Court Opinion

ID: 2749002
Source: CourtListenerOpinion
Date Created: 2014-11-07 15:02:51.585684+00
Date Added: 2024-06-11T10:17:07.612403
License: Public Domain

IN THE SUPREME COURT OF IOWA
                              No. 13–0253

                        Filed November 7, 2014

SHELBY COUNTY COOKERS, L.L.C., an Iowa Limited Liability
Company,

      Appellee,

vs.

UTILITY CONSULTANTS INTERNATIONAL, INC., a Michigan
Corporation,

      Appellant.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Shelby County, James M.

Richardson, Judge.

      A utility bill review consultant seeks further review after the

district court and court of appeals both concluded the consultant’s

short-lived contract with a bacon producer was a contract for services

terminable at will.    COURT OF APPEALS DECISION VACATED;
DISTRICT COURT DECISION REVERSED AND CASE REMANDED.

      M. Brett Ryan of Watson & Ryan, P.L.C., Council Bluffs, for

appellant.

      James G. Powers and April N. Hook of McGrath North Mullin &

Kratz, P.C. L.L.O., Omaha, Nebraska, for appellee.
                                          2

HECHT, Justice.

       Hoping to reduce its expenses, a company contracted with a

consultant whose business is reviewing utility bills and pursuing refunds

of overpayments.         The company terminated the contract after the

consultant reviewed four utility bills and informed the company it was

entitled to a substantial refund for sales tax overpayments.                      The

company sought a declaratory judgment establishing it had no remaining

contractual      obligation    to   the    consultant,     and     the    consultant

counterclaimed for breach of contract. The district court determined the

company’s liability under the contract was limited to services the

consultant provided prior to termination and dismissed the consultant’s

counterclaim on the ground no payment was owed to the consultant

until the company actually receives a refund. The consultant appealed,

and the court of appeals affirmed.                We granted the consultant’s

application for further review.

       I. Background Facts and Proceedings.

       The following facts are supported by substantial evidence in the

summary judgment record. Utility Consultants International, Inc. (UCI)

conducts utility billing reviews for its customers searching for errors or

overpayments that might lead to refunds or other savings. In late July

2011, Shelby County Cookers, LLC (SCC) received an unsolicited phone

call from Jackie Tanguay, a representative of UCI. Troy Schaben, SCC’s

plant controller, took the call.          Tanguay told Schaben about UCI’s

services and offered to perform a utility review for SCC. 1

       1During   this telephone call, Tanguay did not reveal that UCI’s billing reviews
commonly scrutinized customers’ utility bills for sales tax overpayments. She explained
generally to Schaben that UCI could review SCC’s utility bills and search for any
possible errors.
                                         3

       Schaben expressed interest in UCI’s services during the initial

phone conversation with Tanguay, but no contract for services was

formed that day.        Tanguay and Schaben had additional telephone

conversations over the next several days.           Tanguay urged Schaben to

send to UCI copies of SCC’s utility bills covering a period of three

months. Tanguay proposed that UCI would perform a “free preliminary

review” of the bills. Schaben agreed to UCI’s proposal, sending four of

SCC’s utility bills to Tanguay. 2

       In   early   August    2011,    Tanguay     contacted     Schaben      again,

indicating UCI had completed its preliminary review of the four SCC

utility bills. Tanguay informed Schaben that the preliminary review led

UCI to conclude it could obtain “a large refund” for SCC. During this

conversation, Tanguay did not specify the source or anticipated amount

of the potential refund, nor did she explain the process through which a

refund could be pursued.

       On August 9, 2011, Schaben signed UCI’s form contract,

indicating he did so as SCC’s plant controller.           UCI’s president, David

Dawson, signed the contract for UCI.             The contract provides, in its

entirety:

       This   agreement     authorizes   UTILITY       CONSULTANTS
       INTERNATIONAL, INC. to pursue refunds and bill
       reductions, on your behalf, on your utility billings.

       If UTILITY CONSULTANTS INTERNATIONAL, INC. is
       successful in obtaining a refund(s) for your company(ies),
       you[r] fee obligation is 50% of the refund(s). Payable only if
       and when a credit has been applied to your account or a
       check has been issued to you. The future cost reductions,
       as defined by when the utility adjusts your account(s) strictly
       accrue to you.

       2The record does not explain why Schaben actually sent only four bills to UCI,

instead of bills for the previous three months as Tanguay requested.
                                            4
       If you accept our money saving proposal, please sign where
       indicated.

                      Thank you,
                      UTILITY CONSULTANTS INTERNATIONAL, INC.

       After UCI received the signed contract from SCC, Tanguay called

Schaben and requested that SCC transmit copies of its utility bills for the

previous thirty-six months. 3         During this conversation, Tanguay first

disclosed to Schaben the reason for the potential refund: overpayments

of sales taxes detected in SCC’s utility bills. 4 It is undisputed that SCC

did not know it had a claim for a refund of sales tax overpayments until

Tanguay disclosed the information to Schaben after the parties formed

their contract.

       Upon learning UCI’s review had revealed a potential refund claim,

Schaben notified SCC’s secretary and treasurer, Bradley Poppen.

Poppen instructed Schaben not to release more information to UCI until

SCC clarified the scope of UCI’s services. When Tanguay called later to

ask why SCC had not yet sent the additional utility bills she had

requested, Schaben explained that Poppen’s approval of the transaction

was required and that Poppen was now handling the matter. After this

call, Schaben had no further communication with UCI.                      However, he

        3It does not appear from the record that the term of thirty-six months was

discussed before the parties signed the written agreement. However, it appears
Tanguay requested billings for thirty-six months because UCI understood tax refund
claims are time-limited. See Iowa Code § 422.73(1) (2011) (allowing taxpayers three
years to claim refunds).
       4UCI’s   president, David Dawson, explained in his deposition that UCI’s primary
business focus is on sales tax reviews. Dawson further testified it is UCI’s practice not
to tell clients—until after a written contract with UCI is signed—that refunds will likely
be based on sales tax overpayments. According to Dawson, UCI follows this approach
because if potential clients realized the utility bill review would be focused on tax
overpayments, they would not hire UCI, and instead assign the project to their tax
accountants.
                                        5

decided to investigate SCC’s tax payments to determine how much tax

SCC had overpaid on its utility bills.

      On September 2, 2011, Poppen sent an email message to Dawson

requesting specific details about the scope of UCI’s services and a

proposed percentage or hourly rate for those services.                    Dawson

interpreted Poppen’s message as suggesting the parties should form a

new contract. Dawson’s response to Poppen asserted no new contract

was needed because the parties already had a signed agreement for UCI’s

services.

      The parties’ relationship deteriorated.           Poppen presented an

ultimatum to UCI: unless an acceptable agreement could be reached as

to the precise scope of UCI’s proposed work, SCC would terminate the

existing contract.     Dawson responded that the existing contract was

sufficiently detailed and also asserted UCI had already performed when it

“identified erroneous taxes that [SCC was] being charged.” 5                   On

September 20, 2011, Poppen sent a letter to UCI, denying the existence

of a valid contract between the parties 6 and stating alternatively that “to

the extent [the] agreement is valid, it is hereby TERMINATED effective as

of today’s date.”    UCI performed no additional services for SCC after
receiving the notice of termination.        SCC hired an accounting firm to

pursue a refund for sales tax overpayments.

      SCC filed a petition for declaratory judgment requesting the court’s

determination that the parties had no binding agreement and that UCI

      5The  record does not reveal whether UCI disclosed to SCC a projected or
estimated amount of the potential refund before litigation of this case began.
      6Although   SCC initially denied the written agreement was supported by valid
consideration and claimed Schaben was not authorized to sign the written agreement
with UCI, this argument was later abandoned and is not before us on appeal.
                                         6

was not authorized to pursue refunds on SCC’s behalf.                          UCI

counterclaimed, alleging SCC breached the parties’ contract by refusing

to provide UCI with copies of SCC’s utility bills and denying UCI the

opportunity to procure the refunds.

      SCC filed a motion for summary judgment.                The district court

granted the motion, holding the contract was limited in duration to the

period between August 9, 2011, when Schaben signed the contract for

SCC, and September 20, 2011, when Poppen’s letter terminated it. The

district court also determined that although the parties’ signed writing

left the scope of the agreement unspecified, their actions indicated the

only service UCI actually provided was its review of four utility bills.

Thus, the district court ruled UCI was entitled to fifty percent of any

refund SCC receives for overpayment of sales taxes on those four bills.

The court further concluded, however, that UCI is owed nothing under

the contract until the Iowa Department of Revenue actually refunds any

overpayments to SCC. 7

      UCI appealed, and we transferred the case to the court of appeals.

The court of appeals affirmed the district court’s ruling. UCI sought, and

we granted, further review.
      II. Scope of Review.

      Generally our standard of review for declaratory judgment actions

“is determined by the manner in which the action was tried to the district

court.” SDG Macerich Props., L.P. v. Stanek Inc., 648 N.W.2d 581, 584

(Iowa 2002). However, in this case we need not determine whether the

      7When    the motion for summary judgment was filed, SCC’s application for a
refund of more than $250,000 from the state was pending. As SCC had not yet received
a refund, however, the district court concluded UCI’s claim for contract damages was
not yet ripe. Accordingly, the court dismissed UCI’s counterclaim.
                                     7

case was tried at law or in equity, because we are reviewing the district

court’s decision to grant summary judgment. “Thus, we base our review

on the propriety of the district court’s summary judgment ruling, not the

declaratory judgment.” Boelman v. Grinnell Mut. Reins. Co., 826 N.W.2d
494, 500 n.1 (Iowa 2013); see also Ferguson v. Allied Mut. Ins. Co., 512
N.W.2d 296, 297 (Iowa 1994). We review the district court’s summary

judgment ruling for correction of errors at law. Boelman, 826 N.W.2d at

500; SDG Macerich Props., 648 N.W.2d at 584.         Because UCI is the

nonmoving party, we make all reasonable factual inferences in its favor.

Boelman, 826 N.W.2d at 501.

      III. The Parties’ Positions.

      The parties’ main disagreement concerns the effect of SCC’s letter

of September 20, 2011.     SCC insists the letter constituted reasonable

notice that it was terminating a written contract for services which

included no durational term. In contrast, UCI characterizes the letter as

a repudiation of the contract constituting a material breach.

      A. Utility Consultants. UCI maintains that while it only reviewed

four of SCC’s utility bills before repudiation, the information it revealed

to SCC after reviewing those bills constituted performance with value far

exceeding the potential refund expected for sales tax overpayments on

those four bills. Accordingly, UCI asserts the district court committed

legal error in deciding UCI’s expectation interest is limited to damages

based on any refund derived from only the four bills it reviewed before

SCC repudiated the contract. UCI further contends a genuine issue of

material fact on the damage issue precludes summary judgment.

      B. Shelby County Cookers. SCC urges us to affirm the district

court’s judgment and the decision of the court of appeals. As the written

contract for services had no specific duration, SCC contends it was
                                     8

lawfully terminated, not repudiated, by the September 20 letter.        SCC

further contends the scope of the contract was properly limited to any

refunds derived from the four bills UCI actually reviewed. Finally, SCC

asserts the district court correctly concluded UCI had no claim for

damages at the time summary judgment was entered because SCC had

not yet received a tax refund.

      IV. Analysis.

      Our adjudication of the contract’s durational term significantly

affects the merits of the parties’ contentions. Accordingly, we address

that subject first.

      A. Duration of the Contract.          To determine whether SCC’s

September 20 letter constituted evidence of a lawful termination or an

anticipatory repudiation precluding the summary judgment granted by

the district court, we first ask whether “the language within the four

corners of the document” expresses the contract’s duration.          Clinton

Physical Therapy Servs., P.C. v. John Deere Health Care, Inc., 714 N.W.2d
603, 615 (Iowa 2006) (noting contract analysis almost always begins with

the contract’s plain language). In this instance, however, the contract

document does not prescribe a durational term for the parties’

relationship.

      “The law in Iowa is not well developed regarding the duration of

contracts where the parties fail to specify a duration.”           Keppy v.

Lilienthal, 524 N.W.2d 436, 439 (Iowa Ct. App. 1994). SCC relies heavily

on language from Hess v. Iowa Light, Heat & Power Co., 207 Iowa 820,

221 N.W. 194 (1928) (per curiam), in asserting the contract with UCI was

indefinite and SCC’s termination was proper under the circumstances

presented here. In Hess we stated, “where no time limitation is inserted

in a contract for the performance of services, . . . the contract is regarded
                                     9

as terminable by either party on reasonable notice.” Hess, 207 Iowa at

826, 221 N.W. at 196–97. However, SCC’s reliance on Hess is misplaced.

      In Hess, the plaintiff sued on a contract entitling him to receive

free heat and electricity “in consideration of [his] services as director of

the Carroll Light & Heat Company . . . .” Id. at 822, 221 N.W. at 195

(emphasis omitted). Carroll Light subsequently went out of business and

the Iowa Light, Heat & Power Company succeeded it. Id. The successor

company sent a letter to Hess, notifying him that he would no longer

receive free utilities because he was no longer serving as a director of

Carroll Light. Id. Hess maintained he was entitled to continue receiving

free electricity and heat indefinitely and sued to enjoin Iowa Light from

discontinuing the arrangement. Id. at 823, 221 N.W. at 195–96. The

district court dismissed the action, and we affirmed on the ground that

Iowa Light owed Hess no obligation under his contract with Carroll Light.

Id. at 825, 221 N.W. at 196. We reasoned further that, because Hess no

longer served as a corporate director of Carroll Light, he had no

continuing entitlement for free utilities under the express terms of the

contract. Id. Put another way, our decision in Hess was firmly based on

our interpretation of an express contract term. It is therefore clearly not

dispositive in this case, which turns on a term not expressed in the

parties’ written contract.

      SCC points to the above-quoted language in our Hess opinion

suggesting that even if the contract had conferred upon Hess an

entitlement with no express time limitation, Iowa Light could have

terminated the contract for services at will upon reasonable notice. See

id. at 826, 221 N.W. at 196–97. That language is clearly dicta, however,

and does not control our decision in this case.
                                    10

      Because Hess is not controlling, we look to other courts’ decisions

for guidance and find a commonly expressed framework applied in cases

addressing contracts omitting a durational term. A California court has

described the framework in this way:

      The court first seeks an express term. If one is absent, the
      court determines whether one can be implied from the
      nature and circumstances of the contract. If neither an
      express nor an implied term can be found, the court will
      generally construe the contract as terminable at will.

Zee Med. Distrib. Ass’n, Inc. v. Zee Med., Inc., 94 Cal. Rptr. 2d 829, 835

(Ct. App. 2000); see also Consol. Theatres, Inc. v. Theatrical Stage Emps.

Union, Local 16, 447 P.2d 325, 333 (Cal. 1968). Other courts utilize a

similar framework.    See, e.g., Loftness Specialized Farm Equip., Inc. v.

Twiestmeyer, 742 F.3d 845, 853 (8th Cir. 2014) (applying Minnesota law

and noting termination of an indefinite contract is allowed upon

reasonable notice, but only if the contract has neither an express

durational term nor a term that can be implied); S. Bell Tel. & Tel. Co. v.
Fla. E. Coast Ry., 399 F.2d 854, 858 (5th Cir. 1968) (“[A] contract in

which the parties express no period for its duration and no definite time

can be implied . . . can be terminated at will by either party . . . .”

(emphasis added)); Haines v. City of New York, 364 N.E.2d 820, 822 (N.Y.

1977) (“It is generally agreed that where a duration may be fairly and

reasonably supplied by implication, a contract is not terminable at will.”).

      Finding no express durational term in the contract between SCC

and UCI, we next inquire whether the omitted term can be implied from

the nature and circumstances of the contract. To aid us in this inquiry,

we look to the Restatement (Second) of Contracts section 204.          This

section provides that when contracting parties “have not agreed with

respect to a term which is essential to a determination of their rights and
                                    11

duties, a term which is reasonable in the circumstances is supplied by

the court.” Restatement (Second) of Contracts § 204, at 96–97 (1981);

see also Nat’l Util. Serv., Inc. v. Cambridge-Lee Indus., Inc., 199 F. App’x

139, 144 (3d Cir. 2006) (“A contract whose obligations are of indefinite

duration should be interpreted to require performance for a reasonable

period of time.”); Haines, 364 N.E.2d at 822 (“[W]here the parties have

not clearly expressed the duration of a contract, the courts will imply

that they intended performance to continue for a reasonable time.”).

      The durational term of the contract between UCI and SCC is

essential in adjudicating whether UCI has a viable claim for breach of

contract. As the durational term of the asserted contract is essential, it

is a term properly within the purview of section 204. Although we have

not previously applied section 204 in this precise context, we relied on it

when parties to a loan commitment agreement did not expressly state

their obligations in the event the borrower defaulted on its payments to a

third party. Taylor Enter., Inc. v. Clarinda Prod. Credit Ass’n, 447 N.W.2d
113, 116 (Iowa 1989). We have also endorsed the Restatement (Second)’s

approach in many other contract contexts. See, e.g., Rucker v. Taylor,

828 N.W.2d 595, 602 (Iowa 2013); Pavone v. Kirke, 807 N.W.2d 828, 833

(Iowa 2011); Lewis Elec. Co. v. Miller, 791 N.W.2d 691, 695 (Iowa 2010).

We find the approach instructive in reaching our decision in this case.

      Section 204 provides a framework for adjudicating contract

disputes that cannot be resolved by interpreting express contract terms.

Restatement (Second) of Contracts § 204 cmt. c, at 97 (“[S]upplying . . .

an omitted term is not within the definition of interpretation.”); see also

Richard E. Speidel, Restatement Second: Omitted Terms and Contract

Method, 67 Cornell L. Rev. 785, 798 (1982) [hereinafter Speidel]

(“[S]ection 204 is inapplicable until . . . the process of contract
                                    12

interpretation is completed.”). In supplying a reasonable durational term

not expressed by the parties, we consider several factors.            Most

important are the parties’ intent and the contract’s main purpose. See

Koenigs v. Mitchell Cnty. Bd. of Supervisors, 659 N.W.2d 589, 594–95

(Iowa 2003) (determining the duration of maintenance obligations

contained in an express easement); Keppy, 524 N.W.2d at 439

(considering that one party “entered the agreement in order to revitalize

their [swine] herd and earn money”). “[T]he probability that a particular

term would have been used if the question had been raised” also bears

upon reasonableness. Restatement (Second) of Contracts § 204 cmt. d,

at 98. This probability inquiry is a factor, but is not dispositive. The

court’s ultimate goal is reasonableness—not just an approximation of a

term the particular parties might hypothetically have negotiated. See id.;

Speidel, 67 Cornell L. Rev. at 803. A term is reasonable in this context

when it “comports with community standards of fairness and policy.”

Restatement (Second) of Contracts § 204 cmt. d, at 98.         We deem a

contract for services terminable at will only if we cannot ascertain a

durational term by considering these factors.

      The circumstances surrounding the contract between SCC and

UCI reveal the parties’ common purpose. UCI does not volunteer detailed

information about its services unless the client demands it before signing

a written contract because UCI recognizes the information it provides is

valuable and worthy of protection.       Thus, UCI enters contracts with

clients before revealing the specific source and amount of their potential

refunds. Because its compensation under the standard contract is based

on a percentage of the refund its clients receive, UCI’s goal is to maximize

the size of clients’ refunds. Although SCC did not know the amount of

its potential refund or how many bills UCI would need to examine to
                                    13

maximize the potential refund recovery, its primary purpose for

contracting was also to recover the largest possible refund.

      Having identified the parties’ common purpose of achieving as

large a refund for SCC as possible, we consider the duration of the

agreement the parties would have deemed reasonable had the question

been raised. It seems indisputable that both parties likely would have

characterized their agreement as extending for the period of time

necessary to complete a review of SCC’s bills and obtain the largest

possible refund from the appropriate authority. See Keppy, 524 N.W.2d

at 439 (discussing the district court’s finding that an oral contract with

no express duration was “intended . . . to be in effect until [the] herd [of

pigs] could be revitalized and the parties could make a profit”). As we

have noted, the maximum refund is dictated by the three-year limitation

period for tax refunds.

      We next consider whether supplying a reasonable durational term

under the circumstances presented here comports with our state’s

“standards of fairness and policy.” Restatement (Second) of Contracts

§ 204 cmt. d, at 98. Iowa law affirms the proposition that information

can be valuable and attests the principle that valuable information

deserves protection. See Comes v. Microsoft Corp., 775 N.W.2d 302, 311

(Iowa 2009) (discussing a protective order intended “to protect valuable

business information . . . from disclosure,” and concluding that a

modified protective order would still keep valuable information shielded);

cf. Iowa Code § 550.2(4) (2013) (defining “trade secret” as information

that, in part, has actual or potential economic value).        Therefore, we

conclude supplying a durational term that protects the value of UCI’s

information is consistent with standards of fairness and this state’s

policy.
                                     14

      Other utility review cases disclose some disagreement about

whether consultants performing services similar to UCI’s provided

valuable information to their clients.    Compare Nat’l Util. Serv., Inc. v.

Callahan Mining Corp., 799 F. Supp. 1004, 1006 (N.D. Cal. 1990)

(suggesting the client may have intended “to stiff” the consultant by

using the provided information and not paying for it, and refusing to

permit “such shenanigans”), with Wis-Pak, Inc. v. Nat’l Util. Serv., Inc., 65

F. App’x 84, 92–93 (7th Cir. 2003) (refusing to compensate the

consultant for providing a recommendation when the client discovered its

utility overcharges through entirely independent means). However, when

viewed in the light most favorable to UCI, we conclude the summary

judgment record includes evidence from which a reasonable fact finder

could find both parties believed the information UCI supplied was

valuable.

      SCC did not know it was overpaying sales tax before UCI revealed

that fact.    Armed with new knowledge, SCC undertook its own

investigation to determine how large the potential refund might be.

Then, after sending the September 20 letter terminating the contract

with UCI, SCC hired an accounting firm to pursue a refund. The new

and valuable information UCI supplied was essential to this sequence of

events leading to SCC filing a refund claim. See Terrell v. Star Coal Co.,

327 N.W.2d 771, 774 (Iowa Ct. App. 1982) (finding that a contract to

reveal possible mining locations “conveyed new, valuable knowledge . . .

for which plaintiff should be compensated,” because Star Coal had no

idea there were coal deposits “in their own ‘backyard’ ”); see also Nat’l

Util. Serv., Inc. v. Blue Circle, Inc., 793 F. Supp. 52, 55 (N.D.N.Y. 1992)

(“No consideration had been given by [Blue Circle] to the use of

interruptible power prior to . . . plaintiff’s recommendation. Plaintiff is
                                       15

thus entitled to receive the benefits of its recommendation.”); cf. Masline

v. N.Y., N.H. & H. R.R., 112 A. 639, 640 (Conn. 1921) (“[I]mparting

[valuable] information in a situation like this must involve an active

process resulting in arousing or suggesting ideas or notions not before

existent in the mind of the recipient.”); Soule v. Bon Ami Co., 195 N.Y.S.
574, 575 (App. Div. 1922) (denying recovery to a plaintiff claiming he

provided valuable information, because his idea to increase profits by

increasing prices “was not new, it was not original,” and was simply

“call[ing] attention to a fact already known”).

      SCC acted on the valuable information it obtained from UCI, and

the summary judgment record suggests it could derive value from the

contract far beyond the four bills UCI reviewed. See Nat’l Util. Serv., Inc.

v. Hop-In Food Stores, Inc., No. 92–74460, 1993 WL 839797, at *4 (E.D.

Mich. Nov. 10, 1993) (“By its very actions, Michigan Hop-In . . . took

advantage of the information supplied by NUS pursuant to the

agreement.”); Nat’l Util. Serv., Inc. v. J.R. Sexton, Inc., No. N–88–324(JAC),

1989 WL 343048, at *2–3 (D. Conn. Nov. 3, 1989) (awarding summary

judgment    to   the   consultant      after   the   client   implemented   a

recommendation the consultant made, but never “forward[ed] its utility

bills . . . or ma[d]e payments of any kind”); see also Apfel v. Prudential-

Bache Sec. Inc., 616 N.E.2d 1095, 1097 (N.Y. 1993) (“[Prudential]

received something of value here; its own conduct establishes that.”).

Because the value SCC derived from the contract could far exceed a

refund derived from overpayments on the four utility bills UCI reviewed,

it is reasonable that the term of the contract should not be limited to the

short period covered by those bills.

      SCC protests that UCI’s employee, Tanguay, never uttered the

word “tax” until after the contract was signed.          Although the record
                                    16

supports a finding Schaben expected UCI’s review to focus on amounts

paid for utility services—not on tax overpayments—the contracting

parties’ fundamental objectives were clear: SCC wished to obtain refunds

of money it paid to a utility company, and UCI wanted compensation

from SCC for producing refunds.        The source of, or reason for, any

refunds obtained as a result of the contract was inconsequential to

achieving these objectives.   “When the parties’ intent is ascertained, a

reviewing court may not b[y] judicial construction create a new contract

based on one party’s unilateral understanding of the terms.” Terrell, 327
N.W.2d at 774; see also Peak v. Adams, 799 N.W.2d 535, 544 (Iowa

2011) (refusing to credit one party’s “unilateral intent” regarding a

contract); Waechter v. Aluminum Co. of Am., 454 N.W.2d 565, 568 (Iowa

1990) (noting we evaluate contracts according to the parties’ objective

intent, not any “undisclosed intention they may have had in mind, or

which occurred to them later”).

      Applying the relevant factors identified in Restatement (Second) of

Contracts section 204, we conclude a reasonable durational term under

the circumstances in this case is determined by the limitation period

prescribing the maximum possible tax refund. Stated another way, the

contract permitted UCI to review SCC’s utility bills and seek a tax refund

on as many of SCC’s utility bills as the law allows. Because tax refund

claims are limited to three years, see Iowa Code § 422.73(1), UCI’s

expectation interest is limited to compensation at the contract rate on

refunds received for that duration.       This term prevents SCC from

“eva[ding] . . . the spirit of the bargain.”   See Restatement (Second) of

Contracts § 205 & cmt. d (noting the duty of good faith inherent in every

contract and suggesting that evading the spirit of the bargain might

violate that duty). Most importantly, the durational term based on the
                                         17

three-year limitation period will allow UCI to claim the value of the

information it conferred upon SCC.              This durational term will also

effectuate both contracting parties’ fundamental purposes. 8

       B. Remaining Issues.

       1. UCI’s counterclaim. The determination of whether a party has

breached a contract is ordinarily for the fact finder. Kern v. Palmer Coll.

of Chiropractic, 757 N.W.2d 651, 658 (Iowa 2008); Iowa-Ill. Gas & Elec.

Co. v. Black & Veatch, 497 N.W.2d 821, 825 (Iowa 1993). As we have

determined a reasonable durational term for the contract that was not

found by the district court, we conclude the district court erred in

granting summary judgment in favor of SCC. On remand, the district

court shall determine whether SCC’s September 20 letter constituted a

repudiation amounting to an anticipatory breach of the contract

supporting a judgment in favor of UCI on its counterclaim. See Lane v.

Crescent Beach Lodge & Resort, Inc., 199 N.W.2d 78, 82 (Iowa 1972)

(stating “[a]nticipatory breach requires a definite and unequivocal

repudiation of the contract” indicating the intent to refuse future

performance); see also Restatement (Second) of Contracts §§ 250, 253, at

272, 286.

       2. Damages.       If the fact finder determines on remand that SCC

breached the contract, the damages, if any, resulting from the breach

       8However,   we acknowledge the seeming dissonance between our holding in this
case and one of the time-honored principles aiding our interpretation of contracts. We
typically resolve contract ambiguities or deficiencies against the drafter. Peak, 799
N.W.2d at 548; Vill. Supply Co. v. Iowa Fund, Inc., 312 N.W.2d 551, 555 (Iowa 1981).
Although the reasonable durational term we supply is—under the peculiar
circumstances of this case—advocated by and beneficial to the drafter, UCI, contracting
parties are urged to reach an express agreement on the important terms of their
bargains. It of course goes without saying that express agreements produce more
predictable results than implied terms supplied by courts.
                                      18

shall also be found. See Midland Mut. Life Ins. Co. v. Mercy Clinics, Inc.,

579 N.W.2d 823, 831 (Iowa 1998) (noting the measure of damages for a

breach of contract should place the nonbreaching party “in as good a

position   as   [they] would   have   occupied   had   the   contract   been

performed”); Restatement (Second) of Contracts § 344(a), at 102.

      V. Conclusion.

      The district court erred in granting SCC’s motion for summary

judgment. Accordingly, we vacate the court of appeals decision, reverse

the district court’s order granting summary judgment, and remand the

case for further proceedings consistent with this opinion.

      COURT OF APPEALS DECISION VACATED; DISTRICT COURT

DECISION REVERSED AND CASE REMANDED.