Netteland v. Farm Bureau Life Ins. Co., 92-1291

• Decision Date: 28 October 1993
• Docket Number: No. 92-1291,92-1291
• Citation: 510 N.W.2d 162
• Parties: Robert NETTELAND and Kristerin Development Co., An Iowa Corporation, Plaintiffs/Appellees, v. FARM BUREAU LIFE INSURANCE COMPANY, Iowa Farm Bureau Federation and Farm Bureau Management Corporation, Defendants/Appellants.
• Court: Iowa Court of Appeals

Page 162

510 N.W.2d 162

Robert NETTELAND and Kristerin Development Co., An Iowa Corporation, Plaintiffs/Appellees, v. FARM BUREAU LIFE INSURANCE COMPANY, Iowa Farm Bureau Federation and Farm Bureau Management Corporation, Defendants/Appellants.

No. 92-1291.

Court of Appeals of Iowa.

Oct. 28, 1993.

Mark S. Lagomarcino and Joseph J. Mowry of Hanson, Bjork & Russell, Des Moines, for appellants.

John R. Hearn, Des Moines, for appellees.

Heard by OXBERGER, C.J., and HAYDEN and SACKETT, JJ. DONIELSON, J., takes no part.

HAYDEN, Judge.

This appeal arises from a breach of contract claim brought by Robert Netteland and Kristerin Development Company against Farm Bureau Life Insurance Company (Farm Bureau).

In 1987 Farm Bureau began plans to establish a child day-care center at its West Des Moines office. Farm Bureau established a task force to investigate day-care issues. The task force consisted of employees of Farm Bureau and an officer, Thomas Boyer. Boyer served as the chair of this task force and was the vice president of administrative services. The task force reported to the building project team, who in turn reported to the insurance management team. The insurance management team reported to the management corporation.

The task force contacted several day-care agencies in its investigation. In April or May of 1988 Robert Netteland and his company, the Kristerin Development Company, contacted Farm Bureau and expressed an interest in operating the day-care facility.

Eventually, the management corporation approved the task force's recommendation Farm Bureau enter into negotiations with Netteland. In August 1988 Boyer contacted Netteland informing him of the decision. The extent of the subsequent negotiations between the two parties is contested.

At some point negotiations between the parties began to break down. Apparently, the fighting issue was the rates to be charged by the day-care facility. Farm

Bureau contends Netteland called off negotiations at one point because of a dispute over rates. Netteland, however, apparently resumed negotiations within ten or fifteen minutes of the alleged break in negotiations. According to Netteland, he provided Farm Bureau with a written contract detailing his proposed agreement.

On March 14, 1989, Netteland sent a letter including new proposed rates to Farm Bureau. The letter stated "a reduction in the percentage of charges for labor will undoubtedly result in a reduction of the caliber of care." Farm Bureau requested an explanation of this statement. Farm Bureau allegedly ended the negotiations after Netteland refused to respond to this inquiry in a satisfactory manner. In April 1989 Netteland was notified Farm Bureau was going to contract with another provider of day-care services.

Netteland and his company, Kristerin Development, brought suit against Farm Bureau alleging breach of contract, negligence, gross negligence, fraudulent misrepresentation, implied contract, quasi contract, conversion, breach of the covenant of good faith and fair dealing, and estoppel. Netteland alleged an oral contract existed between him and Farm Bureau. Netteland argued the agreement had been breached and he was entitled to lost profits and the value of services rendered. The matter proceeded to a jury trial.

Netteland eventually dismissed all of his claims except the breach of contract and fraudulent misrepresentation claims. After the close of Netteland's case, Farm Bureau moved for a directed verdict. The court directed a verdict on the fraudulent misrepresentation claim in favor of Farm Bureau.

On March 27, 1992, the jury returned a verdict in favor of Netteland and awarded lost profits damages in the amount of $125,000. The district court filed a judgment entry on March 20, 1992. On March 31, 1992, the court granted a motion to extend the deadline for the filing of posttrial motions. Thereafter, Farm Bureau sought a stay of execution. The court granted the stay until three days after its ruling on posttrial motions.

On April 17, 1992, Farm Bureau filed motions for judgment notwithstanding the verdict and new trial. On July 10, 1992, the court denied both motions. Farm Bureau filed a notice of appeal on August 7, 1992. Netteland cross-appeals.

On appeal Farm Bureau contends, inter alia, there was insufficient evidence to submit to the jury the issue of the existence of a contract and lost profits.

I. Contract. The questions of whether an oral contract existed and whether it was breached are ordinarily for the trier of fact. Dallenbach v. Mapco Gas Prods., Inc., 459 N.W.2d 483, 486 (Iowa 1990) (citations omitted). Farm Bureau contends there was insufficient evidence to justify submitting to the jury the issue of whether a contract existed between the parties. Our review is for the correction of errors of law.

Only a reasonable certainty an oral contract existed need be shown. Fortgang Bros., Inc. v. Cowles, 249 Iowa 73, 77, 85 N.W.2d 916, 919 (1957). In other words, the terms must be sufficiently definite to determine with certainty the duties and obligations of each party. Burke v. Hawkeye Nat'l Life Ins. Co., 474 N.W.2d 110, 113 (Iowa 1991) (citing Severson v. Elberon Elevator, Inc., 250 N.W.2d 417, 420 (Iowa 1977)). All minor details of the contract need not be proven in the first instance in order to present the issue for the trier of fact. Fortgang Bros., Inc., 249 Iowa at 77, 85 N.W.2d at 919.

Thomas Boyer testified an oral contract existed between the parties:

Q: So, in other words, Mr. Boyer, you've admitted in your deposition to me that you had an agreement, an oral contract with Mr. Netteland, didn't you, by that deposition, at least? A: By this deposition I indicated that it was, correct.

Q: Okay. So now we've established that you had an oral agreement with Mr. Netteland, haven't we? A: Is that a question?

Q: You bet it is. A: According to this, my answer was correct.

In addition Boyer had submitted in July 1988 a memo to the management corporation recommending "Farm Bureau contract for the operation of a Child Care Center with the Robert Netteland organization." (Emphasis added.) Boyer testified the management corporation approved the recommendations in the memo on August 17, 1988.

In the fall of 1988 Netteland contacted Boyer to specifically ask if the parties had a deal with regard to the day-care facility. Netteland testified Boyer told him the management corporation had approved him. When asked what he told Netteland, Boyer testified:

A: I didn't say he was approved.

Q: What did you say? A: I believe I said something to the effect that "You've been selected to run the day-care center. You'll be working with [the architect], something like that.

Netteland testified, stating as a result of Boyer's confirmation he placed a yellow pages ad regarding the facility, hired additional employees, and assisted in the design and construction of the facility. Farm Bureau admitted it knew Netteland was advertising the Farm Bureau child-care center. Farm Bureau admitted it sought Netteland's assistance with regard to the construction and design of the building.

Terms of an agreement are sufficiently definite if the court can determine with reasonable certainty the duty of each party and the conditions relative to performance. Burke, 474 N.W.2d at 113 (citing Severson, 250 N.W.2d at 420). Prior to August 1988 Farm Bureau had the current rates or competitive rates of over a dozen local day-care providers. At one point Boyer told Netteland Farm Bureau wanted a ten percent discount on competitive rates. Boyer admitted at trial Netteland had agreed to lower his rates by ten percent for the first year.

The parties involved in these negotiations were skilled, experienced businesspersons and fully understood the implications of what they agreed upon. We believe the terms were sufficiently complete when given those reasonable interpretations ordinary businesspersons are willing to give considering the surrounding circumstances. See Severson, 250 N.W.2d at 421 (citation omitted). The district court properly determined the terms of the contract were established with reasonable certainty. The court did not err in submitting to the jury the issue of whether a contract existed and whether it had been breached. We affirm on this issue.

II. Statute of Frauds. Farm Bureau contends Netteland was barred from introducing evidence supporting an oral contract because the statute of frauds applied. Farm Bureau bases its claim upon Iowa Code section 622.32(4) (1991), contending the contract being negotiated was for a five-year period. Iowa Code section 622.32 provides, in pertinent part:

Except when otherwise specially provided, no evidence of the following enumerated contracts is competent, unless it be in writing and signed by the party charged or by the party's authorized agent:

(4) Those that are not to be performed within one year.

Iowa Code § 622.32(4) (1991). The statute of frauds is a rule of evidence, not of substantive law, and relates to the manner of proof but does not render oral contracts invalid. Johnson v. Ward, 265 N.W.2d 746, 747-48 (Iowa 1978); Stauter v. Walnut Grove Prods., 188 N.W.2d 305, 313 (Iowa 1971) (citations omitted). We hold plaintiffs may avoid the impact of the statute of frauds and properly introduce evidence of the oral contract. See Gardner v. Gardner, 454 N.W.2d 361, 363 (Iowa 1990).

Under our statute of frauds, it is well established that a party who partially performs under the agreement may avoid the impact of the statute of frauds and introduce evidence of the oral contract.

Id. (citations omitted). Our courts have recognized any conduct, acts, or circumstances offered to show "part performance" in order to bring a case within the exception of the statute of frauds must be referable exclusively and unequivocably to the contract. In re Lindsey's Estate, 254 Iowa 699, 711, 118 N.W.2d 598, 605 (1962) (citations omitted); see also Knight...