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Powell v. Swine Graphics Enter.

Court of Appeals of Iowa
Feb 6, 2002
No. 1-571 / 00-2002 (Iowa Ct. App. Feb. 6, 2002)

Opinion

No. 1-571 / 00-2002.

Filed February 6, 2002.

Appeal from the Iowa District Court for Hamilton County, TIMOTHY J. FINN, Judge.

Defendant appeals from the judgment entered upon a jury verdict in plaintiffs' favor for breach of contract. AFFIRMED.

Becky S. Knutson and Heather L. Palmer of Davis, Brown, Koehn, Shors Roberts, P.C., Des Moines, for appellant.

Paul B. Ahlers of Johnson, Erb, Bice, Kramer, Good Mulholland, P.C., Fort Dodge, for appellees.

Heard by SACKETT, C.J., and MILLER, J., and C. PETERSON, S.J.

Senior judge assigned by order pursuant to Iowa Code § 602.9206 (1999).


Dennis and Jane Powell filed suit against Swine Graphics Enterprises, L.P., for breach of contract, oral and written, and promissory estoppel. The matter proceeded to a jury trial, resulting in an award to the Powells of $111,069 in damages. Swine Graphics appeals, contending it was entitled to a directed verdict based on the Powells' failure to mitigate damages and failure to satisfy a condition precedent to the parties' contract. We affirm.

I. BACKGROUND FACTS.

A jury could have found the following facts. The Powells operate a hog farm where they "finished hogs" and provided nursery space for Swine Graphics, a hog producer. In early 1998, the Powells approached Swine Graphics about expanding to a "wean-to-finish" operation, which would entail construction of new buildings, and about extending the parties' existing contracts. Various negotiations ensued and the Powells eventually began steps to construct a new facility near a neighboring farm owned by the Andersons. Swine Graphics eventually withdrew its endorsement of the project when it appeared the Andersons were upset and would withhold their approval, contrary to Swine Graphics' good neighbor policy.

The Powells sued Swine Graphics, asserting claims for breach of contract, oral and written, and promissory estoppel. The matter proceeded to a jury trial, resulting in an award to the Powells of $111,069 in damages. Swine Graphics appeals.

II. FAILURE TO MITIGATE DAMAGES.

Swine Graphics contends it was entitled to a directed verdict based on the Powells' failure to mitigate any damages by: (1) neglecting to speak with the Andersons prior to commencing construction on the project, (2) failing to consider alternative locations for the project, and (3) failing to contact other hog producers to obtain production contracts or hogs.

Our review of a ruling on a motion for directed verdict is limited to the grounds raised in the motion. Leaf v. Goodyear Tire Rubber Co., 590 N.W.2d 525, 528 (Iowa 1999). Our preservation rule requires that issues must be presented to and passed upon by the district court before they can be raised and decided on appeal. Metz v. Amoco Oil Co., 581 N.W.2d 597, 600 (Iowa 1998). Swine Graphics did not raise the Powells' failure to mitigate damages as a ground in their motions for directed verdict, and thus we find that Swine Graphics has not preserved error on this issue.

III. FAILURE TO SATISFY CONDITION PRECEDENT TO CONTRACT.

Swine Graphics asserts on appeal that it was entitled to a directed verdict because the Powells' alleged failure to obtain the Andersons' approval of the project amounted to a failure to satisfy a condition precedent of the contract. The district court denied Swine Graphics' motions for directed verdict. We pass the question of error preservation raised by the Powells and address the merits of the issue.

We review the denial of a motion for directed verdict for the correction of errors at law. Top of Iowa Coop. v. Sime Farms, Inc., 608 N.W.2d 454, 466 (Iowa 2000). We must determine whether there was "sufficient evidence to generate a jury question." Id. We view the evidence in the light most favorable to the nonmoving party, regardless of whether the evidence was contradicted. Id. We afford the nonmoving party every legitimate inference that can reasonably be drawn from the evidence. Id. If reasonable minds could differ on resolution of the issue, then it should be submitted to the jury. Id.

"Conditions precedent are those facts and events, occurring subsequent to the making of a valid contract, that must exist or occur before there is a right to immediate performance, before there is a breach of contract duty, and before the usual judicial remedies are available."
Employee Benefits Plus, Inc. v. Des Moines Gen. Hosp., 535 N.W.2d 149, 154 (Iowa Ct. App. 1995).

"A determination that a condition precedent exists depends not on the particular form of words used, but upon the intention of the parties gathered from the language of the entire instrument."

Khabbaz v. Swartz, 319 N.W.2d 279, 283 (Iowa 1982). Nonperformance of a condition precedent will vitiate a contract or proposed contract. Id. at 284.

We find that there was sufficient evidence in the record from which the jury could find as facts the matters set forth in the four immediately following paragraphs of this opinion.

The Powells and Swine Graphics met in June 1998 to discuss their agreement. Swine Graphics' written proposal that immediately followed the meeting contains substantial detail but does not mention a good neighbor policy. Swine Graphics had not mentioned a good neighbor policy prior to that meeting. It did not mention such a policy between that meeting and the Powells' commencement of substantial work on the project more than a month later.

Prior to the June 1998 meeting Mrs. Powell told Mark Weaver, a Swine Graphics manager and part owner, of potential adverse reactions to the building project by neighbors other than the Andersons, and Weaver merely shrugged his shoulders and made no mention of a need to secure the neighbors' approval. In late July 1998 Gene Barrick, the CEO of Swine Graphics, told the Powells that the Andersons had recently complained about the Powells' project. On July 30, 1998, Mrs. Powell talked with Weaver prior to signing a note with Farm Credit Services in the amount of $670,000 for the project. Weaver said the project was a go, and he made no mention of a good neighbor policy. Weaver and a Farm Credit Services employee had been discussing the Andersons' complaints prior to Weaver's conversation with Mrs. Powell.

In September 1998, the Powells received a letter from Swine Graphics, stating in part that the Powells were required to get permission from their neighbors before they could build. Mrs. Powell had never heard of such a requirement before. Swine Graphics has no written good neighbor policy, has no definition of who constitutes a neighbor, and has no requirement that the building party secure written approval of neighbors.

Prior to the Powells' June 1998 meeting and agreement with Swine Graphics, Mrs. Powell had talked to Mrs. Anderson about the Powells' expansion project and Mrs. Anderson expressed no objection. Prior to that meeting Mr. Powell had also talked to Mr. Anderson about the project on more than one occasion. Mr. Powell had mentioned possible locations, including a location near the Andersons, the possibility of Mr. Anderson working for the Powells, and later the fact the Powells were near securing financing. Mr. Anderson expressed no objection.

Substantial portions of the foregoing evidence were controverted. It nevertheless constituted substantial evidence generating a jury submissible issue on Swine Graphics' affirmative defense. There was substantial evidence that the Powells were not required to secure neighbors' approval as a condition precedent to Swine Graphics' obligation to perform. There was also substantial evidence that if such a condition precedent existed, the Andersons tacitly approved the Powells' project. Otherwise stated, we conclude Swine Graphics did not establish its affirmative defense as a matter of law because there were jury submissible issues both on the question of whether neighbors' approval was a condition precedent to Swine Graphics' obligation to perform and, if so, whether the Powells satisfied that condition.

IV. CONCLUSION.

We affirm the district court's rulings denying Swine Graphics' motions for directed verdict and its judgment in favor of the Powells.

AFFIRMED.


Summaries of

Powell v. Swine Graphics Enter.

Court of Appeals of Iowa
Feb 6, 2002
No. 1-571 / 00-2002 (Iowa Ct. App. Feb. 6, 2002)
Case details for

Powell v. Swine Graphics Enter.

Case Details

Full title:DENNIS POWELL and JANE POWELL, Plaintiffs-Appellees, v. SWINE GRAPHICS…

Court:Court of Appeals of Iowa

Date published: Feb 6, 2002

Citations

No. 1-571 / 00-2002 (Iowa Ct. App. Feb. 6, 2002)