Stalter by Stalter v. Iowa Resources, Inc.

• Decision Date: 17 April 1991
• Docket Number: No. 89-1526,89-1526
• Citation: 468 N.W.2d 796
• Parties: Rodney Allen STALTER, by Lori Ann STALTER, His Conservator and Lori Ann Stalter, Individually, Plaintiffs, v. IOWA RESOURCES, INC., Iowa Power and Light Company, Farmer's Cooperative Exchange, State of Iowa and Iowa Interstate Railroad Ltd., Defendants. IOWA RESOURCES, INC., and Iowa Power and Light Company, Appellants, v. IOWA INTERSTATE RAILROAD LTD., Seedburo Equipment Company, Heartland Rail Corporation and Hawkeye Land Company, Defendants to Cross-Petition, and Chicago Pacific Corp., f/k/a Chicago, Rock Island and Pacific Railroad Company, Appellee.
• Court: Iowa Supreme Court

Page 796

468 N.W.2d 796

Rodney Allen STALTER, by Lori Ann STALTER, His Conservator and Lori Ann Stalter, Individually, Plaintiffs, v. IOWA RESOURCES, INC., Iowa Power and Light Company, Farmer's Cooperative Exchange, State of Iowa and Iowa Interstate Railroad Ltd., Defendants.

IOWA RESOURCES, INC., and Iowa Power and Light Company, Appellants, v. IOWA INTERSTATE RAILROAD LTD., Seedburo Equipment Company, Heartland Rail Corporation and Hawkeye Land Company, Defendants to Cross-Petition, and Chicago Pacific Corp., f/k/a Chicago, Rock Island and Pacific Railroad Company, Appellee.

No. 89-1526.

Supreme Court of Iowa.

April 17, 1991.

Gregory R. Brown, Hugh J. Cain and Thomas G. Fisher, Jr., of Duncan, Jones, Riley & Finley, P.C., Des Moines, for appellants.

Henry A. Harmon and Ken A. Winjum of Grefe & Sidney, Des Moines, for appellee.

Considered by McGIVERIN, C.J., and LARSON, LAVORATO, NEUMAN and SNELL, JJ.

McGIVERIN, Chief Justice.

This third-party action presents questions concerning liability for contribution and indemnity in a personal injury case.

Defendants, Iowa Resources, Inc., and Iowa Power and Light Company (collectively referred to as Iowa Power) appeal a district court ruling sustaining third-party defendant Chicago Pacific Corporation's (CPAC) motion for summary judgment. We transferred the case to our court of appeals, which reversed the district court's grant of summary judgment.

We granted CPAC's application for further review and now vacate the decision of the court of appeals and affirm in part and reverse in part the district court judgment.

I. Background facts and proceedings. Chicago, Rock Island & Pacific Railroad Company (Rock Island) constructed a railroad spur near Farmer's Cooperative Exchange (Coop) in Pella, Iowa, in 1970. The spur was constructed underneath 69,000 volt (69kV) electric transmission lines owned by Iowa Power.

Rock Island maintained its interest in the spur near Coop until it filed for bankruptcy. At that time, Rock Island transferred all of its property to a bankruptcy trustee who, on June 1, 1984, deeded portions of that property, including the spur near Coop, to CPAC. ¹ Thereafter, CPAC quit claimed all of its Iowa real estate to either Heartland Railway Co. or Hawkeye Land Co., with the exception of the right to convey easements for power line purposes, which it reserved to itself. CPAC granted such an easement to Iowa Power on October 29, 1985. That easement included the power line passing over the spur near Coop.

On May 14, 1987, Rodney Stalter was atop a railroad car, owned by Iowa Interstate Railroad and located on the spur near Coop, taking grain samples. Stalter's brass sampling device came into contact with an Iowa Power transmission line passing electric current through Stalter and resulting in severe injuries to him.

Plaintiffs, Rodney Allen Stalter, by Lori Ann Stalter, his conservator and Lori Ann Stalter, individually (collectively referred to as Stalters), sued Iowa Power, Coop, Iowa Interstate Railroad and the State of Iowa for damages resulting from the electrical accident. Stalters did not sue CPAC.

Iowa Power, contending that construction of the spur reduced clearance between the ground and its lines below that required by safety standards, cross-petitioned against CPAC, among others, seeking contribution and indemnity for any judgment Stalters might recover from Iowa Power. CPAC moved for summary judgment, Iowa R.Civ.P. 237, contending that, as a matter of law, it was not liable to Iowa Power for contribution or indemnity. The district court sustained CPAC's summary judgment motion and dismissed it as a third-party defendant.

Iowa Power appealed. The court of appeals reversed.

On further review, we now consider whether the district court erred in ruling that, as a matter of law, CPAC was not liable to Iowa Power for contribution or indemnity.

The record for summary judgment purposes consisted of the pleadings, numerous depositions, exhibits, affidavits and responses to discovery.

II. Summary judgment standard. On appeal, we view the whole record in determining whether summary judgment was appropriate. Walker Shoe Stores, Inc. v. Howard's Hobby Shop, 327 N.W.2d 725, 728 (Iowa 1982); Tasco, Inc., v. Winkel, 281 N.W.2d 280, 282 (Iowa 1979). Summary judgment is appropriate if the court determines that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Iowa R.Civ.P. 237(c). "[A] fact issue is generated if reasonable minds can differ on how the issue should be resolved." Thorp Credit, Inc. v. Gott, 387 N.W.2d 342, 343 (Iowa 1986).

III. Contribution. Iowa Power asserts that, under tort theories of premises liability and negligence, CPAC would be jointly liable with Iowa Power to Stalters for injuries Stalter suffered on May 14, 1987. Thus, Iowa Power argues that CPAC is liable to it for contribution. See Iowa Code § 668.5 (1987) (a right of contribution exists between or among two or more persons who are liable upon the same indivisible claim). Iowa Power contends the district court erred when it ruled otherwise.

A. Premises Liability. Iowa Power says CPAC built a spur on CPAC's property in 1970, under Iowa Power's transmission lines. Iowa Power argues that CPAC's spur reduced clearance below the minimum required by state law and, in addition, CPAC failed to notify Iowa Power of the reduced clearance. These facts, Iowa Power contends, make CPAC liable to Stalters under a theory of premises liability. CPAC responds that the theory of premises liability is not applicable to this case because CPAC did not own the spur when Stalter was injured.

It is undisputed that, on May 14, 1987, CPAC no longer possessed any ownership interest in the spur, upon which Stalter was injured, or the area surrounding it. At that time, the spur was owned by a third party, either Heartland or Hawkeye. Iowa Power maintains, however, that a present ownership interest in the spur is not required for CPAC to be held liable to Stalters under the theory of premises liability.

We have previously stated that when the owner of a premises disposes of that premises the owner is no longer liable for injuries to persons upon the property because the former owner is in no position to control the use of the premises. Upp v. Darner, 150 Iowa 403, 407, 130 N.W. 409, 410 (1911). The former owner's duties to persons upon the land are at an end. Id. These principles are in accord with Restatement (Second) of Torts section 352 (1965) which provides:

Except as stated in § 353, a vendor of land is not subject to liability for physical harm caused to his vendee or others while upon the land after the vendee has taken possession by any dangerous condition, whether natural or artificial, which existed at the time that the vendee took possession.

The rationale underlying the general rule that one who has transferred ownership and control is no longer held liable is that the former owner no longer has control and thus may not enter the property to cure any deficiency, and, he/she cannot control the entry of persons onto the property or provide safeguards for them. Preston v. Goldman, 42 Cal.3d 108, 114, 720 P.2d 476, 479, 227 Cal.Rptr. 817, 820 (1986).

Iowa Power does not dispute our general rule that former owners are not liable for injuries to persons upon property once the current owner has taken possession. Rather, Iowa Power suggests that we should carve out an exception to the general rule similar to the exception created by Restatement (Second) of Torts section 353. Section 353 provides:

(1) A vendor of land who conceals or fails to disclose to his vendee any condition, whether natural or artificial, which involves unreasonable risk to persons on the land, is subject to liability to the vendee or other persons upon the land with the consent of the vendee or his subvendee for physical harm caused by the condition after the vendee has taken possession, if

(a) the vendee does not know or have reason to know of the condition or the risk involved, and

(b) the vendor knows or has reason to know of the condition, and realizes or should realize the risk involved, and has reason to believe that the vendee will not discover the condition or realize the risk.

(2) If the vendor actively conceals the condition, the liability stated in Subsection (1) continues until the vendee discovers it and has reasonable opportunity to take effective precautions against it. Otherwise the liability continues only until the vendee has had reasonable opportunity to discover the condition and to take such precautions.

We need not decide whether the exception stated in section 353 should be available in Iowa. Even if we gave Iowa Power the benefit of this exception, it has failed to demonstrate why summary judgment was not proper in this case. See Iowa R.Civ.P. 237(e) (when a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response must set forth specific facts showing there is a genuine issue for trial). Iowa Power has failed to identify facts in the record showing that genuine issues for trial exist in at least three respects.

1. Obvious conditions. Restatement (Second) of Torts section 353 comment b, in part, states:

The vendor [CPAC] is under no duty to either his vendee [Heartland or Hawkeye] or those who may be expected to enter upon or use the land in his right ... to warn the vendee of the extent of the risk involved in an obvious condition, unless the condition is such that the vendee would be unlikely to appreciate the extent of the risk involved.

Jurisdictions reviewing the application of section 353 have granted vendors' summary judgment motions, holding that section 353 does not apply, when the condition and the extent of the risk created by the condition are both obvious. See, e.g., Counts v....