Cooley Pumping, LLC v. Greg Melcher and Lisa Melcher ( 2021 )

IN THE COURT OF APPEALS OF IOWA
No. 20-1146
Filed October 6, 2021
COOLEY PUMPING, LLC,
Plaintiff-Appellee,
vs.
GREG MELCHER and LISA MELCHER,
Defendants-Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Grundy County, David P. Odekirk,
Judge.
Greg and Lisa Melcher appeal a district court order in favor of Cooley
Pumping, LLC and dismissal of their counter claims. AFFIRMED AND
REMANDED.
Bruce J. Toenjes of Nelson & Toenjes, Shell Rock, for appellants.
Mark W. Fransdal and Bradley M. Strouse of Redfern, Mason, Larsen and
Moore, PLC, Cedar Falls, for appellee.
Heard by Mullins, P.J., and May and Ahlers, JJ.
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MULLINS, Presiding Judge.
Greg and Lisa Melcher appeal a district court order in favor of Cooley
Pumping, LLC and dismissing their counterclaims related to the design and
installation of their septic system. The Melchers raised several issues on appeal
including arguments that the district court applied incorrect legal standards, newly
discovered evidence should have led to a new trial, and the district court made
multiple errors in awarding attorney fees and costs.
I. Background Facts and Proceedings
Greg and Lisa Melcher are homeowners in a rural area of Grundy County.
Cooley Pumping, LLC, is a company located in Grundy County that performs
design and installation of septic systems in Grundy and other counties in Iowa.
The Melchers contacted Cooley Pumping in 2017 to design and install a new septic
system on their property. The Melchers’ prior system was declared noncompliant
by Grundy County. Cooley Pumping visited the Melchers’ home to discuss the
specifics of the system and its location on the property. Cooley Pumping’s
proposal for the system was accepted by the Melchers in March. Cooley Pumping
submitted an application to the Grundy County Sanitarian, which was approved on
April 11, the same day a site inspection was performed. The sanitarian approved
installation for a 1250 gallon septic tank with two laterals totaling 180 feet. The
Melchers have only ever used two of the three bedrooms located in the home, and
the evidence shows there was some confusion over how many bedrooms the
home actually has. Cooley Pumping relied on the sanitarian’s loading calculation
and knowledge of the soil type and characteristics to determine the size of the
system and its components. The sanitarian relied on her prior experience with
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neighboring properties and USDA soil surveys to aid her calculation and
determination that a conventional system was appropriate.
At no time did the sanitarian or Iowa Department of Natural Resources
(DNR) representatives who were consulted, neither of which had personal
experience with the Melcher property, have any hesitation about installing a
conventional system. No percolation test was performed on the property because
it was not required by Grundy County. Although no six-foot test hole was dug on
the Melchers’ property, the hole dug for installation was adequate for Cooley
Pumping to determine there would be no problem with the water table.
Cooley Pumping’s owner, Paul Cooley, was on site the morning of the
installation but was called away to another worksite. Cooley left another fully
certified installer, B.H., on the property to oversee installation. The Melchers’
property has a number of limiting characteristics including geothermal lines, a well,
trees, gardens, a pond, a shed, and a slope in elevation. Cooley Pumping also
contracted to pump out, disable, and backfill the old septic system. In order to
accommodate limiting factors, B.H. made the decision to relocate the tank
approximately ten feet from the location the parties planned for it. The Melchers
were informed and made no objection. The sanitarian was unable to visit the day
of installation so Cooley Pumping took photos of the site for approval. The system
was backfilled the same day, and a final inspection was conducted on April 24.
The Melchers raised a number of complaints related to installation and
deviations from the original plan drawn by the parties.1 They insisted the lids were
1A few minor issues were addressed and corrected by Cooley Pumping that have
not been a part of this litigation.
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too high and a significant amount of dirt would need to be loaded on the property
to make them level with the ground. In order to accommodate the cost of
landscaping, the Melchers withheld the last $1000.00 of their payment to Cooley
Pumping. The sanitarian and B.H. visited the Melcher property to address pending
complaints, take measurements, and complete a soil probe. No issues with the
system were found and no alterations were recommended.
The Melchers refused to complete the payment of the contract price.
Cooley Pumping began a small-claims proceeding to recover the remaining
payment and a finance charge. The Melchers made counterclaims, and the
proceedings were removed to the district court. Over the course of litigation, the
Melchers made two motions for summary judgment, which were denied. Multiple
expert witnesses were consulted and testified at trial. Trial was held on September
18 through 20, 2019, and completed on October 9. Post-trial briefing was
submitted and the record was closed in November. The district court’s ruling was
filed February 27, 2020, in favor of Cooley Pumping. At that same time, the
Melchers became aware that the sanitarian and B.H. had engaged in an
extramarital affair at some point. The Melchers filed motions for new trial and to
reconsider, alleging the district court made a number of errors and that the affair
was newly discovered evidence. Cooley Pumping also pursued its right to recover
attorney fees and costs. Extensive litigation began again. A hearing on the post-
trial motions and fees was held on June 24. The district court entered its order on
August 31, again in favor of Cooley Pumping. The Melchers appeal. Following
the notice of appeal, Cooley Pumping filed a supplemental request for attorney
fees, which was granted. The Melchers appeal the supplemental award.
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II. Standards of Review
Claims centered on the contract between the parties and alleged breach
are reviewed for correction of errors at law. Meincke v. Nw. Bank & Trust Co., 756
N.W.2d 223, 227 (Iowa 2008). “We view the evidence in the light most favorable
to the judgment” and examine whether the district court’s fact findings are
supported by substantial evidence. Id. “Evidence is substantial when reasonable
minds accept the evidence as adequate to reach a conclusion.” Id. We ask
whether the evidence “supports the finding actually made, not whether the
evidence would support a different finding.” Id. (quoting Raper v. State, 688
N.W.2d 29, 36 (Iowa 2004)).
Rulings on motions for new trial based on newly discovered evidence are
reviewed for abuse of discretion. Benson v. Richardson, 537 N.W.2d 748, 762
(Iowa 1995). We ask if the district court clearly abused its discretion “on untenable
grounds or acted unreasonably.” Id. “We likewise review for abuse of discretion
rulings allowing or disallowing expert testimony challenged as untimely and ‘accord
the trial court broad discretion.’” Hagenow v. Schmidt, 842 N.W.2d 661, 670 (Iowa
2014) (quoting Klein v. Chi. Cent. & Pac. R.R., 596 N.W.2d 58, 60–61 (Iowa 1999)),
overruled on other grounds by Alcala v. Mariott Int’l, Inc., 880 N.W.2d 699 (Iowa
2016). “We review a district court’s denial of a new trial for failure to administer
substantial justice for abuse of discretion.” Crow v. Simpson, 871 N.W.2d 98, 105
(Iowa 2015).
Attorney fee disputes that require courts to engage in statutory
interpretation are reviewed for correction of errors at law. Van Sloun v. Agans
Brothers, Inc., 778 N.W.2d 174, 182 (Iowa 2010). In the absence of a statutory-
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interpretation issue, review of an attorney-fee award is for an abuse of discretion.
GreatAmerica Leasing Corp. v. Cool Comfort Air Conditioning & Refrigeration, Inc.,
691 N.W.2d 730, 732 (Iowa 2005).
III. Discussion
A. Contractual Claims
The Melchers argue the district court erred in applying the wrong legal
standard to their breach claim, using that allegedly improper standard as a bar to
their counterclaims, and that the analysis was flawed.
1. Standard of Compliance
The parties agree that the standard of review for these contractual claims is
for correction of errors at law but disagree about the necessary level of compliance
required to meet that standard. The Melchers argue that strict compliance with the
applicable administrative code is necessary. Cooley Pumping argues that
substantial compliance is the correct standard.
The DNR controls water pollution within the state, including private sewage
disposal systems. Iowa Code § 455B.172(1), (2) (2018). The DNR regulations for
private sewage disposal systems are contained in 567 Iowa Administrative Code
Chapter 69. County health boards are tasked with adopting the minimum
standards set forth by the DNR but may adopt more stringent standards provided
that they are consistent with the minimum standards set forth in the administrative
code. Iowa Code § 455B.172(3), (4).
The Melchers argue the district court applied the standard of substantial
performance in error, pointing toward its citation to cases involving mechanics
liens. Although Cooley Pumping did not bring their claim through a mechanic’s
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lien, our supreme court has said that “[t]he concept of substantial performance in
the mechanic’s lien context is derived from contract law.” Flynn Builders, L.C. v.
Lande, 814 N.W.2d 542, 546 (Iowa 2012). And, in applying the standard of
substantial performance to a mechanic’s-lien issue, our supreme court also
borrowed its definition from contract law. Id. “In the area of contracts, ‘[s]ubstantial
performance is performance without a material breach, and a material breach
results in performance that is not substantial.’” Id. (quoting II E. Allan Farnsworth,
Farnsworth on Contracts § 8.16, at 518 (3d ed. 2004)). “[T]he burden of proof
regarding the performance of the contract rest[s] on the plaintiff. Although the
burden of proof regarding the showing of substantial compliance rests with the
plaintiff-contractor, the defendant-homeowner has the burden of showing any
defects or incompletions.” Moore’s Builder & Contractor, Inc. v. Hoffman, 409
N.W.2d 191, 194 (Iowa Ct. App. 1987) (citations omitted).
The Melchers cite to Ales v. Merritt, a breach-of-contract case also dealing
with a sewage issue, in which the seller of a home warranted the plumbing system
was in working order. 486 N.W.2d 592, 593, 595 (Iowa Ct. App. 1992). In Ales,
the court noted that the system did not comply with the applicable plumbing
standards. Id. at 595. Another issue entwined with the applicable standard was
whether the septic system actually worked. Id. Ultimately, the court found the
system “did not properly treat or dispose of sewage thus could not be said to be in
working order.” Id. The court’s conclusion rested on the fact that the system in
place failed to “properly treat and dispose of sewage,” meaning it didn’t perform its
essential function and was not in the condition warranted by the contract. Id. That
analysis is supported by a recent pronouncement of our supreme court that
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“substantial performance ‘excuses contractual deviations or deficiencies which do
not severely impair the purpose underlying a contractual provision.’” Homeland
Energy Sols., LLC v. Retterath, 938 N.W.2d 664, 701 (Iowa 2020) (quoting SGD
Macerich Props. L.P. v. Stanek Inc., 648 N.W.2d 581, 586 (Iowa 2002)).
We find no error in applying the substantial performance standard because
our supreme court has noted its applicability on both contract and mechanic’s-lien
issues.
2. Melchers’ Counterclaims
The Melchers argue the district court erred in finding that Cooley Pumping’s
substantial performance was a bar to their counterclaims. Substantial
performance is a defense, not a bar, to warranty claims. Moore’s Builder &
Contractor, Inc., 409 N.W.2d at 195. If the district court declined to consider the
counterclaims merely because Cooley Pumping substantially performed on the
contract, we would be forced to reverse and remand. Id. But, that is not what
happened. In its February 2020 order, the district court specifically found no
material deviations from the contract terms existed.
The Melchers have failed to prove a material breach of
contract by Cooley Pumping. The Melchers received the working
septic system that they have only partially paid for.
....
While there are technical deviations from the terms of the
Chapter 69 regulations, none are material unless and until there is
some impact on the functionality of the system or impact on the
health of the owner or public.
The district court also found the Melchers failed to prove “that the septic system
has or will fail” or that it created unsanitary conditions on the property, and
ultimately that the Melchers suffered only speculative damages.
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Following the Melchers’ motion to reconsider, enlarge, or amend pursuant
to Iowa Rule of Civil Procedure 1.904(2), the district court said again that the
Melchers failed to prove the system was not fit for its intended use or that the work
was performed in any way less than a workmanlike manner. From the record, it is
clear that the district court did consider the counterclaims, including warranty
issues. Because the district court did not bar the counterclaims, but instead
considered substantial performance as a defense, we find no error.
3. Contract Analysis
The Melchers argue the district court’s analysis is incorrect because Cooley
Pumping breached the contract in that it did not comply with chapter 69, no
showing of current harm was required, the Grundy County Sanitarian had no
discretion to excuse the breach, Cooley Pumping failed to substantially perform,
the warranty was breached, and hearsay evidence was given too much weight.2
Cooley Pumping does not dispute the applicability of the local ordinances
or chapter 69. It argues, instead, that it substantially complied with the applicable
ordinances and regulations, and rendered complete performance. The Melchers
cite four ways the septic system violates the applicable regulations: (1) the system
is undersized, (2) the laterals are not level, (3) the laterals are not equal in length,
and (4) there is insufficient treatment soil under the laterals.
We have already established that the district court did not err in applying
the substantial-performance framework and will apply it here. “[A] technical, exact
2 The Melchers argued the district court relied too heavily on hearsay statements
of former DNR employee Dan Olson. They failed to cite to any authority to support
their argument. We deem the argument waived. Iowa R. App. P. 6.903(2)(g)(3).
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and perfect performance is not necessary. Substantial performance is all that is
required. Where there is substantial performance the builder is entitled to the
contract price less reasonable damages on account of slight defects in
performance.” Huffman v. Hill, 65 N.W.2d 205, 206 (Iowa 1954). Cooley Pumping
bears the burden to prove it substantially performed to be entitled to full payment.
Farrington v. Freeman, 99 N.W.2d 388, 391 (Iowa 1959). Defects in performance
may result in a deduction. Id.“Substantial performance,” as defined by the cases, permits only
such omissions or deviations from the contract as are inadvertent or
unintentional, are not due to bad faith, do not impair the structure as
a whole, are remediable without doing material damage to other
parts of the building in tearing down and reconstructing, and may
without injustice be compensated for by deductions from the contract
price.
Id. (quoting Littell v. Webster Cnty., 131 N.W. 691, 694 (Iowa 1911)). “Once a
contractor has met its burden to show substantial performance, the homeowner
has the burden to show any defects or incompletions which may be deducted from
the contract price.” Nepstad Custom Homes v. Krull, 527 N.W.2d 402, 406 (Iowa
Ct. App. 1994).
The district court provided the following discussion and found Cooley
Pumping substantially complied with the contract:
Cooley Pumping installed a system for the Melchers which was
permitted and approved by the Sanitarian for its size, location, and
design. The work was done pursuant to a contract. All of the
features described in the contract were installed, and the system has
performed as intended and expected [since installation]. There had
been no failures, backups, or surface water linked to the septic
system. Six thousand dollars of the modest $7000 cost of this
system was paid, but $1000 was withheld because the Melchers
claimed 30 tons of dirt was needed in the back yard to bring the lids
“flush to the ground,” in spite of the fact that the contract said Cooley
Pumping would complete the area only to “ROUGH GRADE.”
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. . . . The location of the tank was raised as an issue because
Melchers claimed that the contract provided for its placement directly
north of the apple tree and on top of a geothermal line. That is not
consistent with the recommendations of Dan Olson at the DNR. The
Melchers also claim that the tank was set too high, but they have
done nothing to finish the grading and landscaping around the tank,
and the tank has never experienced any freezing. The Melchers
have no out-of-pocket expenses to claim as damages because
nothing has been done to fix the alleged defect. The septic system
has at all times worked as it was intended.
The Sanitarian was aware at some time prior to her final
inspection that the location of the tank was moved 10 feet or less
from its original planned location to make it a more optimal location.
She did not find this to be a significant change in the design. There
is no evidence that this change was material or caused any
problems.
We disagree with the district court to the extent that the contract specified the
Melchers would receive four risers.3 Four were initially installed, but two were
removed to bring the lids closer to the ground.
The district court found the deviations from chapter 69 were “technical,” and
were not “material unless and until there [was] some impact on the functionality of
the system or impact on the health of the owner or public.” The alleged defects of
the system are only, in fact, defects if we find strict compliance with chapter 69 is
the applicable standard. But the language contained in chapter 69 concedes that
perfect compliance is unnecessary. The DNR grants regulative power to the
counties. Iowa Code § 455B.172(4). Both the DNR and administrative authorities,
including local health boards, may grant variances from the regulations when
necessary. Iowa Admin. Code rs. 567-69.1(2), .22. Grundy County defines the
3Risers are concrete cylinders set over the opening of the tank to elevate the lids.
The contract specified that two risers would be stacked on each opening, for a total
of four risers.
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administrative authority to include the County Sanitarian. Grundy Cnty., Iowa
Ordinances 7.02.02(6) (2004).
The evidence presented at trial shows there were minor deviations from the
original plans developed, but that nothing has hindered the performance of the
system. Even though the Melchers point to minor changes, in all other respects,
they received the septic system they contracted to receive. The evidence also
reveals that any deviations from the original plan were approved by the Grundy
County Sanitarian, who had the discretion to grant variances. Iowa Admin. Code
rs. 567-69.1(2), .22. On our review of the record, substantial evidence was
presented to support the district court’s finding that Cooley Pumping substantially
performed on the contract and is not in breach. Homeland Energy Sols., LLC, 938
N.W.2d at 701. Furthermore, we agree with the district court that Cooley Pumping
performed its obligations “in a substantially workmanlike manner and the septic
system is fit for its intended use.” The Melchers’ warranty claims thus fail.
The Melchers take issue with the district court’s requirement of present
harm for an award of damages and argue they should be allowed to recover for
future damages. The Melchers ask that damages be awarded based on
substantial evidence of the probability that the lifespan of the system will be shorter
than it should be. “Under Iowa law, when a contract has been breached the
nonbreaching party is generally entitled to be placed in as good a position as he
or she would have occupied had the contract been performed.” Midland Mut. Life
Ins. Co. v. Mercy Clinics, Inc., 579 N.W.2d 823, 831 (Iowa 1998). “Under this
theory of damages, the nonbreaching party’s recovery ‘is limited to the loss he has
actually suffered by reason of the breach; he is not entitled to be placed in a better
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position than he would have been in if the contract had not been broken.’” Id.(emphasis added) (quoting 22 Am. Jur .2d Damages § 45 (1988)). Applying this
legal framework, the Melchers have suffered no damages. They have not proved
that the system has failed or malfunctioned in any way. They have not completed
the landscaping they claim is required to restore their property. While the system’s
ultimate failure is, or may be, foreseeable at some future point, we have no way to
predict if, when, or to what extent that may occur. It is possible that they system
may have a traditional life expectancy. Like the district court, we find the damages
requested are speculative and there are no damages to award at this time.
B. Evidentiary Claims
The Melchers argue the district court erred in failing to grant a new trial
based on newly discovered evidence, the verdict failed to do substantial justice,
and the late designation of an expert witness should not have been allowed.
1. Newly Discovered Evidence
The Melchers argue that the existence of an extramarital relationship
between the Grundy County Sanitarian and B.H., the Cooley Pumping employee
who led the installation of the Melcher’s system, created bias between the two
witnesses and materially affected the Melchers’ substantial rights. During oral
arguments on the Melchers’ post-trial motions, B.H. testified that the affair occurred
in January 2020. The sanitarian also testified, but reported that the affair occurred
in late January 2020 and lasted into early February. Both testified that the affair
did not exist prior to 2020 and was over in February of that year. The Melchers
became aware of the relationship on February 24, 2020, and confirmed it with
family members of the sanitarian and B.H. on February 27. The Melchers then
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filed their motion for new trial, arguing that the relationship between B.H. and the
sanitarian created bias, that the witnesses coordinated their testimony, and that
they had engaged in spoliation.
Cooley Pumping contests error preservation on the spoliation argument.
The hearing transcript reveals that the witnesses were questioned about the fact
that they deleted text messages that would have exposed the affair to their
spouses even though they were subject to a litigation hold requiring them to retain
records. The trial transcript reveals that the Melchers did raise spoliation in oral
arguments, but the district court rested its decision solely on whether the
relationship itself was newly discovered evidence. “It is a fundamental doctrine of
appellate review that issues must be both raised and decided by the district court
before we will decide them on appeal.” Meier v. Senecaut, 641 N.W.2d 532, 537
(Iowa 2002). The only comment the district court made regarding the phone
records were that they were “consistent with the testimony of [the sanitarian and
B.H.] concerning the timeframe of their relationship.” Although we do assume “that
the district court rejected claims not specifically addressed” in an order, that
assumption is “only to guide our review of an incomplete or sparse record when
preservation of error is not at issue.” Id. at 539–40. In this case, it does not appear
that the district court made any finding related to spoliation and only considered
whether the relationship at issue met the standard to grant a new trial. Because
the district court did not rule on the spoliation issue, it is not preserved for our
review. Id. at 537.
The Melcher’s moved for a new trial pursuant to Iowa Rule of Civil
Procedure 1.1004(7), which allows a party to move for a new trial upon the
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discovery of “[m]aterial evidence, newly discovered, which could not with
reasonable diligence have been discovered and produced at the trial.”
A party seeking a new trial on such grounds must demonstrate three
things: (1) the evidence is newly discovered and could not, in the
exercise of due diligence, have been discovered prior to the
conclusion of trial; (2) the evidence is material and not merely
cumulative or impeaching; and (3) the evidence will probably change
the result if a new trial is granted.
Benson, 537 N.W.2d at 762. When considering the first element of the Benson
test, the evidence must have both (1) “existed at the time of trial” and (2) “for
excusable reasons, the party was unable to produce at the time.” Id. at 762–63.
Trial was held in September and October of 2019, and all of the evidence in the
record points to the affair taking place in January and February of 2020. Thus, no
evidence of any affair existed because it had not yet taken place. Id. In order to
qualify as newly discovered evidence that would lead to a new trial, it must have
existed at the time of the trial. Id. We agree with the district court’s decision to
deny the motion for new trial.
2. Expert Witness Designation
The Melchers argue the district court erred in denying the motion to strike
an allegedly late-designated expert witness, Tim Rozendaal.
Courts are granted broad discretion to consider motions to strike expert
witnesses challenged as untimely. Hagenow, 842 N.W.2d at 670. Iowa Rule of
Civil Procedure 1.500(d) requires that disclosure of experts occur “(1) No later than
90 days before the date set for trial; or (2) Within 30 days after the other party’s
disclosures if the evidence is intended solely to contradict or rebut evidence on the
same subject matter identified by another party under rule 1.500(2)(b) or (c).”
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Cooley Pumping informed the Melchers on July 11, 2019 that Tim
Rozendaal would perform a time-of-transfer evaluation. They requested that the
evaluation occur within three weeks so that the September trial could still occur. A
hearing was held on July 31 to determine the parameters of the evaluation, who
may be present, and whether interaction would be permitted. The evaluation
occurred on August 1, and Rozendaal’s report was provided to the Melchers on
August 19. That information was then updated on August 28. Cooley Pumping
did not file the designation of expert witness with the court until August 29.
The initial disclosure of Rozendaal was sixty-nine days before trial. The
evaluation was forty-eight days before trial. The report was provided to the
Melchers thirty days before trial and was then supplemented twenty-one days
before trial. By the language of the rule, deadlines were missed. Iowa R. Civ.
P. 1.500(d). However, the Melchers had approximately three weeks from the
notification that Rozendaal would perform the evaluation until it occurred. The
Melchers appeared for a hearing to be heard about the conduct of the parties on
their property. It appears that the Melchers were present during the test. On our
review of the record, no prejudice resulted from the late designation and the
expert’s admission was not an abuse of discretion. See Hagenow, 842 N.W.2d at
670.
3. Substantial Justice
The Melchers argue that the district court erred in failing to grant a new trial.
They allege that when the record is viewed as a whole, considering numerous legal
errors and witness issues, the verdict does not do substantial justice between the
parties.
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“[A] trial court has inherent power to grant a new trial when a verdict fails to
administer substantial justice.” Crow, 871 N.W.2d at 108. If the district court
makes a determination that substantial justice was not done, it may grant a new
trial pursuant to Iowa Rule of Civil Procedure 1.1004 if “the reason the verdict fails
to administer substantial justice [is] apparent in the record to justify” the new trial.
Id. The Melchers point to legal errors, biased witnesses, a noncompliant system,
and the lack of a remedy. However, our review has already established that the
alleged legal errors, witness issues, and complaints regarding the system’s
compliance were correctly determined by the district court. The Melcher’s received
a functional system that substantially complies with the applicable regulations and
contract provisions. We find no apparent justification for a new trial and no abuse
of discretion. Id.
C. Fees and Costs
The Melchers argue the district court erred in awarding attorney fees and
costs of the litigation and that the district court lacked jurisdiction to award fees
after the appeal was taken. Cooley Pumping requests an award of appellate
attorney fees.
1. Attorney Fees and Costs
The Melchers argue the district court erred in awarding attorney fees
because their post-trial motions should have been granted and fees that were
associated with a case involving Cooley Pumping’s insurer were unrelated to the
case at issue.
“When judgment is recovered upon a written contract containing an
agreement to pay an attorney fee, the court shall allow and tax as a part of the
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costs a reasonable attorney fee to be determined by the court.” Iowa Code
§ 625.22 (emphasis added). “Costs shall be recoverable by the successful against
the losing party.” Id. § 625.1 (emphasis added). The parties do not dispute the
fact that the contract included an agreement that if litigation resulted from the
contract, “the prevailing party in said legal action shall be entitled to recover its
reasonable attorney’s fees and costs of litigation related to said legal action.” “The
district court is considered an expert in what constitutes a reasonable attorney fee,
and we afford it wide discretion in making its decision.” GreatAmerica Leasing
Corp., 691 N.W.2d at 733. The applicant bears the burden to prove “the services
were reasonably necessary and that the charges were reasonable in amount.”
Landals v. George A. Rolfes Co., 454 N.W.2d 891, 897 (Iowa 1990). Courts may
consider factors including “the time necessarily spent, the nature and extent of the
service, the amount involved, the difficulty of handling and importance of the
issues, the responsibility assumed and results obtained, the standing and
experience of the attorney in the profession, and the customary charges for similar
service.” Id.This case began with a $1000.00 dispute in small claims court for the unpaid
balance on the Melchers’ account with Cooley Pumping. The Melchers’
counterclaims removed the case to the district court. We agree with the district
court’s rendition of the litigation following the change, “involv[ing] extensive
discovery and pretrial litigation (including two motions for summary judgment), a
lengthy trial and post-trial briefs.” Litigation before the district court began in
December 2017 and was not complete until December 2020. The parties
appeared before the court for three hearings before the three and one-half day trial
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and appeared again for post-trial motions. The district court’s decision on attorney
fees and costs involves all of the factors described in Landals. Id. We have
already found the district court did not err in denying the Melchers’ post-trial
motions. Furthermore, we agree with the district court that any fees that may
overlap with the Melchers’ claim involving the insurer are “reasonable in light of the
issues relevant to the defense of the claims in” this matter. We also agree with the
district court that, “had the [Melchers] prevailed they would have likely submitted a
similarly large request for attorney fees and costs relative to the amount of
damages they were claiming.” Finding nothing clearly unreasonable or untenable
on our review of the record, we find no abuse of discretion. GreatAmerica Leasing
Corp., 691 N.W.2d at 732.
2. Jurisdiction Following Notice of Appeal
The Melchers argue that the notice of appeal, filed September 3, 2020,
divested the district court of jurisdiction to consider attorney fees.
Although this issue relates to an attorney-fee award, because it calls
jurisdiction into question, we review for correction of errors at law. In re Marriage
of Engler, 532 N.W.2d 747, 748 (Iowa 1995). Generally, when one party files a
notice of appeal, jurisdiction rests solely with the appellate court. In re Estate of
Tollefsrud, 275 N.W.2d 412, 417 (Iowa 1979). But that rule is not without
exception. “[A] trial court retains jurisdiction to proceed as to issues collateral to
and not affecting the subject matter of the appeal.” Id. at 418. Attorney fees may
be considered “separate and distinct” from underlying matters that transfer
jurisdiction on the filing of an appeal. Landals, 454 N.W.2d at 897.
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In its February 27, 2020 order, the district court found Cooley Pumping
should receive fees and costs following the filing of fee affidavits. Cooley Pumping
then filed its motion for fees and costs, and litigation on that issue began. The
record reveals that on June 24, prior to the hearing on post-trial motions, Cooley
Pumping filed a supplemental affidavit, increasing the amount requested in fees.
The initial request listed fees in the amount of $100,091.00 and costs in the amount
of $4653.38. The supplemental request was for an additional $34,560.05 in fees.
The district court ruled on the post-trial motions on August 31. The procedural
history described in that ruling lists the original motion for fees and costs, but does
not list the supplemental motion. In its analysis, the district court left out the
supplemental request again. The Melchers filed a notice of appeal on September
3. On September 15, Cooley Pumping filed an application for the district court to
rule on its supplemental request; the Melchers resisted. The district court’s ruling
on September 21 granted all but $213.30 of the supplemental request.
The district court reviewed the supplemental request through the factors
presented in Landals, and awarded $34,346.75. 454 N.W.2d at 897. The fees
were related to the Melchers’ “post-judgment motions and resistances,” which
were equally contentious to trial. Although it would have been tidier for the district
court to consider the supplemental request and rule on it with the other fees, the
district court did not lack jurisdiction to rule on the supplemental award after the
notice of appeal was filed. The August 31 order considered all of the fees incurred
by Cooley Pumping through March 3, 2020. The supplemental request related to
the ensuing post-trial litigation, which was extensive. Because the requests related
to distinct phases of litigation, trial and post-trial, and the supplemental request
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had no impact on the substantive issues of the August 31 ruling that was on appeal,
we find the district court retained jurisdiction to rule on the collateral matter of
supplemental attorney fees.
3. Appellate Attorney Fees
Cooley Pumping requests an award of appellate attorney fees. The
Melchers resist, arguing only that Cooley Pumping should not prevail on appeal
and should receive no fee award. “Although a party entitled to attorney fees under
a contract may be entitled to reasonable attorney fees on appeal,” appellate courts
are best equipped to consider the request by examining an affidavit listing the fees
requested. Van Sloun, 778 N.W.2d at 184. In the absence of an affidavit, we find
Cooley Pumping is entitled to appellate attorney fees, but remand to the district
court for its consideration of an appropriate award after an attorney fee affidavit is
filed. See In re Marriage of Heiar, 954 N.W.2d 464, 473–74 (Iowa Ct. App. 2020).
IV. Conclusion
On our review of the record, we find the district court applied the correct
standard of compliance to the contractual issues presented and substantial
evidence was presented to support the conclusion that Cooley Pumping
substantially performed the terms of the contract. Cooley Pumping’s substantial
performance was appropriately considered as a defense to the Melchers’
counterclaims. Furthermore, we agree with the district court’s denial of motions
for new trial because there was no newly discovered evidence that existed at the
time of trial, no prejudice resulted from the late designation of an expert witness,
and substantial justice was done between the parties. Finally, we find no abuse of
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discretion in the district court’s calculation or award of attorney fees or costs. We
remand for a determination of appellate attorney fees.
AFFIRMED AND REMANDED.