Opinion ID: 1733175
Heading Depth: 1
Heading Rank: 3

Heading: Sufficiency of the Evidence to Sustain the Award of Compensatory Damages.

Text: Iowa Realty next suggests that the evidence is insufficient to sustain an award of $50,000 in compensatory damages to the Kimmels. This argument assumes to some extent that certain elements of damage which find support in the record are not legally recoverable. A. Attorney fees in Pinter v. Harley, Inc. When the Kimmels ultimately forfeited the contract with Virdon's Variety on the Grand Avenue property, they had to serve notice on the Pinters as parties in possession. The Pinters unsuccessfully sought to enjoin the forfeiture. The plaintiffs sought to recover their attorney fees in defending the Pinters' injunction action as damages in the present case. The trial court submitted the issue of these attorney fees to the jury under the doctrine of Turner v. Zip Motors, Inc., 245 Iowa 1091, 1097, 65 N.W.2d 427, 431 (1954). In that case it was established that a person who, through the tort of another, has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation from the tortfeasor for expenditures thereby incurred. Iowa Realty urges that the rule in Turner does not apply to the present case because the action with the Pinters was not a natural consequence of Hart's tort. In addition, it is urged that Iowa Realty was not timely vouched into the Pinter litigation. We disagree with both of these contentions. The theory of plaintiffs' claims against Iowa Realty on the Grand Avenue transaction is that Hart, acting for Iowa Realty, committed fraud and breach of a fiduciary duty in not protecting plaintiffs against her known insolvency. Part of the loss to the plaintiffs under their benefit of the bargain damage theory was the expense of securing return of the property for which the sale price went unpaid. Their attorney fees in the Pinter litigation was a part of this cost, and, as such, was a natural consequence of the tort within the rule of Turner. With respect to the timeliness of Kimmels' vouching-in of Iowa Realty in the Pinter litigation, this was done approximately two months after that litigation was commenced and forty days prior to trial. Whether a notice to defend is given within a reasonable time depends upon the circumstances in each case. 46 Am.Jur.2d Judgments § 560 (1969). We cannot say that the vouching-in was untimely as a matter of law. The Kimmels successfully defended against the Pinters' attempts to enjoin the forfeiture. Iowa Realty makes no argument as to how it was prejudiced as to the amount of attorney fees expended in defending that action as a result of any untimeliness of the notice to defend. The issue of timeliness of the vouching-in was submitted to the jury under proper instruction. We find no error in that procedure. The jury properly could have awarded the attorney fees of $7938 incurred in the Pinter litigation as part of plaintiffs' damages in the present case. B. Loss on East 40th Street property. In seeking to place a lid on the amount of compensatory damages which can be awarded on plaintiffs' combined claims against it, Iowa Realty urges that a maximum of $17,000 could have been awarded as damages on the East 40th Street transaction. We disagree. The plaintiffs testified that if the property had been as represented with respect to commercial usage, it would have been worth as much as $55,000. In addition, they testified that in its actual condition it was worth as little as $25,000. As owners of the property, the plaintiffs could properly express their opinion as to these values. Fleener v. Board of Supervisors, 246 N.W.2d 335, 337 (Iowa 1976). Such evidence would sustain a jury finding that the loss on the East 40th Street property was as much as $30,000. C. Loss on Grand Avenue properties. As previously noted, the jury could have found damages of $7938 based on the evidence of plaintiffs' attorney fees in the Pinter litigation and up to $30,000 in damages from plaintiffs' loss on the East 40th Street property. This leaves $12,062 to account for in order to sustain the award of $50,000 in compensatory damages which was returned by the jury. Upon a showing of fraud or breach of fiduciary duty, the plaintiffs were entitled to the benefit of their bargain in the assessment of damages. B & B Asphalt Co. v. T.S. McShane Co., 242 N.W.2d 279, 285 (Iowa 1976). Our review of the record shows that plaintiffs made a showing under the benefit of the bargain theory of a bargain price for the Grand Avenue properties of $112,280 with $33,388 of that sum to be paid by the buyers' assumption of an existing mortgage of approximately $33,390. After the forfeiture of the contract of sale with Virdon's Variety, plaintiffs were forced to pay the then mortgage balance of $36,612 and then resold the property for $70,000. This would support a jury finding that plaintiffs' loss on the transaction was $45,504, less those sums paid on the contract by Virdon's Variety prior to the forfeiture. The payments for which Virdon's must be credited, as shown by the uncontroverted evidence, are $10,000 representing a transfer to plaintiffs of the Pinter rentals; $150 paid directly by Hart; a $301.63 payment made for Virdon's by Iowa Realty; a $6683 payment from Hart; and a $6500 payment collected by plaintiffs' attorney. The latter sum was probably not net to the plaintiffs. If these sums are totaled, they reduce the amount of plaintiffs' loss by $23,634.63, thereby leaving a potential net loss of $21,869.37 on the Grand Avenue properties, as shown by the evidence. In making our computations, we have deliberately avoided consideration of the costs of sale on both sales of the Grand Avenue property. We believe the jury could have found the two items would have balanced each other on opposite sides of the damage equation. We also have ignored rental income received by the plaintiffs. To the extent their repossession of the property generated rental income, their timely receipt of the cash sale proceeds (which were not paid) would doubtless have similarly generated some income. The jury could have found that these two items balanced each other in the damage equation. We find support in the evidence for the jury's award of compensatory damages.