Court Opinion

ID: 4562257
Source: CourtListenerOpinion
Date Created: 2020-09-02 15:06:22.228553+00
Date Added: 2024-06-11T11:50:58.052886
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 19-1594
                            Filed September 2, 2020

DELAINE PETERSEN,
     Plaintiff-Appellant,

vs.

KIRK HUEHN,
     Defendant-Appellee.
________________________________________________________________

      Appeal from the Iowa District Court for Carroll County, Gary McMinimee,

Judge.

      Delaine Petersen appeals an order granting Kirk Huehn’s motion for

summary judgment. AFFIRMED.

      Steven Hamilton of Hamilton Law Firm, P.C., Storm Lake, for appellant.

      Ryan Stefani of Nyemaster Goode, P.C., Des Moines, for appellee.

      Considered by Tabor, P.J., and May and Greer, JJ.
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MAY, Judge.

      Delaine Petersen appeals an order granting Kirk Huehn’s motion for

summary judgment on grounds of claim preclusion. We affirm.

   I. Background Facts and Prior Proceedings

      Petersen owned a custom-built motorcycle. He sought insurance for the

motorcycle from Huehn, an agent of State Farm Automobile Insurance Company

(State Farm). Petersen asked for coverage in the amount of $35,000—the value

he ascribed to the motorcycle. State Farm issued Petersen a policy covering the

motorcycle for the period of April 24, 2014, through April 24, 2015. On or about

April 13, 2015, Petersen claims the motorcycle sustained a total loss. Petersen

submitted a claim to State Farm requesting $35,000. Petersen alleges State Farm

denied coverage.

      In March 2018—almost three years after the alleged total loss of the

motorcycle—Petersen filed suit against State Farm. In that case, Petersen alleged

State Farm denied his claim in bad faith. State Farm removed the case to the

United States District Court for the Southern District of Iowa (Southern District).

State Farm then filed a motion to dismiss. State Farm argued Petersen’s suit was

barred by the policy’s one-year limitation period. The Southern District agreed and

dismissed Petersen’s suit. The Eighth Circuit Court of Appeals affirmed. See

Petersen v. State Farm Mut. Auto. Ins. Co., 750 F. App’x 517, 518 (8th Cir. 2019).

      In July 2018, Petersen filed the present suit against Huehn. Petersen

alleges Huehn was negligent in representing to Petersen that he received a stated

value policy for $35,000. Because of this negligence, Petersen claims he “has
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been deprived of the insurance amount he was told that he had by Defendant

Huehn.”

       Huehn moved for summary judgment. The district court granted the motion

on the basis of claim preclusion. Petersen now appeals.

   II. Standard of Review

       “[W]e review a district court’s grant of summary judgment for correction of

errors at law.” Boelman v. Grinnell Mut. Reinsurance Co., 826 N.W.2d 494, 500

(Iowa 2013). Summary judgment is proper “when the moving party demonstrates

there is no genuine issue of material fact and that [the party] is entitled to judgment

as a matter of law.” Id. at 501. We may resolve a matter on summary judgment if

the only conflict concerns legal consequences of undisputed facts. Id.

   III. Analysis

       In general, “claim preclusion holds that a valid and final judgment on a claim

bars a second action on the adjudicated claim or any part thereof.” Pavone v.

Kirke, 807 N.W.2d 828, 835 (Iowa 2011). In effect, “a party must litigate all matters

growing out of the claim.” Penn v. Iowa State Bd. of Regents, 577 N.W.2d 393,

398 (Iowa 1998).     And claim preclusion “applies not only to matters actually

determined in an earlier action but to all relevant matters that could have been

determined.” Shumaker v. Iowa Dep’t of Transp., 541 N.W.2d 850, 852 (Iowa

1995). So, claim preclusion may bar litigation on matters the parties never litigated

in the first claim. Arnevik v. Univ. of Minn. Bd. of Regents, 642 N.W.2d 315, 319

(Iowa 2002).

       To establish claim preclusion a party must show: (1) the parties in
       the first and second action are the same parties or parties in privity,
       (2) there was a final judgment on the merits in the first action, and (3)
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       the claim in the second suit could have been fully and fairly
       adjudicated in the prior case (i.e., both suits involve the same cause
       of action).

Pavone, 807 N.W.2d at 836.        If any element is missing, a defense of claim

preclusion will fail. Arnevik, 642 N.W.2d at 319.

       We start with the first element, whether the parties were the same or in

privity. Petersen was the plaintiff in both cases. And, throughout both cases,

Petersen has maintained that State Farm and Huehn are principal and agent.

Consistent with this approach, Petersen does not deny that State Farm and Huehn

are in privity. So we consider the first element satisfied.

       We turn next to the second element, whether there was a final judgment in

the prior case. This is not disputed, either. The parties agree that the previous

action—Petersen v. State Farm—ended in a final judgment on the merits.

Specifically, the Southern District granted State Farm’s motion to dismiss, and the

Eighth Circuit affirmed. See Petersen, 750 F. App’x at 518. The second element

is satisfied.

       We turn then to the third and final element. To determine whether a claim

could have been fully and fairly adjudicated in the prior case—whether both suits

involve the same cause of action—we look at whether there is

       a natural grouping or common nucleus of operative facts. Among
       the factors relevant to a determination [of] whether the facts are so
       woven together as to constitute a single claim are their relatedness
       in time, space, origin, or motivation, and whether, taken together,
       they form a convenient unit for trial purposes. . . . If there is a
       substantial overlap, the second action should ordinarily be held
       precluded.

Pavone, 807 N.W.2d at 837 (quoting Restatement (Second) of Judgments § 24

cmt. b (Am. Law Inst. 1982)). Even if “different harms, substantive theories,
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measures[,] or kinds of relief” are brought, there may still be a single cause of

action. Villarreal v. United Fire & Cas. Co., 873 N.W.2d 714, 721 (Iowa 2016)

(quoting Restatement (Second) of Judgments § 24 cmt. c). And parties are “not

entitled to a ‘second bite’ simply by alleging a new theory of recovery for the same

wrong.” Bennett v. MC No. 619, Inc., 586 N.W.2d 512, 517 (Iowa 1998).

       Like the district court, we believe the overlap between the two cases is more

than sufficient. Both cases depended on the same allegations of fact, namely,

(1) Petersen owned a motorcycle; (2) Petersen valued his motorcycle at $35,000;

(3) Petersen wanted insurance that would pay $35,000; (4) Huehn told Petersen

he procured a State Farm policy that would pay $35,000; (5) Petersen’s motorcycle

suffered a total loss; (6) Petersen made a claim with State Farm for $35,000; and

(7) State Farm denied the claim. And to a large extent, both cases focus on the

same alleged wrongdoing—Huehn’s misrepresentation that he procured a policy

that would pay $35,000. Plus both cases allege the same basic harm—that

Petersen “has been deprived of the insurance amount he was told that he had by

Defendant Huehn.”1 As the district court correctly noted, “it is apparent the two

1 This quote comes from Petersen’s petition against Huehn. But it also the gist of
his action against State Farm. In his petition against State Farm, Petersen alleged:
(1) Petersen “believed, through research, his motorcycle was valued” at $35,000;
(2) Petersen “sought out insurance” for the motorcycle “that would pay, in the event
of a total loss,” $35,000; (3) Petersen “very explicitly sought a statement from his
State Farm agent,” Huehn, “that State Farm would provide such insurance”; (4)
Huehn “assured and stated” to Petersen that he “did write . . . a policy of insurance
on behalf of State Farm” that “provided the specific coverage” Petersen sought; (5)
after the motorcycle allegedly sustained a total loss, Petersen “presented a claim
promptly to State Farm claiming a total loss of the motorcycle and the payment of
the amount of $35,000”; and (6) even so, “State Farm has denied and continues
to deny such demand and paid 0 [sic] for the motorcycle loss.” For damages,
Petersen sought “the cost of the motorcycle, the lost use of the motorcycle, and
punitive damages.”
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actions stem from the same transaction and that there would have been a

substantial overlap of evidence in the two cases.” We conclude the third element

is satisfied.

       On appeal, Petersen suggests the one-year limitation provision is a

“personal defense” for State Farm. So, Petersen claims, his defeat in the suit

against State Farm does not bar his current suit against Huehn. For support,

Petersen relies on Restatement (Second) of Judgments, section 51:

       If two persons have a relationship such that one of them is vicariously
       responsible for the conduct of the other, and an action is brought by
       the injured person against one of them, the judgment in the action
       has the following preclusive effects against the injured person in a
       subsequent action against the other.
               (1) A judgment against the injured person that bars him from
       reasserting his claim against the defendant in the first action
       extinguishes any claim he has against the other person responsible
       for the conduct unless:
               (a) The claim asserted in the second action is based upon
       grounds that could not have been asserted against the defendant in
       the first action; or
               (b) The judgment in the first action was based on a defense
       that was personal to the defendant in the first action.

(Emphasis added.)

       As a preliminary matter, we have concerns about error preservation. See

Top of Iowa Coop. v. Sime Farms, Inc., 608 N.W.2d 454, 470 (Iowa 2000) (noting

that courts may consider error preservation on their own motion).            “It is a

fundamental doctrine of appellate review that issues must ordinarily be both raised

and decided by the district court before we will decide them on appeal.” Meier v.

Senecaut, 641 N.W.2d 532, 537 (Iowa 2002) (emphasis added). While the district

court’s ruling mentioned the possibility that State Farm “might have a policy

defense (limitation of action) that might not have been available to Huehn,” the
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district court did not decide the issue. (Emphasis added.) Nor did Petersen file an

Iowa Rule of Civil Procedure 1.904(2) motion. So we doubt Petersen’s personal-

defense theory was preserved.

       Even assuming the issue was preserved, though, we must still affirm unless

Petersen has demonstrated error by the district court. See Clement v. Irwin, No.

19-1192, 2020 WL 4498860, at *2 (Iowa Ct. App. Aug. 5, 2020) (collecting cases).

Petersen has not done so.

       Petersen’s personal-defense theory is that, by suing his agent, he can

obtain the proceeds of an insurance policy without showing he has complied with

the terms of a policy, including a suit-limitation provision. Instead, Petersen claims,

“he must only prove that Huehn represented an amount of coverage and that he

[Petersen] did not get it.” These proofs alone, Petersen says, would support “a

number of theories,” such as “[a]n estoppel,” “a contract action,” “or

misrepresentation action.” But Petersen does not support these theories with

authority. So we decline to treat them as adequate grounds for reversal. See Iowa

R. App. P. 6.903(2)(g)(3) (“Failure to cite authority in support of an issue may be

deemed waiver of that issue.”).

   IV. Conclusion

       Petersen has not shown the district court erred by granting summary

judgment to Huehn. We affirm.

       AFFIRMED.