Opinion
No. 3-128 / 02-0644.
Filed April 30, 2003.
Appeal from the Iowa District Court for Polk County, ROBERT A. HUTCHISON, Judge.
Brad Moeckly appeals from a judgment awarding Steven Plate actual and punitive damages on Plate's fraudulent misrepresentation claim arising out of the sale of feeder pigs. AFFIRMED.
Michael Wunn and Eldon McAfee of Beving, Swanson Forrest, P.C., Des Moines, for appellant.
John C. Wagner and Jeffrey Ritchie of John C. Wagner Law Offices, P.C., Amana, for appellee.
Considered by HUITINK, P.J., and MAHAN and HECHT, JJ.
I. Background Facts and Proceedings.
Brad Moeckly appeals from a judgment awarding Steven Plate actual and punitive damages on Plate's fraudulent misrepresentation claim arising out of a sale of feeder pigs. Moeckly contends the evidence was insufficient as a matter of law to support Plate's fraudulent misrepresentation claim and the trial court erred by failing to sustain his motions for directed verdict and judgment notwithstanding the verdict. Moeckly also challenges the sufficiency of the evidence supporting an award of punitive damages. We affirm.
The record includes the following evidence. On December 9, 1999, Moeckly delivered thirty-six feeder pigs to Plate pursuant to their purchase agreement. On delivery Plate was concerned for the condition of the pigs, noting that they did not have the perky appearance, or "bloom," he normally observed in other feeder pigs. Moeckly assured him the pigs were "okay." At that time Moeckly also gave Plate a health certificate, signed October 5, 1999, by veterinarian Dr. Jerry Kunesh stating the pigs were "not showing signs of infectious, contagious, and/or communicable diseases."
There was also evidence that Dr. Kunesh had given Moeckly some presigned health certificates because Kunesh was going to be gone during November 1999, thereby allowing Moeckly to sell the pigs which Kunesh inspected in October. Dr. Kunesh, however, had not inspected the pigs sold to Plate because these pigs had not yet been born at the time the health certificates were signed. The health certificate stated it was only valid for thirty days.
The feeder pigs Plate purchased from Moeckly immediately showed signs of diarrhea, or "scour." Plate unsuccessfully attempted to treat the pigs. He subsequently learned the pigs purchased from Moeckly were infected with transmissible gastroenteritis (TGE), an untreatable contagious virus. The TGE spread to other pigs on Plate's farm, and he lost 111 of his 126 feeder pigs.
Plate sued Moeckly alleging Moeckly fraudulently misrepresented the condition of the feeder pigs purchased. At the close of the evidence, the trial court denied Moeckly's motion for directed verdict. The jury subsequently returned verdicts awarding Plate actual and punitive damages.
Plate's suit also named SEGHERSgenetics USA, L.C., Joseph Scallon, and Jerry Kunesh as defendants. No judgment was rendered against these defendants, however, and they are not parties to this appeal.
Plate then moved for judgment notwithstanding the verdict. The court denied the motion, finding:
It is undisputed in the record that Moeckly presented a fraudulent certificate to Plate when he sold the hogs. This health certificate was false in a number of respects, but perhaps the most important was its representation that the pigs in question had been inspected by a veterinarian within the past thirty days. They had never been inspected by a veterinarian.
The court entered judgment against Moeckly for $11,402.60 in compensatory damages and $48,000 in punitive damages in accordance with the jury's verdict, resulting in this appeal.
II. Standard of Review.
Our review on rulings for directed verdict and for judgment notwithstanding the verdict is for correction of errors at law. Iowa R.App.P. 6.4. On both motions, we view the evidence in the light most favorable to the party opposing the motion. Iowa R.App.P. 6.14(6)( b); Midwest Home Distrib. v. Domco Indus. Ltd., 585 N.W.2d 735, 738 (Iowa 1998).
We review a ruling on these motions to determine whether the nonmoving party has presented substantial evidence on each element of the claim. Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 391 (Iowa 2001). Evidence is substantial if a jury could reasonably infer a fact from the evidence. Balmer v. Hawkeye Steel, 604 N.W.2d 639, 640 (Iowa 2000).
III. Fraudulent Misrepresentation.
To establish a claim of fraudulent misrepresentation, a plaintiff must prove: (1) defendant made a representation to the plaintiff; (2) the representation was false; (3) the representation was material; (4) the defendant knew the representation was false; (5) the defendant intended to deceive the plaintiff; (6) the plaintiff acted in reliance on the truth of the representation and was justified in relying on the representation; (7) the representation was a proximate cause of plaintiff's damages; and (8) the amount of damages. Gibson, 621 N.W.2d at 400.
A. Intent to Deceive.
Moeckly claims there is insufficient evidence in the record to show that he intended to deceive Plate by giving him the health certificate. He asserts the health certificate was invalid on its face because it was dated October 5, 1999, and stated it was valid for thirty days from the date signed. Plate purchased the pigs on December 9, 1999, when the certificate was no longer valid. Moeckly claims that if he had actually intended to deceive Plate, he would not have given him an obviously invalid health certificate.
An intent to deceive may be shown by evidence the defendant had actual knowledge of the falsity of the representation or he made a representation with reckless disregard of whether it was true or false. Rosen v. Board of Med. Exam'rs, 539 N.W.2d 345, 500 (Iowa 1995). Here, by giving Plate the health certificate at the time of the sale, Moeckly was in effect representing that the pigs had been inspected and that the certificate pertained to the pigs. However, Moeckly knew the pigs sold to Plate had not been inspected and that the health certificate had absolutely no relationship to the pigs in question. We determine there is substantial evidence in the record to show Moeckly's intent to deceive.
B. Justifiable Reliance.
Moeckly similarly contends Plate failed to prove he justifiably relied on the relevant health certificate because the certificate was obviously invalid. He asserts that if Plate had been exercising due diligence, he would have noticed the health certificate was outdated and would have rejected the pigs.
A party may not justifiably rely on some misrepresentations. Lockard v. Carson, 287 N.W.2d 871, 878 (Iowa 1980). For example, a plaintiff may not rely on a misrepresentation if he has equal information of certain knowledge as the defendant. Id. Also, a plaintiff cannot recover if he blindly relies on a misrepresentation the falsity of which would be clear to him if he had utilized his opportunity to make a cursory examination or investigation. McGough v. Gabus, 526 N.W.2d 328, 332 (Iowa 1995). In Iowa, we impose a subjective standard, and consider whether the complaining party, in view of his own information and intelligence, had a right to rely on the representation. Id. Generally, the question of whether a party justifiably relied on the misrepresentation of another is a question for the trier of fact. Lockard, 287 N.W.2d at 877 (citing Christy v. Heil, 255 Iowa 602, 607, 123 N.W.2d 408, 411 (1963)).
We determine there is sufficient evidence in the record for the issue of justifiable reliance to be submitted to the jury. As noted above, by giving Plate the health certificate at the time of the sale, Moeckly in effect represented the pigs had been inspected. The parties did not have equal information concerning the validity of the health certificate. At that time only Moeckly knew that it certified the inspection of some other pigs, which were not sold to Plate. We cannot find, as a matter of law, that Plate did not justifiably rely on the health certificate in accepting the pigs.
IV. Punitive Damages.
Moeckly claims punitive damages were improperly awarded in this case. Punitive damages serve as a form of punishment and to deter others from conduct which is sufficiently egregious to call for the remedy. McClure v. Walgreen Co., 613 N.W.2d 225, 230 (Iowa 2000). Mere negligent conduct is not sufficient to support a claim for punitive damages. Id. Punitive damages are appropriate only when actual or legal malice is shown. Schultz v. Security Nat'l Bank, 583 N.W.2d 886, 888 (Iowa 1998). Actual malice is characterized by such factors as personal spite, hatred, or ill will. Id. Legal malice is shown by wrongful conduct committed or continued with a willful or reckless disregard for another's rights. Id.
Moeckly first claims punitive damages are inappropriate because there is insufficient evidence to support the jury's verdict. We have already found substantial evidence to support the jury's findings that Moeckly engaged in fraudulent misrepresentation. We therefore reject his claims on this issue.
Moeckly next asserts that there was insufficient evidence he acted with actual or legal malice toward Plate. We determine there is sufficient evidence to show Moeckly acted with a willful or reckless disregard for Plate's rights. There was evidence to show Moeckly was probably aware the pigs were sick, due to excessive diarrhea at the time of the sale. Then, knowing the pigs were sick, Moeckly sold them to Plate, using a fraudulent health certificate. Due to Moeckly's willful or reckless disregard for Plate's rights, Plate lost almost all of the feeder pigs on his farm at that time.
After considering all issues raised in this appeal, we affirm the decision of the district court.