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IN THE SUPREME COURT OF IOWA
No. 140 / 04-1729 Filed May 5, 2006 KENNETH FAIRFAX and GERALDINE WATSON, Appellants, vs. OAKS DEVELOPMENT COMPANY, Appellee.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Polk County, Robert Blink, Judge.

Vendees under contract for sale of real estate appeal from judgment confirming the forfeiture of their interest. The court of appeals affirmed. DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT REVERSED AND REMANDED.

Phil Watson and David M. Coco of Phil Watson P.C., Des Moines, and Patrick W. O'Bryan of O'Bryan Law Firm, Des Moines, for appellants.

Dustin D. Smith of Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, PLC, West Des Moines, for appellee.

2 CARTER, Justice. Geraldine Watson and Ken Fairfax, vendees under a contract for the sale of real estate, appeal from a judgment confirming the forfeiture of their interest. Watson and Fairfax were plaintiffs in the district court who had sued in equity to enjoin the forfeiture. The appellee, which was the

defendant in the district court, is Oaks Development Company. The issue involving the purported forfeiture of the vendees' interest in a real estate contract arose in connection with the trial of several other issues in consolidated cases before the district court. In connection with the validity of the forfeiture, the vendees urged that the service of the statutory notice of forfeiture required by Iowa Code section 656.3 (2003) had not been properly completed as to both vendees and that this circumstance rendered the attempted forfeiture under Iowa Code section 656.2 ineffective and invalid. The court of appeals found that the forfeiture had been properly completed by service of proper legal notice. Upon reviewing the record and considering the arguments presented, we disagree with that conclusion and find that notice of forfeiture was not completed as required by law. We vacate the decision of the court of appeals and reverse that portion of the district court's ruling upholding the forfeiture. Because this ruling may affect other issues that were decided in the district court, we remand the case to that court for such further proceedings as may be necessary. The contract vendees entered into an agreement to purchase a residence property that was new construction financed by the appellee, Oaks Development Company. Oaks Development Company, at the time of the agreement, had become the legal owner of the property and was the vendor under the contract. The contract provided for a $12,000 down payment and monthly installments beginning February 15, 2003, in the amount of $977.23 continuing monthly until a balloon payment due on

3 January 5, 2005. The remedies paragraph of the contract allowed for

forfeiture of the vendees' interest in accordance with chapter 656 of the Iowa Code. The vendees made the required down payment and paid the monthly payments that had become due prior to the June 2004 installment, although many payments were late. When the June 2004 installment was not paid on time, the vendor attempted to serve the vendees with a notice of forfeiture. The return on the attempted service by a process server was as follows: I did personally serve a copy of Notice of Forfeiture of Real Estate Contract By delivering a true and correct copy thereof as follows: Name: Geraldine Watson Address: 5401 S.E. 28th Court Name: Kenneth Fairfax Address: " " " " By delivering a true and correct copy to: Geraldine Watson, a person identified as being at least eighteen years old residing therein. The process server's return of service was attached to the affidavit filed with the county recorder in support of forfeiture of the vendees' interest. At the trial, vendee Watson, who accepted the notice of forfeiture from the process server, testified that only one copy of the notice had been delivered to her. The vendees then called the process server as a witness, who confirmed the fact that only one copy of the notice of forfeiture had been served on the vendees. The vendees contended in the district court, and continue to urge on appeal, that it was necessary to serve a separate copy of the notice of forfeiture on each contract vendee in order for the forfeiture to be valid under Iowa Code sections 656.2 and 656.3. The district court rejected that conclusion, as did a majority of the court of appeals.

4 I. Scope of Review. Because the proceeding in the district court was tried by equitable proceedings, our review of both the facts and the law is de novo. Goodale v. Bray, 546 N.W.2d 212, 214 (Iowa 1996); Lett v. Grummer, 300 N.W.2d 147, 148 (Iowa 1981); Iowa R. App. P. 6.4. II. The Statutory Notice Requirements. Iowa Code section 656.2 provides, in part: 1. The forfeiture shall be initiated by the vendor by serving on the vendee a written notice . . . . 2. The vendor shall also serve a copy of the notice required in subsection 1 on the person in possession of the real estate, if different than the vendee; on all the vendee's mortgagees of record; and on a person who asserts a claim against the vendee's interest . . . . Iowa Code section 656.3 provides, in part: Said notice may be served personally or by publication, on the same conditions, and in the same manner as is provided for the service of original notices . . . . Lastly, Iowa Rule of Civil Procedure 1.305(1) provides: Personal service may be made as follows: 1.305(1) Upon any individual who has attained majority and who has not been adjudged incompetent, either by taking the individual's signed, dated acknowledgement of service endorsed on the notice, or by serving the individual personally; or by serving, at the individual's dwelling house or usual place of abode, any person residing therein who is at least 18 years old . . . . It is undisputed that a process server served one copy of a facially valid notice of forfeiture addressed to both vendees by delivering that copy to vendee Watson. The process server then completed a return of service, indicating personal service on Watson and substituted service on Fairfax. At the time the notice was served, Watson and Fairfax were husband and

5 wife who resided together at the property that is the subject of the attempted forfeiture. The issue presented is whether a single copy of a forfeiture notice that has been personally served on one of two contract vendees with the intent to serve both is sufficient service of notice to sustain a forfeiture of the interests of both vendees. The district court and a majority of the court of appeals held that it is. The dissenting judge on the court of appeals

believed otherwise and stated the proposition as follows: The process server could achieve proper service on Geraldine Watson by handing her a copy of the notice. And as the majority [of the court of appeals] has correctly noted the process server could achieve proper service on Ken Fairfax by handing Geraldine Watson a copy of the notice for Fairfax. However, here there was only one notice and because the process server indicated both parties were served by the delivery of a single copy it is unclear which party actually was served and at most only one party was served. We agree with the dissenting judge's views. In speaking to a similar situation, the text in 62B Am. Jur. 2d Process, suggests by way of a practice guide: In making substituted service against two or more defendants having the same place of residence or abode, a copy of the summons must be left for each defendant. 62B Am. Jur. 2d Process

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