister, sister, friend  Let them know that you are there to help with the legal issues but that many of the questions they will encounter will not be of a legal nature. Those should be discussed with a support person.  Set up realistic expectations. Keep in mind that you are only hearing one side of the story and that their spouse is unlikely telling the same story.

1. Pre-Filing- Practice Tips

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1. Pre-Filing- Common Jurisdictional Questions  Before you file a dissolution of marriage case in Iowa, make sure you can.  The Respondent must be an Iowa resident and be personally served OR the Petitioner must have resided here for at least one year  There are endless combinations of facts that can potentially occur, but here are a few basics that come up:

1. Pre-Filing- Common Jurisdictional Questions  I just moved here from Hawaii because I missed the winter. Can I get divorced in Iowa?  No, not until you’ve been here a year, or if your spouse moves here and you have him/her personally served.  I just moved to Hawaii because I hate winter but I want to get divorced in Iowa. That’s where my wife and children live. Can I do that?  Yes, spouse is an Iowa resident

1. Pre-filing- Venue  Venue is proper in any county where either spouse lives  If cost is an issue, consider filing in the county where the attorney works, if that is an option  For example, client lives in Vinton (Benton Co), spouse lives in Cedar Rapids. Client hires Linn County lawyer: much cheaper to walk two blocks to the courthouse than to drive 45 minutes to Vinton.

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1. Pre-filing- a note about domestic abuse  It is important to determine whether domestic abuse is an issue. If so, discuss the option of filing for a 236 protective order.  It is equally important to discuss domestic abuse in the context of not doing it. This can be an awkward conversation, but get comfortable doing it.  Once your client has perpetrated abuse, certain things might be very difficult for them- getting custody or shared care and remaining in their homes, for example.

2. Filing The Case: The Petition

2. Filing The Case- Injunctions  Consider whether an injunction against the dissipation of assets is necessary.  In the Sixth Judicial District, you can get a “standard peacekeeping” injunction pretty easily at the beginning of a case if it is mutual and follows a certain format. (See Injunction in the Appendix).  Requires a sworn statement (affidavit) from client on the necessity and you must follow the Iowa Rules of Civ. Pro. for injunctions (Division XV).

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2. Filing the case- some notes

3. Discovery  Tell your client to begin gathering their financial information.  In fact, some areas have mandatory discovery, like in the 6th Judicial District. (See Appendix for Family Law Case Requirements Order).  Spend some time drafting a really good overview letter that you can use in most cases. It will cut down on getting the same question over and over. Hint: do separate form letters for case with/without children. (See Appendix for Initial Dissolution Letter).

3. Discovery

 Find out if mediation is required in your district.  Find out if the local convention is for attorneys to go to mediation or not.  Even if it’s not required, evaluate whether it will be helpful and whether an attorney presence will also be helpful.  Calendar some follow up dates: when to hound your client about financial documents, when the 90-day waiting period expires, any court ordered dates or deadlines.

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3. Discovery- Formal Discovery  Evaluate whether this is necessary.  Often, it is not. You can get information from the source directly:  It is lying around the house.  Joint bank accounts- have your client obtain the information.  Joint tax returns- your client can request copies.  Subpoenas if you know where the information is located.  Just ask- the other attorney may provide it willingly. Both sides are often under pressure to be cost-effective.

3. Discovery- Formal Discovery  Same tools of discovery as any other civil case (Iowa Rule Civ. Pro. Division XII (1.701 and subsequent)  Depositions  Interrogatories  Requests for Production  Requests for Admissions  Use judiciously- five good questions will be answered more thoroughly than thirty form questions.

4. Case evaluation  When you have all the information you need, begin thinking about your resolution.  Have a list of issues that you provide your client (See Appendix-Settlement worksheet) or use for yourself.  Kids  Property (real estate, debts, cars, bank accounts, retirement)  Support (alimony)  Misc. (name change, court costs, attorney fees)

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4.a. Temporary Orders  Evaluate whether any temporary orders are necessary. Here is what I say to clients:  Because a divorce may take over a year in our district to go to trial, the court can enter orders for custody and support while the case is pending so that you and your spouse know what your obligations are to each other and so that you’re not having disagreements about the kids’ schedule and finances. Do you think you will be able to work out these issues on your own by agreement or that you will need a court order during this time?  It can be quite expensive to have a temporary matters hearing, as well as divisive for spouses to have to take stances against one another early in a case

4.a. Temporary Orders  Let people know they can file a request for temporary orders any time. The decision doesn’t have to be made at the time of filing.  In contentious cases, recommend requesting a temporary hearing right away.  Know whether the court’s schedule is something that a client should be aware of: for ex., in Linn County, the wait on a temp. hearing is about 8 weeks right now.

4.a. Temporary Orders

 So, you think you need them. What can be decided at a temporary matters hearing?  Look at the statute:

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4.a. Temporary Orders  Preparing your client  Don’t reinvent the wheel: spend the time to write a good set of instructions that you can use for every client. Everyone has the same questions. (See Appendix).  Create a letter or instructions for witnesses (See Appendix). Give witnesses padded deadlines.  Reiterate deadlines and let clients know that your ability to do your best depends on them meeting their deadlines. It may take a few experiences to learn this, but a rushed affidavit is never as good as one that has been carefully prepared.  Figure out whether your client will personally testify and prepare them. Even if clients don’t normally personally testify, let them know that it may be a possibility (if that’s true).  Again, set up reasonable expectations

4.a. Temporary Orders  Preparing yourself:  Consider filing a “requested relief” statement.  Have some alternative child support guidelines if child support is an issue.  Have a list of your best points to argue in chambers or to examine your client about (if an in-person hearing is held).  Talk to opposing counsel about what is agreed upon. Make sure you share this with the judge so it ends up in the order.

4.a. Temporary Orders  After the hearing:  No, you can’t really appeal it. You can do an interlocutory appeal, but in our office this has resulted in clients just paying more attorney fees.  No, you can’t modify it because of some small change. But, yes, if something serious occurs you can apply to modify it. This doesn’t mean it will be modified.  Yes, you have to follow this for a year (or so).  Yes, it sets up a status quo that may be hard to get changed at trial.

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4. Evaluation- property  The law: We are striving for an “equitable division of the marital property.”  Does not require “equal” but often gravitates that way.  Think: “fair,” not “equal” when you describe to clients.  Read Iowa Code Section 598.21. It tells you what to consider.  Well developed case law on issues like pensions, premarital property, etc.  But not terribly helpful for issues like what to do with the photo albums.

4. Evaluation

4. Evaluation- children  For cases involving children  Get comfortable talking about “legal custody” and “physical custody.”  Explain “primary” physical custody versus “joint” physical custody.  Be thorough when you analyze how custody and support work together.  Sometimes, a parent is better off agreeing to shared custody and split expenses rather than primary custody and greater child support.  There is plenty of case law regarding custody. Read it and get a feel for the cases.  At least know these cases well: - In RE Marriage of Winter 223 N.W.2d 165 (Iowa, 1974): Discusses factors relevant to a custody determination.

-In re Marriage of Hansen, 733 N.W.2d 683, 695 (Iowa 2007): Discusses the factors for determining whether a shared care schedule is appropriate.

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4. Evaluation- children  Practice tips  Print out some blank Google calendars. Use colors for a visual  Ask for a budget for the kids: include daycare, dance, car insurance, school lunches, school registration, band instrument rental, etc. Don’t include “in home costs” like dinner, hot water bill, clothing  Explore what your client really wants. A lot of people say, “I just want primary care, I don’t care about anything else,” or, “I just want my kids to live with me. Find out why. They may just be parroting what a friend has told them.

4. Evaluation- children  For cases involving children, cont’d  I actually draw out a picture of what people are fighting about in custody cases: What you are paying me to fight about

Client has 0 Exactly equal Spouse has days with time with kids 0 days with children children

 The client need not (usually) be concerned about spending 0 days with their children

4. Evaluation- children  For cases involving children, cont’d  Best interest of the child is the prevailing standard.  Do not forget to explore legal custody- sole legal custody is rarely granted but make sure you are evaluating this issue.  If your client asks “can we bring up x?” the answer is almost always “yes.”  The more important question is whether you should. But read the statute for yourself to determine what you “can bring up,” and what you should bring up: 598.41 is the relevant section.

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4. Evaluation- children  For cases involving children, cont’d  Practice Tip:  Every once in a while the super-agreeable client can be a problem. The most common problem I see is that when someone wants the divorce to be over right away, they will urge you to stop requesting so much detailed information about their custody arrangement. They just want to “keep it open.”  This is a bad idea. Resist the urge! It leaves people with an unusable document when they inevitably need it in the future.  I throw myself under the bus: “just humor me and let’s at least put in some sort of default because I’m so obsessive about this sort of thing.” Or you could try “you’ll thank me when you’re older.”

4. Evaluation- child support  For cases involving children, cont’d  Child support: Apply the Child Support Guidelines.  Located here: http://www.iowacourts.gov/wfdata/files/Childsupport/ Chapter9.pdf  And in your Iowa Court Rules book.  If you do a lot of divorces/custody cases, invest in Iowa Support Master software  Located here: https://www.awism.com/I  If you want to deviate from the guidelines, spell out why in your stipulation of settlement.

4. Evaluation- Alimony  Alimony can often be the most difficult issue.  This is because the law does not provide certainty.  Start by looking at whether there is an income disparity. If so, keep going.  Look at the length of the marriage.  Look at earning capacity, non-monetary contributions to the marriage, moving for one spouse’s career, asset division.  Consider what effect child custody and support decisions have on the alimony analysis.  Read some recent court of appeals decisions.  Look for alimony calculators- from the American Academy of Matrimonial Lawyers, other states, etc. These are not controlling but can give you some ideas.  Consider property settlements in lieu of alimony where appropriate.

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5. Negotiation  Once you have evaluated your case and provided your client with a reasonable set of expectations, you are ready to begin negotiating your case.  You have a variety of techniques at your disposal.  Think of easier/less expensive techniques versus more involved/more expensive techniques.  Level 1 (easier) techniques:  Pick up the phone and talk to the other attorney.  Consider e-mail- this provides a written record of agreements and makes drafting easier. It also allows clients to see the negotiations directly. It also ensures that nothing is forgotten.  Letter writing- just as a note, sometimes it can be hard for a client to receive a strongly worded letter in the mail from the opposing attorney without warning. Consider calling to give them advance warning or putting a cover letter with it.

5. Negotiation  Level 2 negotiation techniques  Mediation- required in many districts.  Consider having attorneys attend and have a stipulation of settlement circulated prior to mediation.  Settlement conferences- both attorneys and both clients, meet at an office and try to work it out.  This is far more effective for an initial divorce than any subsequent modification actions as both parties will probably want the case to be over.  Judge-led settlement conference- this varies from district to district.

6.a. Resolution- Settlement  If you have utilized negotiating techniques that have led to settlement, get it finalized right away.  Even sitting on an agreement overnight can mean the agreement will fall through.  Be careful in your drafting. Learn from your experiences in contempt cases and modifications.  Practice tip- if you use forms or re-use stipulation language, make sure that it is a blank document and has no names in it. It can be easy to miss these changes when you are down to the wire on a settlement.

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6.a. Resolution- Settlement  Set parameters for yourself for settlement and stick to them.  I like to tell clients that I want to know whether their case will likely settle or go to trial by about four months from the trial date. This is padded as I really only need about two months to get ready for most trials, but it helps them stay on task.  Some clients vastly prefer to put their head in the sand and it can be easy not to look at a case if a client isn’t bothering you.  Don’t mistake their lack of contact for intent to agree.

6.a. Resolution- Settlement  BUT- You are dealing with people and families, not insurance companies, and this doesn’t always work. Still, try to make last minute settlements an exception, not the rule.  Request trial retainers by a certain date and use that as a tickler to check in on how a client wants to proceed.  Don’t avoid trying to settle just because a case is contentious- some of the most contentious cases do settle. There is a difference between the chatter of disagreement and real, fundamental disagreement.

6.b. Resolution-Trial  This could be a presentation all of its own. But here are some tips:  Some cases must be tried. Get a retainer. Do not be afraid to try a case.  Prepare well in advance. Create a checklist that you use in every case and follow it.  Go over everything again and again. Knowing the case like the back of your hand will be your most powerful tool at trial. This enables you to maximize your presentation.  Be well organized: use trial binders and sub-dividers.  Don’t miss deadlines.  Stick to only essential witnesses and only ask them what they need to add to the relevant issues.  Ensure that your client knows that his/her credibility is the most important thing about the trial.

14 10/27/2013

6.b. Resolution-Trial  Instruct your client about body language/sighing/furious whispering.  Manage your time: I tell my clients that if the biggest deal to them is custody, I will spend the bulk of our time on that. If they only care a little about the retirement accounts, I will spend relatively little time on that.  Make sure you are utilizing exhibit binders. Piles of papers that get disorganized are distracting.  Practice tip- explain to your client what to expect after the trial and prepare them for post-trial deadlines.

7. Post-Decree  Consider available post-trial motions  Consider appealing adverse rulings (30 days to file notice of appeal)  Figure out whether you have to do anything pursuant to the decree. Do everything you are supposed to do:  Deeds  Qualified Domestic Relations Orders  Income withholding Orders, etc.  Make sure your client understands the ruling.  Tell them to pay their court costs. If you don’t, they will be mad at you when they try to register their car and are told they can’t.

7. Post-Decree  Consider withdrawing from cases when you’ve completed the case. This prevents you from being noticed on future contempt filings, modifications, etc.  Return photos, tax returns, etc. to client.  Learn from your experiences and change how you do things in the next case.  Ask your clients for constructive feedback. We are in a service industry and should be striving to provide satisfactory service to our clients.

15 10/27/2013

A final note…  Family law is stressful. No one going through a divorce is happy to spend thousands of dollars on your services.  Remember, the clients have created their own circumstances. It was not you who locked the other spouse out of the house/said something mean to the kids/etc.  Keep this in mind when you are talking to the opposing counsel. Fight zealously for your client but try not to take on the controversies personally.  Figure out what the legal issues are and make the case about that. Keep it professional, not personal.  Don’t do it if you hate it.

LITIGATION TRACK 12:30-5:00 P.M.

20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

LITIGATION TRACK ADR

12:30 pm.-1:30 p.m.

Presented by David Baker PO Box 74170 Cedar Rapids, IA 52407 Phone: 319-558-7338

Wednesday,Wednesday, OctoberOctober 30,30, 20132013

Mediation- How, When, Why

David L. Baker Cedar Rapids, IA Iowaadr.com

I. What is mediation?

Mediation is a process in which an impartial third party facilitates communication and negotiation and promotes voluntary decision making by the parties to a dispute.

II. Key Qualities of the Mediation Process A. Voluntary B. Confidential C. Informed D. Impartial, Neutral, Balanced and Safe

III. Why mediate? A. Certainty- if you come to an agreement, you will know where you stand. No risk. No trials, no appeals. B. Time C. Cost- trials and appeals are expensive. D. Flexibility

IV. Are you ready to mediate? A. Do both sides have enough information? 1. Have you given the defendant everything they need to evaluate the case? 2. Surprises are bad. B. Does client consent to mediate? C. Are they ready? 1. Do they know the opening demand (or offer) is not real? 2. Do they understand the process? 3. Do they know compromise is the name of the game/ D. Do you have enough authority? V. Talk with opposing counsel: A. Agree on attendees? B. Agree on mediator fee split? C. Agree on date(s)/time/place? D. Agree on mediator to hire?

1. Facilitative Mediator A facilitative mediator assists the parties in reaching a mutually agreeable resolution. This type of mediator asks questions and assists the parties in finding a mutually agreeable resolution. This type of mediator does not make recommendations to the parties, give his or her own advice or opinion as to the outcome of the case, or predict what a court would do in the case. 2. Evaluative Mediator An evaluative mediator is more assertive. This type of mediator points out the weaknesses of each party’s case, and often provides an opinion on what a judge or jury would be likely to do. If legal issues are important, this type of mediator may opine on the outcome of the issues. They help the parties and attorneys evaluate their legal position and the costs vs. the benefits of pursuing a legal resolution rather than settling in mediation.

VI. Mediation Preparation

A. Personal injury

1. Medical expense summary

2. Future medicals calculation

3. Lost earnings calculation

4. Future earning loss calculation

5. Determine liens and subrogation amounts (if to be negotiated, make sure they are available)

a. Medicare and Medicaid set aside

b. Work comp

c. Subrogation

6. Initial demand amount B. Workers compensation

1. Rate calculations

2. Ratings

C. Dissolutions 1. Custody 2. Visitation 3. Child support 4. Health insurance 5. Income tax deductions 6. Real estate 7. Retirement Accounts 8. Other property

9. Liabilities

10. Alimony

11. Attorneys fees and court costs VII. Materials to mediator A. The letter: 1. A summary containing the following:

(a) The nature of the claim.

(b) Liability.

(d) Issues at mediation.

(e) Settlement negotiations to date. (f) Names of persons attending the mediation.

2. Dissolutions should also contain the following:

(a) Assets and liabilities

(b) Income and cash flow

B. Other materials. Any additional materials you would like the mediator to review. Enclose pertinent medical records and any documents that serve as the basis for liability issues. C. Don’t be afraid to discuss warts

VII. The day of the mediation A. Pack for mediation:

1. Pleadings file

2. Deposition transcripts

3. Expert reports

4. Key exhibits/photos

5. Complete set of medical records (with summary or index)

6. Medical expense summary (with copy for each party)

7. Lien holder contact information

8. Itemization of current litigation expenses B. Who attends? 1. Will you demand that all persons be personally present? 2. Will you bring any advisors or will they be available by phone? a. Accountants b. Investments c. Bankers- especially in dissos VIII. The mediation A. Opening statement 1. Optional 2. Short 3. Factual- Lay out the background facts, legal theories and defenses. Anticipate the other party's position. Point out your strengths and weaknesses and why you think your client has the better position. 4. Non-adversarial- Never abuse the opposite party. Such will not endear you to the other side and may make them intractable. B. How will you use the mediator? 1. Courier 2. Hired thug 3. Advisor 4. Cheerleader C. What do we talk about? 1. Risk 2. Cost 3. Time 4. Expense 5. Flexibility D. Techniques 1. Trading offers 2. Brackets 3. Hypothetical numbers 4. Mediator’s number IX. Things to avoid 1. Agreeing to participate in a mediation knowing that opponent’s position has not changed significantly. 2. Failing to consider early reasonable settlement in fee- shifting cases. 3. Delaying settlement of clear liability, low limits, big damages cases. 4. Bringing insureds with no personal exposure but adamant attitudes to mediation. 5. Requesting, at the conclusion of a negotiated settlement, a confidentiality clause or that parties’ names be added to the settlement draft. 6. Suggesting to a mediator that he discuss, especially in front of plaintiff, that the plaintiff’s attorney reduce his/her fee to get the case settled. 7. Demanding written proof that that subrogation claims are resolved before delivering the settlement draft. 8. Failing to distinguish your judgment from your client’s poor judgments. 9. Concealing or delaying disclosure of significant discoverable information - good or bad. 10. Delaying settlement of clear liability, low limits cases with multiple defendants. 11. Refusing to make drafts payable to the plaintiffs’ attorney’s trust account without good cause. 12. Creating settlement expectations that cannot be met. 13. Waiting to try to settle until the eve of trial. 14. Never discussing settlement/never trying to settle a case.

20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

LITIGATION TRACK Juvenile Law 101

1:30 pm.-2:30 p.m.

Presented by Ellen Ramsey-Kacena Attorney at Law 4403 First Avenue SE, Suite 300 Cedar Rapids, IA 52402 Phone: 319-393-4683 Email: [email protected]

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 JUVENILE LAW 101

“Nuts & Bolts” Seminar Iowa State Bar Association Jerry Foxhoven, Drake Legal Clinic JUVENILE COURT PROCEEDINGS

• Child in Need of Assistance • Delinquency • Termination of Parental Rights • Mental/Substance Abuse Commitments • Adoption Child in Need of Assistance

• Person under 18 years of age • Not married prior to case commencing • Meets statutory definition of CINA See Iowa Code Section 232.2(6) Delinquency

• Person under age 18 • Commits a criminal offense • Adjudication vs. Conviction • Rehabilitation vs. Punishment • Exceptions to Juvenile Court Jurisdiction a. Simple misdemeanor traffic, etc. b. Forcible felonies – ages 16 & 17 Delinquency Proceedings • Informal Adjustment • Consent Decree • Adjudication • Disposition – least restrictive a. Probation b. Day/evening treatment c. Foster Care – family or group d. State Training School Termination of Parental Rights

• Chapter 232 – Follows CINA Case • Chapter 600A – Private Termination Adoption

• Chapter 600 – permanent parent- child relationship established following termination of parental rights of biological parents. Commitment Proceeding

• Seriously Mentally Impaired a. Mental illness b. Likely to injure self or others • Chronic Substance Abuser a. Habitual loss of self control – drugs b. Likely to injure self or others Participants • Child • Child’s Parent, Guardian or Custodian • Child’s Guardian ad Litem • County Attorney • Parents’ Attorney • Foster Parent/ Preadoptive Parent Juvenile Hearings

• Open to the Public • Exceptions: a. Harm to child > Public interest b. Commitment hearings Child Abuse Assessments

• Confirmed by a preponderance • Placed on state registry unless: a. Minor, b. Isolated, and c. Unlikely to reoccur Emergency Actions • Remove Physical/Sexual Abuser from Home • No contact order against perpetrator • Temporary Removal of Child a. Imminent risk of harm b. Contrary to welfare to remain c. Reasonable efforts made to prevent CHILD IN NEED OF ASSISTANCE Iowa Code Section 232.2(6)(a) – (q)

• Abandoned or deserted • Physically abused or neglected • Voluntary release of newborn infant • Harmful effects – a. Mental Injury b. Lack of Supervision • Sexual Abuse • Not provided medical, mental or subst. treatment CHILD IN NEED OF ASSISTANCE Continued

• Not provided food, clothing or shelter & refuse help • Without parent, guardian or custodian • Parent/Child seeks removal for good cause • Parent not provide adequate care due to: a. Mental capacity or condition b. Imprisonment c. Drug or alcohol abuse CHILD IN NEED OF ASSISTANCE Continued

• Drug affected child • Manufacture meth in child’s presence • Safe Haven: Voluntary release of Newborn • Knowingly exposing to pornography The Adoption Assistance and Child Welfare Act of 1980 • Prior to placement, reasonable efforts to prevent or eliminate the need for the removal. • After removal, reasonable efforts to make it possible to return the child to the home. Adoption and Safe Families Act (ASFA) • Court has Option to Waive “Reasonable Efforts” Requirement if Parent: • Has already lost parental rights to that child’s sibling • Has committed specific types of felonies, including murder or voluntary manslaughter of the child’s sibling. • Has subjected the child to aggravated circumstances such as abandonment, torture, chronic abuse, and sexual abuse. CINA DISPOSITIONS

• Custodial Parents • Non-custodial parent • Relative or other suitable adult • Family Foster Care • Treatment family foster care • Community day-evening treatment • Foster group care • Psychiatric Medical Institute for Children • Iowa Juvenile Home at Toledo (?) Permanency

• Aggravated Circumstances • Periodic six month review • Permanency hearing within 12 months a. Return child home b. Continue disposition 6 months c. Direct termination petition be filed d. Enter permanency order Permanency Order

• Transfer custody to other parent • Guardianship – May Docket in Probate. • Custodianship • Another Planned Permanent Living Arrangement TERMINATION OF PARENTAL RIGHTS

• Proof by Clear & Convincing Evidence • One or more statutory ground(s) Section 232.116(1)(a) – (o) • Best Interest of Child Adoption and Safe Families Act (ASFA) • REQUIRES filing of a TPR Petition: 1. If an infant has been abandoned. 2. If the parent has committed any of the felonies included in the previous provisions. OR 3. If the child has been in foster care for 15 of the last 22 months. EXCEPTIONS TO TERMINATION Discretionary • Relative has custody of child • Child age 10 or older objects • Detrimental to bond between child & parent • Child institutionalized & not yet for adoption • Parent absent due to hospitalization or armed forces STANDARDS OF EVIDENCE BURDENS OF PROOF

Iowa Juvenile Court Actions DELINQUENCY CASES

• Waiver of Jurisdiction: – Delinquent Act: • Probable Cause • Petitioner – No Reasonable Prospect of Rehabilitation: • Clear & Convincing • Petitioner DELINQUENCY CASES

• Detention/Shelter Care: – Placement into: • Probable Cause • Petitioner/State – Change of Circumstances: • Preponderance • Child DELINQUENCY CASES

• Adjudication: –Beyond a Reasonable Doubt –Petitioner/State • Disposition: –Clear & Convincing –Petitioner/State DELINQUENCY CASES

• Modification (Less Restrictive): – No Clear & Convincing – Opponent • Modification (More Restrictive): – Clear & Convincing – State DELINQUENCY CASES

• Permanency Hearing: – Clear & Convincing – Petitioner/State • Permanency Review Modification: – Preponderance (Material Change in Circumstances) – Moving Party CHILD IN NEED OF ASSISTANCE • Temporary Removal: –Substantial Evidence –Petitioner/State CHILD IN NEED OF ASSISTANCE • Adjudication: – Clear & Convincing – Petitioner/State • Disposition: – Clear & Convincing – Petitioner/State CHILD IN NEED OF ASSISTANCE • Reasonable Efforts Review: – Clear & Convincing – State • Concurrent Jurisdiction: – Preponderance – Moving Party CHILD IN NEED OF ASSISTANCE • Modification (More Restrictive): – Clear & Convincing – State • Modification (Less Restrictive): – Preponderance (Material Change in Circumstances CHILD IN NEED OF ASSISTANCE • Review – Return Home: –Preponderance –Parent/Child CHILD IN NEED OF ASSISTANCE • Permanency: – Clear & Convincing – Petitioner/State • Permanency Review (Modify): – Preponderance (Material Change in Circumstances) – Moving Party TERMINATION OF PARENTAL RIGHTS • Chap. 232 TPR: – Clear & Convincing – Petitioner/State • TPR Review: – Clear & Convincing – Petitioner/State • Chap. 600A TPR: – Clear & Convincing – Petitioner CONTACT POINTS:

Ellen Ramsey-Kacena Attorney at Law 4403 First Avenue SE, Ste 300iversity Ave., Cedar Rapids, IA 52402 [email protected] (319) 393-4683 JUVENILE LAW 101

“Nuts & Bolts” Seminar Iowa State Bar Association Jerry Foxhoven, Drake Legal Clinic

JUVENILE COURT PROCEEDINGS

• Child in Need of Assistance • Delinquency • Termination of Parental Rights • Mental/Substance Abuse Commitments • Adoption

Child in Need of Assistance

• Person under 18 years of age • Not married prior to case commencing • Meets statutory definition of CINA See Iowa Code Section 232.2(6)

1 Delinquency

Delinquency Proceedings • Informal Adjustment • Consent Decree • Adjudication • Disposition – least restrictive a. Probation b. Day/evening treatment c. Foster Care – family or group d. State Training School

Termination of Parental Rights

• Chapter 232 – Follows CINA Case • Chapter 600A – Private Termination

2 Adoption

• Chapter 600 – permanent parent- child relationship established following termination of parental rights of biological parents.

Commitment Proceeding

• Seriously Mentally Impaired a. Mental illness b. Likely to injure self or others • Chronic Substance Abuser a. Habitual loss of self control – drugs b. Likely to injure self or others

Participants • Child • Child’s Parent, Guardian or Custodian • Child’s Guardian ad Litem • County Attorney • Parents’ Attorney • Foster Parent/ Preadoptive Parent

3 Juvenile Hearings

• Open to the Public • Exceptions: a. Harm to child > Public interest b. Commitment hearings

Child Abuse Assessments

• Confirmed by a preponderance • Placed on state registry unless: a. Minor, b. Isolated, and c. Unlikely to reoccur

Emergency Actions • Remove Physical/Sexual Abuser from Home • No contact order against perpetrator • Temporary Removal of Child a. Imminent risk of harm b. Contrary to welfare to remain c. Reasonable efforts made to prevent

4 CHILD IN NEED OF ASSISTANCE Iowa Code Section 232.2(6)(a) – (q)

CHILD IN NEED OF ASSISTANCE Continued

• Drug affected child • Manufacture meth in child’s presence • Safe Haven: Voluntary release of Newborn • Knowingly exposing to pornography

5 The Adoption Assistance and Child Welfare Act of 1980 • Prior to placement, reasonable efforts to prevent or eliminate the need for the removal. • After removal, reasonable efforts to make it possible to return the child to the home.

Adoption and Safe Families Act (ASFA) • Court has Option to Waive “Reasonable Efforts” Requirement if Parent: • Has already lost parental rights to that child’s sibling • Has committed specific types of felonies, including murder or voluntary manslaughter of the child’s sibling. • Has subjected the child to aggravated circumstances such as abandonment, torture, chronic abuse, and sexual abuse.

CINA DISPOSITIONS

6 Permanency

Permanency Order

• Transfer custody to other parent • Guardianship – May Docket in Probate. • Custodianship • Another Planned Permanent Living Arrangement

TERMINATION OF PARENTAL RIGHTS

• Proof by Clear & Convincing Evidence • One or more statutory ground(s) Section 232.116(1)(a) – (o) • Best Interest of Child

7 Adoption and Safe Families Act (ASFA) • REQUIRES filing of a TPR Petition: 1. If an infant has been abandoned. 2. If the parent has committed any of the felonies included in the previous provisions. OR 3. If the child has been in foster care for 15 of the last 22 months.

EXCEPTIONS TO TERMINATION Discretionary • Relative has custody of child • Child age 10 or older objects • Detrimental to bond between child & parent • Child institutionalized & not yet for adoption • Parent absent due to hospitalization or armed forces

STANDARDS OF EVIDENCE BURDENS OF PROOF

Iowa Juvenile Court Actions

8 DELINQUENCY CASES

• Waiver of Jurisdiction: – Delinquent Act: • Probable Cause • Petitioner – No Reasonable Prospect of Rehabilitation: • Clear & Convincing • Petitioner

DELINQUENCY CASES

• Detention/Shelter Care: – Placement into: • Probable Cause • Petitioner/State – Change of Circumstances: • Preponderance • Child

DELINQUENCY CASES

• Adjudication: –Beyond a Reasonable Doubt –Petitioner/State • Disposition: –Clear & Convincing –Petitioner/State

9 DELINQUENCY CASES

• Modification (Less Restrictive): – No Clear & Convincing – Opponent • Modification (More Restrictive): – Clear & Convincing – State

DELINQUENCY CASES

• Permanency Hearing: – Clear & Convincing – Petitioner/State • Permanency Review Modification: – Preponderance (Material Change in Circumstances) – Moving Party

CHILD IN NEED OF ASSISTANCE • Temporary Removal: –Substantial Evidence –Petitioner/State

10 CHILD IN NEED OF ASSISTANCE • Adjudication: – Clear & Convincing – Petitioner/State • Disposition: – Clear & Convincing – Petitioner/State

CHILD IN NEED OF ASSISTANCE • Reasonable Efforts Review: – Clear & Convincing – State • Concurrent Jurisdiction: – Preponderance – Moving Party

CHILD IN NEED OF ASSISTANCE • Modification (More Restrictive): – Clear & Convincing – State • Modification (Less Restrictive): – Preponderance (Material Change in Circumstances

11 CHILD IN NEED OF ASSISTANCE • Review – Return Home: –Preponderance –Parent/Child

CHILD IN NEED OF ASSISTANCE • Permanency: – Clear & Convincing – Petitioner/State • Permanency Review (Modify): – Preponderance (Material Change in Circumstances) – Moving Party

TERMINATION OF PARENTAL RIGHTS • Chap. 232 TPR: – Clear & Convincing – Petitioner/State • TPR Review: – Clear & Convincing – Petitioner/State • Chap. 600A TPR: – Clear & Convincing – Petitioner

12 CONTACT POINTS:

Ellen Ramsey-Kacena Attorney at Law 4403 First Avenue SE, Ste 300iversity Ave., Cedar Rapids, IA 52402 [email protected] (319) 393-4683

13 20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

LITIGATION TRACK Work Comp 101

2:30 pm.-3:30 p.m.

Presented by Tim Semelroth RSH Legal 425 Second Street SE, Suite 1140 Cedar Rapids, Iowa 52401 Phone: 319-365-9200

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 IOWA’S WORKERS’ COMPENSATION 101

Tim Semelroth RSH Legal 425 Second Street SE, Suite 1140 Cedar Rapids, Iowa 52401 (319) 365‐9200 [email protected]

INTRODUCTION

This outline is intended to give a basic overview of the Iowa workers’ compensation system to an attorney who is not familiar with workers’ compensation, but who may – at some point ‐ be contacted by an injured worker who is looking for answers. That is why each heading in this outline addresses a frequently‐asked question from an injured worker.

This outline paints in broad strokes and there are exceptions to many of its general statements. This outline is not meant to be a complete primer on everything you need to know to represent someone in a workers’ compensation claim in Iowa.

For a more complete discussion of Iowa workers’ compensation law and related issues, the author recommends the following resources:

 Iowa Workers’ Compensation Law and Practice, latest ed. (Vol. 15, Iowa Practice Series), James R. Lawyer, Judith Ann Graves Higgs (Ret.)(Thompson West Publishing)

 Iowa Workers’ Compensation Laws, latest ed. (Iowa Workers’ Compensation Advisory Committee, Inc.)

 Iowa Workers’ Compensation Commissioner’s Web Site: www.iowaworkforce.org/wc

I. WHERE AM I?

In Iowa, most employees who are injured on the job are covered by the Iowa’s workers’ compensation system.

Iowa’s workers’ compensation system is set up through a series of statutes and administrative rules ‐ specifically, Iowa Code chapters 85 through 87 and 17A and Iowa Administrative Code chapter 876.

In a nutshell, those statutes and rules require most employers to provide certain benefits to their employees who are injured while working.

II. HOW DID I GET HERE?

A. Who qualifies for Iowa workers’ compensation benefits?

An employee typically qualifies for benefits from the Iowa workers’ compensation system if he or she was injured while working:

1. in Iowa; or 2. in employment principally occurring in Iowa; or 3. for an employer who hired the employee in Iowa.

Employees whose employment is principally in Iowa or who were hired in Iowa may be eligible for Iowa workers’ compensation benefits even if they were injured outside the state.

Iowa workers’ compensation law exempts a few types of employees from coverage, so if an employer claims a worker is not eligible for Iowa workers’ compensation benefits, it will be necessary to research the issue.

For the purposes of the Iowa workers’ compensation system, whether or not someone was at fault for the injury typically does not affect a worker’s eligibility for benefits.

B. What injuries are covered by the Iowa workers’ compensation system?

In Iowa, the workers’ compensation system covers most health conditions caused by work activities. Diseases and hearing loss caused by work activities or exposures are covered. Pre‐existing health conditions that are aggravated or worsened by work are also covered.

III. WHO IS IN CHARGE?

The Iowa Workers’ Compensation Commissioner is the head of the Division of Workers’ Compensation which is part of the State of Iowa’s Workforce Development agency. The Commissioner is responsible for administering, regulating and enforcing Iowa’s workers’ compensation laws.

If there is a dispute between an injured worker and his or her employer over an Iowa workers’ compensation claim, an injured worker can file a petition and get a hearing in front of a deputy Workers’ Compensation Commissioner. A decision of a deputy can be appealed to the Commissioner. The decision of the Commissioner can be subject to judicial review by the Iowa court system.

IV. CAN I LEAVE?

In Iowa, workers’ compensation benefits are the exclusive remedy of the employee against the employer for a work‐related injury. Therefore, in most circumstances, an employee cannot bring a personal injury lawsuit against his or her employer for a workplace injury. If an injured Iowan wants compensation from his or her employer for a work‐related injury, generally the only option is through the Iowa workers’ compensation system.

V. WHAT ARE MY RIGHTS?

When an employee suffers a work injury in Iowa, he or she is primarily entitled to three things:

 Medical benefits  Temporary disability benefits ‐ if the employee missed time from work while recovering from the work injury  Permanent disability benefits ‐ if the employee suffered permanent functional impairment as a result of the work injury

These benefits are to be paid by the employer or its workers’ compensation insurance corporation. For the purposes of this outline, the term “employer” refers both to the employer or its workers’ compensation insurance corporation.

Each type of benefit requires further explanation.

A. Medical Benefits

The employer must pay for all reasonable and necessary medical care required to treat an employee’s work‐related injury. While the employer must provide medical care reasonably suited to treat a work injury, the employer has the right to choose where the injured worker goes to receive that care.

Generally speaking, if the injured worker gets medical care from a provider who is not “authorized” by the employer, the employer will not be obligated to pay for the care. There are, however, exceptions to this rule.

How an Attorney Can Help If a doctor is recommending treatment for a work‐related injury but the employer is refusing to pay for it, the injured worker can file a petition for alternative medical care with the Iowa Workers’ Compensation Commissioner. Tip for the Injured Worker: Talk to an attorney if recommended medical care is being denied by your employer.

As part of medical benefits, the employer must reimburse the injured worker for all reasonable and necessary travel expenses for authorized medical treatment.

How an Attorney Can Help Injured workers are entitled to be reimbursed for mileage if they drive themselves to authorized medical appointments. Mileage for the use of a private car is reimbursed at the level allowed by the IRS for business travel. Tip for the Injured Worker: Talk to an attorney if you have not been reimbursed for travel expenses to and from authorized medical treatment for your work‐related injury.

B. Temporary Disability Benefits

If an employee misses time from work and thus loses wages while recovering from a work injury, then he or she is entitled to some amount of temporary disability benefits.

Temporary disability benefits are paid at the injured worker’s weekly benefit rate. A particular worker’s gross weekly earnings, number of income tax exemptions, and marital status determine his or her weekly disability benefit amount. A worker’s total weekly compensation benefit may not be greater than 80 percent of his or her spendable earnings. The law defines “spendable earnings” as the amount remaining after payroll taxes are deducted from gross weekly earnings.

How an Attorney Can Help

Correctly calculating an injured worker’s weekly benefit rate can be complicated. It

requires a careful review of a worker’s payroll records and non‐wage items such as

regular bonuses and room and board. For this reason, employers often do not take the

time to correctly calculate weekly benefit rates.

Tip for the Injured Worker:

You should not assume that your weekly benefit rate has been calculated correctly. Talk

to an attorney to get an independent calculation and make sure you are getting weekly

benefits at the amount to which you are entitled.

Technically, temporary total disability benefits (TTD) or temporary partial disability benefits (TPD) and healing period benefits (HP) are different, even though they compensate for the same time periods.

1. Temporary Total Disability (TTD) If an employee is off work more than three days because of a work injury, the employee is entitled to TTD benefits beginning on the fourth day and continuing until he or she returns to work or is recovered enough to return to similar work, whichever happens first.

2. Temporary Partial Disability (TPD) An employee is eligible for TPD benefits if he or she is still medically limited in what he or she can do because of the work injury (and therefore, still temporarily disabled), but is released to return to work in some partial or part‐time capacity. The employer pays normal wages for the hours worked and workers’ compensation pays two‐thirds of the difference between the average weekly wage and the actual wages paid by the employer.

3. Healing Period (HP) An employee is entitled to HP benefits while recovering from an injury which produces a permanent impairment. These benefits begin on the first calendar day after the date of the injury and continue until one of the following occurs: (1) the employee returns to work; (2) the employee is medically capable of returning to work; or (3) the employee has reached maximum medical improvement from the injury, whichever occurs first.

How an Attorney Can Help Weekly payments of disability benefits are to begin on the eleventh day of disability. If benefits are not paid when due, an injured worker may be entitled to interest on late payments. If weekly benefits are unreasonably delayed or denied, an injured worker may also be entitled to penalty benefits.

Tip for the Injured Worker:

If you are not receiving your weekly benefit checks on time, it is important to tell an

attorney. There are particular documentation steps that need to be taken if you want to

hold an employer accountable for late weekly benefit payments.

C. Permanent Disability Benefits

If an injury causes a worker to suffer a permanent functional loss of part of his or her body, then the injured worker is entitled to some amount of permanent disability benefits. Permanent disability benefits are in addition to temporary disability benefits and begin when the worker reaches maximum medical improvement. The amount of permanent disability benefits depends on:

 the body part affected  the degree of impairment or disability  the worker’s weekly benefit rate

1. Scheduled Member Disabilities

Generally, if the worker’s injury is to a part [“member”] of the body listed in the table below, the worker’s permanent disability benefits are based upon a permanent impairment rating of the injured member.

Member Weeks Thumb 60 First finger 35 Second finger 30 Third finger 25 Fourth finger 20 Hand 190 Arm 250 Great toe 40 Any other toe 15 Foot 150 Leg 220 Eye 140 Loss of hearing in one ear 50 Loss of hearing in both ears 175 Permanent disfigurement, face or head 150 Body as a whole/industrial disability 500

The scheduled member table lists the number of weeks of benefits payable for 100% loss ‐ or loss of use – of the particular body member. If the permanent impairment rating for the body member is less than 100%, the percentage rating is multiplied by the number of weeks listed for the body member.

For example, a 20% loss of function of a thumb would be computed as 20% of 60 weeks or 12 weeks of PPD benefits at the worker’s weekly benefit rate.

How an Attorney Can Help If an injured employee receives a permanent impairment rating from an employer‐ authorized doctor, the employee has the right to a one‐time, second opinion on the rating from a doctor of the injured worker’s choice – at the employer’s expense. Tip for the Injured Worker: If you have received a permanent impairment rating from an employer‐authorized

doctor, talk to an attorney before exercising your right to your free second opinion. Your choice of an examining doctor could make or break your case.

How an Attorney Can Help As will be seen in the next section, permanent disability benefits based upon a scheduled member are typically significantly less generous than permanent disability benefits based upon a “body as a whole” injury. For that reason, employers are often motivated to misclassify work injuries as scheduled member claims. Tip for the Injured Worker: If your injury to a scheduled member is causing symptoms in other parts of your body (for example, an injured knee can cause a change in walking patterns which can lead to back pain), talk to an attorney before exercising your right to your free second opinion.

2. Body as a Whole Disabilities

Permanent injuries to body parts that are not listed on the scheduled member table are known as “body as a whole” injuries and are compensated much differently. Body as a whole injuries are compensated based upon “industrial disability.” Industrial disability is the reduction in the employee’s earning capacity caused by the work injury.

Industrial disability is assessed based on an evaluation of the following factors: a. Age b. Education c. Other Training and Qualifications (intellectual, emotional & physical) [“potential for rehabilitation”] d. Work Experience (before and after the injury) e. Actual Effect on Employment (loss of job/transfer to different job) [“inability to engage in employment for which the employee is fitted”] f. Actual Effect on Earnings (before v. after)

g. Functional Impairment/Body part affected h. Medical Restrictions i. Motivation to Work j. Medical Condition Before Injury and After Injury k. Site of Injury and its Severity l. Length of Healing Period m. Employer’s Refusal to Rehire

Iowa law provides no official formula that dictates how each of the industrial disability factors should be considered. If the assessment of industrial disability is ultimately made by the Iowa Division of Workers’ Compensation after a hearing, it becomes necessary for the deputy or Commissioner to draw upon his or her prior experience, as well as general and specialized knowledge, to make the finding.

Permanent disability benefits for industrial disability are calculated on a 500‐week basis with the percentage of the industrial disability finding being multiplied by 500 weeks.

How an Attorney Can Help A careful reading of past industrial disability assessments shows that the Commissioner and the deputies have historically placed significant weight on whether an injured employee is left with permanent medical restrictions after a work injury. Tip for the Injured Worker: Talk to an attorney before exercising your right to your free second opinion on your impairment rating to make sure that you are evaluated for permanent medical

restrictions during that exam.

How an Attorney Can Help A careful reading of past industrial disability assessments shows that the Commissioner and the deputies have historically placed significant weight on whether an injured

employee provides evidence of a motivation to work after injury. Tip for the Injured Worker: If you are released back to work by medical professionals after a work injury, talk to an attorney before making the decision to turn down a job offer, quit or retire from your pre‐injury job, or look for different work after being fired. Specific steps need to be followed in those situations to protect your workers’ compensation claim.

How an Attorney Can Help Employers will often make a settlement offer to an injured worker after the worker has reached maximum medical improvement after a work injury. Quite often that settlement offer is only based upon the worker’s permanent impairment rating. Tip for the Injured Worker: As you can see, a permanent impairment rating is only one factor in an industrial disability assessment. Often, industrial disability findings go far beyond the impairment rating number. Talk to an attorney who will do an independent assessment of your entitlement to industrial disability benefits before accepting a settlement offer.

3. Second Injury Fund Benefits

In a very specific situation, an employee with a scheduled member work injury may be entitled to more than just permanent disability benefits based upon the scheduled member. Iowa law has created an additional source of compensation – the Second Injury Fund (SIF) ‐ for certain workers with two separate scheduled member injuries. The Second Injury Fund may be available to workers who meet the following criteria:

 The employee has a qualifying “first injury.” A qualifying first injury is a pre‐existing permanent disability to a hand, arm, foot, leg or eye. This pre‐existing disability does not have to be the result of a work injury. AND  The employee then suffers a work injury resulting in permanent partial disability to a different hand, arm, foot, leg or eye. This is referred to as the “second injury”. AND  The amount of the employee’s industrial disability after the work injury is greater than the combined scheduled member disability from both the first and the second disabled members. If an injured employee meets the criteria for a Second Injury Fund claim, the employer is required to pay all the scheduled member permanent partial disability benefits due on account of the second injury. The Second Injury Fund will then pay weekly benefits for the amount that the industrial disability caused by both injuries is greater the combined scheduled member disability from both the first and the second disabled members.

How an Attorney Can Help A successful Second Injury Fund claim can significantly increase the permanent disability benefits due to a worker with a scheduled member injury. This possibility should always be explored when evaluating a scheduled member injury claim. Tip for the Injured Worker: Tell an attorney about any other injury, disease, or source of disability you experienced before your work injury.

4. Permanent Total Disability

If a work‐related injury leaves an employee incapable of returning to any type of wage‐earning employment, the employee may be entitled to weekly benefits during the time that the employee cannot return to any gainful work.

How an Attorney Can Help Claims for permanent total disability often require expert witness testimony and typically have to be filed, taken to hearing and, if successful, defended on appeal. Tip for the Injured Worker:

If you believe you may qualify for permanent total disability benefits, it is important to consult with an attorney who has the experience and resources to effectively litigate

your claim and see it through to the end.

5. Death Benefits

If an employee is killed on the job, his or her dependents may be eligible to receive death benefits through the Iowa workers’ compensation system.

A surviving spouse may receive death benefits for life or until remarriage. Dependent children are entitled to death benefits until age 18 or, if actually dependent, age 25. Other persons may qualify for death benefits if they were actually dependent upon the deceased worker.

If a surviving spouse remarries and the deceased worker has no dependent children at the time of the remarriage, the surviving spouse is entitled to a two‐year lump sum settlement.

In addition to weekly death benefits, the deceased worker’s employer must pay reasonable burial expenses not to exceed twelve times the statewide average weekly wage in effect at the time of death.

VI. WHAT CAN I DO IF I AM NOT GETTING WHAT I DESERVE?

If injured employees do not believe they are getting the Iowa workers’ compensation benefits to which they are entitled, they have the right to file a petition with the Division of Workers Compensation for a hearing in front of a Deputy Commissioner. While the Commissioner does not require it, most injured workers are represented by legal counsel at these hearings.

There are three important legal deadlines for Iowa workers’ compensation claims:

A. Notice of Injury

A workers’ compensation claim may be denied if the employer does not have notice of the work injury within 90 days of its occurrence. The 90‐day period starts when the employee knew or should have known that his or her injury was related to work.

B. Two‐Year Statute of Limitations

If no weekly benefits (for either temporary or permanent disability) have been paid to the injured worker, he or she has only two years from the date of injury to file a petition with the Division of Workers Compensation.

Medical benefits do not count as weekly benefits.

C. Three‐Year Statute of Limitations

If weekly benefits have been paid (for either temporary or permanent disability), the injured worker has three years from the date the last payment is mailed to file a petition with the Division of Workers Compensation.

Again, medical benefits do not count as weekly benefits.

How an Attorney Can Help There are a number of exceptions to the strict legal deadlines for filing an Iowa workers’

compensation claim. Whether an exception applies to a particular case depends on the facts of the case and the current state of the law.

Tip for the Injured Worker: If you believe you have a valid Iowa workers’ compensation claim but the time for filing the claim appears to have expired, talk to an attorney before abandoning your claim because a valid exception may apply.

VII. CAN I GET A SETTLEMENT?

It is possible to settle an Iowa workers’ compensation claim but all settlements must be submitted with proper paperwork to the Division of Workers Compensation and approved by the Workers’ Compensation Commissioner.

The choice of a type of settlement is an important one. There are different types of settlement allowed under Iowa law and each has a different impact on an injured worker’s future entitlement to workers’ compensation benefits.

The exact language used in settlement paperwork can also be very important. The money an injured worker receives in a worker’s compensation settlement can reduce a worker’s eligibility for Social Security Disability benefits or Medicare benefits.

How an Attorney Can Help An attorney can advise an injured worker how to safely settle a workers’ compensation

claim and avoid any costly Social Security or Medicare mistakes. Before accepting a settlement after a work injury, an employee should have his or her case and settlement paperwork independently evaluated by an attorney. Tip for the Injured Worker: If you are consulting with an attorney about your workers’ compensation claim, make

sure that the attorney knows if you are on Medicare or if you have applied for Social Security Disability benefits.

VIII. WHAT IMPORTANT THINGS HAVEN’T WE DISCUSSED?

As has been previously stated, this outline is not meant to be a complete primer on everything you need to know to represent someone in a workers’ compensation claim in Iowa. You should promptly consult additional resources, particularly if you have questions concerning the following topics:

 Penalty benefits  Third‐party claims  Interest calculation  Products liability  Hearing procedure  Retaliatory discharge  Appeals  Co‐worker gross negligence claims

20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

LITIGATION TRACK Dos and Don'ts for Indigent Defense Attorneys

4:15 pm.-5:00 p.m.

Presented by Sam Langholz State Public Defender Lucas State Office Building 321 E. 12th Street Des Moines, IA 50319 Phone: (515) 242-6158

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 OFFICE OF THE STATE PUBLIC DEFENDER

TERRY E. BRANSTAD, GOVERNOR KIM REYNOLDS, LT. GOVERNOR S AMUEL P. LANGHOLZ, STATE PUBLIC DEFENDER

Dos and Don’ts for Indigent Defense Attorneys Sam Langholz, State Public Defender

1. DO obtain an Indigent Defense Contract with the State Public Defender. - Application is available for download from website, http://spd.iowa.gov. - Generally, limit counties to one hour radius from your home/office - Consider type of contract: appellate (statewide), juvenile, or adult - Contract does not guarantee appointments: introduce yourself to appointing judges and court staff

2. DON’T work for free; DO ensure your indigent defense appointment is valid. - Finding of Indigency - Designation Process or Appellate Appointment Process Followed - Within the scope of your contract or rule exceptions - Special requirements for Parole Violations (Iowa Code § 908.2A) or 600A terminations (Iowa Code § 600A.6A) - If your appointment order does not show on its face that all above requirements are met, collect prior orders or other documentation to submit with your claim

3. DO appropriately obtain and pay Court Reporters, Experts, Evaluations, Investigators, and Interpreters - Attorneys should ensure that the person they hire receives all appropriate court orders and documents necessary to be paid  especially with out-of-state experts who may be unfamiliar with indigent defense payment system - Obtain all court orders authorizing deposition expenses, retaining expert or investigator, etc. prior to any expenses being incurred - Generally the person hired should submit miscellaneous claim form directly to SPD with required documentation (but attorney may instead pay directly and seek reimbursement) - Detailed Procedures for each type of claim in SPD Rules 493-13

4. DON’T be late in submitting your indigent defense claims to the State Public Defender - Must be submitted within 45 days of “Date of Service,” defined in SPD Rule 493-7. - Generally at end of criminal case (sentencing, NOT filling notice of appeal) – more frequently in juvenile cases.

LUCAS STATE OFFICE BUILDING, 321 EAST 12TH STREET, DES MOINES, IOWA 50319-0087 PHONE (515) 242-6158 FAX (515) 281-7289 HTTP://SPD.IOWA.GOV

5. DON’T cause the delay or denial of payment for your indigent defense fee claim a. Types of claims and claim forms: Adult, Juvenile, Appellate, and Miscellaneous b. Submit all required documents in the following order: - Claim form (2 copies) - must have original signature of appointed attorney - Appointment order (for all court numbers listed on claim form) - Order to Exceed - must attach order and application to exceed • advise client • good cause to exceed • good cause for late filing must be set out in application/Order - Receipts/proof of payment - Itemization • chronological order • list date, description of work and time in tenths of an hour for each activity • bill for your actual time, not a minimum, estimated or standard billing amount • time claimed should be for reasonable and necessary legal services d. Expenses and costs - Copies: $ 0.10 per copy - Fax: $ 0.10 per incoming page (time to fax is not payable) - Mileage: $ 0.35 per mile - Travel time only payable in specific circumstances (see definition in Rule 493-7) - Meals/hotels are only reimbursed when travel time payable and only reimbursed at state rate with an itemized receipt e. Common Errors - Sign claim form (must be signed by the attorney who was appointed) - Make sure beginning date on itemization is on or after date of appointment - Check attachments - Submit time in tenths of an hour on claim form- not hundredths - Box 26 (Make Payments to) on claim form must match most recent W-9 - Staple packet – no paperclips and no loose papers e. Seeking Review of a Denied or Reduced Claim - If you do not agree with the SPD reduction or rejection of your claim, you can attempt to resolve informally by contacting the SPD administrative office (the individual signing the Notice of Action) to try to address the issue with the claim or provide additional information - May request court review of the SPD action under Iowa Code § 13B.4(4)(d) and SPD Rule 493-12.9, which sets forth more detailed procedural requirements - Court hearing must be requested within 20 days of SPD Action

6. DO maintain your ethical obligations in your Indigent Defense Billing

a. Key Rules of Professional Responsibility Related to Ethical Billing in Indigent Defense Cases

- “A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expense, or violate any restrictions imposed by law.” Rule 32:1.5(a). - “A lawyer should not exploit a fee arrangement based primarily on hourly charges by using wasteful procedures.” Rule 32:1.5, Comment 5, - “A lawyer shall not knowingly . . . make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer.” Rule 32:3.3(a)(1) - “It is professional misconduct for a lawyer to . . . commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects.” Rule 32:8.4(b) - “It is professional misconduct for a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit or misrepresentation.” Rule 32:8.4(c) - “It is professional misconduct for a lawyer to . . . engage in conduct that is prejudicial to the administration of justice.” Rule 32:8.4(d)

b. Improper Billing to the State Public Defender is prejudicial to the administration of justice because “such conduct is bound to undermine public trust in the accuracy and validity of attorney expense reimbursements sought from public funds.” Iowa Supreme Court Bd. of Prof’l Ethics & Conduct v. Tofflemire, 689 N.W.2d 83, 91 (Iowa 2004).

c. Ethical Practices in Hourly Billing

- A claim for hourly billing should be an accurate representation of the time actually worked. See ABA Ethics Opinion 93-379 (Dec. 6, 1993) (“It goes without saying that a lawyer who has undertaken to bill on an hourly basis is never justified in charging a client for hours not actually expended.”).

• Accuracy requires a method of contemporaneous recordkeeping • While “mere negligence is generally insufficient to sustain a finding of misrepresentation or conduct that is prejudicial to the administration of justice,” an ethical violation does occur when an attorney conducts herself “with a significant and reckless disregard for the accuracy and truthfulness of her billing and timekeeping records.” Iowa Supreme Court Bd. of Prof’l Ethics & Conduct v. Tofflemire, 689 N.W.2d 83, 89 (Iowa 2004); see also Iowa Supreme Court Bd. of Prof’l Ethics & Conduct v. Grotewold, 642 N.W.2d 288 (Iowa 2002) (“False statements cannot be excused on the basis of a casual unawareness of the truth. Our system of justice requires absolute reliability and an impeccable reputation for honesty by its officers.”)

• Ultimately review of the bill is the attorney’s responsibility

i. This duty cannot be delegated to support staff, the attorney must ensure that the staff are appropriately supervised. See Rule 32:5.3 ii. In a court-appointed case, it is the attorney who is court- appointed to the case who must sign the claim form verifying its accuracy even if other attorneys covered and handled portions of the case. iii. When reviewing: - Ensure that dates and times are accurate - Properly perform math calculations if not automatic in billing software, and if using software, ensure that there are no glitches (e.g., expenses entered as time) - Describe work with sufficient detail to justify time - It is a good idea (and will soon be required for indigent defense claims), to note when another attorney is performing the services.

- Billing Increments and Rounding

• Minimum billing increment: 0.1 hours vs. 0.25 hours vs. minutes  Indigent defense requires tenths of an hour and using greater than that amount leads to a strong likelihood of overbilling. See Republican Party of Minn. V. White, 456 F.3d 912, 920 (8th 2006) (concluding tenth-hour billing is more reliable and quarter-hour billing and reducing fees, agreeing that “even short phone calls lasting only five minutes or less would automatically be billed for fifteen minutes,” which when “a number of phone calls are billed separately” risks “potentially inflating the total bill”).

• Some suggest that whatever increment, any time less than half of the increment should round down, not automatically rounding up. (2 minute phone call is not billed at all; 4 minute phone call billed as 0.1 hour)

• Even when using 0.1 hour increments, individually billing for multiple events below the minimum threshold can improperly inflate a bill and should be blocked together. (E.g., receiving 10 emails on the same case in one day and taking one minute to read each should be 0.2 hours, not 1.0).

- “Standardized” billing (set amounts for specific tasks or set tasks always recorded in a case regardless of whether necessarily performed) is inconsistent with accurate hourly billing based on attorney’s time spent on the case  will almost inevitably lead to overbilling

- “Double-Billing” – Because of premise of hourly billing based on time actually expended, an attorney should never bill for the same time period twice. See ABA Ethics Opinion 93-379 (Dec. 6, 1993):

• If multiple clients are handled in one trip to courthouse and corresponding wait time, actual time spent should be allocated proportionally. • If billing for travel time for one client and perform work for another client while traveling (e.g., making telephone calls with county attorney for Client A while driving to prison to visit Client B), attorney should reduce amount of travel time billed to Client B for time spent on Client A. • If attorney prepared ten-page legal brief for Client A and can reuse much of the same research and analysis for Client B, attorney may only bill Client B for the actual time updating the brief for Client B unless Client B agrees to some further non-hourly compensation.

- If any doubt, make written agreement with client about how you will be billing. In the case of indigent defense cases, the Indigent Defense Contract and Administrative Rules provide precise expectations.

d. Ethical Practices with Expenses

- Clerical time and clerical activities are never payable under SPD administrative rules, consistent with ordinary practices that clerical expenses are part of overhead. - Paralegal time is ordinarily billable to a client at a reduced rate, assuming it is work that could have been an attorney doing it but not if it was clerical work that could have been performed by clerical staff. In indigent cases, paralegal time is only payable in Class A felony cases under the administrative rules. - Mileage should be reimbursement for your actual cost  for indigent defense rate is set by administrative rule (currently $0.35 per mile) - If you are traveling for multiple clients, the cost of mileage should be split between clients rather than billing each client or billing only one client.

6. DON’T just guess – use SPD Resources to answer your indigent defense questions - SPD Website: http://spd.iowa.gov - Statutes (Iowa Code Chapters 13B, 814, 815), SPD Rules (493-1 to 493-14) - Ask Questions: Email ([email protected]) is best

IN THE IOWA DISTRICT COURT FOR ______COUNTY

STATE OF IOWA or ______, ) ____ Criminal ____ Civil Plaintiff/Petitioner, ) ) No. ______vs. ) ) ORDER OF APPOINTMENT OF COUNSEL ______, ) Defendant/Respondent. )

NOW on this ______day of ______, 20___, the Court having received and examined the Defendant’s Financial Affidavit and Application for Appointment of Counsel and having considered not only the Defendant’s income, but also the availability of any assets subject to execution and the seriousness of the charge or nature of the case, finds the following:

1. The Defendant:  Is eligible1 for court-appointed counsel pursuant to Iowa Code § 815.9 because:  Defendant’s income is at or below 125% of the poverty guidelines and Defendant is unable to pay for the cost of an attorney; OR  Defendant’s income is between 125% and 200% of the poverty guidelines and not appointing counsel would cause Defendant substantial financial hardship; OR  Defendant’s Income is over 200% of the poverty guidelines, Defendant is charged with a felony, and not appointing counsel would cause Defendant substantial financial hardship.  Is not eligible for court-appointed counsel pursuant to Iowa Code § 815.9. 2. The counsel appointed below to represent the Defendant is:  The local public defender office, nonprofit organization, or attorney designated by the State Public Defender pursuant to Iowa Code § 13B.4(2) to represent indigent persons in this type of case in this county OR  An attorney not designated by the State Public Defender, AND any local public defender office or other designee of the State Public Defender for this type of case in this county has been contacted and has declined the appointment or withdrawn from the case, or there is no designation for this type of case in this county, AND the appointed attorney:  Has a current contract with the State Public Defender to represent indigent persons in this type of case and in this county; OR  Does not have such a contract, but all attorneys with a contract to represent indigent persons in this type of case in this county have been contacted and no such attorney is available to take this case; OR  Does not have such a contract, but the State Public Defender has been consulted and consents to the appointment.

IT IS THEREFORE ORDERED that Defendant’s Application for Appointment of Counsel is  Denied.  Approved, and that ______is appointed to represent the Defendant in this case at State expense and may be contacted at ______.

______JUDGE, ______Judicial District Copy to:

1 In a parole revocation proceeding, the appointment order must include additional specific findings. See Iowa Code § 908.2A(1)(c); Iowa Admin. Code § 493-12.2(1)(b)(2). Do not use this form for parole revocation appointments. Rev. 1/6/12 IN THE IOWA DISTRICT COURT FOR ______COUNTY (JUVENILE DIVISION)

IN THE INTEREST OF ) Juvenile No. ______) ) ORDER OF APPOINTMENT ______, ) OF COUNSEL FOR ) Child(ren). )  Child  Parent  Other: ______

NOW on this ______day of ______, 20___, the Court having received and examined the Financial Affidavit of Parent and Application for Appointment of Counsel and having considered not only the Child/Applicant’s income, but also the availability of any assets subject to execution and the seriousness of the charge or nature of the case, finds the following: 1. The Child/Applicant:  Is eligible1 for court-appointed counsel pursuant to Iowa Code § 815.9 because:  Child/Applicant’s income is at or below 125% of the poverty guidelines and Child/Applicant is unable to pay for the cost of an attorney; OR  Child/Applicant’s income is between 125% and 200% of the poverty guidelines and not appointing counsel would cause Child/Applicant substantial financial hardship; OR  Child/Applicant’s Income is over 200% of the poverty guidelines, case is a felony-level delinquency, and not appointing counsel would cause Child/Applicant substantial financial hardship.  Is a child and is otherwise eligible for court-appointed counsel under Chapter 232.  Is not eligible for court-appointed counsel. 2. The counsel/guardian ad litem appointed below to represent the Child/Applicant is:  The local public defender office, nonprofit organization, or attorney designated by the State Public Defender pursuant to Iowa Code § 13B.4(2) to represent indigent persons in this type of case in this county OR  An attorney not designated by the State Public Defender, AND any local public defender office or other designee of the State Public Defender for this type of case in this county has been contacted and has declined the appointment or withdrawn from the case, or there is no designation for this type of case in this county, AND the appointed attorney:  Has a current contract with the State Public Defender to represent indigent persons in this type of case and in this county; OR  Does not have such a contract, but all attorneys with a contract to represent indigent persons in this type of case in this county have been contacted and no such attorney is available to take this case; OR  Does not have such a contract, but the State Public Defender has been consulted and consents to the appointment. IT IS THEREFORE ORDERED that Child/Applicant’s Application for Appointment of Counsel is  Denied.  Approved, and that ______is appointed to serve as counsel/guardian ad litem in this case for ______at State expense and may be contacted at ______.

______JUDGE, ______Judicial District Copy to:

1 NOTE: A different standard applies for determining eligibility for appointment of respondent’s counsel in a Chapter 600A TPR, and additional findings are required to determine the appropriate party/agency responsible for payment. See Iowa Code §§ 600A.2(11), 600A.6A(2), and 600A.6B. Do not use this form order for 600A TPR Appointments. Rev. 1/6/12 STATE PUBLIC DEFENDER ADULT DESIGNATIONS

County Designation Local Office Conflict Office #1 Conflict Office #2 Conflict Office #3 Effective Adair A’s only SDU Des Moines Adult (A’s only) Des Moines Juv (A’s only) N/A 1/12/11 Adams A’s only SDU Council Bluffs (A’s only) Des Moines Adult (A’s only) N/A 1/12/11 Allamakee A’s only Dubuque Waterloo Adult (A’s only) Waterloo Juv (A’s only) SDU (A’s only) 9/1/11 Appanoose All indictables Ottumwa SDU (A’s only) Burlington (A’s only) N/A 10/3/12 Audubon A’s only Council Bluffs SDU (A’s only) Des Moines Juv (A’s only) N/A 1/13/11 Benton All indictables Cedar Rapids Iowa City (A’s only) Waterloo Adult (A’s only) SDU (A’s only) 9/1/11 Black Hawk All indictables Waterloo Adult Waterloo Juv (All Indict.) Dubuque (A’s only) SDU (A’s only) 6/1/13 Boone All indictables Nevada Fort Dodge (A’s & B’s) SDU (A’s only) N/A 9/1/11 Bremer All indictables Waterloo Juv Waterloo Adult (A’s & B’s) Dubuque (A’s only) N/A 9/19/11 Buchanan All indictables Waterloo Adult Waterloo Juv (All Indict.) Dubuque (A’s only) N/A 8/15/11 Buena Vista A’s & B’s Sioux City Adult Sioux City Juv (A’s & B’s) Council Bluffs (A’s only) SDU (A’s only) 9/1/11 Butler A’s only Mason City Waterloo Adult (A’s only) Waterloo Juvenile (A’s only) SDU (A’s only) 9/1/11 Calhoun All indictables Fort Dodge Mason City (A’s & B’s) SDU (A’s only) N/A 10/1/09 Carroll A’s only Fort Dodge Mason City (A’s only) SDU (A’s only) N/A 10/1/09 Cass A’s only Council Bluffs SDU (A’s only) Des Moines Adult (A’s only) N/A 1/13/11 Cedar A’s & B’s Davenport Iowa City (A’s & B’s) Cedar Rapids (A’s only) SDU (A’s only) 9/1/11 Cerro Gordo All indictables Mason City Fort Dodge (A’s & B’s) SDU (A’s only) N/A 10/1/09 Cherokee A’s only Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/1/11 Chickasaw A’s & B’s Waterloo Adult Waterloo Juv (A’s only) Dubuque (A’s only) SDU (A’s only) 9/1/11 Clarke A’s only SDU Des Moines Adult (A’s only) Des Moines Juv (A’s only) N/A 1/13/11 Clay A’s only Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/1/11 Clayton All Felonies Dubuque Waterloo Adult (A’s only) Waterloo Juv (A’s only) SDU (A’s only) 9/1/11 Clinton A’s & B’s Davenport Dubuque (A’s only) Cedar Rapids (A’s only) SDU (A’s only) 9/1/11 Crawford A’s only Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/1/11 Dallas All indictables Des Moines Adult Des Moines Juv (A’s & B’s) SDU (A’s & B’s) N/A 11/17/09 Davis A’s only Ottumwa Burlington (A’s only) SDU (A’s only) N/A 10/3/12 Decatur A’s only SDU Des Moines Adult (A’s only) Des Moines Juv (A’s only) N/A 1/13/11 Delaware All indictables Dubuque Waterloo Adult (A’s & B’s) Waterloo Juv (A’s & B’s) SDU (A’s only) 9/1/11 Des Moines All indictables Burlington Ottumwa (A’s only) Davenport (A’s only) SDU (A’s only) 10/3/12 Dickinson A’s only Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/1/11 Dubuque All indictables Dubuque Waterloo Adult (A’s & B’s) Waterloo Juv (A’s only) SDU (A’s only) 9/1/11 Emmet A’s only Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/1/11 Fayette A’s & B’s Waterloo Juvenile Waterloo Adult (A’s & B’s) Dubuque (A’s only) SDU (A’s only) 9/1/11

SPD Adult Designations by County – Page 1 (Revised 09/17/13) STATE PUBLIC DEFENDER ADULT DESIGNATIONS

County Designation Local Office Conflict Office #1 Conflict Office #2 Conflict Office #3 Effective Floyd All indictables Mason City Waterloo Adult (A’s only) SDU (A’s only) N/A 9/1/11 Franklin A’s only Mason City Fort Dodge (A’s only) SDU (A’s only) Marshalltown (A’s 9/17/13 only) Fremont A’s only Council Bluffs SDU (A’s only) Des Moines Adult (A’s only) N/A 1/13/11 Greene All indictables Fort Dodge Nevada (A’s only) SDU (A’s only) N/A 10/1/09 Grundy A’s & B’s Waterloo Adult Waterloo Juv (A’s & B’s) Marshalltown (A’s & B’s) SDU (A’s only) 9/1/11 Guthrie A’s only SDU Des Moines Adult (A’s only) Des Moines Juv (A’s only) N/A 1/13/11 Hamilton All indictables Fort Dodge Nevada (A’s only) SDU (A’s only) N/A 10/1/09 Hancock All indictables Mason City Fort Dodge (A’s only) SDU (A’s only) N/A 10/1/09 Hardin All indictables Marshalltown Nevada (A’s only) SDU (A’s only) N/A 10/1/09 Harrison All indictables Council Bluffs Sioux City Adult (A’s only) Sioux City Juv (A’s only) SDU (A’s only) 9/1/11 Henry All indictables Burlington Ottumwa (A’s only) Iowa City (A’s only) SDU (A’s only) 10/3/12 Howard A’s & B’s Waterloo Adult Waterloo Juv (A’s only) Dubuque (A’s only) SDU (A’s only) 9/1/11 Humboldt All indictables Fort Dodge Mason City (A’s only) SDU (A’s only) N/A 10/1/09 Ida All indictables Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/1/11 Iowa All Felonies Iowa City Cedar Rapids (A’s only) SDU (A’s only) N/A 10/1/09 Jackson A’s & B’s Davenport Dubuque (A’s only) Cedar Rapids (A’s only) SDU (A’s only) 9/1/11 Jasper A’s & B’s SDU Marshalltown (A’s only) Des Moines Adult (A’s only) N/A 9/1/11 Jefferson A’s only Ottumwa Burlington (A’s only) Iowa City (A’s only) SDU (A’s only) 10/3/12 Johnson All indictables Iowa City Linn Co. Advocate (All Indict.) Cedar Rapids (A’s only) SDU (A’s only) 7/16/12 **A’s to Cedar Rapids and SDU then Linn Co. Advocate Jones All indictables Cedar Rapids Iowa City (A’s only) Dubuque (A’s only) SDU (A’s only) 9/1/11 Keokuk A’s only Ottumwa Iowa City (A’s only) SDU (A’s only) N/A 1/13/11 Kossuth A’s only Fort Dodge Mason City (A’s only) SDU (A’s only) N/A 10/1/09 Lee North All indictables Burlington Ottumwa (A’s only) Iowa City (A’s only) SDU (A’s only) 10/3/12 Lee South All indictables Burlington Ottumwa (A’s only) Iowa City (A’s only) SDU (A’s only) 10/3/12 Linn All indictables Cedar Rapids Linn Co. Advocate (All Indict.) Iowa City (A’s and B’s) SDU (A’s only) 9/9/11 Louisa All indictables Burlington Iowa City (A’s only) Davenport (A’s only) SDU (A’s only) 9/9/11 Lucas A’s only Ottumwa SDU (A’s only) Des Moines Adult (A’s only) N/A 6/24/11 Lyon All indictables Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) N/A 12/22/09 Madison A’s & B’s SDU Des Moines Adult (A’s only) Des Moines Juv (A’s only) N/A 12/7/09 Mahaska All indictables Ottumwa SDU (A’s only) Marshalltown (A’s only) Iowa City (A’s 10/3/12 only) Marion A’s & B’s SDU Des Moines Adult (A’s only) Des Moines Juv (A’s only) N/A 12/7/09 SPD Adult Designations by County – Page 2 (Revised 09/17/13) STATE PUBLIC DEFENDER ADULT DESIGNATIONS

County Designation Local Office Conflict Office #1 Conflict Office #2 Conflict Office #3 Effective Marshall All indictables Marshalltown Nevada (A’s only) SDU (A’s only) N/A 1/28/10 Mills Indictables & PVs Council Bluffs SDU (A’s only) Des Moines Adult (A’s only) N/A 1/13/11 Mitchell All indictables Mason City Fort Dodge (A’s only) SDU (A’s only) N/A 10/1/09 Monona All indictables Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/9/11 Monroe All indictables Ottumwa SDU (A’s only) Burlington (A’s) N/A 10/3/12 Montgomery A’s & B’s Council Bluffs SDU (A’s only) Des Moines Adult (A’s only) N/A 3/1/13 Muscatine A’s & B’s Davenport Burlington (A’s only) Iowa City (A’s only) SDU (A’s only) 10/3/12 O’Brien A’s only Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/9/11 Osceola A’s only Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/9/11 Page A’s only Council Bluffs SDU (A’s only) Des Moines Adult (A’s only) N/A 1/13/11 Palo Alto A’s only Fort Dodge Mason City (A’s only) SDU (A’s only) N/A 10/1/09 Plymouth All indictables Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) N/A 12/22/09 Pocahontas A’s only Fort Dodge Mason City (A’s only) SDU (A’s only) N/A 10/1/09 Polk All indictables & Des Moines Adult Des Moines Juv (All Indict.) SDU (A’s & B’s) Marshalltown (A’s 9/5/13 PVs except only) misdemeanor domestics1 Pottawattamie Indictables & PVs Council Bluffs Sioux City Adult (A’s only) Sioux City Juvenile (A’s only) SDU (A’s only) 9/9/11 Poweshiek A’s only Marshalltown Nevada (A’s only) SDU (A’s only) N/A 10/1/09 Ringgold A’s only SDU Des Moines Adult (A’s only) Des Moines Juvenile (A’s only) N/A 1/13/11 Sac A’s only Fort Dodge Sioux City Adult (A’s only) SDU (A’s only) N/A 10/1/09 A’s & B’s / Agg. & Serious Misd. Scott Davenport Burlington (A’s only) Iowa City (A’s only) SDU (A’s only) 10/3/12 /OWI 3rd Shelby A’s only Council Bluffs Sioux City Adult (A’s only) Sioux City Juv (A’s only) SDU (A’s only) 9/9/11 Sioux All indictables Sioux City Adult Sioux City Juv (A’s only) Council Bluffs (A’s only) SDU (A’s only) 9/9/11 All indictables Story except serious Nevada Marshalltown (A’s only) Fort Dodge (A’s only) SDU (A’s only) 9/1/11 misd.

1 Polk County also has the following special designations: 1) Parole violations of male parolees (Marshalltown Office); 2) Parole violations of female parolees (Attorney Matt Dummermuth); 3) Contempt proceedings for the nonpayment of support payments under section 598.23A of the Iowa Code and for failing to appear for proceedings under section 598.23A for persons with the last names as follows: “A” - “Dum” (Attorney Jeff Wright); “Dun” – “Kram” (Attorney John Audlehelm); “Kran”-“Robe” (Attorney Nancy Trotter); and “Robf” – “Z” (Attorney Erin Carr).

SPD Adult Designations by County – Page 3 (Revised 09/17/13) STATE PUBLIC DEFENDER ADULT DESIGNATIONS

County Designation Local Office Conflict Office #1 Conflict Office #2 Conflict Office #3 Effective Tama All indictables Marshalltown Nevada (A’s only) SDU (A’s only) N/A 10/1/09 Taylor A’s only SDU Council Bluffs (A’s only) Des Moines Adult (A’s only) N/A 1/13/11 Union A’s only SDU Des Moines Adult (A’s only) Des Moines Juv (A’s only) N/A 1/13/11 Van Buren A’s only Burlington Ottumwa (A’s only) Iowa City (A’s only) SDU (A’s only) 10/3/12 Wapello All felonies Ottumwa Burlington (A’s only) SDU (A’s only) Marshalltown (A’s 3/1/13 and agg. misd. only) Warren A’s & B’s Special Defense Des Moines Adult (A’s only) Des Moines Juv (A’s only) N/A 9/1/11 Washington A’s & B’s Iowa City Cedar Rapids (A’s only) SDU (A’s only) N/A 10/1/09 Wayne A’s only Ottumwa SDU (A’s only) Des Moines Adult (A’s only) N/A 6/24/11 All indictables w/simples, PVs, Webster Fort Dodge Mason City (A’s only) SDU (A’s only) N/A 11/2/09 & non-magistrate contempts Winnebago All indictables Mason City Fort Dodge (A’s only) SDU (A’s only) N/A 10/1/09 Winneshiek A’s only Dubuque Waterloo Adult (A’s only) Waterloo Juv (A’s only) SDU (A’s only) 9/9/11 Woodbury All indictables Sioux City Adult Sioux City Juv (All Indict.) Council Bluffs (A’s only) SDU (A’s only) 9/9/11 Worth All indictables Mason City Fort Dodge (A’s only) SDU (A’s only) N/A 10/1/09 Wright A’s & B’s Fort Dodge Mason City (A’s only) SDU (A’s only) N/A 12/12/11

SPD Adult Designations by County – Page 4 (Revised 09/17/13) STATE PUBLIC DEFENDER JUVENILE DESIGNATIONS

County Designation Local Office Effective Black Hawk All cases representing children in alleged delinquencies, CINA and TPR proceedings. All mental health Waterloo Juvenile 7/22/11 and substance abuse commitments for present juveniles represented by the Waterloo Juvenile Public Defender. Bremer All cases representing children in alleged delinquencies, CINA and TPR proceedings. Waterloo Juvenile 9/19/11 Buchanan All cases representing children in alleged delinquencies, CINA and TPR proceedings. Waterloo Juvenile 10/1/09 Calhoun All cases representing children in alleged delinquencies, CINA and TPR proceedings. Fort Dodge 10/1/09 Cerro Gordo All cases representing children in alleged delinquencies. Mason City 11/1/13 Cherokee All cases representing children in alleged delinquencies, CINA and TPR proceedings. Sioux City Juvenile 10/1/09 Chickasaw All cases representing children in alleged delinquencies, CINA and TPR proceedings. Waterloo Juvenile 1/3/12 Dallas All cases representing children in alleged delinquencies, CINA and TPR cases except for cases referred Des Moines Juvenile 10/1/09 to the Youth Law Center All juvenile cases the Des Moines Juvenile Public Defender declines because of conflict of interest or Youth Law Center work overload. Dubuque All cases representing children in alleged delinquencies, CINA and TPR proceedings. Dubuque 10/1/09 Fayette All cases representing children in alleged delinquencies, CINA and TPR proceedings. Waterloo Juvenile 10/1/09 Greene All cases representing juveniles in delinquency proceedings. Fort Dodge 10/1/09 Grundy All cases representing children in alleged delinquencies, CINA and TPR proceedings. Waterloo Juvenile 8/22/11 Hardin All cases representing juveniles in delinquency proceedings. Marshalltown 10/1/09 Harrison All cases representing children in alleged delinquencies, CINA and TPR proceedings. Council Bluffs 10/1/09 Where the Council Bluffs office is representing parents in criminal proceedings, then the Council Bluffs office will represent the parents in CINA and TPR proceedings. Ida All cases representing children in alleged delinquencies, CINA and TPR proceedings. Sioux City Juvenile 10/1/09 Johnson All cases representing juveniles in CINA, TPR, Juvenile Commitment, Judicial Bypass and Delinquency Linn County 12/3/12 cases. Advocate All cases representing parents in CINA and TPR (chapter 232) proceedings. Iowa City All cases specified by the Iowa City Office for appointment of the University of Iowa Legal Clinic – University of Iowa Family Representation Clinic. Legal Clinic – Family Representation Clinic Lee (North) All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Burlington 10/1/09 Lee (South) All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Burlington 10/1/09 Linn All cases representing parents in CINA and TPR proceedings. All cases representing juveniles in Cedar Rapids 12/1/09 delinquency proceedings. All cases representing juveniles in CINA, TPR, Juvenile Commitment and Judicial Bypass cases and in Linn County Delinquency cases the Cedar Rapids Public Defender declines because of conflict of interest or work Advocate overload. SPD Juvenile Designations by County – Page 1 (Revised 09/17/13) STATE PUBLIC DEFENDER JUVENILE DESIGNATIONS

County Designation Local Office Effective Marshall All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Marshalltown 10/1/09 Mills All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Council Bluffs 6/8/11 Representation of a parent in a CINA or TPR case where the Council Bluffs office represents a parent on adult criminal charges. Monona All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Sioux City Juvenile 10/1/09 Plymouth All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Sioux City Juvenile 10/1/09 Polk All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Des Moines Juvenile 10/1/09 All juvenile cases the Des Moines Juvenile Public Defender declines because of conflict of interest or Youth Law Center work overload. All cases specified by the Des Moines Juvenile Public Defender for appointment to the Middleton Drake Middleton Center for Children’s Rights. Clinic Pottawattamie All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Council Bluffs 10/1/09 Representation of a parent in a CINA or TPR case where the Council Bluffs office represents a parent on adult criminal charges. Story All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Nevada 10/1/09 Warren All cases representing juveniles in CINA and TPR proceedings. Des Moines Juvenile 10/1/09 Woodbury All cases of representation of children in alleged delinquencies, CINA cases and TPR cases. Sioux City Juvenile 10/1/09

There is no designation filed in any county not listed.

SPD Juvenile Designations by County – Page 2 (Revised 09/17/13)

IN THE SUPREME COURT OF IOWA twenty-nine hours for both agencies combined, and No. 114 / 04-0803 (3) made false claims for payment to the SPD and Filed October 6, 2004 false timesheets to IWD.

(Public Version; Also published as 689 N.W.2d 83) Finally, the complaint alleged this conduct violated Iowa Code of Professional Responsibility for IOWA SUPREME COURT BOARD OF Lawyers DR 1-102(A)(3) (lawyer shall not engage in PROFESSIONAL ETHICS AND CONDUCT, illegal conduct involving moral turpitude), (4) (lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation), (5) Complainant, (lawyer shall not engage in conduct prejudicial to the administration of justice), and (6) (lawyer shall not vs. engage in any other conduct that adversely reflects on the fitness to practice law). The complaint also CYNTHIA L. TOFFLEMIRE, alleged Tofflemire charged the SPD fees that violated DR 2-106(A) (lawyer shall not charge an excessive fee). Respondent. The Board filed an amendment to the complaint, expanding on the allegation that during the nine-month period in question Tofflemire made On review of the report of the Grievance false claims for payment to the SPD and false Commission. timesheets to IWD, including the following: (1) she claimed to be working for IWD during the same Grievance Commission report in period she claimed to render services for the SPD, (2) disciplinary proceeding recommended suspending she double-billed the SPD for the same services respondent’s license to practice law. LICENSE rendered to multiple clients, (3) she billed the SPD SUSPENDED. for time that exceeded the time actually expended for services she rendered to indigent defendants, and (4) Charles L. Harrington and Mark Schouten, she submitted copies of altered checks in support of Des Moines, for complainant. claims for reimbursement for expenses she filed with the SPD. The amendment alleged this conduct also violated the above-cited disciplinary rules. Roger J. Kuhle, West Des Moines, and Michael S. Carroll, Des Moines for respondent. The Grievance Commission (Commission) heard testimony from eight witnesses over a three- LAVORATO, Chief Justice. day period and considered the affidavits of two other individuals and over three hundred exhibits. The The Iowa Supreme Court Board of transcript of testimony exceeds seven hundred Professional Ethics and Conduct (Board) filed a pages. The Commission found the Board had proved complaint against the respondent, Cynthia L. several of the allegations against Tofflemire and Tofflemire, alleging several violations of the Iowa recommended that her license should be suspended Code of Professional Responsibility arising out of her without the possibility for reinstatement for a employment with the Labor Division of Iowa minimum of thirty days. Workforce Development (IWD) and her services for the State Public Defender (SPD). We likewise find that the Board proved several of the allegations of misconduct but conclude that the Specifically, the complaint alleged that during egregious nature of Tofflemire’s conduct warrants a a nine-month period Tofflemire (1) claimed sick longer suspension. We therefore suspend her license leave from IWD on days she also certified she was to practice law in this state indefinitely with no engaged in indigent criminal and juvenile defense on possibility of reinstatement for two years. claims she filed with the SPD, (2) filed payroll timesheets with IWD and certified indigent fee claims with the SPD claiming she regularly worked days in excess of twelve hours and as great as

- 1 - I. Scope of Review. 1992 Tofflemire obtained consent to maintain outside employment. That consent was renewed in 1994 and Although Tofflemire did not appeal from the was effective throughout the times material to these Commission’s recommendation pursuant to Iowa proceedings. Court Rule 35.11, she did file a statement at our request, as did the Board. Our review is de Tofflemire’s performance review from IWD novo. See Iowa Ct. R. 35.10(1); Iowa Supreme Ct. covering the period of July 1, 1998 through July 1, Bd. of Prof’l Ethics & Conduct v. Wickey, 679 1999 indicated that she met or exceeded N.W.2d 1, 2 (Iowa 2004). Because we decide what expectations. During the next year, the relationship discipline is appropriate in each case, we may impose between Tofflemire and the other attorneys in her a lesser or greater sanction than the one the office began to deteriorate. Other attorneys in the Commission recommended. Wickey, 679 N.W.2d at office felt compelled to report a potential ethical 2. violation by a former deputy labor commissioner, but Tofflemire did not join in signing the letter to the II. Facts. Board because she did not feel there was such a violation. Upon our de novo review, we find the following facts. Tofflemire’s performance review covering the period from August 1, 1999 to August 1, 2000 Tofflemire was admitted to practice law in reflected a more negative tone than the year before. Comments in this review included the Iowa in 1991. Following her admission to the bar, she worked for a small private law firm. When that following: “Cindy is not always forthcoming to her firm closed its doors, she began her own supervisors,” “Cindy is not a good team player,” and “Cindy really needs to address her working practice. While on her own, she did some indigent criminal defense as well as family law work. relationship with co-workers.” However, this evaluation still stated that Tofflemire’s overall performance met or exceeded expectations. In August 1992 the Division of Labor of the Iowa Department of Employment Services hired In late 1999 Tofflemire began taking on more Tofflemire as a temporary employee. Eventually, she became a full-time employee. The name of the complicated cases as a SPD contract attorney. As agency was later changed from Department of early as March 2000, her supervisors were concerned that Tofflemire’s outside work was taking time away Employment Services to Iowa Workforce Development. She worked out of the Des Moines from her full-time job with IWD. office. In June, Commissioner of Labor Byron Orton learned that Tofflemire had earned nearly $50,000 for At the times material to these proceedings, the first five months of 2000 for her SPD Tofflemire was representing IWD in OSHA and child labor cases. She worked forty hours per week and work. Orton became concerned that Tofflemire’s outside employment had become so substantial that it was allowed to work ten hours per day, Tuesday through Friday. She also had sick leave benefits was not possible for her to give the time and attention according to IWD rules and her union that her job with IWD demanded. When Tofflemire’s supervisors suggested that she was not contract. During this same period, Tofflemire was also engaged as a contract attorney with the SPD to working full time for IWD, she assured them that she represent indigent clients in Polk, Dallas, and Warren was out of the office on rare occasions, she always made sure IWD received its forty hours of work each counties. Tofflemire accepted cases in adult criminal and juvenile court. She also had a limited private week, and she did her indigent defense work at nights practice consisting of family law and guardianship and on weekends. cases. In December an Iowa Department of Revenue and Finance representative notified IWD that IWD allowed employees to work a second job in addition to their IWD responsibilities provided Tofflemire had earned $97,438 in 2000 for work she they notified IWD of the nature of the outside claimed to have performed for the SPD. Her name had come up during a routine cross match that the employment and that such employment would not adversely affect their IWD job responsibilities. In revenue department performs when state employees are receiving 1099 income from more than one state

- 2 - agency. This amount was in addition to the hours. She responded by saying that there had to be $59,391.63 annual salary Tofflemire earned as an some sort of mistake in her SPD billings. When attorney with IWD. The revenue department’s Orton asked Tofflemire about the days she claimed to disclosure caused Orton to initiate an investigation have worked at the county jail or courthouse for SPD that ultimately led to the termination of Tofflemire’s clients during work hours for IWD, she said the employment with IWD. itemizations on her SPD claims were wrong.

The investigation covered the period from Orton and Tofflemire met again on January 12 January 1, 2000 through September 15, 2000. For after Orton had given her a few days to come up with that period, Orton reviewed the hours Tofflemire had an explanation. On that date, Orton brought up the submitted to IWD to justify her forty-hour work June 27, 2000 date when Tofflemire took funeral requirement and the amount of sick leave she had leave from IWD while also claiming to work 6.7 taken. Orton also gained access to billing records hours for SPD. Tofflemire said she had taken funeral Tofflemire had submitted to the SPD and reviewed leave and attended a funeral for a relative in Sioux those records. From that review, Orton found that on Falls, South Dakota. When Orton asked her how she twenty-six occasions Tofflemire took sick leave from could have worked the 6.7 hours for SPD on that IWD while claiming to do indigent defense work for date, she said she did the work after returning from the SPD. Orton also found that Tofflemire had billed South Dakota. substantial hours of work to the SPD on days she claimed she had also worked eight- or ten-hour days Tofflemire’s explanations did not satisfy Orton for IWD. On some days the amount of hours so he terminated her employment with IWD that Tofflemire claimed from IWD employment and SPD same day. His reasons for doing so included her contract work exceeded twenty-four hours for a given abusing the IWD sick leave policy; deliberately date. On one occasion (June 27, 2000), Tofflemire falsifying timesheets, work sheets, production took funeral leave because of a relative’s death and records, materials, or any other records related to on that date actually performed work for the SPD. work activities; and lying during his investigation. A short time later, Becker terminated Tofflemire’s Shortly after initiating his investigation, Orton contract with the SPD because of his concerns that enlisted the help of Thomas Becker, director of the she had submitted inaccurate billing itemizations and SPD office. Becker conducted a spot audit of fee claims to the SPD. Tofflemire’s claim forms. He then asked an attorney who worked for him, Michelle Swanstrom, to review At the hearing before the Commission, Orton all of the claim forms Tofflemire had filed for testified in more detail about his investigation. From 2000. Swanstrom then prepared a spreadsheet listing his testimony we find that the 26 sick days that the services Tofflemire claimed to have performed on Tofflemire took represented approximately 15% of a day-to-day basis for 2000. Thereafter, Orton the 180 workdays for the period reviewed. In prepared his own spreadsheet incorporating the SPD addition, Tofflemire billed the SPD for 247 of 259 data. calendar days during the same period. Although Tofflemire consistently told Orton that she did SPD On January 9, 2001, Orton met with Tofflemire work on weekends, his spreadsheet showed to discuss his findings. His review up to that time otherwise. On a number of weekends she billed no had focused on twenty-six dates in 2000 when time at all to the SPD. Tofflemire had taken sick leave from IWD but also claimed to have done work for the SPD. He Becker likewise testified in more detail about presented those dates to Tofflemire at this meeting his investigation. From this testimony we find that and gave her an opportunity to explain why she had the $97,438 that Tofflemire earned in 2000 was billed the SPD for the same days she had claimed almost as much as the senior supervisors working in sick leave from IWD. Becker’s office were paid (senior supervisors were paid slightly over $100,000 per year). Her claims Tofflemire tried to assure Orton that her work were also at the very top tier of claims paid to for the SPD was not interfering with her work attorneys who had contracts with the SPD. In obligations for IWD. She again claimed that she did addition, the record reflects that in 1999 Tofflemire the bulk of her SPD work on weekends and after earned $49,208.19 in SPD work and $55,972.39 from hours. Orton also confronted Tofflemire about the her full-time job with IWD. days she had billed in excess of twenty-four

- 3 - Becker marveled that Tofflemire was able to letters during the period under investigation. For 282 meticulously capture her time as she did. He of those letters, Tofflemire charged one-half hour, believed she had to be very disciplined in writing and she charged one-half hour for each of four down how much time she spent doing the identical short letters. work. When he was told that Tofflemire had used no system to record her time for the SPD work billed in Sobel also reviewed Tofflemire’s subpoenaed 2000, he responded that would be inconsistent with bank records and discovered that in eight instances the detail he saw. duplicate check copies attached to claim forms filed with the SPD did not match actual checks written on Swanstrom told Becker that Tofflemire’s Tofflemire’s checking account. For example, in one claims were in many instances at the outer edge of instance the original check was written to a Dave reasonableness. Nevertheless, Becker would not Nixon on February 14, 1999 in the amount of conclude that Tofflemire had not performed the $5.00. However, the duplicate check copy attached services. Of course, that is not surprising because the to the particular indigent claim form was to Kinko’s record reflects that the SPD has no accurate way to in the amount of $65.42 and was purported to be determine whether the services were or were not written on September 30, 1999. performed. The SPD has to rely on attorneys being truthful in submitting claims. Sobel also reviewed the summaries Tofflemire submitted as exhibits to explain away apparent Board investigator Elayne Sobel testified inaccuracies and inconsistencies within her concerning her investigation. Sobel took information timekeeping system during 1999 and 2000. Sobel from Orton’s spreadsheet, which included found that over half of the summaries were information from the SPD, and incorporated that inaccurate and the effect of each summary was to information into a database. From the database, shift time from days with high SPD hours to days Sobel prepared a detailed analysis, which shows the with low hours. Tofflemire prepared those following. During the period in question, Tofflemire summaries after she was given Orton’s spreadsheet. claimed to have worked more than twenty-four hours on five different dates between her IWD and SPD III. Ethical Violations. employment. On one of those dates, Friday, February 25, 2000, Tofflemire claimed to have In her testimony, Tofflemire asserted that IWD worked over twenty-nine hours between the two and the SPD misconstrued her billing statements to agencies. On thirty occasions, Tofflemire claimed to the SPD, and therefore their action against her was have worked over eighteen hours per day between the unwarranted. She related that in 1999 and 2000 she two agencies. On 174 of the 259 calendar days, began taking on more complicated cases for the Tofflemire claimed to have worked over ten hours SPD. As a result she was no longer able to keep per day between the two agencies. In addition, the contemporaneous billing records as she performed analysis shows that—contrary to Tofflemire’s services for the SPD. She testified that she resorted claim—only a small portion of her work was done on to what she described as “block and summary” weekends. Finally, consistent with Orton’s billing in which she would summarize letters, testimony, Tofflemire claimed to have done SPD documents, motions, or briefs on the date they were work for 247 days of the 259 days during the nine- completed or filed, even though her work on the month period under investigation. Ten of the twelve documents may have been completed much earlier. days that Tofflemire did not bill the SPD fell on a Saturday or Sunday. In effect, what Tofflemire was doing was to review the file after the case was concluded and then Sobel’s analysis also confirms that Tofflemire reconstruct time and billing records for the case. As billed the SPD for work on the twenty-six days of a result, her block and summary billings had little sick leave Tofflemire took from IWD. On one of relation to the dates when the billed work was those days, Tofflemire claimed she was forced to stay actually done. This, she said, accounted for the at home because of an infected fingernail. On that erroneous conclusion that she was working more than day she attended a pretrial conference, which twenty-four hours in a day. appeared on her weekly tickler/calendar for three weeks prior to the conference, indicating this date was a planned absence. In addition, the analysis As to her billing practices, the Commission shows that Tofflemire claimed to have written 290 found:

- 4 - After reviewing the record in this explanation why her summary entry was matter, the Commission is very inaccurate. The Commission noted that it was troubled by many inconsistencies troubled during the course of the hearing with and inaccuracies that are apparent Tofflemire’s inability to provide succinct and direct in Respondent’s billing and answers to questions pertaining to her billing and recordkeeping process. The recordkeeping practices. Commission is mindful of the fact that mere negligence is generally Tofflemire insisted that the SPD administrative insufficient to sustain a finding of rules did not require dates to be included in a billing misrepresentation or conduct that is statement. The Commission however pointed out prejudicial to the administration of that Tofflemire chose to designate dates for the justice. However, a review of the various services itemized on her fee claims and found entire record in this matter leads the that it would be “disingenuous to assume that a party Commission to conclude that the reviewing the fee claims would not reasonably Respondent conducted herself with believe that the services rendered corresponded with a significant and reckless disregard the dates shown on the fee claim for the accuracy and truthfulness of itemizations.” Moreover, when questioned about this her billing and timekeeping matter, Tofflemire was unable to give a satisfactory records. example of how the billings themselves indicated We agree with and adopt these findings. they were summary billings rather than contemporaneous billings. The Commission made these findings after reviewing ninety-eight separate indigent defense Tofflemire’s testimony that the SPD’s claims that Tofflemire had submitted to the SPD administrative rules did not require dates to be in the during 2000. As to these claims, the Commission billing statement is misleading. The SPD’s written was “quite frankly amazed” that the claims could instructions for completing claims clearly provide contain as much detail and itemization as were found that the claim form should have attached to it an on the claims given that the itemizations were not “itemization detailing the dates, services provided prepared or reconstructed until several months after and billable hours for each service.” We find the services were performed. Like the Commission, incredible her testimony that because these we do not believe that it is possible to reconstruct instructions fail to define the term “services,” she did accurate billing records when such a substantial not know how to properly complete the form. amount of time has passed after the completion of the services. Describing Tofflemire’s billing method as a “recipe for disaster,” the Commission concluded that Without contemporaneous time records to her timekeeping practices for her SPD work support her billings, the Commission had little faith constituted conduct prejudicial to the administration in the accuracy of the summaries Tofflemire of justice and conduct adversely reflecting on her produced to explain inconsistencies or impossibilities fitness to practice law in violation of DR 1-102(A)(5) such as billing for more than twenty-four hours in a and DR 1-102(A)(6). The Commission further day. We likewise have little faith in the accuracy of concluded that Tofflemire’s submission of itemized those summaries. billings “with such a questionable level of accuracy rises to the level of reckless disregard for the truth.” The Commission therefore concluded that One glaring example of the inaccuracy such conduct constituted misrepresentation in concerning Tofflemire’s summaries involved SPD violation of DR 1-102(A)(4). We agree with and client Anthony Lange. Tofflemire claimed that a adopt all of these conclusions. See Iowa Supreme Ct. time entry for Lange was improperly typed in with a Bd. of Prof’l Ethics & Conduct v. Grotewold, 642 date of February 25, 2000, rather than January 14, N.W.2d 288, 293 (Iowa 2002) (concluding attorney’s 2000. According to Tofflemire, the work shown for reckless disregard for the truth constituted Lange actually occurred a month earlier, and the misrepresentation). incorrect date was a typographical error. However, at the hearing, Tofflemire was shown copies of district court filings which indicated that the services she As to the check alteration issue, Tofflemire performed for Lange actually did occur on February testified that all the expenditures were actually made 25, 2000. She was unable to give a satisfactory and she therefore did nothing wrong in altering the

- 5 - original duplicate copies and attaching them to her leave. One occurred on April 19, 2000 when claim forms. Tofflemire claimed nine hours of sick leave because of an infected fingernail and billed six hours to the The Commission disagreed, concluding that such SPD. On that date Tofflemire attended a pretrial actions constituted conduct prejudicial to the conference that had been on her calendar for three administration of justice in violation of DR 1- weeks, indicating that the date was a planned absence 102(A)(5). We likewise agree with and adopt this rather than a legitimate claim for sick leave. The conclusion and the Commission’s finding that such other incident concerned the June 27, 2000 sick leave conduct is “bound to undermine public trust in the claim for a relative’s funeral. On that date, accuracy and validity of attorney expense Tofflemire appeared in court on a plea and reimbursements sought from public funds.” See Iowa sentencing for one SPD client and on an arraignment Supreme Ct. Bd. of Prof’l Ethics & Conduct v. for another. The arraignment had been on her Steffes, 588 N.W.2d 121, 123 (Iowa 1999) (noting calendar for some time before June 27. The that “there is no typical form of conduct that Commission had difficulty believing that the timing prejudices the administration of justice,” but a of these leaves and the timing of the court “common thread” in cases dealing with this violation appearances were merely coincidental. We think is that “the attorney’s act hampered the efficient and they were not coincidental, but planned. proper operation of the courts or of ancillary systems upon which the courts rely”). The June 27 funeral incident is troubling for another reason. Tofflemire originally told Orton that Turning to the sick leave issue, the she did indeed go to the funeral in Sioux Falls, South Commission found that Tofflemire was correct in Dakota. In an answer to a Board interrogatory, she contending that IWD work rules and the collective admitted that she had not gone to the funeral. bargaining agreement do not place any particular constraints on the use of sick leave. Nevertheless, the The Commission concluded that Tofflemire’s Commission frowned upon the practice, noting that “cavalier attitude towards taking IWD sick leave “in the eyes of the public, moonlighting on a second while still performing SPD work constitutes conduct job is not generally viewed as an acceptable practice that is prejudicial to the administration of justice” in during the time a person claims sick leave from their violation of DR 1-102(A)(5). We think so too. In primary employer.” addition, we think her actions were egregious enough to constitute illegal conduct involving moral We take issue with the Commission’s finding turpitude in violation of DR 1-102(A)(3). Iowa that the IWD work rules and the collective bargaining Supreme Ct. Bd. of Prof’l Ethics & Conduct v. agreement do not place constraints on the use of sick Hansel, 558 N.W.2d 186, 189 (Iowa 1997) (stating leave. To the contrary, the collective bargaining “‘[m]oral turpitude’ in the context of attorney agreement and the IWD work rules allow an misconduct means illegal conduct done with a employee to use accrued sick leave when personal fraudulent or dishonest intent”); Comm. on Prof’l illnesses or injuries would require the employee’s Ethics & Conduct v. Hall, 463 N.W.2d 30, 35 (Iowa confinement, or render the employee unable to 1990) (noting that for purposes of disciplinary perform assigned duties, or when performance of proceedings in which moral turpitude is an issue, it is assigned duties would jeopardize the employee’s “immaterial that respondent was not charged or health or recovery. The IWD work rules and convicted of a crime”). collective bargaining agreement are clear that sick leave should not be used for any other reason. The Concerning the Board’s charge of “over- IWD work rules provide that abuse of sick leave billing,” the Commission had concerns that means an employee is claiming sick leave for Tofflemire had repeatedly over-billed the purposes other than those provided for in the SPD. However, because of the haphazard way that collective bargaining agreement. Clearly, working she kept time records, the Commission felt there was for the SPD while claiming sick leave from IWD no way to prove this. However, the Commission did constitutes an abuse of sick leave. Not only is this an find that Tofflemire had overcharged for six abuse of sick leave, but it also constitutes a misuse of letters. Four of those letters were brief identical public funds. letters to witnesses concerning their review and signing of proposed affidavits. Tofflemire billed .5 The Commission was particularly concerned, hours for each of the six letters. Because the as we are, about two incidents involving sick Commission simply did not believe that Tofflemire

- 6 - expended three full hours preparing the letters, it the language “block and summary” billing to describe concluded that the billing constituted conduct her billing and recordkeeping system, we consider prejudicial to the administration of justice in violation that system bogus. of DR 1-102(A)(5) and collection of an excessive fee in violation of DR 2-106(A). Although we agree with A mitigating factor is the attorney’s and adopt these findings and conclusions, we go one recognition of some wrongdoing. Iowa Supreme Ct. step further. We think there is ample evidence from Bd. of Prof’l Ethics & Conduct v. Lane, 642 N.W.2d this record to reasonably infer that Tofflemire 296, 302 (Iowa 2002). Conversely, the attorney’s repeatedly over-billed the SPD. failure to appreciate the wrongfulness of his or her actions is an aggravating circumstance. Iowa IV. Discipline. Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Bell, 650 N.W.2d 648, 655 (Iowa 2002). We have consistently said that the appropriate discipline in a particular case turns on the nature of In her statement to this court, Tofflemire the alleged violations, the need for deterrence, admits that she was sloppy in keeping time records, protection of the public, maintenance of the she should not have attempted to work privately reputation of the bar as a whole, and the respondent’s when she was sick, and she mistakenly submitted fitness to continue in the practice of law. Iowa several copies of carbon checks as proof of expenses Supreme Ct. Bd. of Prof’l Ethics & Conduct v. that at times were the improper check carbon. At Lyzenga, 619 N.W.2d 327, 329-30 (Iowa 2000). We first blush, these statements appear to demonstrate an also consider aggravating and mitigating appreciation of wrongdoing, weighing in favor of circumstances when determining the appropriate mitigating the sanction. However, on closer sanction. Iowa Supreme Ct. Bd. of Prof’l Ethics & examination, each of the statements is followed by an Conduct v. Freeman, 603 N.W.2d 600, 603 (Iowa excuse, evidencing a lack of an actual appreciation of 1999). her wrongful conduct.

Tofflemire offered mitigating evidence in the Moreover, during the hearing before the form of character testimony from judges, attorneys, Commission, Tofflemire consistently maintained that and her daughter. These witnesses stated that she did nothing wrong and that any Tofflemire is trustworthy, truthful, thorough, willing misrepresentations she made were the results of to take difficult cases and clients, works hard, and honest mistakes. For example, she claimed she used zealously advocates for her clients. But as the a calendar for 1999 when she was preparing her 2000 Commission pointed out, “the common denominator claim forms and incorrectly typed the wrong dates on among all of [these witnesses] is the fact that none of the itemization. She also claimed she made errors in them were intimately familiar with [Tofflemire’s] transcribing numbers from her handwritten notes, but billing or timekeeping practices.” With the exception she never produced the notes. Sometimes she of one witness, none of these witnesses was “familiar claimed she simply mistyped the itemization— with her former duties and job performance with striking an adjacent key rather than the correct key [IWD].” when preparing her claim form. And although conceding her summary billing was misleading, she Tofflemire has no history of disciplinary stated she was never asked about it, but would have action. We consider that in her favor. explained if only she were asked. Concerning her actions in doing SPD work while claiming sick leave However, giving evasive or untruthful from IWD, she stated she was forced to do the work testimony at a Commission hearing is an aggravating to avoid committing an ethical violation. She chose to ignore, however, that she could have done the circumstance. Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Plumb, 546 N.W.2d 215, 218 (Iowa work on her own time and avoid claiming pay for 1996). As mentioned, Tofflemire claimed she used sick leave. block and summary billing. However, the billing claims she submitted to the SPD do not reflect that To justify her action in doing SPD work while system. The claims make it appear that the detailed claiming sick leave from IWD, Tofflemire stated the billings were contemporaneously made. Moreover, IWD work rules did not properly define “abuse of she was evasive and unresponsive in many of her sick leave” to guide her in deciding when sick leave answers, and her explanatory summaries were was justified. To the contrary, we have already substantially inaccurate. Finally, although she used

- 7 - indicated the rules were very specific as to what enough to perform SPD work. The deception constituted an abuse of sick leave. continued right into the hearing with her explanatory summaries. Finally, she maintained that but for her refusal to sign the ethics complaint against the former deputy In other instances of similar misconduct, commissioner, her current ethical problems would lawyers have been suspended from three months to never have happened, implying her fellow workers at three years. See, e.g., Lane, 642 N.W.2d at IWD were conspiring against her. 302 (lawyer suspended for six months for submitting an application to the court for attorney Simply put, Tofflemire has steadfastly refused fees in the amount of $16,000 for a brief that was to take blame for her actions. Instead, she has sought largely copied from an uncredited source; lawyer had to shift the blame from herself to other persons or a prior reprimand); Stein, 603 N.W.2d at 575- things. See Iowa Supreme Ct. Bd. of Prof’l Ethics & 76 (lawyer suspended for two years for persistent Conduct v. Fleming, 602 N.W.2d 340, 342 (Iowa course of deceit and misrepresentation in a case in 1999) (an attorney’s “attempt to shift the blame which lawyer misrepresented that he had done work elsewhere . . . reflects poorly on [the lawyer’s] fitness to clear title by performing a contract of forfeiture; to practice law”). lawyer previously had been reprimanded and his license had been suspended); Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Romeo, 554 N.W.2d No standard discipline is imposed for particular instances of attorney misconduct. Grotewold, 642 552, 553-54 (Iowa 1996) (lawyer suspended for three N.W.2d at 294. However, attorneys who have years for falsifying written records to protect client; lawyer previously had been publicly reprimanded); engaged in misrepresentation and deceit have received lengthy suspensions because such conduct Comm. on Prof’l Ethics & Conduct v. Ramey, 512 “constitutes a grave and serious breach of N.W.2d 569, 571-72 (Iowa 1994) (“[l]awyers cannot be excused for false statements on the basis of a professional ethics.” Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Stein, 603 N.W.2d 574, 576 sloppy, or even casual, unawareness of the truth”; (Iowa 1999). As we have said on several occasions: lawyer suspended for three months for one false statement to a judge and his failure to disclose exculpatory evidence; lawyer had been suspended Fundamental honesty is the before for an income tax violation and false base line and mandatory certification); Comm. on Prof’l Ethics & Conduct v. requirement to serve in the legal Zimmerman, 465 N.W.2d 288, 293 (Iowa 1991) profession. The whole structure of (lawyer suspended for six months for filing a false ethical standards is derived from fee application with the court that misrepresented the the paramount need for lawyers to amount of work he and his wife, the conservator, had be trustworthy. The court system done in a conservatorship and for charging an and the public we serve are excessive fee; lawyer had been involved in a prior damaged when our officers play disciplinary case); Comm. on Prof’l Ethics & fast and loose with the truth. The Conduct v. Cody, 412 N.W.2d 637, 640-41 (Iowa damage occurs without regard to 1987) (lawyer’s license suspended for two and one- whether misleading conduct is half years for executing two insufficient fund checks motivated by the client’s interest or when the behavior was not an isolated incident). the lawyer’s own. Comm. on Prof’l Ethics & Conduct v. Bauerle, 460 Finally, we ordered six-month suspensions in N.W.2d 452, 453 (Iowa 1990). several cases involving excessive fees. See, e.g., Lane, 642 N.W.2d at 302; Iowa Supreme Ct. Bd. of What is troubling here is that instead of an Prof’l Ethics & Conduct v. Hoffman, 572 N.W.2d isolated instance of misrepresentation, there was 904, 909-10 (Iowa 1997). repeated deception. Each time Tofflemire prepared a claim form it appeared the services were performed Given the conduct here, we think a suspension contemporaneously when in fact they were not. Not lengthier than the one the Commission recommended once but eight times she attached false carbon copies is warranted. Accordingly, we think a two-year of checks to her claim forms. Each time she claimed suspension is appropriate. sick leave she was representing to her employer, IWD, that she was sick when in fact she was well

- 8 - V. Disposition. Rules 35.13 (procedure on application for reinstatement) and 35.21 (notification of clients and We suspend Cynthia L. Tofflemire’s license to counsel). If Tofflemire intends to engage in the practice law in this state indefinitely with no private practice of law upon any future reinstatement, possibility of reinstatement for two years. This she shall submit satisfactory evidence that she will suspension applies to all facets of the practice of have in place, use, and maintain billing practices that law. See Iowa Ct. R.35.12(3). will ensure contemporaneous billing.

Upon any application for reinstatement, Costs of this action are taxed to Tofflemire Tofflemire must establish that she has not practiced pursuant to Iowa Court Rule 35.25. law during the suspension period and has in all other ways complied with the requirements of Iowa Court LICENSE SUSPENDED.

- 9 - 20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

Post-Conviction Relief

4:30 pm.-5:00 p.m.

Presented by Brian Farrell University of Iowa College of Law 189 Boyd Law Building Iowa City, Iowa 52242 Phone: 319-335-8273

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 Postconviction Relief

Brian Farrell Nuts & Bolts Seminar October 30, 2013 Nature of the Action

• Seeks relief from conviction/sentencing • Hybrid action: Civil suit dealing with criminal subject matter • Former defendant is applicant; State is respondent • Usually follows direct appeal Sources of Law

• PCR is a statutory remedy governed by Chapter 822 (all four pages of it…) • Rules of Civil Procedure • Rules of Criminal Procedure • Cases fill in some gaps Who Handles PCR Cases?

• Usually contract attorneys (adult criminal list), appointed after application has been filed by applicant pro se • Retained attorneys • County attorney represents State Applicability

• PCR takes the place of state habeas (§ 822.1) and other remedies (§ 822.2(2)) for persons convicted/sentenced • Situations where applicable (§822.2(1)) • Usual claim is conviction was in violation of U.S. Constitution or Iowa Constitution or laws Limitations

• PCR must be filed within three years of final conviction/decision or, if appealed, three years from procedendo (§ 822.3) • Limitation does not apply to ground of fact or law that could not be raised • Exception: 90 days for reduction of sentence

Commencement of Action

• Application filed in county of conviction/sentence • Template: R. Crim. P. 2.37-Form 7 • Application typically filed pro se • Usually filed along with application for counsel and waiver of costs Common Claims

• Ineffective assistance of counsel 1) Failure to perform essential duty 2) Prejudice resulted • Strickland v. Washington, 466 U.S. 668 (1984) • Ledezma v. State, 626 N.W.2d 134 (Iowa 2001) • Prosecutorial misconduct • New evidence • Ineffective assistance of judge After Filing

• State is to file response/motion within 30 days (§ 822.6) • After appointment, consider possible amended application to clean up claims • One amendment allowed prior to State’s response or with leave of court or consent (R. Civ. P. 1.402)

Assembling the Case • Secure entire case file and transcripts from clerk • Get appellate file and appendix • Secure original file from trial attorney including notes and work product – consider having client sign a request and authorization Discovery • Full range of civil tools are available: – Interrogatories – Requests for production of documents – Motion to compel following good-faith effort to resolve (R. Civ. P. 1.517(5)) • Depositions (discovery or evidentiary) – Possible limits on out-of-state subpoenas Summary Disposition (§ 822.6)

• Distinct procedure, but essentially treated like civil summary judgment • Appropriate when “no genuine issue of material fact” • If resisting, consider filing statement of contested facts

Hearing (§ 822.7)

• Bench trial • Client present by ICN v. transport • Defense attorney is usually called by State to defend decisions in IAC • Not useful to have applicant simply explain claims in pro se application

Hearing

• Pre- or post-hearing briefs and a summation of evidence addressing each claim may be useful • Everything comes in: make an offer of proof if objection is made • Request can be made to keep record Pro Se Claims • Counsel cannot be put in role of screening pro se claims for court • Gamble v. State, 723 N.W.2d 443 (Iowa 2006)

• Court must rule on all pro se issues • Jones v. State, 731 N.W.2d 388 (Iowa 2007)

• But useful to evaluate and advise client as to merit (in writing!) Ruling • Must contain specific findings of fact and express conclusions of law on each issue (§ 822.7) • If not, motion to enlarge findings and conclusions pursuant to R. Civ. P. 1.904 & 1.1004 is needed • Notice of appeal must be timely filed Why I Like PCR

• Get to dissect serious felony cases • Opportunity to research/argue law • Long, sustained project with foreseeable deadlines (usually) But Understand…

• Record can be large – might stem from multiple defendant Class A with direct appeal • Can fall into trap of simply litigating what’s in applicant’s pro se application • Easy to procrastinate Some Tips • Take a fresh look at the case; consider need to file amended application • PCR is an exercise in long-term project management • Make friends with a good civil litigator! • Be creative and enjoy the flexibility of the hybrid action Some Tips

• Communicate with your client; explain why “cleaner” case may be better • Consciously build the appellate record • Use PCR as a tool to become a better lawyer - mix with trial & appellate work • Don’t be afraid to ask questions

Thanks, Kent. [email protected]

TRANSACTIONAL TRACK 12:30-5:00 P.M.

20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

TRANSACTIONAL TRACK Business Formation

12:30 pm.-1:30 p.m.

Presented by David J. Bright Nyemaster Goode, P.C. One GreatAmerica Plaza 625 First Street SE, Suite 400 Cedar Rapids, Iowa 52401 Phone: 319/286-7000 Fax: 319/286-7050 E-mail: [email protected] www.nyemaster.com

Wednesday,Wednesday, OctoberOctober 30,30, 20132013

Business Formation

Presented by David J. Bright Nyemaster Goode, P.C. One GreatAmerica Plaza 625 First Street SE, Suite 400 Cedar Rapids, Iowa 52401 Telephone: 319/286-7000 Facsimile: 319/286-7050 E-mail: [email protected] www.nyemaster.com

I. Introduction and assumptions.

A. This outline focuses on the nine (9) most common business entity options in Iowa.

B. There are two (2) general categories of these business entity options: for profit and nonprofit.

C. All business entity options discussed herein are domestic business entities.

D. Domestic business entities are defined as a business organized under and subject to the laws of Iowa.

E. Foreign business entities, or those organized under laws other than those of Iowa, should seek legal counsel before transacting business in Iowa. Permission from the Secretary of State of Iowa may be required and the business entity options available to foreign business entities may not include those discussed herein.

F. The selection of a business entity is a complicated process that should only be undertaken after sufficient due diligence and consultation with appropriate advisors, including but not limited to attorneys, accountants and bankers.

G. Initial meetings.

H. What, where, who, when, how and why?

I. Conflict checks.

J. Tax issues.

K. Financing.

L. Insurance.

II. For profit entities.

A. Sole proprietorships.

1. Typically the most simple business entity to form and administer, as there is essentially nothing to do to form one.

2. There are no statutes in Iowa that govern the formation or operation of sole proprietorships.

3. Very common form of business entity.

4. As the name implies, they are a “one person shop”.

5. No distinction between the owner and the sole proprietorship, which from an owner/operator perspective, creates the leading advantage to sole proprietorships: total control.

6. Total control also creates the leading disadvantage to sole proprietorships: total liability.

7. Another disadvantage is that sole proprietorships do not always enable succession planning.

8. An additional disadvantage is that sole proprietorships may have difficulty obtaining financing.

9. Another issue to consider is taxation. Owners/operators of sole proprietorships are taxed at the taxation rate of owners/operators.

10. One final disadvantage to sole proprietorships is the issue of separation.

11. This is more of a counseling issue.

12. Sole proprietorships are advantageous for a new business that will operate on a small scale with limited exposure to liability and which will not require the time, cost and effort of entity formation.

B. General partnerships.

1. General partnerships in Iowa are governed by the Iowa Uniform Partnership Act (Chapter 486A of the Iowa Code).

2. Section 486A.101(6) defines a partnership as “an association of two or more persons to carry on as co-owners a business for profit formed under section 486A.202, predecessor law, or comparable law of another jurisdiction.”

3. Section 486A.202 provides that: “1. Except as otherwise provided in subsection 2, the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership. 2. An association formed under a statute other than this chapter, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this chapter…”

4. General partnerships are essentially a sole proprietorship for two.

5. No fees.

6. Oral agreements are permissible, written agreements are preferred.

7. No reporting requirements.

8. Section 486A.303 provides that a filed Statement of Partnership Authority must include:

a. Name;

b. Street address, if one exists;

c. The names and mailing addresses of all the partners, or of an agent appointed and maintained by the general partnership for the purpose of the above subsection; and

d. The names and mailing addresses of the partners, or of an agent authorized to execute an instrument

transferring real property held in the general partnership’s name.

9. SAMPLE STATEMENT OF PARTNERSHIP AUTHORITY.

10. Section 486A.303 provides that a Statement of Partnership Authority may state the authority, or limitations on the authority, of some or all of the partners to enter into other transactions on behalf of the partnership, and any other matter.

11. A filed Statement of Partnership Authority is canceled by operation of law five (5) years after the date on which the Statement, or the most recent amendment thereto, was filed, unless canceled earlier.

12. General partnerships are subject to pass-through taxation.

13. Partners can agree on management and control of general partnerships, but in the event that partners have no agreement with respect to management and control, see Section 486A.401(6).

14. Partners can agree on capital, but in the event that partners have no agreement with respect to capital, see Section 486A.204.

15. Partners can divide their profits and losses by agreement, but in the event that partners have no agreement with respect to profits and losses, see Section 486A.401(2).

16. Partners can agree on the transferability of ownership of general partnerships, but in the event that partners have no agreement with respect to transferability, see Section 486A.503.

17. The key disadvantage to general partnerships is that the individual assets of all partners can be used to cover any liability incurred by general partnerships. Even if another partner incurred the liability, all partners are liable for it. See Section 486A.306.

18. Partners can agree on the duration of general partnerships, which can be dissolved through the filing of a Statement of Dissolution with the Secretary of State of Iowa.

19. With respect to dissolution, Section 486A.801 provides that: “A partnership is dissolved, and its business must be wound up, only upon the occurrence of any of the following events: 1. In a partnership at will, the partnership's having notice from a partner, other than a partner who is dissociated under section 486A.601, subsections 2 through 10, of that partner's express will to withdraw as a partner, or on a later date specified by the partner. 2. In a partnership for a definite term or particular undertaking if any of the following occur or are present: a. The expiration of ninety days after a partner's dissociation by death or otherwise under section 486A.601, subsections 6 through 10, or wrongful dissociation under section 486A.602, subsection 2, unless before that time a majority in interest of the remaining partners, including partners who have rightfully dissociated pursuant to section 486A.602, subsection 2, paragraph “b”, subparagraph (1), agree to continue the partnership. b. The express will of all of the partners to wind up the partnership business. c. The expiration of the term or the completion of the undertaking. 3. An event agreed to in the partnership agreement resulting in the winding up of the partnership business. 4. An event that makes it unlawful for all or substantially all of the business of the partnership to be continued, but a cure of illegality within ninety days after notice to the partnership of the event is effective retroactively to the date of the event for purposes of this section. 5. On application by a partner, a judicial determination that concludes any of the following: a. The economic purpose of the partnership is likely to be unreasonably frustrated. b. Another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner. c. It is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement. 6. On application by a transferee of a partner's transferable interest, a judicial determination that it is equitable to wind up the partnership business at any of the following times: a. After the expiration of the term or completion of the undertaking, if the partnership was for a definite term or particular undertaking at the time of the transfer or entry of the charging order that gave rise to the transfer. b. At any time, if the partnership was a partnership at will at the time of the transfer or entry of the charging order that gave rise to the transfer.”

C. Limited partnerships.

1. Limited partnerships in Iowa are governed by the Uniform Limited Partnership Act (Chapter 488 of the Iowa Code).

2. Section 488.102(13) defines a limited partnership as, except in the phrases “foreign limited partnership” and “foreign limited liability limited partnership”, as “an entity, having one or more general partners and one or more limited partners, which is formed under this chapter by two or more persons or becomes subject to this chapter under article 11 or section 488.1204, subsection 1 or 2. The term includes a limited liability limited partnership.”

3. Limited partnerships are entities distinct from their partners.

4. To be formed, limited partnerships must file a written Certificate of Limited Partnership with the Secretary of State, with a required $100.00 filing fee.

5. Section 488.201 provides that Certificate of Limited Partnership must include:

a. The name.

b. The street and mailing address of the initial designated office and the name and street and mailing address of the initial agent for service of process.

c. The name and the street and mailing address of each general partner.

d. Whether the limited partnership is a limited liability limited partnership.

e. Any additional information required by article 11.

6. SAMPLE CERTIFICATE OF LIMITED PARTNERSHIP.

7. Section 488.201 provides that a Certificate of Limited Partnership may also contain any other matters.

8. Section 488.201 further provides that if there has been substantial compliance with subsection 1, subject to section 488.206, subsection 3, a limited partnership is formed when the secretary of state files the Certificate of Limited Partnership. The Secretary of State's filing of the Certificate is conclusive proof that all conditions precedent to formation of the limited partnership have been satisfied except in a proceeding by the state to cancel or revoke the Certificate or involuntarily dissolve the limited partnership.

9. The Certificate may be amended, but any amendments must be filed with the Secretary of State, with a required fee of $100.00.

10. Limited partnerships must have both general partners and limited partners.

11. The relationship of the parties is to be governed by a written partnership agreement.

12. Partners can agree on management and control of limited partnerships, but in the event the partners have no agreement with respect to management and control, see Section 488.100.

13. Partners can agree of capital, but in the event that partners have no agreement with respect to capital, see Section 488.110 applies.

14. Partners can divide their profits and losses by agreement, but in the event that partners have no agreement with respect to profits and losses, see Sections 488.501 through 488.509.

15. Partners can agree on the transferability of ownership of limited partnerships, but in the event that partners have no agreement with respect to transferability, see Sections 488.701 through 488.704 apply.

16. The key advantage to limited partnerships is that an obligation of a limited partnership, whether in contract, tort, or otherwise, is not the obligation of a limited partner. A limited partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for an obligation of the limited partnership solely by reason of being a limited partner, even if

the limited partner participates in the management and control of the limited partnership.

17. A limited partner does not have the right or the power as a limited partner to act for or bind limited partnerships.

18. Section 488.104 provides that limited partnerships are perpetual.

19. Dissolved limited partnerships that have wound up business may file a Statement of Termination with the Secretary of State.

20. SAMPLE STATEMENT OF TERMINATION.

21. With respect to non-judicial dissolution, Section 488.801 provides that limited partnerships are dissolved and their activities must be wound up, only upon the occurrence of any of the following:

a. The happening of an event specified in the partnership agreement.

b. The consent of all general partners and of limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective.

c. After the dissociation of a person as a general partner, upon occurrence of either of the following: 1. If the limited partnership has at least one remaining general partner, the consent to dissolve the limited partnership given within ninety days after the dissociation by partners owning a majority of the rights to receive distributions as partners at the time the consent is to be effective. 2. If the limited partnership does not have a remaining general partner, the passage of ninety days after the dissociation, unless before the end of the period, all of the following occur: (a) Consent to continue the activities of the limited partnership and admit at least one general partner is given by limited partners owning a majority of the rights to receive distributions as limited partners at the time the

consent is to be effective. (b) At least one person is admitted as a general partner in accordance with the consent.

d. The passage of ninety days after the dissociation of the limited partnership's last limited partner, unless before the end of the period the limited partnership admits at least one limited partner.

e. The signing and filing of a declaration of dissolution by the secretary of state under section 488.809, subsection 3.

22. Limited partnerships must file Biennial Reports during odd- numbered years following the calendar year in which formed or authorized to transact business in Iowa. There is a filing fee for the Biennial Report, which varies based on whether it is done electronically or in hard copy.

D. Limited liability partnerships.

1. Limited liability partnerships in Iowa are governed by the Iowa Uniform Partnership Act (Chapter 486A of the Iowa Code).

2. Section 486A.101 definition: “…a partnership that has filed a statement of qualification under section 486A.1001 and does not have a similar statement in effect in any other jurisdiction.”

3. Section 486A.1001 provides that “1. A partnership may become a limited liability partnership pursuant to this section. 2. The terms and conditions on which a partnership becomes a limited liability partnership must be approved by the vote necessary to amend the partnership agreement except, in the case of a partnership agreement that expressly considers obligations to contribute to the partnership, by the vote necessary to amend those provisions. 3. After the approval required by subsection 2, a partnership may become a limited liability partnership by filing a statement of qualification….”

4. The Statement of Qualification must contain:

a. The name;

b. The street address of the partnership's chief executive office and, if different, the street address of an office in this state, if any;

c. The address of a registered office and the name and address of a registered agent for service of process in this state, which the partnership is required to maintain as provided in section 486A.1211;

d. A statement that the partnership elects to be a limited liability partnership; and

e. A deferred effective date, if any.

5. SAMPLE STATEMENT OF QUALIFICATION.

6. Section 486A.1001 also provides that the Statement of Qualification shall be executed by one or more partners

authorized to execute the Statement of Qualification on behalf of the partnership.

7. The status of a partnership as a limited liability partnership is effective on the later of the filing of the Statement of Qualification or a date specified in the Statement of Qualification, and payment of a $50.00 fee for the filing of a Statement of Qualification.

8. The Statement of Qualification may be amended, but any amendments must be filed with the Secretary of State, with payment of a fee of $20.00.

9. Section 486A.1001 further provides that the status remains effective, regardless of changes in the partnership, until the Statement of Qualification is canceled pursuant to section 486A.105, subsection 4.

10. The key advantage to a limited liability partnership is that all partners, whether general or limited, are provided with full- shield liability.

11. The relationship of the parties is to be governed by a written partnership agreement.

12. Partners can agree on management and control of limited liability partnerships, but in the event that partners have no agreement with respect to management and control, see Section 486A.401(6).

13. Partners can agree on capital, but in the event that partners have no agreement with respect to capital, see Section 486A.204.

14. Partners can divide their profits and losses by agreement, but in the event that partners have no agreement with respect to profits and losses, see Section 486A.401(2).

15. Partners can agree on the transferability of ownership of limited liability partnerships, but in the event that partners have no agreement with respect to transferability, see Section 486A.503.

16. Limited liability partnerships are governed by many of the same provisions that govern general partnerships, but

remember that they do not share the liability characteristics of general partnerships or limited partnerships.

17. Section 486A.306 provides in relevant part that “…3. An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such an obligation solely by reason of being or so acting as a partner. This subsection applies notwithstanding anything inconsistent in the partnership agreement that existed immediately before the vote required to become a limited liability partnership under section 486A.1001, subsection 2.”

18. Partners can agree on the duration of limited liability partnerships. They can be cancelled by filing a Statement of Cancellation of Qualification and payment of a $20.00 filing fee.

19. SAMPLE STATEMENT OF CANCELLATION OF QUALIFICATION.

20. With respect to dissolution, Section 486A.801 also provides that: “A partnership is dissolved, and its business must be wound up, only upon the occurrence of any of the following events: 1. In a partnership at will, the partnership's having notice from a partner, other than a partner who is dissociated under section 486A.601, subsections 2 through 10, of that partner's express will to withdraw as a partner, or on a later date specified by the partner. 2. In a partnership for a definite term or particular undertaking if any of the following occur or are present: a. The expiration of ninety days after a partner's dissociation by death or otherwise under section 486A.601, subsections 6 through 10, or wrongful dissociation under section 486A.602, subsection 2, unless before that time a majority in interest of the remaining partners, including partners who have rightfully dissociated pursuant to section 486A.602, subsection 2, paragraph “b”, subparagraph (1), agree to continue the partnership. b. The express will of all of the partners to wind up the partnership business. c. The expiration of the term or the completion of the undertaking. 3. An event agreed to in the partnership agreement resulting in the winding up of the partnership business. 4. An event that makes it unlawful for all or

substantially all of the business of the partnership to be continued, but a cure of illegality within ninety days after notice to the partnership of the event is effective retroactively to the date of the event for purposes of this section. 5. On application by a partner, a judicial determination that concludes any of the following: a. The economic purpose of the partnership is likely to be unreasonably frustrated. b. Another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner. c. It is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement. 6. On application by a transferee of a partner's transferable interest, a judicial determination that it is equitable to wind up the partnership business at any of the following times: a. After the expiration of the term or completion of the undertaking, if the partnership was for a definite term or particular undertaking at the time of the transfer or entry of the charging order that gave rise to the transfer. b. At any time, if the partnership was a partnership at will at the time of the transfer or entry of the charging order that gave rise to the transfer.”

21. There is no Biennial Report or reporting requirement required for limited liability partnerships.

E. For profit corporations.

1. For profit corporations in Iowa are governed by the Iowa Business Corporation Act (Chapter 490 of the Iowa Code).

2. Section 490.140(5) definition: a domestic corporation for profit, which is not a foreign corporation, incorporated under or subject to this chapter.

3. For profit corporations are an association of individuals with powers and liabilities independent of its shareholders.

4. For profit corporations are separate entities from the individuals who control, operate and own them.

5. They own their assets and owe their debts. Shareholders are protected from individual losses, save for the value of their investment.

6. They are managed by boards of directors that are typically elected by the shareholders of the for profit corporations.

7. They are governed by Articles of Incorporation and Bylaws.

8. SAMPLE ARTICLES OF INCORPORATION.

9. For profit corporations are formed by adopting and filing of Articles of Incorporation with the Secretary of State of Iowa and the payment of a $50.00 filing fee.

10. Section 490.202 provides that Articles of Incorporation must include:

a. A corporate name for the corporation that satisfies the requirements of section 490.401.

b. The number of shares the corporation is authorized to issue.

c. The street address of the corporation's initial registered office and the name of its initial registered agent at that office.

d. The name and address of each incorporator.

11. Amendments to Articles of Incorporation may be made, but must be filed with the Secretary of State, with the payment of a $50.00 filing fee.

12. Bylaws are not filed with the Secretary of State and may be amended as needed.

13. For profit corporations generally take one of two general forms:

a. Closely held for profit corporations.

b. Publicly held for profit corporations.

14. For profit corporations generally take one of two tax structures:

a. Subchapter S.

b. Subchapter C.

15. Corporations typically are perpetual.

16. The key disadvantage of for profit corporations is that they are subject to double taxation.

17. Section 490.801 provides that generally each corporation must have a board of directors. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed by or under the direction of, its board of directors, subject to any limitation set forth in the articles of incorporation, or in an agreement authorized under section 490.732.

18. Section 490.623 provides that capital is governed by the Articles of Incorporation, but in the event the Articles of Incorporation do not address capital, Section 490.623 provides a default.

19. Section 490.640 provides that profits and losses are governed by the Articles of Incorporation, but in the event the Articles of Incorporation do not address profits and losses, Section 490.640 provides a default.

20. Shares of for profit corporations are generally freely transferable. Any transfer is subject to any restrictions set forth in for profit corporations’ Articles of Incorporation. See Section 490.627.

21. The liability of shareholders of for profit corporations is addressed by Section 490.622. Generally, a purchaser from a for profit corporation or a shareholder is not liable.

22. The liability of directors of for profit corporations is addressed by Section 490.831.

23. The liability of officers of for profit corporations is addressed by Section 490.842.

24. For profit corporation must file Biennial Reports during even- numbered years following the calendar year in which they were formed in Iowa. There is a filing fee for the Biennial Report, which varies based on whether it is done electronically or in hard copy.

25. For profit corporations may dissolve by filing Articles of Dissolution with the Secretary of State. Section 490.1420 provides for administrative dissolution and Section 490.1430 provides for judicial dissolution.

26. SAMPLE ARTICLES OF DISSOLUTION.

F. Professional corporations.

1. Professional corporations are governed in Iowa by the Professional Corporation Act (Chapter 496C of the Iowa Code).

2. Section 496C.2 defines professional corporations as a corporation subject to the Professional Corporations Act, except a foreign professional corporation.

3. Professional corporations must be formed for the sole purpose of rendering professional services and may only be formed by certain defined professionals.

4. Professional corporations are governed by Articles of Incorporation and Bylaws.

5. Professionals include many more professions than may be readily apparent.

6. Professional corporations do not protect professionals against their own negligence.

7. They do protect professionals against the negligence of professional associates, which can supplement protection provided by malpractice insurance.

8. Professional corporations are formed by adopting and the filing of Articles of Incorporation with the Secretary of State, and payment of a filing fee of $50.00.

9. Generally, the Articles of Incorporation must include the same elements as required with for profit corporations.

a. The corporate name, b. The number of shares the professional corporation is authorized to issue, c. The street address of the professional corporation’s initial registered office and the name of its initial registered agent at that office; and d. The name and address of each incorporator.

10. The name shall contain the words “professional corporation” or the abbreviation “P.C.”

11. Amendments to Articles of Incorporation may be made, but must be filed with the Secretary of State of Iowa, with the payment of a filing fee of $50.00.

12. Bylaws are not filed with the Secretary of State and can be amended as needed.

13. Professional corporations typically are perpetual.

14. Generally each professional corporation must have a board of directors. Section 496C.16 provides that all directors of a professional corporation and all officers of a professional corporation, except assistant officers, shall at all times be individuals who are licensed to practice in this state a profession, or a lawful combination of professions pursuant to section 496C.4, which the corporation is authorized to practice.

15. Section 496C.10 provides that capital is governed by the Articles of Incorporation, but in the event the Articles of Incorporation do not address capital, Section 496C.10 provides a default.

16. Section 496C.3 provides that profits and losses are governed by the Articles of Incorporation, but in the event the Articles of Incorporation do not address profits and losses, Section 496C.3 provides a default.

17. Section 496C.11 provides that transfers of ownership are governed by the Articles of Incorporation, but in the event the Articles of Incorporation do not address transfer of ownership, Section 496C.11 provides a default.

18. Section 496C.9 provides that liability is governed by the Articles of Incorporation, but in the event the Articles of Incorporation do not address liability, Section 496C.9 provides that the liability of the shareholders of professional corporations, as shareholders, shall be limited in the same manner and to the same extent as in the case of a corporation organized under the Iowa Business Corporation Act, set forth in Chapter 490.

19. Professional corporations must file Biennial Reports during even-numbered years following the calendar year in which they

were formed or authorized to transact business in Iowa. There is a $45.00 filing fee due with the Biennial Report.

20. With respect to dissolution, Section 496C.19 provides that violation of any provision of this chapter by a professional corporation or any of its shareholders, directors, or officers shall be cause for its involuntary dissolution, or liquidation of its assets and business by the district court, as provided in the Iowa Business Corporation Act. Upon the death of the last remaining shareholder of a professional corporation, or whenever the last remaining shareholder is not licensed or ceases to be licensed to practice in this state a profession which the corporation is authorized to practice, or whenever any person other than the shareholder of record becomes entitled to have all shares of the last remaining shareholder of the corporation transferred into that person's name or to exercise voting rights, except as a proxy, with respect to such shares, the corporation shall not practice any profession and it shall either be promptly dissolved or shall promptly elect to adopt the provisions of the Iowa business corporation Act, as provided in section 490.1701(2). However, if prior to such dissolution all outstanding shares of the corporation are acquired by one or more persons licensed to practice in this state a profession which the corporation is authorized to practice, the corporation need not be dissolved and may practice the profession as provided in this chapter.

G. Limited liability companies.

1. Limited liability companies are governed in Iowa by the Revised Uniform Limited Liability Company Act (Chapter 489 of the Iowa Code).

2. Section 489.102(10) definition: “…except in the phrase “foreign limited liability company”, [means] an entity formed under this chapter.”

3. Limited liability companies are an unincorporated associations with one or more members.

4. Section 489.104 provides that limited liability companies are entities distinct from their members.

5. Section 489.304 provides that with respect to liability: “1. For debts, obligations, or other liabilities of a limited liability company, whether arising in contract, tort, or otherwise all of the following apply: a. They are solely the debts, obligations, or other liabilities of the company. b. They do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or manager acting as a manager. 2. The failure of a limited liability company to observe any particular formalities relating to the exercise of its powers or management of its activities is not a ground for imposing liability on the members or managers for the debts, obligations, or other liabilities of the company.”

6. Limited liability companies are formed by filing a Certificate of Organization with the Secretary of State, with a $50.00 filing fee.

7. SAMPLE CERTIFICATE OF ORGANIZATION.

8. The relationship of the parties is to be governed by an Operating Agreement.

9. SAMPLE OPERATING AGREEMENT.

10. The Certificate of Organization may be amended, but amendments must be filed with the Secretary of State, with a filing fee of $50.00.

11. The Certificate of Organization must contain:

a. The name;

b. The street address of the initial registered office and the name of the initial registered agent for service of process on the company; and

c. The Certificate of Organization must be signed by an organizer of the limited liability company.

12. Section 489.104 provides that limited liability companies have perpetual duration.

13. The ultimate advantages to limited liability companies are that like for profit corporations, limited liability companies’ owners are not generally liable for obligations of limited liability companies, but unlike for profit corporations, limited liability companies enjoy pass-through taxation, not double taxation.

14. Partners can agree on management and control of limited liability companies. In the absence of such agreement, see Section 489.110.

15. Members can agree on the transferability of ownership of limited liability companies. In the absence of such agreement, see Section 489.502.

16. Members can agree to dissolve limited liability companies. They can be dissolved by filing a Statement of Dissolution, with a $5.00 filing fee.

17. SAMPLE STATEMENT OF DISSOLUTION.

18. With respect to dissolution, Section 489.701 provides that “1. A limited liability company is dissolved, and its activities must be wound up, upon the occurrence of any of the following: a. An event or circumstance that the operating

agreement states causes dissolution. b. The consent of all the members. c. Once the company has at least one member, the passage of ninety consecutive days during which the company has no members. d. On application by a member, the entry by a district court of an order dissolving the company on the grounds that any of the following applies: (1) The conduct of all or substantially all of the company's activities is unlawful. (2) It is not reasonably practicable to carry on the company's activities in conformity with the certificate of organization and the operating agreement. e. On application by a member or transferee, the entry by a district court of an order dissolving the company on the grounds that the managers or those members in control of the company have done any of the following: (1) Have acted, are acting, or will act in a manner that is illegal or fraudulent. (2) Have acted or are acting in a manner that is oppressive and was, is, or will be directly harmful to the applicant. 2. In a proceeding brought under subsection 1, paragraph “e”, the court may order a remedy other than dissolution.”

19. Limited liability companies must file Biennial Reports during odd-numbered years following the calendar year in which they were organized. There is a filing fee for the Biennial Report, which varies based on whether it is done electronically or in hard copy.

III. Nonprofit entities.

A. Nonprofit corporations.

1. Nonprofit corporations are governed in Iowa by the Revised Iowa Nonprofit Corporation Act (Chapter 504 of the Iowa Code).

2. Section 504.141 defines a corporation under the Revised Iowa Nonprofit Corporation Act as a public benefit, mutual benefit, or religious corporation.

a. Mutual benefit nonprofits are neither public benefit nor religious and may be clubs, fraternal organizations and homeowners associations.

b. Public benefit nonprofits are exempt under 501(c)(3) of the Internal Revenue Code.

c. Religious.

3. Nonprofit corporations are an association of individuals with independent powers and liabilities.

4. They are separate entities from the individuals who control and operate them.

5. They own their assets and owe their debts.

6. They are managed by boards of directors that are typically elected by the for nonprofit corporations’ members or boards of directors.

7. They are governed by their Articles of Incorporation and Bylaws.

8. Nonprofit corporations are formed by adopting and filing of Articles of Incorporation with the Secretary of State, with payment of a $20.00 filing fee.

9. SAMPLE ARTICLES OF INCORPORATION.

10. Section 504.202 provides that Articles of Incorporation must include:

a. A name;

b. The address of the nonprofit corporation's initial registered office and the name of its initial registered agent at that office’

c. The name and address of each incorporator;

d. Whether the nonprofit corporation will have members. A nonprofit corporation incorporated prior to January 1, 2005, may state whether it will have members in either the articles of incorporation or in the corporate bylaws; and

e. For corporations incorporated after January 1, 2005, provisions not inconsistent with law regarding the distribution of assets on dissolution.

11. Section 504.202 also provides that the Articles of Incorporation may set forth:

a. The purpose for which the nonprofit corporation is organized, which may be, either alone or in combination with other purposes, the transaction of any lawful activity.

b. The names and addresses of the individuals who are to serve as the initial directors.

c. Provisions not inconsistent with law regarding all of the following:

1.) Managing and regulating the affairs of the nonprofit corporation; 2.) Defining, limiting, and regulating the powers of the nonprofit corporation, its board of directors, and members, or any class of members; or 3.) The characteristics, qualifications, rights, limitations, and obligations attaching to each or any class of members.

d. A provision eliminating or limiting the liability of a director to the nonprofit corporation or its members for money damages for any action taken, or any failure to take any action, as a director, except liability for any of the following:

1.) The amount of a financial benefit received by a director to which the director is not entitled; 2.) An intentional infliction of harm on the nonprofit corporation or its members; 3.) A violation of section 504.835; or 4.) An intentional violation of criminal law.

A provision set forth in the articles of incorporation pursuant to this paragraph shall not eliminate or limit the liability of a director for an act or omission that occurs prior to the date when the provision becomes effective. The absence of a provision eliminating or limiting the liability of a director pursuant to this paragraph shall not affect the applicability of section 504.901.

e. A provision permitting or requiring a nonprofit corporation to indemnify a director for liability, as defined in section 504.851, subsection 5, to a person for any action taken, or any failure to take any action, as a director except liability for any of the following:

1.) Receipt of a financial benefit to which the person is not entitled; 2.) Intentional infliction of harm on the nonprofit corporation or its members; 3.) A violation of section 504.835 or 4.) Intentional violation of criminal law.

f. Any provision that under this chapter is required or permitted to be set forth in the bylaws.

12. Amendments to the Articles of Incorporation may be made, but must be filed with the Secretary of State of Iowa, with a required filing fee of $10.00.

13. Bylaws are not filed with the Secretary of State and can be amended as needed.

14. SAMPLE BYLAWS.

15. Nonprofit corporations are not always tax-exempt organizations, but tax-exempt organizations are always nonprofit corporations, trusts or associations.

16. To become a tax-exempt organization, an entity must file Form 1023 or 1024 with the Internal Revenue Service.

17. If an entity obtains tax-exempt status, it will have an ongoing annual reporting requirement (Form 990).

18. Nonprofit corporations must file Biennial Reports during odd-numbered years following the calendar year in which they were formed in Iowa. There is no filing fee due with the Biennial Report.

B. Unincorporated nonprofit associations.

1. Unincorporated nonprofit associations are governed in Iowa by the Revised Uniform Unincorporated Nonprofit Association Act (Chapter 501B of the Iowa Code).

2. The Revised Uniform Unincorporated Nonprofit Association Act (“RUUNAA”) governs the operation in Iowa of all unincorporated nonprofit associations formed or operating in Iowa. It also provides that unless the unincorporated nonprofit associations’ governing principles specify a different jurisdiction, the law of the jurisdiction in which the unincorporated nonprofit association has its main place of activities governs the internal affairs of the unincorporated nonprofit association.

4. Unincorporated nonprofit associations are defined as legal entities distinct from their members and managers.

5. Unincorporated nonprofit associations are perpetual unless their governing principles provide otherwise.

6. Unincorporated nonprofit associations may acquire, hold, encumber or transfer in their names, an interest in real or personal property. They may also be a beneficiary or a trust or contract, a legatee or a devisee.

7. Any debts arising in contract, tort or otherwise are solely the debt, obligation or other liability of the unincorporated nonprofit association. Such debts do not become the debts of a member, manager, employee or volunteer solely because of their actions as a member, manager, employee or volunteer. Members, managers, employees or volunteers are not personally liable for any action taken or failure to act in the discharge of his or her duties except for:

a. The amount of any financial benefit to which the person is not entitled;

b. An intentional infliction of harm on the unincorporated nonprofit association or the members;

c. An intentional violation of criminal law; or

d. Improper distributions.

8. Unincorporated nonprofit associations may sue or be sued.

9. Unless it provides otherwise in its governing principles, an unincorporated nonprofit association must have member approval to do any of the following:

a. Admit, suspend, dismiss or expel a member;

b. Select or dismiss a manager;

c. Adopt, amend or repeal the governing principles;

d. Sell, lease, exchange or otherwise dispose of all, or substantially all, of the unincorporated nonprofit association’s property, with or without the unincorporated nonprofit association’s goodwill, outside the ordinary course of its activities;

e. Dissolve or merge;

f. Undertake any other act outside the ordinary course of the unincorporated nonprofit association’s activities; or

g. Determine the policy and purposes of the unincorporated nonprofit association.

10. Governing principles may deal with suspension, dismissal or expulsion of members. If no such governing principle applies, a member may be suspended, dismissed or expelled by a vote of the members.

11. Governing principles may also deal with resignation and in their absence a member may resign at any time.

12. Memberships are non-transferable.

13. Unless the governing principles apply otherwise, all of the following apply with respect to the selection of managers:

a. Only members may select manager(s).

b. A manager may be a member or non-member.

c. If no manager is selected, all members are managers.

d. Each manager has equal rights in the management of the unincorporated nonprofit association’s activities.

e. All matters relating to the unincorporated nonprofit association’s activities shall be decided by the managers except for matters reserved for approval by members.

f. A difference among managers is decided by a majority of the managers.

14. Managers owe to the unincorporated nonprofit association and its members the fiduciary duties of loyalty and care.

15. Members do not have a fiduciary duty to unincorporated nonprofit associations or other members solely by being a member.

16. Members who are managers then, have different duties than their fellow members.

17. Managers shall manage the unincorporated nonprofit association in good faith, in a manner the manager reasonably believes to be in the best interests of the unincorporated nonprofit association, and with such care, including reasonable inquiry, as a prudent person would reasonably exercise in a similar position and under similar circumstances. A manager may rely in good faith upon any opinion, report, statement or other information provided by another person that the manager reasonably believes is a competent and reliable source for the information. Managers that make business judgments in good faith satisfy the duties of loyalty and care if:

a. The manager is not interested, directly or indirectly, in the subject of the business judgment and is otherwise able to exercise independent judgment.

b. The manager is informed with respect to the subject of the business judgment to the extent the manager reasonably believes to be appropriate under the circumstances.

c. The managers believes that the business judgment is in the best interest of the unincorporated nonprofit association and in accordance with its purposes.

18. Members shall discharge the duties to the unincorporated nonprofit association and other members, and exercise any rights under the Iowa Code consistent with the governing principles of the unincorporated nonprofit association and the obligation of good faith and fair dealing.

19. Distributions are prohibited but compensation and reimbursement are generally permitted.

20. Winding up and termination of an unincorporated nonprofit association requires:

a. All known debts and liabilities must be paid or provided for.

b. Any property subject to a condition requiring return to the person designated by the donor must be transferred to that person.

c. Any property subject to a trust must be distributed in accordance with the trust agreement.

d. Any remaining property must be distributed as required by law, in accordance with the governing principles or in their absence, to the members per capita or as they direct.

e. If neither law nor governing principles apply, then pursuant to Chapter 556.

IV. Conclusion.

OPERATING AGREEMENT FOR DOING BUSINESS AS, L.L.C.

THE UNDERSIGNED, Ellis P. Bright, Magill F. Bright and Porter C. Bright, as signatories to this document and being the only members of the Limited Liability Company hereinafter referred to, do hereby enter into this Operating Agreement at Cedar Rapids, Linn County, Iowa, effective this 22nd day of October, 2013, under the name of DOING BUSINESS AS, L.L.C. (the “L.L.C.”).

ARTICLE I INTRODUCTION The parties formed a Limited Liability Company for the purposes of: (a) urban exploration tours; (b) conducting or engaging in any and all related or incidental businesses or activities; and (c) conducting or engaging in such other businesses or activities as the members may unanimously agree upon in writing.

ARTICLE II DURATION OF THE L.L.C. The L.L.C. commenced immediately upon the filing of the Certificate of Organization with the Secretary of State of the State of Iowa, and shall continue perpetually unless terminated sooner by operation of law or by agreement among the parties, or reenacted after such primary term for such additional periods as shall be mutually determined by the members. This L.L.C. shall be terminated in the event that all property owned by the L.L.C. is transferred to or assumed by others.

ARTICLE III CAPITAL CONTRIBUTIONS The members agree to share in all post-formation capital contributions, profits,

losses and surpluses of the L.L.C. A separate capital account shall be maintained for each

member. Each member owns an undivided interest in the business and L.L.C. as follows:

Member Percentage

Ellis P. Bright 33.33% Magill F. Bright 33.33% Porter C. Bright 33.33%

The members have contributed capital and equipment to the L.L.C. as set forth in

Exhibit “A,” attached hereto and by this reference incorporated herein. These initial

capital contributions will be credited to each member’s capital account.

ARTICLE IV

ADDITIONAL CAPITAL CONTRIBUTIONS

The members may contribute any additional capital deemed necessary for the operation of the L.L.C., provided, however, in the event that any member deems it advisable to refuse, or fails to contribute their share of any or all of the additional capital, then the other members or any one of them may contribute the additional capital not paid in by such refusing member and shall receive therefor an increase in the proportionate share of the ownership or interest in the entire company in direct proportion to the said additional capital contributed. Any additional capital contributions will be credited to each member’s capital account.

ARTICLE V DIVISION OF PROFITS AND LOSSES

Each of the members shall own an interest in the L.L.C. as set forth in Article III, except as the same may hereafter vary or change as provided herein. All revenues of the

L.L.C. enterprise shall be shared by each of said members according to the following percentages:

Member Percentage

Ellis P. Bright 33.33% Magill F. Bright 33.33% Porter C. Bright 33.33%

ARTICLE VI

RIGHTS AND DUTIES OF THE MEMBERS

The members agree to mutually undertake a contributory responsibility of time and effort to the L.L.C. L.L.C. decisions and actions shall be decided by a majority in interest of the members, at meetings regularly called with notice to all members. For purposes of determining a “majority in interest,” a member’s interest will be their interest in profits and losses as set forth in Article V and a majority will mean fifty-one percent

(51%) or more.

ARTICLE VII

COSTS AND EXPENSES

Fixed costs are borne in thirty three percent (33.33%) shares by the members.

ARTICLE VIII

MANAGEMENT, DUTIES AND RESTRICTIONS

(a) Except as provided in subparagraph “b” of this Article, all members shall have proportionate rights in the management of the L.L.C. No individual member shall, without the consent or signature of the other member, endorse any note or other form of indebtedness or act as an accommodation party, or otherwise become surety for any person in any transaction involved in the L.L.C. Without the consent or signature of the other members of the L.L.C., no individual member shall on behalf of the L.L.C. borrow or lend money, or make, deliver or accept any commercial paper, or execute any mortgage, security agreement, bond or lease, or purchase or contract to purchase, or sell or contract to sell any property on behalf of the L.L.C. No member shall, except with the consent or signature of the other member, mortgage, grant a security interest in his/her share in the

L.L.C. or in the L.L.C. capital assets or property, or do any act detrimental to the best interests of the L.L.C. or which would make it impossible to carry on the ordinary purpose of the L.L.C.

(b) The L.L.C. may from time to time elect to designate one of its members as

General Manager for the L.L.C. Such person so designated shall have authority to execute all instruments in the name of the L.L.C. as required for the conduct of the business of the

L.L.C., except that all members shall execute instruments of indebtedness of affecting the

purchase of or transfer of any real estate in the name of the L.L.C., which responsibility

shall not be delegated to such General Manager.

ARTICLE IX

BANKING

(a) All funds of the L.L.C. shall be deposited in its name in such checking

account or accounts as shall be designated by the members. All withdrawals from such

account or accounts shall be made only upon the signature of the persons, from time to

time, designated by the members on a written banking authorization document.

(b) West Bank is hereby designated as a depository in which the funds of the

L.L.C. may be deposited.

or negotiation for other purposes, including to receive cash or credit, any and all checks,

drafts, notes, bills of exchange, and orders for the payment of money, either belonging to or coming into the possession of the L.L.C. Endorsements for deposit may be by the written or stamped endorsement of the L.L.C. without designation of the persons making the endorsement. Each individual member is also hereby initially authorized to sign any and all checks, drafts, and orders, including orders or directions in informal or letter form, against any funds at any times standing to the credit of the L.L.C. with the bank, and/or against any account of the L.L.C. with the bank, and the bank hereby is authorized to honor any and all checks, drafts and orders so signed, including those drawn to the

5 individual order of a member, without further inquiry or regard to the authority of said signatory or the use of said checks, drafts and orders, or the proceeds thereof.

ARTICLE X

BOOKS AND RECORDS AND TAX RETURNS

The L.L.C.’s books and records shall be kept, and income tax returns filed, on the basis of cash received and disbursements. Complete and accurate accounts of all transactions of the L.L.C. shall be kept in proper books and a full and accurate account of the transactions made on behalf of the L.L.C. shall be kept at the principal place of business of the L.L.C. or at such other reasonable place as may be determined by the members. Each member shall at all reasonable times have access to, and may inspect and copy, any of the books of account, records, documents and other papers of the L.L.C.

ARTICLE XI

FINANCIAL STATEMENTS

Any member may require and obtain a financial statement including, but not necessarily limited to, a balance sheet and a profit and loss statement. Such financial statement shall be prepared as soon as is practicable after the close of the next fiscal quarter following the request, and shall be furnished to all members. Any member also may, pursuant to a request made no later than June 1 of any fiscal year, require a certified audit of the L.L.C. books and records with respect to the first preceding fiscal year, to be

6 conducted by an independent certified public accountant to be selected by the members.

The costs of any statements or audit shall be an expense of the L.L.C.

ARTICLE XII

INSURANCE

During the course of the term for which this L.L.C. is formed, the L.L.C. may carry liability insurance in such amounts as are deemed appropriate by the members.

ARTICLE XIII

VOLUNTARY TERMINATION

The L.L.C. may be dissolved at any time by agreement of all of the members, in which event the members shall proceed with reasonable promptness to liquidate the

L.L.C. The assets of the L.L.C. shall be used and distributed in the following order:

(a) To pay or provide for the payment of all L.L.C. liabilities to creditors other than members, and liquidating expenses and obligations;

(b) To create any reserve which the members deem necessary;

(d) To pay debts owing to members in respect to capital; and

(e) To pay debts owing to members in respect to profits.

ARTICLE XIV

WITHDRAWAL

No member shall sell their interest in the L.L.C. without first giving notice to the

other member of the price, terms and conditions of the proposed sale, and the identity of

the proposed purchaser. The remaining member shall have the option to purchase the

selling member’s entire interest in the L.L.C. for a period of thirty (30) days after receipt of

written notice of proposed sale, at an amount equal to the price and on the same terms and conditions as the proposed sale. The non-selling member’s option shall be exercised in

proportion to the respective interest in the L.L.C. at the time of receipt of the notice of

proposed sale and may be exercised only during such period of thirty (30) days. The

above option must be exercised in writing, and the writing must be mailed or hand-

delivered to the selling member before the expiration of the above provided applicable.

The option shall be deemed exercised as of the date the writing is mailed or hand-

delivered to the selling member.

If the above option is exercised, the selling member’s interest shall be transferred to

the purchasing member as of the date of exercise of the option. If the remaining member

does not exercise said option, then the selling member may sell their interest in the L.L.C.

to the person identified in the notice of proposed sale, at the exact price and on the exact

terms and conditions set forth in such notice. Such sale must take place within three (3)

months following the date on which the above provided option period expires, and if the

sale does not take place within such three (3) month period, the option of the remaining

member shall thereupon be automatically reinstated and all of the provisions of this

Section XIV must again be observed. No less than the entire interest proposed to be sold

may be purchased by the remaining member or by the person named in the notice of

proposed sale.

If a member’s interest in the L.L.C. shall be sold pursuant to the foregoing provi-

sions, the selling member shall so notify the other member. For a period of thirty (30) days

following such notice, any remaining member shall have the right and option to dissolve

the L.L.C., in which event the members shall forthwith commence to wind up the affairs of

the L.L.C. pursuant to Article XIII.

Any sale or disposition of an interest in the L.L.C. in contravention of the

provisions of this Article XIV shall be null and void, and of no effect against the L.L.C.,

any other member, any creditor of the L.L.C., or any claimant against the L.L.C.

ARTICLE XV

GOVERNING LAW

This Agreement shall be construed and enforced according to the laws of the State of Iowa.

ARTICLE XVI

NUMBER AND GENDER

The use of the singular in this Agreement includes the plural and the use of the

masculine gender includes the neuter and feminine genders whenever the context thereof

so requires.

ARTICLE XVII

HEADINGS NOT PART OF AGREEMENT

The headings of paragraphs and articles of this Agreement are inserted for

convenience and reference only and they constitute no part of this Agreement.

ARTICLE XVIII

NOTICES

Any notice or demand required to be given herein shall be in writing and the same shall be given and deemed to have been served and given if:

(a) hand delivered, when delivered in person to the address set forth hereinafter for the member to whom notice is given;

(b) mailed, (except where actual receipt is specified in this Agreement), when placed in the United States mail, postage prepaid, by Certified or Registered Mail,

Return Receipt Requested, addressed to the member at the address hereinafter specified; or

Agreement), the next day following deposit into overnight delivery with a reliable

overnight courier, delivery prepaid and addressed to the member at the address hereinafter specified. Any member may change their address for notices, by notice given to all other members, however, any notice of change of address shall be deemed effective only when actually received by all other members.

ARTICLE XIX

AMENDMENT

This Agreement may be amended in writing only at any time and from time to time by the members.

ARTICLE XX

SEVERABILITY

If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall remain in full force and effect and shall in no way affected, impaired or invalidated.

ARTICLE XXI

WAIVER OF ACTION FOR PARTITION

Each of the parties hereto irrevocably waives during the term of the L.L.C. and during any period of winding up upon dissolution of the L.L.C. any right that he may have to maintain any action for partition with respect to the property in the L.L.C.

ARTICLE XXII

VIOLATION OF THIS AGREEMENT

Any member who shall violate any of the terms, conditions and provisions of this

Agreement shall keep and save harmless the L.L.C. property and shall also indemnify the other then-members from any and all claims, demands and actions of every kind and nature whatsoever which may arise out of or by reason of such violation of any of the terms and conditions of this Agreement.

IN WITNESS WHEREOF, the parties have hereunto set their hands the day, month and year first above written.

Ellis P. Bright, Member

Magill F. Bright, Member

Porter C. Bright, Member

ARTICLES OF DISSOLUTION

DOING BUSINESS AS, INC.

TO THE SECRETARY OF STATE OF THE STATE OF IOWA:

Pursuant to section 490.1403 of the Iowa Business Corporation Act, the undersigned, adopts the following articles of dissolution:

ARTICLE I

The name of the Corporation is Doing Business As, Inc.

ARTICLE II

The dissolution of the Corporation was authorized on October 22, 2013.

ARTICLE III

The dissolution of the Corporation was duly approved by all shareholders in the manner required by the Iowa Business Corporation Act and the articles of incorporation.

Dated this 22nd of October, 2013.

By: Ellis P. Bright, President

STATE OF IOWA ) ) ss: COUNTY OF JOHNSON )

This instrument was acknowledged before me on October 22, 2013, by Ellis P. Bright.

Notary Public in and for the State of Iowa

ARTICLES OF INCORPORATION

BRIGHT SKY, INC.

TO THE SECRETARY OF STATE OF THE STATE OF IOWA:

Pursuant to section 504.202 of the Revised Iowa Nonprofit Corporation Act, the undersigned, acting as incorporator, adopts the following articles of incorporation:

ARTICLE I

The name of the Corporation is Bright Sky, Inc.

ARTICLE II

The Corporation shall have perpetual duration.

ARTICLE III

The purpose for which the Corporation is organized is to make the sky more blue. Notwithstanding the foregoing, however, the Corporation is organized exclusively for charitable, educational, and research purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code of 1986, as amended (or corresponding section of any future federal tax code).

ARTICLE IV

The Corporation is not organized for profit. No part of the net earnings of the Corporation shall inure to the benefit of, or be distributable to its members, directors, officers, or other private persons, except that the Corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article III hereof. No substantial part of the activities of the Corporation shall be the carrying on of propaganda, or otherwise attempting, to influence legislation, and the Corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. Notwithstanding any other provision of these articles, the Corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code (or corresponding section of any future federal tax code).

ARTICLE V

The street address of the initial registered office of the Corporation is 625 First Street SE, Suite 400, Cedar Rapids, IA, located in the County of Linn, and the name of its initial registered agent at such address is David J. Bright.

ARTICLE VI

The name and address of the incorporator is:

David J. Bright 625 First Street SE, Suite 400 Cedar Rapids, IA 52401

ARTICLE VII

The Corporation will have members. The members shall have rights as provided under the Bylaws.

ARTICLE VIII

The names and addresses of the individuals who are to serve as initial directors are:

David J. Bright 625 First Street SE, Suite 400 Cedar Rapids, IA 52401

ARTICLE IX

The Corporation shall have all of the powers given to it by the laws of the State of Iowa; provided, however, only such powers shall be exercised as are in furtherance of the tax-exempt purposes of the Corporation and as may be exercised by an organization exempt under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (or the corresponding provision of any future United States Internal Revenue Law).

(A) The Corporation will distribute its income for each tax year at such time and in such manner so that it will not become subject to the tax on undistributed income imposed by Section 4942 of the Internal Revenue Code of 1986, as amended, or corresponding provisions of any later federal tax laws.

(B) The Corporation will not engage in any act of self-dealing as defined in Section 4941(d) of the Internal Revenue Code of 1986, as amended, or corresponding provisions of any later federal tax laws.

(C) The Corporation will not retain any excess business holdings as defined in Section 4943(c) of the Internal Revenue Code of 1986, as amended, or corresponding provisions of any later federal tax laws.

(D) The Corporation will not make any investments in a manner that would subject it to tax under Section 4944 of the Internal Revenue Code of 1986, as amended, or corresponding provisions of any later federal tax laws.

(E) The Corporation will not make any taxable expenditures as defined in Section 4945(d) of the Internal Revenue Code of 1986, as amended (or corresponding provisions of any of any future federal tax code).

ARTICLE X

Upon the dissolution of the Corporation, assets shall be distributed by the board of directors for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government for a public purpose. Any such assets not so disposed of shall be disposed of by the District Court of the county in which the principal office of the Corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.

ARTICLE XI

A director of the Corporation shall not be liable to the Corporation for money damages for any action taken, or any failure to take any action, as a director, except liability for any of the following: (1) the amount of a financial benefit received by a director to which the director is not entitled; (2) an intentional infliction of harm on the Corporation; (3) a violation of the unlawful distribution provision of the Revised Iowa Nonprofit Corporation Act; or (4) an intentional violation of criminal law. If the Revised Iowa Nonprofit Corporation Act is hereafter amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be eliminated or limited to the extent of such amendment, automatically and without any further action, to the fullest extent permitted by law. Any repeal or modification of this Article shall be prospective only and shall not adversely affect any limitation on the personal liability or any other right or protection of a director of the Corporation with respect to any state of facts existing at or prior to the time of such repeal or modification.

ARTICLE XII

The Corporation shall indemnify a director for liability (as such term is defined in section 504.851(5) of the Revised Iowa Nonprofit Corporation Act) to any person for any action taken, or any failure to take any action, as a director, except liability for any of the following: (1) receipt of a financial benefit by a director to which the director is not entitled; (2) an intentional infliction of harm on the Corporation; (3) a violation of the unlawful distribution provision of the Revised Iowa Nonprofit Corporation Act; or (4) an intentional violation of criminal law. Without limiting the foregoing, the Corporation shall exercise all of its permissive powers as often as necessary to indemnify and advance expenses to its directors and officers to the fullest extent permitted by law. If the Revised Iowa Nonprofit Corporation Act is hereafter

amended to authorize broader indemnification, then the indemnification obligations of the Corporation shall be deemed amended automatically and without any further action to require indemnification and advancement of funds to pay for or reimburse expenses of its directors and officers to the fullest extent permitted by law. Any repeal or modification of this Article shall be prospective only and shall not adversely affect any indemnification obligations of the Corporation with respect to any state of facts existing at or prior to the time of such repeal or modification.

ARTICLE XIII

These Articles may be altered, amended or repealed and new Articles adopted by the affirmative vote of two thirds of the entire board of directors at a meeting of the board of directors. Notice of the meeting setting forth the proposed amendment or a summary of the changes to be effected thereby shall be given to each director at least ten (10) days prior thereto by written notice delivered personally or sent by mail to each director at his or her address as shown by the records of the Corporation. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid.

Dated this 22nd of October, 2013.

David J. Bright , Incorporator

ARTICLES OF INCORPORATION

DOING BUSINESS AS, INC.

TO THE SECRETARY OF STATE OF THE STATE OF IOWA:

Pursuant to section 490.202 of the Iowa Business Corporation Act, the undersigned, acting as incorporator, adopts the following articles of incorporation:

ARTICLE I

The name of the Corporation is Doing Business As, Inc.

ARTICLE II

The Corporation shall have perpetual duration.

ARTICLE III

The purpose for which the Corporation is organized to conduct urban exploration tours.

ARTICLE IV

ARTICLE V

The name and address of the incorporator is:

David J. Bright 625 First Street SE, Suite 400 Cedar Rapids, IA 52401

ARTICLE VI

The Corporation is authorized to issues 1,000,000 shares with a par value of $1.00 per share.

ARTICLE VII

The names and addresses of the individuals who are to serve as initial directors are:

David J. Bright 625 First Street SE, Suite 400 Cedar Rapids, IA 52401

ARTICLE VIII

Dated this 22nd day of October, 2013.

By: David J. Bright, Incorporator

BYLAWS

BRIGHT SKY, INC.

ARTICLE I NAME

The name of this organization shall be Big Sky, Inc. (the “Corporation”). It shall be commonly known as “Big Sky.”

ARTICLE II PURPOSE

The purpose of the Corporation shall be to make the sky more blue.

ARTICLE III OFFICES AND REGISTERED AGENT

Section 3.01. Principal Office. The Corporation shall maintain its Principal Office in the City of Iowa City, Iowa.

Section 3.02. Registered Office. The Corporation shall maintain a Registered Office as required by the Revised Iowa Nonprofit Corporation Act, as amended from time to time (the “Act”), at a location in the State of Iowa designated by the Executive Board from time to time. In the absence of a contrary designation by the Board of Directors, the Registered Office of the Corporation shall be located at its Principal Office.

Section 3.03. Other Offices. The Corporation may have such other offices within and without the State of Iowa as the business of the Corporation may require from time to time. The authority to establish or close such other offices may be delegated by the Executive Board to one or more of the Corporation’s Officers.

Section 3.04. Registered Agent. The Corporation shall maintain a Registered Agent as required by the Act who shall have a business office at the Corporation’s Registered Office. The Registered Agent shall be designated by the Executive Board from time to time to serve at its pleasure. In the absence of such designation, the Registered Agent shall be the Corporation’s Secretary.

Section 3.05. Filings. In the absence of directions from the Executive Board to the contrary, the Secretary of the Corporation shall cause the Corporation to maintain current all filings in respect to the Registered Office and Registered Agent with all governmental officials as required by the Act or otherwise by law.

ARTICLE IV MEMBERS

Section 4.01. Membership shall consist of all persons dedicated to making the sky more blue.

Section 4.02. All members of the Corporation shall have voting rights.

Section 4.03. Membership in the Corporation is available to anyone meeting the qualifications set forth in Article IV, Section 1, without regard to gender, race, color, religion, sexual orientation or national origin.

Section 4.04. There shall be no annual dues or fees associated with membership in the Corporation.

ARTICLE V OFFICERS

Section 5.01. Officers. The officers of the Corporation shall consist of President, Vice President/President-Elect, Secretary, Treasurer and will be designated as the Executive Board.

Section 5.02. Duties. The officers of the Corporation shall perform the duties prescribed by these Bylaws and by the parliamentary authority adopted by the Corporation, or assigned to him/her by the Executive Board. All officers shall share substantially in all duties which must be performed.

a. President. The primary duty of the President shall be to oversee the business and affairs of the Corporation and shall:

i. Set the agenda and preside over all regular and special meetings of the Corporation;

ii. Serve as the primary contact and liaison between the public and the Corporation;

iii. Represent the organization at meetings outside the organization;

iv. Serve as an ex officio member of all committees; and

v. Coordinate the work of the officers and committees, in order that the object of the organization is served.

b. Vice President/President-Elect. The Vice President/President-Elect shall:

i. Perform the duties of the office of President in the absence or inability of the President;

ii. Fill a vacancy in the office of President;

iii. Serve as Chairman of the Nominating Committee;

iv. Serve as Chairman of the Finance Committee; and

v. At the end of the one-year term, the person in this position shall begin serving his/her full one-year term as President. c. Secretary. The Secretary shall:

i. Keep the minutes of all regular and special meetings;

ii. Insure that all notices are duly given in accordance with the provisions of these Bylaws;

iii. Establish and report to the assembly if a quorum is established at the start of each meeting of the Corporation.

iv. Be custodian of the records of the Corporation, including the Bylaws, agendas, meeting minutes, and correspondence;

v. Conduct Corporation-related correspondence as requested by the President and/or the Executive Board; and

vi. Serve as a member of the Finance Committee. d. Treasurer. The Treasurer shall:

i. Have charge and custody of and be responsible for all monies and funds of the Corporation;

ii. Keep an accurate record of all financial transactions;

iii. Only disperse funds by authority of the Executive Board or as these Bylaws prescribe;

iv. Make a full annual financial report in the spring and make interim reports as provided by these Bylaws or as the Executive Board may direct; and

v. Present a budget of anticipated revenue and expenses for the year at the first regular meeting, which shall be used to guide the activities of the Corporation during the year. Any substantial deviation from the budget must be approved in advance by the Corporation.

Section 5.03. Nomination and Elections.

a. Nomination. Nominations may be made through the membership or through self-nomination for any office.

b. Eligibility. All members of the Corporation are eligible for election to an office on the Executive Board.

i. To be elected to the office of President, a member shall have previously been active in the Corporation, unless otherwise approved by the Executive Board; and

ii. No officer can be elected to the same office for more than two (2) consecutive terms, unless otherwise approved by the Executive Board.

c. Election of Officers. Elections shall be held annually at the May meeting of the Corporation. Notice of the election shall be made to all members at least two (2) weeks prior to the meeting in the most efficient and least expensive manner possible. A slate of officers will be approved by a two-thirds majority vote of members present providing a quorum is established.

d. Terms of Office. Each officer shall hold office for the term for which he/she is elected and until his/her successor is elected. The officers shall be elected for a one (1) year term corresponding with the fiscal year (July 1-June 30). All officers shall be eligible for reelection provided they meet eligibility requirements (Article V, Section 5.03, Subsection b).

e. Vacancies. If the office of President becomes vacant, the Vice President/President-Elect shall become President. Vacancies in any other executive office shall be filled by a two-thirds majority vote of the members present at a regularly scheduled meeting for the unexpired portion of the term of his/her predecessor.

f. Removal from Office. Officers can be removed from office with cause by a two- thirds majority vote of those present, providing a quorum is established, at a regular meeting where previous notice has been given.

ARTICLE VI MEETINGS

Section 6.01. Regular Meetings.

a. The regular meetings of the Corporation shall be held each month unless otherwise ordered by the Executive Board and are for conducting the business of the Corporation.

b. The most convenient times and days for meetings shall be determined at the beginning of each fiscal year and modified as necessary.

c. A notice will be sent to each member stating the place, day, and hour of the meeting. The notice shall be given in the most efficient and least expensive manner not less

than seven days before the date of the meeting or an annual schedule of the years’ meeting dates will be distributed near the beginning of each fiscal year.

Section 6.02. Special Meetings.

a. Special meetings may be called at the discretion of the President and any two other officers, or via one-half vote of members at a regular meeting.

b. Special meetings will be utilized to conduct business of the Corporation that must be addressed prior to the next regularly scheduled meeting.

c. The purpose of the meeting shall be stated in the call to order. Except in cases of emergency, at least three (3) days notice shall be given.

Section 6.03. Quorum of Members. A quorum shall consist of eight (8) members of the Corporation, two of which shall be Executive Board members.

Section 6.04. Conduct of Meetings. Robert’s Rules of Order shall govern the conduct of all meetings of the Corporation.

ARTICLE VII EXECUTIVE BOARD

Section 7.01. Composition. The officers of the Corporation, consisting of President, Vice President/President-Elect, Secretary and Treasurer shall constitute the Corporation Executive Board.

Section 7.02. Duties and Powers. The Executive Board shall have general supervision of the affairs of the Corporation between its business meetings, fix the hour and place of meetings, make recommendations to the Corporation, and perform such other duties as are specified in these Bylaws. The Executive Board shall be subject to the orders of the Corporation and none of its acts shall conflict with action taken by the Corporation.

Section 7.03. Meetings. Unless otherwise ordered by the Executive Board, regular meetings of the Executive Board shall be held immediately before regular meetings of the Corporation. Special meetings of the Executive Board may be called by the President and shall be called upon the written request of three members of the committee.

Section 7.04. Quorum of Board Members. A quorum shall consist of half the number of board members plus one.

ARTICLE VIII COMMITTEES

Section 8.01. Finance Committee. The Finance Committee shall consist of the Vice President serving as chair, the Treasurer, and one other member appointed by the President. It shall be the duty of this Committee to prepare a budget for the fiscal year (July 1-June 30) and to

submit it to the Corporation at its regular meeting in September. The Finance Committee may from time-to-time submit amendments to the budget for the current fiscal year, which may be adopted by a majority vote.

Section 8.02. Audit Committee. An Audit Committee of three members shall be appointed by the President at the Corporation’s June meeting, whose duty it shall be to audit the Treasurer’s accounts at the close of the fiscal year and to report at the September meeting. The Executive Board shall have the Treasurer’s final report and accounts examined annually. This will be an external review conducted by an accounting specialist, not a member of the Board, who, if satisfied that the Treasurer’s report is correct, shall sign a statement of that fact at the end of the report.

Section 8.03. Nominating Committee. A Nominating Committee of three members shall be appointed by the Vice President/President-Elect at the Corporation’s February meeting, with the Vice President serving as chair. Elections will be held at the May meeting. The Nominating Committee shall select a candidate for each office and present the slate at the April meeting. At that meeting, nominations may also be made from the floor. Voting shall be by voice vote if a slate is presented. If more than one person is running for an office, a ballot vote of those present shall be taken.

Section 8.04. Bylaw Review Committee. A Bylaw Review Committee of three members shall be appointed by the President at the annual meeting every other year, and will be chaired by the President, who will ensure that the Bylaws are reviewed and that any necessary revisions are made as a result of that review. Amendments may also be made on an as-needed basis, provided a two-thirds majority of the Executive Board is in favor and the normal rules for passing amendments are followed.

Section 8.05. Other Committees. Other Committees, standing or special, shall be appointed by the President as the Corporation or the Executive Board shall from time to time deem necessary to carry on the work of the Corporation. The President shall be an ex officio member of all committees.

ARTICLE IX INDEMNIFICATION

Section 9.01. Scope. Every person who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he or she or a person of whom he or she is the legal representative, is or was a Director or Officer of the Corporation or is or was serving at the request of the Corporation or for its benefit as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under and pursuant to the Act, against all expenses, liabilities, and losses (including without limitation attorneys’ fees, judgments, fines, and amounts paid or to be paid in settlement) reasonably incurred or suffered by him or her in connection therewith. Such right of indemnification shall be a contract right that may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other right which such Directors, Officers, or representatives may have or hereafter acquire and,

without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of Members, insurance, provision of law, or otherwise, as well as their rights under this Article.

Section 9.02. Indemnification Plan. The Executive Board may from time to time adopt an Indemnification Plan implementing the rights granted in Section 9.01. This Indemnification Plan shall set forth in detail the mechanics of how the indemnification rights granted in Section 9.01 shall be exercised.

Section 9.03. Insurance. The Executive Board may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person.

ARTICLE X CONTRACTS, LOANS, CHECKS AND DEPOSITS

Section 10.01. Contracts. The Executive Board may authorize any Officer or Officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

Section 10.02. Loans. No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Executive Board, and such authority may be general or confined to specific instances.

Section 10.03. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by the Officer or Officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Executive Board.

Section 10.04. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Executive Board may select.

ARTICLE XI PARLIAMENTARY AUTHORITY

The rules contained in the current edition of Robert’s Rules of Order Newly Revised shall govern the Corporation in all cases to which they are applicable and in which they are not inconsistent with these Bylaws and any special rules of order the Corporation may adopt.

ARTICLE XII MISCELLANEOUS

Section 12.01. Amendments. These Bylaws may be amended at a regular meeting of the Corporation by a two-thirds vote of all members present at the meeting providing a quorum is established and providing notice of the amendment is distributed to the membership at least two (2) weeks prior to the meeting.

Section 12.02. Severability. Any provision of these Bylaws, or any amendment or alteration thereof, which is determined to be in violation of the Act shall not in any way render any of the remaining provisions invalid.

Section 12.03. References to Gender and Number Terms. In construing these Bylaws, feminine or neuter pronouns shall be substituted for those masculine in form and vice versa, and plural terms shall be substituted for singular and singular for plural in any place in which the context so requires.

Section 12.04. Headings. The Article and Section headings in these Bylaws are inserted for convenience only and are not part of the Bylaws.

Section 12.05. Inspection of Records by Members. A member is entitled to inspect and copy, during regular business hours at the Corporation’s principal office, any of the following records of the Corporation, if he or she gives the Corporation written notice of his demand at least five business days before the date on which he wishes to inspect and copy:

a. Its Articles of Incorporation or Restated Articles of Incorporation and all amendments to them currently in effect;

b. Its Bylaws or restated Bylaws and all amendments to them currently in effect;

c. The Minutes of all meetings, and records of all action taken by Members without a meeting, for the past three years;

d. All written communications to Members, generally, within the past three (3) years, including the financial statements furnished for the past three (3) years;

e. A list of the names and business addresses of its current Directors and Officers;

f. Its most recent Annual Report delivered to the Secretary of State; and

g. All contracts or other written agreements between the Corporation and any of its Members and all contracts or other written agreements between two or more of the Members.

A Member’s agent or attorney has the same inspection and copying rights as the member he or she represents. The right to copy records under this section includes, if reasonable, the right to receive copies made by photographic, xerographic, or other means. The Corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents

provided to the shareholder. The charge may not exceed the estimated cost of production or reproduction of the records.

Adopted, October 22, 2013

CERTIFICATE OF LIMITED PARTNERSHIP OF BRIGHT FAMILY PARTNERSHIP III, L.P.

Pursuant to Section 488.201 Code of Iowa, the undersigned person hereby adopts the following Certificate of Limited Partnership under the Uniform Limited Partnership Act:

I. NAME

The name of the limited partnership is BRIGHT FAMILY PARTNERSHIP III, L.P.

II. REGISTERED OFFICE AND REGISTERED AGENT

The street and mailing address of its initial designated office and the name of the initial agent for service of process at that address is:

David J. Bright 625 First Street SE, Suite 400 Cedar Rapids, Iowa 52401

III. NAME AND ADDRESS OF GENERAL PARTNER

The name, street and mailing address of the general partner is:

Ellis P. Bright 625 First Street SE, Suite 400 Cedar Rapids, Iowa 52401

IV. LIMITED LIABILITY LIMITED PARTNERSHIP

The limited partnership is not a limited liability limited partnership.

IN WITNESS WHEREOF, the undersigned has set his hand this 22nd day of October, 2013.

By: Ellis P. Bright, General Partner

STATE OF IOWA ) ) ss: COUNTY OF JOHNSON )

This instrument was acknowledged before me on October 22, 2013, by Ellis P. Bright.

Notary Public in and for the State of Iowa

CERTIFICATE OF ORGANIZATION

DOING BUSINESS AS, L.L.C.

Pursuant to Section 489.201 of the Code of Iowa, the undersigned person hereby forms a limited liability company under the Revised Uniform Limited Liability Company Act and adopts as Articles of Organization of such limited liability company the following:

I. NAME

The name of the limited liability company is Doing Business As, L.L.C.

II. REGISTERED OFFICE AND REGISTERED AGENT

The street address and mailing address of the Limited Liability Company’s initial registered office in Iowa and the name of its initial registered agent at that office is:

Registered Agent: Ellis P. Bright

Street Address: 625 First Street SE, Suite 400 Cedar Rapids, IA 52401

Mailing Address: 625 First Street SE, Suite 400 Cedar Rapids, IA 52401

IN WITNESS WHEREOF, the undersigned has set his hand this 22nd day of October, 2013.

By: Ellis P. Bright, Organizer

STATE OF IOWA ) ) ss: COUNTY OF JOHNSON )

This instrument was acknowledged before me on October 22, 2013, by Ellis P. Bright.

Notary Public in and for the State of Iowa

STATEMENT OF TERMINATION

BRIGHT FAMILY PARTNERSHIP III, L.P.

Pursuant to Section 488.203 Code of Iowa, the undersigned person hereby adopts the following Statement of Termination under the Uniform Limited Partnership Act:

I. NAME

The name of the limited partnership is BRIGHT FAMILY PARTNERSHIP III, L.P.

II. DATE OF FILING OF CERTIFICATE OF LIMITED PARTNERSHIP

The Certificate of Limited Partnership for the limited partnership was filed October 22, 2013.

IN WITNESS WHEREOF, the undersigned has set his hand this 23rd day of October, 2013.

By: Ellis P. Bright, General Partner

STATE OF IOWA ) ) ss: COUNTY OF JOHNSON )

This instrument was acknowledged before me on October 23, 2013, by Ellis P. Bright.

Notary Public in and for the State of Iowa

STATEMENT OF CANCELLATION OF QUALIFICATION

BRIGHT FAMILY PARTNERSHIP III, L.L.P.

Pursuant to Section 486A.1001 of the Code of Iowa, the undersigned person hereby adopts the following Statement of Cancellation of Qualification under the Uniform Partnership Act:

I. NAME

The name of the limited liability partnership is BRIGHT FAMILY PARTNERSHIP III, L.L.P.

II. REGISTERED OFFICE AND REGISTERED AGENT

The street address of its chief executive office and only office in the State of Iowa and the name of the agent appointed by the general partnership at that address is:

David J. Bright 625 First Street SE, Suite 400 Cedar Rapids, Iowa 52401

III. DATE OF FILING STATEMENT OF QUALIFICATION AND CANCELLATION OF STATEMENT OF QUALIFICATION

The Statement of Qualification for the limited liability partnership was filed October 22, 2013. The Statement of Cancellation of Qualification is filed October 23, 2013.

IN WITNESS WHEREOF, the undersigned has set his hand this 23rd day of October, 2013.

By: Ellis P. Bright, Partner

STATE OF IOWA ) ) ss: COUNTY OF JOHNSON )

This instrument was acknowledged before me on October 23, 2013, by Ellis P. Bright.

Notary Public in and for the State of Iowa

STATEMENT OF DISSOLUTION

DOING BUSINESS AS, L.L.C.

Pursuant to Section 489.702 of the Code of Iowa, the following Statement of Dissolution is adopted:

1. The name of the limited liability company is Doing Business As, L.L.C.

2. The date of filing of the Certificate of Organization was August 14, 2013, and there are no amendments thereto.

3. The dissolution is effective on the date of the filing of this Statement of Dissolution.

Dated as of the 22nd day of October, 2013.

DOING BUSINESS AS, L.L.C.

By:______Ellis P. Bright, Organizer

STATEMENT OF PARTNERSHIP AUTHORITY

BRIGHT FAMILY PARTNERSHIP III

Pursuant to Section 486A.303 of the Code of Iowa, the undersigned person hereby adopts the following Statement of Partnership under the Uniform Partnership Act:

I. NAME

The name of the general partnership is BRIGHT FAMILY PARTNERSHIP III.

II. REGISTERED OFFICE AND REGISTERED AGENT

The street address of its chief executive office and only office in the State of Iowa and the name of the agent appointed by the general partnership at that address is:

David J. Bright 625 First Street SE, Suite 400 Cedar Rapids, Iowa 52401

III. AUTHORIZED PARTNER

The name of the partner authorized by the general partnership to execute an instrument transferring real property held in the name of the general partnership is Ellis P. Bright.

IV. LIMITATIONS OF AUTHORITY

Magill F. Bright and Porter C. Bright are not authorized by the general partnership to enter into any transactions on behalf of the partnership.

IN WITNESS WHEREOF, the undersigned has set his hand this 22nd day of October, 2013.

By: Ellis P. Bright, Partner

STATE OF IOWA ) ) ss: COUNTY OF JOHNSON )

This instrument was acknowledged before me on October 22, 2013, by Ellis P. Bright.

Notary Public in and for the State of Iowa

MATT SCHULTZ STATEMENT OF QUALIFICATION Secretary of State OF LIMITED LIABILITY State of Iowa PARTNERSHIP

Pursuant to section 486A.1001 of the Iowa Uniform Partnership Act, the undersigned partnership files its Statement of Qualification as follows:

1. (a) The name of the partnership: ______

(b) The name of the limited liability partnership*: ______*Note: The name must end with “Registered Limited Liability Partnership”, “Limited Liability Partnership”, or the abbreviation “R.L.L.P.”, “L.L.P.”, “RLLP”, or “LLP”.

2. The street address of the partnership’s chief executive office:

______street city state zip

3. The street address of an office in this state, if any. [If different than #2]:

______street city state zip

4. Registered Agent and Registered Office** (a) The name of the registered agent for service of process in Iowa:

______

(b) The address of the registered office:

______**Required by Iowa Code section 486A.1211.

5. The partnership elects to be a limited liability partnership.

6. The deferred effective date*** (and time), if any, is ______, ______, ______; (______)(______) month day year time am/pm ***A delayed effective date shall not be later than the ninetieth day after the date filed.

7. Signature by authorized partner(s): The statement shall be executed by one or more partners authorized to execute this statement on behalf of the partnership.

______/______/______signature name capacity in which signing

NOTES: 1. The filing fee is $50.00. Make checks payable to SECRETARY OF STATE 2. The information you provide will be open to public inspection under Iowa Code chapter 22.11.

SECRETARY OF STATE Business Services Division Lucas Building, 1st Floor Des Moines, IA 50319 Phone: (515) 281-5204 FAX: (515) 242-5953 635_2002 Rev. 12/11 Website: sos.iowa.gov 20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

TRANSACTIONAL TRACK Real Estate

1:30 pm.-2:45 p.m.

Presented by Matt Hektoen Simmons Perrine Moyer Bergman PLC 115 Third St, SE, Suite 1200 Cedar Rapids, Iowa 52401 Phone: 319-366-7641

Wednesday,Wednesday, OctoberOctober 30,30, 20132013

SOME BASICS REGARDING REAL ESTATE TRANSACTIONS

MATTHEW J. HEKTOEN

SIMMONS PERRINE MOYER BERGMAN PLC

I. PURCHASE AGREEMENT.

A. Role of the Attorney.

The purchase agreement establishes and “locks in” the key terms of the real estate transaction. These terms include purchase price, dates of closing and possession, contingencies, description of real property conveyed, description of personal property included or excluded, responsibility for insuring the property, and a number of other provisions. Unfortunately, all too often purchase agreements are drafted by inexperienced persons. Real estate transactions are usually the most important business transactions in which people engage, and, therefore, the purchase agreement should be prepared with great care, preferably by an attorney or experienced realtor and reviewed by the parties’ attorneys. This procedure is often not followed.

B. Typical Forms.

1. Iowa State Bar Association Iowa Docs Forms.

a. Residential Purchase Agreement.

Iowa Docs form 152. See Appendix A.

b. Offer to Buy Real Estate and Acceptance

Iowa Docs form 153. See Appendix B.

c. Residential Property Seller Disclosure Statement.

Iowa Docs form 155. See Appendix C.

d. Lead-Based Paint Disclosure – Sales (for dwellings built prior to 1978).

Iowa Docs form 156. See Appendix D.

2. Typical Realtor Form.

a. Iowa City Area Association of Realtors Purchase Agreement.

See Appendix E.

b. Compare with Iowa Docs Residential Purchase Agreement.

3. Others.

a. Suggestion - Make your own form, the ISBA forms work well in so far as they go, but that isn’t far. Additional benefit that use of your own agreement leads clients away from the idea that real estate is a commodity to be dealt with by standardized forms.

C. Items of Note in Purchase Agreement.

1. Examples of Common Contingency Clauses Include the Following:

a. Sale of Buyers’ Existing Property.

b. Financing Contingency.

Be careful not to give buyers an “option” to purchase as opposed to an “obligation” to purchase.

c. Inspections.

Inspections such as termite inspection, well tests, radon tests, septic system tests, building inspections.

2. When to Request a Survey.

See Iowa Docs form 152 (paragraph 9). Buyers rarely are willing to spend the money necessary to survey property unless required by the lender. It would be prudent to request a survey when boundaries are unclear, potential encroachments may exist, or adequacy of access to public roads is not apparent.

3. Disclosure Issues.

Chapter 558A of the Code requires sellers to make a good-faith disclosure relating to the condition and important characteristics of the property. See Appendix C.

4. Septic System.

Any property with a building serviced by a septic system must have that system inspected prior to closing and the inspection attached to the groundwater hazard statement filed with the warranty deed UNLESS an exemption applies. Failure to address in a timely fashion will result in a delayed closing and upset clients.

II. TITLE EXAMINATION (Buyer’s Attorney).

A. Purpose of Preliminary Title Opinion.

The purpose of the preliminary title opinion is to provide information to the buyers and buyers’ lender, if applicable, reporting on the merchantability of title to the real estate and warning them as to matters that they should, themselves, verify or ascertain. Your clients, the buyers, and lender, if applicable, will rely upon your title opinion. You are responsible to do it correctly.

1. Opine as to merchantability of title and draw buyers’ attention to items of concern or interest based on Iowa law and Iowa State Bar Association Title Standards. See iowabar.org for free copy to all ISBA members.

2. Provide requirements to satisfy any objections, existing liens or encumbrances. This can be in the form of statements of objection or requirements that the seller comply with the relevant ISBA Title Standard.

3. Identify items with potential to be a lien or encumbrance.

B. Preliminary Title Opinion Contents.

1. Preliminary Items. Sample Opinion. See Appendix H.

a. Identify recipients of opinion.

Lending institution, buyers, others, if for Lending institution ensure that you indicate opinion is for “Loan Purposes Only”. Addressees are the parties that are entitled to rely on the opinion so be aware.

b. Identify abstractor with most recent certified entry.

c. Identify total number of entries in the abstract.

d. Set forth date and time of last entry.

e. Location (county, state) and full legal description based on the last caption in the abstract.

f. Opinion of examiner regarding current titleholder(s) and merchantability of title.

g. Identify persons (clients) in whom title will be held.

h. “Subject to the following objections and comments.”

List each objection or comment separately. Lender’s love simplicity and organization.

2. Unpaid or Unreleased Mortgages. a. Unsatisfied mortgages.

You should refer to unsatisfied mortgages by entry number and set forth holder of mortgage, date of mortgage, and date and location of mortgage recording. Lenders also like references to the amount secured by the mortgage. b. This item, if unsatisfied, could constitute a lien on the property.

c. Require documentation of satisfaction of mortgage, including release of mortgage from lending institution.

3. Unpaid Real Estate Taxes.

Unpaid real estate taxes that are not delinquent should be included in a title opinion, as should the period and year for which taxes have not been paid, and the amount owed. It is appropriate to include the language “No other taxes show as a lien” when such is the case.

4. Existing Covenants, Easements, and Restrictions. a. Indicate whether comments are intended to be exhaustive or not.

b. Direct buyers to confirm existence of homeowner’s association and its rules and membership requirements.

c. Direct buyers to verify there are no existing and unpaid association assessments. Unpaid assessments may be a lien on the real estate.

d. Attach copies of existing association agreements and subdividers’ agreements noting any obligations therein. Depending on the municipality, you may or may not be able to secure a release of obligations to construct public improvements.

e. Note the existence and scope of any protective covenants and restrictions. See Iowa Code §614.24.

f. The particular zone of the real estate and use or restrictions in that zone.

g. Any judgments or other liens on the property.

h. Noteworthy platting and subdivision documents should be attached to opinions

5. Access.

a. Review plat to confirm legal access exists. In no plat exists (ie. ag. land) or if you can’t determine whether legal access exists, you should not as such in the opinion.

6. Method of Examination.

a. Who has title? - 40 year chain.

b. Encumbrances and Miscellaneous.

C. Coverage of Preliminary Title Opinion – Carve Out Clauses.

1. Attorneys should take care to provide appropriate carve out clauses in any preliminary title opinion, including:

a. The limitations of the title opinion.

b. Hazards of conducting a closing without an attorney or real estate professional.

c. Admonition for clients to obtain through independent knowledge or investigation matters affecting the title not included in the abstract.

d. Parties in possession not recorded as record title holders.

e. Public improvements that have been ordered but not assessed.

f. Recent unpaid claims for materials or labor.

g. Recent unpaid utility bills.

D. Post-Closing Requirements – Final Title Opinion

1. Buyers to obtain an update to the abstract of title for the time period in between the date of continuation and through the date of closing.

2. “Information contained in the abstract” should be the limited scope of an attorney’s opinion.

3. Purpose is to show that title has been transferred, liens and encumbrances noted in the preliminary opinion have been released and that new mortgage holder, if any, has first lien on the real estate.

III. TRANSFER DOCUMENTS (Seller’s Attorney).

A. Deed

1. Type of Deed (warranty, special warranty, quit claim, court officer, trustee, deed without warranty).

2. Grantor clause (marital status; authorized persons of corporation).

3. Grantee clause

a. Joint Tenancy

b. Tenants in Common

c. Marital Status

d. Life estate or other partial interests

4. Legal description of property transferred, and subject to any limitations.

5. Limited Liability Company as grantor = ILTS 15.3.

B. Declaration of Value

C. Groundwater Hazard Statement

1. This form is particularly critical for real estate in rural or county areas.

2. It is recommended to have transferor fill out in advance.

3. Be sure to pay close attention to the time-of-transfer requirements for private sewage disposal systems (septic tanks). It may need to be inspected in advance of closing, or special provisions made for its later inspection and payment of repairs. See Residential Purchase Agreement paragraph 21.

IV. TITLE GUARANTY.

Iowa Docs does not have formal title insurance, as other states do. Iowa, however, does have Title Guaranty, which provides title protection for real estate in the state. Title Guaranty

now allows attorneys registered with Title Guaranty to issue Commitments (from the preliminary title opinions), Certificates (from the final title opinions), and Endorsements (additional areas of coverage). Each of these usually carries with it a fee or premium. Increasingly, lenders are requiring that attorneys representing buyers be qualified to issue these Title Guaranty Commitments, Certificates and Endorsements.

A. Commitment (See Appendix F)

1. Schedule A shows the titleholder, borrower, lender, owner’s coverage, and lender’s coverage.

2. Schedule B shows the limitations, liens and encumbrances that must be released before closing.

B. Certificate (See Appendix G)

1. Shows new titleholder and other documents recorded post-closing such as mortgage, mortgage release and deed. Also shows endorsements and limitations of coverage.

2. Can be done after four months even if abstract is not updated.

C. Refinancing

1. Form 900 is issued for title commitments for a refinance. It is a short (usually one-page) form showing pertinent title information and avoids a full review of an updated abstract.

2. Form 901 is issued for title certificates for a refinance post-closing. Again, it is a shortened version of the continuation of the abstract and final title opinion.

V. OTHER AREAS.

A. Sale Closings

1. Attend

2. Preside

3. Prepare statements and 1099 reporting

4. Handle recordation and follow-up

5. As to residential, commercial, municipal, condominium and farm real estate

B. Leases

1. Negotiation and drafting

2. Arm's length 3rd parties and between related parties

3. Re residential, commercial, municipal, mobile home and mobile home park and farm real estate

4. Be familiar with Linn Co and Johnson Co rent rates and market conditions for farmland, commercial, office and residential space

C. Landlord -Tenant

1. Rent collection

2. Forcible entry and detainer actions

3. Other lease breach remedy actions

4. Tenants rights

5. Re residential, commercial, municipal, mobile home and mobile home park and farm real estate

6. Farm lease terminations

D. Land Use and Zoning

1. Annexations (proceedings - voluntary, involuntary, applicant rep and opposition

2. Re-zoning proceedings

3. Platting proceedings

4. Zoning enforcement proceedings (and defense of same)

5. Ag land restrictions and rules (Chapter 9H)

6. Familiar with CR, Marion, Hiawatha, North Liberty, Coralville, Iowa City and other adjacent municipalities master plans in general

7. Know the relevant state, county and city officials and offices

8. TIF districts, other tax abatement and economic development aspects re real estate

9. Including contract clauses and issues for buyers, sellers and lenders re such financing involved in deals

10. Be familiar with Iowa Code Chapter 9H restrictions on entity ownership of agricultural land and planning techniques re same

E. Development

1. Platting, Subdivision Mechanics and Law, Planned Unit Developments

2. Engineering basics

3. Condominium Regimes including drafting declarations

4. Homeowners Associations

a. Articles, bylaws, developer transitions, operation and governance etc

5. Restrictive Covenants – drafting, use, enforcement and defense of enforcement

6. See above re Land Use and Zoning - including TIF districts etc

7. Choice of entity re development, acquisition and operation of real estate investments

a. including basic formation of corporations (C and S), LLCs, partnerships (general, limited and limited liability)

8. Know developers in each community served, including ownership and managers in particular – also who represents them if we don’t

9. Know ownership, reputation, specialties and operations managers of major architectural, engineering and construction companies and contractors in our market area.

F. Construction Law

1. Construction contracts

a. Re residential, commercial, municipal, mobile home and mobile home park and farm real estate

2. Architectural Service Contracts

3. Building Contractor and sub-contractor agreements

4. Mechanics Liens, and foreclosure of same, also defense of same and Lien Waivers

5. Know ownership, reputation, specialties and operations managers of major architectural, engineering and construction companies and contractors in our market area

G. Environmental Law

1. Federal and state statutory knowledge

2. Issues to be addressed in all contracts and conveyancing described above

3. Civil and Criminal enforcement and defense against enforcement

4. Familiar with all Brownfield legislation clean-up programs, superfund principles, and "stuff in general" regarding underground fuel and other tanks, leaks, waterway pollution and related matters

5. Engineering basics re use of consultants re Phase I and other levels of inspections and reviews – know leading environmental consulting firms, their general reputations and specialties and key personnel within them.

H. Real Estate Finance

1. Mortgages - drafting, negotiation, releases etc

2. Foreclosures and Forfeiture proceedings

a. Bidding strategy, conduct of the proceedings etc

3. UCC as it affects real estate (fixture filings etc)

4. Lender and Contract Seller Issues in federal bankruptcy cases

I. Taxation

1. Property tax - know all calculation methods, rates and state, county and city exemptions and credits

2. Property tax appeals

3. General income tax knowledge re developers etc such as building depreciation permitted, personal vs real property definitions etc

4. Sale of Residence tax rules, capital gain exclusions rules etc

5. 1031 exchanges, deferred etc - handle from start to finish

6. General choice of entity and form of organization tax matters re real property investment syndications, joint ventures etc

APPENDIX A Residential Purchase Agreement THE IOWA STATE BAR ASSOCIATION I FOR THE LEGAL EFFECT OF THE USE OF Official Form No. 152 I THIS FORM, CONSULT YOUR LAWYER

RESIDENTIAL PURCHASE AGREEMENT

______(SELLERS)

The undersigned BUYERS hereby offer to buy and the undersigned SELLERS by their acceptance agree to sell the real property situated in , Iowa, locally known as ------,,--,--,-,- ------and legally described as:

together with any easements and appurtenant servient estates, but subject to any reasonable easements of record for public utilities or roads, any zoning restrictions, customary restrictive covenants and mineral reservations of record, if any, herein referred to as the "Property," upon the following terms and conditions provided BUYERS, on possession, are permitted to use the Property for residential purposes:

1. PURCHASE PRICE. The Purchase Price shall be $ ------and the method of payment shall be as follows:

$ with this offer to be deposited upon acceptance of this offer and held in trust by --,--::--::----:---::--:---::- as earnest money to be delivered to the SELLERS upon performance of SELLERS' obligations and satisfaction of BUYERS' contingencies, if any; and the balance of the Purchase Price: (a) in cash at the time of closing with adjustment for closing costs to be added or deducted from this amount. This Agreement is not contingent upon BUYERS obtaining such funds. (b) upon the terms specified in alternative of the Financing Addendum to Residential Purchase Agreement as initialed and attached hereto and incorporated herein.

2. REAL ESTATE TAXES. A. SELLERS shall pay all real estate taxes that are due and payable as of the date of possession and constitute a lien against the Property, including any unpaid real estate taxes for any prior years. B. SELLERS shall pay their prorated share, based upon the date of possession, of the real estate taxes for the fiscal year in which possession is given (ending June 30, ___ ) due and payable in the subsequent fiscal year (commencing July 1, ___ ). BUYERS shall be given a credit for such proration at closing (unless this agreement is for an installment contract) based upon the last known actual net real estate taxes payable according to public record. However, if such taxes are based upon a partial assessment of the present property improvements or a changed tax classification as of the date of possession, such proration shall be based on the current millage rate, the assessed value, legislative tax rollbacks and real estate tax exemptions that will actually be applicable as shown by the Assessor's Records on the date of possession. C. BUYERS shall pay all subsequent real estate taxes. 3. SPECIAL ASSESSMENTS. A. SELLERS shall pay in full all special assessments which are a lien on the Property as of the date of acceptance:-:-::-:-::--:------:----,---= B. If "A" is stricken, then SELLERS shall pay all installments of special assessments which are a lien on the Property and, if not paid, would become delinquent during the calendar year this offer is accepted, and all prior

@The Iowa Slate Bar Association 2009 Residl!ntal Purchase Agreaml!nt IOWAOOCS® Revised June 2009 installments thereof. C. All charges for solid waste removal, sewage and maintenance that are attributable to SELLERS' possession, including those for which assessments arise after closing, shall be paid by SELLERS. D. Any preliminary or deficiency assessment which cannot be discharged by payment shall be paid by SELLERS through an escrow account with sufficient funds to pay such Hens when payable, with any unused funds returned to SELLERS. E. BUYERS shall pay all other special assessments.

4. RISK OF LOSS AND INSURANCE. SELLERS shall bear the risk of loss or damage to the Property prior to closing or possession, whichever first occurs. SELLERS agree to maintain existing insurance and BUYERS may purchase additional insurance. In the event of substantial damage or destruction prior to closing, this Agreement shall be null and void; provided, however, BUYERS shall have the option to complete the closing and receive insurance proceeds regardless of the extent of damages. The property shall be deemed substantially damaged or destroyed if it cannot be restored to its present condition on or before the closing date.

5. POSSESSION AND CLOSING. If BUYERS timely perform all obligations, possession of the Property shall be delivered to BUYERS on , and any adjustments of rent, insurance, taxes, interest and all charges attributable to the SELLERS' possession shall be made as of the date of possession. Closing shall occur after approval of title by buyers' attorney and vacation of the Property by SELLERS, but prior to possession by BUYERS. SELLERS agree to permit BUYERS to inspect the Property within hours prior to closing to assure that the premises are in the condition required by this Agreement. If possession is given on a day other than closing, the parties shall make a separate agreement with adjustments as of the date of possession. This transaction shall be considered closed {upon the filing of title transfer documents) (upon the delivery of the title transfer documents to BUYERS) and receipt of all funds then due at closing from BUYERS under the Agreement.

6. FIXTURES. Included with the Property shall be all fixtures that integrally belong to, are specifically adapted to or are a part of the real estate, whether attached or detached, such as: attached wall-to-wall carpeting, built-in appliances, light fixtures (including light bulbs), water softeners (except rentals), shutters, shades, rods, blinds, venetian blinds, awnings, storm windows, storm doors, screens, television antennas (including satellite dishes), air conditioning equipment (except window type), door chimes, automatic garage door openers, electrical service cables, attached mirrors, fencing, gates, attached shelving, bushes, trees, shrubs and plants. Also included shall be the following:

The following items shall not be included:

7. CONDITION OF PROPERTY. A. The property as of the date of this Agreement including buildings, grounds, and all improvements will be preserved by the SELLERS in its present condition until possession, ordinary wear and tear excepted. B. Within days after the acceptance of this Agreement BUYERS may, at their sole expense, have the property inspected by a person or persons of their choice to determine if there are any structural, mechanical, plumbing, electrical, environmental, or other deficiencies. Within this same period, the BUYERS may notify in writing the SELLERS of any deficiency. The SELLERS shall immediately notify the BUYERS in writing of what steps, if any, the SELLERS will take to correct any deficiencies before closing. The BUYERS shall then immediately in writing notify the SELLERS that (1) such steps are acceptable, in which case this Agreement, as so modified, shall be binding upon all parties; or (2) that such steps are not acceptable, in which case this Agreement shall be null and void, and any earnest money shall be returned to BUYERS. C. If "B" is deleted, BUYERS acknowledge that they have made a satisfactory inspection of the Property and are purchasing the Property in its existing condition. D. NEW CONSTRUCTION: If the improvements on the subject property are under construction or are to be constructed, this Agreement shall be subject to approval of plans and specifications by the parties within days of acceptance of this Agreement. New construction shall have the warranties implied by law, those specifically made by suppliers of materials/appliances, and those specifically tendered by the contractor.

-2- 8. ABSTRACT AND TITLE. SELLERS, at their expense, shall promptly obtain an abstract of title to the Property continued through the date of acceptance of this Agreement, , and deliver it to BUYERS' attorney for examination. It shall show merchantable title in SELLERS in conformity with this Agreement, Iowa law, and Title Standards of the Iowa State Bar Association. The SELLERS shall make every reasonable effort to promptly perfect title. If closing is delayed due to SELLERS' inability to provide marketable title, this Agreement shall continue in force and effect until either party rescinds the Agreement after giving ten days written notice to the other party. The abstract shall become the property of BUYERS when the purchase price is paid in full. SELLERS shall pay the costs of any additional abstracting and title work due to any act or omission of SELLERS, including transfers by or the death of SELLERS or their assignees.

9. SURVEY. BUYERS may, at BUYERS' expense prior to closing, have the property surveyed and certified by a Registered Land Surveyor. If the survey shows any encroachment on the Property or if any improvements located on the Property encroach on lands of others, the encroachments shall be treated as a title defect. If the survey is required under Chapter 354, SELLERS shall pay the cost thereof.

10. ENVIRONMENTAL MATTERS. (a) SELLERS warrant to the best of their knowledge and belief that there are no abandoned wells, solid waste disposal sites, hazardous wastes or substances, or underground storage tanks located on the Property, the Property does not contain levels of radon gas, asbestos or urea-formaldehyde foam insulation which require remediation under current governmental standards, and SELLERS have done nothing to contaminate the Property with hazardous wastes or substances. SELLERS warrant that the Property is not subject to any local, state, or federal judicial or administrative action, investigation or order, as the case may be, regarding wells, solid waste disposal sites, hazardous wastes or substances, or underground storage tanks. SELLERS shall also provide BUYERS with a properly executed GROUNDWATER HAZARD STATEMENT showing no wells, private burial sites, solid waste disposal sites, private sewage disposal system, hazardous waste and underground storage tanks an the Property unless disclosed here: ------

(b) BUYERS may at their expense, within days after the date of acceptance, obtain a report from a qualified engineer or other person qualified to analyze the existence or nature of any hazardous materials, substances, conditions or wastes located on the Property. In the event any hazardous materials, substances, conditions or wastes are discovered on the Property, BUYERS' obligation hereunder shall be contingent upon the removal of such materials, substances, conditions or wastes or other resolution of the matter reasonably satisfactory to BUYERS. However, in the event SELLERS are required to expend any sum in excess of $ to remove any hazardous materials, substances, conditions or wastes, SELLERS shall have the option to cancel this transaction and refund to BUYER all Earnest Money paid and declare this Agreement null and void. The expense of any inspection shall be paid by BUYERS. The expense of any action necessary to remove or otherwise make safe any hazardous material, substance, conditions or waste shall be paid by SELLERS, subject to SELLERS' right to cancel this transacf1on as provided above.

11. DEED. Upon payment of the purchase price, SELLERS shall convey the Property to BUYERS by ______deed, free and clear of all liens, restrictions, and encumbrances except as provided in this Agreement. General warranties of title shall extend to the time of delivery of the deed excepting liens or encumbrances suffered or penmitted by BUYERS.

12. JOINT TENANCY IN PROCEEDS AND IN REAL ESTATE. If SELLERS, immediately preceding acceptance of the offer, hold title to the Property in joint tenancy with full right of survivorship, and the jo'1nt tenancy is not later destroyed by operation of law or by acts of the SELLERS, then the proceeds of this sale, and any continuing or recaptured rights of SELLERS in the Property, shall belong to SELLERS as joint tenants with full rights of survivorship and not as tenants in common; and BUYERS in the event of the death of any SELLER, agree to pay any balance of the price due SELLERS under this contract to the surviving SELLERS and to accept a deed from the surviving SELLERS consistent with Paragraph 15.

13. JOINDER BY SELLER'S SPOUSE. SELLER'S spouse, if not a title holder immediately preceding acceptance, executes this agreement only for the purpose of relinquishing all rights of dower, homestead and distributive share or in compliance with Section 561.13 of the Code of Iowa and agrees to execute the deed or real estate contract far this purpose.

14. STATEMENT AS TO LIENS. If BUYERS intend to assume or take subject to a lien on the Property, SELLERS shall furnish BUYERS with a written statement prior to closing from the holder of such lien, showing the correct balance due.

15. USE OF PURCHASE PRICE. At time of settlement, funds of the purchase price may be used to pay taxes and other - 3- liens and to acquire outstanding interests, if any, of others.

16. APPROVAL OF COURT. If the Property is an asset of an estate, trust or conservatorship, this Agreement is contingent upon Court approval unless declared unnecessary by BUYERS' attorney. If the sale of the Property is subject to court approval, the fiduciary shall promptly submit lhis Agreement for such approval. If this Agreement is not so approved by ______either party may declare this Agreement null and void, and all payments made hereunder shall be returned to BUYERS.

17. REMEDIES OF THE PARTIES. A. If BUYERS fail to timely perform this Agreement, SELLERS may forfeit it as provided in the Iowa Code (Chapter 656), and all payments made shall be forfeited; or, at SELLERS' option, upon thirty days written notice of intention to accelerate the payment of the entire balance because of BUYERS' default (during which thirty days the default is not corrected), SELLERS may declare the entire balance immediately due and payable. Thereafter this agreement may be foreclosed in equity and the Court may appoint a receiver. B. If SELLERS fail to timely perform this Agreement, BUYERS have the right to have all payments made returned to them. C. BUYERS and SELLERS are also entitled to utilize any and all other remedies or actions at law or in equity available to them and shall be entitled to obtain judgment for costs and attorney fees as permitted by law.

18. NOTICE. Any notice under this Agreement shall be in writing and be deemed served when it is delivered by personal delivery or by certified mail return receipt requested, addressed to the parties at the address given below.

19. CERTIFICATION. Buyers and Sellers each certify that they are not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by any Executive Order or the United States Treasury Department as a terrorist, "Specially Designated National and Blocked Person" or any other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control; and are not engaged in this transaction, directly or indirectly on behalf of, any such person, group, entity or nation. Each party hereby agrees to defend, indemnify and hold harmless the other party from and against any and all claims, damages, losses, risks, liabilities and expenses (including attorney's fees and costs) arising from or related to my breach of the foregoing certification.

20. GENERAL PROVISIONS. In the performance of each part of this Agreement, time shall be of the essence. Failure to promptly assert rights herein shall not, however, be a waiver of such rights or a waiver of any existing or subsequent default. This Agreement shall apply to and bind the successors in interest of the parties. This Agreement shall survive the closing. Paragraph headings are for convenience of reference and shall not limit or affect the meaning of this Agreement. Words and phrases herein shall be construed as in the singular or plural number, and as masculine, feminine or neuter gender according to the context.

21. INSPECTION OF PRIVATE SEWAGE DISPOSAL SYSTEM. Delete inappropriate alternatives below. If no deletions are made, the provisions set forth in Paragraph A shall be deemed selected. A. Seller represents and warrants to Buyer that the Property is not served by a private sewage disposal system, and there are no known private sewage disposal systems on the property.

B. The Property is served by a private sewage disposal system, or there is a private sewage disposal system on the Property. Seller and Buyer agree to the provision selected in the attached Addendum for Inspection of Private Sewage Disposal System.

C. Seller and Buyer agree that this transaction IS exempt from the time of transfer inspection requirements by reason that ______

-4- 22. ADDITIONAL PROVISIONS: (check if applicable)

_ A. SALE OF BUYERS' PROPERTY. This Agreement is contingent upon the sale and setllement of the BUYERS' property locally known as on or before ------· If setllement has not been made by this date, the SELLERS may rescind this Agreement by giving notice to BUYERS that unless sale and setllement of BUYERS' property is made within five (5) business days of such notice, then this Agreement shall be null and void. Unless SELLERS give such written notice, this Agreement shall remain valid until the sale of BUYERS' property. SELLERS reseNe the right to continue to offer the Property for sale. Should SELLERS receive another offer which they desire to accept, BUYERS shall have days from the delivery of written notice to waive the "contingency of sale." Notice from the BUYERS to the SELLERS, removing the contingency of sale, shall be timely delivered to the SELLERS along with reasonable assurance that BUYERS can complete the purchase without the sale of the property referenced above. If BUYERS do timely remove such contingency, this Agreement will remain in full force end effect (but without being contingent on the sale of BUYERS' property). If BUYERS do not timely remove such contingency, SELLERS will immediately return to BUYERS all earnest money paid, this Agreement will be of no further force and effect, and neither party will have any further obligation to the other hereunder.

B. TERMITE INSPECTION. at their expense shall have the Property inspected for termites or other wood destroying insects by a licensed pest inspector prior to closing. If active infestation or damage due to prior infestation is discovered, SELLERS shall have the option of either having the Property treated for infestation by a licensed pest exterminator and having any damage repaired to the BUYERS' satisfaction or, declaring this Agreement null and void and returning all earnest money to BUYERS. This provision shall not apply to fences, trees, shrubs or outbuildings other then garages. BUYERS may accept the property in its existing condition without such treatment or repairs.

_C. WELL TEST. SELLERS, at SELLERS' expense, shall provide BUYERS, within days after acceptance of this offer, a report issued by the county health department, or a qualified testing service, indicating the location of any well on the Property and that water from each well (1) is safe for its intended use and (2) is in sufficient quantity for its intended use. If BUYERS receive an unsatisfactory report, the basis for which cannot be resolved between BUYERS and SELLERS within days of receipt thereof, then upon written notice from BUYERS to SELLERS, this agreement shall be null and void and all earnest money paid shall be returned immediately to BUYERS.

D. RADON TEST. Within days after the date of acceptance of this offer, SELLERS, at their expense, shall have the property tested for the presence of Radon gas by a qualified professional and shall provide the written results of such test to BUYERS within the same time period. If said results reveal the presence of Radon in the Property at a level greater than 4.0 pCi/L and SELLERS do not agree to remediate the Property at SELLERS' expense such that the Radon levels in the Property are reduced to a level below 4.0 pCi/L, then BUYERS shall have the option to terminate this agreement, in which case all earnest money shall be returned to BUYERS and this Agreement shall be of no further force or effect.

_ E. NO REAL ESTATE AGENT OR BROKER. Neither party has used the seNices of a real estate agent or broker in connection with this transaction. Each party agrees to indemnify and save harmless the other party from and against all claims, costs, liabilities and expense (including court costs and reasonable attorney's fees) incurred by the other party as a result of a breach of this representation, which shall survive closing.

_ F. OWNERS' ASSOCIATION. If the property is subject to control by an association of owners, this Agreement is contingent upon the timely satisfaction or waiver of those conditions set forth on the Owners' Association Addendum attached hereto and by this reference made a part hereof. Buyers may, before closing and no later than days after receipt of all responsive documents, elect to cancel this Agreement by written notice of cancellation to Sellers. If Buyers elect to so cancel this Agreement, then this Agreement shall be null and void and the earnest money paid by Buyers shall be refunded. In the event Buyers do not timely notify Sellers of cancellation, this Agreement shall be binding and remain in full force and effect.

G. OTHER: Attach Addendum.

- 5- ACCEPTANCE. When accepted, this Agreement shall become a binding contract. If not accepted and delivered to BUYERS on or before the , this Agreement shall be null and void and all payments made shall be returned immediately to BUYERS.

Accepted------Dated ______

SELLERS BUYERS

SS#: SS#:

SELLERS BUYERS

SS#: SS#:

Address Address

Telephone Telephone

- 6- INITIAL IF FINANCING ADDENDUM TO RESIDENTIAL PURCHASE AGREEMENT APPLICABLE:

A. NEW MORTGAGE: This Agreement is contingent upon the BUYERS obtaining a commitment in writing for a------ mortgage for not more than __% of the purchase price with note interest at __% or less with a term of no less than __ years. BUYERS agree to pay all customary loan costs. The SELLERS agree to pay a discount and/or origination fee, if required, of __%, or BUYERS less, of the new mortgage obtained by the BUYERS. BUYERS agree upon acceptance of this offer to immediately make application for such mortgage with a lender and to make their best effort to obtain a mortgage commitment as above provided. If BUYERS have not obtained a written commitment or loan denial on or before , then SELLERS may rescind this Agreement by giving written notice to the BUYERS that if a mortgage commitment has not been obtained within 5 business days of SELLERS receipt of such notice then this Agreement shall be null and void. If SELLERS do not choose to give such written notice, then this Agreement shall remain valid until the BUYERS have obtained a mortgage commitment or a denial. In addition to the proceeds of the aforementioned mortgage, the BUYERS shall pay the balance of the purchase price in cash at the time of closing with adjustment for closing costs to be added or deducted from this amount.

B. ASSUMPTION OF MORTGAGE OR CONTRACT: The BUYERS shall pay a portion of the purchase price by assuming and agreeing to pay the mortgage or contract currently on this property with an approximate balance of$. ______with principal and interest payments of approximately $•-,------with current interest of __%. SELLERS shall pay interest to the date of possession. If consent of the holder of such mortgage or contract is required then this Agreement is contingent upon such consent. The BUYERS BUYERS agree in good faith to make their best effort to promptly obtain such consent and to pay all expenses and assumption fees related thereto. If BUYERS have not procured such consent on or before------' then SELLERS may rescind this Agreement by giving written notice to the BUYERS stating that if such consent is not obtained within 5 working days of the receipt of such notice, then this Agreement shall be null and void. All payments due prior to and including the date of closing are to be paid by the SELLERS SELLERS. The balance of the purchase price shall be paid in cash at the time of closing with adjustment for closing costs to be added or deducted from this amount. If the SELLERS have an escrow account in relation to such mortgage or contract, such account shall be brought current and BUYERS shall (check one): _Purchase such escrow account and the balance of SELLERS' tax obligation under paragraphs 2 and 3, if any, shall be credited to BUYERS at the time of closing. _Assume said escrow account in lieu of SELLERS' tax obligations and tax prorations, in which event Paragraphs 2 and 3 herein shall not apply. _This Agreement (is) (is not) contingent upon SELLERS' release from liability on the mortgage/contract being assumed. The mortgage/contract being assumed (does) (does not} provide for a variable interest rate. The mortgage/contract being assumed (does) (does not) contain a balloon payment. Date of balloon, if any:

C. CONTRACT: BUYERS and SELLERS will execute a real estate installment contract with a balance due in the amount of $ on the form of The Iowa State Bar Association in which BUYERS agree to pay monthly payments of $ , including principal and interest at the rate of __%, until the unpaid principal balance, together with accrued interest. is paid in full, or until the amount due is reduced to the amount of the mortgage now or hereinafter placed on the property by BUYERS SELLERS, at which time SELLERS shall deliver to BUYERS a warranty deed. Interest shall commence on the date of possession and the first monthly payment shall be 30 days after the date of possession unless otherwise mutually agreed by the parties. The balance of the purchase price is to be paid in cash at the time of closing, with SELLERS adjustment for closing costs to be added or deducted from this amount. If SELLERS now have or hereafter place a mortgage(s) on the property, such mortgage(s) may not SELLERS exceed the real estate contract balance, and the interest rate and amortization thereof shall be no more onerous than the interest rate and amortization on the real estate contract. This Agreement is contingent upon the SELLERS' lender's approval, if required.

This contract (shall) {shall not) have a balloon payment. Date of balloon, if any: ______This contract (shall) (shall not) allow BUYERS to prepay all or any part of the principal without penalty; This contract (shall) (shall not) be due and payable in full upon sale or assignment by the BUYERS;

This contract (shall) (shall not) require 1/12 of the annual insurance premium and taxes be paid to SELLERS with the monthly payments into an escrow fund established by SELLERS. SELLERS shall use these funds to pay real estate taxes and insurance prior to their delinquency. The parties shall review and make adjustments in the escrow account during the term of the real estate installment contract. In the event that tax payments are not escrowed, Sellers shall pay all real estate tax installments, or portions thereof, for taxes that accrue prior to possession. BUYERS shall pay all real estate tax installments, or portions thereof, for taxes that accrue after the date of possession. The parties shall pay the installments for which they are responsible as they become due and prior to delinquency.

D. OTHER: Attach Addendum. Owners' Association Addendum to Residential Purchase Agreement

1. If the Property is subject to the provisions of a townhome, condominium, subdivision, cooperative or other homeowners' association or declaration, Sellers shall furnish to Buyers within days from the date of acceptance by Sellers complete, current and accurate copies of the following: A. A copy of the declaration (other than the plats); B. A copy of the by-laws of the association; C. A copy of the rules and regulations of the association; D. A certificate from the Association containing: A statement disclosing the effect on the proposed conveyance of any right of first refusal or other restraint on the free alienability of the unit; A statement of the amount of the monthly common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner; A statement of any other fees payable by the unit owner to the association; The current operating budget of the association, including details concerning the amount of the reserve fund for repair and replacement and its intended use, or a statement that there is no reserve fund; A statement of any capital expenditures approved by the association planned at the time of conveyance which are not reflected in the current operating budget included in the certificate. The most recent prepared balance sheet and income and expense statement, if any, of the association. A statement of any judgments against the association and the existence of any pending suits to which the association is a party. A statement generally describing insurance policies provided for the benefit of the unit owners and that the policies are available for inspection stating the location at which they are available. A statement as to whether the association has knowledge that any alteration or improvement to the unit or to the limited common elements assigned to the unit violates any provision of the declaration, by-laws, or rules or regulations. A statement as to whether the association has knowledge of any violation of health or building codes with respect to the unit, the limited common elements assigned to the unit, or any other portion of the property managed by the Association. A description of any recreat'1onal or other facilities which are to be used by the unit owners or maintained by them or the association, and a statement as to whether or not they are to be a part of the common elements. E. A statement by Sellers as to whether Sellers have knowledge: That any alteration to the unit or to the limited common elements assigned to the unit violates any provision of the declaration, by-laws, or rules and regulations. Of any violation of health or building codes with respect to the unit or the limited common elements assigned to the unit. Buyers may, before closing and no later than __ days after receipt of said documents, elect to cancel this Agreement by written notice of cancellation to Sellers. If Buyers elect to so cancel this Agreement, then this Agreement shall become null and void and the earnest money paid by Buyers shall be refunded. In the event Buyers do not so notify Sellers of cancellation, this Agreement shall be binding and remain in full force and effect.

2. If the declaration, articles of incorporation, or by-laws require that this Agreement or the Buyers be approved by the Board of Directors (or other governing body) of the owners association or if any right of first refusal or comparable right exists, then this Agreement is made expressly contingent upon such approval, or upon a waiver of such right, given in writing. Sellers shall promptly give any such required notice, VJith a copy to Buyers, and shall diligently pursue any required approval. In the event such approval is not granted or waived prior to or closing, this Agreement shall be null and void and all earnest money paid by the Buyers shall be refunded.

3. Sellers warrant that all monthly owners' association dues will be paid current as of the date of closing. Buyers acknowledge that the present fee due to the owners' association is $ per :c:c:-c=-:-:cc---:-·· Periodic fees, special assessments and other operating charges shall be adjusted to the date of settlement. No adjustment will be made for any capital reserves. Addendum for Inspection of Private Sewage Disposal System

Buyer and Seller agree on the following initialed alternative to comply with the time of transfer inspection of private sewage disposal systems:

There is a private sewage disposal system on this Property which serves the Property. Seller has obtained or shall obtain at Seller's expense within __ days a certified inspector's report which documents the condition of the private sewage disposal system, that it is of sufficient capacity to serve the Property, that the continued use of the system is permitted, and whether any modifications are required to conform to standards adopted by the Department of Natural Resources. Seller shall attach the inspection report to the Groundwater Hazard Statement to be filed at closing.

If Seller receives an unsatisfactory report, the basis of which cannot be resolved between Buyer and Seller within _ days of delivery of a copy to Buyer, then upon written notice from Buyer to Seller, this agreement shall be null and void and all earnest money paid hereunder shall be returned immediately to Buyer.

There is a private sewage disposal system on this Property. Weather or other temporary physical conditions prevent the certified inspection of the private sewage disposal system from being conducted. Buyer shall execute a binding acknowledgment with the County Board of Health to conduct a cert'1fied inspection of the private sewage disposal system at the earliest practicable time and to be responsible for any required modifications to the private sewage disposal system as identified by the certified inspection. Buyer shall attach a copy of the binding acknowledgment to the Groundwater Hazard Statement to be filed at closing. When the inspection is completed, an amended Groundwater Hazard Statement shall be filed with the certified inspection and shall include the document numbers of both the real estate transfer document and the original Groundwater Hazard Statement

Seller agrees at closing to deposit the sum of$ Dollars into escrow with .-:-c,.-cc,.,--:-c--; z:=:-:=;-::-=--::-c==::c:c:-=:;-::-=-::::-== ("Escrow Agent") to reimburse Buyer for expenses incurred for the cost of the inspection and any required modifications to the private disposal system. Escrow Agent shall pay to Buyer, up to the amount held in escrow, amounts for required modifications after any such modifications are completed and upon submission to Escrow Agent of a detailed invoice. If no modifications are required, the entire escrow account shall be returned to Seller. Any funds remaining in the escrow account after any required modifications shall be returned to Seller. Seller shall not be responsible for any cost in excess of the escrow deposit.

There is a private sewage disposal system on this Property. The building to which the sewage disposal system is connected will be demolished without being occupied. Buyer shall execute a binding acknowledgement with the county board of health to demolish the building within an agreed upon f1me period. Buyer shall attach a copy of the binding acknowledgement to the Groundwater Hazard Statement to be filed at closing.

There is a private sewage disposal system on this Property. The private sewage disposal system has been installed within the past two years pursuant to permit number------APPENDIXB Offer to Buy Real Estate and Acceptance THE IOWA STATE BAR ASSOCIATION I FOR THE l.EGAI. EFFECT OF THE USE OF Official Form No. 153 I THIS FORM, CONSUl. T YOUR LAWYER

I"\ ' '? ~,,'~· 1) ·.. Dl . OFFER TO BUY REAL ESTATE AND ACCEPTANCE t5' 0~ &oci..xt\ TO: , Sellers: 1. REAL ESTATE DESCRIPTION. The Buyers offer to buy real estate in Counly, Iowa, described as follows:

with any easements and appurtenant servient estates, but subject to the following: a. any zoning and other ordinances; b. any covenants of record; c. any easements of record for public utilities, roads and highways, and d. (consider: liens, mineral rights; other easements; interests of others.)

designated the Real Estate; provided Buyers, on possession, are permitted to make the following use of the Real Estate: 2. PRICE. The purchase price shall be $ , payable at County, Iowa, as follows:

3. REAL ESTATE TAXES. Sellers shall pay

and any unpaid real estate taxes payable in prior years. Buyers shall pay all subsequent real estate taxes. Any proration of real estate taxes on the Real Estate shall be based upon such taxes for the year currently payable unless the parties state otherwise. 4. SPECIAL ASSESSMENTS. A. Sellers shall pay all special assessments which are a lien on the Real Estate as of the date of acceptance of this offer. B. If A. IS STRICKEN, then Sellers shall pay all installments of special assessments which are a lien on the Real Estate and, if not paid, would become delinquent during the calendar year this offer is accepted, and all prior installments thereof. C. All other special assessments shall be paid by Buyers. 5. RISK OF LOSS AND INSURANCE. Risk of loss prior to Seller's delivery of possession of the Real Estate to Buyers shall be as follows: A. All risk of loss shall remain with Sellers until possession of the Real Estate shall be delivered to Buyers. B. IF A. IS STRICKEN, Sellers shall maintain $ of fire, windstorm and extended coverage insurance on the Real Estate until possession is given to Buyers and shall promptly secure endorsements to the appropriate insurance policies naming Buyers as additional insureds as their interests may appear. Risk of loss from such insured hazards shall be on Buyers after Sellers have performed under this paragraph and notified Buyers of such performance. Buyers, if they desire, may obtain additional insurance to cover such risk. 6. CARE AND MAINTENANCE. The Real Estate shall be preserved in its present condition and delivered intact at the time possession is delivered to Buyers, provided, however, if 5.a. is stricken and there is loss or destruction of all or any part of the Real Estate from causes covered by the insurance maintained by Sellers, Buyers agree to accept such damaged or destroyed Real Estate together with such insurance proceeds in lieu of the Real Estate in its present condition and Sellers shall not be required to repair or replace same.

@The Iowa Slate Bar Association 2009 153 Offer to Buy Real Estate and Acceptance IOWAOOCS® RevJsed June 2009 7. POSSESSION. If Buyers timely perform all obligations, possession of the Real Estate shall be delivered to Buyers on ------' with any adjustments of rent, insurance, and interest to be made as of the date of transfer of possession. 8. FIXTURES. All property thai integrally belongs to or is part of the Real Estate, whelher attached or detached, such as light fixtures, shades, rods, blinds, awnings, windows, storm doors, screens, plumbing fixtures, water heaters, water softeners, automatic heating equipment, air conditioning equipment, wall to wall carpeting, built-in items and electrical service cable, outside television towers and antenna, fencing, gates and landscaping shall be considered a part of Real Estate and included in the sale except (consider: rental items.)

9. USE OF PURCHASE PRICE. At time of setllement, funds of the purchase price may be used to pay taxes and other liens and to acquire outstanding interests, if any, of others. 10. ABSTRACT AND TITLE. Sellers, at their expense, shall promptly obtain an abstract of tille to the Real Estate continued through the date of acceptance of this offer, and deliver it to Buyers for examination. It shall show merchantable title in Sellers in conformity with this agreement, Iowa law and Title Standards of the Iowa State Bar Association. The abstract shall become the property of the Buyers when the purchase price is paid in full. Sellers shall pay the costs of any additional abstracting and title work due to any act or omiss·lon of Sellers, including transfers by or the death of Sellers or their assignees. 11. DEED. Upon payment of the purchase price, Sellers shall convey the Real Estate to Buyers or their assignees, by deed, free and clear of all liens, restrictions, and encumbrances except as provided in 1 a. through 1 .d. Any general warranties of title shall extend only to the time of acceptance of this offer, with special warranties as to acts of Sellers continuing up to time of delivery of the deed. 12. JOINT TENANCY IN PROCEEDS AND IN REAL ESTATE. If Sellers, immediately preceding acceptance of this offer, hold title to the Real Estate in joint tenancy with full right of survivorship, and the joint tenancy is not later destroyed by operation of law or by acts of the Sellers, then the proceeds of this sale, and any continuing or recaptured rights of Sellers in the Real Estate, shall belong to Sellers as joint tenants with full rights of survivorship and not as tenants in common; and Buyers, in the event of the death of either Seller, agree to pay any balance of the price due Sellers under this contract to the surviving Seller and to accept a deed from the surviving Seller consistent with paragraph 11. 13. JOINDER BY SELLER'S SPOUSE. Seller's spouse, if not a tilleholder immediately preceding acceptance of this offer, executes this contract only for the purpose of relinquishing all rights of dower, homestead and distributive shares or in compliance with Section 561.13 of the Iowa Code and agrees to execute the deed or real estate contract for this purpose. 14. TIME IS OF THE ESSENCE. Time is of the essence in this contract 15. REMEDIES OF THE PARTIES A. If Buyers fail to timely perform this contract, Sellers may forfeit it as provided in the Iowa Code, and all payments made shall be forfeited or, at Seller's option, upon thirty days written notice of intention to accelerate the payment of the entire balance because of such failure (during which thirty days such failure is not corrected} Sellers may declare the entire balance immediately due and payable. Thereafter this contract may be foreclosed in equity and the Court may appoint a receiver. B. If Sellers fail to timely perform this contract, Buyers have the right to have all payments made returned to them. C. Buyers and Sellers also are entitled to utilize any and all other remedies or actions at law or in equity available to them and shall be entitled to obtain judgment for costs and attorney fees as permitted by law. 16. STATEMENT AS TO LIENS. If Buyers intend to assume or take subject to a lien on the Real Estate, Sellers shall furnish Buyers with a written statement from the holder of such lien, showing the correct balance due. 17. SUBSEQUENT CONTRACT. Any real estate contract executed in performance of this contract shall be on a form of the Iowa State Bar Association. 18. APPROVAL OF COURT. If lhe sale of the Real Estate is subject to Court approval, the fiduciary shall promptly submit this contract for such approval. If this contract is not so approved, it shall be void. 19. CONTRACT BINDING ON SUCCESSORS IN INTEREST. This contract shall apply to and bind the successors in interest of the parties.

- 2 - 20. CONSTRUCTION. Words and phrases shall be construed as in the singular or plural number, and as masculine, feminine or neuter gender, according to the context. 21. CERTIFICATION. Buyers and Sellers each certify that they are not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by any Executive Order or the United States Treasury Department as a terrorist, "Specially Designated National and Blocked Person" or any other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control; and are not engaged in this transaction, directly or indirectly on behalf of, any such person, group, entity or nation. Each party hereby agrees to defend, indemnify and hold harmless the other party from and against any and all claims, damages, losses, risks, liabilities and expenses (including attorney's fees and costs) arising from or related to my breach of the foregoing certification. 22. TIME FOR ACCEPTANCE. If this offer is not accepted by Sellers on or before it shall become void and all payments shall be repaid to the Buyers. 23. INSPECTION OF PRIVATE SEWAGE DISPOSAL SYSTEM. Delete inappropriate alternatives below. If no deletions are made, the provisions set forth in Paragraph A shall be deemed selected. A. Seller represents and warrants to Buyer that the Property is not served by a private sewage disposal system, and there are no known private sewage disposal systems on the property. B. The Property is served by a private sewage disposal system, or there is a private sewage disposal system on the Property. Seller and Buyer agree to the provision selected in the attached Addendum for Inspection of Private Sewage Disposal System. C. Seller and Buyer agree that this transaction IS exempt from the time of transfer inspection requirements by reason that ______. 24. OTHER PROVISIONS.

Dated:------

Buyer Buyer

THIS OFFER IS ACCEPTED------

Seller Spouse

- 3 - Addendum for Inspection of Private Sewage Disposal System

Buyer and Seller agree on the following initialed alternative to comply with the time of transfer inspection of private sewage disposal systems:

There is a private sewage disposal system on this Property. Weather or other temporary physical conditions prevent the certified inspection of the private sewage disposal system from being conducted. Buyer shall execute a binding acknowledgment with the County Board of Health to conduct a certified inspection of the private sewage disposal system at the earliest practicable time and to be responsible for any required modifications to the private sewage disposal system as identified by the certified inspection. Buyer shall attach a copy of the binding acknowledgment to the Groundwater Hazard Statement to be filed at closing. When the inspection is completed, an amended Groundwater Hazard Statement shall be filed with the certified inspection and shall include the document numbers of both the real estate transfer document and the original Groundwater Hazard Statement

Seller agrees at closing to deposit the sum of$ Dollars into escrow with---,-----, .,---,---;-;-;;--,-,,-,-.,-=--:------,----, ("Escrow Agent") to reimburse Buyer for expenses incurred for the cost of the inspection and any required modifications to the private disposal system. Escrow Agent shall pay to Buyer, up to the amount held in escrow, amounts for required modifications after any such modifications are completed and upon submission to Escrow Agent of a detailed invoice. If no modifications are required, the entire escrow account shall be returned to Seller. Any funds remaining in the escrow account after any required modifications shall be returned to Seller. Seller shall not be responsible for any cost in excess of the escrow deposit.

There is a private sewage disposal system on this Property. The building to which the sewage disposal system is connected will be demolished without being occupied. Buyer shall execute a binding acknowledgement with the county board of health to demolish the building within an agreed upon time period. Buyer shall attach a copy of the binding acknowledgement to the Groundwater Hazard Statement to be filed at closing.

There is a private sewage disposal system on this Property. The private sewage disposal system has been installed within the past Wto years pursuant to permit number------APPEND/XC Residential Property Seller Disclosure Statement THE IOWA STATE BAR ASSOCIATION I TFOR THE LEGAl. EFFECT OF THE USE OF Official Form No.155 THIS FORM, CONSUl. T YOUR LAWYER ~··~e~ RESIDENTIAL PROPERTY SELLER 76\LJ~ DISCLOSURE STATEMENT ~~(' ·;ol' ~ •SbC'Ii'>\'\

Property Address:

PURPOSE: Use this statement to disclose information as required by Iowa Code chapter 558A. This law requires certain sellers of residential property that includes at least one and no more than four dwelling units to disclose information about the property to be sold. The following disclosures are made by the Seller(s) and not by any agent acting on behalf of the Seller(s).

INSTRUCTIONS TO SELLER(S):

A. Seller(s) must complete this statement. Respond to all questions, or attach reports allowed by Iowa Code section 558A.4(2); B. Disclose all known conditions materially affecting this property; c. If an item does not apply to this property, indicate it is not applicable (NIA); D. Disclose information in good faith and make a reasonable effort to ascertain the required information. If the required information is unknown or is unavailable following a reasonable effort, use an approximation of the information, or indicate that the information is unknown (UNK). All approximations must be identified as approximations (AP). E. Additional pages may be attached as needed: F. Keep a copy of this statement with your other important papers.

DISCLOSURES: Circle response:

1. Basement/Foundation: Any known water or other problems? Yes No N/A UNK Any known repairs? Yes No N/A UNK If yes, date of repairs/replacement:

2. Roof: Any known problems? Yes No N/A UNK Any known repairs? Yes No N/A If yes, date of repairs/replacement: UNK

3. Well and Pump: Any known problems? Yes No N/A UNK Any known repairs? Yes No N/A UNK If yes, date of repairs/replacement: Any known water tests? If yes, date of last report: Yes No N/A UNK and results:

4. Septic Tanks/Drain Fields: Any known problems? Yes No N/A UNK Location of tank: Date tank last cleaned:

5. Sewer Systems: Any known problems? Yes No N/A UNK Any known repairs? Yes No N/A UNK If yes, date of repairs/replacement:

6. Heating System(s): Any known problems? Yes No N/A UNK Any known repairs? Yes No N/A UNK If yes, date of repairs/replacement:

7. Central Cooling System(s): Any known problems? Yes No N/A UNK Any known repairs? Yes No N/A UNK If yes, date of repairs/replacement:

8. Plumbing System(s): Any known problems? Yes No N/A UNK Any known repairs? Yes No N/A UNK If yes, date of repairs/replacement:

©The Iowa Stale Bar Association 2000 156 RESIDENTIAl. SELLER DISCLOSURE STATEMENT IOWAOOCS Revised December 2009 9. Electrical System(s): Any known problems? Yes No N/A UNK Any known repairs? Yes No N/A UNK If yes, date of repairs/replacement:

10. Pest Infestation (e.g., termites, carpenter ants): Any known problems? Yes No N/A UNK If yes, date(s) of treatment: Any known structural damage? Yes No N/A UNK If yes, date of repairs/replacement: Any known inspections? If yes, date of last report: Yes No N/A UNK and results:

11. Asbestos: Any known to be present in the structure? Yes No N/A UNK If yes, explain:

12. Radon: Any known tests for the presence of radon gas? If yes, date of last report: Yes No N/A UNK and results:

13. Lead-Based Paint: Any known to be present in structure? Yes No N/A UNK

14. Flood Plain: Do you know if the property is located in a flood plain? Yes No N/A UNK If yes, what is the flood plan designation:

15. Zoning: Do you know the zoning classification of the property? Yes No N/A UNK If yes, what is the zoning classification:

16. Covenants: Is the property subject to restrictive covenants? Yes No N/A UNK If yes, attach a copy or state where a true, current copy of the covenants can be obtained.:

17. Shared or Co-Owned Features: Any features of the property known to be shared in common with adjoining landowners, such as walls, fences, roads, and driveways whose use or maintenance responsibility may have an effect on the prope11y? Yes No N/A UNK

Any known "common areas" such as pools, tennis courts, walkways, or other areas co-owned with others, or a Homeowner's Association which has any authority over the Yes No N/A UNK property?

18. Physical Problems: Any known settling, flooding, drainage or grading problems? Yes No N/A UNK

19. Structural Damage: Any known structural damage? Yes No N/A UNK

20. See attached Disclosure of Information on Lead-Based Paint and/or Lead- Based Hazard and the attached pamphlet, Protect Your Family from Lead in Your Home.

You MUST explain any "YES" response(s) above. Use the back of this statement or additional sheets as necessary. If reports are attached, identify the reports and the questions to which they pertain. SELLER(S) DISCLOSURE: Seller(s) discloses the information regarding this property based on information known or reasonably available to the Seller{s). The Seller(s) has owned the property since The Seller(s) certifies that as of the date signed this information is true and accurate to the best of my/our knowledge. Seller(s) acknowledges requirement that Buyer(s) be provided with the "Iowa Radon Home-Buyers and Sellers Fact Sheet" prepared by the Iowa Department of Public Health.

Seller------Seller------

Date: ------Date: ------

BUYER(S) ACKNOWLEDGEMENT: Buyer(s) acknowledges receipt of a copy of this Disclosure Statement. This Disclosure Statement is not intended to be a warranty or to substitute for any inspection the Buyer(s) may wish to obtain. Buyer(s) acknowledges receipt of the "Iowa Radon Home-Buyers and Sellers Fact Sheet" prepared by the Iowa Department of Public Health.

Buyer ______Buyer ______

Date: Date: APPENDIXD Lead-Based Paint Disclosure - Sales THE IOWA STATE BAR ASSOCIATION I IFOR THE LEGAL EFFECT OF THE USE OF Official Form No.1 56 THIS FORM, CONSULT YOUR LAWYER

·r·~~ LEAD-BASED PAINT DISCLOSURE- SALES g. lSi w·~ . \~:ibcr,...:f)0..;- Property Address or Legal Description:

Lead warning Statement Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase. Seller's Disclosure (a) Presence of lead-based paint and/or lead-based paint hazards (check (i) or (ii) below): (i) Known lead-based paint and/or lead-based paint hazards are present in the housing (explain).

(ii) Seller has no knowledge of lead-based paint and/or lead-based paint hazards in the housing.

(b) Records and reports available to the Seller (check (i) or (ii) below): (i) Seller has provided the purchaser with all available records and reports pertaining to lead-based paint andfor lead-based paint hazards in the housing (list documents below).

(ii) Seller has no reports or records pertaining to lead-based paint and/or lead-based paint hazards in the housing.

Buyer's Acknowledgment (Initial) ___ By execution of this disclosure, Buyer acknowledges receipt of copies of all information listed above including receipt of the pamphlet, Protect Your Family from Lead in Your Home.

This agreement is contingent upon a risk assessment or inspection of the Property for the presence of lead-based paint and/or lead-based paint hazards at the Buyer's expense until 5 p.m. on the day of [lnserl date 10 days after contract ratification or a date mutually agreed upon]. (Intact lead-based paint that is in good condition is not necessarily a hazard. See the EPA pamphlet Protect Your Family From Lead in Your Home for more information). This contingency will terminate at the above predetermined deadline unless the Buyer (or Buyer's agent) delivers to the Seller (or Seller's agent) a written contract addendum listing together with a copy of the inspection and/or risk assessment report. The Seller may, at the Seller's option, within days after delivery of the addendum, elect in writing whether to correct the condition(s) prior to closing. If the Seller will correct the condition, the Seller shall furnish the Buyer with certification from a risk assessor or inspector demonstrating that the condition has been remedied before the date of closing. If the Seller does not elect to make the repairs, or if the Seller makes a counter-offer, the Buyer shall have days to respond to the counter-offer to remove this contingency and take the property in "as is" condition or this Agreement shall become void. The Buyer may remove this contingency at any time without cause. Buyer hereby waives this contingency. (initial).

Agent's Acknowledgement (initial). Agent has informed the Seller of the Seller's obligations under 42 U.S.C. 4852d and is aware of Agent's responsibility to ensure compliance. Certification of Accuracy The following parties have reviewed the information above and certify, to the best of their knowledge, that the information they have provided is true and accurate.

SELLER Date BUYER Date

AGENT Date AGENT Date

©The Iowa Stale Bar Association 2007 Form 156 Lead-Based Paint Disclosure- Sales !OWADOCS Revised September 2007 APPENDIXE Iowa City Area Association ofRealtors Purchase Agreement RESIDENTIAL REAL ESTATE PURCHASE AGREEMENT mREAlTOR'" .. This form approved by the lo;Na City Area Association of REAL TORS® Date of Agreement ______20 ___

TO------'------(SELLERS:), 1. REAL ESTATE DESCRIPTION. The undersigned BUYERS hereby offer to buy real estate in ______County, Iowa, locally known as:---~----~------ and FOLLOWING THE LEGAL DESCRIPTION CONTAINED IN THE TITLE DOCUMENT BY WHICH THE SELLER RECEIVED TITLE TO THE PROPERTY, SUBJECT TO APPROVAL OF BUYER'S ATTORNEY, or describelj as follows:

wilh any improvements located there on, easements of record and appurtenant servient estates, and subject to the following: {a) any zoning and other ordinances·; {b) any covenants of record; (c) any easements of recoro for public utilrties, roads and highways; and (d) _:______(conslder: liens, other easements, interests of others) designated the Real Estate; provided BUYERS, on possession, ara permitted to make the follcrwing use of the Real Estate=------ Ditapplicable, see HOMEOWNERS ASSOCIATION/CONDOMINIUMASSOCIATIONICO.MMON INTEREST COMMUNITY ADDENDUM (HOA).

2. PURCHASE PRICE. The Purchase Price ~hall be $ and the method of payment shall be as follows:$------~--- with this offer to bB deposited upon acceptance of this offer, in the trust account ofr______

to be delivered to fi:le SELLERS upon Performance of SELLERS' obligations and satisfaction of BUYERS' contingencies, if any, and the balance of the purchase price as ~esignated below. Select (A) (B) and/or (C) or (D) ADNEW MORTGAGE: Check 0(CONV)0(FHA) orO (VA) This Purchase Agreement is contingent upon the BUYERS obtaining a written commitment for a first real estate mortgage for ___% of the Purchase price with interest an the promissory note secured thereby of not more tlian % amortized ov~r a term of not less than ____ years, with a ballqon due dats of not less than years. BUYERS agree to pay no more than ___% for loan origination fees and points, and to pay in addition all other customary loan costs. BUYERS agree upon acceptance of this offer to immediately make application for such mortgage with a commercial mortgage lender and to exercise, good falth efforts to obtain a mortgage commitment as 'above provided. Upon receiving written loen commitment, (supported by the lender's reqUired appraisal), BUYERS shall release this contingenCy in writing. If BLiYERS have not de~vered a written financing contingency relea$e containfng the above tetms, or terms acceptable to BUYERS on or before __ . at ( 0 A.M. 0 P.M. D Noon ) either SELLERS BUYERS may declare this PurchaSe Agreement null and void and all payments made hereunder shall be returned. BUYERS shall pay the balance of the purchase price at the time of the clos!ng by combination of BUYERS' personal funds and the net mortgage proceeds. B. D CASH: BUYERS will pay the balance of the purchase price in cash at the ttme of closing. This Purchase Agreement is not contingent upon BUYERS obtaining such funds. c. D OTHER RNANCING TERMS:

D. 0 If a Mortgage Assumption, Installment contmct Assumption, or Installment contract Sale, see attached addendum. 3. POSSESSION. If BUYERS timely perform all obligations, possession for the Real Estate shall be delivered to BUYERS on -c;======:cc' 20 with any fl.djustments of rent taxe-s, iTu;urnnca, interest, and other applicable matters to ba mad a as cf the date oft-ansfer of pussession. Closing of the tra"nsaction shall occur after approval of title and vacation of the premises by the SELLERS, in the condition ready for BUYERS' possession. Possession shall not be delivered to the BUYERS until completion of the dosing, which shall mean delivery to the BUYERS of all title transfer documents and receipt of the purchase price funds then due from BUY!;RS. If by mutual agreement the parties select a different possession or closing date, they shall execute a separate agreement seHing forth the terms thereof. 4. REAL ESTATE TAXES. SELLERS shall pay all real estate taxes which arn due anti payable and constitute a lien against the above described Real Estate and any unpaid rea! estate taxes for any prior years. Except for the tax proration hereinafter set forth, BUYERS shall pay all subsequent real estate faXes. SELLERS shall also pay a prorated share of the real estate taxes for the "fiscal year ending June 30, 20 and payable in the fiscal year commencing July 1, 20 based upon one of the following formulas: Select (A) (B) or {C). A. 0 Net taxes payable In the current fiscal year in which possession is given to BUYERS. (Do not select this alternative if the current year's taxes ate based upon a vacant lot or partial construction assessment.) B. 0 Net taxes pald in the current fiscal year of possession ( 0 plus/ 0 minus) %thereof. C. 0 An amount calculated based upon the assessed valuation, legislative tax rollback, and real estate-tax exemptions that will actually be applicable to and used (or the calculation of taxes payable in the fiscal year commencing July 1 •. 20 • If, at the time of closing, the tax rate is not certified, then the most current, certified tax rate shall be used. 5. SPECIAL ASSESSMENTS. Select: (A) or (B) A. 0 SELLERS shall pay an special assessments which are a lien on the Real Estate as of the date of closing. B. 0 SELLERS shall pay all installments of special assessments which are a lien on the Real Estate and, If not paid, would become delinquent during the calendar year this offer ls accepted, and all prtor installments thereof. All other special assessments shall be paid by BUYERS.

Buyers' Initials•------Seller's Initials> ______Acknowledge they have read this page. Page 1 of4

~ fmmsimplicity fonns.m•<~<•Orm!e.f.,.ny. 6. FIXTURES. All prOperty that Integrally belongs to or Is part of the Real Estate, whether attached or detached, such as light ffxtures, shades, rods, blinds, automatic garage door openers and transmitter units, all drapery rods and cu~in rods, awnings, windows, stonn doors, screens, plumbing fiXtures, water heaters, water softeners {unless water softener Is rental), automatic heating equipment, air conditioning equipment. wall~to-wan carpeting, mirrors attached to walls or doors, fireplace screen and grate, attached barbecue grills, weather vane, all buHt~in kitchen appliances. built-in Items and electrical service cable, outside television towers and antenna, fencing, gates and landscaping shall be considered a part of Real Estate and also jncludlng the following:------

Each of the above Included items is a fixture that integrally belongs to or is a part of th.e Real Estate. In the event any of the above items are characterized as personal property, such personal property items are not considered a part of the ~eal Estate and shall be transferred with no monetarY value, free and clear of all liens and encumbrances. The following items shall be excluded:

7. OEED. Upon payment of the purchase price, SELLERS shall convey the ~eaf Estate to BUYERS or their assignees, by ""'""::-::~;-;:;.---;=c:::-=-:c:cc. --=-:-==-:--::--;-Deed, free and clear of all liens, restrictions, and el"!cumbran~s except as provided in 1(a) through 1(d). Any general warranties of tiDe shall extend only to the time of acceptance of this offer, with special warranties as to acts of SELLERS continulrig up to time of "!1elivery of the ?eed. 8. TIME IS OF THE ESSENCE. Tim~ is of the essence In this contract 9. CONDITION OF PROPERTY. ·A. . The property as of the dale of this Purchase Agreement fncludlng buildings, grounds, and all Improvements will be preserved by the SELLERS in its present Condition until possession, ordinary wear and tear excepted. Tile SELLERS warrant that the heating, electrical plumbing, and air conditioning systems, well (if app!icable) and all included applianCes will whether subject to ln.spectlon set forth hereinafter or not, be In good working order and condition as of the date of delivery of possession. In determining whether or not the warranted systems are in good working condition and. for the purpose of inspecting the property as outlined in Paragraph 98 (1) of this Purchase Agreement, working condition shall be defined as operating In a manner In which the item was designed to operate. B. The BUYERS must choose one of the following alternatives relative to the condition and quality of the property: 1) 0 By. . . OAM/0 PM on , 20______, the BUYERS may, at their sole expense, have the property inspected by a person or persons of their choice, including but not limited to a qualified home inspector, contractor(s), engineer(s), or other such professlonal(s)~ to determine If there are major deficiencies in the FOLLOWING MAJOR COMPONENTS of the Real ESlate: central heating system, central cooling system, plumbing system, well and weli water (if applicable), electrical·system, roof, wa.lls, ceilings, floors, foundation and basement. SEUERS and BUYERS acknowledge that the property may have imperfect cosmetic conditions that do not affect the working cOndition of the item and are not considered major deficiencies, including, but not limited to, broken seals In windows; minor tears, worn spots. or discoloration of floor coverings, \"Jallpapor, or window treatments; nail holes, scratches, dents, scrapes, or chips In ceilings, walls, floors; and/or surface cracks in driveways or patios. Failure to meet present construction standards and code requirements Is not considered a deficiency in the property unless it is new construction, or unless that failure produces a condition which creates an unreasonable danger o~ risk to the property or fo if:s occupants. By the samo data, BUYERS must notify the SELLERS in writing of any MAJOR deficiencies for which they are requesting remedies. The notification must be accompanied by a copy of a written inspection report from a qualified Inspector identifying the deficiencies. SELLERS shall, within FIVE (5) calendar days after receipt of BUYERS' notlftcatron, notify the BUYERS In writing either that (1) SELLERS agree to remedy th~ deflclencles as requested by BUYERS, in which case this Purchase Agreement as so modified shall be binding on all parties, or (2) SELLERS do not agree to the remedy request in whole or in part and offer a counter pi:Qposal to BUYERS. Upon recelpt of said counter propoSal from SELLERS, the BUYERS shall have FIVE (5} days in which to accept the SELLERS' counter proposal by signing It, or to notify the SELLERS in writing that such steps are not acceptable, in which case, either SELLERS or BUYERS may declare this offer null and void, anc:l any eamest money shall be returned to BUYERS. IN THE ABSENCE OF WRITTEN NOTICE OF ANY DEFICIENCY FROM BUYERS, OR, IF BUYERS FAIL TO RESPOND TO THE SELLERS COUNTER PROPOSAL, WITHIN THE TIME SPECIFIED HEREIN, Ti-llS PROVISION SHALL BE DEEMED WAIVED BY PARTIES AND THIS PURCHASE AGREEMENT SHALL REMAIN IN FUL FORCE AND EFFECT. IF THE SELLERS FAIL TO RESPOND TO THE BUYERS' REMEDY REQUEST WITHIN THE TIME SPECIFIED HEREIN, BUYERS MAY DECLARE THE OFFER NULL AND VOID AND ALL EARNEST MONEY SHALL BE RETURNED. 2) ____ 0 BUYERS acknowledge that they have been advised of their right of property Inspection and have declined to make said lniti;;~!s Inspection. C. The BUYERS must choose one of the following alternatives relative to the presence of radon in the hoine: 1) 0 By . OAM/0 PM on 20__ , the Buyers may, attheirsoleexpense, h·ave the property tested for the presence of radon gas. Such test shall be conducted by an Iowa Certified Radon Specialist Seller agrees to sign documents required for the test to be completed and agrees to cooperate with the specialist in canying ~ut the test Sy the same date, BUYERS must notify SELLER in writing of any radon in excess of ___ pCJ/L. The notification shall be accompanied by a copy of the written radon report. The cost of mitigation, if necessary, shall be negotiated within the timo frames and remedies fn paragraph 9B(1). 2) DBUYERS acknowledge that they have been advised of their right to conduct a radon test and have declined to order Initials said test. D. Septic System to be Inspected and Repaired Oves 0 No~ Not Applicable Iowa Code 4558.172 mandates the inspection of septic systems, unless exempt, pr'1or to the transfer of property. If applicable see the attached Septic System Inspection and Repair Addendum. E. The BUYERS shall be permitted access to the property prior to possession or clOsing, whichever is sooner, in order to detennine that there have been no changes In the condition of the property except those mutually agreed upon and that it Is ready for BUYERS' possession. At the time of closing or possession, whichever occurs sooner, BUYERS will accept property in its present condition without further warranties or guarantees by SELLERS or BROKER concerning the condition of the property. This, however, shall not relieve the SELLERS of any liability for any oondition(s} that is (are) defined as latent defect(s) or any express written warranties contained in this Purchase Agreement or other written agreement between the parties; nor shall this paragraph relieve the SeUers of any liabi!ity for any implied warranty applicable under Iowa law. Buyers' Initials, ______Seller's Initials,______Acknowledge they have read this page. Paga2of4

~ formsimplicity f<>,m>.miKio>lmpi;J.fir>lll)< F. The Inspection of any part of the property not covered In 98(1 )-orthe remedy of any condition not addressed- in 98(1), including but not limited to cosmetic conditions that the BUYERS require ~hall be addressed In Paragraph 27 of this Purchase Agreement. 10. WOOD DESTROYING INSECT INSPECTION. Select (A) or (B) A. Osy D AMID PM on 20___, BUYERS may, at B~RS' expense, have the property Inspected for termites or other wood destroying insects by a licensed Pest lnspe¢or. If active lnfesta11on or damage due to prior Infestation Is discOvered, SELLERS shall have the option of either having the property treated tor Infestation by a HcenSed Pest Exterminator and having any damage repaired to the BUYERS' satisfaction, or declaring this Purchase Agreement void. This provision shall not apply to feilces, trees, shrubs, or out buildings other than garages. BUYERS may accept the property in its existing condition without such treatment or repairs. IF BUYERS ARE OBTAINING VA FINANCING, THEN THE COST OF THE TERMITE INSPECTION SHALL BE BORNE BY THE SELLERS. B. 0BUYERS. acknowledge that they have been advised of their right of a pest inspection and have declined to make said Inspection Initials unless required by lending Institution at which th:ne said inspection would be at BUYERS' eXpense and the BUYER will have the same rights as under paragraph 10A if active infestation or damage d_ue to prior infestation Is discovered. 11. INSURANCE. SELLERS shall beat the risk of loss or damage to the property prior to closing or possession, whichever first occurs. SELLERS agree to maintain existing Insurance and BUYERS may purchase additional Insurance. In the event of substantial damage or destruction prior to closing, this Purchase Agreement shall be null and void, unless otherwise agreed by 1he parties. The property shall be deemed substantially damaged or destroyed if it cannot be restored to its present condition on or before the closing date; provided, however, BuYERS shall have the option to complete the closing and receive insurance proceeds regardless qf the extent of damages. 12. USE OF PURCHASE PRICE. At time of settlement, funds of the purchase price may be used to pay taxes and other liens and to acquire .outstanding interests, If any, of others. · · 13. ABSTRACT AND TITLE. SELLERS, at their expense, shall prompUy obtain an abstract of title to the Real Estate continued through the date of acceptance of this offer, and deliver it to BUYERS for examination. It shall show merchantable title In SELLERS' names in conformity with this Purchase Agreement, Iowa law, and Title Standards of the Iowa State Bar Association. The abstract shall become the property of the BUYERS When the purchase prloe Is paid in fulL SELLERS shall pay the costs of any additional abstracting and title work due to any act or omission of SELLERS, including transfers by or the death of SELLERS or thetr assignees. If, at the time of closing there remain unresolved title objections. the parties agree· to escrow froni the sale proceeds a sufficient amount to protect the BUYERS' inter-ests until said' objections are corrected, allowing a reasonable time for the corrections of said objections; provided, however, that if the commercial mortgage lender of the BUYERS will not make the mortgage funds available with such escrow, the provisions for escrow for title defects shall· not be applicable. 14. JOINT TENANCY IN PROCEEDS AN.D IN REAL ESTATE. If SB...LERS, immediately preceding acceptance of the offer, hol.d title to the Real £;state In joint tenancy with full right of survivorship, and the joint tenancy is not later destroyed by operation of law or by acts of the SELLERS, then the proceeds of this sale. 3nd continuing or recaptured rights of SELLERS in the Real Estate, shall belong to ?ELLERS as joint tenants with full right of survivorship and not as tenants in common; and BUYERS, in the event of the death of either SELLER, agree to pay any balance of the price due SELLERS under this contract to the sutvfving SELLER and to accept a deed from the surviving SELLER consistent with paragraph 7. 15. JOINOER. aY SELLER'S SPOUSE. SELLER'S spouse, if not a Iitle holder immediately preceding acceptance of this offer, execute~ this contract only far the purpose of relinquishing of all rights of dower, homestead and distributive stiare or in compliance with Section 561.13 of the Iowa Code and agrees to execute the deed or real estate contract for this purpose. 16. REMEDIES OF THE PARTIES. A H BUYERS fall to timely perform this contract, SELLERS may forfeit it as provided in the Iowa Code, and all payments made shall be forfeited or, at SELLERS' option, upon Thirty (30) days written notice of infention to accelerate the payment of the entire balance t)ecause of such failure (dlling which thirty days such fa-Ilure Is not corrected) SELLERS may declare the entire balance immediately due and payable. Thereafter this contract may be foreclosed In equity and the COurt may appoint a receiver. B. If SELLERS fail to timely perfonn this contract, BUYERS have the right to have all payments made returned to them. C. BUYERS and SELLERS also are entitled to utilize any and all other remedies or actions at law or In equity available to them and shall be entitled to obtain judgment for costs and attorney fees as permitted by law. D. In the event the BUYERS fail to perform their obligations hereunder and the SELLERS successfuUy forfeit any payments made under this contract, upon receipt by SELLERS, the SELLERS shall pay Broker one-half of the forfeited payment, said one-half not to exceed lhe total commission due to the Broker. In the event the SELLERS fail to perfonn SB-LERS' obligations under this contract when required to do so, SELLERS shall pay to 13roker the Broker's commission in the amount set forth in the SELLERS' Listing Agreement with the SEU.ERS' Broker 17. STATEMENT AS TO UENS. If BUYERS intend to assume or take subject to a lien on the Real Estate, SELLERS shall furnish BUYERS with a written statement prior to closing from the holder of sur:::h lien, showing the correct balance due. 18. APPROVAL OF COURT. If the sale of the Real Estate is subject to Court approval, the fiduciary shall promptly submit this contract for such approval. If this contract is not so approved by the day of 20 either party may declare this contract nu11 and void, a~d all payments made hereunder shall be returned to BUYERS. 19. CONTRACT BINDING ON SUCCESSORS IN INTEREST. lhiS contract shall apply to and bind the successor.s In Interest of the parties. 20. CONSTRUCTION. Words and phrasas shall be construed as ln the singular or plural number, and as masculine, feminine or neuter gender, according to context. 21. SURVEY AND SQUARE FOOTAGE REPRESENTATION. The BUYERS may, within __ days of acceptance of offer, have the property surveyed at their expense. If the survey, certified by a Registered Land Surveyor, sHows any encroachment on said property or if any Improvements lor:::ated on the subject property encroach on lands of others, such ericroachments shall be treated as a title defect. Assuming a representation far square footage has been made, BUYERS understand and agree that said representation is only an approximation of the eXact number of square feet the property contains. The BUYERS have the right to obtain lheir own measurement of square footage. 22. AGENCY DISCLOSURE. The Llsting and Selling Agents/Brokers ars agents of the parties hereto as outlined below, and their fiduciary dutles of loyalty and faithfulness are owed to the party they represent. However, they must treat the other party with honesty and fairness.

Buyers' Initials•------Seller's Initials,______Acknowledge they have read this page. Page 3 of4

~ formsimplicity The SELLERS in thh; transaction are represented by:

------~------{AgentJBrokerage Names)

E-mail: ______-'-- Fax: ______

The BUYERS in this transaction are represented by:

------(Agent/Brokerage Names)

E~mail: Fax:----~------If Agent (including Appointed Agency) and/or Brokerage (Including Consensual Dual Agency) Names are shown as representing both parties, a detailed explanation of representation shall be attached. Further, the BUYERS and SELLERS acknowledge that prior to signing this Purchase Agreement that thelnespective Listing or Sel!ing Agent made a written disclosure of type of repres~ntation being provided. 23. RESIOE:NTIAL _,ROPERTY SELLER DISCLOSURE STATEMENT. 0 The Buyer(s} acknowledge receipt of the Residential Property Seller Disclosure Statement prior to executing this Purchase Agreement A copy of the Residential Property Seller Disclosure Statement is attached to the Purchase Agreement. D Not Applicable 24. NOTICE. Any notice. required under this Purchase Agreement shall be in writing and shall be deemeg effective If to BUYERS when physical delivery Is received by BUYERS or by BUYERS' Agent, and effoot.ive to SELLERS when physical delivery is received by SELLERS or SELLERS' Agent. Physical delivery may be either by personal delivery or upon the date of the posting of said notice posted by Certifi~ Mail. As an alternative to physical da!ivery, any signed document or written notice may be delivered to the respective principal's agent, as set forth In Paragraph 22 herein, in electronic form by facsimile or e-mail. The facsimile or e-mail delivery confinnation shod! constitute notice of delivery. Documents with original signatures shall be provided, by the agent, to their principal.

FQrfueSELLERS: ______~-

Addre~=------

For~eBUYERS: ______~------

Address: ______

25. REPRESENTATIONS. It Is understood that no representations made by the agent in the negotiation of this sale are being relied upon unless incorporateil herein or endorsed in writing. 26. COUNTER PARTS CLAUSE. All partie3 agree to be bound to this contract even if every party does not sign on one original, as long as each copy thai is signed is identical to every other signed copy. · 27. OTHER PROVISIONS.

28. TIME FOR ACCEPTANCE. IF this offer is not accepted by SElLERS on 20 at ( D A.M. D P.M. 0 NOon) It shall become void and all payments sha-~ll-.:bccec:re:::p:-:a:;:id"lo,-o;1h:-:e:-;B;;;Uc;Y'"ER=s00.~.--~ ---~ ------

·-THIS IS A LEGAL, BINDING CONTRACT. IF NOT UNDERSTOOD, SEEK COMPETENT LEGAL ADVICE-· T!"!e undersigned have read and agreed to tho terms and conditions of this- purchase agreement.

DATED:~------·· 20. ______,, at ______(0AM. 0 P.M. 0 Noon).

BUYER {PRINl] BUYER (PRINl]

BUYER (SIGNATURE) BUYER(SIGNATURE)

This offer is accepted.:_------•• 2Q. ______al ______( 0 A.M., 0 P.M.).

SELLER (PRINl] SELLER (PRINT]

SELLER (SIGNATURE} SELLER (SIGNATURE)

For information only. The Seller(s) acknowledge receipt of ths offer--:::-=.,-----:---:-----,.-.,-:-:-- (DATE) (TIME) (INITIALS) Page 4 of 4 Revision Date: 4111 ~ fmmsimplicity APPENDIXF Title Guaranty Commitment SetlalNo. Cwl000553

Commitment for Title Guaranty

The TJtlo Guaranty Divi$oo Q[(he Towil Fins~ Au!hwity, _Weio_l;!~l(rl tbtl _Di_vi$-{Qn_, fo.r ~ W!!W!>bk-.;.~klil~tioo., (;OOlllliWtll i~~ it$-Titk G~®antyCutlfkatq -or CMifiea~ ~~ idcn1ifled in Sclw4ule A, ht mvot oftlw P~ C'lllarnnt(«i namtd in SdtoduleA, asowtwf w frlQft;Si!ig>oo or~ ~e oriJlt.i!MMinthi land ~001 or referrodto in Sclwdule A,. upon Nl-YffloCntofthe prem_iu.nw 3114 ~r_ge; and t:OO'Ipl~~- with 1M! R~!fllmt:onU; all subje~u, tl!4! vrov.WOJ!$ ofScl!il:d-1li~A a,M:B andW.t!LCl CQJt_d-i11QM oftl;isCOO!fl!itm~t.

n~ C'olruni lmllnt sltt~11 be \l-ffirctiw ooly wl!en tlw.lOOtti\'( of tlro- P~

Alllbbility MdubH:vtiQJI ~-tl!i$; QJ.n1JUit.riE!:JrtsAAII e~~-e an9'E_nni@l:;; &ill. (9) m\i!rthla(t.;g~ ttw [iff(!ctive ~u OJWlwfi ttw C"¢rtiftPii\'i rn' Ccttitlcat:lsco.nllnittcd forsliall iuuc, wbidtevtt fiut not tltc fault ortw Oiv~ioo.

IN WJ.TNES!Ii WHEREOF, -tJl<' Title Guaranty Diviiii)ft, MiscausOO lhis O»runitnwnt m be sisnM and smlad:ii~its:Jmm(! by its duly ;l!utl!mi~do-Hl!m; by dircq.Joo ()fit$ 8«1{4, to() t«mne bl!!-dln$ wlw:A "¢ffill1~ffijpt«llty lt$ Difo;:1W, "(jfby af,!lvi.siooPi!aticiJOOt.

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2. Tf~ ~~-l ('I'U3f8ntQq.tJJill-fJ o.r~quircd ~~ klwwli!d,gli! ofsny~f11ct, lilln_, mct!mhr~Q-, :,1dv~ c4im e>r o1h;;!fm$~;Ufer;t!ng -dler than th001-thov.n lnSclwdula 'B IICfC~)r. :find $11:!'111 fail to diocloro Mlfnooto 4!,-q.cxbW.t 1M- Divi$\00 i!!lpr4j\14i£nl by fl1ilur~;~-19i() tlbo;:lO;jll}>i-~_b lmow\qd,gQ. _lf tlll;lp:f~¢ ~Mt~d sll:all disCI OS(! :o-uch knowledge totlw- DM$km, or if t1t,e Divi!ion 0'\loorn·isc- acqujrw oc'll!all:.nowlcda(l-of ~my:>-uehd¢f'ix:,~ lien, t1Wu.nWoran<;lC, ~llfl>~ d;i'!im Qf o~wr mattlr, tl1.; :OMskm at its optioo. lfl;)y amJndScl~<:

J. Li~iliiY oftllil Divl$'\Wnh'S~~Ie:a, ~>r(c) b t~equira orcr~~e: tbeasta1ol)-o_rmte~t orm_Q_rt~~llwreo.neoVCJed by tll~ Olmm\tmol).n_t In nocvtntsW;!IJ such li~;~bUJty-cxi;e\'d 1!1(! antuunt$-Ud.ions s:nd Q:mditil)lW\\fl,d th;:! F.,)lclu~imw from Co't"<:~lm-itted 191' in fa~ oft!~ P~ GuarM1Wedwliiclutftl h¢f($.y bw~tcd by f(!fC.f(lfi(:¢ and ~(!mAd<: a pan QfthisConun1tnwtlt I!>X~t.u o:x~ymodifi:ed hcrd~

4, Tills Commit.m:::nt.\ga -cootnt::tto i~OJtiHlltnmo Ti'illl Gu.lJaJity CCrtit1cat!san6lsoot :an allltmctoftltle or a r~port of tlw oonditlrui oftitle. AJ,lyacti~mvr a~;~ or rl$1~t!J of ootiQJl d~ttl~ ~~d. G'!lamn_1<1~ fllilyi~w or lll<'~Y Wing ~~~ainsttft.e Divi~t 'f!fisins out -oftlw ktahlsoftlP! ti'ilo; to-tlw cstata or lnk'«llitm- tlt(! $t:ltus-of-tJremw~g_e-th:crooocm'"«ll'dby thii: Coonmitn~ntmnstb

THJc GtHU'llJlty

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16 j\__ Title Guaranty Commitment Form Schedule A .>. r>;;l~"'U C:[Tl-F k... IA rti.O.J.X:< ~_1/T(In~"i'f r~~~._;t~~s:·r~; if~,i·;;; ·.:1;·;r1 co:;;i;i·;;;:;;ii

Committnent Nutnbcr~ 0·1000553 Borro\\•!(,YBuyers(s), For Referenco l'llrposes Only: John J. Title and Kri• M. Tide Address~ For Reference Purpos¢.li Only: 8304 Win.,ton Avenue, Urbandale. TA fift\lctive Pate: June 01,2007 at 08:00:00 PM

1. -CerfiOrnN or f'm·UUrntt•s tn he !ssm•d Prtmn:wd fpvrrnqg AmnnuJ FUr• Nnmhm· IA)Hn Numtwr (a) Own,~r f'frtfllrats S220,000.00 (b) 1- &Qtler <)'MtoJ~a!£ $200,000.00 Propoied Ouar.antecd: Bank ofthe West itssucecs:&.ffS- and/or assigns. JolulStou.. lA {e) f 'WdM' Cnti0£aU S2-0~000,00 P:rUJH:tscd (i uarautecd: Bank o-fth~ West its Sl,K;OCSOOf.S Md/nr flSsi:gns~Johnston~ lA 2, The: e.dufe m·lnten~&t ln t11e -Lund dcserihNI or referred tn In tbts Cmnmltn:wnt is afe.e shnJilc {.if uti~•·,. i!!p~ity same)~ FeeSirnple

.3. Title t-o tlie L~tlitc or interest in :mld Land fj ut th-e I•:m~elivi" lbte herrofv,ested In: Joe Titleholder nnd Jane Titkholder Note: The Divl'lion doos not JlUfllQrt to guarantee whether the abcwe pru1iea hold title as joint tenant-; with -full rlghJ.lk (\>unty, Iowa. l'"'l"""d John T.,t By Typc:d 1\'nmc:

TestLawfh1:n i\fmnbcr Nu:m-c Signaturi" afManb.m· 200 E. Orand Ave.~ Suite 350 Des Moines" lA 50309 {1\lutllug A-ddi'CS!!) (Cliy~ State} (ZIJ>)

17 Commitment Form Schedule B

Commitment Number: C~I000553

L SClledute B ofthe Certlficn.teQr Certiticates to be issued will contain the folf-o,ving five Standard Exceptions !ltld c;~ther matter.!~ tUned belo-w -as- exceptions 6~ etc,t unless th;;: $atUC are disposed of to thi!! $.atlsfaction of th~ Divis: ion:

I .. Any right or claim ofn party in possession not shown by the Publte Reoord$.

2. Notwithstandi.llg tbe ~rantee_ing clauses of this GuaraiJty, the Div~Ion ck;es nQt a~rantee ngaiwt any encrrnu;hn-.ent; ei\ClUl\btMCe, violation.. varia_tion, or ad\•erse ci'rcumstanoe af.lbctfng lhe title that woukl be disclosed by an accurate mtd complete land survey

J, Any e

4. My liett or :right to a Uon, for s.:enrkcs, labor or material heretofore or hereafter furni~d. ]J_nposed. by law a1ld oot shown by the Public Reoor&.

5 .. 'Notwitll.standi11g the gllilrmlte.eins clauses ofthis Guaranty. the Dl ~rision doe.

6. Detects, iicn.,;;, e.t~umbrrutees~ adverse cW.in"t& or other mattet!h if any~ created, fust appearing In tl~ Public Records or attaching :suh:sequent to the Effective Date but prior to the date the Proposed Guaranteed acquires for value of ~ thee.~tatc or i_ntQ!'e$ or Mortgage tlwroon cover~ by this Commiunent 7. Payment of the fuH oomideratiou to. or for the aocountof,_ the grantors Qr mortg_ugors.

8. 111~ lien ofth~ tax¢-S f(»'the July 1_. 2006 -JuneJQ, 2007 ti{!Ca_l year and th~eafte~·;. with the tirst half due on Seil!emher t, 2007 (delinquent :after September 30~ 2001) and the scoo-nd l~lf due Qfi M1U'Ch 1. 200-8 {de-linquent nfter J14!l:rc}J .Jl~ 201lS), N

9-.l'.·ior!gage.s~ l'e.!ltriction.-<~. eru;ements or any other lien or eucumbrru:we on or defect in the Title to the property a~ followoS:

a) Mortgage in favort)f(;entraf Stnte Uank ®ted April I. 2-00~_. filed April 41 2005 in .Book23400, at P.age 55,. to secure ~u indebtedness of$34-tOOO.OO b)!Yiorlgage In favor of_U.S.&nk,NA.datedAprill~2005~filed Aprii 4, 200$ ln 'OQ.ok23400,at FageS9, tn~ecure -au ludcbrednea!! of;S U,OOCLOO.

d) FhH(s) .m~ In th~ Polk County, IQ\\'{1~ Recorder's Oftlec. hlctudh~g easement$. building setback&. re.stric-tiQru;,. re.servatk;-_ns, an4 notatk»w.

18 APPENDIXG Title Guaranty Certificate Lender Form ·Title Guaranty Certificate

Any)lm:li;~of claltn and any -otbi!r Qotl~ or lj~t~ntl):l\t in wrftll!g rtqulWd to be ji1Yt!U tlac D:Wiii(Jll u:mllll' tlils:Ct!rtifkat~ Ull!S-1 bl,l ~'\-X'D to the Dlvlslmt at tfw i!.ddr(!5.~durwn lu S~ion17"Qftlu! CmuJitlQns. Cuvm·cd Risks SUBJECT TO THEBXCLUSIONS FROM COVBRAGE, TilE!: EXCEPT_IONS FltOM COVEMGECONTATNEPIN OC'HBPUU~ B, Al\'P TIIBtONPlTIONS, tltil Titk! GU4rantYPivi~km oft!!ioo''), &11aJOOW~, a:;: Qf Dan! -MCC11ifieaM:m\IICeontlw T1dc-. TltisCovcrod Risk irlclUOObut is:notlimite(ltQ~;"t'l'iolfll"l!?ll",gal11:'!1li'$< from: {;fl) A~f(!~ in '!11i!da transfer u:r.!~W:ya!tCc; (iii) a dc.,.··u:m-cnt l!fff>.-"1ing Title not ~ly Cf!:!~ :e>;rolrted, wlf.l~~ scal.;d, aci:Jwv;.'kdg«l, l'LOWizod ordclivtroi~ (jv) failure-to petfrum tl!4Waati neae&S:ar.yto crestc a dr:o.ttncnt byc!ll:ctronlc moons autllori:rod by taw; (v) :;t dt'Cutcd umfura fal>:Hied, m:.pirodor~>U~·~ invalid JXIVi'eft>f f!l.t9n~y; t\i) a (!ioqjml®t notp~dyfiled, r«OJ4«1 or-b:~,d!!x;«t in~ Pllblic R«lo:rdii~bulin.g ftriluro topt~lfOffilU~ca~;b: by dret«mk fl"ealllii autlt«hoodby law; o-r {Vii) a (tl!f(!t:tiv'!'!ju<):ic~l Qff){ifnfnh~trE!tlw pmwding. (b) Tll'I!1J;;!JJ;Of N~l cM-!'!f-q: ~~ w- ~mUlti irntm«l ootl~ Title by a gQl<'tJ:~~~ au'!hor!ty~-w ~}\'lb\e., blJ.ttmpai!.t {c) AJ~YCl!Cf~llf!_e_rn, CJ!OOI\~ttOC-, viohtkm:, Yf1l~ _Ulwi, i~rcoordOO ilk tl~C- Pllhli~< fulCtiQe oftlw tn~n:envmt~ction, dts¢tlbing MY part of11M Lll,ld, isNo.1f~ in tlto<-P11blie fWoords, tmt -only hltn-e.mwn.t of~ C!lfor~®~rn. mfcn-cd tolnthatnotka 1. Tile-~~"" Qftlwr1sl!_~ of l;lmhwntdQmlllilt if$11ol:iw oftJK!> .uerd)e, ~Cf:ibill$ M_Y jwt of~Kl_Lol!nd, isrooonlOO ill tlto Pill> H.:: 'R>loords\ 11. Any ~ins: by a p-enu1_wnta1 ~ U!G!t ~ ~r~d~nd is b-indinson t1V!rigllts (l.ffi pwcJ!:$~ WfY"t!!JW witho~t.Knowkldg:~. 9. TJ~ invalidity mw~oeniOf~~bilityoftlwlknoftlw \mmtlkcl Mu~~-v,pont.l~ Titllh Thk Cffi."(l{CdRiri:: in.elt!:diesl>trt~&f\Ot lim.itOOto t:Ov-ero_ge B:!!f!iJWt IW$ fromanyoftJw. fuUuwjngin:tpairb~gt:® :liei'!: oftlw C'--rttaftln~t'd. M111tg.a1.-e: (a) fro.g'CJY, fraud, u~-~nt1~c, dq:r~ i!I~1~t'I;'fftloo ~«!dMOtW!sa upo:ntloo Titk-QWf any oiJoor liM(lf m.cumhlaltec. (llXOfrJt.'Il! N(k 1..:1 Ol!Ul,l

21 1L Til~ lad; ofpri-oJityofllw lhmoftOO G\wantoedMort~~gc u~~ TJ!.kl: (a) as; troattlly fuT each and C'l·uy ad'f211Cq ofproceeds: of tOO l031l f«ttr:N Da~ ofCcrtificm; Qf (H) t»n~ct«i f\)1'_; cmnlf!l!~d, w w.tltimKd ~r Dsto of Certitka~ iftlw ooJ~® ~ finanecd, htwl!:~ COOi'ltmctkm oroomplct.cd a1 O.UofC~tiiiColte, 12. Tho:! invalklity or1uwnfurcesbility of an.y-am1,g:nmmt ofthe Ct'UUlill1el!d Mortgage, provided ttKl a~»ig;nment i~~Jwm.n in Schedule A, ortlw ft~iluro of dill as;s:ignmcntil@WJiill Sclwdul~-A 1Q vQ>."tti{lll 1.1- the Gu$rm~twrtSl!&~llpon t1w Tille~ (a) r~lting from the-IM)i~<:c in wltolc-orinp~ut, or fiomli coll'ff. ortkr sm>vidin:g1in'!lhWMltive Je_mOOy, of any tfflnSf« or all O'f3llYp31tffitllt! tille to .or any intt:1ll-st in the LandQCcu.rrin;g prior t(Jtlw ~ctiOOllre.llting. llle-llllll ofthe- Quaranto:d Ml)t1gaJ!,e ~till${! tl~ t»"lw ili~fil:-r ~ti'IIJ.Wdfl frau4u1«it orj)Nft!Jentia:l t{ll.mf« ~ f@tal ~~Y. $.61@ inrolvcflCY, or s.imjl-41" cf\'di'l.m$• .cl$1\tf J;m·~ DT (b) !>«~ thcG1wa:ntwd M~ge c~~t~ a~cfcrt;ntial t_f$f!$fef ~r f¢.1!~1 OOolcrupty, $tate ins"Qh"i!n~x. ar ~i!ar cw-dill?-rs'risl\li lmot'$ byJe~ Qfthe fi!iJQ:rCofM~ofd.lngin 'dw NblicReoord$: (i) ~OOtlm-tJy,or (H) inimp.;i.Jt notic~"fiU>i1~We~ tq.;l!pu:rel~f fflo¥ "'~~Qo! t1> ~jml~ntQf )fl;"fl o;"Ndi~, 14. AJ~yd<):(i!(-1 in qrJkn 6f(!1WUml>fill~ll ontl~ Titic-'Qr o*cr ml'llt~ri~ludl;!d in Cov;ffl'd Risl:s 1 tltim!g'h t3 tl!81l~ lx'cn croat¢d 01 attacllt'dorl~ttsbtll:U fikdor ttcrutfud :in -tl~e Public Ro-oordssub.roqllenttoD,ll.t~ i"lfCerttfkfita :!lndprlor tro tht-ft!oordin;g of-tlli! 0®!-antceilM"mtgaWJ in tl~e Public Recorda T.l~e OJvNC\1! wHl alwpay lllq-~ attQnw;~'ffNS, SJidi!X})CI)l!q,s i.l14llitcd i.n:d:c(~ o.fany m.atti11'-~Jtoo!}:;tjl}li~tb; thii Ceitifie¥~1c, but ~nly Wtlw ~tentl)JOVid¢. itJfM CWI.J:~ie)l\,1:, In Wi'blt!ss Wh«ooc; 111~ Titk Ollafa111;Y :Olvl$)n 11$S: <"41.\tWrlthis Ct!rtificate lOhll $-ig®d ~14 seakldln -its M"!ll~ by its .duly 3ltthwi'l<'d()ffit:er, by di~~i

Titlt! Gual'1tnfy Dlvlsltm

Ry Xavd \.; OJ. Ll)yd W, OJ!:lf!, I'Hrcct1lr

22 r<:.xchulons Jrum Caver .age

11w WllowingmaUI.'.rliarc e:qm:s:sly oexcludcd from die o?ov;;:rn;ge ofill!s Certlfic.r~~ @1\dtl~ Division will twlfl@YlQ$S Of dal».l£C, .P(f.i$, ~· fcts, Qr C>rtl®of any lmpnwcmi!Uf cn!~d M tltt' Und; (iii) m.e sub4iviskln ()fJ!I!\4~ m- (lv) ~vlrf>luncau.al prmcctllm-; o-r the off(cl -of t(llyv!oJM[oo()ftlt l~·s, cndl~s orgQWfl~WUttal rcglllatiOO$, Thb; E>:clusloo !(a) ~not lt'KNiltYor limit 41~ CQVet:age prqv~4«1 nnror(l([ Ri~ll:: S. {b) My SO\'"'t!f~l~lillcprtVi'Cf. Thhi -,ED::ci\ISitm-l{b) .¢ol:s®ttnodlfY ol).f\itnitthc ~we~ prQv~d\Wklr Cnvef(d RWt-6. 2. Ri;&li'l$-ofl!mill!l~, adv~ W!Wl;!:r, th~ ~ nm mo-Ji!Yor limlt -illl:l t'Q'\''Im!S~ piQ'\'idOO uru!cr CQv.1JcdRkt II, l3 or t4); or (!:!) re.wlting in10ffOf dama.gl:! tl13twoul:l not have been Slli1ahu:d iftltc MrtlutM&kmdin:gl:rtW. 6. Atlychdm_, by~oo oft1to •mlooof f~;):N\ ~'kruptty, ~11: inrolvqw.;;y, qrsimii~W crOOi~' risll-Wl~w$_, tl~ tl~t.r~t_km (f~~lna;11~ ~~~~of-the Gt!anmlec4 Mortgag:(!, t\': (fl) !I_ fmtAA!-ktntcoo-vq~4! ()f ffll_\Ml1.oott:ran,~or, or (b) a plilft\f>mtial-tr.n~Wr foranyroom1 ootsWt!-d in Covw-00 Risk l;l{b) Qftlti!iC~rtifi~. 1_ Any Ul!n outM Titl-e formal elita~ UIX!l$OUiiiSirs:smentsim~by so~JJ.RUllltal-au!l!Olity$J!dCf«t1i:d:()I-3tbdlhl:Slxltw!OO-nlliW-of ('".l}rtifiQl1illi!RdtJ!t! ~-m-ro~di!\g Qf1'!w-0W!f:;~n-t~ M@S:~in the Pu"H~R-q.c(l.Jds., Tbis B>;t;1usion&esoot n¥Xll!Y QfHmjtth<:- oow,re,s4 pwvkWd ~f OwerW R !:* 1!{b).

C-tmditlam

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Titl-e Guurnnty

ADivi;$il>noftlw towaFinMC~ Autl~rity :Jl00.4J~··'I2JO:

201$ f'mmdAli'emw D® MoiM$, !nwa $0ll2- wv;·w.IQwoll:Fi~~AutJ.ofity.~t>V

26 J\__ Lender Form Schedule A Title Guaranty !o. 11-..UX>>J <:r !H lOo'M t .N~!O." ~UTIIr.~'f{ i~.:;:;;~r~·;g··i;;·iio·;;:~ -;i;;,,J" c~·.v;;;i;;·;;,:;;. Certificate No.: lr.I000553 Lo;mNo.: 789456123

Amount of Coverage~

1~ 1\'umc ufGuat·nnleed: Eankofthe West its suc:oo:~sorsattdlorassigtUl, Johnston, IA 2. The estate m· tntcl'CSt tn the Lnnd thnt I!! i!ntumbet·cd by the Gum·antced M.m1guge fss fee stmple ('lfotl.et\ !lpc-elty snmc}: Fee Simple 3. Title ls vested in: John J. Title nnd Krt;; M. Tftle. hu..;;OOnd and wife~ -as joint tenants w.lth full right$ ofsurvivorship and not U..'J tenant'! .in common. 4~ Tit.c iiu.nt'IUik'Cd Mortgage-,. and ihl-assignme.nts~ if any, me deserHwd ns -ronnws: Mortgnge in tl~e amount ofSJ3S,OOO.OO dated Juoo lO, 2001, tiled June 10,2007, in Book 23400, at Pa;go 456 of tile l'olk County, Iowa, Recorder's Offire. given by John J. Thle and Kris M. Title, hu.lmnd nnd wlfe, to !lank of rho w.,.t. 5, The Lsud t•.cfl!l't'ed toln thhl CerUJkate h d~cdbed as fuUows: Lot2f, in Northv.

Test Lu.w l'inn !'\lember Name Sfgnatul'C of Mem!)d' 200 E, Orand Ave,_,_ Suite 350 Des Moines, lA 50309 (Mnlllng Add1•ess) (Zip)

27 Lender Form Schedule B

Certificate Number: L-1(}(){)553

Exc_ept-tons _Fr-om Covet·age

Schedule B- Part I 11lis Certif~eate does not guarantee against to_;;s ot 'llunage (and the Divl.sion wm notpny C%"1:SI attomeys' fees- or expell.~C$) that ari3e by r®.Son of:

I. The iien of the taxel! (Qr the July ls 2006 M ]l;li"W 30. 200111scat yeur und t~ftcr. with the firm- hnttdue on Se!>tember I, 2007 (dolillque!lt ntler September 30, 2007) and the seoond halfdue on March I, 200R (delinquentatler Mnrch31~200S), None nnw due and pay!!ble.

2. Ordimuwcs.and regulatio_I\S fbr the City ofUrbnndale and County of Polk, row a:.

3. Piat(s) filed in the Polk Ci!unty~ lowo:, Reeorder's Oft1oo, tuctuding ati easement~ buUdlng setbncks1 restricli~ reservations a:nd notations,

4-. Declnration.~~ cov-enants, rc.stric;:tionsf ¢ll.:jementst reservatk>tUi, right$ and optkms 11:1-ed of record in Polk CouutyJ Town; Reoor®r's Otlice,

5. Uti1ity En~n-.en_t in fllVQf Q.t'MidAnlericafi Enttgy i1Wd July I. 2002 in Book 2249il, -at Jl.nge 245,

6. RC$trictive Covenants_fi~ Fehruazy 5-,2-000 ln D-ook lZ(}();I),at Page 234,_and ns amen,

1. 1-lortgagc in favor of Central Sta_te Dank dated April If 2005, filed Ap-ril4~ 100$ in Book 23400. at Page .55, to ~,recure an itldt»tedne..<~S Qf$34.000.00

8. Niort-guge in favor ofU"'"· B-ank, N:A. dated Aprit 1, 2005~ ftted Aprit 4~ 2005 in Book 23400;-at P4lge 89, to secure -nn ind<,ibt¢d!lt;:SS ofS-11,000.00.

Schedule B-Part li l:n addition to the matters set -fOrth in Prut r of this Schedule~ the titre is subjectto the followlng tnattei'lJ and the Div~ion guarilnt«:s ~gninst IOO$ or damage sustained hl the C\'oent that they are not subofdit(atc tQ the lien ofthe -Guaranteed Mortgage;

Jvkml}!lg.e in the amount ofS~~o.ooo,oo dated Ju:t;W; 10, 2007, filed J-Ufle 10,. 20071 to Book 23400, at P~e 465 of the 1\ltk County_~ lt!wa.~ R~order'g Office, given by John 1. tit1emld Krfs M. Title~ hW~band and wif~ tQ Batlk of the West. End ot' Schedule B,. P!li1'S [and 11.

28 Signature nrMember·

Appendix H

Title Opinion Sample

ATTORNEYS Robert E. Konchar Eric W. Lam Kathleen A. Kleiman1 Jacob R. Koller Charles J. Krogmeier COUNSEL RETIRED Darrel A. Morf David W. Kubicek Thomas D. Wolle Brian J. Fagan Laura E. Seaton Larry G. Gutz2 William A. Bergman J. Scott Bogguss Matthew J. Brandes Paul P. Morf Abbe M. Stensland Chad D. Brakhahn Richard G. Hileman, Jr. James E. Shipman Michael McDonough9 Philip A. Burian1 Kyle W. Wilcox6 Lisa A. Stephenson REGISTERED PATENT Stephen J. Holtman2 James M. Peters Christine L. Conover Jeffrey A. Stone Travis M. Cavanaugh OF COUNSEL ATTORNEYS Iris E. Muchmore Mark H. Ogden David J. Zylstra3,4 Matthew J. Hektoen1 Allison R. Slager Stephen C. Nelson Gregory G. Williams Philip D. Brooks Mark A. Roberts Thomas N. DeBoom Christopher J. Voci5,7, 10 Jeffrey K. Rosencrants James R. Snyder Christopher J. Voci5,7,10 James A. Gerk Chad M. VonKampen Jason M. Steffens Dawn M. Gibson Carrie L. Thompson Roger W. Stone Gregory G. Williams Mark J. Herzberger Susan H. Willey8 Kevin J. Visser Nicolas Abou‐Assaly Matthew J. Adam Carrie L. Thompson Randal J. Scholer Allison M. Heffern Robert S. Hatala Travis J. Schroeder William S. Vernon Lynn W. Hartman Amanda M. D’Amico Paul D. Gamez

Writer’s E‐mail: [email protected] Reply to Cedar Rapids office

December 11, 2012

INSERT CLIENT ADDRESS

RE: Preliminary Title Opinion Property Address: ______Abstract No. 15376

Dear Sir or Madam:

I have examined the abstract of title for the real estate described as:

Parcels C and E, Part of the SW ¼ of the NW ¼ of Section 29, T88N, R4W of the Fifth P.M., Delaware County, Iowa according to the plat recorded in Book 7 Plats, Page 43; also that real estate lying generally north of Parcel E, running to the water front of Lake Delhi and then at right angles extending to the middle of Lake Delhi; and also that real estate lying generally North and West of Parcel C, running to the water front of Lake Delhi and then at right angles extending to the middle of Lake Delhi

as last certified by Delaware County Abstract Company under the date of December 3, 2012 at 8:00 a.m. The abstract of title consists of two parts with Part I containing entries I through 191 and Part II containing entries 192 through 247.

TITLE

I find legal title to the real estate to be in:

______

under a Court Office Deed shown at entry 211 filed September 13, 2001 in Book 2001, Page 3302 in the records of the Delaware County, Iowa Recorder.

Legal title to the real estate is subject to the following limitations:

www.simmonsperrine.com  115 Third Street SE, Suite 1200, Cedar Rapids, Iowa 52401 ● Telephone 319 366‐7641 ● Fax 319 366‐1917  City Center Square, 1100 ‐ 5th Street, Suite 205, Coralville, Iowa 52241 ● Telephone 319 354‐1019 ● Fax 319 354‐1760 Also licensed to practice in: 1 Illinois 2 Wisconsin 3 Missouri 4 Kansas 5 New York 6 Minnesota 7 Michigan 8 California 9 Nebraska 10 Texas

Simmons Perrine Moyer Bergman PLC October 27, 2013 Page 2

DESCRIPTION

1. Entry 185 shows a Plat of Survey for Parcel C, Parcel D and Parcel E filed September 17, 1993 in Book 7, Plats, Page 43 of the records of the Delaware County, Iowa Recorder. Entry 194 shows a Plat of Survey filed December 14, 1993 in Book 7, Plats, Page 57 of the records of the Delaware County, Iowa Recorder. Copies of both Plats of Survey have been attached for your reference.

MORTGAGES

2. Entry 243 shows an Open‐End Mortgage by Peck Excavating Corporation to Community Savings Bank filed October 30, 2006 in Book 2006, Page 3865 of the records of the Delaware County, Iowa Recorder. The Mortgage secures credit in the amount of $350,000.00, contains a due on transfer clause and other provisions affecting the rights of the parties. Arrangements should be made for the release of this mortgage prior to closing.

EASEMENTS

3. Entry 9 shows a Warranty Deed by the then titleholders of the “lake bed” to Interstate Power Company, which Warranty Deed reserved to the grantors thereof the “perpetual use of the premises conveyed, which is not overflowed by the construction and maintenance of a dam by the grantee, its successors or assigns”. This “perpetual use” right is now owned by the Rocky Nook Association, Inc. pursuant to a Real Estate Contract shown at entry 205 recorded May 24, 2000 in Book 2000, Page 1566 in the records of the Delaware County, Iowa Recorder.

4. Entry 14 shows an Easement Indenture to Interstate Power Company filed February 11, 1927 in Book 59, L.D., Page 583‐584 of the records of the Delaware County, Iowa Recorder. A copy is attached for your reference.

5. Entry 15 shows an Easement Indenture to Interstate Power Company filed February 11, 1927 in Book 59, L.D., Page 584‐585 of the records of the Delaware County, Iowa Recorder. A copy is attached for your reference.

6. Entry 30 shows an Easement for Public Highway to County of Delaware filed June 2, 1964 in Book 84, L.D. Page 25 of the records of the Delaware County, Iowa Recorder. A copy is attached for your reference.

7. Entry 35 shows a Plat showing a road easement filed August 25, 1969 in Book 2, Plats, Page 177 of the records of the Delaware County, Iowa Recorder.

8. Entry 202 shows a Quiet Title Action in Case No. EQCV 3556 First v. Maxfield in which it was established by order of the Court that Clifford K. First has access an Easement across Parcel C to the then‐existing 3 dock spaces on Parcel E and to his docks west of Parcel E.

WELL AGREEMENT

9. Entry 188 shows a Water Access and Use Agreement filed September 21, 1993 in Book 4, Misc. Page 98 of the records of the Delaware County, Iowa Recorder. A copy is attached for your reference. While not a replacement for your thorough review of this document, I draw particular attention to Section 5, which section sets forth certain access rights and docking

Simmons Perrine Moyer Bergman PLC October 27, 2013 Page 3

privileges for the owner of Parcel D of the SW ¼ NW ¼ adjacent to the real estate under examination.

10. Entry 213 shows a Well Agreement filed October 24, 2001 in Book 2001, Page 3810 of the records of the Delaware County, Iowa Recorder. A copy is attached for your reference.

MISCELLANEOUS

11. Entries 223, 226 and 228 show Quiet Title Case No. EQCV005477 wherein it was decreed by the Delaware County District Court that the Rocky Nook Association adversely possessed a portion of the embankment adjacent to the Lake Delhi Dam structure. Copies of these entries are attached for your reference.

12. Entry 246 shows Delaware County Ordinance #34 Floodplain Management Ordinance adopted September 13, 2010 by the Delaware County Board of Supervisors and filed December 13, 2010 in Book 2010, Page 4030, and re‐recorded December 23, 2010 in Book 2010, Page 4191, which provides for flood hazard areas of Delaware County, Iowa and provisions applying to said land.

13. You should confirm that your intended use of the real estate conforms with the current zoning ordinances of the Town of Delhi of Delaware County, Iowa.

14. You should confirm that there are no matters affecting title from December 3, 2012 at 5:00 p.m. up to the date and hour of the closing.

TAXES

15. Entry 247 states the all taxes are paid, except as hereinafter shown:

Real Estate: Fiscal 2011‐2012 payable 2012‐2013 ½ paid balance $518.00; Personal: None Special Assessments: None

* Special Assessments only shown if available on the Iowa State County Treasurer’s Association website; refer to the Delaware County Treasurer for information regarding ten year or other multi‐year special assessments, including total payments due since those amounts are unavailable on the ISCTA website.

GENERAL

This opinion is expressly limited to matters shown in the abstract covering the period up to the date of certification. No opinion is expressed as to matters not shown in the abstract which might affect title to the real estate, among which are the following:

a Mechanics’ liens for services rendered or materials furnished on the premises since liens need not be filed until 90 days after the completion of the work or the materials have been furnished; b rights of persons in possession; c all public assessments ordered but which have not become a matter of record in the county courthouse;

Simmons Perrine Moyer Bergman PLC October 27, 2013 Page 4

d forged or fraudulent contracts, deeds or other instruments affecting title; e any transfers, the substance and subject of which may be attacked as a fraudulent conveyance within the meaning of the Federal Bankruptcy Code or Iowa law; f any defects of title which may be revealed by an accurate survey; g any state of facts which might be revealed by physical inspection or soil test of the property, including but not limited to diseased trees, location of driveways, easements, fences, hedges, drainage ditches, and an encroachment of buildings which may have set the boundary lines of the property; h zoning or other ordinances of the municipality or county; i any flood plain regulations, encroachment limits or flood plain zoning as established by the Iowa Natural Resources Council; j any security interests in fixtures attached to the real estate of which notice may be given by a financing statement that has not been filed of record; k the presence of hazardous substances, pollutants, contaminants, solid wastes, hazardous wastes, and other environmentally regulated activities, including those substances defined to be hazardous in Chapter 42 of the United States Code, Section 960114 and Chapter 455B of the Iowa Code, which could require a purchaser, owner or lender to incur liability or remedial actions or other clean‐up; and l any delinquent sewer, water and garbage fees that may be assessed by various cities.

You are advised to inform yourself of these matters by independent investigation.

You should determine whether any solid waste, hazardous substances, pollutants, above or below ground storage tanks, drainage wells, water wells, land fill sites or other environmentally regulated conditions exist on the property. Such conditions are not ordinarily shown in the abstract, but they may result in injunctions, fines, required clean‐up, or other remedial action under federal, state, or local laws. These laws may impose liens against the property and personal liability against the owner, even though the owner did nothing to create the condition, and acquired the property without knowing about it.

You may purchase additional protection of your interest in the real estate through an owner’s or lender’s title guaranty certificate issued by the Title Guaranty Division of the Iowa Finance Authority and purchased through our firm. A Title Guaranty Certificate provides certain protection of your interest in the property which exceeds the protection available through this opinion. If you are interested in such a Certificate or have questions concerning such Certificates, please contact me.

You are advised that if the real estate uses a sewage disposal system, you may be subject to Iowa Department of Natural Resources rules. These rules typically require all such systems be inspected for compliance upon a transfer of ownership. You should determine for yourself if the proposed real estate transfer is subject to these requirements. If so, you should be certain they are met, since failure to meet them may prevent the recording of the deed or contract.

Simmons Perrine Moyer Bergman PLC October 27, 2013 Page 5

You should confirm with the abstracter prior to closing that no additional matters, liens or encumbrances have been recorded or filed since the date of the last extension that would affect title to the property.

Respectfully submitted,

SIMMONS PERRINE MOYER BERGMAN, PLC

Matthew J. Hektoen Iowa Title Guaranty Member #10102

MHT:gl:encl.

Appendix I

Warranty Deed Package

Prepared by/Return to: Matthew J. Hektoen, Simmons Perrine Moyer Bergman PLC, 115 Third St. SE, Suite 1200, Cedar Rapids, IA 52401, PHONE (319) 366-7641 FAX (319) 366-1917

Address tax statement to: ______

WARRANTY DEED

For the consideration of One Dollar ($1.00) and other valuable consideration, ______, LLC, an Iowa limited liability company, does hereby transfer and convey to ______, LLC, an Iowa limited liability company, the following described real estate situated in Linn County, Iowa:

______, subject to covenants, restrictions and easements of record

Grantor is a manager-managed LLC, this conveyance is made in the ordinary course of business and the undersigned has full authority to execute this Warranty Deed. Grantor does hereby covenant with grantee, and successors in interest, that grantor holds the real estate by title in fee simple; that grantor has the good and lawful authority to sell and convey the real estate; that the real estate is free and clear of all liens and encumbrances except as may be above stated; and grantor covenants to warrant and defend the real estate against the lawful claims of all persons except as may be above stated and except as to any liens or encumbrances created or suffered to be created by the acts or defaults of the Grantee.

Words and phrases herein, including acknowledgment hereof, shall be construed as in the singular or plural number, and as masculine or feminine gender, according to the context.

Dated this _____ day of October, 2013.

______, LLC, an Iowa limited liability company

______, Manager STATE OF IOWA, LINN COUNTY ss:

This instrument was acknowledged before me on this _____ day of October, 2013 by ______, as Manager of ______, LLC, an Iowa limited liability company.

Notary Public in and for said State My Commission Expires:______

20132013 NutsNuts && BoltsBolts SeminarSeminar CoralvilleCoralville

TRANSACTIONAL TRACK Estate Planning

2:45 pm.-3:45 p.m.

Presented by Janice Kerkove Bradley & Riley 2007 First Ave. SE PO Box 2804 Cedar Rapids, IA 52406 Phone: 319-861-8763

Wednesday,Wednesday, OctoberOctober 30,30, 20132013 NUTS & BOLTS OF ESTATE PLANNING

Janice J. Kerkove October 30, 2013 [email protected]

• Last Will & Testament • Revocable Trust (optional) • Asset Titling • Beneficiary Designations • Financial Power of Attorney • Medical Power of Attorney • Living Will • Declaration re: Last Remains

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com CREATE A GOOD DATA SHEET

• Personal information for clients & their children – Identify any beneficiaries with special issues – Identify children vs. step-children

• Financial information – How is the asset titled? – Is there a beneficiary designation?

• Identify who is to fill various fiduciary roles

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com CREATE A GOOD DATA SHEET

• Any obligations under a prenuptial agreement? • Any obligations under a dissolution decree? • Any significant future inheritances? • Is there genetic reproductive materials in storage? • Do they want to give someone control over their digital assets?

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FEDERAL ESTATE TAX ISSUES

• Internal Revenue Code §§2001 – 2801

• Federal estate taxes based on value of estate

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FEDERAL ESTATE TAX ISSUES

• Federal estate tax exemption currently $5.25 million (2013) for each taxpayer, future years indexed for inflation • Federal estate tax exemption not used at first death can be transferred to surviving spouse – Requires timely filing of Federal 706 Estate Tax Return • Large gifts made during lifetime decrease the federal estate tax exemption available at death

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com IOWA INHERITANCE TAX ISSUES

• Iowa Code Chapter 450

• Taxes based on the relationship between decedent & recipient & the value of Iowa assets received by the recipient

• Gross estates of less than $25,000 exempt from Iowa inheritance taxes

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com IOWA INHERITANCE TAX ISSUES

• Lineal descendants & lineal ascendants exempt • Brothers, sister, daughter-in-law, son-in-law subject to tax starting at 5% and ending at 10% marginal rate • Nieces, nephews, other relatives, friends subject to tax starting at 10% and ending at 15% marginal rate • Step-children are exempt, step-grandchildren are not

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com IOWA INHERITANCE TAX ISSUES?

• Certain assets are exempt from inheritance tax – Life insurance paid to a named beneficiary (not estate) – IRA & qualified plan assets paid to a named beneficiary who is subject to income tax – Non-Iowa assets

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com IOWA RESIDENT WITH REAL ESTATE HOLDINGS IN OTHER STATES?

• Fifteen states have decoupled from federal estate tax system – In those states, the state death tax exemption is fixed at an amount that is lower than current federal estate tax exemption – Minnesota, Illinois, Indiana, New York are a few of the states that have decoupled

• Iowa and five other states have inheritance taxes

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHAT TYPE OF DOCUMENT?

• Should client’s primary method of distributing assets be a Will or Revocable Trust?

• Will administration governed by Iowa Probate Code 633

• Trust administration governed by Iowa Trust Code 633A

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WILL REVOCABLE TRUST

• Cheaper to draft • More expensive to draft & fund • Probate is required • No probate required if all assets in – Code establishes 2% Atty/Exec Fees trust or have beneficiary designation – Court Costs at time of grantor’s death • Will & Asset information part of – Code establishes reasonable fee for public record Atty/Exec – No Court Costs – Bad for businesses that may need to be sold as part of the proceeding • Maintains privacy of affairs • Does not take effect until death • Easier transition for management of – Need separate POA to deal with affairs if client becomes incapacitated incompetency issues – Easier to obtain involuntary – Difficult to obtain involuntary accounting from Trustee than POA accounting from POA • Court involvement can be invoked if • Court oversees process necessary • Extensive case law as precedent • Limited case law as precedent • Still need a Will

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WILL VS. REVOCABLE TRUST

• Cost Benefit Analysis – Will the increased cost of drafting & funding a trust be justified by the decreased costs of administration after the client’s death? • Probate required in every state client has real estate – Timeshares are sometimes treated as real estate interest – Mineral interests (oil/gas) usually treated as real estate interest

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com PROVISIONS OF LW&T

• Revoke prior Wills • Identify beneficiaries • Outline plan of distribution of assets • Outline plan for payment of administration expenses & taxes • Designate fiduciaries • Draft for proper execution of the document

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com IDENTIFY BENEFICIARIES

• List next of kin • Does the client want the list of beneficiaries to include beneficiaries born after execution? • Does the client want the list of beneficiaries to include adopted children? • Does the client want to exclude any beneficiaries? – If yes, make that clear in the document

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com OUTLINE PLAN OF DISTRIBUTION

• Tangible personal property – Include option to leave separate writing – Include a plan for resolving disputes – Authorize Executor to donate/destroy items • Special bequests – Charities – any limitations on how used? – Godchild, Special Friends, Grandchildren – Digital assets – Genetic materials in storage

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com OUTLINE PLAN OF DISTRIBUTION – RESIDUARY ESTATE IF SURV. SPOUSE

• Distribute outright to surviving spouse? • Hold in credit shelter trust for surviving spouse? – Who is Trustee? – What are distribution standards? – Can distributions be made to any other beneficiaries? • Hold in marital trust for surviving spouse? – Who is Trustee? – IRS requires mandatory distribution of net income to spouse – IRS requires that spouse be giving right to turn non-income producing property into income-producing property – Client decides on principal distribution standards for spouse – IRS mandates no one else is entitled to principal during spouse’s lifetime

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com OUTLINE PLAN OF DISTRIBUTION – RESIDUARY ESTATE NO SURV. SPOUSE

• Distributed equally or some other percentage? • What happens if beneficiary dies? – Balance to surviving members of group? – Balance to lineal descendants? • Per stirpes vs. per capita • Trust for any beneficiaries who may be minors at the time of inheritance • Trusts for any beneficiaries who have special issues

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com OUTLINE PLAN FOR PAYMENT OF ADMINISTRATION EXPENSES

• Consider liquidity issues – Does the probate estate have sufficient liquid assets to pay mortgage, utilities, property taxes, attorney fees, executor fees, appraisal costs, funeral expenses, court costs, and other expenses of administration? – Should a portion of life insurance be paid to estate to provide necessary funds?

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com OUTLINE PLAN FOR PAYMENT OF ADMINISTRATION EXPENSES

• Who should be charged with administration expenses? – Default rule is administration expenses paid by residuary unless document states otherwise – Residuary share vs. equitable allocation

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com OUTLINE PLAN FOR PAYMENT OF DEATH TAXES

• Who pays federal estate taxes – Default rules is tax paid by residuary share unless document states otherwise – Residuary vs. equitable allocation • Charities not subject to federal estate tax • Surviving spouse usually not subject to federal estate tax (if document properly drafted)

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com OUTLINE PLAN FOR PAYMENT OF DEATH TAXES

• Who pays Iowa inheritance taxes – Default rule is beneficiary pays unless document states otherwise – Residuary vs. equitable allocation • What if beneficiary receiving non-probate asset? • What is beneficiary is receiving non-liquidate asset (real estate)?

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com DESIGNATE FIDUCIARIES

• Guardians for minor children – Special considerations if naming married couples • Trustees for any trusts created under LW&T – Specify powers granted to Trustees • Executor of LW&T – Waiver of bond? – Power of sale? – Authority over digital assets?

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com DRAFT FOR PROPER EXECUTION

• Client & two disinterested witnesses sign in the presence of each other • Client, two disinterested witnesses, and notary sign Self-Proving Affidavit – If no self-proving affidavit, must find at least one of the witnesses after date of death – If unable to find witnesses, then client died intestate

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHERE WILL ORIGINAL BE STORED?

• Very difficult to admit Will to probate if original document cannot be found – Law presumes that Will was revoked – Can only admit copy of presumption can be overcome • Keep record of where client will be storing original – Lock box at ______branch of ______bank – Fireproof safe at office – Gun safe at home • Generally do not have clients deposit with Clerk of Court

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com TITLING ASSETS – JOINT TENANCY

• Joint tenancy with rights of survivorship vs. tenants in common ownership

• Joint tenancy ownership with rights of survivorship overrides terms of Will or Trust – Assets pass directly to the surviving joint tenant and are never under the control of the Executor or Trustee

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com TITLING OF ASSETS – JOINT TENANCY

• If married couple has no federal estate tax concerns, assets can be held in joint tenancy to avoid probate at first spouse’s death

• If not a married couple or if there are federal estate tax concerns, joint tenancy ownership is not recommended

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com TITLING OF ASSETS – JOINT TENANCY WITH NON-SPOUSE

• Beware of titling assets jointly with non-spouses • Joint owner has immediate access to the joint tenancy accounts – does not require client’s permission to withdraw funds • Asset becomes subject to claims from their creditors, spouse, ex-spouse, etc. • Asset automatically passes to surviving joint tenant - there is no legal obligation for joint tenant to share proceeds with other intended beneficiaries • Can increase income tax liability when assets are sold in the future

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com BENEFICIARY DESIGNATIONS

• Typically on Life Insurance, IRA’s, 401(k)’s, annuities, 403(b)’s, etc • Beneficiary designation overrides terms of Will or Trust • Need to look at contract closely to determine what happens if the beneficiary predeceases client • Be sure beneficiary designation complements plan of distribution under Will or Trust

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com BENEFICIARY DESIGNATIONS – ESTATE AS THE BENEFICIARY

• Provides liquid assets for payment of debts and expenses • Provides funding for credit shelter trust if other assets are not sufficient • May allow creditors to access proceeds • May subject proceeds to Iowa Inheritance Tax • May be included in calculating court costs, attorney fees, etc. • May be adverse income tax consequences

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com BENEFICIARY DESIGNATIONS – SPOUSE AS BENEFICIARY

• Under old Iowa law, ex-spouse received proceeds if beneficiary designation was not changed after the divorce • Iowa law now nullifies ex-spouse and ex-spouses family members as beneficiaries after a divorce – Only applies to non-ERISA assets – Must follow the appropriate notification procedures before funds are paid out • Assets received by spouse under beneficiary designation/joint tenancy does not count against spouse’s right to claim 1/3 of estate Iowa Code 633.238

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com BENEFICIARY DESIGNATIONS – MULTIPLE CHILDREN AS BENE’S

• Important to determine what happens if a child predeceases the owner

• Default plan rules usually call for distribution to the surviving children

• Most clients prefer that lineal descendants of deceased child take which requires adding of “per stirpes” language to the designation

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com BENEFICIARY DESIGNATIONS – TAX DEFERRED ASSETS

• Beneficiary designations on IRA’s or qualified plans should be properly drafted to allow beneficiary to have ability for maximum deferral for income tax purposes

• If client has charitable bequests, consider making the charities the beneficiaries of tax-deferred accounts as the charities will not pay income tax

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com BENEFICIARY DESIGNATIONS – POD/TOD

• POD designations used on bank accounts • TOD designations used on brokerage accounts, savings bonds or stock – Iowa Code Chapter 633D • Cannot be used in Iowa for real estate holdings • Designates beneficiary who is to receive asset upon death of owner - designation is revocable • Beneficiary has no rights to asset until client’s death

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com BENEFICIARY DESIGNATIONS – POD/TOD

• Asset passes to designee outside of probate • Beneficiary has no obligation to share with other intended beneficiaries • Beneficiary may not be required to use funds for funeral, burial, taxes, or other administration expenses • If most assets pass by joint tenancy ownership or beneficiary designation, then no assets available for personal representative to pay administration expenses, including carrying costs of real estate, etc.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINANCIAL/GENERAL POWER OF ATTORNEY

• Iowa Code Chapter 633B

• Currently, very limited statutory provisions

• Expanded statutory provisions currently under consideration

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINANCIAL POWER OF ATTORNEY

• Designates Attorney-in-Fact to control assets and pay bills if client becomes incapacitated or needs assistance due to physical limitations. • Avoids time and expense of court proceedings to establish and administer conservatorship. • Help client choose carefully! Attorney-in-Fact has substantial power and limited supervision.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINANCIAL/GENERAL POWER OF ATTORNEY

• Currently no statutory form for Financial/General Power of Attorney

• Financial/General Power of Attorney should always be notarized – Otherwise, cannot be recorded so that Attorney-in-Fact has authority to deal with real estate

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINANCIAL POWER OF ATTORNEY

• Consider expanding ISBA form to give Attorney-in- Fact authority to deal with: – US Series I Savings Bonds – Retirement assets – Transfer assets to Revocable Trust – Beneficiary designations – Digital assets

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINANCIAL POWER OF ATTORNEY

• If principal is incapacitated, generally requires appointment of Conservator to obtain accounting from Attorney-in-Fact

• Consider expanding ISBA form document to provide mechanism for others to demand an accounting from the Attorney-in-Fact

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINANCIAL POWER OF ATTORNEY

• Uniform Financial Power of Attorney Act coming soon (we hope) – Will be considered during 2014 legislative session – Hopefully will be effective on July 1, 2014 – Creates substantially expanded form document – Deals with accounting issues

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com LIVING WILL

• Life-Sustaining Procedures Act • Iowa Code Chapter 144A

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com LIVING WILL

• Executed at any time by a competent adult. • Document must either be notarized or witnessed by two adults. • Becomes effective if patient is in terminal condition and is unable to make their own medical decisions. • Provides directions on use or withdrawal of life- sustaining procedures. • May be revoked at any time, without regard to mental or physical condition.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com TERMINAL CONDITION

• Incurable or irreversible condition that, without administration of life-sustaining procedures, will, in the opinion of the attending physician, result in death within a relatively short period of time. • State of permanent unconsciousness from which, to a reasonable degree of medical certainty, there can be no recovery.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com LIFE-SUSTAINING PROCEDURES

• Any medical procedure, treatment, or intervention, including resuscitation, which utilizes mechanical or artificial means to sustain, restore or supplant a spontaneous vital function, and when applied to a patient in a terminal condition, would only serve to prolong the dying process.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WITNESSES TO LIVING WILL

• Signed by 2 adult witnesses in the presence of each other and the declarant. • At least one witness must be unrelated (not a relative by blood, marriage, or adoption within the third degree of consanguinity). • Attending physician and employees of the attending physician cannot serve as witness. • Prefer use of notary instead of 2 witnesses to avoid increased chance of litigation.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com APPLICABILITY OF LIVING WILL

• Attending physician concludes that patient is in a terminal condition. • Diagnosis is confirmed by another physician. • Notation is made in medical record that Living Will is now applicable. • Effectiveness delayed if patient is pregnant with fetus that could develop to point of live birth with continued application of life-sustaining procedures.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com OLD LIVING WILLS

• Definition of life-sustaining procedures changed on April 23, 1992. • After that date, definition of life-sustaining procedures includes hydration and nutrition administered through IV or NG tube. • Living Will documents signed prior to April 23, 1992, do not allow the withdrawal of food and water provided through artificial means.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHAT IF NO LIVING WILL?

• No presumption for or against life-sustaining procedures based on failure to execute Living Will. • Must be consultation and written agreement between attending physician and alternate decision makers who must be guided by the express or implied intentions of patient. • If legal guardian has been appointed for the patient, court order is required prior to withdrawal of life- sustaining procedures.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com LIVING WILL – ALTERNATE DECISION MAKERS

1st: Person designated under health care POA. 2nd: Legal guardian of patient. 3rd: Spouse of patient. 4th: Adult children (majority of children who are reasonably available for consultation). 5th: Parents of patient. 6th: Adult siblings of patient.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com MEDICAL POWER OF ATTORNEY DURABLE POA FOR HEALTH CARE

• Iowa Code Chapter 144B

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com MEDICAL POWER OF ATTORNEY

• Designates another person to make health care decisions when patient is no longer able to make those decisions on their own. • Takes effect when patient can no longer make their own medical decisions. • Covers more situations than Living Will. • Can be revoked at any time, without regard to mental or physical condition.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com MEDICAL POWER OF ATTORNEY – REQUIREMENTS FOR VALIDITY

• Written designation. • Explicitly authorizes attorney-in-fact to make health care decisions. • Notarized or signed by 2 witnesses. • Same witness limitations as described for Living Will.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com MEDICAL POWER OF ATTORNEY – INELIGIBLE DECISION MAKERS

• Attending physician cannot serve as attorney-in-fact.

• Employee of the attending physician cannot serve as attorney-in-fact, unless the individual is related to patient by blood, marriage, or adoption within the 3rd degree of consanguinity.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com MEDICAL POWER OF ATTORNEY – LEGAL EFFECT

• Designated attorney-in-fact has authority to make decisions if principal is unable, in the judgment of attending physician, to make their own health care decision. • Designated attorney-in-fact has duty to act in accordance with desires of the patient as expressed in the Medical POA or otherwise made known to attorney-in-fact at any time.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com MEDICAL POWER OF ATTORNEY – LEGAL EFFECT

• If patient’s desires are unknown, attorney-in-fact has duty to act in the best interests of the patient, taking into account the patient’s overall medical condition and prognosis. • Attorney-in-fact can be removed if district court determines that attorney-in-fact is acting contrary to wishes of the patient. • If patient has Living Will and Medical POA, provisions of Living Will take priority.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com MEDICAL DIRECTIVES

• Optional document that supplements the Medical Power of Attorney and Living Will. • Provides specific instructions to Agent regarding medical decisions to be made under specific circumstances. • Client should complete with input of personal physician.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com DNR ORDERS

• Iowa Code Chapter 144D

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com DNR ORDERS

• Do Not Resuscitate Orders (DNR) orders can only be completed by or for individuals who are determined to be near the end of life. • DNR Orders must be completed with the assistance of physician. – Attorneys cannot draft DNR Orders. • Iowa law has provisions allowing DNR Orders to be portable between facilities.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com DECLARATIONS RE: LAST REMAINS

• Final Disposition Act • Iowa Code Chapter 144C

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINAL DISPOSITION ACT

• Applies to all deaths occurring on or after July 1, 2008 and to all declarations executed on or after that date.

• Gives an individual the ability to designate who will be in charge of making funeral and burial decisions for the individual following his or her death.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINAL DISPOSITION ACT – ORDER OF PRIORITY 144C.5

• Designee (then alternate designee) in declaration; • Surviving spouse (provided not legally separated); • Surviving adult children (majority rules); • Surviving parents; • Surviving adult grandchildren (majority rules); • Surviving adult siblings (majority rules);

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINAL DISPOSITION ACT – ORDER OF PRIORITY 144C.5

• Surviving grandparents (majority rules); • Persons in next degree of kinship under rules of intestate succession (majority rules); • Person who represents that he/she knows the decedent’s identity and who signs an affidavit verifying decedent’s identity and assuming responsibility/expense; • County medical examiner (if responsible for remains).

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINAL DISPOSITION ACT – DUTIES OF DESIGNEE

• Designee(s) jump to front of the line.

• Designee has obligation to act in good faith and in a manner that is reasonable under the circumstances.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINAL DISPOSITION ACT – DUTIES OF DESIGNEE

• Reasonable under the circumstances means consideration of what is appropriate in relation to the Decedent’s: – Finances; – Cultural or family customs; and – Religious or spiritual beliefs.

• Reasonable under the circumstances also may include, but is not limited to, consideration of the Decedent’s: – Preneed funeral, burial, or cremation plan; and – Known or reasonably ascertainable creditors.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINAL DISPOSITION ACT – REQUIREMENTS FOR VALID DESIGNATIONS • Must be in written form that substantially complies with language in Chapter 144C.6; • Must be contained in or attached to a durable power of attorney for health care; • Must be dated and signed by declarant; and • Must be witnessed by 2 individuals or notarized.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINAL DISPOSITION ACT – REQUIREMENTS FOR VALID DESIGNATIONS

• CAN include – The location of an agreement for prearranged funeral services or funeral merchandise; – Cemetery lots owned by or reserved for the declarant; and – Special instructions regarding organ donation.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com FINAL DISPOSITION ACT – REQUIREMENTS FOR VALID DESIGNATIONS

• But CANNOT include: – Directives for final disposition of the declarant’s remains (i.e. I want to be cremated and ashes spread in the Pacific Ocean); nor – Arrangements for ceremonies planned after the declarant’s death.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHALEN CASE

• Decided by the Iowa Supreme Court on February 22, 2013. • Mary Florence Whalen (Flo) died on June 9, 2012 in Anamosa. • She was survived by: – Michael (her husband of 60 years); – 10 adult children (Michael is their father); and – Mary Ann McCloskey (her sister)

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHALEN CASE

• Flo and Michael married in 1952, lived in Anamosa briefly and moved to Billings, Montana in 1953. • They lived together in Billings from 1953-1996. • They separated (but not legally) and Michael returned to Anamosa in 1996. • Flo became ill while visiting Iowa, Michael cared for her in his home. • Flo died in Iowa in June 2012.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHALEN CASE

• Flo had lawfully created and signed her LW&T in October of 2009. • She named Mary Ann as Executor. • The Will contained a specific statement regarding Flo’s wishes to be buried in a specific grave and cemetery in Billings, MT.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHALEN CASE

• It was NOT disputed that: – Flo had purchased burial plot in the cemetery of her choice. – Flo had repeatedly expressed her wishes regarding a burial in Billings, MT to her children, Mary Ann and Michael. – Flo had expressed the same desire in her LW&T and prior Wills. – Shortly before her death, Flo had written and distributed a letter to her family members restating her wish to be buried in Billings, MT. – Flo’s children consulted with funeral director on how to make her wishes binding and were told that there was nothing they could do to remove spouse from first priority

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHALEN CASE

• Following Flo’s death, Mary Ann tried to arrange to have Flo’s remains transported to Billings, MT. • Michael directed Flo’s remains be buried in Anamosa, IA. • The funeral home agreed to keep the remains until a Court order could be obtained. • The case was heard at the District Court level and then appealed to the Iowa Supreme Court.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHALEN CASE

• Two Questions the Supreme Court addressed: – Does the Final Disposition Act allow a de facto designee to disregard an individual’s directions regarding disposition of his or her remains, thus affecting rights of an individual to control disposition of his or her remains? – If yes, then did Flo comply with the requirements of the Act to alter the de facto rules?

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHALEN CASE

• Mary Ann argued that the Final Disposition Act did not (and could not) displace common law rights given to individuals to direct where their remains will be buried. • The Court disagreed and said the Act has language giving sole control to the decision maker identified under Section 144C.5. • The Court held that the Act displaced any common law right requiring a surviving spouse to follow a decedent’s instructions regarding burial.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com WHALEN CASE

• The Court turned to the second question and said that the written documents, specifically Flo’s letter, were NOT attached to the durable power of attorney for health care, as required by Section 144C.6(2). • The Court also said it could not be valid because it contained specific instructions and specific instructions are prohibited under the Act.

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com LESSONS OF WHALEN

• Clients should discuss their wishes with family – Helps determine which family members can be trusted to carry out their wishes • Clients should sign a declaration that complies with Iowa law – Designee has an obligation to act in good faith – Default decision makers have no such obligation • Clients should not seek legal advice from funeral directors

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com THANK YOU

Follow up questions can be directed to Janice Kerkove at [email protected] or (319) 861-8763.

Cedar Rapids Iowa City 2007 First Avenue SE Tower Place PO Box 2804 One South Gilbert Cedar Rapids, Iowa 52406 Iowa City, Iowa 52240 Ph: 319.363.0101 Ph: 319.466.1511 Fax: 319.363.9824 Fax: 319.358.5560

BRADLEY & RILEY PC ATTORNEYS AND COUNSELORS www.bradleyriley.com Do I Need To Change My Will or Trust?

NUTS & BOLTS OF ESTATE PLANNING

Janice J. Kerkove October 30, 2013 [email protected]

ESTATE PLANNING – IT’S MORE THAN JUST A WILL