Klooster v. North Iowa State Bank
| Citation | 404 N.W.2d 564 |
| Decision Date | 15 April 1987 |
| Docket Number | No. 84-985,84-985 |
| Parties | Alfred D. KLOOSTER, Charlotte R. Klooster and Raymond J. Klooster, All Individually and f/d/b/a Triple-K Partnership, Appellees, v. NORTH IOWA STATE BANK; the Aetna Casualty and Surety Company; David J. Michel, Individually and as Sheriff of Hancock County, Iowa; and Hancock County, Iowa, Appellants. |
| Court | Iowa Supreme Court |
David M. Nelsen and John S. Mackey of Nelsen & Folkers, Mason City, and M. Gene Blackburn of Law Offices of M. Gene Blackburn, P.C., Fort Dodge, for appellants.
David A. Opheim and Greg Knoploh of Kersten, Opheim & Carlson, Fort Dodge, and David A. Sergeant of Johnson, Erb, Latham, Gibb & Carlson, P.C., Fort Dodge, for appellees.
Considered by REYNOLDSON, C.J., and LARSON, SCHULTZ, CARTER and WOLLE, JJ.
Defendants, North Iowa State Bank (the bank) and its surety, Aetna Casualty and Surety Company, appeal from a judgment for actual and punitive damages entered against them in favor of plaintiffs, Alfred Klooster, Charlotte Klooster, and Raymond Klooster (the Kloosters), on various legal theories as a result of the bank's attachment (for which bond was furnished) and sale of hogs securing debts owed the bank by the Kloosters. Claims of the Kloosters against Hancock County and the sheriff of Hancock County and the sheriff's cross-petition against defendants have been disposed of by the parties and are not involved in this appeal.
In 1981, the bank, in an action against the Kloosters on two promissory notes, sought and obtained an ex parte order for the attachment of the Kloosters' swine herd, which was collateral for the notes. The action sought recovery of $128,364. The order provided for attachment of hogs with a value of $100,000. All of the Kloosters' 1736 hogs were attached by the sheriff. A surety bond of $250,000 was provided by Aetna Casualty and Surety.
The order authorizing the attachment provided that because the hogs were perishable they should be sold immediately and the proceeds should be applied against the Kloosters' debts to the bank. An affidavit of the bank president, attached to the ex parte application, stated that there were reasonable grounds to believe that the Kloosters had sold or had attempted to sell some of their hogs for the purpose of putting the collateral beyond the reach of creditors and that, unless prevented by the court, the hogs might be sold, removed, and concealed.
The notice of levy of attachment contemporaneously served on the Kloosters did not mention any sale. Prior to taking possession of the hogs, the sheriff contacted three potential bidders, requesting private bids, and sold the hogs to one of them for $63,500. This sale occurred without the Kloosters' knowledge.
The Kloosters' amended petition sought actual and punitive damages from the bank on theories of wrongful attachment, conversion, disposition of collateral in other than a commercially reasonable manner, abuse of process, tortious interference with a business relationship, and violation of civil rights contrary to 42 U.S.C. section 1983 (1982). Following the first segment of a bifurcated trial involving only liability, the jury returned findings in favor of the Kloosters and against the bank under each of the foregoing theories. The same jury then heard additional evidence concerning damages and returned verdicts against the bank in the following amounts:
Wrongful attachment $565,000 actual damages
50,000 punitive damages
Abuse of Process 50,000 actual damages
25,000 punitive damages
Conversion 145,000 actual damages
50,000 punitive damages
Sale in Other Than 145,000 actual damages
Reasonably Commercial 100,000 punitive damages
Manner
Tortious Interference 100,000 actual damages;
With Business 30,000 punitive damages
Operations
Civil Rights Violation 50,000 pecuniary damages;
Under 42 U.S.C. § 1983 45,000 damages for emotional
distress;
25,000 punitive damages
The court, apparently believing that certain of the separate verdicts were duplicative of each other, included in the judgment only the $565,000 actual damage recovery for wrongful attachment, the $45,000 recovery for emotional distress under section 1983, and the highest of the several punitive damage verdicts ($100,000). In addition, it awarded the Kloosters $116,820 for attorney fees under section 1983.
The bank and its surety have appealed from this judgment, asserting that they were entitled to a directed verdict on each of the several claims and, in the alternative, asserting that errors were committed during the trial with respect to admission of evidence and instructions on the applicable law. We discuss those portions of the several contentions urged which we deem dispositive of the issues on appeal. Additional facts bearing upon the disposition of the case will be stated in conjunction with our discussion of the legal issues.
We first consider the bank's contention that certain of the plaintiffs have failed to demonstrate that they are the real parties in interest with respect to various portions of the damage claims which were allowed. We find no merit in this contention. The record suggests that one or more of the plaintiffs, or a partnership to whose interest one or more of the plaintiffs succeed, would be the real parties in interest with respect to the several claims presented. Under such circumstances, it is permissible for the parties to jointly present said claims without identifying the interest which each individual plaintiff has in the whole.
The extent of each individual plaintiff's interest in the recovery is a matter to be settled between the plaintiffs inter se. As long as the defendants are protected against double recovery, they are not prejudiced by that method of submitting the case. See Kimmel v. Iowa Realty Co., 339 N.W.2d 374, 379-80 (Iowa 1983); In re Marriage of Stutsman, 311 N.W.2d 73, 75 (Iowa 1981); Iowa R.Civ.P. 2. No danger of double recovery against the defendants is presented under the present facts with respect to the claims of the plaintiffs or of the partnership to whose interest they succeed.
The bank also contends that the district court erred in denying its motion for summary judgment with respect to each of the various theories for which recovery was ultimately allowed. The same legal arguments presented in this assignment of error are also included in a separate assignment stating that the bank and its surety were entitled to a directed verdict as to these claims at the conclusion of all of the evidence.
On an appeal from a final judgment following trial, determination of the existence or nonexistence of genuine issues of material fact made upon affidavits, depositions, and pleadings for the purpose of adjudicating a motion under Iowa Rule of Civil Procedure 238, should, we believe, be superseded by the court's rulings on motions for directed verdict at the close of all the evidence. Consequently, determinations made in advance of trial concerning a genuine issue of material fact will not constitute grounds for reversal where a full trial is subsequently held and sufficient evidence is produced to sustain the claim. We decline to consider the assignments of error relating to the summary judgment stage of the litigation and instead consider only those claims in connection with the bank's motion for directed verdict made at the conclusion of all of the evidence.
The bank asserts that its motion for directed verdict should have been granted with respect to each of the several theories of liability presented. We agree as to that portion of the Kloosters' claims based upon wrongful attachment, tortious interference with a business relationship, and the alleged civil rights violation under 42 U.S.C. section 1983.
A. The wrongful attachment claim. The Kloosters presented a traditional wrongful attachment claim based upon their contention that the bank did not have reasonable grounds to believe the matters asserted in the affidavit offered for purposes of obtaining the writ under Iowa Code section 639.3 (1983). The grounds which had been asserted by the bank in seeking the writ were that it had reasonable cause to believe that the Kloosters had sold or were attempting to sell their hogs in order to put them beyond the reach of creditors and that, unless prevented by the court, they would continue to do so.
In December 1980, the bank advised the Kloosters in writing that it would not provide further financing for their farming operations and requested that existing notes be paid as they came due. All existing notes were secured by liens on the Kloosters' swine herd. Evidence produced at the trial indicated substantial sales by the Kloosters of hogs subject to the bank's security interest. Defendant's Exhibit FFF is a compilation of evidence of various hog sales made by the Kloosters during the three-month period preceding the writ of attachment. It shows the following:
Rath Packing Co. $34,474.81
Schmidt Lvstk. 8,627.02
Cow Palace 9,798.01
Algona Lvstk 15,159.00
Sorensen Lvstk. 1,504.12
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Total Sales $69,562.96
The bank shared in the proceeds of some of these sales by unilaterally exercising a set off against the account in which the funds were deposited.
It is not entirely clear whether the bank was aware of the full extent of the hog sales which had taken place at the time it sought the writ of attachment. It does appear without dispute, however, that prior to obtaining the attachment the bank became aware of certain pending sales of the Kloosters' hogs and...
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