Graber v. Iowa Dist. Court for Washington County, 86-322

• Decision Date: 22 July 1987
• Docket Number: No. 86-322,86-322
• Citation: 410 N.W.2d 224
• Parties: Peter GRABER, Wanda L. Graber, Eric P. Graber, and Lori L. Graber, Plaintiffs, v. IOWA DISTRICT COURT FOR WASHINGTON COUNTY, Defendant, The Southeast Iowa Production Credit Association N/K/A the Production Credit Association of the Midlands, Intervenor.
• Court: Iowa Supreme Court

Page 224

410 N.W.2d 224

Peter GRABER, Wanda L. Graber, Eric P. Graber, and Lori L. Graber, Plaintiffs, v. IOWA DISTRICT COURT FOR WASHINGTON COUNTY, Defendant The Southeast Iowa Production Credit Association N/K/A the Production Credit Association of the Midlands, Intervenor.

No. 86-322.

Supreme Court of Iowa.

July 22, 1987.

Marilyn S. Scheer and Steven L. Nelson, of Davis, Hockenberg, Wine, Brown & Koehn, Des Moines, for intervenor.

Peter C. Riley and Mary K. Hoefer, Cedar Rapids, for plaintiffs.

Considered by REYNOLDSON, C.J., and McGIVERIN, WOLLE LAVORATO and NEUMAN, JJ.

NEUMAN, Justice.

In this original certiorari action brought in accordance with Iowa Rule of Civil Procedure 306, the plaintiffs attack the legality of an order nunc pro tunc entered by the district court in a mortgage foreclosure action. The issue is whether the district court had jurisdiction to amend its final judgment after the time for posttrial motions and appeal had expired. We conclude that it did not and sustain the writ.

I. Background Facts and Proceedings.

The mortgage foreclosure action which is the primary focus of these proceedings was just one of three suits pending between plaintiffs Peter, Wanda, Eric and Lori Graber (Grabers) and intervenor, The Production Credit Association of the Midlands (PCA). One action was a tort claim by Grabers against the PCA for an alleged breach of its fiduciary duty towards the Grabers in connection with the financing of Grabers' farming operation. The other was a replevin action filed by PCA against the Grabers to recover personal property pledged as collateral for unpaid loans. In both the replevin and foreclosure actions, Grabers raised the defense of equitable estoppel, asserting that the PCA falsely promised renewal of Grabers' loans and that Grabers' reliance on those promises led to their substantial financial loss.

All three cases were consolidated for trial. The replevin and tort actions were tried to a jury and the foreclosure action was tried to the court. The jury returned special verdicts in the replevin action finding Grabers had established that PCA was equitably estopped from enforcing its promissory notes and security agreements and that Grabers were entitled to damages of $235,770 for the wrongful detention and sale of property seized. In the tort action, the jury awarded Grabers $1,279,666 as compensation for PCA's breach of fiduciary duty.

In the tort and replevin actions, PCA timely moved for judgment notwithstanding the verdict and for new trial. PCA challenged the verdict in the tort action as excessive and duplicative inasmuch as Grabers' loss appeared to be calculated by adding Grabers' alleged net worth in 1981 to the amount of Grabers' indebtedness to the PCA. Further, PCA claimed that the jury's finding of equitable estoppel as a defense to the replevin action was not supported by substantial evidence.

Grabers resisted the motion on all grounds. They did, however, acknowledge that the damages would be duplicative if the court, in the foreclosure action, adopted the jury's finding on equitable estoppel and both findings were upheld on appeal. Grabers suggested a remittitur in the tort action in the amount of PCA's debt subject to that condition.

On January 2, 1986, the district court declined to direct judgment in favor of PCA in the tort action, ruling the evidence supported the jury's finding of breach of fiduciary relationship. Likewise, the court specifically found the jury's special verdict on the issue of equitable estoppel supported by the evidence and therefore upheld the jury's award in the replevin action. The court did, however, sustain PCA's motion for new trial in the tort action, finding the damages awarded by the jury excessive, duplicative and influenced by passion, sympathy or prejudice.

On the same day, the district court entered judgment for the Grabers in the foreclosure action, finding that the notes and mortgages were in default but adopting the jury's finding that the Grabers established by "clear, satisfactory and convincing evidence the defense of equitable estoppel." The court therefore ordered PCA "estopped from any further proceedings in attempting to foreclose the Graber mortgages" and taxed the cost of the action to the PCA. Neither party appealed the court's judgment in the foreclosure action.

On January 10, 1986, PCA filed a motion for enlarged findings and conclusions in the tort action. The sole relief requested was a determination of the scope of the new trial, the issue being whether or not both liability and damages would be retried or only the issue of damages. No mention was made in this motion of any objection to the court's judgment for Grabers in the foreclosure action.

On January 28, 1986, twenty-six days after the court ruled in Grabers' favor in the foreclosure action, PCA arranged a telephone conference between the district court and counsel to inquire whether the court's finding of equitable estoppel in the foreclosure action prevented PCA from enforcing its promissory notes. The parties dispute whether Grabers' counsel acquiesced in this irregular procedure and actively resisted PCA's claim on the merits, or whether counsel merely made himself available for the conference in order to preserve Grabers' interest in any matter raised by PCA. Because PCA's request for further hearing was not written nor was the telephone conference reported, this court has the dubious task of recreating the subsequent action of the parties and the court by reference to competing letters and affidavits.

The parties do agree that the district judge, by telephone messages on January 31, 1986, informed both counsel that he intended to alter the foreclosure judgment in favor of PCA on the notes. By letter of February 13, 1986, prior to entry of the ruling, counsel for Grabers informed the district court that they contested its jurisdiction to so alter the judgment. In response, PCA filed an "amendment to motion for enlarged findings and conclusions of law" in which it alleged that the court failed to address the issue of Grabers' outstanding indebtedness on the PCA notes in its foreclosure ruling. This document, filed forty-four days after final ruling in the action, was the first time PCA attempted in writing to obtain an amendment of the foreclosure judgment. ¹

On February 20, 1986, the district court entered a written order nunc pro tunc altering the judgment. Because the rationale embodied in its ruling is material to our consideration of plaintiffs' challenge, we set out the pertinent parts here:

On January 2, 1986, this court entered judgment in this matter estopping the PCA from foreclosing the Grabers' mortgages....

This court further made a finding at paragraph 4 that the mortgages and notes were delinquent and the Grabers were in default.

This court further stated in paragraphs 5 and 6 of the Findings of Fact, that the Grabers had established their defense of equitable estoppel and PCA could not foreclose its mortgages.

This court made no finding that PCA could not obtain judgment on the note because of the delinquent status. This court should have entered judgment in favor of PCA for the amount due under the note as of the date of trial with accruing interest at the highest legal rate thereafter. The amounts due at the time of trial was $479,212.36 principal plus $149,570.73 accrued interest.

This omission by the court was brought up through a telephone conference with the attorneys in response to a request for clarification by PCA's counsel concerning judgment on the note.

(Emphasis in original.)

It is this nunc pro tunc order which forms the basis of this certiorari action.

II. Intervenor's Motion to Dismiss.

Plaintiffs claim that the district court acted illegally and without jurisdiction when it entered its order of February 20, asserting the ruling was neither proper under Iowa Rule of Civil Procedure 179(b) nor as an order nunc pro tunc. Intervenor PCA resists plaintiffs' challenge to the order and further moves this court to dismiss the petition for writ of certiorari based on the doctrines of judicial estoppel and appellate waiver. We turn first to intervenor's motion to dismiss which merits only our brief attention.

A. Judicial estoppel.

PCA argues that the doctrine of judicial estoppel bars the Grabers from pursuing this certiorari action. The doctrine, which prohibits a party who successfully and unequivocally asserts a position in one proceeding from asserting an inconsistent position in a subsequent proceeding, was recently discussed by this court in Vennerberg Farms, Inc. v. IGF Ins. Co., 405 N.W.2d 810, 814 (Iowa 1987). There, as here, the doctrine has no application. PCA claims that Grabers' reliance in this action on the unenforceability of the promissory notes is inconsistent with the position Grabers took in retrying the breach of fiduciary duty claim. At the retrial, Grabers introduced evidence showing their debt to PCA based on the nunc pro tunc order it now challenges. PCA argues this amounts to an admission of the debt, thus barring Grabers from claiming in this action that the debt does not exist. According to PCA, if Grabers cannot challenge the existence of the debt they cannot challenge the order nunc pro tunc.

As we said in Vennerberg, a fundamental feature of the doctrine of judicial estoppel is the successful assertion of the inconsistent position in a prior action. Absent judicial acceptance of the inconsistent position, application of the rule is unwarranted because no risk of inconsistent, misleading results exists. Furthermore, an intentional attempt to mislead the court with the inconsistency must be shown. Id. While Grabers may have gained an advantage upon retrial because the judgment they now challenge served to enhance their damage claim, PCA's characterization of this strategy as "playing fast and loose with the courts" is untenable. To the contrary,...