Delaine Petersen v. Kirk Huehn ( 2020 )

IN THE COURT OF APPEALS OF IOWA
No. 19-1594
Filed September 2, 2020
DELAINE PETERSEN,
Plaintiff-Appellant,
vs.
KIRK HUEHN,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Carroll County, Gary McMinimee,
Judge.
Delaine Petersen appeals an order granting Kirk Huehn’s motion for
summary judgment. AFFIRMED.
Steven Hamilton of Hamilton Law Firm, P.C., Storm Lake, for appellant.
Ryan Stefani of Nyemaster Goode, P.C., Des Moines, for appellee.
Considered by Tabor, P.J., and May and Greer, JJ.
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MAY, Judge.
Delaine Petersen appeals an order granting Kirk Huehn’s motion for
summary judgment on grounds of claim preclusion. We affirm.
I. Background Facts and Prior Proceedings
Petersen owned a custom-built motorcycle. He sought insurance for the
motorcycle from Huehn, an agent of State Farm Automobile Insurance Company
(State Farm). Petersen asked for coverage in the amount of $35,000—the value
he ascribed to the motorcycle. State Farm issued Petersen a policy covering the
motorcycle for the period of April 24, 2014, through April 24, 2015. On or about
April 13, 2015, Petersen claims the motorcycle sustained a total loss. Petersen
submitted a claim to State Farm requesting $35,000. Petersen alleges State Farm
denied coverage.
In March 2018—almost three years after the alleged total loss of the
motorcycle—Petersen filed suit against State Farm. In that case, Petersen alleged
State Farm denied his claim in bad faith. State Farm removed the case to the
United States District Court for the Southern District of Iowa (Southern District).
State Farm then filed a motion to dismiss. State Farm argued Petersen’s suit was
barred by the policy’s one-year limitation period. The Southern District agreed and
dismissed Petersen’s suit. The Eighth Circuit Court of Appeals affirmed. See
Petersen v. State Farm Mut. Auto. Ins. Co., 750 F. App’x 517, 518 (8th Cir. 2019).
In July 2018, Petersen filed the present suit against Huehn. Petersen
alleges Huehn was negligent in representing to Petersen that he received a stated
value policy for $35,000. Because of this negligence, Petersen claims he “has
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been deprived of the insurance amount he was told that he had by Defendant
Huehn.”
Huehn moved for summary judgment. The district court granted the motion
on the basis of claim preclusion. Petersen now appeals.
II. Standard of Review
“[W]e review a district court’s grant of summary judgment for correction of
errors at law.” Boelman v. Grinnell Mut. Reinsurance Co., 826 N.W.2d 494, 500
(Iowa 2013). Summary judgment is proper “when the moving party demonstrates
there is no genuine issue of material fact and that [the party] is entitled to judgment
as a matter of law.” Id. at 501. We may resolve a matter on summary judgment if
the only conflict concerns legal consequences of undisputed facts. Id.III. Analysis
In general, “claim preclusion holds that a valid and final judgment on a claim
bars a second action on the adjudicated claim or any part thereof.” Pavone v.
Kirke, 807 N.W.2d 828, 835 (Iowa 2011). In effect, “a party must litigate all matters
growing out of the claim.” Penn v. Iowa State Bd. of Regents, 577 N.W.2d 393,
398 (Iowa 1998). And claim preclusion “applies not only to matters actually
determined in an earlier action but to all relevant matters that could have been
determined.” Shumaker v. Iowa Dep’t of Transp., 541 N.W.2d 850, 852 (Iowa
1995). So, claim preclusion may bar litigation on matters the parties never litigated
in the first claim. Arnevik v. Univ. of Minn. Bd. of Regents, 642 N.W.2d 315, 319
(Iowa 2002).
To establish claim preclusion a party 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)
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the claim in the second suit could have been fully and fairly
adjudicated in the prior case (i.e., both suits involve the same cause
of action).
Pavone, 807 N.W.2d at 836. If any element is missing, a defense of claim
preclusion will fail. Arnevik, 642 N.W.2d at 319.
We start with the first element, whether the parties were the same or in
privity. Petersen was the plaintiff in both cases. And, throughout both cases,
Petersen has maintained that State Farm and Huehn are principal and agent.
Consistent with this approach, Petersen does not deny that State Farm and Huehn
are in privity. So we consider the first element satisfied.
We turn next to the second element, whether there was a final judgment in
the prior case. This is not disputed, either. The parties agree that the previous
action—Petersen v. State Farm—ended in a final judgment on the merits.
Specifically, the Southern District granted State Farm’s motion to dismiss, and the
Eighth Circuit affirmed. See Petersen, 750 F. App’x at 518. The second element
is satisfied.
We turn then to the third and final element. To determine whether a claim
could have been fully and fairly adjudicated in the prior case—whether both suits
involve the same cause of action—we look at whether there is
a natural grouping or common nucleus of operative facts. Among
the factors relevant to a determination [of] 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. . . . If there is a
substantial overlap, the second action should ordinarily be held
precluded.
Pavone, 807 N.W.2d at 837 (quoting Restatement (Second) of Judgments § 24
cmt. b (Am. Law Inst. 1982)). Even if “different harms, substantive theories,
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measures[,] or kinds of relief” are brought, there may still be a single cause of
action. Villarreal v. United Fire & Cas. Co., 873 N.W.2d 714, 721 (Iowa 2016)
(quoting Restatement (Second) of Judgments § 24 cmt. c). And parties are “not
entitled to a ‘second bite’ simply by alleging a new theory of recovery for the same
wrong.” Bennett v. MC No. 619, Inc., 586 N.W.2d 512, 517 (Iowa 1998).
Like the district court, we believe the overlap between the two cases is more
than sufficient. Both cases depended on the same allegations of fact, namely,
(1) Petersen owned a motorcycle; (2) Petersen valued his motorcycle at $35,000;
(3) Petersen wanted insurance that would pay $35,000; (4) Huehn told Petersen
he procured a State Farm policy that would pay $35,000; (5) Petersen’s motorcycle
suffered a total loss; (6) Petersen made a claim with State Farm for $35,000; and
(7) State Farm denied the claim. And to a large extent, both cases focus on the
same alleged wrongdoing—Huehn’s misrepresentation that he procured a policy
that would pay $35,000. Plus both cases allege the same basic harm—that
Petersen “has been deprived of the insurance amount he was told that he had by
Defendant Huehn.”1 As the district court correctly noted, “it is apparent the two
1 This quote comes from Petersen’s petition against Huehn. But it also the gist of
his action against State Farm. In his petition against State Farm, Petersen alleged:
(1) Petersen “believed, through research, his motorcycle was valued” at $35,000;
(2) Petersen “sought out insurance” for the motorcycle “that would pay, in the event
of a total loss,” $35,000; (3) Petersen “very explicitly sought a statement from his
State Farm agent,” Huehn, “that State Farm would provide such insurance”; (4)
Huehn “assured and stated” to Petersen that he “did write . . . a policy of insurance
on behalf of State Farm” that “provided the specific coverage” Petersen sought; (5)
after the motorcycle allegedly sustained a total loss, Petersen “presented a claim
promptly to State Farm claiming a total loss of the motorcycle and the payment of
the amount of $35,000”; and (6) even so, “State Farm has denied and continues
to deny such demand and paid 0 [sic] for the motorcycle loss.” For damages,
Petersen sought “the cost of the motorcycle, the lost use of the motorcycle, and
punitive damages.”
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actions stem from the same transaction and that there would have been a
substantial overlap of evidence in the two cases.” We conclude the third element
is satisfied.
On appeal, Petersen suggests the one-year limitation provision is a
“personal defense” for State Farm. So, Petersen claims, his defeat in the suit
against State Farm does not bar his current suit against Huehn. For support,
Petersen relies on Restatement (Second) of Judgments, section 51:
If two persons have a relationship such that one of them is vicariously
responsible for the conduct of the other, and an action is brought by
the injured person against one of them, the judgment in the action
has the following preclusive effects against the injured person in a
subsequent action against the other.
(1) A judgment against the injured person that bars him from
reasserting his claim against the defendant in the first action
extinguishes any claim he has against the other person responsible
for the conduct unless:
(a) The claim asserted in the second action is based upon
grounds that could not have been asserted against the defendant in
the first action; or
(b) The judgment in the first action was based on a defense
that was personal to the defendant in the first action.
(Emphasis added.)
As a preliminary matter, we have concerns about error preservation. See
Top of Iowa Coop. v. Sime Farms, Inc., 608 N.W.2d 454, 470 (Iowa 2000) (noting
that courts may consider error preservation on their own motion). “It is a
fundamental doctrine of appellate review that issues must ordinarily be both raised
and decided by the district court before we will decide them on appeal.” Meier v.
Senecaut, 641 N.W.2d 532, 537 (Iowa 2002) (emphasis added). While the district
court’s ruling mentioned the possibility that State Farm “might have a policy
defense (limitation of action) that might not have been available to Huehn,” the
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district court did not decide the issue. (Emphasis added.) Nor did Petersen file an
Iowa Rule of Civil Procedure 1.904(2) motion. So we doubt Petersen’s personal-
defense theory was preserved.
Even assuming the issue was preserved, though, we must still affirm unless
Petersen has demonstrated error by the district court. See Clement v. Irwin, No.
19-1192, 2020 WL 4498860, at *2 (Iowa Ct. App. Aug. 5, 2020) (collecting cases).
Petersen has not done so.
Petersen’s personal-defense theory is that, by suing his agent, he can
obtain the proceeds of an insurance policy without showing he has complied with
the terms of a policy, including a suit-limitation provision. Instead, Petersen claims,
“he must only prove that Huehn represented an amount of coverage and that he
[Petersen] did not get it.” These proofs alone, Petersen says, would support “a
number of theories,” such as “[a]n estoppel,” “a contract action,” “or
misrepresentation action.” But Petersen does not support these theories with
authority. So we decline to treat them as adequate grounds for reversal. See Iowa
R. App. P. 6.903(2)(g)(3) (“Failure to cite authority in support of an issue may be
deemed waiver of that issue.”).
IV. Conclusion
Petersen has not shown the district court erred by granting summary
judgment to Huehn. We affirm.
AFFIRMED.