Opinion ID: 1919035
Heading Depth: 1
Heading Rank: 5

Heading: Indemnity Claims against RVS.

Text: 1. Issue preservation. RVS argues that Wells did not properly preserve the issue of independent duty in this case. RVS claims that the first time Wells raised the issue of an independent duty to indemnify was in its opposition to RVS's motion for summary judgment. RVS argues that a careful reading of the Wells' cross-petition against RVS does not reveal even a hint of the theories espoused in its opposition to summary judgment. We reject RVS's preservation claim. We continue to rely upon notice pleading in Iowa. As such, it is not necessary to raise a specific theory of liability, but only to state the basis in broad, general terms. Iowa R. Civ. P. 1.402(2)( a ). The parties may utilize ordinary discovery techniques to determine the basis of the underlying claim. Cemen Tech, Inc. v. Three D Indus., L.L.C., 753 N.W.2d 1, 12 (Iowa 2008). 2. Implied contractual indemnity. Wells asserts that engineering specifications, blueprints, and sales invoices collectively amount to a contractual agreement between it and RVS. Wells claims that pursuant to this contractual relationship, RVS had a duty to provide safety features for the component parts it supplied to AIR and had a duty to inspect its work and recommend necessary repairs and modifications. From these contractual obligations, Wells argues that an implied contractual duty to indemnify arises. RVS responds that it at no time had a contractual relationship with Wells. RVS further asserts that even if a contractual relationship existed, the relationship only amounted to a sale-and-purchase agreement that did not give rise to indemnity obligations. We agree with RVS. A contract requires offer, acceptance, and sufficiently definite terms to be enforced. While we have held that a series of documents may give rise to a contractual relationship, Horsfield Construction, Inc. v. Dubuque County, Iowa, 653 N.W.2d 563, 570 (Iowa 2002), we find that under the undisputed facts, RVS and Wells did not have a contractual relationship under the series of documents presented here. The blueprints that are said to be part of the contract here are simply that, blueprints. There is nothing in them that suggests an offer, acceptance, or legal duty between RVS and Wells. Crum Elbow Sportsmen's Ass'n v. Whelan, 189 Misc. 117, 73 N.Y.S.2d 531, 532-33 (Sup.Ct.1947) (holding blueprints and a check do not amount to binding contract for sale of land). Similarly, the sales invoices document a series of purchases between RVS and AIR, not between RVS and Wells. Each of these invoices states that RVS sold the items to AIR for shipment to Wells. The fact that the merchandise was shipped to Wells is not evidence of a contractual relationship between Wells and RVS. There can be no basis for implied indemnity based on independent contractual duties where there is no underlying contract between the parties. Moreover, even if there were a contract, there is no basis for implied contractual indemnity. The documents reflect at most purchase orders. There is no contractual language or contractual duty that demands that an indemnification obligation be implied for such purchase orders. Johnson, 481 N.W.2d at 320. 3. Equitable indemnity based on professional duties. Wells asserts that RVS had noncontractual independent duties sufficient to give rise to equitable indemnity. Specifically, Wells claims that it was RVS's client and that, as a result, RVS had a duty to perform its work to the standard of the engineering profession and to provide a refrigeration system that was fit for ordinary use and/or intended use. RVS does not challenge the assertion that it had an engineering relationship with Wells. [3] Based on our holding on the identical issue with respect to AIR, we conclude that RVS is not entitled to summary judgment on the equitable indemnity claim based upon an alleged breach of professional duties. 4. Equitable indemnity based on U.C.C. warranties. We have already determined that there is no contractual relationship between RVS and Wells. This lack of privity is dispositive of the equitable indemnity claim against RVS based upon U.C.C. warranties. This court has, of course, eliminated the privity requirement in products liability cases raising a breach-of-implied-warranty claim. State Farm Mut. Auto. Ins. Co. v. Anderson-Weber, Inc., 252 Iowa 1289, 1301, 110 N.W.2d 449, 456 (1961). Nevertheless, the claims that may be brought by a remote purchaser are limited. While we have held that a nonprivity purchaser may recover direct economic loss for breaches of implied warranties under the U.C.C., we have repeatedly held that a remote purchaser of goods cannot recover consequential economic loss from a vendor under an equitable indemnity theory. Kolarik v. Cory Int'l Corp., 721 N.W.2d 159, 163 n. 3 (Iowa 2006); Beyond the Garden Gate, Inc. v. Northstar Freeze-Dry Mfg., Inc., 526 N.W.2d 305, 309 (Iowa 1995). Direct economic loss is the difference between the value of goods as warranted and the value of goods actually delivered, while consequential economic losses includes all losses caused by the defective product. Id. In this case, the recovery which Wells seeksindemnity for the contractual claims of Pillsburyis a consequential economic loss. As such, the loss would not be recoverable in a direct breach of warranty action under the U.C.C. due to Wells' lack of privity with RVS. It would be illogical for indemnity based upon independent duties established by implied U.C.C. warranties to provide greater substantive relief than would be available in a direct action under the U.C.C. Therefore, RVS is entitled to summary judgment on the equitable indemnity claim based upon U.C.C. warranties.