IN THE COURT OF APPEALS OF IOWA

No. 17-1118

Filed November 7, 2018

ERIC N. LUCY,

Plaintiff-Appellee/Cross-Appellant,

vs.

PLATINUM SERVICES, INC., now known as PLATINUM SUPPLEMENTAL 

INSURANCE, INC., and WAYNE BRIGGS,

Defendants-Appellants/Cross-Appellees.

________________________________________________________________

Appeal from the Iowa District Court for Dubuque County, Monica L. Wittig, 

Judge.

Defendants appeal and plaintiff cross-appeals the district court’s ruling on 

summary judgment. AFFIRMED ON APPEAL; REVERSED ON CROSSAPPEAL.

Kevin J. Visser, Paul D. Gamez, and Thomas D. Wolle of Simmons Perrine 

Moyer Bergman PLC, Cedar Rapids, for appellants.

Christopher C. Fry and McKenzie R. Hill of O’Connor & Thomas, P.C., 

Dubuque, for appellee.

Considered by Doyle, P.J., and Tabor and McDonald, JJ.
2

McDONALD, Judge.

Eric Lucy filed this declaratory judgment action against his former employer, 

Platinum Services, Inc., and Platinum’s majority shareholder, Wayne Briggs. Lucy 

sought a declaration of his rights under two contracts—one between Lucy and 

Platinum and one between Lucy and Briggs. At issue in the contract between Lucy 

and Platinum was the enforceability of a seven-year covenant not to compete. At 

issue in the contract between Lucy and Briggs was Lucy’s entitlement to payment 

under the terms of a stock purchase agreement pursuant to which Lucy sold his 

minority stake in Platinum to Briggs. Lucy filed a motion for summary judgment. 

With respect to the first contract, the district court concluded the covenant not to 

compete was “unreasonable and too restrictive as it is written” and “[t]he 

acceptable period of restriction is therefore limited to the two-year period 

subsequent to Lucy’s termination of employment.” With respect to the second 

contract, the district court concluded Briggs was entitled to terminate payment in 

the event Lucy violated the covenant not to compete contained in the first 

agreement. Platinum and Briggs timely filed this appeal, challenging the district 

court’s ruling on the covenant not to compete. Lucy timely filed this cross-appeal,

challenging the district court’s conclusion Briggs was entitled to terminate payment 

under the stock purchase agreement in the event Lucy violated the terms of the 

covenant not to compete. 

The standard of review in a declaratory judgment action is dependent on 

whether the action was brought in equity or at law. See Boelman v. Grinnell Mut. 

Reinsurance Co., 826 N.W.2d 494, 500 n.1 (Iowa 2013). Because this dispute 

was resolved on summary judgment, our review is for correction of errors at law. 
3

See id. at 500 & n.1. Summary judgment should be granted “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). The party seeking summary judgment has the burden of establishing 

that the facts are undisputed and that the “party is entitled to a judgment as a 

matter of law.” See Estate of Harris v. Papa John’s Pizza, 679 N.W.2d 673, 677 

(Iowa 2004) (quoting Iowa R. Civ. P. 1.981(3)). “When a motion for summary 

judgment is made and [properly] supported . . . [the opposing] party may not rest 

upon the mere allegations or denials of the pleadings.” Iowa R. Civ. P. 1.981(5); 

Bitner v. Ottumwa Cmty. Sch. Dist., 549 N.W.2d 295, 299 (Iowa 1996). Instead, 

the resisting party must set forth specific material facts, supported by competent 

evidence, establishing the existence of a genuine issue for trial. See Iowa R. Civ. 

P. 1.981(5); Bitner, 549 N.W.2d at 299. “A fact is material if it will affect the 

outcome of the suit, given the applicable law.” Parish v. Jumpking, Inc., 719 

N.W.2d 540, 543 (Iowa 2006). An issue of fact is “genuine” if the evidence would 

allow “a reasonable jury [to] return a verdict for the nonmoving party.” Fees v. 

Mutual Fire & Auto. Ins. Co., 490 N.W.2d 55, 57 (Iowa 1992). It is well established 

that “[s]peculation is not sufficient to generate a genuine issue of fact.” Waddell v. 

Univ. of Iowa Cmty. Med. Servs., Inc., No. 17-0716, 2018 WL 4638311, at *3 (Iowa 

Ct. App. Sept. 26, 2018) (quoting Nelson v. Lindaman, 867 N.W.2d 1, 7 (Iowa 

2015)). “[S]ummary judgment is correctly granted where the only issue to be 

decided is what legal consequences follow from otherwise undisputed facts.” 
4

Budny v. MemberSelect Ins. Co., No. 16-1189, 2017 WL 104964, at *2 (Iowa Ct. 

App. Jan. 11, 2017). 

The summary judgment record reflects the following. Briggs formed

Platinum in 1995. Platinum sells supplemental health insurance. Lucy joined 

Platinum in 1996 as a salesperson and ascended the company ladder over time. 

In an effort to assure management and ownership continuity, on January 1, 2002, 

Platinum granted Lucy stock in the company amounting to a ten percent interest 

in Platinum. 

In conjunction with the award of stock, Lucy and Platinum entered into a 

Combined Cross-Purchase and Redemption Agreement (“Redemption 

Agreement”). The agreement specified it was “entered into . . . by and among Eric 

N. Lucy (”Lucy”), and Platinum Services, Inc., an Iowa business corporation . . . .” 

The Redemption Agreement contained several terms dictating the terms and 

conditions of any future sale of Lucy’s shares. Article two of the Redemption 

Agreement required Lucy to give Platinum the right of first refusal should Lucy elect 

to sell his shares. In the event Platinum declined to purchase Lucy’s shares, the 

other shareholders were granted the right to purchase Lucy’s shares on a pro-rata 

basis based on their share percentage ownership. Section 2.2,

1 entitled “Rules 

Governing Stock Purchases,” stated: “If any [s]hares are to be purchased by the 

Corporation pursuant to this [a]rticle 2, the following rules will apply: . . . The 

purchase price of each [s]hare will be paid in accordance with [section] 5.3 of this 

 

1 The Redemption Agreement inadvertently has two sections numbered 2.2. This 

opinion’s references to section 2.2 refer to the section entitled “Rules Governing Stock 

Purchase.”
5

[a]greement.” (Emphasis added.) Article five provided the manner for determining 

a purchase price per share and the manner of payment. Section 5.3(a) required 

“[t]wenty percent (20%) of the purchase price of [s]hares being purchased and sold 

under this [a]greement will be paid in cash upon the effective date (the “Closing”) 

of the purchase and sale.” Section 5.3(b) stated: “The unpaid balance of the 

purchase price, if any, will be evidenced by a negotiable promissory note payable 

in 60 consecutive equal monthly installments, with the first payment due one month 

after the [c]losing. The note shall be made by the Corporation to the order of the 

[s]eller . . . .”

The Redemption Agreement also contained a covenant against 

competition. Section 9.2(a) stated: 

During Lucy’s employment and continuing through the period 

ending two years after the later to occur of (x) Lucy ceasing to be 

employed by Corporation; or (y) after Lucy is paid in full for his shares 

as provided in [a]rticle 5 (the “Restriction Period”), Lucy shall not, 

directly or indirectly, compete with Corporation within the geographic 

area described by a centering circle having a radius of 150 miles of: 

(i) Corporation’s presently-existing offices, (i.e., Dubuque, Iowa); and 

(ii) any other office or branch offices operated by Corporation. For 

purposes of this paragraph, competition shall include . . . providing 

services or engaging in business similar to Corporation’s business. 

Section 9.8 conditioned Lucy’s right to installment payments, stating: “Lucy’s rights 

to payments pursuant to [section] 5.3(b) above are contingent upon Lucy 

complying with the covenants of this [a]rticle 9. A breach of [a]rticle 9 by Lucy will, 

in addition to other remedies provided herein, cause payments owed pursuant to 

[s]ection 5.3(b) to cease.”

Lucy continued to work for Platinum and was made vice president of sales 

in 2004. In 2013, Lucy sought to sell his shares. Briggs agreed to purchase Lucy’s 
6

shares for $3 million, with an initial payment of $600,000 and the remaining $2.4

million to be paid in monthly installments over sixty months. To formalize and 

execute the agreement, Lucy and Briggs entered into a Stock Purchase 

Agreement (“SPA”) on June 28, 2013. The SPA specified it was “made and 

entered into . . . by and between Eric N. Lucy and Wayne A. Briggs.” The terms 

and conditions of payment set forth in the SPA regarding Briggs’ payment 

obligations to Lucy were similar to the terms and conditions of payment set forth in 

the Redemption Agreement regarding the corporation’s payment obligations to 

Lucy in the event the corporation had purchased the shares. The SPA did not 

expressly incorporate any terms of the Redemption Agreement. Although Lucy 

sold his stock to Briggs, he continued to work for Platinum through December 31, 

2014. Lucy filed his petition for declaratory judgment in August 2016 seeking to 

determine his rights and obligations under the Redemption Agreement and SPA. 

With that background, we turn to the merits of the issues presented. The 

law regarding the interpretation and construction of contracts is well established. 

When reviewing a contract, we must remember “[a] writing is interpreted as a 

whole, and all writings that are part of the same transaction are interpreted 

together.” Jeffries v. Gen. Cas. Ins. Cos., No. 14-0032, 2015 WL 1046170, at *2 

(Iowa Ct. App. Mar. 11, 2015) (quoting Restatement (Second) of Contracts § 202 

(Am. Law Inst. 1981)). “Generally, when we interpret contracts, we look to the 

language contained within the four corners of the document.” DuTrac Cmty. Credit 

Union v. Radiology Grp. Real Estate, L.C., 891 N.W.2d 210, 216 (Iowa 2017). “If 

a contract is not ambiguous, it will be enforced as written.” Thornton v. Hubill, Inc., 

571 N.W.2d 30, 33 (Iowa Ct. App. 1997) (citing Spilman v. Bd. of Dirs., 253 N.W.2d 
7

593, 596 (Iowa 1977)). “If the language of the contract is ambiguous, then we 

engage in interpretation in order to determine ‘the meanings attached by each 

party at the time the contract was made.’” DuTrac Cmty. Credit Union, 891 N.W.2d 

at 216 (quoting Clinton Physical Therapy Servs., P.C. v. John Deere Health Care, 

Inc., 714 N.W.2d 603, 615 (Iowa 2006)). A contract is ambiguous if more than one 

interpretation is reasonable. See Thornton, 571 N.W.2d at 33. “To the extent 

necessary to reveal the parties’ intent, extrinsic evidence is admissible.” DuTrac 

Cmty. Credit Union, 891 N.W.2d at 216. 

“In the construction of written contracts, the cardinal principle is that the 

intent of the parties must control, and except in cases of ambiguity, this is 

determined by what the contract itself says.” Iowa R. App. P. 6.904(3)(n); Peak v. 

Adams, 799 N.W.2d 535, 543 (Iowa 2011). Generally, “[t]he construction or legal 

effect of a contract is always a matter of law to be decided by the court, as is the 

interpretation or meaning of contractual words unless it depends on extrinsic 

evidence or a choice among reasonable inferences from extrinsic evidence.” 

Campbell v. Mid-Am. Constr. Co. of Iowa, 567 N.W.2d 667, 669-70 (Iowa Ct. App. 

1997) (citing Connie’s Constr. v. Fireman’s Fund Ins., 227 N.W.2d 207, 210 (Iowa 

1975)). “Our task is to determine the intent of the parties as evidenced by the 

language of their agreement[s]” and to enforce the agreements as written. See 

Thornton, 571 N.W.2d at 33. It is not our task to go beyond the plain language of 

the agreements to construe them to mean something the parties wish they would 

have said in hindsight. 

We conclude the Redemption Agreement and the SPA are unambiguous

and the parties’ rights and obligations under the same can be declared as a matter 
8

of law. We first consider the issue of whether Lucy is entitled to continued payment 

for his shares in the event he were to breach the terms and conditions of the 

covenant not to compete. Platinum and Briggs argue Briggs’ obligation to continue 

payment for Lucy’s shares is contingent upon Lucy’s compliance with the covenant 

not to compete. In support of this argument, Platinum and Briggs rely on section 

9.8 of the Redemption Agreement. That section provides “Lucy’s rights to 

payments pursuant to [section] 5.3(b) above are contingent upon Lucy complying 

with the covenants of this [a]rticle 9. A breach of [a]rticle 9 by Lucy will, in addition 

to other remedies provided herein, cause payments owed pursuant to [s]ection 

5.3(b) to cease.” Lucy argues this provision is inapplicable and his right to receive 

continued payments from Briggs is not contingent upon compliance with the 

restrictive covenant. We conclude Lucy has the better of the argument. 

Under the plain language of the parties’ agreements, section 9.8 of the 

Redemption Agreement is inapplicable here. First, the Redemption Agreement 

and the SPA are separate and distinct agreements. The Redemption Agreement

does not incorporate by reference any future stock purchase agreements or 

identify any person as an intended beneficiary of the agreement. The SPA does 

not incorporate by reference the Redemption Agreement, nor does it identify 

Platinum as an intended beneficiary of the SPA. We will not construe the 

documents as part of a single transaction with cross-enforcement provisions when 

the parties did not contract for the same. See Longfellow v. Sayler, 737 N.W.2d 

148, 154 (Iowa 2007) (“The doctrine of incorporation requires the contract to make 

a clear and specific reference to an extrinsic document to incorporate the 

document into the contract.”). 
9

Second, the contracts were entered into by different parties. The 

Redemption Agreement was entered into in 2002 between Lucy and Platinum. 

Lucy and Briggs entered into the SPA in 2013. Platinum is a corporate entity 

separate and distinct from Briggs. In the context of non-compete agreements, the 

Iowa Supreme Court has paid particular attention to the actual parties to the 

agreement. For example, in Casey’s General Stores, Inc. v. Campbell Oil Co., the 

supreme court found that controlling shareholders of a corporation were not bound 

by a non-compete agreement where the plain language of the non-compete 

agreement applied only to the corporation they owned and not them personally. 

See 441 N.W.2d 758, 762 (Iowa 1989) (“As Campbell Oil points out in its argument, 

the relationship between itself, as a corporation, and Les and Norma Campbell 

imposes no servitude on the Campbells as individuals. As controlling 

shareholders, the Campbells control the actions of the corporation rather than the 

corporation controlling them.”). The same principle is applicable here. In Casey’s, 

the supreme court held the restriction on the corporation’s activities would not be 

extended to the corporation’s principals when the contract did not so provide. 

Similarly, in this case, the enforcement mechanism provided to the corporation to 

cease payment in the event Lucy violated the terms of the covenant not to compete 

should not be extended to Briggs when the contracts did not so provide. 

Other courts have drawn similar distinctions in the enforcement of noncompetition agreements, drawing sharp distinctions between entities and their 

principals based on the language of the contract at issue. See, e.g., Lee & Lee 

Intern., Inc. v. Lee, 261 F.Supp.2d 665, 674 (N.D. Tex. 2003) (“Nowhere in the 

noncompete clause does it say that [d]efendant agrees that she will not set up a 
10

business selling Lee & Lee products. The [c]ontract in no way prohibits its 

shareholders from selling Lee & Lee products in their individual capacity. While 

[p]laintiffs may have intended for [d]efendant to be prohibited from setting up a 

business selling identical Lee & Lee products, that was not the agreement set forth 

in the [c]ontract.”); Otto v. Weber, 379 N.W.2d 692, 696 (Minn. Ct. App. 1986)

(“The non-compete clause in a contract for the sale of business assets between 

corporations does not personally bind appellant, who signed the contract as 

president of his corporation.”); Bernstein v. Warner, 185 A.2d 452, 455 (R.I. 1962)

(“In support of all of his contentions the complainant argues that, although the 

noncompetitive agreement may technically bind the corporation, [it] . . . was 

intended to bind the respondents individually. The agreement was drafted by the 

complainant and he was apparently content to have it signed by the respondents 

in their corporate capacities.”).

Third, and related, the plain language of the agreements does not condition 

Briggs’ payment obligations on Lucy’s compliance with the covenant not to 

compete. Section 9.8 of the Redemption Agreement applies only where the 

payments for Lucy’s shares were made by Platinum “pursuant to section 5.3(b)” of 

the Redemption Agreement. In this case, the payments are being made by Briggs 

pursuant to section 2 of the SPA. While the SPA’s terms are consistent with the 

terms set out in the Redemption Agreement, they are not one in the same. There 

is no language in the SPA incorporating the restrictive covenant into the 

agreement. Because Briggs’ installment payments for Lucy’s stock are not made 

“pursuant to section 5.3(b)” of the Redemption Agreement, the contingency 

regarding compliance with the terms of the covenant not to compete is inapplicable 
11

here. See Farm Sec. Admin. v. Harren, 165 F.2d 554, 562 (8th Cir. 1948) (noting 

provisions of a contract between parties are controlling upon them).

Next, we review the duration of the covenant not to compete. Section 9.2(a) 

prohibited Lucy’s participation in the relevant market “through the period ending 

two years after the later to occur of (x) Lucy ceasing to be employed by 

Corporation; or (y) after Lucy is paid in full for his shares as provided in [a]rticle 5.” 

As discussed in the preceding paragraphs, Briggs’ payment to Lucy are made 

pursuant to section 2 of the SPA and not article 5 of the Redemption Agreement. 

Thus, provision (y) of section 9.2(a) is not implicated here. The duration of the 

covenant not to compete is thus governed by provision (x). Like the district court, 

we conclude the period of non-competition is limited to two years from Lucy’s 

termination of employment, December 31, 2014. However, unlike the district court, 

we reach this conclusion under the plain language of the agreement and not in

consideration of the reasonableness or restrictive nature of the covenant.

In sum, the terms and conditions of payment for Lucy’s shares are governed 

by the SPA and not the Redemption Agreement. Nothing in the SPA permits 

Briggs to terminate payment for Lucy’s shares upon a violation of the restrictive 

covenant contained in the separate Redemption Agreement. Because the

payments for Lucy’s shares are made by Briggs pursuant to the SPA and not by 

Platinum pursuant to the Redemption Agreement, the covenant not to compete 

expires two years following the cessation of Lucy’s employment with Platinum. We

affirm the judgment of the district court on different grounds on appeal and reverse 

the judgment of the district court on cross-appeal.

AFFIRMED ON APPEAL; REVERSED ON CROSS-APPEAL.