Rita McNeal and Cliff McNeal v. Wapello County and Wapello County Board of Supervisors ( 2023 )

IN THE SUPREME COURT OF IOWA
No. 21–0215
Submitted December 14, 2022—Filed February 3, 2023
RITA McNEAL and CLIFF McNEAL,
Appellants,
vs.
WAPELLO COUNTY and WAPELLO COUNTY BOARD OF SUPERVISORS,
Appellees.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Wapello County, Shawn R.
Showers, Judge.
Landowners appeal a district court’s grant of summary judgment in an
action against a county for breach of a settlement agreement. DECISION OF
COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.
Mansfield, J., delivered the opinion of the court, in which Christensen,
C.J., and Waterman, McDonald, and Oxley, JJ., joined. McDermott, J., filed a
special concurrence. May, J., took no part in the consideration or decision of the
case.
Matthew G. Sease (argued) of Sease & Wadding, Des Moines, for
appellants.
2
Hugh J. Cain (argued) (until withdrawal), Eric M. Updegraff, Brent L.
Hinders, and Daniel J. Johnston (until withdrawal) of Hopkins & Huebner, P.C.,
Des Moines, for appellees.
3
MANSFIELD, Justice.
I. Introduction.
How canst thou make me satisfaction? William Shakespeare, Henry V act
IV, sc. 8, l. 46–47.
A problem for King Henry V, a problem in this case. Since Shakespeare’s
time, “satisfaction” has had both subjective and objective components.
Colloquially sometimes we say that a person has been satisfied when they feel
satisfied, sometimes we say so when objectively they ought to be satisfied. The
law is no different. When a contract requires performance of a covenant to a
party’s satisfaction, sometimes we place a subjective gloss, sometimes an
objective gloss, on that language.
In this case, landowners were operating a vehicle repair and salvage
business on R-1 residential property in Wapello County. When the County
notified the landowners of its plans to clean up the alleged nuisance, the parties
entered into a settlement agreement. Under the agreement, the landowners were
to remove “derelict vehicles” from the property, among other things. After forty-
five days, the County could enter the property “to determine what
remaining . . . derelict vehicles” still needed to be removed and notify the
landowners. If the landowners did not remove “derelict vehicles . . . to the
satisfaction of the County” at the expiration of ninety days, the County could
enter again and remove the “derelict vehicles.”
At the end of the ninety-day period, sixteen vehicles remained on this
property—the same sixteen that had always been there. So the County had them
4
towed away, giving the landowners an opportunity to reclaim any of them by
paying the towing and storage fees so long as they didn’t bring them back to the
property. None of the vehicles displayed a current license, many—if not all of
them—were inoperative, the vehicles were generally decades old, and some of
them were simply being mined for auto parts. Yet the landowners sued, asserting
that the County had breached the agreement by removing a group of vehicles
that were not “derelict.”
The district court granted the County’s motion for summary judgment,
reasoning that the agreement allowed the County to decide subjectively whether
it was satisfied with the removal of vehicles. The court of appeals reversed on the
ground that an objective standard applied to the County’s determination of its
satisfaction under the agreement.
On further review, we agree with the court of appeals that an objective
standard applies. But we find that the removal of the vehicles did not breach
that objective standard. Accordingly, we vacate the decision of the court of
appeals and affirm the judgment of the district court.
II. Background Facts and Proceedings.
Together, Rita and Cliff McNeal are the owners of R&C Auto & Auto Repair,
which is a vehicle repair and sales business located at their home in rural
Wapello County. As part of their business, the two regularly purchase damaged
or inoperative vehicles. They either repair and sell the vehicles, or they use them
as sources of parts for other repairs. The McNeals store some of the inoperative
automobiles on their home property.
5
The property is zoned R-1, a single-family residential district classification
that does not allow the operation of a junk or salvage yard. See Wapello County,
Iowa, Code of Ordinances § 40.12 (2019); see also id. § 40.05(53). The County
zoning ordinance provides,
This definition also includes auto or other vehicle or machinery
wrecking or dismantling activities. . . . The presence on any lot,
parcel or tract of land of three (3) or more wrecked, scrapped, ruined,
dismantled or inoperative motor vehicles . . . shall constitute prima
facie evidence of a junk or salvage yard. This does not include motor
vehicles licensed for the current year as provided by law; and/or up
to five (5) motor vehicles legally placed in storage; and/or more than
five (5) legally stored vehicles if kept within a completely enclosed
building or totally screened from view.
Id. § 40.05(53).
On January 21, 2019, the McNeals learned of a bid proposal by the County
for “Property Clean-up and Debris Removal” at their home to occur on or before
May 1. The bid proposal provided, “The property shall be cleaned and cleared of
all brush, small trees, broken concrete and/or rock, trash, garbage and other
types of debris.” However, it stated that “[a]ll vehicles and trailers shall not be
moved for clean-up or debris removal.”
Within days, the McNeals filed a petition for declaratory judgment and
injunctive relief against the County and its board of supervisors in the Wapello
County District Court.1 The petition alleged that the McNeals had not received
proper notice or time to abate any charged violations.
1For simplicity, we will hereafter refer to the defendants collectively as “the County.”
6
To resolve the litigation, the parties entered into a written settlement
agreement on April 23. As part of this agreement, the McNeals dismissed their
petition without prejudice.
The agreement also contained a series of four recitals. In the second
recital, the parties “agreed that the McNeals have received notice pursuant to
Iowa Code § 331.384(2).” The fourth (and final) recital stated, “WHEREAS, the
Parties have agreed to a procedure if the McNeals fail to clean the Property in
accordance with Iowa Code § 331.384 and Wapello County Ordinances.”
The agreement also contained the following operative provisions:
1. The McNeals have 90 days from April 1, 2019 to clean the
Property including the removal of debris and derelict vehicles and
begin repairs on the residence . . . .
2. Forty-five days after April 1, 2019, (May 16, 2019) the
McNeals grant to the County the right to enter onto the Property and
to determine what remaining debris, derelict vehicles, or repairs
need to be completed. The County will then notify the McNeals of the
additional work which needs to be completed within the 90 day
period.
3. If the removal of debris, derelict vehicles, and maintenance
of the Property has not been completed to the satisfaction of the
County by the end of the 90th day (June 30, 2019), then the McNeals
grant unto the County the right for the County and/or its agents to
enter onto the Property and to remove all remaining debris, derelict
vehicles, and unrepaired structures. The County’s cost in removing
such debris, derelict vehicles, or structures will be assessed against
the Property pursuant to provisions of Iowa law, including Iowa Code
§ 331.384.
4. . . . Other than the procedure set forth in this Settlement
Agreement, the McNeals waive and release any other statutory or
common law right to challenge the County’s right to enter the
Property and to conduct clean up activities, including any rights
against the County’s employees, elected officials, or agents.
....
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6. This Agreement is the entire agreement between the Parties
and supersedes all prior discussions, understandings or
representations. It may not be modified or amended, nor any waiver
of its provisions, except by a written instrument executed by the
parties.
The County zoning administrator entered the McNeals’ property on May
19. No cleanup work had been done at that time. He sent a letter documenting
these findings to the McNeals on May 21, but the County did not make the letter
a part of the summary judgment record. When the ninety-day period ran out on
June 30, the McNeals had not complied with the instructions in the zoning
administrator’s letter.
On August 5, after the ninety-day period plus another thirty-five days had
elapsed, the County entered the McNeals’ property and removed a large number
of items, including sixteen vehicles. All but one of the vehicles had been sitting
outside on the property. The only exception was a heavily damaged vehicle that
was found under an open structure along with other debris.2
None of the sixteen vehicles removed displayed a dealer license plate or
any indication of current licensure. However, the McNeals later attested that nine
of the vehicles did have current dealer licensure; the rest of the vehicles did not.
Some did not have licensure because no vehicle title could be found or because
the vehicle was being used for parts. The removed vehicles were generally Chevy
and Ford pickups and sedans from the 1980s, the 1990s, and the 2000s.
2The other items removed included a pole barn kit, trailers, a Chevy motor, a Ford motor,
fuel tanks, a steel shed, a dog pen, a used furnace, a used water tap, and loose construction
materials such as steel beams, sheet metal, windows, six exterior doors, 176 sheets of sheet
rock, multiple pallets of shingles, a bathroom cabinet, a sink top, and thirty-six rolls of
insulation.
8
The County sent a letter to the McNeals on August 27 advising them that
they could retrieve any of these vehicles by providing an indication of title and
paying the towing and storage fees, but the vehicles could not be returned to the
McNeals’ residence and would be destroyed if not retrieved within ten days.
On September 6, the McNeals filed another action in the Wapello County
District Court, alleging that the County’s removal of vehicles from their property
breached the settlement agreement. The petition sought damages and injunctive
relief. The County moved for summary judgment, arguing that its actions had
complied with the settlement. The McNeals resisted, and the district court held
a hearing.
The parties’ disputes centered on paragraph three of the settlement
agreement, which stated in part,
If the removal of debris, derelict vehicles, and maintenance of
the Property has not been completed to the satisfaction of the
County by the end of the 90th day (June 30, 2019), then the McNeals
grant unto the County the right for the County and/or its agents to
enter onto the Property and to remove all remaining debris, derelict
vehicles, and unrepaired structures.
The County argued that this language gave the County sole discretion to
determine whether vehicles were “derelict.” The McNeals countered that there
were genuine issues of material fact whether the vehicles were, in fact, derelict,
and they argued that the County did not have absolute discretion to make that
determination.
The district court agreed with the County’s position and granted summary
judgment. The court reasoned,
9
Derelict is mentioned five times in the agreement. The first
instance grants [the McNeals] 90 days to remove derelict vehicles.
The second grants [the County] the right to enter upon the property
and to determine what remaining derelict vehicles need to be
completed. The third is to indicate that the removal of derelict
vehicles must be done to the satisfaction of the [County]. The fourth
is if the [County is] not satisfied, [it] may remove the derelict
vehicles. The fifth is that the [County] may assess the cost in
removing derelict vehicles to the [McNeals].
Based upon the language used in the agreement, the Court
finds it [was] the intent of the parties that [the County] be granted
the discretion to determine what constitutes derelict. . . . Because
the determination of dereliction is an exclusive power of [the
County], and not the process by which the vehicles are removed, the
Court finds that interpretation of derelict is a right conferred to [the
County] by the agreement.
The McNeals appealed. We transferred the case to the court of appeals,
where a divided panel reversed the district court judgment and remanded for
further proceedings. The court of appeals majority found that the County did not
have absolute discretion to decide whether a given vehicle was derelict. As the
majority put it, “[N]owhere in the agreement does it say that the county will be
the party deciding on the definition.” The majority added, “A fair reading of
paragraph three as drafted contemplates the [C]ounty only removing vehicles
that met a common understanding of the term derelict.”
A dissenting judge disagreed. She urged that the settlement agreement,
read as a whole, effectuated a trade-off. The McNeals were given more time to
clean up their property in return for the County getting discretion to decide what
needed to be cleaned up, including which vehicles. Thus, she reasoned that the
cleanup, including the determination of which vehicles would be considered
derelict, was to be performed to the County’s satisfaction.
10
The County applied for further review, and we granted its application.
III. Scope and Standard of Review.
We review a grant of summary judgment for correction of errors at law.
Peak v. Adams, 799 N.W.2d 535, 542 (Iowa 2011). “Summary judgment is proper
when the moving party has shown ‘there is no genuine issue as to any material
fact and the moving party is entitled to judgment as a matter of law.’ ” EMC Ins.
Grp. v. Shepard, 960 N.W.2d 661, 668 (Iowa 2021) (quoting MidWestOne Bank v.
Heartland Co-op, 941 N.W.2d 876, 882 (Iowa 2020)). This is “the put up or shut
up moment in a lawsuit”; a nonmovant “must show what evidence it has that
would convince a trier of fact to accept its version of the events.” Garrison v. New
Fashion Pork LLP, 977 N.W.2d 67, 88 (Iowa 2022) (quoting Buboltz v. Birusingh,
962 N.W.2d 747, 754–55 (Iowa 2021)).
IV. Analysis.
A. General Principles. Contract interpretation is the general process “for
determining the meaning of the words used by the parties in a contract.”
Pillsbury Co. v. Wells Dairy, Inc., 752 N.W.2d 430, 435 (Iowa 2008). “We now
recognize the rule in the Restatement (Second) of Contracts that states the
meaning of a contract ‘can almost never be plain except in a context.’ ” Id. at 436(quoting Restatement (Second) of Conts. § 212 cmt. b, at 126 (Am. L. Inst. 1981)
[hereinafter Restatement (Second)]).
Thus, we adhere to the Restatement (Second)’s approach in considering
the contract as a whole—and pertinent extrinsic evidence—before determining
whether the contract is ambiguous and what it means. Pillsbury Co., 753 N.W.2d
11at 435. “[A]ny determination of meaning or ambiguity should only be made in
the light of relevant evidence of the situation and relations of the parties, the
subject matter of the transaction, preliminary negotiations and statements made
therein, usages of trade, and the course of dealing between the parties.” Id.(quoting Fausel v. JRJ Enters., 603 N.W.2d 612, 618 (Iowa 1999)); accord
Homeland Energy Sols., LLC v. Retterath, 938 N.W.2d 664, 687 (Iowa 2020); Alta
Vista Props., LLC v. Mauer Vision Ctr., PC, 855 N.W.2d 722, 727 (Iowa 2014);
Soults Farms, Inc. v. Schafer, 797 N.W.2d 92, 107–08 (Iowa 2011).
Introducing extrinsic evidence may implicate the parol-evidence rule.
C & J Vantage Leasing Co. v. Wolfe, 795 N.W.2d 65, 85 (Iowa 2011). This
settlement agreement contained an integration clause, stating that it was “the
entire agreement between the Parties and supersede[d] all prior discussions,
understanding or representations.” For agreements that are fully
integrated—meaning that the parties adopted a writing as the final and complete
expression of their agreement—the parol-evidence rule does not permit “the use
of extrinsic evidence introduced solely to vary, add to, or subtract from the
agreement.” Id. However, “extrinsic evidence is admissible as an aid to
interpretation when it sheds light on the situation of the parties, antecedent
negotiations, the attendant circumstances, and the objects they were striving to
attain.” Kroblin v. RDR Motels, Inc., 347 N.W.2d 430, 433 (Iowa 1984). Extrinsic
evidence may be offered to show the meaning of what the parties said, but not
to show what they meant to say. Bankers Tr. Co. v. Woltz, 326 N.W.2d 274, 276
(Iowa 1982).
12
The law favors settlements. Walker v. Gribble, 689 N.W.2d 104, 109 (Iowa
2004). “We have long held that voluntary settlements of legal disputes should be
encouraged, with the terms of settlements not inordinately scrutinized.” Id.(quoting Wright v. Scott, 410 N.W.2d 247, 249–50 (Iowa 1987) (en banc) (per
curiam)). Particularly with settlement agreements, “in the absence of an express
reservation of rights, a settlement agreement disposes of all claims between the
parties arising out of the event to which the agreement related.” Waechter v.
Aluminum Co. of Am., 454 N.W.2d 565, 568–69 (Iowa 1990).
When a contract requires something to be done to a party’s satisfaction,
courts apply either an objective or a subjective standard of satisfaction. Emp.
Benefits Plus, Inc. v. Des Moines Gen. Hosp., 535 N.W.2d 149, 154 (Iowa Ct. App.
1995) (en banc). The court of appeals has summarized the general rule well:
Absent express contractual language indicating which standard to
apply, the objective reasonable satisfaction standard is applied
when the contract involves commercial quality, operative fitness, or
mechanical utility which knowledgeable persons are capable of
judging; the subjective personal satisfaction standard is applied
when the contract involves personal aesthetics, taste or fancy. When
the express language or nature of the contract do not make it clear
that personal satisfaction is required, the law prefers the objective
(reasonable person) standard.
Id. (citations omitted).
Along the same lines, the Restatement (Second) provides:
When it is a condition of an obligor’s duty that he be satisfied
with respect to the obligee’s performance or with respect to
something else, and it is practicable to determine whether a
reasonable person in the position of the obligor would be satisfied,
an interpretation is preferred under which the condition occurs if
such a reasonable person in the position of the obligor would be
satisfied.
13
Restatement (Second) § 228, at 181. We have also said, “[A] contract will not be
interpreted giving discretion to one party in a manner which would put one party
at the mercy of another, unless the contract clearly requires such an
interpretation.” Iowa Fuel & Mins., Inc. v. Iowa State Bd. of Regents, 471 N.W.2d
859, 863 (Iowa 1991).
B. Deciding This Case. We now turn to the fighting issue in this case:
What does it mean to say that “the removal of debris, derelict vehicles, and
maintenance of the Property has not been completed to the satisfaction of the
County”? Are vehicles derelict simply because the County said they were, or does
an objective standard apply? And if an objective standard applies, how do we
resolve this case?
The County emphasizes several points. First, it highlights the satisfaction
clause in paragraph three that we have just quoted. The County clearly wasn’t
satisfied here. Second, the County points to paragraph two which it views as an
affirmation of the County’s discretion. That paragraph grants the County after
May 16, 2019, “the right to enter onto the Property and to determine what
remaining debris, derelict vehicles, or repairs need to be completed.” Third, it
notes that the agreement was a settlement. Under the McNeals’ interpretation,
the County would still have to prove its original case on the merits, meaning that
the settlement would have limited value. The County also observes that its zoning
ordinance prohibited operating a junk or salvage yard on R-1 residential
property, with “three (3) or more wrecked, scrapped, ruined, dismantled or
inoperative motor vehicles” constituting prima facie evidence of a junk or salvage
14
yard. Wapello County, Iowa, Code of Ordinances § 40.05(53); see id. § 40.12. It
was undisputed that many of the vehicles were inoperative and a few of them
were scrapped or dismantled. Lastly, the County points to the evidence showing
that it proceeded in good faith, whereas the McNeals refused to remove any
vehicles.
The McNeals respond that the original bid notice stated that vehicles and
trailers would be left in place. They point out that they have been operating their
vehicle salvage and repair business since 1982. They deny that any of the
vehicles were derelict, even though they acknowledge that some of the vehicles
were not going to be repaired and were being cannibalized for parts. They also
deny ever intending that the County would have complete discretion over what
constitutes a “derelict vehicle.” Lastly, they urge that the settlement agreement
simply established a “procedure,” as indicated in the last recital and in
paragraph four of the agreement. They contrast “procedure” with “substance,”
and argue that the County did not have substantive rights under the settlement
agreement to determine whether vehicles were derelict.
On our review, we sort through these contentions as follows.
To begin, we do not agree with the County that it had unfettered discretion
to classify vehicles as derelict. At the same time, we do not agree with the
McNeals that it is the court’s (or a jury’s) role to define “derelict vehicle.” Reading
the settlement agreement as a whole in light of the surrounding circumstances,
we believe the relevant question is “whether a reasonable person in the position
of the [County] would be satisfied.” Restatement (Second) § 228, at 181. We think
15
it is “practicable to determine whether a reasonable person in the position of the
obligor would be satisfied.” Id. There is a preference for an objective standard in
the absence of express language to the contrary. Id. § 228 cmt. b, at 183; see
Emp. Benefits Plus, 535 N.W.2d at 154. The settlement does not use a phrase
like “as determined by the County in its sole discretion.” Also, the duties imposed
by the settlement agreement were not inherently personal or difficult to evaluate.
This is more analogous to installing a heating system to a party’s satisfaction
than painting a portrait or providing music to a party’s satisfaction. See
Restatement (Second) § 228 cmt. b, illus. 3–5, at 183–84.3 So, reading the
contract as a whole, we believe that the relevant question is whether a reasonable
person in the County’s position would have been satisfied with the McNeals’
removal of derelict vehicles, and whether the County’s response was reasonable.
We are not persuaded that the word “procedure” will bear the weight either
of the parties want to foist on it. It is true that the agreement lays out a series of
steps that will occur. This series of steps is what the agreement means by “a
procedure.” See Procedure, Webster’s Third International Dictionary 1807 (unabr.
ed. 2002) (defining procedure, among other ways, as “a series of steps followed
in a regular orderly definite way”). Still, each of these steps imposes substantive
requirements. Step two is that the County gets to “determine” what remaining
3In their briefing before the district court, the McNeals said, “[I]t is presumed the McNeals
were told to ‘clean up’ the Property because it was aesthetically displeasing.” This might support
the application of a subjective standard—to the County’s benefit and the McNeals’ detriment.
See Emp. Benefits Plus, 535 N.W.2d at 154 (“Absent express contractual language indicating
which standard to apply, . . . subjective personal satisfaction standard is applied when the
contract involves personal aesthetics, taste or fancy.”). Yet we are not persuaded that the
determination of whether a vehicle is derelict involves high-level aesthetics as opposed to basic-
level common sense.
16
debris and derelict vehicles need to be removed, and what maintenance needs to
be performed. Step three is that the removal of debris, derelict vehicles, and
maintenance will be performed “to the satisfaction of the County.” Step five, to
give another example, is that the McNeals will dismiss their lawsuit without
prejudice. So the agreement, unquestionably, contains substantive
requirements, and a couple of those steps involve some degree of County
discretion.
Yet our determination that an objective standard governs the County’s
satisfaction does not mean that the grant of summary judgment necessarily has
to be reversed. Litigants make extravagant claims all the time. For instance, as
the court of appeals noted in the present case, “[C]ounsel [for the County]
submitted that the county could, in its absolute discretion under the settlement
agreement, decide that a brand-new vehicle with current license plates was
derelict and remove it.” We need not go that far. An appellant’s or an appellee’s
brief is not an all-or-nothing proposition. We can accept a litigant’s arguments
in part and decide that the law is more nuanced.
Therefore, we now turn to whether a reasonable person would have been
satisfied with the McNeals’ cleanup. Our review of this issue might have benefited
from the County’s or the McNeals’ inclusion of the County zoning administrator’s
May 21, 2019, letter in the record. But we don’t get to make the record, we only
get to review it. It should be noted that the McNeals, as the party claiming breach
of contract, have the burden of proof. See Iowa Mortg. Ctr., L.L.C. v. Baccam, 841
N.W.2d 107, 110–11 (Iowa 2013).
17
On this record, we find the McNeals failed to offer any competent proof
that the County acted unreasonably in removing the vehicles from the property
as derelict vehicles.
We emphasize that under our view of the law, the role of judge (or jury if
necessary) is not to decide whether vehicles actually were derelict. Such an
interpretation would give no weight to the additional language allowing the
County “to determine” what removal of derelict vehicles needs to occur and
requiring the removal to be “completed to the satisfaction of the County.” See
Dickson v. Hubbell Realty Co., 567 N.W.2d 427, 430 (Iowa 1997) (“[I]t is assumed
that no part of [a contract] is superfluous and an interpretation that gives a
reasonable meaning to all terms is preferred to one that leaves a term
superfluous or of no effect.”); Iowa Fuel & Mins., 471 N.W.2d at 863 (indicating
that the preferred interpretation of a contract leaves no part of it superfluous).
Thus, the bottom line is whether the County’s classification of the vehicles as
derelict was objectively reasonable.
None of the vehicles had current licensure on them. Some of them lacked
titles. A few lacked vehicle identification numbers (VINs). The McNeals concede
that many (if not all) of them were inoperative. Some of them were being used for
parts only. Below is the only photo of a vehicle that was actually included in the
summary judgment record. Is that a derelict vehicle? “I know it when I see it,”
Justice Potter Stewart might have said. See Jacobellis v. Ohio, 378 U.S. 184, 197
(1964) (Stewart, J., concurring).
18
Iowa does not have a state law defining “derelict vehicle.” However, a few
other states do, and clearly some of the vehicles on the McNeals’ property would
have qualified under those definitions. See N.C. Gen. Stat. § 20-137.7(4) (2023)
(stating that “[d]erelict vehicle” includes a vehicle “[w]hose certificate of
registration has expired and the registered and legal owner no longer resides at
the address listed on the last certificate of registration on record with the North
Carolina Department of Transportation,” “[w]hose major parts have been
removed so as to render the vehicle inoperable and incapable of passing
inspection as required under existing standards,” or “[w]hich is more than 12
19
years old and does not bear a current license as required by the Department”);
S.C. Code § 56-5-5810 (c) (2023) (stating that “[d]erelict vehicle” includes a
vehicle “whose certificate of registration has expired and the registered owner no
longer resides at the address listed on the last certificate of registration on record
with the Department of Motor Vehicles,” “whose motor or other major parts have
been removed so as . . . to render the vehicle inoperable,” or “which is more than
eight years old and does not bear a current registration”).4
The McNeals concede that they had not taken any vehicles off their
property during the ninety-day period. This tends to bolster the reasonableness
of the County’s dissatisfaction because the settlement agreement expressly
required the removal of “derelict vehicles” in three separate paragraphs. Clearly
it was anticipated that the McNeals would remove some vehicles.
The County’s decision on August 5 to determine that all the vehicles in
question were derelict and to remove all of them was thus a reasonable response.
The County could see that none of the vehicles had current licensure, most of
them were decades old, some of them obviously could not be driven, and a few
of them didn’t even have VINs. Lacking car keys, the County had no way to tell
whether a specific vehicle might have been capable of being driven and, perhaps,
might not meet some definition of “derelict.” The McNeals offered no proof that a
specific vehicle was in good, running condition. Hence, we conclude as a matter
4The dictionary provides several alternative definitions of “derelict.” Derelict, Webster’s
Third International Dictionary 607 (unabr. 2002). One is “abandoned,” another is “run-down.” Id.
Abandoned may not be an apt characterization of the vehicles in question, but run-down seems
to be.
20
of law that the County acted reasonably in towing all sixteen vehicles, while
offering the McNeals the opportunity to retrieve any particular vehicle by paying
the towing and storage fees for that vehicle. We conclude the district court
properly granted summary judgment to the County.5
The McNeals assert in their affidavits that they did not consider the
vehicles derelict because they “ha[d] productive value” and the McNeals “use[d]”
them in their repair and salvage business. The McNeals claim not to have
anticipated that the County would classify them as derelict. They also point out
that the original bid for property cleanup and debris removal expressly excluded
the removal of vehicles. Finally, they point out that they had been operating their
auto repair and salvage business on the property for forty years.
These arguments fall short of creating a genuine issue of material fact for
several reasons. As we have noted, the settlement agreement—as executed by
the parties—required the removal of derelict vehicles to the County’s satisfaction.
Whether the McNeals believed they didn’t have to remove any vehicles is beside
the point. A party’s “undisclosed, unilateral intent” in signing a settlement
agreement doesn’t matter if the agreement says otherwise. Peak, 799 N.W.2d at544–45. And under the parol-evidence rule, a notice of bid for cleanup and debris
removal that excluded vehicles can’t alter subsequent contractual requirements
that included removal of vehicles. See Cannon v. Bodensteiner Implement Co.,
5We also note that the McNeals have litigated the removal of the vehicles essentially as
an all-or-nothing proposition. In their briefing they do not identify specific vehicles as nonderelict
in the event they were to lose their primary argument that none of the vehicles are derelict.
21
903 N.W.2d 322, 328–29 (Iowa 2017).6 Whether the McNeals might have had a
legally protected nonconforming use is also not before us and was not raised
before the district court. And a reasonable person could still view a vehicle as
derelict even if it might have had value in a salvage and repair business.
In sum, we conclude that under the settlement agreement, derelict
vehicles had to be removed to the County’s satisfaction. This does not mean that
the County could act unreasonably and arbitrarily. But it also did not mean that
the McNeals could litigate the dispute as if there had been no settlement
agreement. The law does indeed favor settlement agreements, and it shows this
favoritism best of all by enforcing them as written. See Peak, 799 N.W.2d at 543.
The district court properly granted summary judgment.7
V. Conclusion.
For the foregoing reasons, we affirm the district court’s judgment and
vacate the decision of the court of appeals.
DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT
JUDGMENT AFFIRMED.
Christensen, C.J., and Waterman, McDonald, and Oxley, JJ., join this
opinion. McDermott, J., files an opinion concurring specially. May, J., takes no
part.
6The
record doesn’t explain why the bid excluded vehicle removal, but it may be that the
County contemplated using a separate tow service to remove vehicles.
7Although the McNeals’ affidavits express dissatisfaction with other actions the County
took during the cleanup of the property, they do not raise anything other than the removal of
vehicles in their briefing.
22
#21–0215, McNeal v. Wapello Cnty.
McDERMOTT, Justice (concurring specially).
In affirming summary judgment in favor of Wapello County and its board
of supervisors, the majority opinion focuses on the “satisfaction of the County”
language in the settlement agreement and whether a reasonable person in the
County’s position would have been satisfied under the circumstances. While I
agree that the grant of summary judgment should be affirmed, I arrive there
through a different mode of analysis.
The McNeals focus their argument on the meaning of a particular term in
the contract—“derelict vehicles”—and argue that its meaning is a disputed issue
of material fact for the jury to resolve at a trial, not for the court to decide on
summary judgment. The court of appeals was correct in its legal formulation that
disputes about the meaning of words in contracts generally present questions of
fact left to juries. “[T]he question of what is the meaning that should be given by
a court to the words of a contract, is a question of fact, not a question of law.”
Morris Plan Leasing Co. v. Bingham Feed & Grain Co., 143 N.W.2d 404, 412 (Iowa
1966) (quoting 3 Arthur Linton Corbin, Corbin on Contracts: A Comprehensive
Treatise on the Working Rules of Contract Law § 554, at 219 (1960) [hereinafter
Corbin on Contracts]). But not all questions about the meaning of terms are
beyond a court’s reach. “[I]f the evidence is so clear that no reasonable [person]
would determine the issue before the court in any way but one, the court will
itself determine the issue, either by directing the verdict or by dispensing with
any verdict whatever.” Corbin on Contracts § 554, at 222.
23
The purpose of contract interpretation “is always the discovery of actual
intention: [1] the intentions of both parties if they are the same [or] [2] the actual
intention of one party if the other knew or had reason to know what it was.”
Hamilton v. Wosepka, 154 N.W.2d 164, 168 (Iowa 1967) (quoting Corbin on
Contracts, at III). The settlement agreement between the McNeals and the County
called for the McNeals’ removal of “derelict vehicles.” The parties, it stands to
reason, would not have included that specific term if the parties didn’t believe at
least one of the vehicles on the property at that time was derelict. This point is
illustrated by the absence of any reference in the settlement agreement to any
other items that were not present on the property that might require removal,
such as, say, broken appliances or dilapidated gazebos.
And since the McNeals had reason to know that the County considered at
least one vehicle on their property derelict, their argument that none were
derelict requires us to read the settlement agreement against common sense.
There would be no reason to include specific reference to derelict vehicles if none
were present. The McNeals thus “knew or had reason to know” in this case “the
actual intention of [the County]” about the meaning of “derelict vehicles” in the
settlement agreement. Id. The agreement must have referred to at least one
vehicle that was “derelict” existing on the McNeals’ property at the time of the
settlement agreement.
The failure to remove any vehicles from the property within the required
period allowed the County to exercise the remedy it had bargained for in the
settlement—entering onto the property and removing derelict vehicles with the
24
costs assessed to the McNeals. On the question of whether it was reasonable for
the County to remove all the vehicles—and thus whether the County might have
violated the settlement agreement by removing nonderelict vehicles along with
the derelict—the McNeals have presented no evidence giving us any basis to
disagree with the County’s apparent determination that all were derelict.
As a result, contrary to the McNeals’s argument, and contrary to the court
of appeals’ holding, the interpretation of the meaning of “derelict vehicle” in the
settlement agreement is sufficiently clear in this case that the court can enter
judgment against the McNeals as a matter of law. As Professor Corbin put the
point:
[W]e do not say that if no reasonable man would have used the words
with any but one meaning, that meaning will be adopted by the court
without aid from the jury. The person whose meaning is in issue
may have been a very unreasonable man; such men make contracts.
The court must indeed state the issue; it must determine the person
or persons whose meaning shall be held to prevail. What that
meaning was, though a question of fact, may be made so clear by
the evidence that a jury’s verdict to the contrary would be set aside.
Corbin on Contracts § 554, at 222–23. Finding no disputed factual issues
remaining, I respectfully concur in affirming judgment in favor of the County.