Opinion
No. 4:18-cv-00248-RGE-RAW
2019-10-09
BELLE CITY AMUSEMENTS, INC., Plaintiff, v. IOWA STATE FAIR AUTHORITY, Defendant.
Timothy N. Lillwitz, Bradshaw Fowler Proctor & Fairgrave, P.C., Des Moines, IA, Lan B. Kennedy-Davis, Pro Hac Vice, Rumberger Kirk & Caldwell P.A., Orlando, FL, for Plaintiff. Matthew C. McDermott, Espnola F. Cartmill, Ryan Gene Koopmans, Belin McCormick, P.C., Des Moines, IA, for Defendant.
Timothy N. Lillwitz, Bradshaw Fowler Proctor & Fairgrave, P.C., Des Moines, IA, Lan B. Kennedy-Davis, Pro Hac Vice, Rumberger Kirk & Caldwell P.A., Orlando, FL, for Plaintiff.
Matthew C. McDermott, Espnola F. Cartmill, Ryan Gene Koopmans, Belin McCormick, P.C., Des Moines, IA, for Defendant.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S CROSS MOTION FOR SUMMARY JUDGMENT
Rebecca Goodgame Ebinger, United States District Judge
I. INTRODUCTION
In 2009, Plaintiff Belle City Amusements, Inc. was assigned a written contract with Defendant Iowa State Fair Authority allowing Belle City to operate a carnival at the annual Iowa State Fair. From 2009 to 2016, Belle City paid a per-capita rate to the State Fair based on overall fair attendance. After the 2016 fair, Belle City refused to make a final reconciliation payment, arguing it had overpaid since 2011 because it paid a greater per-capita rate than required by the written contract. Belle City brings this action against the State Fair for the allegedly overpaid amounts. The State Fair counterclaims for the unpaid final reconciliation payment from 2016.
The State Fair now moves for summary judgment, arguing the parties' course of dealing modified the written contract and increased the per-capita rate for the 2011–2016 fairs. Belle City moves for partial summary judgment, asking the Court to hold, subject to the State Fair's defenses at trial, that the per-capita rate was as listed in the written contract. For the reasons set forth below, the Court grants the State Fair's motion for summary judgment and denies Belle City's cross-motion for partial summary judgment.
I. BACKGROUND
A. Factual Background
The background facts are undisputed, even though the parties disagree on certain conclusions to be drawn from them. See Pl.'s Resp. Def.'s Statement Material Facts, ECF No. 20-1; Def.'s Resp. Pl.'s Statement Material Facts, ECF No. 25; see also Def.'s App. Supp. Mot. Summ. J., ECF No 17-3; Pl.'s App. Supp. Resist. Def.'s Mot. Summ. J. & Pl.'s Cross-Mot. Summ. J., ECF No. 20-2.
In 1992, Mighty Blue Grass—Belle City's contractual predecessor—entered into a written contract with the State Fair to operate concessions and rides at the Iowa State Fair through 2001. ECF No. 20-1 ¶¶ 1, 3; ECF No. 17-3 at App. 22–32. Mighty Blue Grass and the State Fair modified this contract through several written addenda over the years. In 1995, they amended it to require Mighty Blue Grass to make $0.30 per-capita payments to the State Fair. ECF No. 20-1 ¶ 5. This addendum provided Mighty Blue Grass would make these per-capita payments each day based on attendance estimates. Id. And after each fair, the contract required either Mighty Blue Grass or the State Fair to make a final reconciliation payment based on actual attendance figures. Id. In 1996, Mighty Blue Grass and the State Fair amended the contract to increase the per-capita rate to $0.40 "for the 1996 Iowa State Fair ... and in subsequent years thereafter." Id. ¶ 6; ECF No. 25 at ¶¶ 5–6. Mighty Blue Grass and the State Fair amended the contract twice more, in 1997 and 2002, to extend the contract term through 2016. ECF No. 20-1 ¶¶ 3–4; ECF No. 17-3 at App. 28–29.
In 2009, Mighty Blue Grass assigned the contract to Belle City. ECF No. 20-1 ¶ 2. The State Fair consented to this assignment and executed a written addendum with Belle City raising the per-capita rate to $0.54 for the 2009 fair only. Id. ¶ 7. While negotiating this addendum, the parties also discussed the per-capita rate for the 2010 fair. Id. ¶ 8. Belle City proposed contract language stating the per-capita rate would revert to $0.40 after the 2009 fair. Id. The State Fair rejected this proposed language, arguing paragraph 17 of the contract gave it the right to increase the 2010 rate upon six-month's notice. Id. ¶¶ 9–10. The parties could not reach an agreement, so they simply amended the contract to provide the 2009 rate change would be "without prejudice to any party hereafter asserting any right under the contract including assertion of rights under Paragraph 17." Id. ¶ 11. In 2010, the State Fair and Belle City amended the contract, again setting the per-capita rate at $0.54. Id. ¶ 15. This change applied only to the 2010 fair. Id. The State Fair's counsel sent Belle City a letter memorializing this amendment and stating, "[t]he parties have agreed to address this issue again as part of their negotiations regarding the 2011 Iowa State Fair." Id. ¶ 15; ECF No. 17-3 at App. 21.
The parties did not discuss the per-capita rate again until after the 2016 fair. See ECF No. 20-1 ¶¶ 16, 21, 26. Instead, Belle City made, and the State Fair accepted, daily per-capita payments each year from 2011 to 2016 at the same $0.54 rate. Id. ¶¶ 17–19, 21. At the end of each fair, Belle City received a one-page final reconciliation statement listing the "Per Cap rate" as $0.54. Id. ¶¶ 19, 21–22. Based on these statements, Belle City either made or received a final reconciliation payment, also calculated at the $0.54 rate. See id. ¶¶ 19–23; Panacek Dep. 46:16–48:16, ECF No. 17-3 at App. 6–8. This arrangement persisted until the end of the 2016 fair. See ECF No. 20-1 ¶¶ 24–26; Panacek Dep. 56:7–13, ECF No. 17-3 at App. 14.
In accordance with its terms, the contract between Belle City and the State Fair expired after the 2016 fair. ECF No. 20-1 ¶¶ 4, 24. The 2016 final reconciliation statement showed that Belle City owed the State Fair $60,731.36. Id. ¶ 25; ECF No. 17-3 at App. 54. Based on advice from its attorney, Belle City refused to pay this amount, arguing that absent a modification after the 2010 fair, the per-capita rate reverted to the 1996 addendum rate of $0.40 per capita. Id. ¶ 26.
The parties' representatives discussed these events at their depositions. Belle City's owner and CEO Charles Panacek testified he instructed his office manager in 2009 to calculate and make payments at the $0.54 rate unless he instructed otherwise. Id. ¶ 13; Panacek Dep., 47:23–48:8, ECF No. 17-3 at App. 7–8. He assumed his office manager continued calculating and making payments at this rate through 2016 based on his instructions from 2009, which he never withdrew. Panacek Dep. at 48:10–16, 53:17–24, ECF No. 17-3 at App. 8, 11. Panacek also admitted to receiving and reviewing yearly reconciliation statements. He testified he "probably overlooked" the per-capita rate listed on each statement because he focused primarily on which party owed money. ECF No. 20-1 ¶¶ 20–23. State Fair CEO Gary Slater testified his failure to address the per-capita rate from 2011 to 2016 was an "oversight" caused by the reassignment of the lawyer who usually notified him of the need to address it. Slater Dep. 46:5–47:1, ECF No. 20-2 at Pl.'s App. 28–29.
B. Procedural Background
Belle City filed a complaint against the State Fair, alleging breach of contract and unjust enrichment claims. Compl., ECF No. 1. Belle City alleges the per-capita rate reverted to $0.40 after the 2010 fair and it overpaid the State Fair at the $0.54 rate from 2011 to 2016. Id. ¶¶ 17–28. The State Fair denies Belle City's allegations and asserts a counterclaim for breach of contract, alleging Belle City failed to pay the contractually required final reconciliation payment of $60,731.36 for the 2016 fair. Answer, Affirmative Defenses, & Countercl., ECF No. 8.
The State Fair's counterclaim alleges Belle City failed to make a final required payment of $61,355.06. ECF No. 8 at 7. But the State Fair's motion for summary judgment clarifies the amount unpaid after certain adjustments is $60,731.36. See Def.'s Br. Supp. Mot. Summ. J. 11, ECF No. 17-1; see also ECF No. 17-3 at App. 55.
The State Fair now moves for summary judgment on Belle City's claims and its counterclaim. Def.'s Mot. Summ. J., ECF No. 17. Belle City resists the State Fair's motion and separately moves for summary judgment. Pl.'s Br. Supp. Resist. Def.'s Mot. Summ. J., ECF No. 20; Pl.'s Mot. Summ J., ECF No. 21. The Court held a hearing on the parties' cross motions for summary judgment on September 13, 2019. Mot. Hr'g Mins., ECF No. 27. Attorneys Timothy N. Lillwitz and Ben Erickson appeared for Belle City. Id. Attorney Lan Kennedy Davis appeared telephonically for Belle City. Id. Attorneys Ryan G. Koopmans and Matthew C. McDermott appeared for the State Fair. Id. At the hearing, Belle City clarified its motion as one for partial summary judgment. As Belle City's counsel explained, Belle City asks the Court to rule as a matter of law that under the written contract the per-capita rate was $0.40 from 2011 to 2016. Belle City's counsel conceded such a ruling would not preclude the State Fair from asserting defenses at trial. Belle City also orally moved to dismiss its unjust enrichment claim. Id. ; Pl.'s Oral Mot. Dismiss Count II, ECF No. 28. The Court granted Belle City's oral motion. ECF No. 27; Text Order Granting Pl.'s Oral Mot. Dismiss Count II, ECF No. 29.
II. LEGAL STANDARD
Under Federal Rule of Civil Procedure 56, the Court must grant a party's motion for summary judgment if there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists where the issue "may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Id. at 248, 106 S.Ct. 2505. Where there is a genuine dispute of facts, those "facts must be viewed in the light most favorable to the nonmoving party." Ricci v. DeStefano , 557 U.S. 557, 586, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009) (quoting Scott v. Harris , 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) ).
To defeat a motion for summary judgment, the nonmoving party "may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial." Anderson , 477 U.S. at 248, 106 S.Ct. 2505 (omission in original) (quoting a prior version of Fed. R. Civ. P. 56(e) ). In analyzing whether a party is entitled to summary judgment, a court "may consider only the portion of the submitted materials that is admissible or useable at trial." Moore v. Indehar , 514 F.3d 756, 758 (8th Cir. 2008) (quoting Walker v. Wayne Cty. , 850 F.2d 433, 434 (8th Cir. 1988) ). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial" and the moving party is entitled to judgment as a matter of law. Torgerson v. City of Rochester , 643 F.3d 1031, 1042–43 (8th Cir. 2011) (en banc) (quoting Ricci , 557 U.S. at 586, 129 S.Ct. 2658 ).
III. DISCUSSION
The only claims remaining are Belle City's breach of contract claim and the State Fair's breach of contract counterclaim, which arise from the same facts. Belle City moves for partial summary judgment, asking the Court to interpret the parties' written contract as requiring a $0.40 per-capita rate for the 2011–2016 fairs. See ECF Nos. 21, 21-1. The State Fair moves for complete summary judgment, arguing the parties' course of dealing changed the per-capita rate to $0.54 for the 2011–2016 fairs. ECF No. 17; Def.'s Br. Supp. Mot. Summ. J. 8–11, ECF No. 17-1. The State Fair alternatively argues acquiescence by estoppel bars Belle City from enforcing the $0.40 rate term. ECF No. 17-1 at 11–13. Because granting the State Fair's motion for summary judgment on Belle City's breach of contract claim disposes of the case and requires denial of Belle City's cross-motion, the Court addresses it first, viewing the facts in the light most favorable to Belle City. See Ricci , 557 U.S. at 586, 129 S.Ct. 2658. The Court then addresses the State Fair's motion for summary judgment on its counterclaim.
A. Belle City's Breach of Contract Claim
The State Fair argues the parties' actions from 2011 to 2016 demonstrate their mutual consent to change the contract's per-capita rate to $0.54 for each of those years. ECF No. 17-1 at 8–11. Belle City counters that whether the parties modified the contract through their course of dealing is a disputed fact question for the jury. ECF No. 20 at 7–11. The State Fair concedes course of dealing is ordinarily a question for the jury, but argues Belle City has provided no evidence from which a jury could find the parties did not intend to modify the per-capita rate. Def.'s Reply Supp. Def.'s Mot. Summ. J. & Resist. Pl.'s Cross Mot. Summ. J. 2–5, ECF No. 26. For the reasons set forth below, the Court concludes the parties' course of dealing modified the contract as a matter of law and changed the per-capita rate to $0.54 from 2011 to 2016. Belle City has not shown a genuine dispute of material fact as to this dispositive issue.
1. Belle City and the State Fair's course of dealing modified the contract
An executory contract "may be effectively modified by one party with the consent of the other provided it does not violate the law or public policy." Martindale Corp. v. Heartland Inns of Am. L.L.C. , No. 08-CV-2065-LRR, 2009 WL 3246608, at *10 (N.D. Iowa Oct. 7, 2009) (quoting Davenport Osteopathic Hosp. Ass'n of Davenport v. Hosp. Serv., Inc. , 261 Iowa 247, 154 N.W.2d 153, 157 (1967) ). "[T]he requisite consent may be either express or implied from acts and conduct." Id. (alteration in original) (quoting Davenport Osteopathic , 154 N.W.2d at 157 ). "Whether a contract has been modified by the parties is ordinarily a question of fact." Id. (quoting Tindell v. Apple Lines, Inc. , 478 N.W.2d 428, 430 (Iowa Ct. App. 1991) ).
Although course of dealing typically presents a fact question, summary judgment is appropriate when undisputed evidence shows the parties to a contract agreed through informal writings to modify the allegedly breached contract term. In Polk County v. Populous, Inc. , for example, another judge in this District granted summary judgment to a subcontractor on a contractor's breach of contract claim because undisputed evidence showed authorized representatives from both companies agreed by email to modify the allegedly breached contract term. No. 4:11-cv-00235-SMR-RAW, 2013 WL 12284450, at *3 (S.D. Iowa July 12, 2013) (Rose, J.). Most importantly, this result followed even though the contract provided modifications could be made only through signed writings. Id.
At the other end of the spectrum, summary judgment on a course of dealing defense is not appropriate when the evidence shows the plaintiff objected to the alleged modification, even while continuing performance. In Davenport Osteopathic , for example, the Iowa Supreme Court held a hospital could sue an insurance company for breach of a written contract even after the hospital accepted reduced payments under the contract from the insurance company. 154 N.W.2d at 158. The court rejected the insurance company's argument that the parties' course of dealing modified the written contract because the hospital "openly and repeatedly voiced objection" to the reduced payment amount. Id. ; see also Clasing v. Hormel Corp. , 993 F. Supp. 2d 960, 976–77 (N.D. Iowa 2014) (denying meat-packing company's motion for summary judgment on hog finishers' breach of contract claim where hog finishers continued performing at new price but repeatedly protested price change); Tindell , 478 N.W.2d at 430–31 (finding no contract modification where lessee continued performing contract at lower compensation rate but protested lower rate and refused to agree to it in writing).
Here, the parties' mutual course of dealing from 2011 to 2016 modified the per-capita rate in the written contract. Although the parties did not expressly agree to modify the per-capita rate, modification "may be either express or implied from acts and conduct." Davenport Osteopathic , 154 N.W.2d at 157. The parties' acts and conduct from 2011 until the end of the 2016 fair unequivocally indicate they agreed to the $0.54 per-capita rate. At the beginning of the 2011 fair, Belle City—on its own initiative—began making payments at the $0.54 rate. ECF No. 20-1 ¶ 17. After the 2011 fair, Belle City received a reconciliation statement listing the per-capita rate as $0.54. Id. ¶¶ 18–19. Belle City then received a reconciliation payment from the State Fair, also calculated at the $0.54 rate. See id. ¶¶ 19–23; Panacek Dep. 46:16–48:16, ECF No. 17-3 at App. 6–8. This same payment pattern occurred each year from 2011 to 2016: initial per-capita payments and a final reconciliation payment, all calculated at the $0.54 per-capita rate. After the 2016 fair, Belle City received the final reconciliation statement and objected to the per-capita rate. ECF No. 20-1 ¶¶ 21–26. At that point, Belle City had calculated, made, and received payments at the $0.54 per-capita rate for over six years without objection. See id. ¶¶ 16–26. In these circumstances, there is no genuine dispute as to whether the parties' course of dealing modified the contract. Cf. Clasing , 993 F. Supp. 2d at 976–77 (denying summary judgment "somewhat reluctantly" because plaintiffs "pointed to evidence that they repeatedly protested the price change").
2. Belle City fails to show a genuine dispute of material fact as to course of dealing
Belle City makes three arguments to the contrary. First, Belle City argues the clear language of the contract set the per-capita rate at $0.40 and required the State Fair to provide six-month's notice for any modification. ECF No. 20 at 8–9. This legal argument goes to the meaning of the written contract. The factual dispute here is whether the parties' conduct impliedly modified the contract. The language of the original contract does not create a genuine dispute as to the issue of contract modification. See Populous, Inc. , 2013 WL 12284450, at *3 (granting summary judgment despite clear contract language because subsequent emails modified contract); cf. Martindale Corp. , 2009 WL 3246608, at *11 (finding genuine issue of material fact as to course of dealing despite clear contract language to the contrary). Nor does the contract provision requiring the State Fair to provide six-month's notice foreclose summary judgment. See Populous, Inc. , 2013 WL 12284450, at *3 (rejecting argument that contract provision requiring formal, signed modifications precluded summary judgment on course of dealing defense).
Second, and relatedly, Belle City suggests the Court may not look to extrinsic evidence, including the parties' course of dealing, because the contract language is unambiguous. ECF No. 21-1 at 3–4; see also ECF No. 20 at 9. To the extent Belle City maintains this argument, Iowa law forecloses it. See, e.g., Pillsbury Co., Inc. v. Wells Dairy, Inc. , 752 N.W.2d 430, 436 (Iowa 2008) ("Long ago we abandoned the rule that extrinsic evidence cannot change the plain meaning of a contract.").
Third, Belle City argues summary judgment is inappropriate because the evidence shows the parties used the $0.54 rate due to their mutual mistake. ECF No. 20 at 10–11. As described earlier, Charles Panacek testified he "probably overlooked" the rate listed in the yearly reconciliation statements. ECF No. 20-1 ¶¶ 20–23. Similarly, State Fair CEO Gary Slater testified his failure to address the per-capita rate was an "oversight." Slater Dep. 46:5–47:1, ECF No. 20-2 at Pl.'s App. 28–29. The parties' 2009 email discussions seem to reflect their mutual assumption that a new agreement would be necessary to set the rate at $0.54 in future years. ECF No. 17-3 at App. 33–47. And the 2010 letter from the State Fair's counsel to Belle City states, "[t]he parties have agreed to address this issue again as part of their negotiations regarding the 2011 Iowa State Fair." Id. at App. 21.
Viewing this evidence in the light most favorable to Belle City, it does not create a genuine issue of fact as to course of dealing. Whether parties' course of dealing modifies a contract turns on their "acts and conduct"—not their subjective motivations. Davenport Osteopathic , 154 N.W.2d at 158 ; see Schaer v. Webster Cty. , 644 N.W.2d 327, 338 (Iowa 2002) ("[M]utual assent is based on objective evidence, not on the hidden intent of the parties.") (internal quotation marks omitted). Here, the parties' course of dealing objectively and unambiguously demonstrates the parties intended to modify the per-capita rate to $0.54. The subjective intent behind the parties' actions is immaterial.
For these reasons, the Court holds the State Fair is entitled to summary judgment on Belle City's breach of contract claim. Given this conclusion, the Court need not reach the State Fair's acquiescence by estoppel argument. For the same reasons the State Fair is entitled to summary judgment, the Court holds Belle City is not entitled to partial summary judgment.
B. State Fair's Breach of Contract Counterclaim
The Court further holds the State Fair is entitled to summary judgment on its breach of contract counterclaim. See ECF No. 8 at 5–7. The State Fair argues, and Belle City does not contest, that Belle City failed to make a final reconciliation payment of $60,731.36 after the 2016 fair. ECF No. 17-1 at 11; ECF No. 20-1 ¶ 26. Belle City argues it was entitled to withhold payment because it was erroneously calculated at the $0.54 per-capita rate. See ECF No. 20-1 ¶¶ 26, 29. The Court's decision that the parties' course of dealing modified the written contract establishes that the per-capita rate was $0.54 in 2016. Accordingly, Belle City breached the contract by withholding a final reconciliation payment calculated at the $0.54 rate. Because Belle City does not dispute the attendance figures for the 2016 fair or any other aspect of the 2016 final reconciliation statement, the State Fair is entitled to summary judgment on its counterclaim in the amount of $60,731.36. See ECF No. 20-1 ¶¶ 27–28.
IV. CONCLUSION
The undisputed evidence shows the parties' course of dealing changed the per-capita rate in their written contract to $0.54 for each Iowa State Fair from 2011 to 2016. Belle City has not demonstrated a genuine dispute of material fact on this issue.
Accordingly, IT IS ORDERED that Defendant Iowa State Fair Authority's Motion for Summary Judgment, ECF No. 17, is GRANTED as to Plaintiff Belle City Amusement, Inc.'s breach of contract claim and Defendant Iowa State Fair Authority's breach of contract counterclaim.
IT IS ORDERED that Plaintiff Belle City Amusement, Inc.'s Motion for Summary Judgment, ECF No. 21, is DENIED .
The Clerk of Court is directed to enter judgment in favor of Defendant Iowa State Fair Authority. Defendant Iowa State Fair Authority's request for costs is GRANTED . Costs shall be taxed to Plaintiff Belle City Amusements, Inc. Defendant Iowa State Fair Authority is ordered to submit a bill of costs within fourteen days of the entry of this order.