IN THE COURT OF APPEALS OF IOWA

No. 14-1272

Filed August 5, 2015

FIRST AMERICAN BANK,

Plaintiff-Appellee,

vs.

URBANDALE LASER WASH, LLC, 

WALNUT CREEK LASER WASH, LLC, 

and STEVEN GOLDEN,

Defendants-Appellants.

________________________________________________________________

Appeal from the Iowa District Court for Polk County, Jeffrey Farrell, Judge.

Defendants appeal from the district court’s ruling granting summary 

judgment in favor of the plaintiff in a foreclosure action. AFFIRMED.

Matthew E. Laughlin and Sarah E. Crane of Davis, Brown, Koehn, Shors 

& Roberts, P.C., Des Moines, for appellants.

Nicholas Cooper and William C. Scales of Whitfield & Eddy, P.L.C., Des 

Moines, for appellee.

Considered by Danilson, C.J., and Vaitheswaran and Doyle, JJ.
2

DANILSON, C.J.

First American Bank initiated a foreclosure action against Urbandale Laser 

Wash, LLC, Walnut Creek Laser Wash, LLC, and Steven Golden (collectively 

referred to as Golden). Golden responded and claimed as an affirmative defense 

that the two parties had reached a forbearance agreement that precluded 

foreclosure. Golden also filed four counterclaims: (1) First American’s breach of 

the forbearance agreement was a breach of contract; (2) First American’s 

freezing of Golden’s bank accounts was a breach of the bank account 

agreements; (3) First American converted the funds in Golden’s bank accounts;

and (4) First American breached its duty of good faith and fair dealing. First 

American filed a motion for summary judgment. Golden resisted First American’s 

motion and filed a cross-motion for summary judgment. The district court 

granted First American’s motion for summary judgment in whole and dismissed 

Golden’s counterclaims.

Here, Golden maintains there is a genuine issue of material fact whether 

the parties reached a forbearance agreement so First American was not entitled 

to summary judgment in the foreclosure action. Golden also maintains First 

American was not entitled to summary judgment on Golden’s counterclaims. 

Because we find there was no meeting of the minds between the parties 

to form a second forbearance agreement as a matter of law, the district court’s 

ruling granting First American’s motion for summary judgment on the foreclosure 

claim and dismissing the corresponding counterclaim was proper. Additionally, 

because First American’s placement of the administrative hold on Golden’s bank 

accounts and use of the funds was done pursuant to agreement between the 
3

parties, the district court properly dismissed Golden’s remaining counterclaims.

Thus, we affirm the district court’s ruling granting First American’s motion for 

summary judgment in whole and dismissing each of Golden’s counterclaims.

I. Background Facts and Proceedings.

This case involves two loans—totaling approximately $2,679,000—that 

Steven Golden took out to purchase and operate two car washes. On April 17, 

2009, he executed two promissory notes payable to First American. The 

promissory notes were secured by two mortgages on the real estate, two security 

agreements, and two limited guaranties by Steven Golden individually.

The notes were originally set to mature on April 17, 2012, but First 

American and Golden executed a change in terms agreement to extend the 

maturity date until July 5, 2012. The modification agreement was in writing and 

signed by the parties.

Golden defaulted on the loans in July 2012, but First American continued 

to negotiate with Golden to attempt to reach a modification, which would include 

a forbearance agreement. 

On April 17, 2013, Steven Phipps, a special assets officer for First 

American, prepared a modification request for submission to its director loan 

committee based on his understanding of the terms of the proposed loan 

restructure. A separate modification request was submitted for each loan, and 

both requests listed “requested change[s]” of adding Golden Enterprises, LTD as 

a limited guarantor of $350,000 and Steven Golden individually as an unlimited 

guarantor.
4

On April 30, 2013, Phipps sent Steven Golden an email stating, “The 

requests did not get to committee this week, but will go next Tuesday. I made 

the adjustment to the forbearance agreement as discussed and will change dates 

to May instead of April.”

Golden made interest payments on May 6, 2013, in the amount of 

$18,415.321.1

On May 7, 2013, First American’s director loan committee met and 

approved the modification request that had been submitted on April 17. 

On May 8, 2013, Phipps sent Steven Golden an email stating, in part,

“Both loans were approved in committee late yesterday. I would estimate 

documents would be ready either Friday or early next week (usually takes 2-3 

days after they receive formal approval).”

On May 23, 2013, Phipps sent Steven Golden an email with the updated 

forbearance agreements attached “for [his] review.”

On May 24, 2013, Steven Golden sent Phipps an email advising him that 

he would not be able to keep their scheduled meeting to sign documents the next 

day because his attorney had not yet reviewed and approved the agreement.

On June 5, 2013, Golden sent his attorney, Joel Templeman, an email, 

stating in part:

I am forwarding to you the e-mail chain of discussions with First 

American Bank concerning financing of the two car washes called 

Urbandale Laser Wash and Walnut Creek Laser Wash. There are 

quite a few e-mails but they are mostly short. Am sending you this 

“stuff” so you get the flavor of negotiations. We are close to an 

agreement but there are some items I do not want to agree to 

 

1 Golden made interest payments periodically after the July 2012 default. He made 

seven payments between July 27, 2012, and March 7, 2013.
5

without discussion with you and one item I do not want to agree to 

period. In this case I need you to be the “bad guy.” It concerns the 

personal guarantee.

On June 25, 2013, Golden’s new attorney, Matthew Laughlin, sent an 

email to First American listing thirteen issues with the proposed forbearance 

agreement and associated documents. The attorney stated he had reviewed the 

documents with Steven Golden and asked First American to send revised 

documents with the changes if they were acceptable. One of the proposed 

changes was to remove Golden as a co-borrower and instead allow him to 

continue with the previous limited guarantees.

On June 28, 2013, First American sent Golden a notice for default and 

demand for payment reflecting the amount due that day—$2,508,720.22. The 

demand stated, “Please remit such payment on or before July 15, 2013 . . . .” 

The same day, First American placed an administrative hold on, or “froze”

Golden’s small business accounts. At the time, the accounts totaled $38,265.06 

although the amount grew to approximately $48,419 as receipts continued to be 

deposited into the accounts.

On July 13, 2013, First American filed a petition for mortgage foreclosure 

and foreclosure of security agreements.

On August 16, 2013, Golden filed an answer, affirmative defenses, and 

counterclaims. As an affirmative defense, Golden maintained First American had 

entered into a forbearance agreement and was in breach of that agreement. 

Golden also asserted four counterclaims: (1) First American’s breach of the 

forbearance agreement was a breach of contract, (2) First American’s freezing of 

Golden’s bank accounts was a breach of the bank account agreements, (3) First 
6

American converted the funds in Golden’s bank accounts, and (4) First American 

breached its duty of good faith and fair dealing. First American filed a motion for 

summary judgment. 

On January 3, 2014, First American retroactively set off the “frozen” funds 

in the small business accounts against the indebtedness owed by Golden 

effective June 28, 2013. The funds were applied to the principal balance owed. 

On January 24, 2014, First American filed a motion for summary 

judgment.

On March 7, 2014, Golden filed a resistance to First American’s motion for 

summary judgment and a cross-motion for summary judgment.

On May 7, 2014, the district court ruled on the motions. The court found 

the parties “never reached mutual asse[n]t on a forbearance agreement,” and 

Golden had no affirmative defense to the foreclosure action. Regarding Golden’s 

counterclaims, the district court found there was not a forbearance agreement so 

First American could not have breached it. The court also found First American 

was entitled to freeze the small business accounts for setoff under the terms of 

the contract and at common law. The court granted First American’s motion for 

summary judgment in whole. Golden’s motion for summary judgment was 

denied and the counterclaims were dismissed with prejudice.

On June 2, 2014, Golden filed a motion to enlarge, amend, or reconsider 

the district court’s ruling. First American resisted, and the district court denied 

the request on July 9, 2014. The same day, the district court entered judgment 

and decree of foreclosure against Golden.

Golden appeals. 
7

II. Standard of Review.

We review summary judgment rulings for correction of errors at law. 

Crippen v. Cedar Rapids, 618 N.W.2d 562, 565 (Iowa 2000). Summary

judgment is proper only if “the pleadings, depositions, answers to interrogatories, 

and admissions on file, together with the affidavits, if any, show that there is no 

genuine issue as to any material fact and that the moving party is entitled to a 

judgment as a matter of law.” Iowa R. Civ. P. 1.981(3). A question of fact exists 

“if reasonable minds can differ on how the issue should be resolved.” Walker v. 

Gribble, 689 N.W.2d 104, 108 (Iowa 2004). In reviewing the district court’s 

ruling, the evidence presented must be viewed in the “light most favorable to the 

party opposing the motion for summary judgment.” Kelly v. Iowa Mut. Ins. Co.,

620 N.W.2d 637, 641 (Iowa 2000); Gen. Car & Truck Leasing Sys., Inc. v. Lane 

& Waterman, 557 N.W.2d 274, 276 (Iowa 1996). However, the opposing party 

“may not rest upon the mere allegations of his pleading but must set forth specific 

facts showing the existence of a genuine issue for trial.” Hlubek v. Pelecky, 701 

N.W.2d 93, 95 (Iowa 2005); see also Iowa R. Civ. P. 1.981(5). Speculation is 

insufficient to create a genuine issue of material fact. Hlubek, 701 N.W.2d at 96.

III. Discussion.

A. Forbearance Agreement.

The district court concluded the parties had not reached a forbearance 

agreement. Golden maintains there is at least a genuine issue of material fact 

whether a forbearance agreement was reached, so summary judgment was not 
8

proper.2 Also, Golden maintains the district court wrongly made determinations 

of witness credibility, as well as inferences and findings of fact in the moving 

parties’ favor in determining the parties had not reached a forbearance 

agreement.

Iowa Code section 535.17(2) (2013) provides, in part:

Unless otherwise expressly agreed in writing, a modification of a 

credit agreement which occurs after the person asserting the 

modification has been notified in writing that oral or implied 

modifications to the credit agreement are unenforceable and should 

not be relied upon, is not enforceable in contract law by way of 

action or defense by any party unless a writing exists containing the 

material terms of the modification and is signed by the party against 

whom enforcement is sought. . . . When a modification is required 

by this section to be in writing and signed, such requirement cannot 

be modified except by clear and explicit language in a writing 

signed by the person against whom the modification is to be 

enforced.3

Section 535.17(2) places an extra burden on the parties entering into a 

contract—the essential elements of a contract must still exist. See Iowa Code 

§ 535.17(7) (“This section entirely displaces principles of common law and equity 

that would make or recognize exceptions to or other limit or dilute the force and 

effect of its provisions concerning the enforcement in contract law of credit 

agreements or modifications of credit agreements. However, this section does 

not displace any additional or other requirements of contract law, which shall 

continue to apply, with respect to the making of enforceable contracts . . . .” 

(emphasis added)).

 

2 Although Golden now maintains summary judgment was not appropriate because there 

is a genuine issue of material fact whether the parties reached a forbearance 

agreement, in its cross-motion for summary judgment, Golden asserted, “Pursuant to the 

undisputed facts, there is no genuine issue of material fact regarding whether the parties 

entered into a valid forbearance agreement preventing foreclosure . . . .” 

3

It is undisputed that First American provided Golden notification that only written 

modifications are enforceable.
9

In order to be bound by it, “contract parties must manifest a mutual assent 

to the terms of the contract.” Rick v. Sprague, 706 N.W.2d 717, 724 (Iowa 2005). 

“This assent usually is given through the offer and acceptance.” Id. The party 

who makes the offer is the master of the offer. Blackford v. Prairie Meadows 

Racetrack & Casino, Inc., 778 N.W.2d 184, 191 (Iowa 2010). “A binding contract 

requires an acceptance of an offer.” Heartland Express, Inc. v. Terry, 631 

N.W.2d 260, 270 (Iowa 2001). “[T]he acceptance must conform strictly to the 

offer in all its conditions, without any deviation or condition whatever. Otherwise 

there is no mutual assent and therefore no contract.” Rick, 706 N.W.2d at 724. 

Acceptance must be communicated or delivered. Heartland, 631 N.W.2d at 270–

71. A private, uncommunicated assent does not make a contract. Id. 

Golden claims there is at least a genuine issue of material fact whether 

First American agreed to only one $350,000 guarantee but later changed the 

terms. Golden’s mere assertion is not enough to make summary judgment 

improper. See Hlubek, 701 N.W.2d at 95 (“[T]he nonmoving party may not rest 

upon the mere allegations of his pleading but must set forth specific facts 

showing the existence of a genuine issue for trial.”); see also Iowa R. Civ. P. 

1.981(5). Golden’s only support of its assertion is an affidavit from Jeff Harder, 

the vice president of VisionBank, which provided services to Golden Enterprises 

and had to approve any guaranty made by Golden Enterprises. Harder’s affidavit 

states on or about April 16, 2013, he had a phone conversation with Steve 

Phipps and another First American employee in which Harder approved one 

$350,000 guaranty and “it was understood by all parties in the call that 

VisionBank would support only one $350,000 guaranty.” However, Phipps did 
10

not have the independent authority to approve Golden’s loan modifications. 

Harder’s statement about what the parties understood is contrary to the April 17 

modification request Phipps submitted to the director loan committee as it added 

Golden Enterprise as a limited guarantor for $350,000 to each loan. On May 7, 

2013, the director loan committee approved the modification request as

submitted. As the party making the offer, First American was the master of the 

offer. See Blackford, 778 N.W.2d at 191. 

There is no genuine issue of material fact supporting Golden’s claim that 

First American’s offer was accepted. Phipps sent Steve Golden the proposed 

forbearance agreement for review on May 23, 2013. On June 5, 2013, Steve 

Golden sent his attorney an email in which he stated, in part, “We are close to an 

agreement but there are some items I do not want to agree to without discussion

with you and one item I do not want to agree to period.” The “one item” was the 

personal guaranty required by the proposed forbearance agreement and not the 

$350,000 limited guaranty by Golden Enterprises on each loan. Almost three 

weeks later—on June 25, 2013—Golden’s attorney sent First American an email 

listing thirteen issues Golden had with the proposed agreement and requesting 

changes. First American sent the notice of default three days later. 

On appeal, Golden maintains the record establishes the parties entered 

into an agreement because Phipps sent an email to Steve Golden that listed 

terms and “many of those terms were then agreed to between” the parties. As 

stated above, “[A]cceptance must conform strictly to the offer in all its conditions, 

without any deviation or condition whatever. Otherwise there is no mutual assent 

and therefore no contract.” Rick, 706 N.W.2d at 724. As a matter of law, there
11

was no meeting of the minds to form a forbearance agreement, and the district 

court’s ruling granting First American’s motion for summary judgment on the 

foreclosure claim was proper.4 Because First American chose to negotiate with 

Golden but had no duty to and did not enter a new agreement, Golden’s asserted 

affirmative defense that First American breached the covenant of good faith and 

fair dealing was properly dismissed. See Engstrom v. State, 461 N.W.2d 309, 

314 (Iowa 1990) (concluding, “Plaintiffs have cited no case decided by this court 

that provides a contract remedy for breaching an implied duty of good faith in 

entering a contract. . . . We believe the Restatement position is sound in 

implying a duty of good faith only in the performance and enforcement of a 

contract.”). Additionally, the district court did not err in granting First American’s 

motion to dismiss Golden’s counterclaim that First American’s action of filing a 

petition for foreclosure constituted a breach of contract. 

 

4 Golden makes several arguments regarding whether a forbearance agreement had to 

be in writing to be enforceable, whether the emails between the parties constitute 

writings, and whether partial performance defeats the writing requirement. However, we 

find no agreement existed between the parties, under any of these circumstances. At 

best, the parties had a nonbinding agreement to agree. A writing that clearly 

contemplates the subsequent execution of a formal agreement raises the inference that 

the parties to the writing did not intend to be bound until the subsequent formal 

agreement is finalized. See, e.g., Kopple v. Schick Farms, Ltd., 447 F. Supp. 2d 965, 

976 (N.D. Iowa 2006); Air Host Cedar Rapids, Inc. v. Cedar Rapids Airport Comm’n, 464 

N.W.2d 450, 453 (Iowa 1991); Crowe–Thomas Consulting Group, Inc. v. Fresh Pak 

Candy Co., 494 N.W.2d 442, 444–45 (Iowa Ct. App.1992). Furthermore, an agreement 

that is absent essential details and terms (or leaves such details and terms open for 

subsequent negotiation) is not usually recognized as a binding contract between the 

parties. See Kopple, 447 F. Supp2d at 977–78; see also Air Host, 464 N.W.2d at 453.

Thus an email that contemplates the subsequent execution of a written formal 

agreement would not be binding. See Iowa Code § 554D.106(2) (“This chapter only 

applies to transactions between parties each of which has agreed to conduct 

transactions by electronic means.”) Here, Phipps’ email sent May 8, 2013, to Golden 

stated in the subject line “Loans-Approved,” but the contents of the email provided in 

part, “Both loans were approved in committee late yesterday, I would estimate 

documents would be ready either Friday or early next week.” Clearly the bank’s email 

expresses its intent that a subsequent written loan agreement would be necessary.
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B. Golden’s Remaining Counterclaims.

Golden maintained First American’s action of freezing Golden’s bank 

accounts constituted a breach of the bank account contracts, a breach of the 

duty of good faith and fair dealing, and conversion. The district court granted 

First American’s motion to dismiss Golden’s counterclaims. Golden maintains 

the district court made an error of law by failing to enforce the language of the 

bank account contracts and the district court’s dismissal of the claims should be 

reversed.

Golden does not dispute that the bank account agreements at issue allow 

First American to set-off funds against a due and payable debt. Golden’s 

argument appears to be two-fold: (1) the debt was not “due and payable” on 

June 28, 2013, when the administrative hold was placed, because First 

American’s letter sent on the same date set forth a demand date of July 15, 

2013, and (2) First American’s action in placing an administrative hold on the 

funds without actually using them to set-off the debt was in breach of the 

contract.

The terms and conditions of the small business accounts agreements in 

question explicitly give First American the following rights:

SETOFF—We may (without prior notice and when permitted by 

law) set off the funds in this account against any due and payable 

debt you owe us now or in the future, by any of you having the right 

of withdrawal, to the extent of such persons’ or legal entity’s right to 

withdraw. . . . We will not be liable for the dishonor of any check 

when the dishonor occurs because we set off a debt against this 

account. You agree to hold us harmless against any claim arising 

as a result of our exercise of our right to setoff.

Additionally, the provisions of the promissory notes provide:
13

SECURITY: To secure the payment and performance of 

obligations incurred under this Note, Borrower grants Lender a 

security interest in all of Borrower’s right, title, and interest in all 

monies, instruments, savings, checking share and other accounts 

of Borrower . . . that are now or in the future in Lender’s custody or 

control.

. . . .

RIGHTS OF LENDER ON EVENT OF DEFAULT. If there is

an Event of Default under this Note, Lender will be entitled to 

exercise one or more of the following remedies without notice or 

demand (except as required by law):

. . . .

(d) to take possession of any collateral in any manner 

permitted by law;

(e) to employ a managing agent of the Property and let the 

same, in the name of the Lender or in the name of the Mortgagor, 

and receive the rents, incomes, issues and profits of the Property 

and apply the same, after the payment of all necessary charges 

and expenses, on account of the Obligations;

. . . .

(g) to set-off Borrower’s obligations against any amounts due 

to Borrower including, but not limited to, monies, instrument, and 

deposit accounts maintained with Lender; and

(h) to exercise all other rights available to Lender any other 

written agreement or applicable law.

Pursuant to the signed promissory notes, First American had the right to take 

possession of the monies in the bank accounts and set-off against the amount 

owed without notice or demand. Here, Golden was in default in July 2012 and 

owed First American approximately $2.5 million. First American did not have to 

wait until June 28, 2013, to take action, and it was not required to send a demand 

letter or provide Golden with notice. Moreover, Golden has cited no authority to 

support its position that First American’s decision to voluntarily provide a demand 

letter binds the bank in any way. Thus, the set-off could have been exercised 

any time after that date and there is no requirement that it coincide with the date 

fixed in the demand letter. 

As the district court stated:
14

While [Golden] may have been surprised by [First American’s] 

action to freeze and offset the accounts, an offset action is 

necessarily one of surprise. It would be impractical for the bank to 

give notice and warning of its intent due to concern that the account 

holder would transfer or otherwise spend the funds.

Despite the demand letter with a date of July 15, 2013, Golden’s debt remained 

due and payable on the date of the set-off, June 28, 2013, and First American 

was entitled to use the monies in Golden’s accounts to set-off the debt. 

We acknowledge it is undisputed that First American froze Golden’s 

account on or about June 28, 2013, and subsequently retroactively set-off 

$43,235.77 of the monies by action taken on January 3, 2014.

5 But we are 

unable to conclude this action or inaction constituted a breach of any agreement, 

reflected a lack of fair dealing or good faith, or constituted conversion.6

Golden maintains that this delay in using the monies for set-off constituted 

a breach of contract. However, Golden has cited no case law or provision of the 

parties’ agreements that requires First American to set-off the debts within a 

certain time period. Even if First American was required to take such action 

within a reasonable amount of time and did not, Golden cannot claim any 

damages because the monies were retroactively set-off. Moreover, as the 

district court recognized:

While the bank did not immediately “set-off” the funds in the 

bank accounts by applying them to the loans, the administrative 

hold served essentially the same purpose—it prevented defendants 

 

5 These monies were from the small business accounts.

6 Both Golden and the district court state the sum of $48,419 was the largest balance in 

the accounts after the administrative hold was placed on them. They cite to affidavits 

stating the same information. However, accountings from the bank show $43,235.77 

was used to set-off against the outstanding principal and $6278.27 was used to make a 

“protective advance” to pay utilities and water, which totals $49,514.04. Because the 

total amount of money in the accounts was less than the amount owed to First 

American, we are not concerned by the difference.
15

from accessing the funds and protected the funds to apply to the 

delinquency owed to the bank.

[Golden’s] argument amounts to a technicality without a 

meaningful distinction. In fact, the bank’s action was arguably more 

favorable to defendants. If the bank had set off the funds at the 

time, the action was essentially final. In theory, the bank’s action to 

freeze the accounts allowed flexibility if the parties had reached a 

voluntary resolution because the bank could have lifted the 

administrative hold.

First American used the balance of the monies in the frozen small 

business accounts to pay water and other utility bills for the two mortgaged

properties. Golden maintains, in the alternative, that even if First American 

properly used the funds in the frozen accounts to set-off the debt owed, the use 

of funds for other purposes was improper and a breach of agreement. We 

disagree. 

The promissory notes specifically provide First American with the right to 

“receive the rents, incomes, issues and profits of the Property and apply the 

same” to “the payment of all necessary charges and expenses.” Golden does 

not contend the water and other utility bills were not “necessary charges and 

expenses.” In fact, as part of its argument that First American breached the duty 

of good faith and fair dealing, Golden maintains that placing an administrative 

freeze on the bank accounts “jeopardized its ability to pay municipal water bills, 

electricity, state sales tax, insurance premiums, and other ordinary business 

expenses.” Thus, neither First American’s action of placing the administrative 

hold nor First American’s use of the funds as a protective advance was in breach 

of the bank account contracts. 

Because First American’s actions were taken pursuant to contracts 

between the parties, Golden’s remaining counterclaims regarding breach of duty 
16

of good faith and fair dealing and conversion also fail.7 See Alta Vista Props., 

LLC v. Mauer Vision Ctr., PC, 855 N.W.2d 722, 732 (Iowa 2014) (“The implied 

covenant of good faith and fair dealing . . . does not give rise to new substantive 

terms that do not otherwise exist in the contract.” (internal quotation marks 

omitted)). Thus, the district court properly dismissed each of Golden’s 

counterclaims.

IV. Conclusion.

We conclude there was no meeting of the minds between the parties to 

form a second forbearance agreement as a matter of law, and the district court’s 

ruling granting First American’s motion for summary judgment on the foreclosure 

claim and dismissing the corresponding counterclaim was proper. Additionally, 

because First American’s placement of the administrative hold on Golden’s bank 

accounts and use of the funds was done pursuant to the agreements between 

the parties, the district court properly dismissed Golden’s remaining 

counterclaims. Thus, we affirm the district court’s ruling granting First American’s 

motion for summary judgment in whole and dismissing each of Golden’s 

counterclaims.

AFFIRMED.

 

7 Because we find the district court properly dismissed Golden’s counterclaims, we do 

not consider whether Golden would have been entitled to a jury trial on them.