England v. Iowa Department of Transportation ( 2022 )

IN THE COURT OF APPEALS OF IOWA
No. 21-0470
Filed August 3, 2022
JEFFREY ENGLAND, LARRY ENGLAND and CHARLOTTE ENGLAND,
Plaintiffs-Appellees,
vs.
STATE OF IOWA ex rel., IOWA DEPARTMENT OF TRANSPORTATION,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Wapello County, Crystal S. Cronk,
Judge.
The Iowa Department of Transportation (DOT) appeals the district court’s
denial of the DOT’s motion for summary judgment. REVERSED AND
REMANDED.
Thomas J. Miller, Attorney General, and Matthew S. Rousseau, Assistant
Attorney General, for appellant.
Nathan A. Olson and Christine E. Branstad of Branstad & Olson Law Office,
Des Moines, for appellees.
Considered by May, P.J., and Schumacher and Badding, JJ.
2
SCHUMACHER, Judge.
This opinion addresses the second appeal concerning a 2016 land auction
by the Iowa Department of Transportation (DOT). The DOT appeals the district
court’s denial of the DOT’s motion for summary judgment. We determine the
breach-of-contract claim instituted by Jerry, Larry, and Charlotte England (the
Englands) is barred by their previous litigation. Accordingly, we reverse and
remand for entry of summary judgment for the DOT.
I. Background Facts & Proceedings
The facts underlying this appeal were recited by this court in a 2019
decision:
The DOT owns the parcel of land at issue in this appeal. In
2016, the DOT decided to dispose of the parcel by auction. The DOT
opened the auction to the owners of the three abutting pieces of
property: Jon and Cheryl Simparcel, Kurt and Carol Anderson, and
Jeffrey England. The DOT sent the owners of each abutting parcel
a letter and a bidding form. The letter stated that “Iowa DOT policy
allows a purchase preference for all abutting owner(s) of land to be
sold.” The letter stated it would give preference to bids that equaled
or exceeded the fair market value of the parcel, which the DOT
determined was $45,000. The bid form stated that to submit a valid
bid the bidder must include a check with the returned form. The form
also pre-printed $45,000 as the default bid amount: “I herewith
submit an unconditional offer of $45,000 to the [DOT] for the
purchase of the following land[.]” Finally, the form stated “The [DOT]
reserves the right to waive any technicalities and to reject any or all
bids or offers.”
The Andersons returned a completed form. The bid form
offered $45,000 and was accompanied by a check for the same
amount. Jeffrey England also submitted a form. Jeffrey’s bid form
left the pre-printed bid amount of $45,000. However, Jeffrey’s bid
was accompanied by a check signed by his parents, Larry and
Charlotte, in the amount of $51,016. After the Andersons learned
another party was interested in the property, they increased their bid
to $50,000. The bidding period then closed.
Subsequently, the DOT called Jeffrey. The exact substance
of that phone call is not in the record. Jeffrey contends he was
“informed he was the high bidder for the parcel.” According to the
3
agency, Jeffrey “was informed that the check from Larry and
Charlotte England for $51,016 was the highest offer, and that there
were discrepancies between the Offer to Buy Jeffrey England signed
and the check received from Larry and Charlotte England.” Jeffrey
was also allegedly informed “the DOT would need to send a new
Offer to Buy form to Larry and Charlotte England, to be signed so
that the offer would match the check.”
On the same day, the DOT also called Charlotte. It is unclear
exactly what transpired during this phone call. According to the DOT,
Charlotte was “informed of the discrepancies between the Offer to
Buy that Jeffrey England signed and the check received from Larry
and Charlotte England.” She was also told “that [the DOT] would be
mailing her paperwork, including a new Offer to Buy, to be signed by
Larry and Charlotte England, so that the offer would match the
check.”
Finally, the DOT sent the Andersons a letter that explained
that their bid was unsuccessful. The DOT also returned the
Andersons’ uncashed check.
Shortly after, the DOT attempted to mail Charlotte and Larry
the original, voided bid form that Jeffrey had submitted. The DOT
also sent a blank bid form and a note that said, “Cross off the amount
of $45,000.00 and write in $51,016.00 above it and initial. Fill in
name as Larry England and Charlotte England. Please sign and date
as 3-18-16.” However, because of a clerical error, the DOT
inadvertently sent the forms to the Andersons instead of Charlotte
and Larry.
After the Andersons were inadvertently mailed the letter
intended for Larry and Charlotte, the Andersons’ attorney contacted
the DOT regarding the potential sale of the property. The Andersons
raised concerns that the land was being sold to parties who were not
abutting landowners. They requested “an opportunity for an open
auction of the property with the abutting land owners identified in your
disposal notice.” In response to the Andersons’ concerns, the DOT
reviewed the matter and concluded that the sale of the land should
not go forward. The DOT issued Charlotte and Larry a check
refunding their payment. The DOT also sent letters to all abutting
landowners, informing them that the sale would be cancelled and the
DOT would reinitiate the bidding process at a later time.
In response, the Andersons and the Englands petitioned for a
declaratory order. The Englands claimed the DOT was contractually
bound to sell the land to Jeffrey or, in the alternative, the DOT was
contractually bound to sell the land to Larry and Charlotte. The
Andersons claimed they were the sole abutting landowners to place
a valid bid and they were therefore entitled to the property.
In response, the DOT issued a declaratory order, determining
that it had not erred in cancelling the auction and that it had not
entered into an enforceable contract with Jeffery or Charlotte and
4
Larry England. Both the Andersons and the Englands appealed to
the district court. The district court affirmed.
Anderson v. State ex rel. Iowa Dep’t of Transp., No. 17-1276, 2019 WL 1055720,
at *1–2 (Iowa Ct. App. Mar. 6, 2019). On appeal, we affirmed. Id. at *1.
Our previous opinion noted that “[i]n the preprinted forms mailed to the
potential bidders, the DOT made explicitly clear that it reserved the right ‘to reject
any or all bids and offers.’ This reservation of rights was not qualified or limited in
any respect.” Id. at *3. Accordingly, “nothing in the solicitation prevented the DOT
from canceling the auction. . . . That wholly discretionary decision was certainly
within its purview.” Id. Our court noted that the DOT lacked the authority to
determine whether there was a valid contract between itself and another party. Id.
at *2. Instead, “to the extent the parties seek a declaration of contract rights, their
respective remedies lie in the district court and not within the very agency allegedly
a party to the contract.” Id.
The Englands initiated the instant action on November 19, 2019, filing a
petition in district court. The petition claimed the DOT breached the contracts it
made with both Jeffrey and with Charlotte and Larry. The Englands requested
specific performance to convey the land. The DOT moved for summary judgment,
alleging that the Englands’ claim was barred by their previous lawsuit, which
culminated in the Anderson decision.
The district court denied the DOT’s motion for summary judgment. The
court noted that, “[u]nder typical circumstances,” it would find claim preclusion
based on the decision of the district court in Anderson. However, the court found
that the Englands “did not have a full and fair opportunity to litigate the claim in the
5
district court proceeding” because of the more stringent evidentiary rules and
because “the district court did not make independent or de novo findings.” The
DOT applied for interlocutory appeal and request for stay, which our supreme court
granted.
II. Standard of Review
We review summary judgment rulings for corrections of errors at law.
Villarreal v. United Fire & Cas. Co., 873 N.W.2d 714, 719 (Iowa 2016). “Summary
judgment is appropriate only if no genuine issues of material fact exist and the
moving party is entitled to judgment as a matter of law.” Id.; see also Iowa R. Civ.
P. 1.981(3). “[W]e examine the record in the light most favorable to the nonmoving
party to determine if the moving party has met its burden.” Pavone v. Kirke, 807
N.W.2d 828, 832 (Iowa 2011).
III. Discussion
The DOT asserts the Englands’ claims are barred by the previous litigation
that culminated in the Anderson decision. “The general rule of claim preclusion
holds that a valid and final judgment on a claim bars a second action on the
adjudicated claim or any part thereof.” Id. at 835. The doctrine prevents a party
from taking a “second bite” at the same litigation. Bennett v. MC No. 619, Inc., 586
N.W.2d 512, 517 (Iowa 1998). “[C]laim preclusion will apply ‘not only to matters
actually determined in an earlier action but to all relevant matters that could have
been determined.’” Pavone, 807 N.W.2d at 835 (quoting Penn v. Iowa State Bd.
of Regents, 577 N.W.2d 393, 398 (Iowa 1998)). Therefore, “[c]laim preclusion may
preclude litigation on matters the parties never litigated in the first claim.” Id.6
A. Claim Preclusion & Agency Declaratory Orders
As a preliminary matter, the parties disagree on whether the administrative
decision is entitled to a preclusive effect.1 Both parties cite Ghost Player, LLC v.
Iowa Department of Economic Development, 906 N.W.2d 454 (Iowa 2018). In that
case, our supreme court recognized Iowa’s adoption of section 83 of the
Restatement (Second) of Judgments, which notes that administrative actions
ordinarily do not carry preclusive effect unless they were made via processes that
contain the “essential elements of adjudication.” Ghost Player, 906 N.W.2d at
462–63. The court explained:
The Restatement (Second) provides that “the essential
elements of adjudication” include adequate notice, the right of a party
“to present evidence and legal argument” in support of the party’s
contentions, and “to rebut evidence and argument by opposing
parties.” Other essential elements of adjudication include “[a]
formulation of issues of law and fact in terms of application of rules
with respect to specified parties,” a “rule of finality,” and “[s]uch other
procedural elements as may be necessary to constitute the
proceeding a sufficient means of conclusively determining the matter
in question.”
A comment to section 83 explains its rationale. According to
the comment,
Where an administrative agency is engaged in
deciding specific legal claims or issues through a
procedure substantially similar to those employed by
courts, the agency is in substance engaged in
adjudication. Decisional processing using procedures
whose formality approximates those of courts may
properly be accorded the conclusiveness that attaches
to judicial judgments.
1 The Englands also claim there is an important distinction between declaratory
orders, which offer prospective relief, and traditional contract claims, which offer
retrospective relief. See Int’l Union, United Auto, Aerospace, Agric. & Implement
Workers of Am. v. Iowa Dep’t of Workforce Dev., No. 00-2112, 2002 WL 1285965,
at *2 (Iowa June 12, 2002). However, that distinction serves little purpose here.
The Englands base both claims on the same conduct and ask for the same relief.
Thus, while their claims technically have different orientations, that difference does
not alter our conclusion.
7
Id. at 463 (citations omitted).
The court noted, “Short of a formal, contested case hearing, there exists a
sliding scale of formality and procedure in other agency actions.” Id. at 465. The
court ultimately found that the process the Iowa Department of Economic
Development (IDED) utilized was not entitled to preclusive effect because neither
the legislature nor the agency established procedures that included procedural
rights similar to traditional adjudications:
These agency actions were imbued with informality. Ghost
Player did not have a right to, nor was it provided, any kind of hearing
where it was allowed to present arguments and the IDED would be
required to respond to the arguments. Ghost Player was permitted,
at the agency’s discretion, to present documents and attempt to
persuade the IDED to grant tax credits, but the IDED was not
required to make formal findings of law and fact in response to Ghost
Player. The lack of procedural rights and trial-type opportunities to
present evidence and argument strongly weighs against applying res
judicata in this case on behalf of either Ghost Player or IDED.
Further, the IDED action granting tax credits was not a
proceeding in which two parties contest facts and law before an
agency decision-maker in an adversarial proceeding. Adjudications
are ordinarily a three-cornered proposition, with contesting parties
jousting before a passive third-party tribunal. Here, the parties were
binary. There were no adversaries making arguments and proving
their cases before a third party as is generally required for
adjudication. The IDED staff were acting more like tax accountants
than adjudicators.
Id. at 466.
The DOT asserts the agency decision concerning the cancellation of the
auction is entitled to preclusive effect. They contend, “[A] final adjudicatory
decision of an administrative agency such as the Commission is entitled to res
judicata effect as if it were a judgment of a court.” City of Des Moines Police Dep’t
8
v. Iowa C.R. Comm’n, 343 N.W.2d 836, 839 (Iowa 1984) (citing Toomer v. Iowa
Dep’t of Job Serv., 340 N.W.2d 594, 598 (Iowa 1983)).
Having reviewed the sliding scale of formality in relation to the
administrative decision, we determine that the administrative decision was an
adjudication that is entitled to preclusive effect.2 An administrative proceeding was
conducted on a lengthy record, followed by an order with written findings. Both
sides were represented at the agency level and at hearing on the petition for
judicial review. The determination that the DOT was within its authority to cancel
the auction carries preclusive effect.
B. Full and Fair Adjudication
To establish claim preclusion, the DOT must show: “(1) the parties in the
first and second action are the same parties or parties in privity, (2) there was a
final judgment on the merits in the first action, and (3) the claim in the second suit
could have been fully and fairly adjudicated in the prior case.” Pavone,807 N.W.2d
at 836. Here, the parties only contest the third element—whether this claim could
have been adjudicated in the previous litigation.3
2 See 17A.9(7) (“A declaratory order has the same status and binding effect as any
final order issued in a contested case proceeding.”); Sierra Club Iowa Chapter v.
Iowa Dep’t of Transp., 832 N.W.2d 636, 647 (Iowa 2013) (“Subsection (7) assures
that declaratory rulings are (i) judicially reviewable, (ii) binding on the petitioner,
the agency, and other parties to the declaratory proceeding, unless reversed or
modified on judicial review, and (iii) have the same precedential effect as contested
cases.’ (quoting Arthur Earl Bonfield, Amendments to Iowa Administrative
Procedure Act, Report on Selected Provisions to Iowa State Bar Association and
Iowa State Government 1–8 (1998)).
3 We agree the first two elements have been met. The parties in this action are
the same as in the first case, thus meeting the first element. “On the merits” means
“[a] judgment based on the evidence rather than on technical or procedural
grounds.” Peppmeier v. Murphy, 708 N.W.2d 57, 64 (Iowa 2005) (alteration in
original). The Anderson court, as well as the district court below it, found the DOT
9
“To determine whether the claim in the second suit could have been fully
and fairly adjudicated in the prior case, that is, whether both suits involve the same
cause of action, this court must examine: ‘(1) the protected right, (2) the alleged
wrong, and (3) the relevant evidence.’” Id. at 837 (quoting Iowa Coal Mining Co.
v. Monroe Cnty., 555 N.W.2d 418, 441 (Iowa 1996)). Our supreme court has noted
a distinction between the same cause of action and related causes of action:
[A single cause of action] connotes a natural grouping or
common nucleus of operative facts. Among the factors relevant to a
determination whether the facts are so woven together as to
constitute a single claim are their relatedness in time, space, origin,
or motivation, and whether, taken together, they form a convenient
unit for trial purposes. Though no single factor is determinative, the
relevance of trial convenience makes it appropriate to ask how far
the witnesses or proofs in the second action would tend to overlap
the witnesses or proofs relevant to the first. If there is a substantial
overlap, the second action should ordinarily be held precluded. But
the opposite does not hold true; even when there is not a substantial
overlap, the second action may be precluded if it stems from the
same transaction or series.
Id. (quoting Restatement (Second) of Judgments § 24 cmt. B, at 199 (1982)).
Here, the Englands raise the same claim as in their previous litigation
related to the validity of the contract. Anderson, 2019 WL 1055720, at *2. The
Englands’ claim rests on the same alleged wrong perpetrated by the DOT—the
violation of their alleged contract when the DOT cancelled the land auction.
Similarly, in both the first case and this one, the Englands request specific
performance, compelling the DOT to deliver title to the land. Finally, the evidence
for both claims would be the same: the bidding form and subsequent bids, DOT
policies, and phone calls between the parties.
had not violated the Iowa Administrative Procedure Act, rendering a decision on
the merits. See Anderson, 2019 WL 1055720, at *3.
10
The Englands highlight a sentence that comes from our decision in
Anderson. In it, our court declined to reach the contract claim, noting, “To the
extent the parties seek a declaration of contract rights, their respective remedies
lie in the district court and not within the very agency allegedly a party to the
contract.” Id. at *2. The Englands emphasize this sentence as demonstrating that
their contract claims could not have been brought in the previous litigation because
the DOT administrative action could not render a decision on the validity of its own
contract. The district court relied on this sentence as well in denying the DOT’s
motion for summary judgment.
While our court stated it was not considering the contract claims, we noted
the following:
In the letter sent to the potential bidders, the DOT stated it was
soliciting offers from abutting owners for the purchase of the land.
The letter made clear that any offers were for “consideration” by the
DOT “prior to offering the property for public sale.” In the preprinted
forms mailed to the potential bidders, the DOT made explicitly clear
that it reserved the right “to reject any or all bids or offers.” This
reservation of rights was not qualified or limited in any respect. There
was thus nothing in the solicitation that prevented the DOT from
canceling the auction. Here, the DOT determined there was too
much confusion to move forward with this particular auction and
decided to start over. That wholly discretionary decision was
certainly within its purview.
Id. at *3.
Our prior opinion found that the DOT did not violate the Administrative
Procedure Act because it had informed the abutting landowners that the forms
were merely for the consideration of the DOT and that it could refuse any and all
bids. Id. As a result, there was nothing preventing the DOT from rejecting all bids
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and starting over. Our court’s determination was that the Englands had submitted
bid or offer that could be, and was, rejected by the DOT. See id.
This determination comports with the purpose of claim preclusion by
preventing the Englands from multiple attempts to achieve their desired result. It
would be inconsistent to hold on the one hand that the DOT could cancel the land
auction, while on the other hand finding that the auction was complete and the
DOT was bound by contract with the Englands. Simply put, those propositions
cannot both be true. The DOT could not be within its authority to cancel bids or
offers and also have formed a contract on the basis of such a bid or offer. This
would require a disregard of the previous court of appeals decision.
During oral arguments, questions also arose over the applicability of
Lambert v. Iowa Department of Transportation., 804 N.W.2d 253 (Iowa 2011).
That case noted, “A clear signal from a court that it did not intend its decision to
have preclusive effect on a specific claim should be honored.” Lambert, 804
N.W.2d at 259. However, the Englands, through counsel, expressly disavowed
any reliance on that case.4 In any event, the case is distinguishable from the
4 We also note the Englands do not raise any argument that the Restatement
(Second) of Judgments, section 33 applies to prevent the DOT from raising the
doctrine of claim preclusion. This section provides that a “valid and final judgment
in an action brought to declare rights or other legal relations of the parties is
conclusive in a subsequent action between them as to the matters declared, and,
in accordance with the rules of issue preclusion, as to any issues actually litigated
by them and determined in the action. Our supreme court adopted section 33 in
Gansen v. Gansen, 874 N.W.2d 617, 623 (Iowa 2016), holding
the general rule under the Restatement (Second), section 33 that
only issue preclusion, but not claim preclusion, applies to declaratory
actions should be followed. We find merit to the observation that the
difference between an action declaring rights and a coercive action
is the difference between “diplomacy and war.” The purpose of
declaratory actions—providing prompt and less abrasive relief to the
12
present claim. The district court in Lambert expressly referenced an on-going
action between the same parties when it dismissed Lambert’s claim. Id. at 257–
58. That reference proved to be an important factor in the supreme court’s
decision, as the Lambert court explained, “[C]ritical to our resolution of this case is
the language in the [first case’s] dismissal order that indicated the proceedings in
[the second case] would continue.” Id. at 258. In contrast, there was no on-going
proceeding at the time of Anderson, and as such the court’s reference to the
appropriate forum for a contract claim could be read as advice to litigants in general
as it could be read as instructions to the Englands. Accordingly, Anderson’s
discussion of contract claims was not “[a] clear signal” that the court did not intend
for its decision to have preclusive effect. Here, we are left with a determination
that the DOT was within its authority to cancel the auction and bids. The sentence
highlighted from our prior decision noted only that the agency could not determine
whether a contract existed, and did not comment on the merits of a contract claim.
The previous litigation precludes the Englands’ present contract claim, and
as such is a second action “on the adjudicated claim or any part thereof.” With the
cancellation of the bids, the Englands would be unable to prove an element of a
contract claim. The district court erred in denying the DOT’s motion for summary
parties—is encouraged by this limited application of res judicata
concepts.
The DOT makes clear in its reply brief that it is only relying on the doctrine of claim
preclusion, not issue preclusion. Thus, while section 33 could be applicable to this
dispute, we choose not to resolve that question on our own without the benefit of
briefing from the parties on the issue, which is not free from doubt. Cf. Gansen,
874 N.W.2d at 620 (applying section 33 even though it was not raised by the
parties).
13
judgment. We reverse and remand for entry of summary judgment for the State of
Iowa, ex rel., DOT. 5
REVERSED AND REMANDED.
Badding, J., concurs; May, P.J., dissents.
5 The Englands raise several constitutional issues in the brief. We have reviewed
the same and reject those arguments.
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MAY, Presiding Judge (dissenting)
The majority’s opinion is thoughtful and thorough. But I think our decision
in Anderson v. State ex rel. Iowa Department of Transportation, No. 17-1276, 2019
WL 1055720, at *3 (Iowa Ct. App. Mar. 6, 2019), only adjudicated the statutory
question of whether the Iowa Department of Transportation (DOT) “violated the
Iowa Administrative Procedure Act, Iowa Code chapter 17A (2016)” by cancelling
the auction. Anderson did not adjudicate the separate common law question of
whether the DOT's actions had created or breached a contract. See 2019 WL
1055720, at *2. Indeed, Anderson said the contract-rights issue could only be
decided in a different case. Id. Anderson explained that, “To the extent the parties
seek a declaration of contract rights, their respective remedies lie in the district
court . . . .” Id. Given Anderson’s apparent direction that the parties must take
their contractual dispute to district court, I cannot conclude Anderson barred the
parties from bringing this contract case in district court. So I would affirm the district
court’s denial of summary judgment. I respectfully dissent.