IN THE COURT OF APPEALS OF IOWA

No. 21-1764

Filed December 7, 2022

MICHAEL BROWNE,

Plaintiff-Appellant,

vs.

CHRISTOPHER ROTH and DEBRA ROTH,

Defendants-Appellees.

________________________________________________________________

Appeal from the Iowa District Court for Black Hawk County, Bradley J. 

Harris, Judge.

Michael Browne appeals the district court’s rejection of his statutory and 

breach-of-contract claims against Christopher and Debra Roth for failure to 

disclose material defects in their written disclosure statement. AFFIRMED.

Adam J. Babinat of Redfern, Mason, Larsen & Moore, P.L.C., Cedar Falls, 

for appellant.

Patrick C. Galles of Correll, Sheerer, Benson, Engels, Galles & Demro, 

P.L.C., Cedar Falls, for appellees.

Considered by Vaitheswaran, P.J., and Greer and Schumacher, JJ.
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VAITHESWARAN, Presiding Judge.

Michael Browne bought a Cedar Falls home from Christopher and Debra 

Roth, with the intent to “gut” and remodel it before moving in. While he was 

stripping the basement walls, he discovered mold and moisture. Browne stopped 

his demolition work and never moved into the home.

Browne sued the Roths for failure to “disclose any problems concerning 

water seepage . . . [and] any known fungus or mold issues.”1 He claimed the Roths 

breached statutory disclosure requirements as well as the real estate purchase 

contract incorporating those requirements.2 

A few months after suit was filed, a basement pipe burst. Browne 

discovered the pipe on “one of [his] checkups.” Water was “[s]praying against the 

drywall” and running to the floor. Browne did “not know” how long the water had 

been running before he discovered it.

Years passed. The home remained unoccupied from the time of purchase 

in mid-2016 through trial five years later. Following trial, the district court ruled in 

favor of the Roths. In response to a posttrial motion, the court enlarged its findings 

and reaffirmed its conclusions.

On appeal, Browne contends “the Roths had actual knowledge of a mold 

and moisture problem,” they “failed to disclose anything which would have 

informed [him] further investigation was warranted,” and “[t]he district court erred 

by concluding the Roths did not violate their [statutory] disclosure duty” and by 

1 Browne alleged other nondisclosures that are not at issue on appeal.

2 Brown additionally raised negligent and fraudulent-misrepresentation claims that 

he voluntarily dismissed with prejudice. 
3

rejecting his contract claim. He concedes the breach-of-contract claim rises or 

falls on the outcome of the statutory claim. Accordingly, we will confine our 

discussion to the statutory claim.

Iowa Code chapter 558A (2021) requires a prospective seller to “deliver a 

written disclosure statement to” a prospective buyer. The statement must “include 

information relating to the condition and important characteristics of the property

. . . including significant defects in the structural integrity.” Iowa Code 

§§ 558A.2(1), 558A.4(1)(a); Iowa Admin. Code r. 193E—14.1(6) (sample 

statement); Putman v. Walther, 973 N.W.2d 857, 863 (Iowa 2022). A person who 

violates the disclosure requirement is ordinarily liable for actual damages, but 

“shall not be liable . . . for the error, inaccuracy, or omission in information . . . 

unless that person has actual knowledge of the inaccuracy, or fails to exercise 

ordinary care in obtaining the information.” Iowa Code § 558A.6(1).

We begin with the Roths’ information on water seepage. The district court 

found that the Roths saw waviness in “the beadboard located in the northeast and 

southeast corner of the basement.” They “removed the beadboard, and the 

wallboard behind the beadboard was damp.” They removed the wallboard and 

observed black mold on the wallboard, flooring strips, and the concrete block 

foundation wall.” They “cleaned up the mold, caulked, replaced a piece of 

wallboard in each corner with mold-resistant sheetrock, and returned the 

beadboard to its original position.” The Roths do not dispute these findings. The 

findings are supported by substantial evidence. See Hammes v. JCLB Props., 

LLC, 764 N.W.2d 552, 555 (Iowa Ct. App. 2008) (setting forth standard of review).
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We turn to whether the Roths disclosed the information to Browne. The 

answer is unequivocally “No.” They checked “No” to the question about “[a]ny 

known water, seepage or other problems”; “No” to the question about “[a]ny known 

fungus or mold”; “No” to the question about “[a]ny known modifications, 

remodeling, alterations, or repairs, etc., made without necessary permits or 

licensed contractors”; and “No” to the question about “[a]ny known physical 

problems.” When they completed the form, they had actual knowledge of seepage 

and mold in the basement. Again, the Roths conceded as much. Because 

disclosure of the seepage, mold and remedial measures was statutorily required, 

the Roths violated the statute by failing to make the disclosures. See Yeboah v. 

Emans, No. 12-0900, 2011 WL 1453231, at *2 (Iowa Ct. App. Apr. 10, 2013).3 We

are left with the question of actual damages for the mold and water seepage. 

The district court found “the mold problem in the basement of the residence 

had resolved at no cost to” Browne and “[t]his had occurred despite standing water 

being present on the floor of the basement for several years due to an unrelated 

bursting of a water pipe.” The court concluded Browne “failed to prove any 

damages to remedy the undisclosed mold problem in the basement of the 

residence.” 

Substantial evidence supports the court’s underlying findings. Browne 

testified, “The mold is gone.” When pressed with the question, “There is no mold 

3 The district court found the Roths “thought they had taken care of the problem.” 

The court of appeals was unpersuaded by a similar argument. See Yeboah, 2011 

WL 1453231, at *3 (noting a “sunroom leak was a known problem that was 

repaired” and “[t]he sellers had an obligation to disclose the leak and the repair, 

notwithstanding their belief that the issue was resolved”).
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there anymore?” he responded, “The last time I was there, no. There was no 

mold.” And when asked, “The mold is not an issue?” He responded, “No, sir.” 

Seeking reconfirmation of this point, Browne’s attorney inquired, “Are you asking 

the court for any damages related to any mold remediation you would have had to 

undertake?” Browne answered, “No sir.” In light of his testimony, the district court 

did not err in concluding no actual damages were warranted on the statutory claim 

related to nondisclosure of mold. 

We turn to Browne’s requested damages for “water seepage repair.” In its 

expanded posttrial findings, the district court found the “condensation problem” 

observed by the Roths “would be alleviated by the construction of energy walls.” 

Because the City required these walls in connection with Browne’s remodeling of 

the basement, the court determined Browne “incurred no additional costs as a 

result of [the Roths’] failure to disclose the moisture problem.” 

We discern a more fundamental problem with Browne’s request for waterseepage damages—the Roths’ lack of actual knowledge of widespread water 

seepage.

4

 The district court credited the Roths’ testimony concerning their 

knowledge of this seepage, finding (1) “[a]t no time did [they] notice water on the 

floor in the basement or was the basement carpet wet” and (2) the Roths “noticed 

4 The Roths point to their lack of knowledge and also argue the damages were not 

proximately caused by their nondisclosure. See Putman, 973 N.W.2d at 865 

(evaluating a summary judgment record on a chapter 558A claim for “damages 

proximately caused by the misrepresentation”); Hammes, 764 N.W.2d at 558–59

(remanding for adjustment of a damage award under chapter 558A by “deducting 

an appropriate amount for the southern portion of the basement deconstruction 

and remodeling necessitated by the sewer back-ups and not caused by the 

undisclosed water problem”). We find it unnecessary to address the causation 

issue. 
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no additional moisture problems in the basement.” Substantial evidence supports 

the court’s findings. 

Christopher Roth agreed he saw some discoloration on the wall but said the 

wall “was never wet or wet to the touch” and there was never any seepage problem 

in the house. Roth also saw no water on the basement floor. His testimony was 

consistent with Browne’s testimony on this point. As Browne concedes on appeal, 

his home inspector did not detect water seepage and he “only learned of the mold 

and moisture issues . . . after he removed the drywall.”

As for Browne’s expert, he testified certain discoloration was indicative of 

“seepage through the basement walls,” but his testimony was based on pictures 

taken in 2019, not 2016 when the house was sold. Significantly, he said he would 

expect to see water on the floor if there were seepage. In his words, water 

seepage “doesn’t have anywhere else to go other than the floor—joint of the floor 

or out to the floor itself.” While Browne’s attorney attempted to rehabilitate him, 

his concession bolstered Roth’s and Browne’s testimony concerning the absence 

of water on the floor.

The district court was free to weigh the testimony and assign credibility as 

it saw fit. See Poller v. Okoboji Classic Cars, LLC, 960 N.W.2d 496, 519 n.3 (Iowa 

2021) (deferring to district court’s credibility findings in a contract case); Tim O’Neill 

Chevrolet, Inc. v. Forristall, 551 N.W.2d 611, 614 (Iowa 1996) (“The trier of fact . . . 

has the prerogative to determine which evidence is entitled to belief. The district 

court has a better opportunity than we do to evaluate the credibility of the 

witnesses. So we think factual disputes . . . are best resolved by the district 

court.”). The court did just that in finding the Roths lacked actual knowledge of the
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water seepage beyond the identified corners. Without actual knowledge, the Roths 

could not be liable for actual damages. Accordingly, the district court did not err in 

declining to award water seepage damages. 

Having concluded the district court did not err in dismissing the statutory 

claim, we further conclude the court did not err in dismissing the breach-of-contract 

claim.

Browne seeks appellate attorney fees. He notes that “the real estate 

purchase agreement provides for the recovery of . . . attorneys’ fees in the event 

of a breach.” That type of language in a purchase agreement will not support an 

award of attorney fees for a chapter 558A violation unless the agreement required 

the sellers to make the statutory disclosures. See Hovden v. Lemke, No. 19-0399, 

2020 WL 2988531, at *4 (Iowa Ct. App. June 3, 2020) (noting the purchase 

agreement made “no provisions for attorney fees relating to chapter 558A or 

nondisclosures,” precluding an award of attorney fees); Payton v. Digiacomo, 

No. 14-1453, 2015 WL 5285740, at *3 (Iowa Ct. App. Sept. 10, 2015) (concluding

a checkmark indicating the attachment of a disclosure form to the purchase 

agreement was insufficient to incorporate “any term relating to the requirements of 

chapter 558A,” precluding recovery of attorney fees); cf. Johnson v. Baum, 

No. 09-1340, 2010 WL 2757192, at *3 (Iowa Ct. App. July 14, 2010) (concluding 

language in the purchase agreement specifying a “legal duty to disclose [m]aterial 

[d]efects” incorporated the requirements of chapter 558A and was sufficient to 

trigger the attorney-fee provision). 

This case is more like Hovden and Payton than Johnson. The purchase 

agreement contains a check box to indicate whether the Chapter 558A disclosure 
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statement is attached and does not otherwise contain any language incorporating 

those disclosure duties into the contract. The remedies provision of the contract 

authorizes attorney fees for failure to “timely fulfill the terms of this agreement.” 

Because the terms do not include the chapter 558 disclosures except by a checkbox reference to the addendum, we conclude Browne was not authorized to obtain 

attorney fees even if he prevailed.

AFFIRMED.