Helm Financial Corp. v. Iowa Northern Ry. Co.

Decision Date31 May 2002
Docket NumberNo. C01-3006-MWB.,C01-3006-MWB.
PartiesHELM FINANCIAL CORPORATION, Plaintiff, v. IOWA NORTHERN RAILWAY COMPANY, Defendant.
CourtU.S. District Court — Northern District of Iowa
MEMORANDUM OPINION AND ORDER REGARDING THE PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT

BENNETT, Chief Judge.

                TABLE OF CONTENTS
                I. INTRODUCTION...............................................................940
                    A. Factual Background......................................................940
                       1. The IANR locomotives.................................................941
                       2. The MKCX locomotives.................................................943
                       3. The payment dispute..................................................945
                    B. Procedural Background...................................................950
                       1. Helm's Complaint and IANR's original Answer..........................950
                       2. Helm's first summary judgment motion.................................950
                       3. IANR's First Amended Answer, Affirmative Defenses, and Counterclaim..950
                       4. IANR's motions for summary judgment an d motions to strike...........951
                       5. Helm's second motion for summary judgment and motions to
                strike.............................................................951
                       6. Oral arguments.......................................................952
                 II. WHAT RECORD CAN BE CONSIDERED?............................................952
                    A. IANR's Motions To Strike................................................952
                       1. Applicable standards.................................................952
                          a. Lack of personal knowledge........................................952
                          b. Contradiction of prior testimony..................................954
                       2. Application of the standards.........................................955
                          a. Mr. Bernard's affidavit...........................................955
                          b. Mr. Warner's affidavit............................................957
                    B. Helm's Motions to Strike................................................959
                       1. Deficiencies of IANR's resistance to Helm's second summary judgment
                motion..............................................................959
                       2. Improper amendment of prior statement of facts.......................961
                III. STANDARDS FOR SUMMARY JUDGMENT............................................963
                     A. Requirements Of Rule 56................................................963
                     B. The Parties' Burdens...................................................964
                IV. MERITS OF THE SUMMARY JUDGMENT MOTIONS.....................................965
                    A. Who Breached The IANR Lease?............................................965
                        1. The claim and counterclaim..........................................965
                           a. Arguments of the parties.........................................966
                           b. What constitutes the IANR Lease?.................................968
                              i. Oral promises and amendments..................................968
                              ii. Written amendment............................................969
                           c. Breach by IANR...................................................970
                           d. Breach by Helm...................................................974
                
                2. IANR's unconscionability defense...................................976
                            a. Arguments of the parties........................................976
                            b. Applicable law..................................................977
                            c. Unconscionability of the challenged terms.......................979
                               i. Procedural unconscionability.................................979
                              ii. Substantive unconscionability................................981
                         3. Failure to mitigate damages defense................................981
                    B. IANR's Breach Of Warranty Counterclaims.................................983
                    C. Breach Of Covenant Of Good Faith And Fair Dealing.......................983
                       1. Arguments of the parties.............................................984
                       2. Governing law........................................................984
                       3. The record in light of governing law.................................985
                    D. Counterclaim For Quantum Meruit.........................................987
                       1. Arguments of the parties.............................................987
                       2. The governing law....................................................988
                       3. The record in light of governing law.................................988
                    E. Who Pays For Rent And Repairs To The MKCX Locomotives?..................989
                       1. Helm's claim and IANR's defenses.....................................989
                       2. Arguments of the parties.............................................990
                       3. The governing law....................................................990
                       4. The record in light of governing law.................................992
                    F. IANR's Counterclaim For Tortious Interference With Business.............995
                       1. Arguments of the parties.............................................995
                       2. The governing law....................................................996
                       3. The record in light of governing law.................................996
                 V. CONCLUSION.................................................................997
                

This lawsuit, which is set for trial to begin on July 15, 2002, involves claims by plaintiff Helm Financial Corporation (Helm) that defendant Iowa Northern Railway Company (IANR) failed to pay for rent and repairs on four locomotives leased from Helm and used by IANR in its shortline railroad business in north central Iowa. IANR has also brought various Counterclaims, including claims for breach of lease, tortious interference with business, and punitive damages. This matter comes before the court pursuant to various cross-motions for summary judgment or partial summary judgment, as well as motions by the parties to strike portions of each other's responses to the dispositive motions. These motions have now been fully briefed and the court heard oral arguments on them on May 17, 2002. Therefore, these motions are now ripe for disposition by the court.

I. INTRODUCTION
A. Factual Background

Although this matter is before the court on cross-motions for summary judgment or partial summary judgment, the court will not attempt here an exhaustive dissertation of the undisputed and disputed facts in the record. Rather, the court will present sufficient of the facts, both disputed and undisputed, to put in context the parties' arguments for and against summary judgment on the various claims, counterclaims, and defenses in this litigation. This task is not an easy one in this case, however, because the parties hotly contest not only individual facts, but the completeness or context of those facts and the inferences or legal conclusions to be drawn from them.

Despite the intensity of the parties' disputes, what is clear is that, at the center of this litigation is Helm's allegation that IANR has failed to pay for use of and repairs to four locomotives, which IANR used in its shortline railroad business in north central Iowa. IANR leased two of the locomotives at issue, designated IANR 3607 and IANR 3609, respectively, directly from Helm in 1995 and returned them to Helm in January 2001 pursuant to an agreed court order issued by this court in prior litigation. See Helm's Appendix to First Motion for Summary Judgment at 50 (Exhibit 14, Order of December 20, 2000, in Case No. C 00-3095-MWB). The other two locomotives at issue, designated MKCX 4302 and MKCX 4303, respectively, on which Helm also held the lease, were provided to IANR in May 2000 by another railroad, the Canada American Railroad Company (CDAC). IANR returned those two locomotives to Helm in December 2000. Although there is some temporal overlap in IANR's use of the four locomotives, the court believes that a more coherent picture of the facts in this case can be developed by discussing separately the facts pertaining to each pair of locomotives, at least up until the point at which their stories become inextricably intertwined.

1. The IANR locomotives

IANR and Helm entered into a Lease of Railroad Equipment (the IANR Lease) dated March 28, 1995, for four locomotives. See Helm's Appendix to First Motion for Summary Judgment (Exhibit 1, Lease of Railroad Equipment) at 2. IANR's President executed the lease on March 30, 1995, and Helm's President executed the lease on September 29, 1995. Id. at 19. However, IANR contends that the story begins well before March 28, 1995, with IANR's determination that 2,000 horsepower, GP-38 locomotives, would meet its requirements followed by "detailed" discussions between IANR and Helm regarding IANR's power needs. It is undisputed that Helm represented that it had several GP-38 locomotives that were then or would soon be available to lease to IANR and that IANR's then Chief Mechanical Officer, Richard Adreon, inspected several locomotives at Helm's facility in Oregon in February 1995 before hand-picking four locomotives that he considered best suited to IANR's needs.

The four locomotives selected by IANR became the subject of the IANR Lease, and were described in Annex A of that Lease as "Four (4), two-thousand (2,000) horsepower, GP38 locomotives," with the following "New Unit Numbers": IANR 3606 ("Old Unit Number" HLCX 2034); IANR 3607 ("Old Unit Number" HLCX 3607); IANR 3609 ("Old Unit Number" HLCX 3609); and IANR 3611 ("Old Unit Number" HLCX 3611). See id. at 22. IANR now contends that...

To continue reading

Request your trial
30 cases
  • Webster Industries, Inc. v. Northwood Doors, Inc.
    • United States
    • U.S. District Court — Northern District of Iowa
    • March 25, 2004
    ...claim under Iowa law, and the elements that must be proved to recover on such a claim, in Helm Financial Corp. v. Iowa Northern Railway Company, 214 F.Supp.2d 934 (N.D.Iowa 2002): As the Iowa Supreme Court recently explained, The doctrine of unjust enrichment is based on the principle that ......
  • Central States Indus. Supply, Inc. v. McCullough
    • United States
    • U.S. District Court — Northern District of Iowa
    • September 3, 2003
    ...Inc. v. Travelers Indemnity Co. of Illinois, 241 F.Supp.2d 945, 956-57 (N.D.Iowa 2003); see also Helm Fin. Corp. v. Iowa Northern Ry. Co., 214 F.Supp.2d 934, 952-54 (N.D.Iowa 2002) (stating similar b. Contradiction of prior testimony This court has also considered the standards applicable t......
  • Gaston v. The Restaurant Co.
    • United States
    • U.S. District Court — Northern District of Iowa
    • May 5, 2003
    ...in Barnes v. Northwest Iowa Health Ctr., 238 F.Supp.2d 1053, 1093-95 (N.D.Iowa 2002) (quoting Helm Financial Corp. v. Iowa Northern Railway Co., 214 F.Supp.2d 934, 954 (N.D.Iowa 2002)). With respect to Gaston's alleged contradictory testimony, the standards to a challenge As to contradictio......
  • Guinan v. Boehringer Ingelheim Vetmedica, Inc.
    • United States
    • U.S. District Court — Northern District of Iowa
    • July 25, 2011
    ...belief is insufficient.” Camfield Tires, Inc. v. Michelin Tire Corp., 719 F.2d 1361, 1367 (8th Cir.1983).Helm Fin. Corp. v. Iowa N. Ry. Co., 214 F.Supp.2d 934, 953 (N.D.Iowa 2002). An affiant's conclusions based on personal observations over time may constitute personal knowledge, and an af......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT