Ballou v. Kurtenbach
| Docket Number | 21-1014 |
| Decision Date | 20 July 2022 |
| Parties | WILLIAM L. BALLOU and LINDA L. BALLOU, Individually and as Trustees of the BALLOU FAMILY REVOCABLE TRUST u/d/o August 15, 2012, KATHRYN BENSON, LORILEE ANDREINI and THE MILLER FARM PARTNERSHIP, Plaintiffs-Appellees, v. LEE P. KURTENBACH, Defendant-Appellant. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Cedar County, Thomas G Reidel (summary judgment) and Jeffrey D. Bert (attorney fees), Judges.
A farm tenant appeals the grant of summary judgment on his slander of title and related claims and the attorney-fee award to the landowner.
Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellant.
Karl M. Sigwarth and Jeremiah D. Junker of Bradley &Riley PC Cedar Rapids, for appellees.
Considered by Tabor, P.J., and Greer and Ahlers, JJ.
Appellate courts often say summary judgment is not a dress rehearsal for trial.[1] Building on that analogy, landowners William and Linda Ballou quip that Lee Kurtenbach's case is "barely even a table-read." Turning to the storyline, Kurtenbach contracted with the Ballous to rent their farmland. They sued for breach. He counterclaimed alleging they engaged in tortious conduct. The district court entered summary judgment for the Ballous. Kurtenbach appeals the dismissal of his counterclaim and contests an attorney-fee award.
We agree with the Ballous on the weakness of Kurtenbach's counterclaim. Kurtenbach failed to present triable issues on his allegations of tortious conduct. So the district court properly decided the Ballous were entitled to judgment as a matter of law. We also affirm the award of trial attorney fees under the lease agreement. And we award reasonable appellate attorney fees, remanding for the district court to determine the amount.
In fall 2015, Kurtenbach rented two farms, totaling 388.4 acres, from the Ballous.[2] They entered two leases, each for a one-year term starting in March 2016.[3] Those leases renewed each year unless terminated. If Kurtenbach defaulted on rent, the agreement gave a security interest or lien to the Ballous in "all growing or mature crops" on the real estate.
Kurtenbach fell behind in his payments by January 2017. Another payment was due March 2017. Despite Kurtenbach being in arrears, the Ballous did not move to terminate the lease right away. During that reprieve, Kurtenbach tried to obtain financing for rent and farm operations but nothing came together. The parties tried to negotiate a deal so Kurtenbach could continue farming the land. Again, it did not work out.[4]
In January 2018, the Ballous filed a Uniform Commercial Code (UCC) Financing Statement with the Iowa Secretary of State noting an agricultural lien on Kurtenbach's crops. Then the Ballous moved to terminate the lease.[5] Kurtenbach ended up farming the Ballous' land only in 2016 and 2017.
In February 2019, the Ballous sued Kurtenbach alleging breach of contract, promissory estoppel, unjust enrichment, and fraudulent misrepresentation. Kurtenbach raised the affirmative defense that the Ballous breached the contract to extend him credit. And he counterclaimed, alleging breach of that secondary contract, conversion, fraudulent misrepresentation, and punitive damages.
The Ballous sought summary judgment on their breach-of-contract claim and on Kurtenbach's breach-of-contract and fraudulent-misrepresentation counterclaims. In spring 2020, Kurtenbach amended his counterclaims to include a fifth count for "tortious conduct" encompassing "interference with existing and prospective contractual relationships, slander of title[,] and defamation." That claim was based on the UCC financing statement. Kurtenbach alleged the financing statement made it appear that the lien was on crops harvested after he stopped farming the leased land, which prevented him from obtaining financing for his 2020 farming operations. He also alleged the Ballous had refused to terminate or amend the statement to clarify that it does not cover crops after 2017.
The district court granted the Ballous' motion for summary judgment on their breach-of-contract claim, finding Kurtenbach owed them $137,281.50 in missed rent, plus interest. And it dismissed the counterclaims for breach of contract and fraudulent misrepresentation. Kurtenbach then withdrew his conversion claim.
The Ballous next sought summary judgment on Kurtenbach's remaining counterclaim for punitive damages, as well as the amended count of tortious conduct. After a hearing in April 2021, the court granted the motion, dismissing the remaining counterclaims. Kurtenbach moved to enlarge the order, but the court denied that motion. A few weeks later, the Ballous sought an award of $59,379.38 in attorney fees. The court approved a slightly lower award, $55,472.68.
Kurtenbach appealed the second summary judgment order and the attorney-fee award. The supreme court consolidated those appeals and transferred the case to us.
We review summary judgment orders for correction of legal error. Morris v. Legends Fieldhouse Bar and Grill, LLC, 958 N.W.2d 817 (Iowa 2021). "Summary judgment is appropriate only when the record shows no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." Hedlund v. State, 930 N.W.2d 707, 715 (Iowa 2019); see also Iowa R. Civ. P. 1.981(3) (requiring court to consider "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any" when deciding motion for summary judgment). "A genuine issue of fact exists if reasonable minds can differ on how an issue should be resolved." Banwart v. 50th St. Sports, L.L.C., 910 N.W.2d 540, 544 (Iowa 2018) (citation omitted). And "[a] fact is material when it might affect the outcome of a lawsuit." Id. Kurtenbach, as the opponent of summary judgment, may not rest on the allegations in his pleading but must lift up specific facts showing the existence of a genuine issue for trial. See Hlubek v. Pelecky, 701 N.W.2d 93, 95 (Iowa 2005). We view the evidence in the light most favorable to Kurtenbach. See Banwart, 910 N.W.2d at 545. And we accept every legitimate inference we can reasonably draw from the record. Hedlund, 930 N.W.2d at 715. But "speculation is insufficient to generate a genuine issue of fact." Hlubek, 701 N.W.2d at 98.
Likewise, we review the district court's contract interpretation for correction of legal error. Colwell v. MCNA Ins. Co., 960 N.W.2d 675, 676-77 (Iowa 2021). The "cardinal rule" of contract interpretation is to determine the intent of the parties when they formed the contract. Pillsbury Co., Inc. v. Wells Dairy, Inc., 752 N.W.2d 430, 436 (Iowa 2008). True, the contract's language "remain[s] the most important evidence of intention." Id. But the meaning of those words "can almost never be plain except in a context." Id. ()). So we examine the contract language in context to assess the district court's ruling.
Kurtenbach contends that he produced enough evidence to generate a jury question on his tortious conduct count, which encompassed claims of slander of title, defamation, and interference with existing and prospective contracts. So, he argues, the district court erred in granting summary judgment on those counterclaims.
Stepping back a moment, section 16 of the lease gives the Ballous "a security interest in, but not limited to, all growing or mature crops on the Real Estate, as provided in the Iowa Uniform Commercial Code." In their UCC financing statement, the Ballous noted the collateral on the lien was "$155,000 worth of soybeans, and earlage[6] in white bags all stored at debtor's residence." The financing statement also said, "Debtor (Tenant) grants to Creditors (Landlords) a security interest in the crops raised on the leased land owned by Creditors."
In the district court, Kurtenbach made these allegations to support his tortious conduct claims:
In his supporting affidavit, Kurtenbach gave the following account of his financial struggles:
The effects of the COVID-19 pandemic led to school closures, which decreased milk demand. In approximately March or April, 2020, the creamery would no longer take my milk. I was forced to sell my dairy herd. While I was aware at some point in time a UCC Financing Statement had been filed on behalf of [the] Ballous, it didn't really affect my farming operation until I tried to obtain financing for my 2019 crop. I went to a company called Ag Resources Management (ARM) in 2019 for crop financing and was told they could not provide financing because there was a UCC filing against me. Because I was milking until the spring of 2020, I was able to finance my 2018 and 2019 crop year inputs from the net proceeds of the milk checks I would receive. I didn't have proceeds from milk checks in the spring of 2020, so I was not able to finance my 2020 crop from milk checks.
Kurtenbach then discussed his efforts to have the Ballous amend their...
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