Opinion ID: 1923357
Heading Depth: 1
Heading Rank: 3

Heading: Relief. What relief should be granted? We vacate the trial court's judgment, and grant relief as follows.

Text: A. The note of $49,000 resulted from a breach of trust in which the Bank took part. The court will not enforce the note, and the Bank can have nothing on account of it. The entire fund which the Bank received from the liquidation, the second-mortgage foreclosure, and checking account, together with interest on that fund at the legal rate from time of receipt by the Bank until disbursement under this decision, but excluding the amount previously paid to the landlord, is to be applied, first, upon the note of $36,000 and interest. Second, any surplus is to be applied pro rata upon the corporation's other indebtedness excluding the note for $49,000. Third, if any surplus still remains, it is to be distributed to the stockholders in the following proportions: the Craigs, 5.88%, and the four minority stockholders, 23.53% each. The minority stockholders are discharged from any liability. B. The minority stockholders originally asked for punitive damages from the Bank and on this appeal they still make that request. Sufficient actual damage appears here to permit an award of punitive damages. See Pringle Tax Service, Inc. v. Knoblauch, 282 N.W.2d 151, 154 (Iowa 1979). Punitive damages are not infrequently allowed in cases of breach of trust analogous to the situation before us. Rowen, 282 N.W.2d at 661-62. We have stated, however, that [e]xemplary damages are not awarded as a matter of right; rather, their allowance rests with the factfinder. Their award depends upon whether under the facts in a particular case such [an] award is appropriate in order to punish an offending party or discourage others from similar wrongful conduct. This determination depends upon the existence of maliceeither actual or legal malice. [L]egal malice. . . may be established by showing wrongful or illegal conduct committed or continued with a willful or reckless disregard of another's rights. Feeney v. Scott County, 290 N.W.2d 885, 892 (Iowa 1980) (citations omitted). As a result of our decision, the Bank has lost $49,000 it lent to the corporation, and interest. While this is less than the investments and loans the minority stockholders altogether lost in the failure of the corporation, it is sufficiently substantial to punish the Bank and to deter others. Acting as the factfinder in this de novo appeal, we exercise our discretion to deny punitive damages of the Bank, in addition to its loss. C. Attorney fees. Since this is not a derivative action and the parties are essentially enforcing their own rights, the general rule applies that attorney fees are not allowable. Walters v. Bartel, 254 N.W.2d 321, 322-23 (Iowa 1977); Holden, 202 N.W.2d at 365-66 (both nonderivative and derivative services; attorney fees denied for former, allowed for latter). We return the case to district court for such hearings and orders as may be needed, if any, on motion of any party, to carry this opinion into effect. REVERSED AND REMANDED.