Hunter v. Union State Bank

• Decision Date: 25 August 1993
• Docket Number: No. 92-51,92-51
• Parties: Gerald D. HUNTER and Pearl A. Hunter, Appellants, v. UNION STATE BANK and Ronald Kniep, Appellees.
• Court: Iowa Supreme Court

Page 172

505 N.W.2d 172

Gerald D. HUNTER and Pearl A. Hunter, Appellants, v. UNION STATE BANK and Ronald Kniep, Appellees.

No. 92-51.

Supreme Court of Iowa.

Aug. 25, 1993.

Kermit Dunahoo of Dunahoo & Lawry, Des Moines, for appellants.

Ann M. Nielsen of Nielsen & Nielsen, P.C., Corning, for appellees.

Considered by McGIVERIN, C.J., and SCHULTZ, LAVORATO, NEUMAN, and ANDREASEN, JJ.

LAVORATO, Justice.

Gerald D. Hunter and Pearl A. Hunter lost 360 acres of farmland to Union State Bank through foreclosure. Later the bank accepted offers of purchase on four separate parcels of the land from four different buyers. All of the offers were subject to the Hunters' right to repurchase under Iowa Code section 524.910(2) (1987). The bank gave notice to the Hunters of these purchase offers and of their repurchase rights under section 524.910(2). When the Hunters failed to respond to the notices by exercising their right to repurchase, the bank completed the sales to the third parties.

The Hunters then sued the bank and its president, Ronald Kniep, under several theories. After the case was tried but before a ruling was issued, the judge presiding over the case died.

Several months later a different judge from the same district ruled in favor of the bank and Kniep. The successor judge thought he could dispose of the case in the way the deceased judge had indicated to his law clerk he was going to rule: in favor of the defendants. Relying on Iowa Rule of Civil Procedure 367(b), the successor judge proceeded to do just that. On appeal, we vacated the ruling and remanded the case to the district court to consider the various options under Rule 367(b) in making a final ruling. See Hunter v. Union State Bank, 468 N.W.2d 456 (Iowa 1991) (Hunter I ).

On remand, a judge other than the successor judge was assigned the case. He opted to make a decision based on the transcript of the original trial. After reviewing the transcript and briefs and upon hearing oral arguments, this judge dismissed the Hunters' petition.

In this second appeal, the Hunters raise four issues. Their contentions are that (1) the district court abused its discretion under Rule 367(b) by not granting a new trial and permitting the parties to recall witnesses; (2) the notices the bank sent the Hunters were inadequate and failed to comply with section 524.910(2); (3) section 524.910(2) created implied contract or quasi-contract rights in the Hunters against the bank, requiring the bank to offer the land to the Hunters in one parcel; and (4) the actions of the bank and Kniep under section 524.910(2) violated the Hunters' civil rights, giving rise to a 42 U.S.C. section 1983 claim.

Finding the ruling of the district court correct on all four issues, we affirm.

I. The Decision To Make a Ruling Based on the Transcript of the Original Trial.

The Hunters' first contention is that on remand the district court abused its discretion by (1) not granting them a new trial, and (2) not allowing them to recall witnesses. They believe these omissions run afoul of the requirements of Iowa Rule of Civil Procedure 367(b). In support of this contention, the Hunters argue that (1) the issues in the case are very complex, (2) the credibility of witnesses is of paramount importance, and (3) too much time elapsed between the original trial and review of the transcript on remand (two and one-half years). Without a new trial and the concomitant ability to recall witnesses, the Hunters believe the district court on remand was unable to make a fair and rational decision and based its conclusion on hearsay.

The bank and Kniep counter that the district court's actions on remand were a proper exercise of the wide latitude given trial courts in such situations. We agree.

In pertinent part Rule 367(b) provides:

In the event of the death ... of a judge who has under advisement ..., [a] case tried to him without a jury, any other judge of the district may be called in, ... to consider the same, and, if by a review of the transcript or a reargument he can, in his opinion, sufficiently inform himself to enable him to render a decision, he shall do so; otherwise he may order a continuance, declare a mistrial, or order a new trial of all or any of the issues, or direct the recalling of any witnesses, or make such disposition of the matter as the situation warrants.

Iowa R.Civ.P. 367(b) (emphasis added).

In Hunter I, we explained Rule 367(b) this way:

Subsection (b) of Iowa Rule of Civil Procedure 367 addresses the situation where the judge has died after a case tried to the court is under advisement. Another judge may then review the transcript or order a reargument and decide the case. If the case is not concluded in this manner, the judge may order a continuance, declare a mistrial or order a new trial. The judge may also direct the recalling of witnesses or make such disposition of the matter as the situation warrants.

Hunter I, 468 N.W.2d at 457-58 (emphasis added). We concluded the intent of Rule 367(b) mandated that the ultimate decision in the case be that of the successor judge. We were also convinced that by such mandate "the parties are afforded a certainty of continuity to a decision without the presence of hearsay however reliable it may be." Id. at 458. Because we concluded the decision as presented to us was that of the deceased judge rather than the successor judge, we vacated the decision. We determined that the decision was not reviewable by us because of the successor judge's procedural misinterpretation of Rule 367(b). Id.

On remand Judge James W. Brown was assigned to hear the case. After hearing arguments from the parties on how to proceed under Rule 367(b), the judge reviewed the transcripts and exhibits in the case. He ruled that the record as it existed was complete to submit and decide the case. He entered an order in which he deemed the case submitted on the record made and set a hearing to permit the parties to make final arguments on the facts and law.

In the initial hearing on remand on the question of how to proceed under Rule 367(b), Judge Brown's comments explain his subsequent ruling to decide the case on the record made:

But until I review the transcript and [decide how to proceed], I think it would be premature in deciding exactly where we are going to go.... The case should be decided on the facts as they existed at the time of the trial and the fact that time has gone by since that time I think perhaps suggests a stronger argument for deciding the case on a transcript rather than a retrial because ... memories fade and witnesses become unavailable. We have a complete transcript of what everybody said and we know what the exhibits were at the time of the trial. There is no mistake. There is no question about different testimony. There is no question about missing witnesses. There are no memories fading. We have what they said. Now if ... we get into a problem of credibility of the witnesses and if that is a big problem, and I don't think I can determine that until I have reviewed the transcript; that would favor a retrial. If I have to determine this case on who the trial court believes, that is a strong argument for having the trial court see those people and observe their testimony and weigh the conflicting stories by seeing them in life. It is not conclusive but it is an argument for doing it that way. [Defendant's counsel] suggests that many of the facts in this case are undisputed and what we are trying to determine--what the Court is trying to determine is how do I interpret those facts and it's more of a mixed fact law situation or what conclusion you should draw from those facts rather than a credibility situation. I might change my mind after I review the transcript but that is my initial thought.

We too have reviewed the record and agree entirely with Judge Brown's reasoning. Evidently credibility was not that crucial to the court's decision. And we agree with that assessment. Because we find a reasonable basis in the record for Judge Brown's decision to decide the case on the existing record, we find no abuse of discretion in refusing to order a new trial and permitting parties to recall witnesses. See State ex rel. Miller v. National Dietary Research, Inc., 454 N.W.2d 820, 824 (Iowa 1990) (abuse of discretion found when district court gave no reasons to support its discovery protective order).

II. Adequacy of Notices Under Iowa Code Section 524.910(2).

The Hunters' second contention centers around the adequacy of the four separate notices the bank sent them. The Hunters think (1) that the notices were insufficient under section 524.910(2) as a matter of law, and (2) such insufficiency denied them due process of law. Specifically, the Hunters argue that each notice failed to adequately apprise them of their obligations and rights to repurchase under section 524.910(2). They also argue that one notice is "patently defective" on its face because it contains contradictory terms.

For reasons that follow we conclude the notices were adequate and did satisfy due process.

Section 524.910(2) requires that

[b]efore the state bank sells or otherwise disposes of agricultural land held pursuant to this subsection, the state bank shall first offer the prior owner the opportunity to repurchase the agricultural land on the terms the state bank proposes to sell or dispose of the agricultural land.

Neither party disputes the fact that section 524.910(2) does not prescribe any procedural notice requirements. In such circumstances all that is required is that the notice "state with reasonable certainty the essential facts required by law." Woodruff & Son v. Rhoton, 251 Iowa 550, 555, 101 N.W.2d 720, 723 (1960). See also Buchholz v. Board of Adjustment, 199 N.W.2d 73, 77 (Iowa 1972) ("When notice must be given but no method is prescribed, the notice must be a reasonable one under the circumstances."). The legislative intent on this point ...