Articles Posted in Contracts

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The Supreme Court reversed the judgment of the district court dismissing Plaintiff’s two-count petition, holding that the district court erred in holding that a seller of auction services of certain machinery is entitled to summary judgment on a claim brought by a buyer of those services under the Door-to-Door Sales Act (DDSA), Iowa Code chapter 555A. Plaintiff brought this action claiming a violation of the DDSA and seeking a declaratory judgment challenging the underlying sales contract because of an invalid execution by a third party and because of fraud in the inducement. The district court granted summary judgment in favor of Defendant, concluding, among other things, that the DDSA does not apply to a contract for auction services, such as the contract in this case. The Supreme Court reversed, holding (1) Defendant was not entitled to summary judgment on the DDSA claim where Defendant presented no evidence that Plaintiff’s purpose in purchasing the auction services was not “primarily for personal, family, or household purposes”; and (2) because the declaratory judgment count had allegations beyond the DDSA the district court erred in dismissing this count of the petition. View "Morris v. Steffes Group, Inc." on Justia Law

Posted in: Consumer Law, Contracts

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The Supreme Court affirmed in part and reversed in part the judgment of the district court dismissing Plaintiff’s unjust enrichment, quantum meruit, and promissory estoppel claims, holding that the district court erred in granting Defendants’ motion for summary judgment on the promissory estoppel claim. Plaintiff, a farmer, sued Defendants, his neighbor’s heirs, claiming that he and the decedent entered into an option contract to purchase farmland that Plaintiff leased from he decedent and upon which Plaintiff had made substantial improvements. After the farm was sold, Plaintiff brought this action claiming that Defendants breached an option contract to sell him the property. Alternatively, Plaintiff alleged various equitable theories of promissory estoppel, quantum meruit, and unjust enrichment. A jury found in favor of Plaintiff on his contract claim, but the district court granted Defendants’ motion for directed verdict and refused to order a new trial on Plaintiff’s alternative equitable theories. The court of appeals remanded the case for further proceedings on the equitable claims. On remand, the district court granted Defendants’ motion for summary judgment on the remaining equitable claims. The Supreme Court reversed in part, holding that Plaintiff’s promissory estoppel claim survived summary judgment. View "Kunde v. Estate of Arthur D. Bowman" on Justia Law

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Retaliatory discharge claims are not categorically reserved for at-will employees. A state administrative law judge (ALJ) brought suit alleging wrongful termination in violation of public policy after she was terminated for giving unfavorable testimony about the director of her division to the Iowa Senate Government Oversight Committee. The ALJ’s employment was covered by a collective bargaining agreement (CBA). The State filed a motion to dismiss, asserting that the common law claim of wrongful discharge is reserved for at-will employees. The district court agreed and dismissed the case. The court of appeals reversed, concluding that the ALJ’s status as a CBA-covered employee did not preclude her wrongful-discharge claim. The Supreme Court affirmed, holding that the common law tort of retaliatory discharge against public policy is generally available to contract employees. View "Ackerman v. State" on Justia Law

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Retaliatory discharge claims are not categorically reserved for at-will employees. A state administrative law judge (ALJ) brought suit alleging wrongful termination in violation of public policy after she was terminated for giving unfavorable testimony about the director of her division to the Iowa Senate Government Oversight Committee. The ALJ’s employment was covered by a collective bargaining agreement (CBA). The State filed a motion to dismiss, asserting that the common law claim of wrongful discharge is reserved for at-will employees. The district court agreed and dismissed the case. The court of appeals reversed, concluding that the ALJ’s status as a CBA-covered employee did not preclude her wrongful-discharge claim. The Supreme Court affirmed, holding that the common law tort of retaliatory discharge against public policy is generally available to contract employees. View "Ackerman v. State" on Justia Law

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The gestational surrogacy contract in the instant case was legally enforceable in favor of the intended, biological father against a surrogate mother and her husband who were not the child’s genetic parents. Plaintiffs were a married couple who signed a contract with Defendants, the surrogate mother and her husband. The surrogate mother was impregnated with embryos fertilized with the plaintiff-father’s sperm and the eggs of an anonymous donor. After one surviving child was born, Defendants refused to honor the agreement. Plaintiffs sued to enforce the contract and gain custody of the child. The district court concluded that the contract was enforceable, terminated the presumptive parental rights of the surrogate mother and her husband, established paternity in the biological father, and awarded him permanent legal and physical custody. The Supreme Court affirmed, holding that the district court properly established paternity in the biological father based on the undisputed DNA evidence, terminated the presumptive parental rights of Defendants and awarded permanent custody to the biological, intended father. A contrary holding invaliding surrogacy contracts would deprive infertile couples of the opportunity to raise their own biological children and limit the personal autonomy of women willing to serve as surrogates. View "P.M. v. T.B." on Justia Law

Posted in: Contracts

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The district court erred in ruling that the coguarantors of a loan were not entitled to contribution from other guarantors of an underlying debt because the funds used to make the payments on the debt were provided to them by their respective parents. Here, the parents of the coguarantors provided funds to their children to pay part of the underlying debt. The funds were placed in accounts owned or co-owned by the coguarantors, who then paid down a debt with funds drawn from these accounts. The coguarantors sought contribution from the other guarantors of the underlying debt. The district court and court of appeals ruled against the coguarantors. The Supreme Court vacated the decision of the court of appeals and reversed the judgment of the district court, holding that the coguarantors were entitled to contribution from other guarantors on the undisputed facts of this case. View "Shcharansky v. Shapiro" on Justia Law

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This case, which turned on the issue of when Plaintiff’s causes of action accrued, must be reversed and remanded for a new trial because genuine factual disputes over the statute of limitations should be resolved by the factfinder. Plaintiff, Defendant’s brother, entrusted Defendant, his sister, with blank checks signed in advance to be used to pay bills of Plaintiff and his adult children while he was out of the country. When he returned, Plaintiff learned that Defendant had written many checks to herself. When Plaintiff asked for all of his money back, Defendant told him it had been spent. Brother sued. At issue was when Plaintiff’s causes of action accrued. If they accrued when Plaintiff learned Defendant had written checks to herself, his claims were time-barred. But if they accrued when Plaintiff was told the money was gone, they were timely. The district court declined to instruct the jury on the statute of limitations, and the jury returned a substantial damage verdict on several of Plaintiff’s legal theories. The court of appeals reversed. The Supreme Court affirmed, holding that the district court erred in not instructing the jury on statute of limitations at all. View "Shams v. Hassan" on Justia Law

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The Supreme Court affirmed the judgment of the district court granting summary judgment to Defendants in this case brought by an independent contractor who sued for damages when he purchased a used tractor from a John Deere implement dealer that proved to be a “lemon.” The contractor brought suit against several parties, including the implement dealer. The court of appeals affirmed the judgment of the district court in all respects but reversed the district court’s grant of summary judgment on the contractor’s express warranty claim against the implement dealer. The Supreme Court vacated in part the decision of the court of appeals, holding that the disclaimers contained in the purchase agreement negated any express warranties allegedly made by the implement dealer. View "Cannon v. Bodensteiner Implement Co." on Justia Law

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A civil service employee may enter into a valid last-chance agreement, which remains subject to principles of contract law, and the civil service commission need not sanction the agreement for it to be effective. A municipal firefighter pled guilty to domestic abuse assault. The municipality offered to discipline him instead of terminating his employment but required that the firefighter agree that the municipality have the discretion to terminate him immediately and without appeal if he violated the related no-contact order. The firefighter agreed to the proposal and signed a written "last-chance agreement." One year later, the firefighter violated the no-contact order, and the municipality terminated the firefighter’s employment in reliance on the agreement. The firefighter attempted to appeal, but the civil service commission declined to hear the appeal. The district court, however, concluded that the last-chance agreement was invalid because the commission had not approved or reviewed it before the parties entered into it. The Supreme Court reversed, holding that the last-chance agreement in this case was valid and enforceable. View "Whitwer v. Civil Service Commission of the City of Sioux City" on Justia Law

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This legal malpractice case arose from work performed by the Dunakey & Klatt law firm for Michael Cox II. Cox later died. Thereafter, Michael Cox’s parents (Plaintiffs) filed this action for legal malpractice against Dunakey & Klatt and two of the attorneys in the firm. The parties agreed to mediate their dispute. Following mediation, the parties agreed on what would be paid to settle the case. The parties exchanged versions of a confidentiality provision to be included in the settlement agreement, although they never settled on the same version at the same time. The district court nevertheless enforced the settlement agreement and dismissed the underlying malpractice case. Plaintiffs appealed, arguing, inter alia, that there was no “meeting of the minds” on settlement. The Supreme Court reversed the order of the district court enforcing a settlement agreement between Plaintiffs and the law firm, holding that there was no binding settlement agreement because the parties never mutually assented to the same settlement agreement. View "Estate of Michael G. Cox II v. Dunakey & Klatt, P.C." on Justia Law