Opinion ID: 2132794
Heading Depth: 1
Heading Rank: 6

Heading: The Attorney Fee Issue.

Text: The district court awarded the Van Sickels $16,222.36 in attorney fees. The treasurer contends the district court erred in awarding these fees. In awarding the fees, the district court relied on our decision in Hockenberg Equipment Co. v. Hockenberg's Equipment & Supply Co., 510 N.W.2d 153 (Iowa 1993). The treasurer contends her conduct does not meet the high standard set in that case for an award of common law attorney fees. Generally, a party has no claim for attorney fees as damages in the absence of a statutory or written contractual provision allowing such an award. Id. at 158. There is no such statutory or written contractual provision in this case. Therefore, the Van Sickels must find support for such an award under the common law. See id. Whether to grant common law attorney fees rests in the court's equitable powers. Id. Our review of this issue is therefore de novo. See id.; Iowa R.App. P. 6.4. To obtain common law attorney fees, a party must prove that the culpability of the [opposing party's] conduct exceeds the `willful and wanton disregard for the rights of another' standard required to prove punitive damages. Hockenberg Equip. Co., 510 N.W.2d at 159. The opposing party's conduct must rise to the level of oppression or connivance to harass or injure another. Id. at 159-60. Oppressive conduct denotes conduct that is difficult to bear, harsh, tyrannical, or cruel. Id. at 159. Connivance is defined as voluntary blindness [or] an intentional failure to discover or prevent the wrong. Id. (citation omitted). These terms envision conduct that is intentional and likely to be aggravated by cruel and tyrannical motives. Such conduct lies far beyond a showing of mere `lack of care' or `disregard for the rights of another.' Id. Here, the district court found that the treasurer issued a series of misleading documents, in the form of a tax sale certificate and a tax sale notice she now claims was ineffectual. Additionally, the court found that the treasurer fabricated records and certified them into pretrial discovery and then offered them as trial evidence. She testified falsely about her retrieval of records.... She sat on the county's rights to seek collection, to the substantial detriment of the defendants. In awarding the attorney fees, the court found that [t]he totality of the treasurer's actions here attain a level emblematic of `harsh, tyrannical' motivations and an `intentional failure to discover or prevent the wrong.' (Citation omitted.) To understand the district court's ruling, we need to put the court's findings in context. As mentioned, one of the affirmative defenses the Van Sickels and Wilson asserted was equitable estoppel premised on the treasurer's April 15, 1991 notice, a defense the district court upheld. In addition, the Van Sickels asserted counterclaims for damages against the treasurer, also premised on that notice. The counterclaims were for fraudulent misrepresentation and negligent misrepresentation, both of which the district court dismissed following the bench trial. The elements of equitable estoppel include the following: the opposing party misrepresented or concealed material facts; the party relying on estoppel lacked knowledge of the true facts; the party misrepresenting or concealing the true facts intended the deceived party to act on those representations; and detrimental reliance by the party to whom the representations were made. Rubes v. Mega Life & Health Ins. Co., 642 N.W.2d 263, 271 (Iowa 2002). Like the equitable estoppel defense, the fraudulent misrepresentation and negligent misrepresentation claims both include the element of reliance, which is important in understanding the significance of the treasurer's conduct. See Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 400 (Iowa 2001) (plaintiff must prove reliance to establish claim of fraudulent misrepresentation); Barske v. Rockwell Int'l Corp., 514 N.W.2d 917, 924 (Iowa 1994) (reliance an element of negligent misrepresentation). At trial, two letters the treasurer introduced into evidence became the source of much discussion and debate. The treasurer testified that once she determined the April 15, 1991 tax sale notice had been sent in error, she sent letters to Robert Van Sickel and Wilson. The letters explained that the tax sale notice had been sent in error and should be disregarded, and that the county would not be taking the deed. The treasurer claimed she found the letters approximately three months before the trial while emptying out a box of old records under her desk to make more legroom. The alleged discovery was also shortly after the district court denied the treasurer's motion to dismiss the counterclaims. The letters were not dated, and the treasurer provided no proof that the letters were mailed. Robert Van Sickel and Wilson testified they had never seen the letters. Letters admitted into evidence that were dated 1990, 1992, and 1994 were typed on a typewriter, using preprinted letterhead. The letterhead used in the letters allegedly sent to Robert Van Sickel and Wilson shortly after the tax sale notice is identical to letterhead used in letters dated 1997, which were typed on a computer. Marla Belloma, former employee of the treasurer, testified that the treasurer used letterhead stationary and a typewriter to type all correspondence in 1991. She also testified that there were no personal computers capable of producing letters like those allegedly sent to Robert Van Sickel and Wilson in the office in 1991. Olive Hand, another former employee, testified about a tax sale of property owned by Gladys Depuy, which occurred in the late 1980s. Depuy claimed she had not received any notification that the property had been sold at a tax sale. Hand and two other co-employees looked through the correspondence file and could not find a letter from the treasurer to Depuy. The next day the file was on Hand's desk, and the treasurer asked her to look in the file again for the letter. This time, Hand found a letter notifying Depuy that her property had been sold. Hand testified she believed the letter had been typed and put in the file for someone to find. Depuy eventually lost her home through the tax sale process. On our de novo review, we agree with the district court that the treasurer had fabricated the two letters after the start of the lawsuit. The treasurer compounded the fraud by offering them as evidence at trial. Obviously, her intent was to disprove the reliance element necessary for the estoppel defense and the fraud counterclaims, thereby establishing her case against the defendants and defeating their counterclaims against her. At this point, we think the treasurer crossed the line, causing her conduct to rise to a level above the willful and wanton disregard of the rights of another standard required to prove punitive damages. We agree with the Van Sickels that [i]t is hard to imagine behavior that would be more oppressive or conniving than a public official creating documents which benefit herself to the detriment of those she is elected to represent. Equally oppressive and conniving was her attempt to defraud the district court in her scheme to protect herself from liability. Nevertheless, we think the attorney fee award should be modified by limiting the award to the time and effort the Van Sickels' attorney expended after the treasurer claimed she discovered the two letters (approximately three months before trial) and embarked on her fraudulent scheme. In addition, the Van Sickels are entitled to appellate attorney fees because the treasurer continues to insist here that she did not fabricate the letters, causing the Van Sickels to defend once again against this claim.