Opinion ID: 2134995
Heading Depth: 1
Heading Rank: 4

Heading: Negligent Breach of Contract Pleading.

Text: In Preferred Marketing v. Hawkeye National Life, 452 N.W.2d 389, 397 (Iowa 1990), we recognized that under some circumstances, breach of a contractual duty may give rise to an independent action in tort. At the same time we rejected the suggestion that every breach of contract gives rise to an action in tort. We said: Only where a duty recognized by the law of torts exists between the plaintiff and defendant distinct from a duty imposed by the contract will a tort action lie for conduct in breach of the contract. As Prosser stated: [I]f a relation exists which would give rise to a legal duty without enforcing the contract promise itself, the tort action will lie, otherwise not. Id. (quoting William L. Prosser, Handbook of the Law of Torts § 33, at 205 (1st ed. 1941)). See also William L. Prosser & W. Page Keeton, The Law of Torts § 92, at 656 (5th ed. 1984 & Supp.1988) (maintaining distinction); 57A Am.Jur.2d Negligence § 119, at 176 (1989). The negligence pleaded against defendants Ruigh, Hurd, and Dickey comes from their alleged failure to carry out their duty to destroy or return Taldine's note guarantee agreement after it had been paid. As we found in our first consideration of the facts in this case in In re Estate of Thies, it was the presence of the note among the assets of CSB after its insolvency, its acquisition by the Federal Deposit Insurance Corporation, and the automatic application of the federal banking law under 12 U.S.C. section 1823(e) that caused the loss sustained by Taldine's estate. In re Estate of Thies, 463 N.W.2d at 40. We have recognized that negligence is behavior that produces an unreasonable danger of injury to others. Rinkleff v. Knox, 375 N.W.2d 262, 265 (Iowa 1985); Evans v. Howard R. Green Co., 231 N.W.2d 907, 913 (Iowa 1975). Because current federal law virtually eliminates factual defenses to guarantee agreements, should they fall into the hands of liquidators, an increased danger is created to the guarantors. Consequently, we believe those persons responsible for the preparation and custody of these documents within the workings of the financial institution have a duty to exercise reasonable care to (1) assure that the writing accurately reflects the true nature of the guarantor's obligation and (2) return the guarantee agreement to the guarantor when that obligation is satisfied. Although it is not possible to determine at the pleading stage what, if any, participation the various defendants had in this transaction so as to expose them to liability under this general duty, that uncertainty does not allow the sustaining of a motion to dismiss under rule 104(b). The petition should be construed in the light most favorable to the plaintiff with doubts resolved in that party's favor in ruling on the motion. Bindel v. Iowa Mfg. Co., 197 N.W.2d 552, 555 (Iowa 1972). A motion to dismiss is sustainable only when it appears to a certainty that the plaintiff would not be entitled to relief under any state of facts that could be proved in support of the claims asserted. Id. Conceivably, plaintiff can show that any one of the named defendants played a role in this transaction that triggered a duty to handle the Thies guarantee agreement in a more protective manner. The motions to dismiss the negligence claims against Ruigh, Hurd, and Dickey should have been denied. We reverse and remand for further proceedings consistent with this opinion. AFFIRMED IN PART, REVERSED IN PART AND REMANDED.