Court Opinion

ID: 4383677
Source: CourtListenerOpinion
Date Created: 2019-04-03 16:04:34.812352+00
Date Added: 2024-06-11T14:50:10.241037
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                    No. 18-0712
                                 Filed April 3, 2019

MIKE MARION NIDAY,
     Petitioner-Appellant,

vs.

ROEHL TRANSPORT, INC.,
     Respondent-Appellee.
________________________________________________________________

       Appeal from the Iowa District Court for Polk County, Paul D. Scott, Judge.

       An injured worker appeals the district court order finding the Iowa Workers’

Compensation Commission had no jurisdiction to award benefits. REVERSED

AND REMANDED.

       Joseph S. Powell of Thomas J. Reilly Law Firm, P.C., Des Moines, for

appellant.

       Lee P. Hook and Tyler S. Smith of Peddicord Wharton, LLP, West Des

Moines, for appellee.

       Heard by Potterfield, P.J., and Tabor and McDonald, JJ, but Decided by

Potterfield, P.J., and Tabor and Mullins, JJ.
                                             2

TABOR, Judge.

       We must decide if a truck driver injured outside of Iowa is entitled to workers’

compensation benefits under Iowa Code section 85.71(1)(b) (2014). The key

question is whether the “contract of hire” between employer Roehl Transport, Inc.

(Roehl) and employee Mike Niday was “made in this state.” Because the parties

assented to all terms of the contract while Niday was in Iowa, his claim met the

requirement of territorial jurisdiction under the statute. Accordingly, we reverse the

district court’s judicial review decision and remand for further proceedings.

I.     Facts and Prior Proceedings

       In his mid-50s and looking for a career change, Niday enrolled in classes at

Indian Hills Community College to earn his commercial driver’s license (CDL). He

worked as a supply-chain manager for Liguria Foods in Humboldt and attended

weekend classes in the spring of 2013.            On campus, Niday noticed posters

advertising employment opportunities with Roehl.

       Roehl is a nationwide trucking company with operating authority in forty-

eight states—including Iowa.         The company is headquartered in Marshfield,

Wisconsin and has nine terminals in seven states—Wisconsin, Georgia, Indiana,

Texas, California, Arizona, and Michigan. Roehl also has drop yards1 across the

country, though it has none in Iowa.

       The posters sparked Niday’s interest, so he asked one of his instructors if

Roehl was a good employer. Because the instructor had positive views of the

1
  A “drop yard” is “a small area of land that trucking companies own and allows for drivers
to park their trucks and trailers on it.” Trucking Terminology—Truck Driver Lingo, CDL
Training        Today,         https://cdltrainingtoday.com/cdl-training-resources/cdl-study-
guide/trucking-terminology/ (last visited Mar. 26, 2019).
                                        3

company, Niday decided to apply for a truck-driver position through Roehl’s

website after he earned his CDL in May 2013. Roehl receives applications from

all over the country and reviews them at its corporate headquarters in Wisconsin.

      Shortly after applying, Niday received a written notice from Roehl recruiter

Alice Farvour-Smith congratulating him for passing Roehl’s initial screening

process. The notice advised Niday to call Farvour-Smith within two days if he was

interested in progressing to the next steps of the hiring process. Before Niday had

a chance to contact Farvour-Smith, she called to discuss employment with Roehl.

Niday was on the job at Liguria Foods in Humboldt when he received Farvour-

Smith’s phone call. Niday testified:

      [They] said they had received my online application and would like
      to discuss me com[ing] to work for them.
             ....
             I don’t remember verbatim, but I do remember that we
      discussed the divisions they had, flatbed, dry van, reefer, and I chose
      the flatbed division. They have different subdivisions, Midwest
      regional, national, and of course there’s different pay packages. We
      discussed that. I told them I’d like to accept the Midwest regional,
      have a little more home time.

      On May 10, Farvour-Smith followed up with a letter mailed to Niday’s

Dakota City, Iowa home. The letter began: “Congratulations!          Based on the

information we’ve received so far, I’m pleased to inform you that you qualify for a

driving position with TeamRoehl.” The letter advised Niday the employment offer

was “conditional” based on (1) the continued accuracy of the information he

provided in his application, (2) successful completion of a “pre-work screening” to

ensure Niday could meet the physical demands of the job, (3) passage of a pre-

employment drug screen, and (4) successful completion of “all the requirements”

of Roehl’s “Safety and Job Skills Program.” The letter then described the two
                                           4

phases of Roehl’s training program—phase one consisted of classroom work,

followed by a preliminary test; phase two involved over-the-road experience with

another driver, followed by a final driving test. Additionally, the letter confirmed the

specific position and associated pay Niday and Farvour-Smith discussed in their

earlier phone conversation.

        The letter instructed Niday to await a call from a Roehl representative in the

next twenty-four hours to arrange a Department of Transportation medical

examination, after which Roehl would schedule Niday’s orientation. The letter

promised Roehl would provide transportation to the designated phase-one training

facility, as well as lodging and meals on phase-one training days. The letter

concluded: “Again, congratulations on qualifying for this conditional offer of

employment.      You’ve completed the first steps toward a rewarding career at

Roehl . . . .”

        Niday provided Liguria Foods two weeks’ notice of his intent to leave his job

as supply-chain manager. Roehl arranged for Niday to pick up a rental car in Des

Moines on June 1 and directed him to report to Marshfield, Wisconsin for

orientation beginning June 3. In Marshfield, Niday completed an “application

addendum” supplementing his initial application from May 8 and underwent a drug

test. The following day, Niday reported to Roehl’s Gary, Indiana terminal for

classroom training.

        On June 10, Niday completed the phase-one classroom training and passed

the preliminary driving test. Roehl identifies that day as Niday’s hiring date, despite

the fact he had yet to complete the second phase of training and Farvour-Smith’s
                                            5

May 10 letter conditioned his employment offer on completion of “all requirements

of [the] Safety and Job Skills Program.”

       For the second phase, Roehl paired Niday with a trainer who observed him

drive the trainer’s truck “all over the United States.” After this on-the-road training,

Niday returned to Indiana for the final driving test. Niday testified an instructor

informed Niday he passed the test and assigned him a fleet manager. 2 Niday’s

fleet manager, Gina Sanders, directed him to pick up a truck from Roehl’s

maintenance shop in Gary. Niday retrieved the truck and returned home to Iowa,

set to begin driving solo routes for Roehl.

       While working for Roehl, Niday received his load assignments through the

computer in his truck. When he accepted an assignment, Roehl sent Niday

directions to the pick-up site. Niday would drive to the vendor, load the goods into

his truck, and inform Roehl once the goods were secured so Roehl could send

2
  Karen Cliver, a Roehl administrator, stated in her sworn affidavit Niday was hired “upon
the successful completion of training” and assigned a fleet manager “upon being hired.”
Roehl presented no additional testimony. The deputy commissioner made no findings
regarding the inconsistency of Cliver’s statements with Niday’s account, but the deputy
did find Niday’s testimony credible. The fact findings summarized the timeline:
                 Claimant testified following classroom training, he took a driving test
        in Indiana. He then began over-the-road training with another driver. Once
        he began this work, claimant indicated he began to receive a regular
        paycheck. At the conclusion of this training, claimant completed a final
        driving test in Gary, Indiana. Upon successful completion, defendant’s
        employee Gina Sanders called him, introduced herself as his fleet
        manager, and advised him to proceed to the maintenance shop to pick up
        his keys and trailer. He then began driving solo routes for defendant.
And later, the deputy’s conclusions of law provided:
                 The May 2013 conversation and letter served essentially as an
        agreement to agree to enter into an employment contract upon successful
        completion of the conditions precedent. These conditions were likely met
        while claimant participated in the training process in Gary, Indiana; the
        conditions were most certainly not met while claimant remained in Iowa
        prior to presenting for training.
                                          6

directions to the destination. In his deposition, Niday testified the pick-up locations

varied based on his location at a given time:

              About every time I left my home I would have a run out of
       Iowa, because [Roehl] always tried minimizing your deadhead miles
       when you’re not carrying freight. So Monday mornings that I would
       leave, it was generally a run located out of Iowa.
              And then from there it just depended on where I dropped, and
       they would give me a close pickup to run from there. But most of my
       runs when I left home [were] out of the Iowa area.

Of the seventy-three assignments Niday completed for Roehl, twenty-five were

either picked up from or delivered to Iowa locations.

       In November 2013, Niday picked up a load of large aluminum coils from

Logan Aluminum in Kentucky. After much heavy lifting, Niday became winded. At

first, he blamed the humidity for his difficulty breathing. But then he developed

chest pain. A warehouse employee called Logan’s on-site paramedics, and an

ambulance transported Niday to a hospital. Niday had suffered a heart attack.

       On June 30, 2014, Niday filed a petition with the Iowa Workers’

Compensation Commission seeking benefits. Roehl denied Niday’s claim, arguing

the commission lacked jurisdiction because the injury occurred outside of Iowa and

none of the grounds in Iowa Code section 85.71 applied. A deputy commissioner

heard the matter and filed an arbitration decision finding the commission lacked

jurisdiction over Niday’s claim because the “contract of hire” was not made in Iowa

and Roehl did not have a “place of business” in Iowa. The deputy characterized

the May 2013 conversation and letter while Niday was in Iowa as “an agreement

to agree to enter into an employment contract upon successful completion of the

conditions precedent.” The deputy held those conditions “were likely met” in

Indiana.
                                            7

       Niday unsuccessfully appealed to the commissioner, who adopted the

deputy’s decision. Niday then sought judicial review in Iowa District Court for Polk

County.    After a February 2018 hearing, the district court agreed with the

commission, concluding the contract of hire was made outside of Iowa and Roehl

had no place of business in Iowa, so the agency lacked jurisdiction to hear Niday’s

claim under Iowa Code section 85.71(1)(a) or (b). Niday appeals.

II.    Scope and Standards of Review

       Section 17A.19(10) (2017) of the Iowa Administrative Procedure Act

governs our review of agency decision-making. Neal v. Annett Holdings, Inc., 814
N.W.2d 512, 519 (Iowa 2012). On judicial review, the district court acts in an

appellate capacity. Id. When reviewing the district court’s decision, “we apply the

standards of [c]hapter 17A to determine whether the conclusions we reach are the

same as those of the district court. If they are the same, we affirm; otherwise, we

reverse.” Id. (quoting Mycogen Seeds v. Sands, 686 N.W.2d 457, 463 (Iowa

2004)).

       When factual findings are not challenged on appeal, but instead the claimed

error is in the agency’s interpretation of law, we decide if that interpretation was

erroneous.3 Meyer, 710 N.W.2d at 219. If we conclude the agency’s interpretation

was erroneous, we substitute our interpretation of the law. Id. Finally, if

3
  In Heartland Express, Inc. v. Terry, 631 N.W.2d 260, 266 (Iowa 2001), our supreme court
framed the issue on appeal as “whether there was substantial evidence to support the
chief deputy’s finding that the contract of hire took place in Iowa,” citing Anstey v. Iowa
State Commerce Commission, 292 N.W.2d 380, 384 (Iowa 1980), for the proposition the
“substantial evidence test governs review of agency action regarding jurisdictional facts.”
But this statement does not mean any issue related to jurisdiction will be undisturbed on
appeal if supported by substantial evidence. Instead, Anstey confirmed factual findings
related to jurisdiction are treated like any other factual findings. See 292 N.W.2d at 384.
                                               8

       the claim of error lies with the ultimate conclusion reached, then the
       challenge is to the agency’s application of the law to the facts, and
       the question on review is whether the agency abused its discretion
       by, for example, employing wholly irrational reasoning or ignoring
       important and relevant evidence. See Iowa Code § 17A.19(10)(i),
       (j).

Id.

       Here, the parties agree the claimed error stems from the agency’s

interpretation and application of contract law principles; the facts are undisputed.4

Neither party asserts the legislature vested authority in the commissioner to

interpret the statutory phrase “contract of hire” nor do we find any indication the

legislature intended to delegate such authority to the commissioner. See Neal,

Despite branding it a question of substantial evidence, the Terry court went on to correct
a legal error, concluding the claimant’s job application could not, as a matter of law,
constitute an offer. See 631 N.W.2d at 268–69. Our supreme court has since clarified
the importance of pinpointing the question on appeal. See Meyer v. IBP, Inc., 710 N.W.2d
213, 219 (Iowa 2006) (“In sum, when an agency decision on appeal involves mixed
questions of law and fact, care must be taken to articulate the proper inquiry for review
instead of lumping the fact, law, and application questions together within the umbrella of
a substantial-evidence issue.”). We examine an agency’s legal conclusions for soundness
even when related to jurisdiction. See, e.g., Heartland Express v. Gardner, 675 N.W.2d
259, 262 (Iowa 2003) (“We typically review a district court’s decision on judicial review for
correction of errors at law. This standard dovetails with our review of jurisdictional
questions, which is also for correction of errors at law.” (internal citations omitted)); Annett
Holdings, Inc. v. Allen, 738 N.W.2d 647, 648–49 (Iowa Ct. App. 2007) (reviewing
commissioner’s interpretation of Iowa Code section 85.71 under the “erroneous”
standard).
4
  “The question of whether a contract of hire exists is ordinarily one of fact.” Parson v.
Procter & Gamble Mfg. Co., 514 N.W.2d 891, 893–94 (Iowa 1994). This principle follows
from the “general rule of contract law that ‘the determination of the intent of the parties to
make a contract, as gathered from what they did and said, is normally a question of fact
for the jury, particularly where the terms of the contract are unclear.’” Id. (quoting 75A
Am. Jur. 2d Trial § 795, at 403 (1991)). Here, the deputy commissioner made no findings
regarding the parties’ intent, but did find credible Niday’s testimony that Roehl offered and
he accepted the job and corresponding terms during the early-May phone call. The
agency’s conclusion the contract of hire was made outside of Iowa was based on its
characterization of the communications between Niday and Roehl as merely an
“agreement to agree” pending Niday’s fulfillment of the conditions. So too was the district
court’s conclusion based on its belief a contract could not be formed until the fulfillment of
all conditions contained in an agreement rather than a finding of lack of intent to enter into
a contractual relationship.
                                                9
814 N.W.2d at 519; see also Iowa Code § 85.71; Iowa Ins. Inst. v. Core Grp. of

Iowa Ass’n for Justice, 867 N.W.2d 58, 65 (Iowa 2015) (“In recent years, we have

repeatedly declined to give deference to the commissioner’s interpretations of

various provisions in chapter 85.”). Accordingly, we do not defer to the agency’s

interpretation. See Neal, 814 N.W.2d at 519. “We will reverse if we find the

agency’s decision was ‘[b]ased upon an erroneous interpretation of a provision of

law.’” Andover Volunteer Fire Dep’t v. Grinnell Mut. Reinsurance Co., 787 N.W.2d
75, 80 (Iowa 2010) (quoting Iowa Code § 17A.19(11)(b)).

        When interpreting provisions of chapter 85, we remain cognizant of its

purpose: to benefit injured workers. Jacobson Transp. Co. v. Harris, 778 N.W.2d
192, 197 (Iowa 2010).

III.    Analysis

        Iowa Code section 85.71 outlines when an employee is entitled to benefits

if his or her injury occurs outside of Iowa.5 The statute lists five ways an employee

may qualify for benefits:

5
  Our supreme court has interpreted section 85.71 as conferring subject matter jurisdiction
to the commission over claims arising from extraterritorial injuries. See, e.g., Terry, 631
N.W.2d at 265. So, not surprisingly, the parties dub the issue on appeal as one of subject
matter jurisdiction. But in 2008, the legislature amended section 85.71 to add: “This
section shall be construed to confer personal jurisdiction over an employee or employer
to whom this section is applicable.” 2008 Iowa Acts ch. 1091, § 2. While the distinction
is not dispositive in the instant dispute, section 85.71 reads more like a test for
extraterritorial jurisdiction or a long-arm statute rather than defining the commission’s
subject matter jurisdiction. See Extraterritorial Jurisdiction, Black’s Law Dictionary (10th
ed. 2014) (“A court’s ability to exercise power beyond its territorial limits.”); see also
Jahnke v. Deere & Co., 912 N.W.2d 136, 142 (Iowa 2018) (discussing the presumption of
territorial application of statutes and noting section 85.71 “affirmatively states that it applies
to employees injured ‘while working outside the territorial limits of this state’ if certain
circumstances are met”); Cargill, Inc. v. Conley, 620 N.W.2d 496, 501 (Iowa 2000)
(“‘Subject matter jurisdiction is the authority of a court to hear and determine cases of the
general class to which the proceedings belong, not merely the particular case then
occupying the court’s attention.’ Bailey v. Batchelder, 576 N.W.2d 334, 337 (Iowa 1998).
                                         10

               (a) The employer has a place of business in this state and the
       employee regularly works at or from that place of business.
               (b) The employee is working under a contract of hire made in
       this state and the employee regularly works in this state.
               (c) The employee is working under a contract of hire made in
       this state and sustains an injury for which no remedy is available
       under the workers’ compensation laws of another state.
               (d) The employee is working under a contract of hire made in
       this state for employment outside the United States.
               (e) The employer has a place of business in Iowa, and the
       employee is working under a contract of hire which provides that the
       employee’s workers’ compensation claims be governed by Iowa law.

Iowa Code § 85.71(1).

       Niday relies on subsection (b), which requires proof of two elements: (1) at

the time of the injury, he was working under a “contract of hire” made in Iowa; and

(2) he regularly worked in Iowa.6 Neither party disputes Niday regularly worked in

Iowa. The fighting issue is whether the “contract of hire” was “made in this state.”

       We determine the place of contracting based on the parties’ intention to

form a binding contract. Terry, 631 N.W.2d at 266–67 (quoting Burch Mfg. Co. v.

McKee, 2 N.W.2d 98, 101 (Iowa 1942)).

       As a rule [the place of contracting] is considered to be the place
       where the offer is accepted, or where the last act necessary to a
       meeting of the minds, or to complete the making of the contract, is
       performed. . . . [T]he place of contract is the place where the
       acceptance is made, as, if a resident of one state places a letter in
       the mail making an offer to one who resides in another state, the
       contract would be completed where the acceptance is mailed.

Id. (quoting McKee, 2 N.W.2d at 101).

. . . The problem with Cargill’s argument is that the industrial commissioner did have
subject matter jurisdiction of the claim presented to her—a claim for workers’
compensation benefits.”).
6
   Alternatively, Niday argues he meets the criteria in subsection (a). Niday asserts,
because he received assignments while in Iowa and began and ended every run from his
home, his Iowa residence was his “home terminal,” constituting Roehl’s “place of
business” under the statute. See Iowa Code § 85.71(1)(a). Because Niday meets the
criteria in subsection (b), we need not reach this issue.
                                              11

       To be bound by a contract, the parties “must manifest a mutual assent to

the terms of the contract, and this assent is usually given through the offer and

acceptance.” Kristerin Dev. Co. v. Granson, Inc., 394 N.W.2d 325, 331 (Iowa

1986). Here, Niday and Roehl agreed to the terms of Niday’s employment during

Farvour-Smith’s May phone call to Niday, answered by Niday while in Iowa.

Farvour-Smith confirmed the terms the parties discussed on the phone in a letter

sent to Niday’s Iowa residence.           So the crux of the dispute is whether the

requirements listed in the May 10 letter constituted conditions precedent7 to

performance of the contract or conditions precedent to formation of the contract.8

Roehl contends they were conditions precedent to formation, so the contract was

not made until Niday fulfilled the training requirements in Gary, Indiana. Roehl

argues the conditional nature of its offer meant the exchange in Iowa was merely

an “agreement to enter into an agreement,” citing Khabbaz v. Swartz for the

7
  The Second Restatement of Contracts abandons the terms condition precedent and
condition subsequent—instead employing the term “condition” in place of condition
precedent, and replacing condition subsequent with “an event terminating a duty.”
Restatement (Second) of Contracts § 224 reporters note cmts. c, e (Am. Law Inst. 1981).
8
  In its appellate brief, Roehl quotes the following passage from Magnussen Agency v.
Public Entity National Co.-Midwest, 560 N.W.2d 20, 26 (Iowa 1997): “An offer that invites
an acceptance by performance is deemed accepted by such performance unless there is
a manifestation of intention to the contrary.” Although that language from Magnussen
describes a unilateral contract, Roehl does not use the term “unilateral contract” in its brief.
In fact, Roehl fails to further develop an argument that its contract was unilateral. Roehl
does not point to facts or case law supporting a contention the contract was unilateral.
See Daeges v. Beh, 224 N.W. 80, 81 (Iowa 1929) (“It is presumed that an offer invited the
formation of a bilateral contract by an acceptance amounting, in effect, to a promise by
the offeree to perform what the other requests.”); Restatement (First) of Contracts § 31
(Am. Law Inst. 1932) (“In case of doubt it is presumed that an offer invites the formation
of a bilateral contract by an acceptance amounting in effect to a promise by the offeree to
perform . . . , rather than the formation of one or more unilateral contracts by actual
performance on the part of the offeree.”). Without a more fully-formed argument, we
decline to address the possibility the contract was unilateral. See Hyler v. Garner, 548
N.W.2d 864, 876 (Iowa 1996) (“[W]e will not speculate on the arguments [the parties]
might have made and then search for legal authority and comb the record for facts to
support such arguments.”).
                                             12

proposition “[n]onperformance of a condition precedent vitiates a contract or a

proposed contract.”        319 N.W.2d 279, 284 (Iowa 1982).           Roehl asserts its

communications with Niday “could certainly have been considered a proposed

contract with conditions precedent.”

         Contrary to Roehl’s assertion, the agreement reached in the May telephone

call and confirmed by letter was more than a “proposed contract.” Iowa case law

uses the term “proposed contract” when “no mutuality of assent [exists] between

the parties.” See Bruggemeyer v. Bruggemeyer, 258 N.W.2d 364, 365–66 (Iowa

1977) (finding no mutual assent to proposed contract for purchase of real estate

where defendants’ counsel notified plaintiffs’ counsel that client would not sign

contract until disputed pasture rent had been paid and rent was never paid). By

contrast, all the terms of Niday’s employment were settled in the phone call and

reiterated in the May 10 written confirmation. Roehl does not contend that any

terms of Niday’s employment were left up in the air. Instead, the company argues,

         Niday’s receipt of the terms of the May 10, 2013, letter did not create
         a legally binding employment relationship until the conditions listed
         therein were satisfied.      These were conditions which, until
         completed, did not create a binding obligation on the part of Roehl
         Transport to employ Niday as a driver.

         Roehl’s argument blurs the line between the formation of a contract and the

fulfillment of conditions within an existing contract. See Restatement (Second) of

Contracts § 224 cmt. c (Am. Law Inst. 1981) (“In order for an event to be a

condition, it must qualify a duty under an existing contract.”).9 Our supreme court

9
    As further clarification, the American Law Institute reporter noted:
          When an event that is not normally part of the process of formation of
          contract is made an event upon which the performance of the contract is
          dependent, courts often describe it as a condition that must be performed
                                           13

has defined conditions precedent as “those facts and events, occurring

subsequently to the making of a valid contract that must exist or occur before there

is a right to immediate performance, before there is a breach of contract duty,

before the usual judicial remedies are available.” Nat’l Farmers Org., Inc. v. Lias,

271 N.W.2d 751, 754 (Iowa 1978) (emphasis added); accord Yost v. City of

Council Bluffs, 471 N.W.2d 836, 838 (Iowa 1991) (“The City initially attempts to

dismiss the allegations raised by Yost in this appeal by contending that no valid

and enforceable contract ever existed between the parties. In support of its

contention, the City argues that because Yost failed to complete all of the

conditions precedent to form the contract, the proposed contract was a nullity. We

. . . find this argument to be meritless and conclude that a valid and enforceable

contract was in full force at the time of the fire.”); see also State ex rel. Career

Aviation Sales, Inc. v. Cohen, 952 S.W.2d 324, 326–27 (Mo. Ct. App. 1997) (“A

condition precedent presupposes the existence of a contract and not the converse

. . . . A condition precedent is a condition which must be fulfilled before the duty

to perform an existing contract arises. Thus, a condition precedent denotes an

event which qualifies a duty under an already enforceable contract. A contract

condition which qualifies a duty of performance by a party does not make the

existence or validity of the contract hinge on the condition.” (internal citations

omitted)).

       before the contract comes into existence. Similarly, inartistically drafted
       contracts may contain language such as: “this contract shall not come into
       existence until Event A occurs.” . . . [I]t is better to view a contract as
       already in existence, but with the parties’ respective performances subject
       to the specified event, which is a condition to their respective
       performances.
Restatement (Second) of Contracts § 224 reporter’s note cmt. c (citations omitted).
                                          14

       A contract is made where the last act necessary to form a binding contract

occurs. Terry, 631 N.W.2d at 266–67. We are persuaded by out-of-state authority

that the “last act necessary” means acceptance of an offer rather than fulfillment

of conditions.10   For example, the New Mexico Court of Appeals thoroughly

examined the issue before us—“whether [a drug and safety testing requirement

contained in employment offer] was a prerequisite to the formation of the

underlying contract, or whether the condition was a prerequisite to a future

obligation to perform under the contract.” Potter v. Patterson UTI Drilling Co., 234
P.3d 104, 109 (N.M. Ct. App. 2010).         The New Mexico court concluded the

condition “did not affect the formation of the underlying contract”—instead, the

testing was a prerequisite to continued performance under the contract—i.e.,

beginning work. Id. at 110.

       Likewise, in General Electric Co. v. Folsom, the Oklahoma Supreme Court

rejected an employer’s argument the contract was formed in a different state

because the offer of employment was contingent on the claimant passing a driving

test and a number of physical exams. 332 P.2d 950, 951–52 (Okla. 1958). The

Oklahoma court focused on the undisputed evidence—mailed correspondence

from the employer extending an offer of employment and claimant accepting,

despite the contingencies contained in the offer. See id. The court concluded,

       [W]e think there can be no question that, as a matter of fact and law,
       it was the intention of both Folsom and his employer that his contract
10
   Several jurisdictions have concluded, at least under particular circumstances, that a
contract is not formed until the conditions are fulfilled. See, e.g., Dhermy v. Illinois
Workers’ Comp. Comm’n, No. 4-13-0011WC, 2013 WL 5972176, at *4–5 (Ill. Ct. App. Nov.
8, 2013); Graham v. TSL, Ltd., 350 S.W.3d 430, 432–33 (Ky. 2011); Taylor v. Howard
Transp., Inc., 771 S.E.2d 835, 839 (N.C. Ct. App. 2015); Pro Football Inc. v. Paul, 569
S.E.2d 66, 71 (Va. Ct. App. 2002). But we find the decisions from those courts that
distinguish formation from enforceability to be more convincing.
                                          15

       of employment come into being in Oklahoma, and that is the state
       where it was entered into. . . . When he thereafter met those
       requirements, even though he did not take, and pass, the company’s
       physical examination until after his arrival in Indiana, the location of
       his first job assignment, the effective date of his employment related
       back to, and was coincident with, his acceptance in Oklahoma of said
       company’s offer.

Id.; see also Alexander v. Transp. Distribution Co., 954 P.2d 1247, 1250–51 (Okla.

Ct. App. 1997) (“[I]t is not the ‘final assent’ of the employer that establishes the

‘place where the contract is made . . .’ but the ‘final assent’ of an Oklahoma resident

to an offer of employment.” (citation omitted)).

       And in Bowen v. Workers’ Compensation Appeals Board, 86 Cal. Rptr. 2d
95, 103–04 (Ct. App. 1999), the California Court of Appeals concluded a contract

of hire was formed when the Florida Marlins farm team drafted a baseball player,

communicating the terms of the employment over the phone. Id. The team mailed

the player a contract so he could sign it, then forwarded it to the commissioner; the

contract noted it would not become valid until the commissioner signed it. Id. at

97. The California court concluded subsequent formalities did not “abrogate the

contract of hire.” Id. at 100. It continued: “[s]uch things as filling out formal papers

regarding the specific terms of employment or obtaining a security clearance from

the federal government” did not “prevent the contract from initially coming into

existence.” Id.

       Similarly, the Kansas Court of Appeals concluded the “last act necessary”

to form a contract of hire was the claimant’s acceptance of a company’s offer over

the phone, despite the requirement the claimant “submit to a pre-employment drug

screening and background check” in a different state, as noted in a letter sent by

the employer. Shahane v. Station Casino, 3 P.3d 551, 554–55 (Kan. Ct. App.
                                        16

2000). More jurisdictions take the same stance. See, e.g., Brown v. Travelers Ins.

Co., 232 S.E.2d 609, 609 (Ga. Ct. App. 1977); Mattel v. Pittman Constr. Co., 180
So. 2d 696, 698 (La. 1965) (finding contract of hire made in Louisiana where union

officer told claimant where to report for work and claimant understood terms of

work regarding time and wages, despite fact employer could have rejected

claimant upon arrival at out-of-state job site); O’Briant v. Daniel Constr. Co., 305
S.E.2d 241, 243 (S.C. 1983) (“The existence of a contract, not the commencement

of work, establishes the employer-employee relationship which is the jurisdictional

foundation upon which an award is made. . . . The final act which rendered a

binding contract in the present case was O’Briant’s verbal acceptance over the

telephone.”); see also Matthews v. St. Paul Prop. & Liab. Ins., 845 S.W.2d 737,

739 (Tenn. 1992) (“[Employer] offered [claimant] a job during the telephone

conversation and . . . he accepted that offer. The fact that a written contract was

later executed in Missouri memorializing the details of the agreement between the

trucking company and its new driver does not affect this finding.”).

       Roehl overlooks the distinction between formation of a contract and

enforceability of a contract. See H.L. Munn Lumber Co. v. City of Ames, 176
N.W.2d 813, 816 (Iowa 1970) (“The insertion of a condition precedent in a contract

does not render the same void but only delays the enforceability of the contract

until the condition precedent has taken place.” (quoting Locke v. Bort, 103 N.W.2d
555, 558 (Wis. 1960))). Roehl does not argue it was not bound by its promise to

employ Niday provided he fulfilled the enumerated conditions. Nor does it dispute

Niday’s assertion Farvour-Smith offered him a job during their May 10 phone

conversation or that Niday accepted the offer during the same conversation. And
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Roehl did not present any evidence demonstrating offer or acceptance occurred

at a different time or place.

       Applying the law to these facts, we conclude Niday and Farvour-Smith

struck a bargain in their telephone call. Employment contracts are often oral and

informal. See Parson v. Proctor & Gamble Mfg. Co., 514 N.W.2d 891, 893 (Iowa

1994) (noting the frequent lack of formality in contracts for hire). Here, no terms

remained to be negotiated following the May 10 letter, which documented Niday’s

conditions of employment in detail.      After Niday accepted Roehl’s offer, he

informed his current employer of his intent to leave, and Roehl scheduled and

funded travel arrangements for his training in Indiana. It would be unusual for

Roehl to fund Niday’s trip to Indiana and invest in his training absent affirmation

from Niday confirming his intent to work for Roehl provided he could meet all

requirements. The contract of hire was formed before Niday left Iowa.

       Roehl’s offer, accepted by Niday, is distinguishable from an agreement to

enter into an agreement. See, e.g., Air Host Cedar Rapids, Inc. v. Cedar Rapids

Airport Comm’n, 464 N.W.2d 450, 452–53 (Iowa 1990) (finding no enforceable

contract where terms were indefinite, stating: “It is axiomatic that understandable

or ascertainable terms are necessary ingredients for an enforceable contract. A

contract generally is not found to exist where the parties agree to a contract on the

basis to be settled in the future”). The record shows Roehl intended to be bound

by Farvour-Smith’s offer to Niday. And Niday “sp[oke] his . . . acceptance” in Iowa.

See Terry, 631 N.W.2d at 270.

       Because the last act necessary to a meeting of the minds—Niday’s

acceptance of Roehl’s offer—occurred in Iowa, he was working under a contract
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of hire made in this state.      See id. at 266–67 (citing 99 C.J.S. Workers’

Compensation § 72, at 144–45 (2000) (“Where the worker’s acceptance of an offer

of employment is given by telephone, the place of contracting is where the

acceptor speaks his or her acceptance.”); Restatement (Second) of Contracts §

64 cmt. c (“To the extent the issue [of where an acceptance takes effect] is referred

to the rule governing private contract disputes, . . . the contract is created at the

place where the acceptor speaks or otherwise completes his manifestation of

assent.”)); see also Iowa Code § 85.71(1)(b). Because the contract of hire was

made in Iowa, and Roehl concedes Niday regularly worked in Iowa, Niday’s claim

meets the jurisdictional requirements in section 85.71(1)(b). We reverse and

remand for further proceedings consistent with this opinion.

       REVERSED AND REMANDED.