IN THE SUPREME COURT OF IOWA

No. 20–0698 

Submitted April 14, 2021—Filed June 11, 2021 

Amended August 6, 2021 

EMC INSURANCE GROUP, INC.,

Appellee, 

vs. 

GREGORY M. SHEPARD,

Appellant. 

Appeal from the Iowa District Court for Polk County, Lawrence P. 

McLellan, Judge. 

Investor appeals summary judgment determining he failed to validly 

exercise right to appraisal following merger. AFFIRMED.

Waterman, J., delivered the opinion of the court, in which all justices 

joined. 

Thomas K. Cauley, Jr. (argued), Sidley Austin LLP, Chicago, Illinois, 

and Steve Eckley of Eckley Law PLLC, Des Moines, for appellant. 

Beth I.Z. Boland (argued), Eric G. Pearson, and Joseph S. Harper of 

Foley & Lardner, LLP, Boston, Massachusetts, and Michael W. Thrall, 

Mark C. Dickinson, and Lynn C. Herndon of Nyemaster Goode, P.C., 

Des Moines, for appellee. 
2 

Stephen E. Doohen of Whitfield & Eddy, P.L.C., Des Moines, and 

Gregg M. Mashberg, Margaret A. Dale, and Brian A. Hooven of Proskauer 

Rose LLP, New York, New York, for amicus curiae The Depository Trust 

Company. 
3 

WATERMAN, Justice. 

In this appeal, we must decide whether the district court correctly 

entered summary judgment against an investor on grounds he failed to 

exercise his appraisal rights in a merger. The controlling statute, Iowa 

Code section 490.1303(2)(a) (2019), requires a beneficial shareholder to 

submit the written consent of “the record shareholder” to demand 

appraisal. The investor, the beneficial owner of 1.1 million shares, received 

$36 per share ($39.6 million) when the merger transaction closed. He 

objected to the merger and, through his attorney and broker, sought to 

exercise his appraisal rights but never obtained the written consent of 

Cede & Co. (Cede), shown on the corporation’s records as the record 

shareholder. Another dissenting investor successfully exercised his 

appraisal rights by obtaining the timely consent of Cede. The corporation 

filed this declaratory judgment action and moved for summary judgment, 

which the district court granted. The investor appealed and we retained 

the case. 

On our review, we determine that Cede was the sole record 

shareholder as a matter of law for the disputed shares. The investor, 

lacking Cede’s consent, failed to validly exercise his appraisal rights that 

have been extinguished. His waiver and estoppel arguments fail. For the 

reasons explained below, we affirm the district court’s summary judgment 

against the investor.

I. Background Facts and Proceedings. 

The material facts in this case are undisputed. Employers Mutual 

Casualty Company (EMCC) was the majority owner of EMC Insurance 

Group, Inc. (EMCI). Gregory Shepard was the beneficial owner of 

1.1 million shares of EMCI stock. Shepard held these shares in two 

brokerage accounts at Morgan Stanley Smith Barney LLC (Morgan 
4 

Stanley), a Depository Trust Company (DTC) participant.1 As the DTC 

explained in its amicus curiae brief in this appeal, participants 

deposit securities into their DTC accounts for “book-entry” 

services; i.e., transfer of beneficial ownership interests by 

means of automated credits and debits to securities accounts, 

rather than actual transfer of record ownership. Securities 

deposited at DTC for book-entry services are registered on the 

books and records of the issuer in the name of DTC’s nominee, 

Cede & Co., which becomes the record (legal) owner of the 

shares. 

This case arises from the merger of EMCC and EMCI. Before the 

special meeting for this proposed merger, EMCI’s transfer agent, AST, sent 

EMCI a list of record shareholders as of August 8, 2019 (the record date), 

eligible to vote at the special meeting (the Record Shareholder Voting List). 

AST was in charge of maintaining EMCI’s records of its registered 

shareholders. This list indicated that Cede held 9,432,555 shares as of 

the record date for the special meeting. AST also sent EMCI a spreadsheet 

on the day of the special meeting and included the registered shareholders 

of the company (the Record Shareholder Payment List). Neither Morgan 

 

1DTC exists to obviate the need for cumbersome transfers of physical stock 

certificates. In the 1970s, 

[t]ransfer of securities in the traditional certificate-based system was a 

complicated, labor-intensive process. Each time securities were traded, 

the physical certificates had to be delivered from the seller to the buyer, 

and in the case of registered securities the certificates had to be 

surrendered to the issuer or its transfer agent for registration of transfer. 

Unif. Com. Code art. 8 Prefatory Note (1994), 2C U.L.A. 431 (2005). “As is well known, 

the mechanical problems of processing the paperwork for securities transfers reached 

crisis proportions in the late 1960s . . . .” Id. As a result, the Securities and Exchange 

Commission “adopted a national policy of share immobilization” and “placed a new 

entity—the depository institution—at the bottom [of] the ownership chain.” See In re 

Appraisal of Dell Inc., Consol. C.A. No. 9322–VCL, 2015 WL 4313206, at *1 (Del. Ch. 

July 13, 2015). “DTC emerged as the only domestic depository,” with “[o]ver 800 

custodial banks and brokers [as] participating members . . . .” Id. Under this system, 

“all of the shares are issued in the name of Cede”—DTC’s nominee, short for “Central 

Depository.” Id. Beneficial ownership interests in the shares may trade numerous times 

among various beneficial owners, while “legal title remains with Cede.” Id. at *1–2. 
5 

Stanley nor Shepard appeared as registered shareholders on either of 

these lists. 

On August 8, EMCI mailed to the company’s shareholders and filed 

with the Securities and Exchange Commission the “EMC Insurance Group 

Inc. Definitive Proxy Statement on Schedule 14A,” (Proxy Statement), 

which provided: 

Beneficial owners of shares of common stock held of record in 

the name of another person, such as a bank, broker or other 

nominee, may assert appraisal rights only if the shareholder 

submits to the Company the record holder’s written consent 

to the assertion of such rights . . . . 

The Proxy Statement told shareholders that all shares of common stock 

would “automatically be cancelled and cease to exist, except for the right 

to receive the merger consideration” at the time of the merger. In order to 

avoid this outcome, shareholders were required to “demand[] and perfect[] 

their right to appraisal of their shares in accordance with Division XIII of 

the Iowa Business Corporation Act.” (Emphasis added.) The statement 

included the following admonition: 

The Company urges you to read the entire proxy statement, 

including the annexes and the documents referred to or 

incorporated by reference in the proxy statement, carefully, as 

it sets forth the details of the merger agreement and other 

important information related to the merger. 

Under “Dissenters’ Rights to Appraisal,” the company repeated: 

You are encouraged to read Division XIII of the Iowa Business 

Corporation Act carefully and in its entirety. Moreover, due 

to the complexity of the procedures for exercising the right to 

seek appraisal, shareholders who are considering exercising 

such rights are encouraged to seek the advice of legal counsel. 

Failure to comply with these provisions may result in loss of 

the right of appraisal. Any holder of common stock who loses 

his, her or its appraisal rights will be entitled to receive the 

merger consideration of $36.00 per share in cash if such 
6 

person is a shareholder of the Company as of the effective time 

of the merger.2 

On September 10, EMCI received a letter from Cede submitted on 

behalf of one of EMCI’s beneficial shareholders (the other dissenter), who 

had also obtained certificates for its shares and deposited them with EMCI. 

That letter stated that Cede was the nominee of DTC, “a holder of record 

of shares [of EMCI],” and that, “[i]n accordance with instructions received 

from Participant on behalf of Beneficial Owner, we hereby assert appraisal 

(or dissenters’) rights with respect to the Shares.” The Record Shareholder 

Payment List had the shares of the other dissenter recorded with the 

notation “CEDE & CO FBO DISSENTER.” 

On September 12, EMCI obtained an Omnibus Proxy and Security 

Position Report (SPR or Cede Breakdown) from DTC. The Omnibus Proxy 

is the means by which DTC, “the holder of record for depository-eligible 

securities, transfers the right to vote with respect to those securities to the 

DTC participants that hold record date positions.” Proxy Services, DTCC, 

(emphasis added) https://www.dtcc.com/settlement-and-asset-services/ 

issuer-services/proxy-services [https://perma.cc/D32H-JMZS]. The 

Cede Breakdown includes detailed share and contact information for each 

participant. Id. The September 12 Omnibus Proxy provided that Cede 

appointed the person or entity named in the attached Cede Breakdown to 

vote the shares opposite its name. The September 12 Cede Breakdown 

identified Morgan Stanley as a participant with respect to 1,123,502 

 

2The DTC website describes this process: “DTC also assists Participants in 

exercising other rights in connection with its role as the record holder of securities on 

deposit.” Proxy Services, DTCC, (emphasis added), https://www.dtcc.com/settlementand-asset-services/issuer-services/proxy-services [https://perma.cc/D32H-JMZS]. “In 

order to exercise [appraisal] rights through DTC, the participant must complete and 

submit to DTC a letter identifying the issue and the quantity of securities involved, along 

with the instruction letter instructing DTC to act.” Id. 
7 

shares of DTC’s total position in EMCI. Shepard’s name was not on the 

Cede Breakdown. 

On September 16, Thomas Cauley, Shepard’s attorney, sent EMCI 

notice of Shepard’s “intent to demand payment pursuant to Iowa law” and 

attached Shepard’s vote against the merger. The next day, Cauley sent 

another letter to EMCI that enclosed a September 17 letter from Shepard’s 

broker, Morgan Stanley (the Morgan Stanley Letter). Cauley indicated the 

enclosed letter confirmed Shepard was authorized to exercise appraisal 

rights with respect to the 1.1 million shares of EMCI common stock that 

he owned. The Morgan Stanley Letter stated that Shepard maintained two 

brokerage accounts at Morgan Stanley. It stated his shares held in these 

accounts were “held in street name and Morgan Stanley’s records reflect 

that the Client is the owner of record of the shares held in each account.” 

The letter also stated that 

[t]he control agreement between Morgan Stanley, [Heartland 

Bank and Trust Company (HBTC)] and the Client does not 

restrict the Client’s ability to exercise his voting and appraisal 

rights with respect to the shares of EMCI, however, Morgan 

Stanley makes no representation regarding any other 

agreements that may exist between HBTC and the Client. 

After receiving these letters, Todd Strother—the Senior Vice President, 

Chief Legal Officer, and Secretary of EMCI—spoke by phone with a 

representative of AST, who confirmed EMCC, through AST, was to pay 

Cede for the 9,270,528 shares beneficially owned through it, including 

Shepard’s shares (the DTC Payment). Cede would then distribute the DTC 

Payment to its participants, who in turn would distribute the funds to the 

ultimate beneficial holders of EMCI’s common stock. AST confirmed 

Shepard had not requested his shares be removed from Cede’s record 

ownership and that Cede would not make the distribution payment to any 
8 

of the beneficial shareholders unless and until it received $36 per share 

for all of its shares reflected on the Record Shareholder Payment List. 

On September 18, EMCI shareholders met and voted to approve the 

merger. Effective September 19, EMCC purchased the remaining 

outstanding shares of EMCI for $36 a share. The Agreement and Plan of 

Merger (Merger Agreement) controlled the terms of the merger and required 

that all shares of EMCI be converted into the right to receive $36 in cash, 

without interest (the Merger Consideration). The only shares exempted 

from this payout were those held by shareholders who demanded and 

perfected their appraisal rights and those held by EMCC and certain 

EMCI-affiliated entities. Section 1.6 of the Merger Agreement stated: 

[A]ll Company Dissenting Shares held by shareholders who 

shall have failed to perfect or . . . lost their rights to 

appraisal . . . under Iowa Law shall thereupon be deemed to 

have been converted into, and to have become exchangeable 

for, as of the Effective Time, the right to receive the Merger 

Consideration, without any interest thereon . . . [and] shall 

cease to be Company Dissenting Shares hereunder. 

Section 1.13 notified shareholders that book-entry shares would be 

cancelled after the holder received Merger Consideration. On 

September 20, EMCC paid the Merger Consideration to the registered 

shareholders of EMCI’s common stock. EMCI relied on the Record 

Shareholder Payment List to determine the shareholders that were to 

receive the $36 per share Merger Consideration. On September 23, 

Shepard received $36 for each of his 1.1 million shares. At the time of this 

merger, Shepard was the largest single minority shareholder of EMCI. 

That same day, Cauley sent a letter to EMCI outside counsel, Michael 

Thrall, about this payment. Cauley wrote, “[W]e assume [the payment] 

reflects EMCI’s estimate of the ‘fair value’ of EMCI’s shares and was paid 
9 

pursuant to Sections 490.1322 and 490.1324” and “[p]lease let us know 

when we can expect to receive th[e] appraisal notice.” 

On September 26, EMCI sent Shepard a letter entitled “Appraisal 

Rights Notice” that included an “Appraisal Rights Form.” The letter 

acknowledged receiving Cauley’s September 16 letter, “indicating 

Mr. Shepard’s intent to seek appraisal rights” and notified Shepard that 

the merger was complete. The letter told Shepard he was required to 

submit the appraisal rights form but did not comment on whether it had 

received Cede’s consent. The letter stated in part, 

Please be advised as follows: 

1. To formally assert appraisal rights with respect to 

the Appraisal Shares, Mr. Shepard must proceed as follows: 

 Complete, date and sign the Appraisal Rights Form 

included with this Notice to make the certifications 

required by Section 490.1322(2)(a) of the Iowa Act 

with respect to the Appraisal Shares. 

 Return the completed Appraisal Rights Form to the 

Company at the address below such that the 

Company receives the Appraisal Rights Form by no 

later than November 5, 2019 (the “Response 

Deadline”). 

. . . . 

2. Failure to return the Appraisal Rights Form by the 

Response Deadline will result in a waiver and loss of 

Mr. Shepard’s right to demand appraisal of the fair value of 

the Appraisal Shares under the Iowa Act. 

The letter told Shepard that it was being sent “pursuant to the 

requirements of Section 490.1322 of the Iowa Business Corporation Act 

[(IBCA)]” and attached a copy of Division XIII of the IBCA, which describes 

the statutory requirements for a beneficial shareholder exercising 

appraisal rights, including submitting the record shareholder’s written 

consent as stated in section 490.1303(2)(a). 
10 

The next day and in response to this notice, Cauley sent another 

letter to Thrall indicating that “[w]e assume that EMCI does not intend to 

pay Mr. Shepard a second time” and alleging that “EMCI clearly has not 

followed the appraisal process set forth in the Iowa Business Corporations 

Act.” Cauley wrote that if Shepard decided to return the appraisal rights 

form, he would do so by November 5 and would also provide EMCI with 

his estimate of EMCI’s fair value; Cauley noted Shepard did not agree that 

the $36 per share was the fair value of EMCI’s stock at the time the merger 

became effective. Finally, Cauley wrote that Shepard had no obligation to 

provide a fair value estimate within thirty days of September 23 because 

EMCI did not comply with the IBCA timetable. Thrall did not respond to 

Cauley’s letters of September 23 or 27. Shepard returned the completed 

Appraisal Rights Form on November 4, enclosed in a letter from Cauley, 

without Cede’s written consent for Shepard’s assertion of his appraisal 

rights. 

On November 12, EMCI filed this declaratory judgment action 

seeking a determination that Shepard had failed to meet the statutory 

requirements to exercise his appraisal rights under the IBCA, Iowa Code 

chapter 490, division XIII, and that he did not retain any legal interest in 

the shares he beneficially owned prior to the merger. EMCI also requested 

the court “enjoin[] Shepard from pursuing such rights” if the court did not 

decide the declaratory judgment request by November 25. That same day 

EMCI requested expedited relief and a stay. On November 18, the court 

entered the parties’ stipulated order staying the statutory appraisal 

process and establishing a briefing schedule. 

Shepard filed a motion to dismiss, and EMCI responded with a 

motion for summary judgment. The district court proceeded without an 

evidentiary hearing, pursuant to the parties’ agreement that the written 
11 

submissions provided the necessary facts. On April 5, 2020, the district 

court filed a thorough, fifty-nine-page ruling that denied Shepard’s motion 

and granted EMCI’s motion for summary judgment. The district court 

determined that Shepard had failed to obtain written consent from the 

record shareholder, Cede, prior to November 5, 2019, and had thus failed 

to comply with Iowa Code section 490.1303(2)(a). The district court 

rejected Shepard’s waiver and equitable estoppel claims. 

II. Standard of Review. 

We review rulings on statutory interpretation for correction of errors 

at law. Doe v. State, 943 N.W.2d 608, 609 (Iowa 2020). 

“We ‘review a district court ruling on a motion for summary 

judgment for correction of errors at law.’ ” MidWestOne Bank v. Heartland 

Co-op, 941 N.W.2d 876, 882 (Iowa 2020) (quoting Wells Fargo Equip. Fin., 

Inc. v. Retterath, 928 N.W.2d 1, 5 (Iowa 2019)). “Summary judgment is 

proper when the moving party has shown ‘there is no genuine issue as to 

any material fact and the moving party is entitled to judgment as a matter 

of law.’ ” Id. (quoting Jahnke v. Deere & Co., 912 N.W.2d 136, 141 

(Iowa 2018)). “Summary judgment is appropriate ‘if the record reveals only 

a conflict concerning the legal consequences of undisputed facts.’ ” Id.

(quoting Nelson v. Lindaman, 867 N.W.2d 1, 6 (Iowa 2015)). “We review 

evidence in the light most favorable to the nonmoving party.” Id. 

III. Analysis. 

We first address whether the district court erred by ruling that Cede 

was the sole record shareholder of the shares beneficially owned by 

Shepard such that his right to an appraisal failed without Cede’s written 

consent. Then we determine whether the district court erred by rejecting 

Shepard’s waiver and equitable estoppel claims. The parties agree there 
12 

are no genuine issues of material fact precluding summary judgment but 

disagree on the legal significance of the undisputed facts. 

A. Shepard’s Right to Appraisal Required the Written Consent 

of Cede as the Record Shareholder. Under the controlling provision of 

the IBCA, in order to assert appraisal rights, a beneficial owner of shares 

must submit “the record shareholder’s written consent.” Iowa Code 

§ 490.1303(2)(a) (emphasis added). Shepard argues his broker, Morgan 

Stanley, was the record shareholder. EMCI argues that the record 

shareholder was Cede and because Shepard did not submit Cede’s 

consent, Shepard failed to exercise his appraisal rights. We must identify 

the “record shareholder” whose consent to appraisal is required. 

We begin with the statutory text. Doe, 943 N.W.2d at 610 (“Any 

interpretive inquiry thus begins with the language of the statute at issue.”). 

Iowa Code chapter 490 is commonly referred to as the “IBCA.” See 

5 Matthew G. Doré, Iowa Practice Series, Business Organizations 

§ 1:2(2)(a), at 4 (2020–2021 ed. 2020) [hereinafter Doré]. The IBCA “is 

Iowa’s principal general corporation law[,] . . . a modern, consistent, and 

coherent statute modeled on the ABA’s Model Business Corporation Act 

(1984).” Id. Division XIII of the IBCA governs appraisal rights. The 

legislature defined “record shareholder” as “the person in whose name 

shares are registered in the records of the corporation.” Iowa Code 

§ 490.1301(8) (emphasis added). The statute’s use of the definite article 

“the” is a word of limitation, a singular term meaning a specific person. 

See Doe, 943 N.W.2d at 611. The IBCA, by its terms, confirms there is 

only one record shareholder; it refers to a singular “person.” See Iowa 

Code § 490.1301(8).3

 

3This definition has remained essentially unchanged since its adoption. Compare

Iowa Code § 490.1301(8) (2019), with 1989 Iowa Acts ch. 288, § 131(5) (codified at 
13 

We also consider the broader context in which the statutory term is 

used. See Doe, 943 N.W.2d at 610. Defining the record shareholder in the 

singular—as but one person or entity—makes sense to avoid inconsistent 

votes being cast for the same share. Article 8 of the Iowa Uniform 

Commercial Code makes the right to vote exclusive to a single owner of the 

shares: 

Before due presentment for registration of transfer of a 

certificated security in registered form, or of an instruction 

requesting registration of transfer of an uncertificated 

security, the issuer or indenture trustee may treat the 

registered owner as the person exclusively entitled to vote, 

receive notifications, and otherwise exercise all the rights and 

powers of an owner. 

Iowa Code § 554.8207(1) (emphasis added). The registered owner’s 

exclusive right to vote shares aligns with the appraisal rights statute’s 

definition of the record shareholder. See id. §§ 490.1301(8), .1303(2)(a). 

Morgan Stanley and Cede cannot both be record shareholders of the same 

shares under Iowa law. We hold that under section 490.1303(2)(a), there 

is only one record shareholder whose consent is required for an appraisal 

of the shares. 

To identify the record shareholder in this case, we look to the records 

of the corporation. See id. §§ 490.1301(8), .1601(3) (“A corporation or its 

agent shall maintain a record of its shareholders . . . .”). Shepard argues 

that the pertinent record is the Cede Breakdown and that because Morgan 

Stanley was shown as a participant on that list, Shepard properly asserted 

his appraisal rights through his broker. We disagree. The DTC website 

describes the relationship between Morgan Stanley and Cede as follows: 

When an investor holds shares [in street name], the 

investor’s name is listed on its brokerage firm’s books as the 

 

Iowa Code § 490.1301(5) (Supp. 1989)) (defining “record shareholder” as “the person in 

whose name shares are registered in the records of a corporation”). 
14 

beneficial owner of the shares. The brokerage firm’s name is 

listed in DTC’s ownership records. DTC’s nominee name 

(Cede & Co.) is listed as the registered owner on the records of 

the issuer maintained by its transfer agent. DTC holds legal 

title to the securities and the ultimate investor is the beneficial 

owner. 

FAQS: How Issuers Work with DTC, DTCC, 

https://www.dtcc.com/settlement-and-asset-services/issuer-services/ 

how-issuers-work-with-dtc#:~:targetText=DTC%20holds%20legal%20title 

%20to,investor%20is%20the%20beneficial%20owner.&targetText=If%20a

n%20investor%20purchases%20securities,direct%20registration%20syst

em%20(DRS) [https://perma.cc/PTD2-NKTZ]. The district court correctly 

relied on the Record Shareholder Voting List provided by AST, on which 

Cede was listed as the registered owner, not Shepard or Morgan Stanley.4 

The Cede Breakdown is a list used, as DTC explained in its amicus 

brief, “to provide the issuers [EMCI] with information necessary to process 

certain transactions, including those governed by the federal securities 

laws.” See, e.g., 17 C.F.R. § 240.14c–7 (2019). As DTC further explained: 

[T]he SPR is merely a mechanism to allow the issuer to identify 

the beneficial owners; i.e., DTC Participants having positions 

in their issue. . . . It is not a “competing” list of record owners 

that supplements or conflicts with the issuer’s list of 

registered shareholders required by Iowa Code Ann. 

§ 490.1601(3). 

 

4Iowa’s statute distinguishes between “beneficial” and “record” shareholders. As 

the district court noted, so does Oregon’s statute. Compare Or. Rev. Stat. Ann. §§ 60.551, 

.557 (West, Westlaw through 2020 Reg. Sess. 80th Legis. Assemb.), with Iowa Code 

§§ 490.1301, .1303. A federal district court has relied on this distinction to reject a 

beneficial shareholder’s argument that the proxy statement was “misleading,” and the 

court held that the plaintiff failed to comply with the statutory requirements, including 

submitting the written consent of the record shareholder. Nelson v. R-B Rubber Prods., 

Inc., No. Civ. 03–656–HA, 2005 WL 1334538, at *5 (D. Or. June 3, 2005). By contrast, 

other jurisdictions do not make the same distinction. See, e.g., Mass. Gen. Laws Ann. 

ch. 156B, § 86 (West, Westlaw through ch. 8, 2021 1st Ann. Sess.); N.Y. Bus. Corp. Law 

§ 623 (McKinney, Westlaw through L.2021) (mentioning beneficial shareholders but not 

requiring written consent of record shareholder to exercise dissenter’s rights). 
15 

The Cede Breakdown notifies issuers which banks and brokers hold 

shares through DTC. See In re Appraisal of Dell Inc., Consol. C.A. 

No. 9322–VCL, 2015 WL 4313206, at *6 (Del. Ch. July 13, 2015). It does 

not transfer legal title nor does it alter the statutory obligation on 

Shepard’s part to obtain Cede’s consent to exercise appraisal rights. Iowa 

Code section 490.1601(3) requires Iowa corporations to 

maintain a record of its shareholders in a form that permits 

preparation of a list of the names and addresses of all 

shareholders in alphabetical order by class of shares showing 

the number and class of shares held by each. 

This requirement makes sense in light of the definition of “record 

shareholder.” See Iowa Code § 490.1301(8) (defining “record shareholder” 

as “the person in whose name shares are registered in the records of the 

corporation”) (emphasis added). 

EMCI had such a list that met the requirements of section 

490.1601(3): the Record Shareholder Voting List. This list was prepared 

by EMCI’s agent (AST) but still qualifies as a corporate record. See In re 

Appraisal of Dell Inc., 2015 WL 4313206, at *9 (“Virtually all public 

corporations have outsourced the maintaining of the stock ledger to a 

transfer agent . . . . The stock ledger and the stock list as of a particular 

record date are corporate records, but they exist and are maintained 

outside the corporation.”). EMCI was entitled to “rely on its records until 

a stockholder t[ook] proper steps to transfer title to the shares.” Id. at *8.5 

Cede was listed as the record shareholder on this list. Cede’s consent was 

required for Shepard to exercise his appraisal rights. See id. at *9 (“Under 

 

5Shepard argues that In re Appraisal of Dell Inc. stands for the proposition that 

“[a]n issuer cannot rely on the stock ledger maintained by its transfer agent, pretend that 

Cede is a single record holder, and ignore the Cede breakdown.” See 2015 WL 4313206, 

at *11. However, this discussion was offered as a “possible interpretation” and is not 

binding precedent here. Id. 
16 

existing precedent, Cede was the stockholder of record for purposes of the 

[beneficial shareholders’] shares and therefore made the appraisal 

demand.”).6 EMCI was not required to look outside of this list to search 

for other potential record shareholders. Iowa Code section 490.1303(2)(a) 

only provides for one record shareholder, which the district court correctly 

ruled was Cede.7 

“In making th[e] choice [to hold shares in street name], the burden 

must be upon the stockholder to obtain the advantages of record 

ownership.” See Enstar Corp. v. Senouf, 535 A.2d 1351, 1354 (Del. 1987); 

cf. Allison v. Preston, 651 A.2d 772, 775–76 (Del. Ch. 1994) (distinguishing 

Enstar because the beneficial shareholders in Allison were forbidden “from 

holding their shares in their own name”), aff’d sub nom. Preston v. Allison, 

650 A.2d 646 (Del. 1994). The other dissenter effectively exercised 

appraisal rights by following the statutory requirement to submit Cede’s 

 

6See also Nelson, 2005 WL 1334538, at *5; Kaiser Steel Res., Inc. v. Jacobs (In re 

Kaiser Steel Corp.), 110 B.R. 514, 521–23 (D. Colo. 1990) (“[T]he bankruptcy court 

incorrectly assumed that Kaiser’s records would indicate that Schwab[, the broker,] was 

the record owner of Kaiser stock. . . . Kaiser stock held by Schwab’s customers in street 

name was actually registered in the name of DTC’s nominee, Cede & Co. Consequently, 

if anything, Kaiser’s records would indicate that it was dealing with Cede & Co., not 

Schwab.”), aff’d sub nom. Kaiser Steel Corp. v. Charles Schwab & Co., 913 F.2d 846 

(10th Cir. 1990); Enstar Corp. v. Senouf, 535 A.2d 1351, 1356 (Del. 1987) (referencing 

prior Delaware cases and agreeing that “demands for appraisals made by the beneficial 

owners of stock, rather than the stockholders of record, [are] invalid[], even though the 

identity of the holder of record [i]s known”); Harkins v. Sun Pharm. Indus., Inc., No. 

344505, 2019 WL 6977838, at *3 (Mich. Ct. App. Dec. 19, 2019) (per curiam) (holding 

that because the beneficial shareholders did not submit Cede’s written consent, they 

failed to assert dissenters’ rights), appeal denied, 957 N.W.2d 819 (Mich. 2021) (mem.); 

Kohler Co. v. Sogen Int’l Fund, Inc., No. 99–2115, 2000 WL 1124233, at *2 (Wis. Ct. App. 

Aug. 9, 2000) (per curiam) (agreeing with the Delaware court in Enstar and holding that 

the corporation could rely solely on the actions of Cede and that the beneficial 

shareholders failed to exercise dissenters’ rights). 

7This is not to say that a broker could never be a record shareholder. See, e.g., 

Nelson, 2005 WL 1334538, at *3 (holding plaintiffs were beneficial shareholders because 

they had “transferred record ownership” to their broker). However, here, Morgan Stanley 

was not the record shareholder because Shepard had not transferred record ownership 

to it. 
17 

written consent, and Shepard was required to do so as well. Cf. Enstar, 

535 A.2d at 1354 (“The legal and practical effects of having one’s stock 

registered in street name cannot be visited upon the issuer. The attendant 

risks are those of the stockholder, and where appropriate, the broker.”). 

Nor did the Omnibus Proxy submitted with the Cede Breakdown change 

the record shareholder; it simply notified EMCI that Cede had transferred 

its right to vote on the merger to Morgan Stanley. See In re Appraisal of 

Dell Inc., 143 A.3d 20, 28–29 (Del. Ch. 2016) (describing how Cede remains 

the record shareholder when it transfers its right to vote via an omnibus 

proxy to a participant). Compare Iowa Code § 490.722 (discussing 

appointment of proxies), with id. § 490.1303 (describing how shareholders 

may assert appraisal rights). 

We hold that for purposes of exercising appraisal rights, the record 

shareholder is the shareholder listed on the record maintained under 

section 490.1601(3) and not the Cede Breakdown provided by DTC. See 

Graeser v. Phoenix Fin. Co. of Des Moines, 218 Iowa 1112, 1118–19, 

254 N.W. 859, 862 (1934) (holding that “until [an equitable shareholder] 

has caused a transfer to be made upon the books of the corporation, his 

title, as between the corporation and himself, is not perfected, and he 

neither has the rights nor is subject to the liabilities of membership” 

(quoting Brown v. Duluth, M. & N. Ry., 53 F. 889, 894 (D. Minn. 1893))). 

Our holding comports with the Model Business Corporation Act (Model 

Act), upon which the IBCA is based. See Doré, § 1:2(2)(a), at 4.8 The Model 

Act draws clear distinctions between the record shareholder, the broker, 

and the customer. See 1 Model Bus. Corp. Act Ann. § 7.23 cmt., at 145 

(Am. Bar Ass’n 2008) (“[I]t has become a common practice for persons 

 

8“Approximately 30 states have based their own corporate statutes on the 

MBCA . . . .” See Doré, § 17.3, at 555 n.9. 
18 

purchasing shares to have them registered in the ‘street name’ of a brokerdealer or other financial institution, principally to facilitate transfer by 

eliminating the need for the beneficial owner’s signature and delivery. . . . 

In th[e depository system], financial institutions deposit securities with the 

depository, which becomes the registered owner of the shares.”). 

We decline Shepard’s invitation to adopt the federal securities law 

definition of “record holder”; such a change in the legislative definition 

must come from the legislature.9 See Crown EMAK Partners, LLC v. Kurz, 

992 A.2d 377, 398 (Del. 2010) (en banc) (emphasizing the “comprehensive 

and carefully crafted statutory scheme” of the Delaware General 

Corporation Law and noting that “[a]ny adjustment to the intricate 

scheme . . . should be accomplished by the General Assembly through a 

coordinated amendment process”). We are not free to rewrite the statute. 

We affirm the district court’s ruling that Cede was the record shareholder 

whose consent was required for Shepard to exercise his appraisal rights. 

Lacking Cede’s consent, Shepard lost his right to an appraisal. 

B. Shepard’s Waiver and Estoppel Claims Fail. Shepard argues 

that EMCI waived his failure to obtain Cede’s consent and is estopped from 

raising his omission because EMCI prematurely cancelled his shares and 

that EMCI “made a number of false and misleading representations to 

Shepard during the parties’ correspondence.” The district court correctly 

rejected Shepard’s waiver and estoppel arguments. 

1. Waiver. “Waiver applies when a party voluntarily relinquishes a 

known right.” DuTrac Cmty. Credit Union v. Hefel, 893 N.W.2d 282, 292 

 

9As the district court noted, “[A]t least the Delaware and Iowa legislatures have 

not seen fit to amend their statutes to incorporate the federal securities law definition of 

record holder urged by Shepard.” It “assume[d] this [wa]s true for the other states since 

Shepard cited to no state laws that incorporate the federal securities law definition of 

record holder into their definition of record shareholder.” 
19 

(Iowa 2017). “The essential elements of a waiver are the existence of a 

right, knowledge, actual or constructive, and an intention to relinquish 

such a right.” Id. (quoting Iowa Comprehensive Petroleum Underground 

Storage Tank Fund Bd. v. Federated Mut. Ins., 596 N.W.2d 546, 552 

(Iowa 1999)). “Waiver can be either express or implied.” Id. “Generally, 

the issue of waiver is one for the jury; when the evidence is undisputed, 

however, the issue is one of law for the court.” Iowa Comprehensive 

Petroleum Underground Storage Tank Fund Bd., 596 N.W.2d at 552. EMCI 

and Shepard agree the material facts are undisputed but disagree over the 

legal consequences of those facts. 

First, the district court correctly rejected Shepard’s claim that EMCI 

waived strict compliance with the appraisal requirements by cancelling 

Shepard’s shares and paying him when the merger closed in September, 

well before the November 5 appraisal deadline. EMCI did exactly what the 

Proxy Statement told Shepard would happen: Pursuant to the terms of the 

Merger Agreement, his shares were cancelled when the merger closed. 

EMCI’s September share cancellation and payment did not violate Iowa’s 

appraisal statute that sets the date “by or before” payment must be made 

(December 5 in this case), not a date “on or after” payment is to occur. See

Iowa Code § 490.1324(1) (requiring the corporation to pay the shareholder 

“within thirty days” of the appraisal deadline (emphasis added)). In any 

event, at no time before the November 5 appraisal deadline did Shepard 

seek Cede’s consent or attempt to retrieve his cancelled shares. Without 

Cede’s consent, his appraisal rights were never perfected. EMCI, by acting 

pursuant to the Merger Agreement, cannot be deemed to have waived strict 

compliance with appraisal requirements. If the sequence of deadlines left 

a trap for the unwary, Shepard has himself to blame. See Enstar, 535 A.2d 

at 1354 (“The legal and practical effects of having one’s stock registered in 
20 

street name cannot be visited upon the issuer. The attendant risks are 

those of the stockholder, and where appropriate, the broker.”) 

Second, the parties’ correspondence show no waiver by EMCI of 

strict compliance with the appraisal statute. EMCI was required by Iowa 

Code section 490.1322(1) to “send a written appraisal notice and 

[appraisal form], to all shareholders who satisfied the requirements of 

section 490.1321.” EMCI did so. Shepard argues EMCI waived its right 

to strict compliance with the Iowa appraisal statute because in sending 

him its September 26 “Appraisal Rights Notice,” 

EMCI affirmatively represented to Shepard . . . that the only 

step left for Shepard to “formally assert appraisal rights” was 

to “complete, date and sign” the attached appraisal form and 

return that form to EMCI by November 5, which Shepard did. 

We disagree. EMCI’s letter, as required by section 490.1322(2), listed 

several steps Shepard was required to take to assert his appraisal rights, 

but the word “only” is Shepard’s gloss and does not appear in that letter. 

The body of the letter is silent about the separate requirement to provide 

the written consent of the record shareholder, Cede. In that regard, the 

letter could have been clearer. Yet EMCI’s letter, as required by 

section 490.1322(2)(c), also attached a copy of the IBCA division including 

section 490.1303(2)(a), which expressly sets forth that consent 

requirement. The letter nowhere stated the record shareholder’s consent 

to appraisal was not required. Shepard, an investor holding a $39.6 

million stock position and represented by counsel, remained on notice that 

Cede’s written consent was still required. As the district court concluded, 

“There is nothing in the language of the letter that suggests EMCI expressly 

and unequivocally waived its right to challenge Shepard’s assertion of 

appraisal rights at a later date.” And as the district court determined, 

“There is no language in the notice or form which suggests EMCI was 
21 

waiving any challenges it may have to his assertion of appraisal rights.” 

See Dirienzo v. Steel Partners Holdings L.P., No. 4506–CC, 

2009 WL 4652944, at *5 (Del. Ch. Dec. 8, 2009) (rejecting waiver claim 

under similar circumstances). When EMCI’s September 26 

communication is read as a whole with the attached code provisions 

requiring consent of the record shareholder, no reasonable fact finder 

could find EMCI voluntarily relinquished that statutory requirement. See 

id. The district court correctly ruled that Shepard’s waiver claim failed as 

a matter of law. 

2. Equitable estoppel. Shepard has the burden of proving equitable 

estoppel by a clear and convincing preponderance of the evidence. Christy 

v. Miulli, 692 N.W.2d 694, 702 (Iowa 2005). Shepard must prove: 

(1) The defendant has made a false representation or has 

concealed material facts; (2) the plaintiff lacks knowledge of 

the true facts; (3) the defendant intended the plaintiff to act 

upon such representations; and (4) the plaintiff did in fact rely 

upon such representations to his prejudice. 

Id. (quoting Meier v. Alfa-Laval, Inc., 454 N.W.2d 576, 578–79 (Iowa 1990)). 

Ordinarily, the party claiming equitable estoppel must show “some 

affirmative act” of concealment. Skadburg v. Gately, 911 N.W.2d 786, 798 

(Iowa 2018). “However, our caselaw relaxes the requirement to allege and 

prove affirmative concealment when there is a confidential or fiduciary 

relationship.” Id. “When a fiduciary relationship exists, mere silence 

supplies the affirmative-act requirement.” Id. Shepard does not claim that 

EMCI owed him a fiduciary duty to assist his assertion of appraisal 

rights.10 Shepard, a substantial and sophisticated investor represented 

 

10In related litigation, Shepard sued EMCC and its CEO, Bruce G. Kelley, in 

federal court for breach of fiduciary duty in connection with the merger with EMCI. See 

Shepard v. Emps. Mut. Cas. Co., 476 F. Supp. 3d 862, 866–67 (S.D. Iowa 2020), aff’d, 

998 F.3d 330 (8th Cir. 2021). The district court dismissed that lawsuit for failure to state 

a claim. Id. at 882. 
22 

by experienced legal counsel, was dealing with EMCI at arm’s length. The 

district court correctly concluded no fiduciary relationship existed between 

EMCI and Shepard regarding the appraisal process. 

Shepard’s estoppel claim fails on the first element. To survive 

summary judgment without a fiduciary relationship between himself and 

EMCI, Shepard must allege and show EMCI either made a false 

representation or took some affirmative act to conceal a material fact. 

EMCI did neither. To the contrary, in the Proxy Statement and the Merger 

Agreement, EMCI told Shepard of the requirements to exercise his 

appraisal rights and the consequences of failing to do so. The Proxy 

Statement told Shepard that he needed to submit the record holder’s 

written consent to EMCI to exercise his appraisal rights and that he should 

review the IBCA statute “carefully and in its entirety.” The Proxy 

Statement encouraged shareholders to retain counsel “due to the 

complexity of the procedures for exercising the right to seek appraisal” and 

warned that a failure to comply with statutory provisions could result in 

the loss of the right of appraisal. The Merger Agreement specifically cited 

to Iowa Code sections 490.1301–.1303 and 490.1320–.1326. The 

agreement told Shepard the consequences of failing to perfect his appraisal 

rights, including conversion of the shares into a right to receive Merger 

Consideration and the cancellation of shares. The other dissenter had no 

difficulty perfecting appraisal rights. 

EMCI did not respond to Cauley’s September 23 and 27 letters and 

did not tell Shepard the Morgan Stanley Letter was insufficient to perfect 

his appraisal rights before November 5. Nor did EMCI’s September 26 

letter itself mention Cede’s consent was required (although, as noted, the 

attached code provisions set forth the record shareholder consent 

requirement). Yet with no fiduciary relationship, EMCI’s silence under 
23 

these circumstances is insufficient to raise a jury question on equitable 

estoppel. 

EMCI had previously notified Shepard that if he failed to perfect his 

appraisal rights, EMCI would cancel his shares and convert them to a right 

to receive Merger Consideration; that is exactly what EMCI did. The 

district court correctly ruled that Shepard’s equitable estoppel claim fails 

as a matter of law. 

IV. Disposition. 

For the foregoing reasons, we affirm the district court’s ruling 

granting EMCI’s motion for summary judgment and denying Shepard’s 

motion for summary judgment. 

AFFIRMED.