Merrill v. Valley View Swine, LLC

• Decision Date: 27 March 2020
• Docket Number: No. 19-0821,19-0821
• Citation: 941 N.W.2d 10
• Parties: Michael MERRILL and Karen Jo Frescoln, Appellants, v. VALLEY VIEW SWINE, LLC and JBS Live Pork, LLC f/k/a Cargill Pork, LLC, Appellees.
• Court: Iowa Supreme Court

941 N.W.2d 10

Michael MERRILL and Karen Jo Frescoln, Appellants,

v.VALLEY VIEW SWINE, LLC and JBS Live Pork, LLC f/k/a Cargill Pork, LLC, Appellees.

No. 19-0821

Supreme Court of Iowa.

Filed March 27, 2020

Benjamin G. Arato, Steven P. Wandro, and Jennifer H. De Kock of Wandro & Associates, PC, Des Moines, for appellants.

William H. Roemerman & Laura M. Williams of Elderkin & Pirnie, PLC, Cedar Rapids, for appellee Valley View Swine, LLC.

Shannon L. Sole and Robert C. Gallup of Faegre Drinker Biddle & Reath LLP, Des Moines, for appellee JBS Live Pork, LLC f/k/a Cargill Pork, LLC.

MANSFIELD, Justice.

I. Introduction.

This case requires us to interpret Iowa Code section 657.11(5), a litigation-cost-shifting provision relating to animal feeding operations:

If a court determines that a claim is frivolous, a person who brings the claim as part of a losing cause of action against a person who may raise a defense under this section shall be liable to the person against whom the action was brought for all costs and expenses incurred in the defense of the action.

Iowa Code § 657.11(5) (2013).

A group of property owners filed a petition alleging that certain confined animal feeding operations (CAFOs) operated and supported by the defendants constituted a nuisance. Because the plaintiffs had failed to exhaust farm mediation, they had to dismiss their initial lawsuit. The plaintiffs refiled. Later, two of the plaintiffs voluntarily dismissed their claims a second time, resulting in an adjudication against them on the merits. See Iowa R. Civ. P. 1.943.

The defendants sued by these two plaintiffs moved for costs and expenses pursuant to Iowa Code section 657.11(5), and the district court granted their motions. The two plaintiffs now appeal. They argue: (1) two voluntary dismissals do not mean they had "a losing cause of action," (2) their claims were not frivolous, and (3) the district court improperly assessed certain costs and expenses. On our review, we hold that these plaintiffs had a losing cause of action, that the district court did not abuse its discretion in finding their claims frivolous, and that the district court’s apportionment of costs and expenses was appropriate. Accordingly, we affirm the judgment of the district court.

II. Facts and Procedural History.

The underlying litigation has been before us already. See Honomichl v. Valley View Swine, LLC , 914 N.W.2d 223 (Iowa 2018). We will not restate all the details. In 2013, after obtaining authorization from the Iowa Department of Natural Resources, Valley View Swine began operating two CAFOs in Wapello County for swine owned by JBS Live Pork. The CAFOs are known as Site 1 and Site 2. Other CAFOs are also in operation or planned in Wapello and Jefferson Counties.

In November 2013, seventy property owners filed suit against Valley View, Valley View’s principals, JBS, and several other defendants. The petition alleged claims of negligence and nuisance "based on the odors, pathogens, and flies they alleged stem from the CAFOs, as well as defendants’ alleged failure to use prudent management practices to reduce these odors, pathogens, and flies." Id. at 228. The plaintiffs included Michael Merrill and Karen Jo Frescoln. All the plaintiffs, however, had to dismiss their original suit without prejudice because they had not complied with the farm mediation requirement. See Iowa Code § 657.10.¹

On April 2, 2014, the plaintiffs, now numbering sixty-nine and having exhausted farm mediation, refiled their action. The district court severed the action into three divisions based upon the allegations against three diverse defendant groups. Division A encompassed the plaintiffs who were suing Valley View, Valley View’s principals, and JBS over Site 1 and Site 2. Divisions B and C involved other sets of plaintiffs and defendants. Merrill and Frescoln were plaintiffs in division A.

Merrill lives in Batavia, 2.36 miles from Site 1 and 3.69 miles from Site 2. He was deposed on July 30, 2015, and questioned at length about odor and other effects resulting from the two CAFOs. He testified that his home has odor problems only when there is a slight breeze out of the southwest up to five miles per hour. He recalled there being odor issues six to twelve times in 2015 through the date of his deposition and eight to sixteen times in 2014. However, Merrill kept an odor calendar from February 2015 through July 2015 that specifically noted only two occasions of odor at his home—on June 1 and July 12. Merrill works as an auto mechanic out of his house. He testified the odor on June 1 caused him to cut short the time he was spending outside working by thirty to forty-five minutes. On July 12, the odor again forced Merrill into the house. Merrill did not specifically investigate where the odors were coming from, but Valley View operates the two closest CAFOs.

Frescoln, who was deposed the day before Merrill, lives in rural Libertyville, 5.65 miles from Site 1 and 6.51 miles from Site 2. Her nuisance claims do not pertain to her actual residence though. Frescoln spends time in Batavia babysitting her grandchildren at a farmhouse that is much closer to Site 1 and Site 2. The farmhouse was formerly owned by Frescoln and her husband but, at all relevant times, was owned by their daughter and son-in-law. The underlying land is owned by Frescoln’s husband, who has early-onset Alzheimer’s disease.² Frescoln does have an ownership interest in several nonhabitable structures on the land: a barn with a concrete floor "that maybe one day will blow down we hope," a storage area consisting of an old railroad car, and a grain bin that is rented out to a farmer.

Frescoln testified that she smells odor almost daily at her daughter and son-in-law’s home in Batavia. Her calendar contains approximately one or two odor entries per month. The entries reflect times when the odor was at its worst. On many occasions, the odor interfered with activities, such as Frescoln’s grandchildren playing outside. Frescoln also noticed an abundance of green flies, which she attributes to the CAFOs. Frescoln testified that the family had to postpone moving cattle onto the farmstead in Batavia because the smells from the CAFOs made it too difficult to be outside installing and repairing fencing. She said she no longer goes camping on that property, although she has not been camping in four years anywhere. It should be noted that Frescoln’s husband, daughter, and son-in-law are not plaintiffs in the litigation.

The district court had implemented a "bellwether" procedure whereby selected groups of plaintiffs in divisions A, B, and C of the litigation would have their claims tried first. Merrill and Frescoln were chosen as two of the bellwether plaintiffs in division A. In February 2016, a jury returned a defense verdict in the division C bellwether trial. The division A bellwether trial was scheduled to go forward in August.

On June 7, two months before this scheduled trial, Merrill dismissed his claims voluntarily. Three days later, Valley View and JBS filed a motion for judgment and costs and expenses, including attorney fees, against Merrill pursuant to Iowa Code section 657.11(5) and Iowa Rule of Civil Procedure 1.413(1).

Meanwhile, on June 8, the district court entered a summary judgment ruling striking the defendants’ immunity defense on the ground that Iowa Code section 657.11(2) was unconstitutional as applied to the division A plaintiffs.³ On July 15, this court granted the defendants’ application for an interlocutory appeal and stayed proceedings. That appeal was resolved nearly two years later when this court, on June 22, 2018, reversed the district court’s ruling. Honomichl , 914 N.W.2d at 238–39. Yet we explained that the statute could still be found unconstitutional as to the division A plaintiffs if, on "a fact-based analysis," they showed that

they (1) "received no particular benefit from the nuisance immunity granted to their neighbors other than that inuring to the public in general[,]" (2) "sustain[ed] significant hardship[,]" and (3) "resided on their property long before any animal operation was commenced" on neighboring land and "had spent considerable sums of money in improvements to their property prior to construction of the defendant’s facilities."

Id. at 237–39 (quoting Gacke v. Pork Xtra, L.L.C. , 684 N.W.2d 168, 178 (Iowa 2004) ).

On September 24, after procedendo had issued and the case had been returned to the district court, Frescoln voluntarily dismissed her claims. On October 11, Valley View and JBS filed a motion for costs, expenses, and attorney fees as to Frescoln under Iowa Code section 657.11(5) and Iowa Rule of Civil Procedure 1.413(1). Both Merrill and Frescoln resisted the motions, and the district court held a hearing on November 20.

A few weeks later, on December 11, the district court issued its ruling. The court found that Merrill and Frescoln’s pleadings were not sanctionable under rule 1.413(1). Turning to Iowa Code section 657.11(5), the court declined to award any attorney fees, reasoning they were not "costs and expenses" within that meaning of that statute. Iowa Code § 657.11(5). The court did, however, reject Merrill and Frescoln’s argument that two-time voluntary dismissers did not qualify as having "a losing cause of action." Id. The court elaborated,

The statutory reference [in section 657.11(5) ] to "brings the claim as part of a losing cause of action" reasonably embraces other, non-trial situations where a decision on the merits is effected: such outcome could take shape as a summary-judgment dismissal—or, as in this case, a second, voluntary dismissal.

In addition, after summarizing the deposition testimony of Merrill and Frescoln which had been submitted by the parties, the district court found their claims to be "frivolous" as that term is used in Iowa Code section 657.11(5). As to Merrill, the court observed,

Merrill was unable to tie any of the odor he detected to the subject CAFOs

...