Sungreen Lawncare, L.L.C. and Matthew Romine, plaintiffs/counterclaim v. Beautiful Lawns by Longs, L.L.C. and Brandan Long, defendants/counterclaim ( 2017 )

IN THE COURT OF APPEALS OF IOWA
No. 16-1271
Filed April 19, 2017
SUNGREEN LAWNCARE, L.L.C. and MATTHEW ROMINE,
Plaintiffs/Counterclaim Defendants-Appellees,
vs.
BEAUTIFUL LAWNS BY LONGS, L.L.C. and BRANDAN LONG,
Defendants/Counterclaim Plaintiffs-Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Brad McCall, Judge.
Beautiful Lawns by Longs, L.L.C. and Brandan Long appeal the district
court’s dismissal of their petition to modify default judgment. REVERSED AND
REMANDED.
Thomas P. Murphy of Hopkins & Huebner, Adel, for appellants.
Sungreen Lawncare, L.L.C. and Matthew Romine, Urbandale, appellees.
Considered by Mullins, P.J., and Bower and McDonald, JJ.
2
MULLINS, Presiding Judge.
Beautiful Lawns by Longs, L.L.C. (Beautiful Lawns) and Brandan Long
appeal the district court’s dismissal of their petition to modify default judgment.
We reverse and remand.
I. Background Facts and Proceedings
This litigation arose from the parties’ dispute over lawn equipment.
Sungreen Lawn Care, L.L.C. (Sungreen) and Matthew Romine brought suit in
August 2015 against numerous defendants, including Beautiful Lawns and Long.
In September, Beautiful Lawns and Long, along with other defendants who are
employees of Beautiful Lawns, answered, and Beautiful Lawns asserted three
counterclaims: (1) declaratory judgment regarding its ownership of the disputed
equipment, (2) injunctive relief, and (3) unjust enrichment. On September 10, the
district court granted Beautiful Lawn’s request for temporary injunction, which
enjoined Romine from “sell[ing] the equipment until th[e] temporary injunction is
set aside or otherwise lifted.” On September 15, counsel for Romine and
Sungreen filed a motion to withdraw, which the court granted on September 23.
On November 10, summary judgment was granted to Beautiful Lawns and
its employees on Sungreen and Romine’s petition. Two days later, Beautiful
Lawns and Long filed an application for default judgment with regard to their
counterclaims. In December, Beautiful Lawns and Long filed an application to
modify the temporary injunction, asking that the court direct Sungreen and
Romine to return the equipment to Long to prevent it from being stolen or
otherwise harmed. The district court granted the unresisted modification request
3
on December 30, ordering Sungreen and Romine to grant Long access to the
equipment in order to “secure and retain the equipment.”
On January 8, 2016, the district court entered default judgment against
Sungreen and Romine and, in relevant part, ordered Sungreen and Romine to
return the equipment to Beautiful Lawns and awarded damages on the unjust
enrichment claim. On January 27, when the equipment was not returned,
Beautiful Lawns and Long filed an application for rule to show cause. After filing
this application, Long learned Romine purportedly sold one of the mowers back
in August 2015—before the counterclaim was even filed—and additional
equipment had been sold from a storage unit on February 12, 2016 1—after
default judgment had been entered. A hearing was held on the application for
rule to show cause, at which time Romine claimed he was in jail when the
equipment was sold from the storage unit in February and thus he had no
knowledge of the sale and was unable to prevent it.2 In April 2016, the district
court entered an order on the application for rule to show cause, finding the clerk
of court failed to set up Romine “as a pro se litigant to receive copies of any court
orders or other filings in this matter” and thus “the court c[ould not] find beyond a
reasonable doubt that [Romine] was provided a copy of the orders which he is
alleged to have violated, both of which were entered after his prior attorney
withdrew from the case.”
1
Romine testified everything Beautiful Lawns and Long wanted, except for the mower
that was sold in August 2015, had been in that storage unit.
2
Specifically, he claimed he fell behind on his payments for the storage unit and an
auction was held without him receiving any notice. He testified other property of his was
sold as well.
4
As a result, on June 8, 2016, Beautiful Lawns and Long filed a petition to
modify the court’s January 8, 2016 default judgment, requesting a “trial on
conversion damages.” The district court denied the petition to modify without a
hearing, reasoning:
In the Petition to Modify Judgment the Counterclaim
Plaintiffs now seek to amend the judgment to include damages for
an alleged conversion of the lawn maintenance equipment
occurring, perhaps, before the original Judgment was entered, and
perhaps later. In this Petition to Modify Judgment the Counterclaim
Plaintiffs seek to modify the Judgment to recover damages on a
new and different theory not included in the original action. The
Counterclaim Plaintiffs recognized the possibility of this new and
different theory of recovery, alleging in the Counterclaim “if the
equipment has been sold Beautiful Lawns will seek leave to amend
and to bring valid claims against any Plaintiff(s) and any person
who knowingly accepted the proceeds of the equipment.”
The Judgment entered on January 8, 2016 is a final
judgment. While the Counterclaim Plaintiffs may assert a new
cause of action against the Plaintiffs on the basis of alleged
conversion of the lawn maintenance equipment, they may not now
simply have the prior judgment modified to include damages on a
theory not asserted in the original proceeding.
Beautiful Lawns and Long filed a motion to amend or enlarge, which the
district court denied. Beautiful Lawns and Long appeal.3
II. Standard and Scope of Review
We review an appeal of an order under Iowa Rule of Civil Procedure
1.1012 at law. See In re Adoption of B.J.H., 564 N.W.2d 387, 391 (Iowa 1997).
“We give the district court wide discretion in ruling on such petitions, and an
abuse of discretion is needed for reversal.” Soults Farms, Inc. v. Schafer, 797
N.W.2d 92, 109 (Iowa 2011). “We will reverse a court’s discretionary ruling only
3
No responsive briefing was filed by Sungreen or Romine on appeal.
5
when the court rests its ruling on grounds that are clearly unreasonable or
untenable.” Id. at 110.
III. Analysis
On appeal, Beautiful Lawns and Long argue the newly discovered,
material evidence is that Romine disposed of part of the property—and
misleadingly indicated he had that property during the pendency of this action—
and then allowed additional property to be disposed of after judgment had been
entered against him. Beautiful Lawns and Long also argue the district court
failed to hold a trial on the petition before denying it.
Iowa Rule of Civil Procedure 1.1012 provides a “court may correct, vacate
or modify a final judgment or order, or grant a new trial” where there is “[m]aterial
evidence, newly discovered, which could not with reasonable diligence have
been discovered and produced at the trial, and was not discovered within the
time for moving for new trial under rule 1.1004.” Rule 1.1013(3) requires the
court to “promptly assign the petition for trial not less than 20 days after notice is
served.” Under rule 1.1013(4), a “court may try and determine the validity of the
grounds to vacate or modify a judgment or order before trying the validity of the
claim or defense.” Here, the district court determined the validity of Beautiful
Lawns and Long’s petition but did so without first providing them the opportunity
to be heard. See generally In re Marriage of Kierkegaard, No. 10-1924, 2011 WL
3116940, at *1-3 (Iowa Ct. App. July 27, 2011). Without reaching the question of
whether Beautiful Lawns and Long have valid grounds to vacate or modify the
prior default judgment, we reverse the denial of the petition and remand this
6
matter to the district court to allow Beautiful Lawns and Long an opportunity to be
heard on their petition, in compliance with Iowa Rule of Civil Procedure 1.1013.
REVERSED AND REMANDED.