Articles Posted in Contracts

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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

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Plaintiffs’ attorney filed two board claim forms with a state appeals board on behalf of Plaintiffs, signing their names and his own. The attorney did not attach any document showing he had power of attorney. The board rejected Plaintiffs’ claims. Plaintiffs then filed their claim in district court. The district court dismissed Plaintiffs’ claims on the ground that their attorney signed the forms on their behalf. The Supreme Court reversed, holding (1) a claimant presents a claim when the board receives a writing that discloses the amount of damages claimed and generally describes the legal theories asserted against the State; and (2) the district court had jurisdiction to hear Plaintiffs’ claims. View "Segura v. State" on Justia Law

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The district court granted a request for entry of a charging order against a personal guarantor and judgment debtor’s transferable interest in an LLC. The judgment debtor and intervenor filed a motion to quash alleging that multiple levies and garnishments were improper. The district court granted the motion to quash. The Supreme Court affirmed in part and reversed in part, holding (1) the entry of the charging order was proper; but (2) the district court erred in granting the motion to quash because it is proper to have multiple levies and garnishments at the same time so long as they are under a single execution. Remanded. View "DuTrac Community Credit Union v. Hefel" on Justia Law

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Liberty Bank made five loans to the owner of real property (Property). Liberty Bank and five other banks entered into participation agreements related to the loan. Iowa Great Lakes Holding later defaulted on the loan, and the mortgage was extinguished. After the surrender and foreclosure, Liberty Bank and Central Bank entered into an agreement under which Central Bank acquired assets, including loans, from Liberty Bank. Liberty Bank conveyed the Property to a Central Bank affiliated entity via quitclaim deed. Central Bank then filed a declaratory action against Liberty Bank and the five participating banks seeking a ruling that it owned the Property free and clear of any interest of the participating banks. The district court granted summary judgment for Defendants, concluding that, under the participation agreements, Central Bank did not own the property in fee simple because Liberty Bank did not sell Central Bank a one hundred percent interest in the property. The Supreme Court affirmed, holding that the ownership interest of the participating banks in the mortgage and underlying collateral was superior to Central Bank, which claimed its interest was derivative of and limited to the interest held by Liberty Bank. View "Central Bank v. Hogan" on Justia Law

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This case involved a dispute over a change in hauling fees paid by a dairy cooperative to an independent contractor who transported milk from farms to the cooperative’s facilities. When the co-op notified the hauler that it would be phasing out a trip fee it had been paying the hauler, the hauler objected but continued to transport milk. Thereafter, the co-op paid the agreed hauling rate without the trip fees. Several months later, the hauler sued the co-op for unpaid trip fees. The co-op, in turn, declared the contract terminated. The district court granted summary judgment for the co-op, concluding that the change in payment terms was a new offer that the hauler accepted by performance. The court of appeals reversed, concluding that summary judgment was inappropriate where questions of fact existed as to acceptance. The Supreme Court vacated the decision of the court of appeals and affirmed the district court’s summary judgment, holding that, under the parties’ oral contract, the co-op could alter payment terms prospectively upon reasonable notice, and the hauler accepted the new terms by performance, notwithstanding its protests. View "Johnson v. Associated Milk Producers, Inc." on Justia Law

Posted in: Contracts

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Plaintiff filed a class action petition against J.C. Penney asserting that the internet retailer unlawfully charged Iowa sales tax on shipping and handling charges. J.C. Penney forwarded the tax to the Iowa Department of Revenue (IDOR) pursuant to the Iowa version of the Streamlined Sales and Use Tax Act (SSUTA). The district court granted summary judgment in favor of J.C. Penney. The Supreme Court affirmed, holding (1) the district court correctly granted J.C. Penney’s motion for summary judgment on Plaintiff’s statutory claims grounded in SSUTA, as the SSUTA does not create a private cause of action; (2) the district court did not err in granting summary judgment on Plaintiff’s claims related to the alleged unlawful payment of taxes on the ground that the remedies under Iowa Code 423.45(3) and 423.47 are exclusive remedies barring other claims for relief for wrongful payment of taxes under SSUTA; and (3) Plaintiff was not entitled to recover on her claims alleging shipping and handling misrepresentations. View "Bass v. J.C. Penney Co., Inc." on Justia Law

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Developers and a general contractor of an apartment complex purchased a primary commercial general liability (CGL) insurance policy from Arch Insurance Group and an excess CGL insurance policy from National Surety Corporation (NSC). Westlake Investments, LLC, which purchased the complex, sued the insureds for construction defects. Arch defended the suit on behalf of the insureds, and the parties eventually settled. Pursuant to the settlement agreement, the insureds assigned their claims against NSC on the excess CGL policy to Westlake. Thereafter, NSC initiated this declaratory judgment action seeking a declaration that it had no obligation to pay any portion of the judgment awarded to Westlake. Westlake counterclaimed for breach of contract. The district court granted partial summary judgment in favor of Westlake, concluding that property damage resulting from defective work performed by an insured’s subcontractor may constitute an accident that qualifies as an occurrence covered by the Arch policy, and therefore, the NSC policy. After a trial, the jury returned a verdict in favor of Westlake. The Supreme Court affirmed in part and reversed in part, holding that defective workmanship by an insured’s subcontractor may constitute an occurrence under the terms of the Arch policy incorporated by reference into the NSC policy. View "Nat’l Surety Corp. v. Westlake Invs., LLC" on Justia Law

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An aviation company challenged the application of a statutory immunity provision to its claim of a breach of the implied warranty of merchantability found in the Uniform Commercial Code (UCC) arising from an alleged defect in product design or manufacturing. The issue this appeal presented for the Supreme Court's review was whether the immunity provision only applied in tort cases or if it also applied to contracts. The Court held the statutory immunity only applied in products liability cases involving personal injury or property damage, not in cases based solely on economic loss. View "Des Moines Flying Service, Inc. v. Aerial Services, Inc." on Justia Law

Posted in: Business Law, Contracts

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Plaintiff, an agricultural supply company, was delivering its own products in a semi-trailer when the semi-trailer wrecked and spilled fertilizers and chemicals, contaminating several hundred cubic yards of soil. Plaintiff suffered a loss of almost $1 million due to the environmental remediation and for the value of the trailer and its contents. Plaintiff had been leasing the semi-tractor and its driver from another source at the time of the accident. Plaintiff, on behalf of itself and its insurer, filed suit against the lessors and their driver, alleging negligence and breach of contract. The district court granted summary judgment in favor of Defendants, concluding that the terms of the lease and Iowa Code 325B.1 barred any recovery by Plaintiff. The Supreme Court reversed, holding (1) section 325B.1 governs relations between authorized motor carriers and shippers and does not apply to the lease in this dispute because Plaintiff is a private carrier rather than a motor carrier; (2) the indemnification provisions in the lease are valid and enforceable; and (3) the anti-subrogation rule limits potential recovery in this case. View "United Suppliers, Inc. v. Hanson" on Justia Law

Posted in: Contracts, Injury Law