Court Opinion

ID: 2687729
Source: CourtListenerOpinion
Date Created: 2014-07-31 21:43:14.503593+00
Date Added: 2024-06-11T13:17:02.431935
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 13-0755
                              Filed July 16, 2014

RUSS HOTCHKISS and DARUSS ENTERPRISES, INC., d/b/a PROSHIELD
FIRE PROTECTION, an Iowa Corporation,
      Plaintiffs-Appellants,

vs.

INTERNATIONAL PROFIT ASSOCIATES, INC., n/k/a INTERNATIONAL
SERVICES, INC., an Illinois Corporation, INTERNATIONAL TAX ADVISORS,
INC., n/k/a STRATEGIC TAX ADVISORS, INC., a Nevada Corporation, and
ACCOUNTANCY ASSOCIATES, LLC, n/k/a VALUATION ADVISORY
SERVICES, LLC, an Illinois Limited Liability Co.,
      Defendants-Appellees.
________________________________________________________________

      Appeal from the Iowa District Court for Black Hawk County, Joel A.

Dalrymple, Judge.

      Russ Hotchkiss appeals the district court’s grant of summary judgment in

favor of International Profit Associates. AFFIRMED IN PART, REVERSED IN

PART, AND REMANDED.

      Susan M. Hess of Hammer, Simon & Jensen, P.C., Dubuque, for

appellants.

      James R. Hellman and Erin P. Lyons of Dutton, Braun, Staack & Hellman,

Waterloo, for appellees.

      Heard by Vogel, P.J., and Doyle and Mullins, JJ.
                                         2

VOGEL, P.J.

       Russ Hotchkiss appeals the district court’s grant of summary judgment in

favor of International Profit Associates (IPA). Hotchkiss asserts the district court

improperly concluded his claims were time barred due to the statute of limitations

and that the savings statute did not apply. Hotchkiss further argues the court

erred when it held there was no issue of material fact with regard to the merits of

any of his claims.

       We conclude the district court correctly found Hotchkiss’s claim based on

Iowa Code section 706A (2011) was barred due to the statute of limitations, and

the savings clause in Iowa Code section 614.10 did not prevent this claim from

being time barred. However, the breach of contract claim was based on a written

contract, and therefore the ten-year statute of limitations applied. Additionally,

the equitable fraud and negligent misrepresentation causes of action did not

begin to accrue until Hotchkiss discovered the injury, that is, August 29, 2008,

and therefore his September 11, 2012 petition was filed within the five-year

statute of limitations. Moreover, there is an issue of material fact as to whether

IPA breached the written contract. There is also an issue of material fact with

respect to the negligent misrepresentation claim, though the district court

correctly concluded Hotchkiss’s breach of warranty and equitable fraud claims

should fail as a matter of law. Consequently, we affirm the district court’s grant of

summary judgment regarding the breach of warranty, equitable fraud, and the

706A causes of action, but reverse the grant of summary judgment as to the

breach of contract and negligent misrepresentation claims.
                                         3

I. Factual and Procedural Background

      Hotchkiss owns Daruss Enterprises, Inc., d/b/a Proshield Fire Protection.1

On March 7, 2007, Hotchkiss, on behalf of his company, entered into a contract

with IPA for financial consulting services. Pursuant to the agreement, IPA was

required to provide consulting services to maximize the business’s profits.

Included in the document entitled “Agreement for Services (IPA)” were three

independent agreements with Accountancy Associates, International Tax

Advisors, and International Profit Associates.2 Also included in the contract was

a document entitled “IPA Assurance,” which was signed by Hotchkiss and IPA.

This portion of the contract included the following language:

      IPA will, upon satisfactory completion of the consulting
      engagement, assure to Pro Shield Fire Protection, Inc. (“Client”) the
      realization of a return, through a combination of cost savings and
      profit enhancements, in excess of 3 (three) times the investment
      incurred for consulting hours billed, during the 12 months following
      the successful completion of the project.

      Additionally, the contract contained a denial of any express or implied

warranties, as well as an integration clause.       The contract further required

Hotchkiss to submit monthly Financial and Operational Summary Reports to

IPA’s Client Relations Department. The number of reports ultimately submitted

by Hotchkiss is disputed.

      The relationship between Hotchkiss and IPA soon deteriorated. On June

13, 2007, Hotchkiss wrote to IPA to catalog his “frustrations and dissatisfaction”

with regard to IPA’s services. Included in the letter was the following statement:

1
   The present action includes Hotchkiss individually and his company, referred to
collectively as “Hotchkiss.”
2
  The appellees in this case will be referred to collectively as “IPA.”
                                            4

        I am extremely irate because I have paid you people in excess of
        $100,000 and do not feel I have gotten services up to $1000. Now,
        I have nearly $160,000 on my American Express Gold Card and I
        cannot pay it . . . . You people sure do not look after your clients. If
        I did business in that manner, I would be out of business. You may
        have just finished me off. Right now I just want my money back.

On July 30, 2007, Hotchkiss wrote another email stating: “I WANT MY MONEY

BACK.     YOU PEOPLE HAVE SCAMMED ME.                     HOW HAVE YOU PEOPLE

HELPED ME? I WANT MY MONEY BACK! I WANT MY MONEY BACK!! I

WANT MY MONEY BACK!!!”

        IPA responded to Hotchkiss’s concerns by sending out a new

representative, Bill Sweigard, to correct the formulas with which Hotchkiss was

having difficulty implementing and utilizing. At the end of the project, Hotchkiss

expressed satisfaction with Sweigard’s work. Additionally, between November

and December 2007, several emails were exchanged between IPA and

Hotchkiss concerning debt financing.          IPA concluded its consulting work on

August 29, 2007. Pursuant to the terms of the Assurance Agreement, Hotchkiss

could expect a return on his investment twelve months later, that is, August 29,

2008.

        On October 14, 2008, Hotchkiss sent a letter to IPA demanding a refund

of his money. IPA did not respond. On June 3, 2009, Hotchkiss filed suit against

IPA.3   Hotchkiss moved to amend the petition to add parties as well as an

additional cause of action, which the district court denied.              Consequently,

3
  IPA filed an interlocutory appeal contesting the district court’s refusal to enforce a
forum selection clause specifying Illinois, rather than Iowa, as the state possessing
exclusive jurisdiction over any legal action arising from the contract. Our court affirmed
the district court’s decision on April 13, 2011. See Hotchkiss v. Int’l Profit Assocs., No.
09-1632 2011 WL 1378926, at *3 (Iowa Ct. App. April 13, 2011).
                                         5

Hotchkiss dismissed his original petition without prejudice. On September 11,

2012, he filed his second petition that included International Tax Advisors and

Accountancy Associates as defendants. The second petition alleged the same

claims, though it added one additional cause of action based on Iowa Code

section 706A.

       IPA moved for summary judgment, and Hotchkiss resisted. A hearing was

held on January 4, 2013. On April 9, 2013, the district court issued a ruling

granting IPA’s motion for summary judgment. In its order, the court concluded

the breach of contract claim was based on an oral agreement, and therefore the

statute of limitations found in Iowa Code section 614.1(5) was five years. In

particular, it found the written contract contained no “guaranteed profitability” and

“no money-back guarantee.” It therefore dismissed the breach of contract claim

based on the statute of limitations.      It also dismissed the equitable fraud,

negligent misrepresentation, and 706A claims as filed beyond the statute of

limitations, concluding the causes of action began to accrue no later than July 30,

2007, the date of Hotchkiss’s second email expressing dissatisfaction and

demanding his money back. It also dismissed the equitable fraud, negligent

misrepresentation, breach of contract, and breach of warranty claims on the

merits, concluding there was no genuine issue of material fact with regard to

these claims. Hotchkiss appeals.

II. Standard of Review

       We review rulings on a motion for summary judgment for correction of

errors at law. Stevens v. Iowa Newspapers, Inc., 728 N.W.2d 823, 827 (Iowa

2007). Summary judgment is appropriate when the entire record demonstrates
                                              6

that no genuine issue of material fact exists and the moving party is entitled to

judgment as a matter of law. Id. We review the evidence in the light most

favorable to the nonmoving party. Id.

III. Statute of Limitations

       Hotchkiss first contends the district court erred in concluding all of his

claims were time barred.         Iowa Code section 614.1 governs the statute of

limitations for various causes of action. Claims based on unwritten contracts,

equitable causes of action, “and all other actions not otherwise provided for in

this respect” must be brought within five years from the time they accrue. Iowa

Code § 614.1(4).4 Those founded on written contracts must be brought within

ten years. Id. § 614.1(5). A claim brought pursuant to a statute has a two-year

statute of limitations, provided the statute itself does not specify a time limitation.

Id. § 614.1(2).5

       A. 706A Claim

       Iowa Code section 706A proscribes the act of receiving income or

property as a result of fraud.         The statute allows “an aggrieved person [to]

institute civil proceedings against any person in district court seeking relief from

conduct constituting a violation of this chapter.” Id. § 706A.3(1). This section

does not contain a specified statute of limitations for the civil cause of action.

4
  This paragraph states:
        Unwritten contracts—injuries to property—fraud—other actions. Those
        founded on unwritten contracts, those brought for injuries to property, or
        for relief on the ground of fraud in cases heretofore solely cognizable in a
        court of chancery, and all other actions not otherwise provided for in this
        respect, within five years, except as provided by subsections 8 and 10.
Iowa Code § 614.1(4).
5
  This paragraph states: “Those [causes of action] founded on injuries to the person or
reputation, including injuries to relative rights, whether based on contract or tort, or for a
statute penalty, within two years.” Iowa Code § 614.1(2).
                                          7

Here, Hotchkiss’s petition alleged IPA benefitted financially due to fraudulent

activity, specifically, “false or fraudulent pretenses, representations, promises, or

material omissions” in violation of chapter 706A.

       In concluding Hotchkiss’s 706A claim was time barred, the district court

stated:

       The statute of limitation for causes of action under Iowa Code
       section 706A commences upon the “(d) discovery of the injury, not
       discovery of the other elements of the claim.” Bendzak v. Midland
       Nat. Life Ins. Co., 440 F. Supp. 2d 970, 980 (S.D. Iowa 2006),
       quoting Rotella v. Wood, 528 U.S. 549, 553 (2000). The Court
       finds the plaintiffs discovered the injury as early as June 13, 2007,
       and unequivocally by July 30, 2007. Therefore, applying a five-year
       statute of limitations, the plaintiffs’ action is time barred.
       Furthermore, the Court concludes based upon the citations and
       arguments submitted by the defendants, given the statutory nature
       of the plaintiffs’ remedies sought, a two-year statute of limitations is
       applicable. As such, the Iowa Code section 706A claim is time
       barred.

       We agree with the district court that Hotchkiss’s cause of action arises

from a statute, given section 706A specifically allows for a civil remedy, and

Hotchkiss’s petition asserted IPA’s conduct violated this chapter. Consequently,

the statute of limitations for actions based on a statute—that is, a period of two

years—applies, and Hotchkiss’s cause of action is time barred. See Iowa Code

§ 614.1(2); see also Venard v. Winter, 524 N.W.2d 163, 165 (Iowa 1994) (“The

actual nature of the action determines the proper statute of limitations. This

determination turns on the nature of the right sued upon and not on the elements

of relief sought for the claim.”). Therefore, the district court properly granted

summary judgment with respect to Hotchkiss’s 706A claim.
                                           8

       B. Equitable Fraud and Negligent Misrepresentation Claims

       Iowa Code section 614.1(4) requires claims of fraud, actions based in

equity, and all other causes of actions not specifically provided for in this chapter

to be brought within five years of the time the cause of action begins to accrue.

A claim starts to accrue at the point the plaintiff discovers “the fact of the injury

and its cause.” Hallett Const. Co. v. Meister, 713 N.W.2d 225, 231 (Iowa 2006).

Both equitable fraud and negligent misrepresentation are subject to the statute of

limitations found in Iowa Code section 614.1(4), that is, five years.          See id.

(noting claims of fraud are subject to the five-year statute of limitations);

McCracken v. Edward D. Jones & Co., 445 N.W.2d 375, 383 (Iowa Ct. App.

1989) (noting negligent misrepresentation is subject to a five-year statute of

limitations).

       Here, the terms of the agreement stated: “[U]pon satisfactory completion

of the consulting engagement, [IPA] assure[s] to Pro Shield Fire Protection, Inc.

(“Client”) the realization of a return . . . in excess of 3 (three) times the investment

incurred for consulting hours billed, during the 12 months following the successful

completion of the project.” According to Hotchkiss’s petition, he claims he was

damaged based on this contract term, that is, that his business would realize a

return on its investment from IPA’s work twelve months after the work’s

completion.     The petition is also based on the alleged oral money-back

guarantee as conveyed to Hotchkiss by IPA agents.             Specifically, under the

heading of negligent misrepresentation, the petition states:

             Defendants,     through      their agents, made        certain
       representations to Plaintiffs regarding guarantees on behalf of their
       company.
                                         9

              In reliance on those representations Plaintiffs paid
       substantial sums to Defendant.
              Defendants’ representations were false and Plaintiff suffered
       damages in excess of the jurisdictional limitations as a result of his
       reliance on those representations.

With regard to the equitable fraud claim, the petition alleges:

               Defendants, through their agents, and acting in concert with
       each other, made certain representations to Plaintiffs regarding
       guarantees on behalf of their company, including but not limited to
       increasing profitability of Plaintiff company.
               The representations were material to Plaintiffs entering into
       the contract.
               In reliance on those representations Plaintiffs paid
       substantial sums to Defendant and expended substantial time and
       effort to comply with the contract terms.
               Defendants’ representations were false and Plaintiffs
       suffered damages in excess of the jurisdictional limitations as a
       result of his reliance on those representations.
               Plaintiffs did not realize the profitability and Defendants
       refused to refund the money.

       Pursuant to the contract and as conveyed by IPA agents, Hotchkiss could

not have discovered the fact of an injury until one year after IPA concluded its

work—August 29, 2008. See Hallett Const. Co., 713 N.W.2d at 231. The district

court found Hotchkiss’s June 13, 2007 and July 30, 2007 emails, in which he

demanded his money back, was the date Hotchkiss discovered his injury.

However, in response to those emails, IPA was able to take corrective action,

thus restoring the relationship between the parties and allowing the agreement to

run its full twelve-month time period, which was necessary to measure the return

on Hotchkiss’s investment.

       Thus, regardless of whether the claims are based on the oral guarantee or

the written Assurance Agreement, Hotchkiss was only able to discover the injury

after IPA allegedly breached the written contract and Hotchkiss did not realize a
                                           10

return on his investment or, pursuant to the alleged oral representation, receive

his money back. Hotchkiss could only discover the absence of these events after

IPA concluded its work and the requisite twelve months passed. Only then could

IPA’s performance be measured and the determination made as to whether IPA

breached the agreement.

       Hotchkiss’s petition was filed on September 11, 2012.            Therefore, the

petition was brought within the requisite five years after these causes of action

began to accrue. Consequently, the district court erred in concluding the statute

of limitations barred both the negligent misrepresentation and equitable fraud

claims.

       C. Breach of Contract Claim

       Hotchkiss next argues the court incorrectly concluded his breach of

contract claim was based on an unwritten contract, and therefore erroneously

applied the five-year statute of limitations, rather than the ten-year time period

found in Iowa Code section 614.1(5).6

       Claims founded on written contracts must be brought within ten years. Id.

In order for an action to be founded on a written contract, the essential facts

establishing liability of the defendant must be shown by a writing, without resort

to parole evidence. Matherly v. Hanson, 359 N.W.2d 450, 454 (Iowa 1984).

With regard to when the statute of limitations begins to run, absent specific

6
   IPA contends Hotchkiss did not preserve error on this claim because it was not
presented in the district court. However, the basis of the motion for summary judgment
regarding the breach of contract claim, resisted by Hotchkiss, was whether the statute of
limitations barred the current suit. The district court clearly ruled on this issue.
Therefore, error was preserved. See Lamasters v. State, 821 N.W.2d 856, 864 (Iowa
2012).
                                         11

language in the contract, we apply traditional rules regarding commencement of

the contract statute of limitations to make this determination. The general rule is

that the contract statute of limitations commences upon the date the contract is

breached. Hamm v. Allied Mut. Ins. Co., 612 N.W.2d 775, 784 (Iowa 2000).

       In concluding Hotchkiss’s cause of action was time barred, the district

court stated:

              The Court finds that the applicable statute of limitations in
       this matter is five years. Although a written contract was entered
       into by the parties in March of 2007, the plaintiff’s breach of
       contract cause of action does not arise out of the actual writings,
       but stems from an alleged oral exchange between Hotchkiss and
       an IPA representative, Greg Helmers.
              ....
              The Court relies upon the citations provided that the five-
       year statute of limitations pursuant to Iowa Code section 614.1(4)
       for oral contracts must apply. Although a written contract exists
       suggesting the ten-year statute of limitations of Iowa Code section
       614.1(5) applies, the essential terms of the alleged contract
       providing a “money-back guarantee” must be implied or presumed
       from parol evidence of the parties’ conduct. Therefore, the contract
       is subject to the limitations statute applicable to oral rather than
       written contracts and the five-year limitation controls.

       Hotchkiss’s cause of action set forth in his petition alleges:

               On March 6, 2007 Defendants approached Plaintiffs at their
       place of business in Blackhawk County, Iowa, and presented a
       high-pressure sales pitch, which included a written contract on a
       form prepared by Defendants.
               On March 6, 2007 for valuable consideration the Defendants
       entered into the written contract with Plaintiffs, copy of which is
       attached hereto as Exhibit A.
               Plaintiffs performed all requirements under the contract.
               The Defendants have not performed the agreement on their
       part in that Defendants failed to deliver the guaranteed profitability.
               Plaintiffs demanded that the Defendants refund their money.
               Defendants have refused to do so.
               As a result of this breach of the agreement by Defendants,
       the Plaintiffs were damaged in an amount which exceeds the
       jurisdictional limitation.
                                         12

              WHEREFORE, Plaintiffs ask for the contract to be rescinded
       and award to Plaintiffs all sums paid under the contract to date,
       along with consequential damages to Plaintiffs resulting from the
       false representations made to them by Defendants.

       The pertinent sections of the contract relied upon by Hotchkiss to establish

his breach of contract claim state:

               It is expressly agreed that this printed document embodies
       the entire agreement of the parties in relation to the subject matter
       of services to be rendered; and that no other understanding or
       agreement, verbal or otherwise, exists between the parties, except
       as herein expressly set forth.
               ....
               IPA will, upon satisfactory completion of the consulting
       engagement, assure to Pro Shield Fire Protection, Inc. (“Client”) the
       realization of a return, through a combination of cost savings and
       profit enhancements, in excess of 3 (three) times the investment
       incurred for consulting hours billed, during the 12 months following
       the successful completion of the project.
               Early detection of variance in projected profits, and effecting
       changes designed to bring the identified variance back into
       compliance, is instrumental in assuring achievement of profitability
       goals. To this end, it is essential that Client provide a timely,
       monthly Financial and Operational Summary Report to the Client
       Relations Department for review during the year period, and such
       other reports as may be determined during the course of the
       project.

       Based on these facts, we disagree with the district court that Hotchkiss’s

breach of contract claim relies primarily on the oral exchange between Hotchkiss

and an IPA representative.      Hotchkiss’s petition states expressly that “[t]he

Defendants have not performed the agreement on their part in that Defendants

failed to deliver the guaranteed profitability.” The basis for this alleged breach

can be found in the written contract under the “IPA Assurance” agreement, which

states that IPA promises “the realization of a return, through a combination of

cost savings and profit enhancements, in excess of 3 (three) times the

investment incurred . . . .” Regardless of any alleged oral promise, liability here
                                         13

can be established by a writing, given this assurance that establishes “an

obligation or liability to do . . . something.” Matherly, 359 N.W.2d at 454.

       IPA argues that, because Hotchkiss concedes the Assurance Agreement

does not include a money-back guarantee, there is no written contract provision

governing IPA’s liability. However, the petition does not allege the breach of a

money-back guarantee; rather, it uses the term “guaranteed profitability,” which

reasonably can be interpreted as a promise inherent in the Assurance

Agreement. The failure of IPA to return Hotchkiss’s money was not alleged as

the breach, but, rather, was the remedy Hotchkiss sought upon the breach.

Therefore, the essential facts governing IPA’s liability can be found in the written

contract, for which the applicable statute of limitations is ten years. See Iowa

Code § 614.1(5); see also 51 Am. Jur. 2d, Limitation of Actions, § 117 (2012)

(noting that the statute of limitations with respect to unwritten contracts only

applies when it is necessary to resort to parol evidence to establish the essential

terms of the contract).

       Hotchkiss’s petition was filed on September 11, 2012. With the claim

beginning to accrue on the date the contract was allegedly breached—August

29, 2008, twelve months after IPA completed its work—the petition was filed

within the applicable ten-year time period. Consequently, Hotchkiss’s claim is

not time barred, and it cannot be disposed of on statute-of-limitations grounds.

We therefore reverse this portion of the district court’s summary judgment

decision.
                                          14

IV. Savings Clause

       As an alternative argument, Hotchkiss asserts the savings clause applies

to all issues, and therefore his claims were brought within the applicable time

period.7 He argues the voluntary dismissal of his original petition constituted a

continuation of the first petition pursuant to Iowa Code section 614.10, such that

his claims are not barred by the statute of limitations.

       The savings clause found in Iowa Code section 614.10 states: “If, after the

commencement of an action, the plaintiff, for any cause except negligence in its

prosecution, fails therein, and a new one is brought within six months thereafter,

the second shall, for the purposes herein contemplated, be held a continuation of

the first.”   Our supreme court has interpreted the phrase “negligence in its

prosecution” to include most types of voluntary dismissals. Specifically, the court

has held: “The Archer–Pardey–Ceprley line of cases stands for the proposition

that for a voluntary dismissal to be within the scope of the term ‘fails’ under the

savings statute, there must be compulsion to the extent that a plaintiff’s entire

underlying claim has been, for all practical purposes, defeated.”           Furnald v.

Hughes, 804 N.W.2d 273, 282 (Iowa 2011).

       Here, Hotchkiss voluntarily dismissed his petition as a result of the district

court’s denial of his motion to amend the pleadings. This was not an action in

which Hotchkiss was forced to engage due to circumstances beyond his control.

See id. at 283–84 (holding the fact that plaintiff voluntarily dismissed his original

petition precluded the application of the savings statute to his second petition,

7
  Because we conclude the breach of contract, equitable fraud, and negligent
misrepresentation claims were timely filed, we address this claim only as it pertains to
the chapter 706A allegation.
                                        15

and thus his claims were time barred). Therefore, Hotchkiss’s claim did not “fail”

within the meaning of Iowa Code section 614.10, and the savings statute did not

prevent Hotchkiss’s 706A claim from being barred by the statute of limitations.

V. Summary Judgment on the Merits

       Hotchkiss further claims the district court erred in granting summary

judgment on the merits because there is an issue of material fact with regard to

his claims of breach of contract, equitable fraud, negligent misrepresentation,

and breach of warranty. Because we concluded the statute of limitations did not

bar any of these claims, we will address Hotchkiss’s argument that there is an

issue of material fact with respect to each of these claims.

       A. Breach of Contract

       To succeed on a breach of contract claim, the plaintiff must show:

       (1) the existence of a contract; (2) the terms and conditions of the
       contract; (3) that [the plaintiff] has performed all the terms and
       conditions required under the contract; (4) the defendant’s breach
       of the contract in some particular way; and (5) that plaintiff has
       suffered damages as a result of the breach. A party breaches a
       contract when, without legal excuse, it fails to perform any promise
       which forms a whole or a part of the contract.

Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224 (Iowa

1998) (internal citations omitted). Conditions precedent must be satisfied “before

there is a breach of contract duty.” Mosebach v. Blythe, 282 N.W.2d 755, 759

(Iowa Ct. App. 1979) (internal citation omitted). In deciding whether a condition

precedent has been satisfied, only “where the facts are not in dispute and the

inferences are certain” can summary judgment be granted. Met-Coil Sys. Corp.

v. Columbia Cas. Co., 524 N.W.2d 650, 656 (Iowa 1994); see also Grinnell Mut.

Reinsurance Co. v. Jungling, 654 N.W.2d 530, 535 (Iowa 2002) (“No fact
                                        16

question arises if the only conflict concerns legal consequences flowing from

undisputed facts.”).

       In granting summary judgment, the district court stated:

       The contract specifically requires performance on the part of the
       plaintiffs to provide timely monthly Financial and Operational
       Summary Reports to the Client Relations Department of IPA for
       review during the one-year period after the completion of IPA’s
       consulting project . . . . The defendants allege Hotchkiss never
       submitted a timely Financial and Operational Summary Report to
       the Client Relations Department. Although a factual question may
       exist in that Hotchkiss never submitted the said reports to the IPA’s
       Client Relations Department, but submitted one or two such reports
       to Mr. Sweigard. Whether he submitted zero reports or at most two
       reports to Mr. Sweigard, there is no genuine issue of material fact
       suggesting Hotchkiss submitted the requisite twelve or one-year’s
       worth of reports to IPA’s Client Relations Department. In the
       absence of a genuine issue of material fact, the defendants are
       entitled to summary judgment as a matter of law on the breach of
       contract issue.

       In reaching this conclusion, it appears the district court assumed the

submission of the Financial and Operational Summary Reports was a condition

precedent to IPA’s completion of its duties under the contract, specifically the

Assurance Agreement. However, the clause states:

       Early detection of variance in projected profits, and affecting
       changes designed to bring the identified variance back into
       compliance, is instrumental in assuring achievement of profitability
       goals. To this end, it is essential that Client provide a timely,
       monthly Financial and Operational Summary Report to the Client
       Relations Department for review during the year period, and such
       other reports as may be determined during the course of the
       project.

This clause is not definitively phrased as a condition precedent to IPA’s

performance under the contract. Moreover, “[a] determination that a condition

precedent exists depends not on the particular form of words used, but upon the

intention of the parties gathered from the language of the entire instrument.”
                                       17

Mosebach, 282 N.W.2d at 759.       It is not clear from this clause or from the

contract as a whole that the submission of Financial and Operational Summary

Reports is a condition precedent to IPA’s performance. Therefore, there is an

issue of material fact with regard to whether this clause is a condition precedent

Hotchkiss must satisfy before he can establish a breach of contract claim.

      Additionally, even if this clause is determined to be a condition precedent

to IPA’s assurance of a profit return, we do not agree the record definitively

established Hotchkiss did not at least substantially comply with this term. The

parties dispute the number of reports submitted by Hotchkiss. IPA relies on

Hotchkiss’s deposition as proof Hotchkiss did not comply with this clause;

however, this is the exchange that took place:

             Q: And you’re saying [the report submitted in discovery is]
      not a report sent to the Client Relations Department at IPA? A: I’m
      not saying we didn’t send it. I don’t remember it. I even told my
      attorney I don’t remember this particular report.
             ....
             Q: Have you been able to locate any other documents that
      are Financial and Operational Summary Reports that you submitted
      to IPA’s Client Relations Department in the 12 months following the
      completion of the consulting engagement? A: I would have to look.
      I do remember submitting some to Bill, but that’s it.
             ....
             Q: You’re supposed to submit them to the Client Relations
      Department. A: You do not understand me.
             Q: Did you do that? A: I couldn’t.
             Q: You couldn’t? Why not? A: John’s reports would not
      work. His formulas didn’t work.
             Q: Did they work after Mr. Sweigard came out? A: They
      never worked. Once Bill got there, things were different, yes, yes.
             Q: Well, did you produce any of those reports to the Client
      Relations Department after Mr. Sweigard was at your place of
      business? A: Not to Client Relations.

      The burden of proof to show there is no issue of material fact is on IPA,

and all facts are taken in the light most favorable to Hotchkiss. See Stevens, 728
18
N.W.2d at 827. Given this standard, the exchange on which IPA relies does not

definitively establish Hotchkiss did not substantially comply with a condition

precedent, the non-performance of which would excuse IPA from its obligations

under the contract. Consequently, there is an issue of material fact as to whether

IPA breached the contract, and the district court erred in granting summary

judgment on the merits of this claim.

       B. Breach of Warranty

       To establish a breach of warranty, the plaintiff must show “the infraction of

an express or implied agreement as to the title, quality, content or condition of a

thing sold.” Dailey v. Holiday Distrib. Corp., 151 N.W.2d 477, 482 (Iowa 1967).

Here, however, each separately signed agreement contained a clause stating “it

is understood and agreed that no express or implied warranty of any general or

specific results shall apply to the work done under this agreement.” Moreover,

the contract contained an integration clause, which prevents any parol evidence

from being introduced to establish the existence of an oral warranty.          See

Whalen v. Connelly, 545 N.W.2d 284, 290 (Iowa 1996).            Given the contract

expressly states there are no warranties to breach, no issue of material fact

exists as to whether Hotchkiss can succeed on his breach of warranty claim. We

therefore conclude the district court properly granted summary judgment on the

merits with respect to this claim.

       C. Negligent Misrepresentation

       To succeed on a claim of negligent misrepresentation, the plaintiff must

show the defendant:
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       [I]n the course of his business, profession or employment, or in any
       other transaction in which he has a pecuniary interest, supplies
       false information for the guidance of others in their business
       transactions, [and] is subject to liability for pecuniary loss caused to
       them by their justifiable reliance upon the information, [when the
       defendant] fails to exercise reasonable care or competence in
       obtaining or communicating the information.

Van Sickle Const. Co. v. Wachovia Commercial Mortg., Inc., 783 N.W.2d 684,

690 (Iowa 2010) (quoting Restatement (Second) of Torts § 552, at 126–27

(1977)).

       Viewing the facts in the light most favorable to Hotchkiss, there is an issue

of material fact as to whether Hotchkiss could succeed on his negligent

misrepresentation claim.     Hotchkiss asserts an IPA representative stated he

could get his money back if IPA did not deliver the guaranteed profitability

contained in the written contract. While the district court concluded Hotchkiss

could not rely on this oral representation as a matter of law, “the decision

whether or not reliance by a plaintiff is justified is one for the fact finder to

resolve.” Spreitzer v. Hawkeye State Bank, 779 N.W.2d 726, 739 (Iowa 2009).

       Moreover, the terms of the contract state Hotchkiss should be able to

realize a return on his investment.        This, too, could be considered “false

information for the guidance of others” such that Hotchkiss was justified in relying

on the statement when entering into the contract, and as a result suffered

pecuniary losses.       See Van Sickle Const. Co., 783 N.W.2d at 690.

Consequently, the district court erred in concluding Hotchkiss’s negligent

misrepresentation claim failed as a matter of law.
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       D. Equitable Fraud

       To establish a claim of equitable fraud, the plaintiff must prove by clear

and convincing evidence “(1) representation; (2) falsity; (3) materiality;

(4) scienter; (5) intent to deceive; (6) reliance; and (7) resulting injury and

damage.” Morton v. Underwriters Adjusting Co., 501 N.W.2d 72, 73 (Iowa Ct.

App. 1993). A bare allegation that a defendant made a false statement on which

the plaintiff relied, without more, cannot establish a claim of equitable fraud.

Grefe v. Ross, 231 N.W.2d 863, 867 (Iowa 1975) (“A false statement innocently

but mistakenly made will not establish intent to defraud, but, when recklessly

asserted, it will imply an intent to defraud.”).

       Even when viewing the facts in the light most favorable to Hotchkiss, he is

unable to establish either scienter or intent to deceive. He alleges no facts,

either in his petition or elsewhere, which would establish IPA had “actual

knowledge of the falsity of [its] representations [or spoke] in reckless disregard of

whether [its] representations [were] true or false.” Beeck v. Aquaslide ‘N’ Dive

Corp., 350 N.W.2d 149, 155 (Iowa 1984). No deposition, interrogatory, or other

evidence shows IPA or an IPA representative possessed the requisite intent or

reckless disregard of the truth regarding its statements. Rather, Hotchkiss simply

asserts he relied on IPA’s statement he would either get his money back or

realize a three-fold return on his investment, without alleging intent or reckless

disregard on the part of IPA. Consequently, the district court properly concluded

Hotchkiss’s equitable fraud claim fails as a matter of law.

       Having considered Hotchkiss’s arguments, we affirm the district court’s

grant of summary judgment with respect to Hotchkiss’s breach of warranty,
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equitable fraud, and 706A claims, but reverse the grant of summary judgment

regarding the breach of contract and negligent misrepresentation causes of

action. We remand the case for further proceedings consistent with this opinion.

      AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.