Opinion
No. 2-885 / 01-1537
Filed January 15, 2003
Appeal from the Iowa District Court for Marion County, Peter A. Keller, Judge.
Defendants appeal the district court's ruling for plaintiffs in this action for breach of an oral contract. AFFIRMED.
Richard A. Bartolomei of Bartolomei Lange, P.L.C., Des Moines, for appellants.
David L. Brown of Hansen, McClintock Riley, Des Moines, and H. Patrick Myers of Myers Myers, Pleasantville, for appellees.
Heard by Mahan, P.J., Vaitheswaran, J., and Brown, S.J.
Senior Judge assigned by order pursuant to Iowa Code section 602.9206 (2001).
Defendants appeal the district court's ruling for plaintiffs in this action for breach of an oral contract. Defendants claim: (1) the district court should have permitted them to submit proposed findings of fact; (2) there was no meeting of the minds to create an agreement; and (3) there was insufficient evidence to show Robert Wales was a party to the agreement. We affirm.
I. Background Facts Proceedings
All the parties to this lawsuit are related. Plaintiff Kenneth Wales and defendants Robert and John Wales are brothers. Plaintiff Ruth Wales is the wife of Kenneth, while Richard Wales is his son and Kurt Appley is his son-in-law. Defendant Brian Wales is the son of Robert. Robert and John farmed together for many years but in the 1980s had financial difficulties. They stated that Brian, who was then a high school student, took over the farming operation, while they became merely "advisors."
In 1984 the parties entered into an oral agreement. Plaintiffs testified the agreement was that they would purchase cattle and defendants would provide feed and care. Plaintiffs would receive a ten-percent return, either in cash or in calves, and defendants would be responsible for dead or lost animals. Defendants agreed that plaintiffs purchased cattle, and they would provide feed and care. They stated they agreed to pay plaintiffs ten percent each year for ten years, and at the end of that time they would own the cattle. They testified plaintiffs were responsible for dead or lost animals. The parties proceeded to act under the agreement, and plaintiffs placed cattle in the defendants' care. Kenneth met with the three defendants each year, and they reconciled accounts.
The parties exchanged written contracts, but these were never signed. The district court found the terms of a written contract prepared by defendant Robert Wales was "remarkably similar to the terms of the agreement as expressed by the Plaintiffs."
In 1990 Kenneth asked to have the rate of return increased to twelve percent or he would remove the plaintiffs' cattle. Defendants testified this is the first they realized plaintiffs were claiming to own the cattle. They agreed to this arrangement, however, and continued to accept cattle from plaintiffs.
In November 1999 Kenneth told the defendants he believed the plaintiffs owned 1265 cows and 39 bulls, which were in the defendants' care. He testified Robert told him the plaintiffs did not own any cattle held by defendants. The plaintiffs then filed this action against defendants, alleging breach of an oral agreement.
At trial, plaintiffs produced checks and receipts to show the purchase of 1301 cattle which were placed in the care of defendants. Defendants testified that one month before trial they held their first cattle inventory, and found eighty-two cows and six bulls belonging to plaintiffs. They were unable to explain the whereabouts of other cattle purchased by plaintiffs.
The trial was held on August 14 and 15, 2001. A calendar entry states, "Final arguments proposed findings to be submitted to the Court by August 31, 2001." Plaintiffs submitted their proposed decision on August 20, 2001. The district court entered its ruling for plaintiffs on August 21, 2001. The court concluded:
The terms of the agreement are ascertainable through an analysis of the testimony of the parties and the evidence offered. The cattle were placed in the agreement with the understanding the Plaintiffs were to retain ownership of the cattle, were to be compensated by being paid the cash equivalent of 10% of the total investment or an equivalent number of calves and having the Defendants replace all dead, missing or cull animals. The Defendants breached this contract.
The court determined the defendants denial of knowledge of the whereabouts of the cattle was not credible, and "[i]n fact, it is absolutely incredible." The court found all three defendants were equally liable for any damages. Defendants were assessed total damages of $1,112,125 for the missing cattle.
Defendants filed a motion to reconsider because they did not have the opportunity to provide their own proposed decision. After a hearing, the court denied the motion. Defendants appeal.
We recognize a motion to reconsider has no authorization in the Iowa Rules of Civil Procedure, but will consider the motion as one made pursuant to rule 1.904(2). See Kanzmeier v. McCoppin, 398 N.W.2d 826, 828-29 (Iowa 1987).
II. Standard of Review
Our scope of review in this action is for the correction of errors at law. Iowa R.App.P. 6.4. The findings of fact in a law action are binding upon us if they are supported by substantial evidence. Iowa R.App.P. 6.14(6)( a). Evidence is substantial if a reasonable mind would accept it as adequate to reach the same findings. Frontier Props. Corp. v. Swanberg, 488 N.W.2d 146, 147 (Iowa 1992).
III. Proposed Decisions
Defendants contend the case should be remanded for a new trial because the district court considered only the proposed decision of plaintiffs. Our appellate courts have criticized a district court's ex parte request of counsel to submit a proposed decision, which is in essence what happened here, because the court only considered the proposed decision of one party. See Williamson v. Wellman Fansteel, 595 N.W.2d 803, 807 (Iowa 1999); In re Marriage of Siglin, 555 N.W.2d 846, 848 (Iowa Ct.App. 1996); see also Rubes v. Mega Life Health Ins. Co., 642 N.W.2d 263, 266 (Iowa 2002) ("[T]he customary deference accorded trial courts cannot fairly be applied when the decision on review reflects the findings of the prevailing litigant rather than the court. . . .").
We note the plaintiffs do not specifically state the district court's ruling was a verbatim adoption of the plaintiffs' proposed decision, but state the decision was "apparently" written by plaintiffs. Plaintiffs argue the district court did not simply adopt its proposed decision, and the ruling was the work of the district court. The proposed decision is not part of the record, and we are unable to determine how closely the district court's ruling matches the plaintiffs' proposed decision.
As our courts have often stated, the better practice is to request a proposed decision from both parties, and to give the parties an opportunity to comment on the proposal submitted by the other. Williamson, 595 N.W.2d at 807; Production Credit Ass'n v. Shirley, 485 N.W.2d 469, 475 (Iowa 1992); Kroblin v. RDR Motels, Inc., 347 N.W.2d 430, 435 (Iowa 1984); Siglin, 555 N.W.2d at 848.
Although we criticize the district court's actions in this case, the defendants are not entitled to a new trial. Even when a proposed decree is adopted verbatim, it does not necessarily mean the decision was not a product of independent judicial judgment. Quality Refrigerated Servs., Inc. v. City of Spencer, 586 N.W.2d 202, 205 (Iowa 1998). In this regard, we note the defendants had the opportunity to make their arguments through the motion to reconsider, and also, here on appeal.
IV. Meeting of the Minds
Defendants claim the district court erred by finding there was a valid oral contract between the parties. They claim there was no meeting of the minds concerning the terms of the alleged contract. A contract is valid when the parties have expressed mutual assent to the terms of the contract. Schaer v. Webster County, 644 N.W.2d 327, 338 (Iowa 2002). If no meeting of the minds occurs, no contract is formed. Id. Mutual assent, however, is based on objective evidence, not the hidden intent of the parties. Id.
In order to prove an oral contract, a party must show the terms were sufficiently definite for the court to determine with certainty the duty of each party and the conditions relative to performance. Seastrom v. Farm Bureau Life Ins. Co., 601 N.W.2d 339, 346 (Iowa 1999). When a contract appears to exist, courts are reluctant to find it too uncertain to be enforceable. Gallagher, Langlas Gallagher v. Burco, 587 N.W.2d 615, 617 (Iowa Ct.App. 1998). The existence of an oral contract, as well as its terms, and whether or not it was breached, are ordinarily questions for the trier of fact. Id.
We find there is sufficient evidence in the record to support the district court's finding there was an oral contract, for the court to determine its terms, and for the court to conclude defendants breached the contract. Those terms are set forth earlier in this opinion. We note the terms of the contract were sufficiently definite for the parties to proceed under the agreement for fifteen years before defendants stated they no longer knew the whereabouts of plaintiffs' cattle. We find no error in the district court's conclusions on this issue.
V. Robert Wales
Defendants claim there is insufficient evidence to show Robert was a party to the agreement. They state they were not engaged in a joint venture and should not be subjected to joint liability. Defendants state Robert only helped his son, Brian, feed the cattle and perform some chores.
A joint venture is an association of two or more persons to carry out a single business enterprise or a common undertaking in which they combine their property, money, efforts, skill, or knowledge. Hartig v. Francois, 519 N.W.2d 393, 394 (Iowa 1994). The existence of a joint venture need not be expressed, but may be implied in whole or in part by the conduct of the parties. Id. The criteria for a joint venture may vary from case to case. Farm-Fuel Prods. Corp. v. Grain Processings Corp., 429 N.W.2d 153, 156 (Iowa 1988).
There are five indicia of a joint venture: (1) a common undertaking; (2) a joint proprietary interest in the subject matter; (3) a mutual right to control; (4) a right to share in the profits; and (5) a duty to share in the losses. Thomas v. Hansen, 524 N.W.2d 145, 146 (Iowa 1994). These are not considered to be "elements," because they are not all necessary to prove a joint venture in every case. Farm-Fuel, 429 N.W.2d at 156.
We find there is sufficient evidence in the record to support the district court's conclusion that Robert participated in the agreement. The evidence showed, "Robert Wales also was present at the annual reconciliation between the parties, `advised' Brian Wales and prepared the contract to present to Ken Wales." Robert compiled Brian's farm records. Robert "provided labor in maintaining the cattle placed with the Defendants." Robert purchased cattle for the plaintiffs, bought cattle from the plaintiffs, and attended a sale on their behalf. Brian received all of the income from the cattle operation, and he made subsequent distributions to Robert and John for living expenses. Robert was not separately compensated for maintaining the plaintiffs' cattle.
Furthermore, Kenneth testified John told him Brian and Robert agreed to the contract. He also testified Robert was the spokesperson for the defendants at their annual meetings, and Robert told him in November 1999 that he no longer had any cattle held by defendants. When John was questioned, "What did Bob have to do with this cattle raising agreement?" he replied, "Bob done the work." John also testified that he, Robert, and Brian, all contributed something to the cattle operation.
We conclude there is sufficient evidence to show the defendants were engaged in a joint venture, which involved a common undertaking in which they combined their property, money, efforts, skill, and knowledge. The evidence showed Robert and John assisted Brian in making decisions regarding the farm. They all shared in the profits of the cattle operation. We find the district court properly determined the defendants should be jointly liable to the plaintiffs.
We affirm the decision of the district court.