Court Opinion

ID: 9323603
Source: CourtListenerOpinion
Date Created: 2022-12-07 18:03:32.185969+00
Date Added: 2024-06-11T17:14:49.998391
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                 No. 22-0069
                           Filed December 7, 2022

MICHELLE DOWNEY and BRANDON J. DOWNEY,
     Plaintiffs-Appellants,

vs.

CARMEN J. MILLER,
     Defendant-Appellee.
________________________________________________________________

      Appeal from the Iowa District Court for Polk County, Lawrence P. McLellan,

Judge.

      Michelle and Brandon Downey appeal the district court’s grant of judgment

notwithstanding the verdict on their claims against Carmen Miller. AFFIRMED.

      Matthew M. Sahag of Dickey, Campbell & Sahag Law Firm, PLC, Des

Moines, for appellants.

      David L. Brown of Hansen, McClintock & Riley, Des Moines, for appellee.

      Considered by Bower, C.J., and Greer and Badding, JJ.
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BOWER, Chief Judge.

       Brandon and Michelle Downey appeal the district court’s entry of judgment

notwithstanding the verdict on their claims against Carmen Miller. We conclude

the district court did not err and affirm.

I. Background Facts & Proceedings.

       Miller purchased a Des Moines home in 2001. In 2004, after flooding in the

basement, she installed a sump pump and states that resolved the problem.

       On September 19, 2018, Miller sold the home to the Downeys. On the

seller’s disclosure form, Miller checked “Yes” to the question “Has there been

known water or other problems?” She wrote “sump pump added—no issues.”

       According to Michelle, during her first visit to the house, there was no water

in the basement, but she “could see the marks on the two-by-fours of the level of

water that had been in the home.” However, she did not notice any water damage

to the basement furniture. Brandon said he did not notice any water stains when

he went through the house.

       The home inspection summary noted several issues in the basement, but it

did not mention water stains, water seepage, or a problem with the sump pump.

       Approximately a week and a half after the Downeys moved into the house,

the basement flooded during a rainstorm. Michelle described it to the jury as

follows:

       But I see water coming in on the north side of the wall in the
       basement.
              So I called my husband down there. And there was so much
       water that had come in on the north side that it had traveled to the
       other side of the basement. We stayed up throughout the night
       running the Shop-Vac and taking turns sucking up the water. It was
       almost like somebody turned on the hose up against the north wall,
                                         3

      and the water was just running everywhere. Most of our belongings
      that were down there were sitting in water.

She further explained the water came in where “the concrete block meets the

floor.” Brandon described the water entering the basement as “trickling in the

corner, and then it would run down the wall behind the washer and dryer.”

According to Michelle, “there’s water coming in every single time it rains,” and the

basement floods when the rain is heavy. Michelle also testified black mold grows

due to moisture behind the laundry area and Miller had painted over it. The

Downeys received an estimate of $8154.51 to repair the water issues.

      The Downeys filed suit against Miller, alleging she “failed to provide required

information in the written disclosure statement” in violation of Iowa Code chapter

558A (2018) and breached the purchase agreement by failing to disclose material

defects to the property.1   Miller moved for summary judgment.          Viewing the

evidence in the light most favorable to the Downeys, the court denied the motion.

The court found a fact question existed whether “Miller had actual knowledge that

the sump pump did not fully fix the flooding issue” in light of the Downeys’

experience and the occurrence of heavy rainfall events between the sump pump

installation and their purchase of the house.

      At the trial’s conclusion, Miller’s attorney moved for a directed verdict,

asserting there was no evidence Miller knew the sump pump did not work as

intended or that the Downeys would get water in the basement. The district court

denied the motion.

1The Downeys also filed suit against Miller’s real estate broker and company.
Those claims were resolved via summary judgment.
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       The jury found for the Downeys on both allegations and awarded them

$8154.51, consistent with the repair estimate. Miller filed a motion for judgment

notwithstanding the verdict. The district court found there was insufficient evidence

to support a legitimate inference Miller had actual knowledge of flooding or water

issues in the basement before selling it to the Downeys. The court reasoned, “To

reach the conclusion that Miller had actual knowledge based upon the June 25,

2018 rain event required the jury to speculate.” The court stated it should not have

submitted the question to the jury and granted Miller’s motion for judgment

notwithstanding the verdict.

       The Downeys appeal.

II. Standard of Review.

       “We review the district court’s grant of a motion for judgment

notwithstanding the verdict for correction of errors at law. Doe v. Cent. Iowa Health

Sys., 766 N.W.2d 787, 790 (Iowa 2009). “A motion for judgment notwithstanding

the verdict should be granted if there is not substantial evidence to support the

elements of the plaintiff’s claim.” Thornton v. Am. Interstate Ins. Co., 940 N.W.2d

1, 8 (Iowa 2020). We view the evidence in the light most favorable to the party

against whom the motion is intended, the nonmoving party. Doe, 766 N.W.2d at

790.

III. Analysis.

       The Downeys made two claims: breach of contract and a violation of real

estate disclosures required under Iowa Code chapter 558A. As to the breach of

contract, the jury was instructed: “Carmen Miller breached the terms of the

purchase agreement by . . . . [n]ot disclosing that the addition of a sump pump to
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the basement did not fix the water problems in the basement of the home.” On the

chapter 558A claim, the jury was instructed: “Your verdict must be for the Downeys

and against Carmen Miller on the Downeys’ Iowa Code chapter 558A claim if one

or more of the following elements have been proven: . . . Carmen Miller had actual

knowledge that the addition of a sump pump to the basement did not fix the water

problems in the basement of the home.”

      The district court granted judgment notwithstanding the verdict based on

the actual-knowledge element of each claim, finding there was not substantial

evidence to support a legitimate inference Miller knew of the issue. The Downeys

assert circumstantial evidence allowed the jury as factfinder to draw a legitimate

inference Miller had actual knowledge of water or flooding issues at the time she

sold the home. Miller asserts the jury’s verdict was based on speculation.

      No direct evidence presented supports a finding Miller had actual

knowledge the sump pump did not fix the water problem.              So, we consider

circumstantial evidence.

      [C]ircumstantial evidence is sufficient to establish a fact only where
      the evidence has sufficient force to allow a factfinder to draw a
      legitimate inference from the evidence presented. A legitimate
      inference drawn from circumstantial evidence must be “rational,
      reasonable, and otherwise permissible under the governing
      substantive law.” An inference is not legitimate if it is based upon
      suspicion, speculation, conjecture, surmise, or fallacious reasoning.
      “Under our law it is just as pernicious to submit a case to a jury and
      permit the jury to speculate with the rights of citizens when no
      question for the jury is involved, as it is to deny to a citizen his trial
      by jury when he has the right.”

Godfrey v. State, 962 N.W.2d 84, 102–03 (Iowa 2021) (internal citations omitted).

“In order to prove actual knowledge through circumstantial evidence . . . the

evidence must be sufficient to draw a conclusion that a reasonable person simply
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could not have known otherwise. Actual knowledge thus can be established by

circumstantial evidence only in rare cases.” Caruso v. Apts. Downtown, Inc., 880

N.W.2d 465, 474 (Iowa 2016) (emphasis added) (internal citations omitted). “It is

the general rule in this state that in matters of proof, a litigant is not justified in

inferring a fact as proven from mere possibility of existence of facts.” Goodman v.

Gonse, 76 N.W.2d 873, 877 (Iowa 1956).

       Here, the evidence presented included Miller’s testimony she did not have

water problems after the installation of a sump pump in 2005, and the basement

held furniture with rugs on the floor when she was owner of the house. The photos

from the house listing did not show any evidence of water on the walls, floors, or

furniture in the basement. The house inspection summary did not note evidence

of water seeping in or the sump pump’s functionality. Michelle testified she could

see evidence of past water in the basement; her husband saw no evidence of

water damage.      The only evidence to support the jury’s inference of actual

knowledge was the presence of mold behind the washer and dryer along the north

wall, the occurrence of a heavy rainfall after the Downeys moved in, and the fact

water entered the basement despite the sump pump.

       The district court determined the circumstantial evidence was not sufficient

for the jury to infer Miller had actual knowledge of the water problem in the

basement. We agree and affirm.

       AFFIRMED.