Opinion
No. 2-898 / 02-0191
Filed February 12, 2003
Appeal from the Iowa District Court for Lyon County, Robert J. Dull, District Associate Judge.
Plaintiffs appeal from a ruling granting defendant's motion for directed verdict following a bench trial. VACATED AND REMANDED.
Brian McPhail of Gross McPhail, Osage, for appellant.
James Haberkorn of Austin, Haberkorn Kippley, Rock Rapids, for appellee.
Considered by Vogel, P.J., and Zimmer and Hecht, JJ.
Double H Livestock, Inc. and Harvey Hanson (Double H) filed suit against Larry Gathman seeking damages arising from the sale of a 1978 Wilson livestock trailer. The matter was tried to the district court without a jury. At the close of the plaintiffs' evidence, Gathman moved for a directed verdict which the court denied. Gathman renewed his motion for directed verdict after his own case was presented. The court granted the motion in a written ruling following trial. The court concluded the statute of frauds, specifically Iowa Code section 554.2201(1) (2001), barred the plaintiff's contract claim. Plaintiffs filed a motion to reconsider which the court rejected. On appeal, Double H contends the district court erred in granting a directed verdict. In the alternative, it asserts it is entitled to recover against Gathman under theories of promissory estoppel and unjust enrichment. Because we conclude disposition of this case by directed verdict was inappropriate, we vacate and remand to the district court for adjudication of this action on its merits.
I. Background Facts and Proceedings.
Double H is in the business of transporting livestock to markets and is owned by Harvey Hanson and his wife. Defendant Larry Gathman is in the business of buying and selling semi-trailers. Gathman and Hanson had dealt in buying, selling, and trading livestock trailers on at least five separate occasions during the period from 1989 to 1999. The dispute in this case stems from an alleged oral contract for the sale of a livestock trailer in 1997.
Hanson testified to the following version of events at trial. The parties began negotiating the sale and trade of a set of livestock trailers. Hanson sought to trade up to three trailers, including a 1984 Wilson trailer, for a forty-eight foot trailer. The parties negotiated a price of $3250 for the 1984 Wilson trailer. Hanson then delivered the 1984 trailer in the spring of 1997. Gathman never found Double H a trailer for which a trade could be made and Gathman never paid Hanson for the 1984 Wilson trailer. In September 1997 Gathman contacted Hanson seeking a trailer. Gathman agreed to buy a 1978 Wilson trailer for $4500. Hanson delivered the 1978 trailer the following week. Prior to delivery, he left a message on Gathman's recorder requesting payment for both trailers. When Hanson arrived with the 1978 trailer, Gathman gave him a check for $3250 and indicated he would pay for the 1978 trailer once he converted and sold it. According to Hanson, Gathman never paid anything toward the $4500 obligation despite acknowledging the debt.
Gathman testified to a different version of events at trial. He claimed that he had no knowledge of the 1984 Wilson trailer allegedly delivered in the spring of 1997. He testified that the check for $3250 written to Hanson in September 1997 paid for the 1978 Wilson trailer delivered at that time. According to Gathman, he would normally pay for a trailer when he received it.
II. Scope of Review.
When an action is tried before a court without a jury, a motion for directed verdict should actually be designated as a motion to dismiss. Iowa Coal Min. Co., Inc. v. Monroe County, 555 N.W.2d 418, 438 (Iowa 1996) (citing B B Asphalt Co. v. T.S. McShane Co., 242 N.W.2d 279, 281 (Iowa 1976)). However, this misnomer is immaterial as a motion to dismiss during trial is equivalent to a motion for directed verdict. Id. Our review of a ruling granting a motion for directed verdict is for correction of errors at law. Iowa R.App.P. 6.4; Balmer v. Hawkeye Steel, 604 N.W.2d 639, 640 (Iowa 2000). "When reviewing the ruling, we view the evidence in the same light as the district court to determine whether the evidence generated a jury question." Balmer, 604 N.W.2d at 640-41. The evidence must be viewed in the light most favorable to the party against whom the motion was made, regardless of whether it was contradicted. Iowa R.App.P. 6.14(6)( b); Reuter v. State Farm Mut. Auto. Ins. Co., Inc., 469 N.W.2d 250, 251 (Iowa 1991). In ruling on such motions the trial court must first decide whether the nonmoving party has presented substantial evidence on each element of the claim. Balmer, 604 N.W.2d at 641. Evidence is substantial if a jury could reasonably infer a fact from the evidence. Id. If the evidence is not substantial, a directed verdict is appropriate. Id.
III. Discussion.
Double H asserts the district court erred in directing a verdict based on the statute of frauds. Although the alleged contract in this case is not in writing, Double H argues it is still enforceable under section 554.2201(3)(c) because Gathman received and accepted the 1978 trailer from Double H. Alternatively, Double H proffers promissory estoppel and fraud as grounds of relief.
A. Statute of Frauds.
The district court granted a directed verdict after concluding the parties' agreement was barred by the statute of frauds under chapter 554. The section of the statute of frauds relied on by the trial court provides, in pertinent part,
[A] contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by that party's authorized agent or broker.
Iowa Code § 554.2201(1). The court reasoned the alleged oral contract at issue was for the sale of a good for more than five hundred dollars. Specifically, the court found the alleged oral contract for the sale of the 1978 Wilson livestock trailer to be for the price of $4500. According to the court's ruling, the contract was unenforceable because there was no writing sufficient to indicate a contract.
In its motion to reconsider, Double H asserted the statute of frauds was inapplicable because of evidence Gathman had received and accepted the 1978 trailer within the meaning of section 554.2201(3)(c) which provides,
3. A contract which does not satisfy the requirements of subsection 1 but which is valid in other respects is enforceable
. . . .
c. with respect to goods for which payment has been made and accepted or which have been received and accepted (section 554.2606).
This section makes an otherwise unenforceable contract under 554.2201(1) enforceable if the goods have been received and accepted.
In ruling on plaintiff's motion to reconsider, the court failed to specifically resolve Double H's claim that the 1978 trailer had been received and accepted by Gathman. Instead, the court stated, "Upon review of the pleadings and the record the Court concludes that the receipt and acceptance of the alleged goods was contested in the proceedings and that Iowa Code Section 554.2201(1) is applicable."
As we have already mentioned, evidence must be viewed in the light most favorable to the party against whom a motion for directed verdict is made, in this case Double H. We agree with plaintiffs' contention that there is substantial evidence in the record indicating Gathman received and accepted the 1978 trailer at issue from Double H. The trial court acknowledged that the evidence regarding the issue of receipt and acceptance was conflicting but did not resolve the conflict in the evidence. We vacate the trial court's ruling granting a directed verdict to the defendant and remand for adjudication of this case on its merits based on the evidence presented at trial. In view of this result, we find it unnecessary to address the merits of appellants' remaining claims.
IV. Conclusion.
We conclude the district court committed error in granting defendant's motion for directed verdict. Accordingly, we vacate and remand for adjudication of this case on the merits.