IN THE SUPREME COURT OF IOWA 

No. 86 / 06–1541 

Filed September 19, 2008 

JANICE A. MEINCKE, 

 Appellant, 

vs. 

NORTHWEST BANK & TRUST COMPANY, 

 Appellee. 

 On review from the Iowa Court of Appeals. 

Appeal from the Iowa District Court for Scott County, Mark D. 

Cleve, Judge. 

 A bank asks for further review of a court of appeals decision. 

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT 

JUDGMENT AFFIRMED. 

 Christopher L. Surls, William B. Norton and Timothy L. Baumann 

of William B. Norton Law Firm, P.C., Lowden, for appellant. 

Michael J. McCarthy of McCarthy, Lammers & Hines, Davenport, 

for appellee. 
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WIGGINS, Justice. 

Janice Meincke loaned her daughter and nephew $90,000. The 

loan was secured by a mortgage on property owned by the daughter and 

nephew’s business. A bank also held mortgages on the same property; 

however, Janice’s mortgage had priority. For the daughter and nephew 

to obtain more financing, the bank required Janice to subordinate her 

mortgage to the bank’s by signing a subordination agreement. Janice 

signed the agreement, but challenged its enforcement by arguing it 

lacked consideration. Janice appealed a district court judgment finding 

of consideration. Our court of appeals reversed the district court by 

finding substantial evidence did not support the judgment. However, 

upon further review, we find substantial evidence does support the 

judgment, and we affirm the judgment of the district court. 

I. Background Facts and Procedure. 

Sandra Marti and Craig Meincke operated two businesses, 

SCRAMM Enterprises, L.C., and C.A. Meincke Plumbing, Inc. (plumbing 

business). Both Sandra and Craig owned shares of SCRAMM. In 1997 

and 1998 the plumbing business received two loans from Rock Island 

State Bank, each secured by a mortgage on the building owned by 

SCRAMM. In February of 2001, the plumbing business signed several 

notes with Northwest Bank & Trust. These notes were not secured by 

mortgages. 

In July of 2002, Janice, Sandra’s mother and Craig’s aunt, issued 

SCRAMM three checks totaling $90,000. This loan was reflected in a 

promissory note dated September 15. The note was secured by a 

mortgage on the building owned by SCRAMM. 

On May 23, 2003, Northwest Bank issued three more notes to the 

plumbing business. These notes were issued to restructure a preexisting 
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Northwest Bank debt and were secured by a mortgage on the SCRAMM 

building. 

On March 3, 2004, Northwest Bank offered to issue the plumbing 

business another loan to restructure the existing Northwest Bank debt 

and refinance the Rock Island State Bank debt. This loan was also to be 

secured by a mortgage on the SCRAMM building. Before granting the 

loan, Northwest Bank informed Craig it would not refinance the Rock 

Island State Bank debt if Janice did not subordinate her mortgage to its 

own. To comply with this condition, it was necessary for Janice to sign a 

subordination agreement. James Legare, the vice president commercial 

loan manager for Northwest Bank, testified the bank would not have 

made the loan if Janice had refused to sign the subordination agreement. 

Neither Legare nor anyone else from Northwest Bank spoke to Janice 

about the subordination agreement. Rather, Craig spoke with Janice 

about the agreement. Although the details of that conversation are 

unclear, Janice understood after signing the agreement she would be 

“second in line.” 

In May of 2004, approximately two and a half months after the 

restructuring of the plumbing business, Craig notified Legare he was 

closing the plumbing business. The plumbing business agreed to a 

voluntary foreclosure on the mortgages held by Northwest Bank. The 

building was sold, and the proceeds were applied to the two remaining 

Northwest Bank loans, but debt remained. Janice did not receive any 

proceeds from the sale. 

Janice filed a petition asking the court to find the subordination 

agreement null and void for lack of consideration. Janice amended her 

petition to add a count for intentional interference with an existing 

contract. At trial, Janice motioned the court to amend her petition to 
4

add a count of fraud, which the district court denied. Also at trial the 

court heard testimony on whether the subordination agreement was 

properly acknowledged. The court held defective acknowledgement of the 

subordination agreement is not a defense where the controversy involves 

the original parties to the agreement. 

The district court found the agreement was supported by 

consideration. The court found Northwest Bank suffered a detriment by 

loaning the plumbing business additional funds in response to Janice 

signing the subordination agreement. 

The district court also found Northwest Bank’s interference with 

the contract between Janice and SCRAMM was not improper because 

Janice signed the subordination agreement in part to help her family, 

and Northwest Bank had a good-faith belief the plumbing business was 

financially secure when it restructured its loans. 

Janice appealed and the case was routed to our court of appeals, 

who found the consideration for the subordination agreement was not 

bargained for. Northwest Bank petitioned for further review, which we 

granted. 

II. Issues. 

Janice originally appealed, claiming the district court erred: (1) in 

finding the subordination agreement was supported by consideration; 

(2) by failing to find the subordination agreement lacked proper 

acknowledgement; (3) by failing to find improper interference with an 

existing contract; and (4) by denying her motion to amend the petition to 

add a claim for fraud. The court of appeals found the first issue 

dispositive; therefore, it did not consider the others. 

Northwest Bank petitioned for further review, which we granted. 

Because we find substantial evidence supported the district court’s 
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determination that the subordination agreement was supported by 

proper, bargained for consideration, we will address Janice’s other claims 

on our further review. 

III. Discussion. 

A. Consideration. Claims based on a contract that are tried at 

law are reviewed for correction of errors at law. Iowa R. App. P. 6.4; 

Harrington v. Univ. of N. Iowa, 726 N.W.2d 363, 365 (Iowa 2007). The 

district court’s findings of fact are binding on the court if they are 

supported by substantial evidence. Iowa R. App. P. 6.14(6)(a); Fischer v. 

City of Sioux City, 695 N.W.2d 31, 33 (Iowa 2005). We view the evidence 

in the light most favorable to the judgment when a party argues the trial 

court’s ruling is not supported by substantial evidence. Fischer, 695 

N.W.2d at 33. Evidence is substantial when reasonable minds accept the 

evidence as adequate to reach a conclusion. Id. “Evidence is not 

insubstantial merely because we may draw different conclusions from it; 

the ultimate question is whether it supports the finding actually made, 

not whether the evidence would support a different finding.” Raper v. 

State, 688 N.W.2d 29, 36 (Iowa 2004) (citations omitted). However, 

appellate courts are not bound to a district court’s conclusion of law or 

that court’s application of legal conclusions. Id.

It is presumed that an agreement, which has been written and 

signed, is supported by consideration. Kristerin Dev. Co. v. Granson Inv., 

394 N.W.2d 325, 331 (Iowa 1986). A failure of consideration is a defense 

to enforcing the contract that must be proven by the party asserting the 

defense. Hubbard Milling Co. v. Citizens State Bank, 385 N.W.2d 255, 

259 (Iowa 1986). We determine whether there is consideration from what 

is stated in the instrument or by what the parties contemplated at the 
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time the instrument was executed. Id. A party can use want of 

consideration as a defense to a subordination agreement. Id. 

Consideration can be either a legal benefit to the promisor, or a 

legal detriment to the promisee. Magnusson Agency v. Pub. Entity Nat’l 

Company-Midwest, 560 N.W.2d 20, 27 (Iowa 1997). The district court 

found the bank suffered a detriment by loaning the plumbing business 

additional funding. The detriment to the bank is adequate consideration 

for the subordination agreement. See 55 Am. Jur. 2d Mortgages § 320, 

at 66 (2007) (stating the extension of future credit can serve as 

consideration for a subordination agreement). However, the question 

here is not whether this detriment was sufficient to constitute 

consideration; it is whether the benefit or the detriment was bargained 

for. Magnusson, 560 N.W.2d at 27. According to the Restatement 

(Second) of Contracts: 

(1) To constitute consideration, a performance or a return 

promise must be bargained for. 

(2) A performance or return promise is bargained for if it 

is sought by the promisor in exchange for his promise 

and is given by the promisee in exchange for that 

promise. 

§ 71, at 172 (1981); see also id. § 72, at 177 (stating “[e]xcept as stated in 

§§ 73 and 74, any performance which is bargained for is consideration”). 

For consideration to be “bargained for,” the consideration must “induce” 

the making of the promise. Id. § 71 cmt. b, at 173. 

A sufficient legal detriment to the promisee exists if the promisee 

“promises or performs any act, regardless of how slight or inconvenient, 

which he is not obligated to promise or perform so long as he does so at 

the request of the promisor and in exchange for the promise.” 3 Samuel 

Williston & Richard A. Lord, A Treatise on the Law of Contracts § 7:4, at 
7

41 (4th ed. 1992). There is substantial evidence in the record the 

detriment suffered by the bank was bargained for. 

Janice admitted that Craig and Sandra would receive a benefit if 

she signed the subordination agreement by stating the following: 

Question: Okay. And Craig and Sandy received a benefit 

also because they asked you to do this and this would help 

their business, correct? 

Janice: I suppose, yes. 

“[I]t must appear that the disadvantage was suffered at the request of the 

promisor, expressed or implied.” Heggen v. Clover Leaf Coal & Mining 

Co., 217 Iowa 820, 824, 253 N.W. 140, 142 (1934) (citing Handrahan v. 

O’Regan, 45 Iowa 298, 300 (1876)) (emphasis added). Janice’s statement 

implies she understood the bank would lend more money to Craig and 

Sandra if she signed the subordination agreement. By signing the 

subordination agreement, Janice impliedly requested Northwest Bank to 

refinance Craig and Sandra’s loans, thus she requested the bank suffer a 

detriment. 

Because there is substantial evidence the consideration was 

bargained for, we affirm the district court ruling on the consideration 

issue. 

B. Acknowledgment. Janice argues the district court erred when 

it refused to render the subordination agreement null and void due to an 

insufficient acknowledgement. Specifically, Janice argues the document 

was not properly notarized. At trial both Janice and Legare testified the 

subordination agreement was not notarized in Janice’s presence, but 

rather on a later date at the bank. 

 We have determined improper acknowledgment is not a valid 

defense in a controversy between original parties. Brose v. Int’l Milling 
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Co., 256 Iowa 875, 880, 129 N.W.2d 672, 675 (1964). We only overturn 

a rule “ ‘after it has been duly tested by experience, [and it] has been 

found to be inconsistent with the sense of justice or with the social 

welfare.’ ” McElroy v. State, 703 N.W.2d 385, 395 (Iowa 2005) (quoting 

Benjamin N. Cardozo, The Nature of the Judicial Process 150 (1921)). We 

cannot say the rule disallowing the inadequate acknowledgement defense 

between original parties has been found to be inconsistent with the sense 

of justice or social welfare. To the contrary, it is generally held the 

defense has no merit among original parties. See Joyce Palomar, Patton 

and Palomar on Land Titles § 356, at 187−88 (3d ed. 2003) (stating 

“unless required by statute, the certificate of acknowledgement is not a 

part of a deed, and is unnecessary as against the grantor, her heirs and 

all others as to whom a conveyance is operative without being of record”). 

The acknowledgement is an official instrument used to show the 

promisor executed an instrument voluntarily. Id. In the case at hand, 

Janice does not argue she involuntarily signed the subordination 

agreement, or that she was under coercion or duress when she signed 

the agreement. Therefore, this case does not present a situation that 

demonstrates our long-standing rule regarding the improper 

acknowledgment defense is “ ‘inconsistent with the sense of justice or 

with social welfare.’ ” McElroy, 703 N.W.2d at 395 (citation omitted). 

C. Intentional Interference with a Contract. To establish a 

claim of intentional interference with a contract, Janice needed to prove 

Northwest Bank intentionally and improperly interfered with the contract 

involving Craig, Sandra, and herself. See Nesler v. Fisher & Co., Inc., 452 

N.W.2d 191, 198 (Iowa 1990). We have held “a party does not improperly 

interfere with another’s contract by exercising its own legal rights in 

protection of its own financial interests.” Berger v. Cas’ Feed Store, Inc., 
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543 N.W.2d 597, 599 (Iowa 1996). It was not improper for Northwest 

Bank to ask Janice whether she would subordinate her interest to its 

own. 

D. Amended Petition. At the end of trial Janice moved to amend 

her original petition to include a claim for fraud. Iowa Rule of Civil 

Procedure 1.457 allows a party to amend the pleadings to conform to the 

evidence presented at trial. Iowa R. Civ. P. 1.457. The issues to be tried 

are established either by the initial pleadings or by the consent of the 

parties, either expressly or impliedly. Allison-Kesley AG Ctr., Inc. v. 

Hildebrand, 485 N.W.2d 841, 846 (Iowa 1992). Janice argued the issue 

of fraud was tried by implied consent of the parties; however, the district 

court found otherwise. We have held: 

“Allowance of an amendment to a pleading is the rule 

and denial the exception, although an amendment is not 

permissible which will substantially change the issue. 

Additionally, a trial court has considerable discretion as to 

whether an appropriate request for leave to amend should be 

granted or denied and we will reverse only where a clear 

abuse of discretion is shown.” 

Id. at 845 (quoting M-Z Enters., Inc. v. Hawkeye-Sec. Ins. Co., 318 N.W.2d 

408, 411 (Iowa 1982)). To give appropriate deference to the trial court, 

when a movant seeks to amend a petition based on trial testimony the 

movant knew or should have known prior to trial, the amendment is 

more properly denied than one that might have been otherwise allowed 

earlier in the proceedings. Id. at 846; see also Mora v. Savereid, 222 

N.W.2d 417, 422–23 (Iowa 1974) (upholding denial of a motion to amend 

where testimony presented “no surprise” to moving party). 

Janice knew, or should have known, the testimony that supported 

her fraud claim before trial because Legare offered similar testimony 

during his deposition; therefore, the district court did not abuse its 
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discretion in denying Janice’s motion to amend her petition. See AllisonKesley AG Ctr., Inc., 485 N.W.2d at 846 (holding where plaintiff knew or 

should have known at the inception of the suit of the testimony the 

defendants offered at trial, the district court properly denied the 

plaintiff’s motion to amend). 

IV. Disposition. 

Because we find substantial evidence to support the district court’s 

judgment on the issues of consideration, defective acknowledgment, and 

intentional interference with a contract and because the court did not 

abuse its discretion when it denied Janice’s motion to amend her 

petition, we vacate the decision of the court of appeals, and affirm the 

judgment of the district court. 

DECISION OF COURT OF APPEALS VACATED; DISTRICT 

COURT JUDGMENT AFFIRMED. 

All justices concur except Baker, J., who takes no part.