Court Opinion

ID: 9926352
Source: CourtListenerOpinion
Date Created: 2024-01-24 17:05:07.119613+00
Date Added: 2024-06-11T09:22:43.731639
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 22-1861
                            Filed January 24, 2024

RICHARD GERDTS,
     Plaintiff-Appellant,

vs.

DONAN ENGINEERING CO., INC., and LANCE L. LETELLIER, P.E.,
     Defendants-Appellees.
________________________________________________________________

      Appeal from the Iowa District Court for Scott County, John Telleen (partial

dismissal) and Stuart P. Werling (summary judgment), Judges.

      The plaintiff appeals the grant of motions to dismiss and for summary

judgment. AFFIRMED.

      James C. Larew and Claire M. Diallo of Larew Law Office, Iowa City, for

appellant.

      Eric G. Hoch and Kevin J. Driscoll of Finley Law Firm, PC, Des Moines, for

appellees.

      Heard by Tabor, P.J., Badding, J., and Blane, S.J.*

      *Senior judge assigned by order pursuant to Iowa Code section 602.9206

(2024).
                                         2

BLANE, Senior Judge.

       Homeowner Richard Gerdts appeals the grant of Donan Engineering Co.,

Inc. and Lance LeTellier’s1 motions to dismiss and for summary judgment related

to denial by his insurance company of his claim for hail damage to the roof of his

duplex.   Gerdts appeals three of those rulings.2      We affirm for the reasons

discussed below.

    I. Facts and prior proceedings

       Gerdts owns half of a duplex in Bettendorf.        In April 2020, Gerdts’s

neighborhood experienced a hailstorm. As a result, many of Gerdts’s neighbors

had their roofs replaced, including the owner of the other half of Gerdts’s duplex,

who had a homeowner’s policy with a different insurance carrier.

       Gerdts made a claim to the Property and Casualty Insurance Company of

Hartford (Hartford), his insurer, for the hail damage to his portion of the roof.

Hartford claims representative, Daryl Holmes, hired an adjusting company, Ladder

Now, to inspect the roof. Ladder Now reported to Hartford that there was hail

damage to roof vents and the furnace cap, all made of plastic or soft metal, but not

to the roof shingles. Holmes determined that the damage cost to the roof vents

and furnace cap was below Gerdts’s deductible. So he denied the claim for roof

shingle replacement. In response, Gerdts hired an independent adjuster and a

1 We will refer to the defendants as “Donan” except when it is necessary to
specifically refer to LeTellier.
2 While Gerdts raised other claims against the insurance company (breach of

contract, bad faith, fraudulent misrepresentation, conspiracy, negligence, and
negligent misrepresentation) and Donan (tortious interference with contract,
fraudulent misrepresentation, equitable fraud, constructive fraud, conspiracy,
negligence, and negligent misrepresentation), we limit our discussion to the claims
raised on appeal.
                                         3

roofing contractor3 and had them inspect the roof. Both opined that there was hail

damage and the roof shingles should be replaced. Gerdts communicated this to

Hartford in support of his claim, so Holmes then retained Donan to perform another

inspection. Hartford issued the following “scope of work” to Donan: “Inspect roof

for cause of damage.      Include test squares on each slope and advice on

reparability vs replacement.” Donan assigned the case to its employee, Lance

LeTellier, a licensed civil engineer in Cedar Rapids.

      LeTellier did a site visit, took pictures of what he observed on the roof, and

reported the following summary of his conclusions: “The roof is not damaged by

hail impact. Man-made damage, balding, age-related deterioration, and nail pops

are on the roof.” He submitted his report and photographs to Hartford. He also

submitted various literature about hail damage and the types and sizes of hail

expected to cause significant damage to roof shingles. He testified in deposition

that hail of the size that could cause roof damage did not appear in Gerdts’s area

at the time of the storm.4 He further testified that to find hail damage, he would

look for a fracture of the shingle that “affects the water-shedding ability of that

shingle” or a “bruise” to the shingle. A “bruise” is “an indentation that extends

through the entire premise of the shingle.” He stated, “Those are the two primary

determinations of hail damage situations.” Donan and LeTellier were not provided

3 The same roofer who had inspected the other half of the duplex.
4 LeTellier relied on National Oceanic and Atmospheric Administration (NOAA)

records and weather reports.
                                          4

a copy of Gerdts’s insurance policy with Hartford. Based on Donan’s report,

Holmes determined again to deny Gerdts’s claim.5

       Gerdts filed suit against Hartford, Donan, and LeTellier. Donan filed a pre-

answer motion to dismiss. The court dismissed Gerdts’s negligence claim but

declined   to   dismiss   the   tortious-interference,   third-party-beneficiary   and

conspiracy claims. After discovery, Donan moved for summary judgment. The

court granted Donan’s summary judgment motion and dismissed the remaining

claims. Gerdts appeals the dismissal of the negligence claim and the summary

judgment and dismissal of the tortious-interference and third-party-beneficiary

claims.

   II. Standards of review

       “We review a district court’s ruling on a motion to dismiss for the correction

of legal error.” White v. Harkrider, 990 N.W.2d 647, 650 (Iowa 2023). “A motion

to dismiss challenges a petition’s legal sufficiency.”       Id. (quoting Meade v.

Christie, 974 N.W.2d 770, 774–75 (Iowa 2022)). On our review, we accept the

facts alleged in the petition as true and take the allegations in the light most

favorable to Gerdts as the plaintiff. Id. In general, appellate courts disfavor

motions to dismiss versus summary judgment proceedings or trial. See Benskin,

Inc. v. W. Bank, 952 N.W.2d 292, 296 (Iowa 2020). To get dismissal, the petition

must show the claim is legally deficient and the plaintiff has no right of recovery as

a matter of law. White, 990 N.W.2d at 650.

5 Not wanting to hold up the re-roofing of the duplex, Gerdts paid out of pocket to

replace his half of the roof. He then sought indemnification from Hartford.
                                         5

       We review summary judgment rulings for correction of legal error. Morris v.

Legends Fieldhouse Bar and Grill, LLC, 958 N.W.2d 817 (Iowa 2021). “Summary

judgment is appropriate only when the record shows no genuine issues of material

fact and the moving party is entitled to judgment as a matter of law.” Hedlund v.

State, 930 N.W.2d 707, 715 (Iowa 2019); accord Iowa R. Civ. P. 1.981(3) (requiring

court to consider “the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any” when deciding motion for

summary judgment). “A genuine issue of fact exists if reasonable minds can differ

on how an issue should be resolved.” Banwart v. 50th St. Sports, L.L.C., 910

N.W.2d 540, 544 (Iowa 2018) (citation omitted). And “[a] fact is material when it

might affect the outcome of a lawsuit.” Id. Gerdts, as the opponent of summary

judgment, may not rest on the allegations in his pleading but must lift up specific

facts showing the existence of a genuine issue for trial.           See Hlubek v.

Pelecky, 701 N.W.2d 93, 95 (Iowa 2005). We view the evidence in the light most

favorable to Gerdts. See Banwart, 910 N.W.2d at 545. And we accept every

legitimate inference we can reasonably draw from the record.          Hedlund, 930

N.W.2d at 715. But “speculation is insufficient to generate a genuine issue of fact.”

Hlubek, 701 N.W.2d at 98.

   III. Analysis

       Gerdts appeals the dismissal of his claim for negligence and the grant of

summary judgment on his tortious-interference and breach-of-contract claims. We

start with negligence.
                                             6

   A. Negligence

       We first address whether the claim in question is negligence or “professional

negligence,” as Gerdts captions it in his appeal brief. Donan responds that Gerdts

did not plead “professional negligence,” so any claim derived from that pleading is

not preserved for appeal. Looking at the petition and amended petitions, Gerdts

captioned the claim as “negligence” against Hartford, Donan, and LeTellier. The

substance of the claim includes that the defendants, including Hartford, breached

a duty to handle the insurance claim process with “reasonably competent

professional claims adjustors and, if retained by the insurer, professional

engineers.”   We read this claim to mean a breach of a general duty, not a

professional duty. Thus the claim is for general negligence.

       Here, as in any negligence claim, Gerdts must show the applicable duty of

care, a breach of that duty, proximate cause, and damages. See Thompson v.

Kaczinski, 774 N.W.2d 829, 834 (Iowa 2009). Whether a duty arises is “a matter

of law for the court’s determination.” Id.

       The district court found Gerdts had no right of recovery for negligence,

whether or not he could show those grounds, under the economic loss rule. That

rule says “a plaintiff who has suffered only economic loss due to another’s

negligence has not been injured in a manner which is legally cognizable or

compensable.” Annett Holdings, Inc. v. Kum & Go, L.C., 801 N.W.2d 499, 503

(Iowa 2011) (citation omitted). In other words, “there is no recovery in negligence

for pure economic loss, that is, for economic loss unrelated to injury to the person

or the property of the plaintiff.” Id. (citation omitted). The rule is meant to prevent

parties litigating in tort what should be litigated in contract where, presumably, the
                                         7

parties “have allocated [expectations of the contractual relationship] between

themselves in their contract.” Id.

       Where, as here, the parties do not have “direct contractual privity,” we apply

the “stranger economic loss rule” based on similar principles. Id. at 504. The

supreme court has recognized exceptions to the rule for professional negligence

claims against attorneys and accountants.       Id.   Responding to the dismissal

motion, Gerdts argued that engineers should be recognized as a further exception.

The district court said:

               In the current case, Plaintiff alleges purely economic losses
       against the Donan Defendants but urges the Court to adopt an
       exception to the economic loss rule for engineers. The Court finds
       the unpublished Iowa Court of Appeals case Ziel v. Energy Panel
       Structures, Inc., cited by the Donan Defendants, persuasive on the
       issue.      [No. 19-0508,] 2020 WL 4498064 (Iowa Ct. App.
       Aug. 5, 2020). In Ziel, the appellant in a negligence suit against an
       engineering firm argued that the professional negligence exception
       permitted suit against the firm for purely economic loss. The Iowa
       Court of Appeals rejected that argument, noting that “no case has
       exempted engineering negligence from the economic loss rule.” The
       Court likewise finds that there is no authority to support an exemption
       from the economic loss rule for engineers, and declines to extend the
       doctrine on its own recognizance. Plaintiff argues that the loss
       alleged against the Donan Defendants is not purely economic
       because the Report caused a delay in the repair of his property. This
       argument is without merit. Plaintiff does not claim that the Donan
       Defendants caused the hail damage. Rather, Plaintiff is alleging that
       the Donan Defendants interfered with his contractual rights to
       receive indemnification from the Hartford. “[S]ome losses are
       encompassed by contract law principles and others by tort law
       principles.” “When . . . the loss relates to a consumer or user’s
       disappointed expectations due to deterioration, internal breakdown,
       or nonaccidental cause, the remedy lies in contract.” Plaintiff’s
       claims derive from his disappointed expectation that the Hartford
       would indemnify a loss otherwise solely attributable to natural forces.
       This is an economic loss. Because the Court finds that the economic
       loss rule applies, Plaintiff’s claim of Negligence against the Donan
       Defendants must be dismissed.

(Citations omitted).
                                          8

       On appeal Gerdts raises two challenges to the district court’s ruling. First,

he contends the court erred in finding Donan did not owe a duty of care to Gerdts.6

Second, he renews the contention that the economic loss doctrine does not apply

to his claim because he did not have a contract with Donan and, unlike Ziel, the

court did not find there was no duty between the parties. See 2020 WL 4498064,

at *4–5.

       Like the district court, we find that Gerdts is claiming a purely economic loss.

In determining whether the doctrine applies, the supreme court has focused on

“the nature of the defect, the type of risk, and the manner in which the injury arose

as well as the type of damages that the plaintiff seeks to recover.” Annett Holdings,

Inc., 801 N.W.2d at 506 (edited for readability). On appeal, Gerdts is not claiming

that Donan created any injury to the roof during the inspection. Rather, he claims

the inspection and report caused Hartford to decline coverage under the insurance

policy to reimburse Gerdts for the cost of replacing the roof. And he says the

nature of the defect is “a concentrated effort by the Donan Defendants . . . to deny

property damage claims.” He equates this to a “physical consequence.” Still, the

remedy sought is reimbursement for the cost of replacing his roof, which Hartford

refused to pay. So the economic loss doctrine applies whether or not there is a

duty between the parties or a contract—Gerdts cannot succeed in a negligence

claim for this loss.

6 Both parties seem to assert that the court’s finding that there is no duty of care is

implied but not explicit. Donan asserts that because it was raised to the district
court as an alternative ground, we can still address it on appeal. We choose to
bypass this concern because the economic loss issue is independently dispositive
of the negligence claim on appeal.
                                         9

      But Gerdts insists engineers like Donan and LeTellier should be exempted

from the rule, like lawyers and accountants. The district court cited Ziel stating,

“No case has exempted engineering negligence from the economic loss rule.” Id.

at *6. This is still a correct statement.7 But Gerdts claims reliance on Ziel was

erroneous because Ziel failed to argue professional negligence below and the

court did not directly address whether engineers should be exempted. Gerdts

argues that the purpose of the economic loss rule does not apply here because he

has no contract with Donan so there is no inappropriate resort to tort.8 He points

to Pitts v. Farm Bureau Life Ins. Co., where the supreme court suggested the

exception could be extended to insurance agents, in addition to attorneys and

accountants. 818 N.W.2d 91, 98 (Iowa 2012). But the Pitts court pointed out Farm

Bureau did not raise the economic loss rule as a defense. Id. at 98 n.4. Still, the

court agreed that features of that case, involving the conduct of an insurance

agent, “may place it outside the scope of the economic loss rule.” Id. The court

identified the absence of a “chain of contracts” connecting the parties, that the

claim was not as “remote” as other claims, and the “direct cause of loss suffered”

by the plaintiff through the defendant’s conduct. Id. Those features do not arise

in Gerdts’s case.

7 In Even v. Title Servs. Corp., No. 21-0727, 2022 WL 2348189, at *3 (Iowa Ct.

App. June 29, 2022), we found there was no duty of care in a negligent
representation action. One party raised the economic loss doctrine in defense,
and we determined that their claim was negligent misrepresentation rather than
general negligence. 2022 WL 2348189, at *3 n.1. But we noted “no reason to
think the outcome of this appeal would be different if we characterized their claims
in terms of general negligence instead.” Id.
8 We note this is inconsistent with Gerdts’s other claims in his petition.
                                          10

         Gerdts also points to claims of professional negligence, which are exempted

from the rule. See, e.g., John T. Jones Constr. Co. v. Hoot Gen. Constr., 543 F.

Supp. 2d 982, 1009 (S.D. Iowa 2008). Alongside that, he cites other jurisdictions

that have suggested or determined engineers are an exception to the economic

loss rule.

         Still we choose to adhere to the reasoning in Ziel. As Donan points out, Ziel

did not expand the exception to engineers because it found no binding authority to

do so. See 2020 WL 4498064, at *6 (citing Van Sickle Constr. Co. v. Wachovia

Com. Mortg., Inc., 783 N.W.2d 684, 692 n.5 (Iowa 2010) (noting exceptions have

been found for attorneys and accountants)). The claimed damages here are purely

economic, and the economic loss doctrine bars Gerdts’s recovery as a matter of

law. So the court did not err in granting Donan’s motion to dismiss the negligence

claim.

    B. Tortious interference with contract

         Gerdts next claims the district court erred in granting summary judgment

and dismissing his tortious-interference-with-contract claim. The elements of that

claim are (1) Gerdts had a contract with Hartford, (2) Donan knew of the contract,

(3) Donan intentionally and improperly interfered with the contract, (4) the

interference caused Hartford to not perform or made performance more

burdensome or expensive; and (5) damages to Gerdts resulted. See Jones v.

Lake Park Care Ctr., Inc., 569 N.W.2d 369, 377 (Iowa 1997).9

9  As to tortious interference with contract, our supreme court has adopted
Restatement (Second) of Torts sections 766 and 767 and applied the restatements
comments. See Kern v. Palmer Coll. of Chiropractic, 757 N.W.2d 651, 663–64
(Iowa 2008).
                                          11

       Gerdts alleged that “Donan, using licensed engineers, rewrites the terms of

insurance policies to narrow definitions of coverage and deny coverage to insureds

such as Mr. Gerdts.” He also alleges that Donan committed an intentional tort by

failing to properly abide by terms that were contractually binding between Gerdts

and Hartford. And he asserts his insurance policy with Hartford provided for

coverage if there was “property damage” defined as “physical injury to, destruction

of, or loss of use of tangible property.” The policy does not specifically define “hail

damage.” He argues that Donan did not apply the “property damage” definition

and instead defined hail damage as “loss of functioning and integrity” of roof

shingles. On the other hand, Donan argues that its direction from Hartford was to:

“Inspect roof for cause of damage. Include test squares on each slope and advice

on reparability vs replacement.” Thus, Donan argues it was not charged with the

duty to determine or give an opinion on policy coverage.

       In its motion for summary judgment, Donan focused on the third element of

tortious interference, that Gerdts did not have admissible evidence of any “willful

and intentional” interference with Gerdts’s contract with Hartford. The district court

focused on Gerdts’s assertion that Donan demonstrated its improper motive by

failing to follow business standards and ethical duties of engineers. The district

court found Donan’s adherence to professional standards was a question that

required expert testimony. Because Gerdts failed to put forward an expert witness,

he could not prove his case and summary judgment was appropriate. The ruling

stated:

              The question of whether the Donan Defendants adhered to
       professional standards of conduct requires Plaintiff to prove (1) what
       the standards of professional conduct are for engineers, and (2) that
                                          12

       the Donan Defendants breached this standard. This is not a factual
       scenario “within the knowledge and experience of an ordinary
       layperson.” Rather, this inquiry “involve[s] technical, scientific issues
       which cannot be fully understood by the average juror without some
       expert assistance.” “If expert testimony is required to establish the
       foundational facts and expert testimony is unavailable, then
       summary judgment is appropriate.” Without expert testimony
       demonstrating that the Donan Defendants’ engineering report was
       actually faulty, there is no evidence that the Donan Defendants
       improperly interfered with Plaintiff’s insurance policy. The Court
       hereby dismisses Article II, Count I of Plaintiff’s Petition, Tortious
       Interference with Contract.

(Citations omitted.)

       On appeal, Gerdts asserts the district court imposed an additional

requirement for his tortious-interference-with-contract claim that does not exist.10

He contends expert testimony would only be necessary if he was trying to prove

professional negligence. He makes this assertion despite the fact he continues to

claim Donan did not “follow business standards and ethical duties on engineers.”

He also argues that Donan “used definitions to define the existence—or non-

existence—of ‘hail damage’ that are not included in the Policy to determine

property damage caused by hail.”        Finally, Gerdts asserts Donan improperly

10 The district court reasoned:

               Iowa law establishes that engineering is a profession upon
        which expert testimony is typically required to establish a case for
        negligence. . . . The Court finds this rationale equally applicable
        where a party seeks to establish a claim for intentional interference
        with contract by showing that an expert engineer failed to adhere to
        the standards of his profession. If this were a professional
        negligence action, Plaintiff would proceed by establishing “a violation
        of defendant’s standard of care” by showing that the defendant failed
        to exercise “that degree of skill, care, and learning ordinarily
        possessed and exercised by members of that profession in good
        standing in similar circumstances.” This is exactly what Plaintiff
        seeks to do in the current case to demonstrate improper interference.
(Citations omitted.)
                                         13

aligned with Hartford because Donan’s motive “appears to be one of obtaining

consistent, compensated work from insurers.”

       The supreme court has said,

       For purposes of a claim for intentional interference with a contract,
       the factors used to help determine if the challenged conduct was
       improper include: 1. The nature of the conduct. 2. The Defendant’s
       motive. 3. The interest of the party with which the conduct interferes.
       4. The interest sought to be advanced by the Defendant. 5. The
       social interests in protecting the freedom of action of the Defendant
       and the contractual interests of the other party. 6. The nearness or
       remoteness of the Defendant’s conduct to the interference. 7. The
       relations between the parties.

Green v. Racing Ass’n of Cent. Iowa, 713 N.W.2d 234, 244 (Iowa 2006).

“[C]onduct is generally not improper if it was merely a consequence of actions

taken for a purpose other than to interfere with a contract.” Id. “[A] party does not

improperly interfere with another’s contract by exercising its own legal rights in

protection of its own financial interests.” Berger v. Cas’ Feed Store, Inc., 543

N.W.2d 597, 599 (Iowa 1996). Rather, there must be substantial evidence that the

party’s predominant purpose was to cause injury to the plaintiff. See id. at 599–

600.

       Donan’s involvement was initiated by Hartford to provide an “independent”

assessment whether the roof sustained hail damage and “advice on reparability vs

replacement.” The only evidence concerning Donan’s involvement is Holmes’s

email to Donan outlining Hartford’s directions of what it wanted Donan to do,

LeTellier’s on-site inspection of Gerdts’s roof, and LeTellier’s report sent to

Hartford.   Gerdts does not claim LeTellier’s inspection was faulty or that he
                                         14

misrepresented the physical inspection made of the roof.11 It is LeTellier’s report

and conclusion—that the roof did not sustain hail damage—that Gerdts argues

tortiously interfered since that is what Hartford relied on to continue its denial of

the insurance claim. So Gerdts must identify specific facts in the record to show

that Donan, in preparing and submitting the report, acted with the improper

purpose of interfering with the insurance contract.

       In ruling on the summary judgment motion, the district court did not analyze

the seven criteria identified in Green to determine whether Donan’s conduct was

improper. Rather, it latched onto one factor, that Gerdts needed an expert to prove

Donan’s conduct was improper. In doing so, we find that the district court indeed

adopted an extra element to prove tortious interference. The decision in Schlader

v. Interstate Power Co., 591 N.W.2d 10, 14 (Iowa 1999), is instructive. That case

involved a claim of “stray voltage.” The district court granted summary judgment

because the plaintiff did not have an expert witness. The supreme court reversed,

holding that while “expert testimony would clearly be helpful to fact finders in such

a claim, it is not a condition precedent.” Schlader, 591 N.W.2d at 14 (emphasis

added). The court contrasted the claim before it with professional negligence

cases, where expert testimony is required, before stating:

       Although testimony of witnesses having specialized education and
       training, or special experience and knowledge, is often admitted into
       evidence on the ground of necessity, it is not necessarily required
       merely because a case involves matters of science, special skill,
       special learning, knowledge, or experience which may be difficult for
       jurors to comprehend.
               Causes of action which predicate recovery upon expert
       testimony are rare.

11 Numerous photographs, including close ups of the roof shingles were attached

to the report.
                                         15

Id. (citations omitted); accord Roling v. Daily, 596 N.W.2d 72, 75 (Iowa 1999) (“We

do not indiscriminately impose a requirement for expert testimony in order to

establish an element for tort recovery.”).

       The determination of whether there is hail damage sufficient to require the

insurance company to approve a claim does not require a professional engineer.

Not all hail damage claims are resolved solely by professional engineers; they are

also approved and denied by insurance companies based upon inspections and

determinations made by insurance adjusters and roofers.12 It is the complexity of

professional negligence cases that requires expert testimony.       Schlader, 591

N.W.2d at 14. Because expert testimony is not required here, the court granted

summary judgment on an improper basis. Every legitimate inference that can be

reasonably deduced from the evidence should be afforded the nonmoving party.

Knapp v. Simmons, 345 N.W.2d 118, 121 (Iowa 1984).             A fact question is

generated if reasonable minds can differ on how the issue should be resolved. Id.

       Donan argues that since its report to Hartford was an engineering analysis

that determined “the roof is not damaged by hail impact,” for Gerdts to show this

conclusion was improper required a professional engineer. However, whether

Donan’s engineering analysis was improper does not by itself answer the legal

inquiry of whether its conduct improperly interfered with the insurance policy

between Hartford and Gerdts. It is only one of the Green/Restatement factors in

12 After all, Hartford first denied Gerdts’s claim based upon the report of
independent adjuster, Ladder Now.
                                          16

determining improper conduct. And it does not absolutely require expert testimony

to establish.

       We find Gerdts’s lack of an expert witness does not require dismissal. But

that does not end our inquiry. “If we reverse a district court’s decision to grant

summary judgment on one ground, . . . we may still affirm the ruling on alternative

grounds raised but not ruled on below and subsequently urged on appeal.” Pitts,

818 N.W.2d at 97 (“Having concluded summary judgment on that ground was in

error, we must now turn to the other grounds raised below to determine if they will

support granting Farm Bureau’s motion for summary judgment.”); see also Ostrem

v. Prideco Secure Loan Fund, LP, 841 N.W.2d 882, 904 (Iowa 2014) (“We will

consider on appeal if ‘there is an alternative ground, raised in the District Court

and urged on appeal, that can support the Court’s decision.’” (quoting Fencl v. City

of Harpers Ferry, 620 N.W.2d 808, 811–12 (Iowa 2000))).

       Donan’s motion for summary judgment regarding the tortious-interference

claim argued, “The Donan Defendants are entitled to summary judgment on

Plaintiff’s tortious interference with contract claim (Article II Count 1) because there

is no evidence that the Donan Defendants’ alleged conduct constituted willful and

intentional interference with the Policy.” In its brief in support of the motion, Donan

cited Green and argued the seven factors discussed in that case.13 In its appeal

brief, Donan again argues Green and the seven factors. In both his resistance to

Donan’s summary judgment motion and in his appeal brief, Gerdts addresses the

seven Green factors in arguing that Donan acted improperly. Thus, pursuant to

13 These seven factors are found in Restatement (Second) of Torts section 767.
                                           17

Pitts, we are to determine if Donan’s motion for summary judgment should have

been granted on this alternative ground and will address the seven factors to

determine if Donan’s actions rise to being improper and, if not, if Donan is entitled

to summary judgment.

       In addition to the general principles surrounding intentional interference with

contract set out above, we find the following instructive in addressing whether

conduct was improper as required to prevail. “The intent to interfere with a contract

does not make the interference improper.” Green, 713 N.W.2d at 244. “[C]onduct

is generally not improper if it was merely a consequence of actions taken for a

purpose other than to interfere with a contract.” Id. “If the sole motive is a

legitimate purpose derived from the law, then any interference is not improper as

a matter of law.” Id. at 245. “[A] party does not improperly interfere with another’s

contract by exercising its own legal rights in protection of its own financial interest.”

Wilkin Elevator v. Bennett State Bank, 522 N.W.2d 57, 62 (Iowa 1994).

       In analyzing these factors, we also find assistance in the comments to

Restatement (Second) of Torts sections 766 and 767: “In order for the actor to be

held liable, [section 766] requires that his interference be improper. The factors of

importance in determining this issue are stated and explained in [section] 767,

which must be read closely with [section 766].” Restatement (Second) of Torts

§ 766 cmt. a. The essential thing is the intent to cause the result. “The rule stated

in [section 766] is applicable if the actor acts for the primary purpose of interfering

with the performance of the contract, and also if he desires to interfere, even

though he acts for some other purpose in addition.” Id. § 766 cmt. j.
                                          18

       If the actor is not acting criminally nor with fraud or violence or other
       means wrongful in themselves but is endeavoring to advance some
       interest of his own, the fact that he is aware that he will cause
       interference with the plaintiff’s contract may be regarded as such a
       minor and incidental consequence and so far removed from the
       defendant's objective that as against the plaintiff the interference
       may be found to be not improper.

Id. (citation omitted).

       “Although intentional torts ‘are generally poor candidates for summary

judgment because of the subjective nature of motive and intent . . . , the rule is not

absolute . . . .’” Robert’s River Rides, Inc. v. Steamboat Dev. Corp., 520 N.W.2d

294, 299 (Iowa 1994), abrogated on other grounds by Barreca v. Nickolas, 683

N.W.2d 111 (Iowa 2004) (citation omitted). “The party resisting summary judgment

‘must set forth specific facts constituting competent evidence to support a prima

facie claim.’” Id. (citation omitted).

       With these in mind, we turn to the seven factors to determine if Donan’s

conduct was improper.

   1. The nature of the conduct.

       At Hartford’s request, Donan conducted an inspection of Gerdts’s roof for hail

damage and submitted a report of its findings to Hartford.           Donan’s findings,

applying engineering principles, were that the roof did not sustain hail damage that

was “functional.” Gerdts contends that Donan’s conduct was to intentionally and

improperly use a definition to describe hail damage that was narrower than the

insurance policy definition and thus give Hartford a basis to deny Gerdts’s claim.

He argues: “The Donan Defendants have not followed business standards and

ethical duties of engineers. They have used definitions to define the existence—or

non-existence—of ‘hail damage’ that are not included in the Policy to determine
                                         19

property damage caused by hail.” Gerdts also argued: “the nature of the actor’s

conduct was, in effect, to rewrite an insurance policy post-loss, by changing the

definition of hail damage to functional hail damage, requiring essentially a hole in an

insured’s home’s roof before it can be a covered loss.”

       There are two problems with Gerdts’s argument. First—and here is where

the lack of an engineering expert witness comes into play—Gerdts did not have an

expert engineer to establish that Donan violated the “business standards and ethical

duties of engineers” in submitting its report to Hartford and presented no evidence

in resistance to Donan’s motion for summary judgment to support this assertion.

Second is that Donan was not provided a copy of Gerdts’s insurance policy with

Hartford, was not provided the policy definition, was unaware of the policy definition,

was not asked to apply the policy definition, and was not asked to provide an opinion

whether the roof damage observed during the inspection was covered by the policy.

Further, the policy does not have a definition for hail damage. There was no re-

write of the policy. It was still up to Hartford to determine coverage under the policy.

All Donan was asked to do was provide a roofer’s opinion on the “cause of damage”

and “advice on repairability vs replacement.” This is what Donan did.

   2. The Defendant’s motive.

       Donan argues its motive was to fulfill its agreement with Hartford to complete

an inspection, submit a report and supply “test squares on each slope” and “advice

on repairability vs replacement.” Gerdts argues that Donan’s motive was to submit

a report that allowed Hartford to deny coverage thus incurring Hartford’s favor and
                                         20

potential future business with Hartford.14 We find little evidence in the record to

support Gerdts’s argument—Donan was not aware of the policy definition and was

not requested to give an opinion on whether the damage found during the inspection

was covered by the Hartford insurance policy. Donan submitted a report to Hartford

that contained a site study with photographs, applied engineering principles

supported by engineering literature to support an “engineering” definition for hail

damage. Gerdts’s cannot prove Donan “intentionally” interfered by using a non-

policy definition when it did not know and was not asked about a policy definition for

hail damage.

   3. The interest of the party with which the conduct interferes.

       Gerdts’s interest is to have Hartford reimburse him pursuant to his insurance

policy for the cost of replacing his roof due to hail damage.

   4. The interest sought to be advanced by the Defendant.

       Donan argues that its interest was to “merely provide[] the services they

were retained to provide by the Hartford.” Gerdts contends, “Here, the Donan

Defendants acted in a manner solely to protect their own financial interests by, in

14 Gerdts asserts in support of this argument, “Mr. LeTellier issued more than 25

reports for one insurer alone over the course of just two years in eight counties in
Iowa.” The partial dissent relies on these documents to support its position. A
review of the record shows the documents were submitted by Gerdts as Appendix
II in support of his resistance to Donan’s summary judgment. The documents in
that appendix were not part of any pleading, answer to interrogatory, response to
a request for admission, deposition or affidavit or exhibit attached to what the court
is allowed to consider in ruling on a motion for summary judgment. See Iowa R.
of Civ. P. 1.981(3). We question whether the reports were properly submitted by
Gerdts so as to be considered in ruling on the summary judgment motion, although
Donan did not challenge their inclusion in the district court proceedings or on
appeal.
                                         21

effect, changing the definitions in a Policy, with the intended result of diminishing

or defeating a policyholder’s hail loss claim, in order to protect or exercise those

interests.” We have already determined above that Donan could not have had an

interest of “changing the definitions in the policy” when they were unaware of the

definition.

   5. The social interests in protecting the freedom of action of the Defendant and
      the contractual interests of the other party.

       Donan is an engineering firm that is in the business of performing engineering

services for clients.

   6. The nearness or remoteness of the Defendant’s conduct to the interference.

       It is Gerdts’s contention that Donan’s conduct of submitting a report re-

writing the definition of hail damage that caused Hartford to continue to deny his

claim. Donan’s conduct is claimed to be a direct cause that would be near and not

remote.

   7. The relations between the parties.

       Donan contends it did not have a direct relationship with Gerdts. Donan

argues that it was retained by Hartford to conduct an inspection and submit a

report. Except for contact during the inspection of the roof, Donan and LeTellier

were not directly engaged with Gerdts. Gerdts claimed that he was a third-party

beneficiary to the agreement between Donan and Hartford for the inspection and

report. The district court decided this claim against Gerdts and, as discussed

below, we agree with the district court that Gerdts was not a third-party beneficiary.

       After analyzing the seven factors in Restatement Torts (Second) section 767

as set out in Green, we are satisfied that Donan’s acts were not for the primary
                                         22

purpose of interfering with the performance of the insurance contract and may be

regarded as such a minor and incidental consequence and so far removed from

Donan’s objective that as against Gerdts we find no genuine issues of fact material

to improper interference.

       We determine that the district court should have granted Donan’s motion for

summary judgment based upon application of the seven factors and that, under that

test, Gerdts failed to establish a genuine issue of material fact that Donan’s conduct

was improper. Donan is entitled to summary judgment as a matter of law. We

therefore affirm the grant of summary judgment, not based upon the district court’s

reasoning, but for the reason arrived at in this opinion.

   C. Breach of contract as a third-party beneficiary

       Finally, Gerdts contends the district court erred in holding Gerdts was not a

third-party beneficiary of the contract between Donan and Hartford and granting

summary judgment on his breach-of-contract claim. To prevail in this claim, Gerdts

had to show the following:

               (1) Unless otherwise agreed between promisor and promisee,
       a beneficiary of a promise is an intended beneficiary if recognition of
       a right to performance in the beneficiary is appropriate to effectuate
       the intention of the parties and either
               (a) the performance of the promise will satisfy an obligation of
       the promisee to pay money to the beneficiary; or
               (b) the circumstances indicate that the promisee intends to
       give the beneficiary the benefit of the promised performance.
               (2) An incidental beneficiary is a beneficiary who is not an
       intended beneficiary.

RPC Liquidation v. Iowa Dep’t of Transp., 717 N.W.2d 317, 319 (Iowa 2006)

(quoting Restatement (Second) of Contracts § 302 (1981)). The district court,

avoiding the direct question, found:
                                          23

       even supposing that Plaintiff is a Third-Party Beneficiary of the
       contract between the Donan Defendants and Hartford, Plaintiff must
       still demonstrate that there is a promise of performance that one of
       the parties to the contract failed to honor. Here, Plaintiff’s Third-Party
       Beneficiary claim relies on the assertion that LeTellier should have
       “found damage to the home, as all objective evidence points.”
       Plaintiff’s claim relies on the indispensable assumption that
       LeTellier’s engineering report was flawed. This is substantially the
       same claim as with Plaintiff’s claim for intentional interference, and
       Plaintiff’s failure to designate an engineering expert to opine about
       the quality of the Donan Defendants’ Report is likewise fatal in this
       regard. The Court dismisses Article II, Count V of Plaintiff’s Petition,
       Breach of Contract, Third Party Beneficiary.

(Citations omitted.) In other words, the district court found that an underlying

assumption of Gerdts’s claim is that he is meant to obtain a benefit from the

contract between Donan and Hartford. Indeed, “[t]he primary question in a third-

party beneficiary case is whether the contract manifests an intent to benefit a third

party.” Id. at 319–20. Gerdts did not produce and we see no evidence of a written

contract between Hartford and Donan other than the “scope of work” assignment

to Donan to “[i]nspect roof for cause of damage. Include test squares on each

slope and advice on reparability vs replacement.”         The instruction to provide

“advice on repairability vs replacement” does not manifest any intent to benefit

Gerdts as a third party. At best, Hartford contracted with Donan for an accurate

report of professional advice on the damage to Gerdts’s roof.             There is no

prescription in the instruction to make any particular finding—either in favor of

Gerdts or Hartford. Again, Gerdts asserts his appearance on the communications

between Hartford and Donan name him and his home as beneficiaries, but he has

not produced sufficient evidence to generate a jury question that he was meant to
                                         24

benefit.   As a matter of law, Gerdts cannot prove that he was an intended

beneficiary, so he cannot prove his breach-of-contract claim.15

   IV. Conclusion

       We affirm the district court’s dismissal of the negligence claim and grant of

summary judgment and dismissal of the third-party-beneficiary claims. We also

affirm the grant of summary judgment and dismissal of the tortious-interference-

with-contract claim for the reason discussed in this opinion and not for the reason

determined by the district court.

       AFFIRMED.

       Badding, J., concurs; Tabor, P.J., partially dissents.

15 The district court again resolved this claim by finding Gerdts would need expert

testimony. We find we can resolve the claim as a matter of law on this alternative
ground urged below.
                                        25

TABOR, Presiding Judge (concurring in part and dissenting in part).
       This case is about common sense.           A severe hailstorm pummeled

Bettendorf in April 2020. Many of Richard Gerdts’s neighbors, including his duplex

neighbor who shared the same roof, received insurance payouts to fix their

damaged shingles.     But not Gerdts.     The Property and Casualty Insurance

Company of Hartford denied his claim because Donan Engineering said he did not

have hail damage. Donan engineer Lance LeTellier gave that opinion without

checking for a definition of hail damage in the insurance policy. In fact, LeTellier

testified that he did not care what the policy said. To avoid summary judgment on

his claim of tortious interference with contract, Gerdts presented evidence that

Donan relied on its restrictive definition of hail damage in numerous reports

commissioned by an insurer deciding whether to deny coverage to Iowa

homeowners. Did that pattern reveal a motive to find no damage—fueled by a

desire to secure future business with insurance companies? Using their common

sense, jurors could say yes. Did Donan intentionally and improperly interfere with

Gerdts’s contract with Hartford? I think a jury should decide. Thus, I respectfully

dissent in part.

       First, a few points of consensus. The majority finds that the district court

erred in resting its summary-judgment ruling on Gerdts’s lack of an expert witness

without analyzing the other factors cited in Green v. Racing Ass’n of Cent.

Iowa, 713 N.W.2d 234, 244 (Iowa 2006). I agree that an expert witness was not

required to prove Donan’s improper conduct. I also agree that we can consider

other grounds raised in the district court and argued on appeal to decide if

summary judgment was proper.          Pitts v. Farm Bureau Life Ins. Co., 818
                                         26

N.W.2d 91, 97 (Iowa 2012). But I disagree with the majority’s assessment of the

evidence of Donan’s motive under the Green factors.

       Like the district court, the majority faults Gerdts for not having an expert to

establish that Donan did not follow “business standards and ethical duties of

engineers.” The majority also rejects Gerdts’s claim that Donan “in effect” rewrote

the insurance policy post-loss by changing the definition of hail damage. In the

majority’s view, nothing devious occurred because Donan was unaware of the

policy definition of loss.

       I disagree that these details prevent Gerdts from showing that Donan

improperly interfered with his insurance contract. A jury could reasonably infer that

Donan’s head-in-the-sand approach to its inspection and report signaled improper

interference. In the summary-judgment proceedings, Donan engineer LeTellier

acknowledged that he did not make an “apple to apple” comparison of the damage

standard in his report to any definition of loss in the insurance policy. When, as

here, an inspector does not bother to find out how the insurance contract defined

loss, it would not take an expert to determine that the engineer was not following

accepted business practices. Cf. Est. of Butterfield by Butterfield v. Chautauqua

Guest Home, Inc., 987 N.W.2d 834, 841 (Iowa 2023) (discussing circumstances in

which expert testimony is not required). “The real question is whether the actor’s

conduct was fair and reasonable under the circumstances.” Toney v. Casey’s

General Stores, Inc., 460 N.W.2d 849, 852 (Iowa 1990) (quoting Restatement

(Second) of Torts § 767 cmt. j). Donan knew it was hired to assess Gerdts’s

insurance claim. Using its own narrow definition of hail damage, Donan reported

to The Hartford that Gerdts’s roof was not damaged. But Donan was blissfully
                                         27

ignorant whether the insurer used the same definition in its contract with Gerdts.

Jurors could use their common sense to decide if such conduct was fair and

reasonable. On this record, Gerdts generated a question of material fact whether

Donan wrongfully interfered with the insurance contract.

       The majority also dismisses Gerdts’s evidence that Donan engineers used

the same definition of hail damage when issuing more than two dozen reports for

one insurer over the course of two years in eight Iowa counties. In the majority’s

view, that evidence did not show an improper motive on Donan’s part. True, those

reports—standing alone—may not prove an improper motive. But they do shed

light on Donan’s interest in securing future business by delivering reports favorable

to the insurance company’s bottom line. See generally Meadows of Bloomfield

Assn. v. State Farm Fire and Cas. Co., No. A22-1775, 2023 WL 5012219, at *1

(Minn. Ct. App. Aug. 7, 2023) (“After receiving Meadows’ storm claim, State Farm

hired Donan Engineering to inspect the damage. Donan Engineering concluded

that hail had damaged the soft metals on the roofs but did not damage the

shingles.”).

       Summary judgment is inappropriate if reasonable minds could disagree

about how issues of fact should be resolved. Pitts, 818 N.W.2d at 106. Unlike the

plaintiffs in Green, Gerdts offered evidence to show Donan’s motive for finding no

hail damage. See 713 N.W.2d 234, 245 (Iowa 2006) (affirming summary judgment

when nonmoving party failed to “identify specific facts that reveal the alleged

underlying motive”). Viewing the summary judgment record in the light most

favorable to Gerdts, I would reverse and remand for a trial on the tortious-

interference claim.
                                      28

      I concur with the majority opinion on the remaining issues. That said, this

case also presents a good opportunity for the supreme court to clarify whether

engineering negligence is exempt from the economic loss rule. See Van Sickle

Const. Co. v. Wachovia Com. Mortg., Inc., 783 N.W.2d 684, 692 n. 5 (Iowa 2010)

(noting “purely economic losses are recoverable in actions asserting claims of

professional negligence against attorneys and accountants”).