Wayne J. Tetzlaff, Barbara A. Tetzlaff And Briana A. Tetzlaff Vs. Timothy Camp And Glenna Camp, Al Pangborn And Rachael Pangborn ( 2006 )


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  •                  IN THE SUPREME COURT OF IOWA
    No. 63 / 04-1499
    Filed June 2, 2006
    WAYNE J. TETZLAFF, BARBARA A.
    TETZLAFF and BRIANA A. TETZLAFF,
    Appellants,
    vs.
    TIMOTHY CAMP and GLENNA CAMP,
    Defendants,
    AL PANGBORN and RACHAEL PANGBORN,
    Appellees.
    ________________________________________________________________________
    Appeal from the Iowa District Court for Polk County, Glenn Pille,
    Judge.
    Appellants contend on interlocutory appeal that district court’s
    summary judgment decision finding lessors not liable for the nuisance
    activities of their tenants was in error. REVERSED AND REMANDED.
    Brenda L. Myers-Maas, West Des Moines, for appellants.
    Eldon L. McAfee of Beving, Swanson & Forrest, P.C., Des Moines,
    for appellees.
    Paul Swinton of Morain, Burlingame & Pugh, P.L.C., West
    Des Moines, and Christina L. Gruenhagen, West Des Moines, for amici
    curiae.
    2
    STREIT, Justice.
    With ownership of property comes responsibility.         The plaintiffs,
    Wayne, Barbara, and Briana Tetzlaff (Tetzlaffs), rural homeowners,
    appeal from a summary judgment entered in favor of co-defendants Al
    and Rachael Pangborn (Pangborns), owners of adjacent property, on their
    nuisance claim. Tetzlaffs contend the district court erred in ruling as a
    matter of law that Pangborns could not be found liable for the other co-
    defendants’, Tim and Glenna Camp (Camps), decision to spread manure
    on the Pangborn property. Because we find a landlord may be liable if he
    or she renews a lease with notice that the tenant’s prior use resulted in a
    nuisance, we reverse the decision of the district court.
    I. Facts and Prior Proceedings
    The three parties to this litigation are neighbors. Camps operate a
    three-hundred head hog finishing facility on land they own across the
    road from Tetzlaffs’ acreage. Pangborns live on an acreage to the south
    of Tetzlaffs. Approximately ten acres of farmland (hereinafter the “south
    field”) separates the Tetzlaff and Pangborn residences.            In 1999,
    Pangborns bought approximately sixty-seven acres of farmland directly
    north of Tetzlaffs’ acreage (hereinafter the “north field”).
    Camps hay the south field and plant row crops on the north field.
    There is no written tenancy agreement between Pangborns and Camps.
    Instead, there is a verbal, yet nearly unspoken “gentlemen’s agreement.”
    On a year-to-year basis, Camps farm the property and pay 50% of the
    cash proceeds from the harvested crops to Pangborns.              Pangborns
    maintain grass paths around the north and south fields. They also drive
    their ATVs and snowmobiles over the grass paths, maintain deer stands
    in the north field, and hunt and allow others to hunt in the north field.
    3
    Camps      routinely     apply manure from their hog finishing
    facility on Pangborns’ north and south fields and, at Pangborns’ request,
    spread manure on Pangborns’ personal garden.         The hog manure is
    surface spread 90 feet from the south side of Tetzlaffs’ home and 160 feet
    from the north side.
    In October of 1999, a month before Pangborns purchased the
    north field, Tetzlaffs complained to Pangborns about Camps’ manure
    spreading procedures on the south field.      Despite these complaints,
    Pangborns purchased the north field and allowed Camp to spread
    manure there also.     After Tetzlaffs’ numerous complaints fell on deaf
    ears, they filed an action in 2003 against both Pangborns and Camps
    alleging negligence, nuisance, and nuisance under Iowa Code chapter
    657 (2003).
    Pangborns filed a motion for summary judgment contending they
    were not liable because they merely had a farm lease with Camps, the
    party controlling the nuisance activity. Tetzlaffs resisted the motion by
    arguing there was no lease, and even if there was a lease, Pangborns
    were still liable for allowing Camps to spread manure on the land. The
    district court concluded the “essential factual issue” determining
    Pangborns’ liability was whether Pangborns substantially controlled or
    participated in the nuisance activity, “regardless of whether the case is
    analyzed through a landlord tenant-theory or independent contractor
    theory.” The court concluded Pangborns did not substantially control or
    participate in the nuisance activity and therefore granted Pangborns’
    motion for summary judgment.
    On interlocutory appeal, Tetzlaffs argue the district court erred in
    summarily dismissing Pangborns from the case.
    4
    II. Scope of Review
    Summary judgment is appropriate if there is no genuine issue of
    material fact and the moving party is entitled to judgment as a matter of
    law. Keokuk Junction Ry. v. IES Indus., Inc., 
    618 N.W.2d 352
    , 355 (Iowa
    2000).     We view the evidence in the light most favorable to the non-
    moving party. 
    Id.
     Every legitimate inference reasonably deduced from
    the evidence should be afforded the resisting party. Farm Bureau Mut.
    Ins. Co. v. Milne, 
    424 N.W.2d 422
    , 423 (Iowa 1988).                  Our review of a
    summary judgment ruling is for correction of errors of law.                     Keokuk
    Junction Ry., 
    618 N.W.2d at 355
    .
    This decision is limited to the question of whether the district
    court’s decision to grant Pangborns’ summary judgment motion was
    appropriate. Whether the manure spreading activities were or were not a
    nuisance is not an issue before this court.
    III. Error Preservation
    As discussed below, we conclude the district court committed error
    when it concluded “[s]ubstantial control or participation is the essential
    factual issue that determines liability for the Pangborns in this dispute.”
    However, before we proceed we must first address Pangborns’ argument
    that Tetzlaffs failed to preserve a key issue for this appeal.
    Pangborns contend the district court did not address whether a
    landlord can be liable for a nuisance caused by a tenant in possession.
    More importantly, Pangborns argue Tetzlaffs did not preserve this issue
    for our review because they never filed a 1.904 motion 1 asking the court
    to enlarge its findings. See Meier v. Senecaut III, 
    641 N.W.2d 532
    , 537
    1
    A rule 1.904 motion is the proper method to ask the district court to enlarge or
    amend its findings of fact and conclusions of law when the district court failed to
    resolve an issue, claim, or other legal theory properly submitted for adjudication. Boyle
    v. Alum-Line, Inc., 
    710 N.W.2d 741
    , 751 n.4 (Iowa 2006).
    5
    (Iowa 2002) (“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.”); Iowa R. Civ. P. 1.904(2).
    Because this argument was both raised and ruled upon by the district
    court, we find the issue was preserved for our review.
    The motion for summary judgment focused on several issues. The
    dominant issue was whether a farm tenancy existed between Pangborns
    and Camps. Another issue was whether Pangborns were liable, even if
    there was a farm tenancy.      Pangborns argued that Camps, as farm
    tenants in possession, were responsible for the farm ground and
    therefore Pangborns owed no duty of care to Tetzlaffs.             In their
    memorandum of authorities supporting the motion for summary
    judgment, Pangborns stated:
    In order to prevail under a nuisance theory, [Tetzlaffs]
    must establish that Pangborns would be liable if they carried
    on the alleged nuisance causing activity themselves, and at
    the time of the leasing, that the Pangborns consented to the
    activity and knew that the activity would necessarily result
    in a nuisance. See Restatement (Second) of Torts § 837. . . .
    The Pangborns could not have known or anticipated that an
    activity such as fertilizer application on agricultural property
    in a rural Iowa county would, at some point in the future,
    necessarily result in a nuisance to neighbors living on an
    adjacent acreage that, at the time of leasing, did not yet
    exist. The law does not require a lessor to exhibit this degree
    of foresight. Therefore, [Tetzlaffs’] claim of nuisance against
    defendant Pangborns is void as a matter of law and should
    be dismissed.
    While Tetzlaffs themselves did not specifically cite Restatement section
    837 in their resistance to the summary judgment motion, they clearly
    addressed the issue of Pangborns’ reliance on the Restatement in their
    memorandum of authorities:
    Iowa Courts have also found owners of land who allow others
    to create or maintain nuisance conditions on the owner’s
    6
    land liable for the nuisance. Percival v. Yousling, 
    120 Iowa 451
    , 
    94 N.W. 913
     (1903) (owner of land who allowed others
    to dump manure and other refuse on land liable for
    nuisance). . . . The court must go one step further and
    determine whether, even if there is a landlord-tenant
    relationship between [Pangborns and Camps], the Pangborns
    are liable for nuisance or negligence because of their
    involvement in creating and/or maintaining the nuisance
    complained of.
    The court devoted the bulk of its decision to discussing whether
    Pangborns substantially controlled or participated in the nuisance
    activity.   The court found Pangborns were not liable “regardless of
    whether the case is analyzed through a landlord tenant-theory or
    independent contractor theory” because Pangborns did not substantially
    control or participate in the manure spreading. A landlord’s liability for
    the nuisance causing activities of his or her tenants was clearly argued
    to the court, and the court ruled upon this issue by concluding it was
    not an avenue for liability.
    Tetzlaffs did not need to file a rule 1.904 motion to preserve this
    issue for appeal. When a district court does not rule on an issue properly
    raised, a party must file a motion requesting a ruling in order to preserve
    error for appeal. Meier, 
    641 N.W.2d at 539
    ; Benavides v. J.C. Penney Life
    Ins. Co., 
    539 N.W.2d 352
    , 356 (Iowa 1995). We require such a motion
    because it is “in the best interests of the public, and especially the
    litigants” to give the court an opportunity to address an issue it may
    have missed.    Estate of Grossman v. McCreary, 
    373 N.W.2d 113
    , 114
    (Iowa 1985). Also, an “overlooked issue, called to the trial court’s
    attention, might be resolved so as to avoid an appeal” or “a ruling on [the
    overlooked issue] might avert a second trial and possible appeal.” 
    Id.
     In
    this case, the court summarily resolved the issue—Pangborns were not
    liable under a landlord/tenant theory.    Tetzlaffs correctly concluded it
    7
    was not necessary to belabor the point with a rule 1.904 motion
    asking the court to reconsider its decision on the issue.
    IV. Merits
    Property law regards a lease as equivalent to a sale of the premises
    for the term of the lease, making the tenant both owner and occupier
    during the lease.   Harms v. City of Sibley, 
    702 N.W.2d 91
    , 103 (Iowa
    2005); accord Restatement (Second) of Torts § 356 cmt. a, at 240 (1965)
    (“When land is leased to a tenant, the law of property regards the lease
    as equivalent to a sale of the land for the term of the lease. The lessee
    acquires an estate in the land, and becomes for the time being the owner
    and occupier, subject to all of the liabilities of one in possession, both to
    those who enter the land and to those outside of it.”); see also Van Essen
    v. McCormick Enters. Co., 
    599 N.W.2d 716
    , 721 n.5 (Iowa 1999) (quoting
    in part Restatement (Second) of Torts § 356 cmt. a, at 240 (1965)).
    Because the tenant has exclusive possession of the property, and the
    right of entry of the landlord is suspended during the term of the lease,
    the landlord’s responsibility for removing objectionable conditions is
    likewise suspended.      Harms, 
    702 N.W.2d at 103
    .           Therefore, the
    landowner is generally not responsible for the tenant’s acts in creating or
    maintaining a nuisance upon the leasehold once the landlord transfers
    possession to the tenant. 
    Id.
    Recently, we discussed one important exception to this general
    rule. In Harms v. Sibley, we were presented with a landowner who found
    himself on the wrong end of a nuisance action against his tenants. 
    Id. at 96
    . The landowner, Sandbulte, leased property to Joe’s Ready Mix, Inc.
    
    Id. at 104
    . Joe’s Ready Mix constructed and operated a ready mix plant
    on the property. 
    Id.
     A neighboring landowner sued both Joe’s Ready Mix
    and Sandbulte for nuisance.        
    Id. at 94
    .    The district court found
    8
    Sandbulte liable for the nuisance. 
    Id. at 95
    .        On appeal, Sandbulte
    argued he was not personally liable because he “merely leased the
    property to Joe’s Ready Mix and had minimal personal involvement.” 
    Id. at 103
    .    Rather than analyzing whether Sandbulte was liable for
    participating, to a substantial extent, in carrying on the nuisance
    activity, we applied section 837 of the Restatement Second of Torts and
    affirmed the district court judgment.     See 
    id.
     at 103-04 (citing other
    jurisdictions applying same). Section 837 provides:
    (1) A lessor of land is subject to liability for a nuisance
    caused by an activity carried on upon the land while the
    lease continues and the lessor continues as owner, if the
    lessor would be liable if he had carried on the activity
    himself, and
    (a) at the time of the lease the lessor consents to the
    activity or knows or has reason to know that it will be
    carried on, and
    (b) he then knows or should know that it will
    necessarily involve or is already causing the nuisance.
    (2) A vendor of land is not liable for a nuisance caused solely
    by an activity carried on upon the land after he has
    transferred it.
    See also 58 Am. Jur. 2d Nuisances § 120, at 647 (2002) (“Under the
    Restatement Second of Torts, a lessor’s liability is generally based on his
    or her consent to or knowledge of the nuisance.”).
    We found the following facts constituted “substantial evidence” to
    support all of the elements of section 837. Harms, 
    702 N.W.2d at 104
    .
    First, at the time Sandbulte leased the property to Joe’s Ready Mix,
    Sandbulte knew that Joe’s Ready Mix planned to operate a ready mix
    plant on the property and knew the types of activities that would be
    performed within the plant.     
    Id.
       Also, Sandbulte was aware of the
    plaintiff’s protests about the proposed conditions before the plant was
    9
    even constructed. 
    Id.
     And finally, Sandbulte was, at some point, the
    president of Joe’s Ready Mix and oversaw all operation of the plant. 
    Id.
    Section 837 does not require that the lessor work, or participate in the
    nuisance activity, but Sandbulte’s role as president illustrates he knew
    the lessee’s activities and understood the externalities that flowed
    therefrom.
    The facts of the present case, viewed most favorably for the
    Tetzlaffs, similarly demonstrate Pangborns, as lessors, may be liable for
    the alleged nuisance caused by their tenants.
    The first element of section 837(1)—“the lessor would be liable if he
    had carried on the activity himself”—is not in dispute. Pangborns would
    be liable if they had caused a nuisance by personally spreading manure
    on the north and south fields. See Michael v. Michael, 
    461 N.W.2d 334
    (Iowa 1990) (holding that spreading hog manure near neighboring
    residents can be a nuisance for which injunctive relief may be awarded);
    Valasek v. Baer, 
    401 N.W.2d 33
     (Iowa 1987) (holding same). Likewise, if
    Pangborns had allowed others, without a lease, to spread manure on
    their property, they would also have potential liability. See Percival, 120
    Iowa at 455, 94 N.W. at 914-15 (holding owner of land liable for nuisance
    for allowing others to dump horse manure in a ravine on his property).
    The second element of section 837(1)—“at the time of the lease the
    lessor consents to the activity or knows or has reason to know that it will
    be carried on”—is also satisfied by Al Pangborn’s statement that he
    assumed Camps would spread manure on the north field, just as they
    had done on the south field.
    Pangborns vigorously dispute whether the record satisfies the third
    element of section 837(1)—that Pangborns knew or should have known
    that Camps’ activities would necessarily involve a nuisance or was
    10
    already    causing     the    nuisance.        Pangborns contend they could not
    have known or anticipated that manure spreading on agricultural
    property in a rural area would, at some point in the future, necessarily
    result in a nuisance. They contend the law should not require a lessor to
    exhibit this degree of foresight.         This argument ignores the stage of
    proceedings and the facts of this case.
    Tetzlaffs complained to Pangborns about Camps’ surface spreading
    of manure on the south field and Pangborns’ personal garden before
    Pangborns even purchased the north field.                 Common sense would
    indicate that more of the same activity, in an area adjacent to Tetzlaffs’
    property, would exacerbate Tetzlaffs’ complaints.              Beyond this initial
    complaint, Tetzlaffs also complained to Camps, the Madison County
    Sheriff, and the Department of Natural Resources 2 about the manure
    spreading activities after the “gentlemen’s agreement” was formed, but
    before at least one of its subsequent renewals. 3 Pangborns were alerted
    to the continuing complaints in early 2000 when a third party spoke
    individually with Rachael Pangborn about Tetzlaffs’ complaints. In 2002,
    the Madison County Sheriff spoke with Al Pangborn about Tetzlaffs’
    complaints. In his notes regarding the conversation, the sheriff indicated
    Al Pangborn agreed the manure spreading was probably very offensive to
    the Tetzlaff family.       Tetzlaffs’ complaints to Pangborns, along with
    2The    Department of Natural Resources’ conclusions that Camps’ manure
    spreading procedures were not in violation of existing regulations does not terminate
    Tetzlaffs’ nuisance complaint. A business operated within government guidelines may
    still, under some circumstances and in some locations, constitute a private nuisance.
    See, e.g., Kriener v. Turkey Valley Comm. Sch. Dist., 
    212 N.W.2d 526
    , 535 (Iowa 1973);
    Patz v. Farmegg Prods., Inc., 
    196 N.W.2d 557
    , 561 (Iowa 1972).
    3Although the exact date of the “gentleman’s agreement” was not known, it was
    formed at some point between the fall of 1999 and March 1, 2000. The agreement
    would have therefore been renewed on approximately March 1, 2001, March 1, 2002,
    and March 1, 2003. This action was filed in early April, 2003.
    11
    Pangborns’ discussions with the                sheriff   about     such     complaints,
    create a permissible inference that Pangborns knew the manure
    spreading was interfering with Tetzlaffs’ property rights.                   Pangborns’
    subjective conclusion that Tetzlaffs’ complaint had no merit does not
    mean he did not know of at least the potential for a nuisance action.
    Comment g to section 837 also supports this conclusion.                           It
    provides:
    If at the time that the lessor renews the lease he knows that
    activities are being carried on or that physical conditions
    have been created upon the leased land that are causing an
    unreasonable interference with the use and enjoyment of
    another’s land, he is liable for the continuance of the
    interference after the renewal.
    Restatement (Second) of Torts § 837 cmt. g, at 153-54 (1979). As noted
    above, it is beyond dispute Pangborns were on notice that the manure
    spreading activity was “already causing [a] nuisance” when they renewed
    their lease with Camps. See Restatement (Second) of Torts § 837(1)(b) (“A
    lessor of land is subject to liability for a nuisance caused by an activity
    carried on upon the land while the lease continues and the lessor
    continues as owner, if . . . . [the lessor] knows or should know that [the
    activity] will necessarily involve or is already causing the nuisance.”).
    Therefore, it is clear that, under section 837, Pangborns may be liable for
    the manure spreading activities of their tenants. 4
    4While   there are no Iowa cases with facts similar to this case, at least one other
    court has found a lessor of agricultural land liable for nuisance for allowing a lessee to
    spread manure near neighboring residents. In Koch v. Randall, the parties owned
    properties adjacent to each other. 
    618 A.2d 283
    , 284 (N.H. 1992). Randall owned a
    home on a portion of his property and leased the remainder of his acreage to a co-
    defendant who farmed the fields and spread chicken manure thereon for fertilizer. Id.
    at 284-85. The New Hampshire Supreme Court held Randall, as lessor, was liable for
    nuisance because he knew his lessee used chicken manure to fertilize the fields and he
    had been put on prior notice of the nuisance when the plaintiff complained to county
    health officials who in turn relayed the complaints to Randall. Id. at 285-86.
    12
    The      amici      curiae,       a    conglomeration of farming-related
    associations, fear that holding Pangborns liable for the actions of their
    farmer tenants will negatively impact Iowa’s economy because other
    landowners would then forbid their tenants from utilizing manure as a
    fertilizer.   The amici hypothesize the rental price for farm land will
    “undoubtedly” fall, and the state’s economy will necessarily suffer
    because a farmer interested in renting property for crop production will
    be less inclined to rent a piece of land when the landlord forbids
    fertilization of the land with manure application. 5
    We disagree.      It is still the law of this state that a landlord is
    generally not responsible for the tenant’s acts in creating or maintaining
    a nuisance upon the leasehold.            Section 837 protects the landlord so
    long as he or she does not know, at the time of the lease, (1) that the
    activity will be carried on by the tenants and (2) that the activity involved
    will necessarily cause a nuisance.            These are formidable barriers, but
    Pangborns’ specific activities in this case generate enough of a factual
    dispute to preclude summary judgment.                Pangborns knew of Camps’
    manure spreading activities and Tetzlaffs’ corresponding complaints
    before the alleged farm tenancy was created. Pangborns also continued
    to renew Camps’ lease (and thereby endorsed Camps’ manure spreading
    procedures) despite Tetzlaffs’ repeated complaints. It is also important
    that the initial “gentlemen’s agreement” and the ensuing renewals placed
    no limitation on the method of manure application.                 Not surprisingly,
    5
    In addition, the amici speculate farmers will lose an important outlet for the
    manure created by their livestock. They hypothesize that small livestock operations will
    be forced to cease operations because of the high cost of otherwise treating and
    disposing of manure. We reject the amici’s attempt to have this case decide the hog lot
    debate in Iowa. To find that section 837 does not apply to farm tenancies would allow
    other rural landowners to rent their ground out as a manure disposal site, without any
    regard for the consequences to the neighbors. This is not an acceptable alternative.
    13
    Camps chose the quickest and             cheapest   method   of    manure
    application—surface spreading, where a plume of manure is broadcast
    only on the surface of the ground.          As discussed in our previous
    decisions in Michael v. Michael and Valasek v. Baer, surface spreading
    hog manure leads to nauseating odors which may result in a nuisance to
    others. Michael, 
    461 N.W.2d at 335
    ; Valasek, 
    401 N.W.2d at 35-37
    .
    We do not hold that all rural landlords who allow manure
    spreading on their property are liable for nuisance. We merely find that
    this landlord’s unique level of involvement with both the lessee and
    complaining neighbor generate enough factual issues to surmount the
    obstacles to landlord liability at this stage in the proceedings. Therefore
    summary judgment is not appropriate in this case.
    V. Disposition
    If a nuisance arises from the use of the premises during the period
    of the lease, the landlord likely does not have the power to abate that
    nuisance. However, at the expiration of the lease, the landlord, knowing
    that the potential nuisance exists, has the ability to stop the nuisance by
    not renewing the lease or by adding restrictive terms in the lease. If the
    landlord does not choose to do so, but renews the lease, then the
    landlord may be liable for the continuance of the interference after the
    renewal. We reverse the district court’s grant of summary judgment in
    favor of Pangborns and remand for further proceedings consistent with
    this opinion.
    REVERSED AND REMANDED.