Court Opinion

ID: 4249888
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:21:49.029606+00
Date Added: 2024-06-11T13:27:18.465540
License: Public Domain

IN THE SUPREME COURT OF IOWA
                                 No. 08–0485

                             Filed August 7, 2009

U.S. BANK,

         Appellant,

vs.

ALISA R. BARBOUR,

         Appellee.

         Appeal from the Iowa District Court for Linn County, Marsha

Bergan (initial motion to dismiss), Thomas L. Koehler (recast ruling), and

Fae Hoover-Grinde (dismissal ruling), Judges.

         The plaintiff appeals a district court decision dismissing the

plaintiff’s action as a sanction for plaintiff’s failure to comply with a court

order.       DISTRICT    COURT     JUDGMENT       REVERSED       AND    CASE

REMANDED WITH DIRECTIONS.

         Piper Lori Hughes of Litow Law Office, P.C., Cedar Rapids, for

appellant.

         Rodney W. Kleitsch of Iowa Legal Aid, Cedar Rapids, for appellee.
                                      2

WIGGINS, Justice.

      A bank filed a petition to recover a debt alleging a credit card

holder defaulted on her credit card account.         In the course of the

proceedings, the debtor filed a preanswer motion to recast, which the

court granted. The bank did not recast its petition. As a sanction for its

failure to recast, the court dismissed the petition. Because the district

court erred when it entered its order requiring the bank to recast the

petition, we reverse the decision of the district court and remand for

further proceedings.

      I. Background Facts and Proceedings.

      Alisa R. Barbour and U.S. Bank began their financial relationship

in December 1994 when Barbour opened her credit card account. By

February 2006 U.S. Bank alleges Barbour owed $13,707.60 on the

account.

      U.S. Bank filed a three-count petition against Barbour on

February 9, 2007, to obtain a judgment for the balance due on the

account.    U.S. Bank attached Barbour’s February 2006 credit card

statement to its petition. U.S. Bank sought the principal amount owed,

$13,707.60, as well as prepetition interest in the amount of $1,130.41,

postpetition interest at a rate of ten percent, and court costs.

      After receiving notice of the petition, Barbour filed a preanswer

motion to dismiss for failure to state a claim upon which relief can be

granted.   Specifically, Barbour claimed the petition failed to allege the

existence of a contract between her and the bank, the petition failed to

identify a legal theory, and the bank had not provided a numbered bill of

particulars that limited and defined the proof of an account pursuant to

Iowa Rule of Civil Procedure 1.420.
                                      3

      U.S. Bank opposed the motion to dismiss claiming, even if a

deficiency existed in its pleading, the motion to dismiss was not the

proper remedy.    Concurrent to this response, the bank also filed an

amended bill of particulars. The bank claimed the bill of particulars was

sufficient to allow Barbour to answer the petition. This amended bill of

particulars consisted of Barbour’s credit card statements displaying her

credit card activity from December 19, 2002, through February 15, 2006.

      Barbour filed a reply to the bank’s opposition and amended bill of

particulars. It stated the bill of particulars was insufficient because it

did not contain consecutively numbered paragraphs and did not define

and limit the proof because the first statement starts with a balance of

over $7400.

      The court held a hearing on this motion to dismiss.         Barbour

argued not only was the petition unclear, but it also alleged the existence

of an account, which required U.S. Bank to have a numbered bill of

particulars that defined and limited the proof in compliance with Iowa

Rule of Civil Procedure 1.420. Barbour further asserted the amended bill

of particulars that U.S. Bank provided was not sufficient because it was

not numbered and the credit card statements did not begin with a zero

balance.

      In response to Barbour’s argument, the bank argued under notice

pleading that it plead three theories of recovery—open account, quantum

meruit, and account stated. The bank also argued under federal law it

was only required to keep two years of statements, and it attached to its

amended bill of particulars all of the statements it had in its possession.

Finally, the bank argued Barbour was attempting to begin discovery,

rather than answering the petition.
                                    4

      The district court found the petition contained fair and sufficient

notice enabling Barbour to admit or deny the petition. Regarding the bill

of particulars, the court stated that issue was more appropriately decided

upon summary judgment because the question really concerned the

issue of damages, not whether the petition should stand.

      Barbour then filed a preanswer motion for a recast of the petition

and stated the amended bill of particulars did not satisfy Iowa Rule of

Civil Procedure 1.420. She asked for a numbered bill of particulars in

compliance with the rule.    She also stated the bill of particulars was

deficient because it did not start with a zero balance. U.S. Bank opposed

the motion claiming the court had already decided this issue and these

matters should wait and be determined at summary judgment stage of

the case.

      A different judge granted Barbour’s preanswer motion to recast.

The court stated U.S. Bank had thirty days to recast, otherwise

sanctions, including dismissal of the action, could be imposed.      U.S.

Bank requested a reconsideration of the ruling stating the amended bill

of particulars contained all the information necessary and anything

further would be too cumbersome.        The court overruled U.S. Bank’s

motion to reconsider.

      Barbour filed a motion to dismiss based on U.S. Bank’s failure to

recast. U.S. Bank opposed this motion. The court held a hearing on this

motion.     A third judge determined U.S. Bank did not comply with the

ruling on the motion to recast, so the court granted Barbour’s motion to

dismiss.

      U.S. Bank appeals.
                                      5

      II. Issue.

      U.S. Bank raises two issues on appeal. However, the issue as to

whether the district court erred in ordering U.S. Bank to recast its

petition in light of the court’s prior ruling on the motion to dismiss is

dispositive of this appeal. Therefore, it is the only issue we will discuss.

      III. Scope of Review.

      The order requiring U.S. Bank to recast its petition is contrary to

the ruling made by the court on Barbour’s motion to dismiss. Normally a

trial judge may correct another judge’s ruling any time before final

judgment. Kendall/Hunt Publ’g Co. v. Rowe, 424 N.W.2d 235, 240 (Iowa

1988). Thus, the answer to the question as to whether the court erred in

ordering U.S. Bank to recast its petition depends on whether the ruling

on the motion to dismiss was correct. A ruling on a motion to dismiss is

reviewed for correction of errors at law. Estate of Ryan v. Heritage Trails

Assocs., Inc., 745 N.W.2d 724, 728 (Iowa 2008).

      IV. Analysis.

      In the order overruling the motion to dismiss, the first judge found:

             Reading and interpreting the allegations in each count
      of the Petition in a light most favorable to Plaintiff, the Court
      finds that fair and sufficient notice is provided to enable
      Defendant to admit or deny the numbered paragraphs of the
      Petition. The discovery process will afford Defendant the
      opportunity to obtain further appropriate information
      regarding the claims.

The court did mention in a footnote that if Barbour still had difficulty

answering the petition, she could move to have the bank recast or ask for

a more specific statement.

      In the order overruling the motion to dismiss, the first judge also

addressed the inadequacies of the amended bill of particulars. As to this

issue, the court stated:
                                       6
             Any deficiency Defendant claims exists with the
      amended bill of particulars would more appropriately be
      raised by a motion for summary judgment or a pretrial
      motion to limit evidence, consistent with pleadings and
      discovery. The deficiencies appear more related to the issue
      of damages recoverable by Plaintiff rather than whether the
      Petition itself should be permitted to stand.

      After the ruling on the motion to dismiss, Barbour filed a motion to

recast the petition, claiming deficiencies existed in the bank’s amended

bill of particulars.   The deficiencies raised in the motion to recast are

exactly the same deficiencies she raised prior to the hearing on the

motion to dismiss—the items in the bill of particulars were improperly

numbered and the bill of particulars did not start with a zero balance. In

response to the motion to recast, the second judge ordered the bank to

recast its petition and include a bill of particulars so the paragraphs were

consecutively numbered and started with a zero balance. The effect of

the second order was to overrule the ruling concerning the bill of

particulars made by the first judge.

      If the initial order regarding the motion to dismiss was correct in

not requiring the bill of particulars to be renumbered and start with a

zero balance, the second order requiring another bill of particulars

should not have been granted. See Kendall/Hunt Publ’g Co., 424 N.W.2d

at 240 (stating the consequences of the second order can only be decided

if the first order was correctly entered). If the court erroneously granted

the second order, the court had no grounds for its sanction.

      A court should grant a motion to dismiss if the petition fails to

state a claim upon which any relief may be granted.        Iowa R. Civ. P.

1.421(1)(f). In considering a motion to dismiss, the court considers all

well-pleaded facts to be true.    O’Hara v. State, 642 N.W.2d 303, 305

(Iowa 2002). A court should grant a motion to dismiss only if the petition
                                     7

“ ‘ “on its face shows no right of recovery under any state of facts.” ’ ”

Trobaugh v. Sondag, 668 N.W.2d 577, 580 (Iowa 2003) (quoting Ritz v.

Wapello County Bd. of Supervisors, 595 N.W.2d 786, 789 (Iowa 1999)).

Nearly every case will survive a motion to dismiss under notice pleading.

Rees v. City of Shenandoah, 682 N.W.2d 77, 79 (Iowa 2004). Our rules of

civil procedure do not require technical forms of pleadings. Iowa R. Civ.

P. 1.402(2)(a).    However if a pleading is founded on an account, the

pleading shall contain a bill of particulars, consecutively numbered

defining and limiting the proof. Id. r. 1.420.

      A “petition need not allege ultimate facts that support each

element of the cause of action[;]” however, a petition “must contain

factual allegations that give the defendant ‘fair notice’ of the claim

asserted so the defendant can adequately respond to the petition.” Rees,

682 N.W.2d at 79.      The “fair notice” requirement is met if a petition

informs the defendant of the incident giving rise to the claim and of the

claim’s general nature. Soike v. Evan Matthews & Co., 302 N.W.2d 841,

842 (Iowa 1981).

      We agree with the first judge’s order that the petition as pled gave

Barbour fair notice that the bank was seeking a judgment against her for

her failure to pay her credit card bill, regardless of the theory pled.

Therefore, the first order was correct in not dismissing the case for a

failure to state a claim upon which any relief may be granted.

      We also agree with the first judge’s ruling that the amended bill of

particulars is sufficient for Barbour to answer the petition. Rule 1.420

requires consecutively numbered items to be included in the bill of

particulars. The purpose of this requirement is to allow the defendant to

specifically admit or deny each item.      Iowa R. Civ. P. 1.420.   If the

defendant fails to deny an item, that item is deemed admitted. Shirk Oil
                                           8

Co. v. Peterman, 329 N.W.2d 13, 16 (Iowa 1983). The amended bill of

particulars substantially complies with rule 1.420.

       The statements for each month contain a posting date, transaction

date, and reference number for each transaction.                    In her answer,

Barbour could admit or deny the transactions by referring to the posting

date, transaction date, and reference number.               It would be absurd to

require the bank to retype each statement in a form containing

consecutively numbered items, when the statements contain unique

dates and identifying numbers for each transaction.                     There is no

prejudice to Barbour by requiring her to refer to a date and reference

number to deny an item.              Thus, the amended bill of particulars

substantially complies with the numbering requirements of rule 1.420.

See Iowa Dep’t of Human Servs. ex rel. Greenhaw v. Stewart, 579 N.W.2d

321, 323–24 (Iowa 1998) (holding substantial compliance with a rule is

sufficient so long as the purpose of the rule has been accomplished and

the opposing party is not misled to his irreparable harm).

       Furthermore, the failure to start the bill of particulars with a zero

balance does not mean the bank failed to state a claim upon which any

relief may be granted. The failure to start at a zero balance may merely

define and limit the bank’s proof.             Iowa R. Civ. P. 1.420.      The court

should allow the parties to complete their discovery to narrow the issues

and better define the theories of recovery and any defenses Barbour may

have to each theory. 1

       1We  also note that at this stage in the proceedings, it has yet to be determined
on what theory the bank is seeking recovery. As the court stated in its first ruling,
further discovery is need to determine the exact theory upon which the bank seeks to
recover. Rule 1.420 limits the requirement for a bill of particulars to a “pleading
founded on an account.” Iowa R. Civ. P. 1.420. After the completion of discovery, it
may be determined that the bank does not need a bill of particulars to proceed with its
lawsuit.
                                     9

      Therefore, the second judge erred when he overruled the decision

of the first judge. The first judge was correct not to require the bank to

file a further bill of particulars prior to Barbour filing her answer.

Consequently, the sanction imposed for the bank’s failure to comply with

the second judge’s order was also wrong.

      V. Disposition.

      The first judge’s ruling requiring Barbour to file her answer

without the filing of an additional bill of particulars was a correct ruling.

The second judge erred by reversing the first judge’s order.      The error

was compounded when a third judge entered the sanction dismissing the

action when the bank failed to comply with the second order. Therefore,

we reverse the district court judgment dismissing the action and the case

is remanded for Barbour to answer the petition.

      DISTRICT      COURT      JUDGMENT        REVERSED        AND    CASE

REMANDED WITH DIRECTIONS.