Opinion
No. 5-933 / 04-1097
Filed January 19, 2006
Appeal from the Iowa District Court for Decatur County, David L. Christensen, Judge.
Appeal from the district court's grant of summary judgment for plaintiff and its denial of motions for leave to amend answer and to assert counterclaims. AFFIRMED.
Douglas D. Daggett, Creston, for appellants.
Rebecca S. Adams, Leon, pro se.
G. Mark Rice and B. MacPaul Stanfield of Whitfield Eddy, P.L.C., Des Moines, for appellee.
Considered by Sackett, C.J., and Vogel and Eisenhauer, JJ.
Robex, Inc. and Rebecca S. Adams (defendants) appeal from the district court's grant of summary judgment in favor of Wells Fargo Bank Minnesota, N.A. (plaintiff) in its suit for judgment on a promissory note. The defendants contend the district court erred in granting summary judgment and in denying their motions for leave to amend answer and to assert counterclaims. We affirm.
Background facts and proceedings.
In September of 2000 Robex obtained a loan from Wells Fargo. Adams, as president of Robex, executed a promissory note providing that Robex would repay the loan and that Robex would pay all costs, including attorney fees, incurred by Wells Fargo in collecting money due. Adams executed a personal unconditional guarantee, promising to pay to Wells Fargo all of Robex's indebtedness, including costs and attorney fees incurred in collecting money due. The promissory note was modified in May of 2001 and again in February of 2002, when the amount of the loan was increased and certain payments were deferred.
When Robex failed to make payments as required, Wells Fargo sought voluntary surrender of the collateral, but Robex refused. Wells Fargo then filed a replevin suit to obtain the collateral and this suit for judgment on the promissory note. The district court granted the writ of replevin and Wells Fargo took possession of the collateral and sold it at auction. We affirmed the district court in the defendants' appeal from the replevin in Wells Fargo Bank v. Robex, Inc., No. 04-0292 (Iowa Ct.App. Jan. 19, 2006).
In the instant case, the plaintiff filed the petition in October of 2002. The defendants answered in November, generally denying the allegations in the petition. In February of 2003, the district court entered a scheduling order that set trial for June 24, 2002, closed pleadings sixty days before trial, and required that all motions be filed sixty days before trial. On April 13, the plaintiff filed its motion for summary judgment that is the subject of this appeal. On April 23, the district court entered an order setting a hearing on the motion for summary judgment on May 14. The defendants filed no resistance to the motion for summary judgment within the fifteen-day period after being served. See Iowa R. Civ. P. 1.981(3).
On May 14, the parties appeared for the hearing. The defendants made an oral motion to continue the hearing, which the court denied. The defendants also served the plaintiff with (1) a resistance to the motion for summary judgment with supporting documents, (2) a motion to amend answer and assert counterclaims, (3) an affirmative defense and counterclaims, (4) a jury demand, and (5) a motion to re-set trial. The motions were made orally at the hearing and were resisted by the plaintiff. The district court, following arguments from the parties at the hearing, orally granted the plaintiff's motion for summary judgment. It entered its order on May 18 and a formal judgment against the defendants, prepared by the plaintiff, on June 9.
All of the pleadings and documents served on the plaintiff at the time of the hearing on summary judgment on May 14 subsequently were filed on May 19.
On July 8, the defendants appealed from the district court's grant of summary judgment. The defendants also sought rulings on the motions listed above. In February of 2005 the supreme court ordered a limited remand to the district court for rulings on the motions. Following a hearing, the district court entered an order on March 31, denying all the pending motions. The defendants appealed.
Scope and standards of review.
Summary judgment.
Review of summary judgments is for correction of errors at law, and they will be affirmed only when the entire record establishes no genuine issue of material fact. Hlubek v. Pelecky, 701 N.W.2d 93, 96 (Iowa 2005). In determining whether summary judgment is warranted, the entire record is viewed in a light most favorable to the nonmoving party. Mason v. Vision Iowa Bd., 700 N.W.2d 349, 353 (Iowa 2005). "We also indulge in every legitimate inference that the evidence will bear in an effort to ascertain the existence of a fact question." Crippen v. City of Cedar Rapids, 618 N.W.2d 562, 566 (Iowa 2000). "A genuine issue of material fact is lacking when a reasonable jury or judge could conclude that no evidence entitles the nonmoving party to relief." Keokuk Junction R.R. v. IES Indus., Inc., 618 N.W.2d 352, 355 (Iowa 2000).
Motion for leave to amend.
Our review of a district court's ruling on a motion for leave to amend a petition is for an abuse of discretion. Holliday v. Rain and Hail L.L.C., 690 N.W.2d 59, 63 (Iowa 2004). We will reverse only if the record indicates the court clearly abused its discretion. Rife v. D.T. Corner, Inc., 641 N.W.2d 761, 766 (Iowa 2002).
Discussion.
Summary judgment.
The defendants assert the district court's grant of summary judgment was inappropriate because genuine issues of material fact exist. They contend the "initial pleadings demonstrate a material fact dispute as to the enforceability of the promissory note and security agreement." In response to the plaintiff's allegation "Robex made, executed and delivered to the Bank a certain written Promissory Note" the defendants denied the allegation in their answer and filed an affidavit averring "the signatures contained upon a copy of each of these documents do not appear to be a genuine or authorized signature of Rebecca S. Adams individually or as an officer of Robex, Inc." The plaintiff contends summary judgment was appropriate because "an adverse party may not rest upon the mere allegations or denials in the pleadings, but . . . must set forth specific facts showing that there is no genuine issue for trial." Iowa R. Civ. P. 1.981(5).
In its answer in the companion suit against the defendants for replevin of the collateral, Robex admitted executing the promissory note, that it had not paid the note, and that the amount owing was in excess of $605,000. The district court there granted the plaintiff's motion for summary judgment, finding "that the facts are as alleged in the petition." In the instant case, the plaintiff argues the doctrine of res judicata demonstrates there is no genuine issue of material fact because the earlier case decided all the fact issues. The defendants argue the plaintiff may not rely on the decision in the companion case because it is on appeal and thus not a final decision. However, "the ruling in the original case is res judicata of the issues there decided while that ruling is on appeal." Johnson v. Ward, 265 N.W.2d 746, 749 (Iowa 1978). The general denial in the defendants' answer and accompanying affidavit are insufficient to raise a genuine issue of material fact. We conclude, therefore, the district court did not err in granting the plaintiff's motion for summary judgment. We, like the district court, do not consider the defendants' resistance to the motion for summary judgment as it was untimely.
Motion for leave to amend.
On limited remand from the supreme court, the district court considered and denied the defendants' motion for leave to amend the pleadings to raise an affirmative defense and assert counterclaims. The motion was filed after the close of pleadings and after the court granted summary judgment in favor of the plaintiff. We review a court's ruling on a motion for leave to amend for an abuse of discretion and will reverse only on a clear showing it abused that discretion. Wooridge v. Central United Life Ins. Co., 568 N.W.2d 44, 47-48 (Iowa 1997). We will find an abuse of discretion when the court bases its decision on clearly untenable grounds or to an extent clearly unreasonable. McElroy v. State, 637 N.W.2d 488, 495 (Iowa 2001). Denying an untimely motion that "would have substantially changed the issues of the suit" is not an abuse of discretion. See Holliday v. Rain and Hail L.L.C., 690 N.W.2d 59, 65 (Iowa 2004) (quoting Bennett v. City of Redfield, 446 N.W.2d 467, 474-75 (Iowa 1989)). We find no abuse of discretion under the circumstances before us.