Nationwide Agribusiness Insurance Company, as Subrogee of Farmers Cooperative Company v. Pgi International, Squibb-Taylor, Inc., Cox Manufacturing Company D/B/A Dalton Ag Products, Inc., and Cnh Corp. A/K/A Cnh American, LLC A/S/O Dmi, Inc. , 2016 Iowa App. LEXIS 397 ( 2016 )

IN THE COURT OF APPEALS OF IOWA
No. 15-0364
Filed April 27, 2016
NATIONWIDE AGRIBUSINESS INSURANCE
COMPANY, as subrogee of FARMERS
COOPERATIVE COMPANY,
Plaintiff-Appellant,
vs.
PGI INTERNATIONAL, SQUIBB-TAYLOR,
INC., COX MANUFACTURING COMPANY
d/b/a DALTON AG PRODUCTS, INC.,
and CNH CORP. a/k/a CNH AMERICAN,
LLC a/s/o DMI, INC.,
Defendants-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Boone County, Michael J. Moon,
Judge.
Nationwide Agribusiness Insurance Company appeals following the district
court’s grant of the Appellees’ respective summary judgment motions on
Nationwide’s contribution claim. AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED.
Mark R. Bradford of Bassford Remele, P.A., Minneapolis, Minnesota, and
David L. Brown of Hansen, McClintock & Riley, Des Moines, for appellant.
Mark W. Thomas and Laura N. Martino of Grefe & Sidney, P.L.C., Des
Moines, for appellee PGI International.
2
Jeff H. Jeffries and Michelle R. Rodemyer of Hopkins & Huebner, P.C.,
Des Moines, for appellee Squibb-Taylor, Inc.
Stephen E. Doohen of Whitfield & Eddy, P.L.C., Des Moines, for appellee
Cox Manufacturing Company d/b/a Dalton Ag Products, Inc.
Daniel A. Haws, St. Paul, Minnesota, and Thomas J. Cahill of Cahill Law
Offices, Nevada, for appellee CNH Corp. a/k/a CNH America, L.L.C. a/s/o DMI,
Inc.
Heard by Potterfield, P.J., and Mullins and McDonald, JJ.
3
MULLINS, Judge.
Nationwide Agribusiness Insurance Company (Nationwide) appeals
following the district court’s grant of the Appellees’1 respective summary
judgment motions on Nationwide’s contribution claim.
I. Background Facts and Proceedings
In October 2011, Richard Shaw died as a result of a tragic farming
accident. Richard’s son, Michael, was also injured in his attempt to rescue his
father. In November 2012, Farmers Cooperative Company (FCC) and its insurer,
Nationwide, paid approximately $4 million to the Shaw family to settle the
resulting claims. As part of that settlement, the Shaw family executed releases.
In June 2013, Nationwide, as subrogee of FCC, filed suit against the Appellees,
seeking contribution for the amounts paid to the Shaw family. In August 2014,
the Appellees filed their respective motions for summary judgment, arguing
collectively that Nationwide could not seek contribution because the releases
signed by the Shaw family failed to discharge the liability of the Appellees. By
order dated January 28, 2015, the district court granted the Appellees’ respective
motions for summary judgment. Nationwide appeals.
II. Scope and Standard of Review
Our review of the district court’s grant of summary judgment is for
correction of errors of law. See Jones v. Univ. of Iowa, 836 N.W.2d 127, 139
(Iowa 2013).
1
PGI International, Squibb-Taylor, Inc., Cox Manufacturing Company d/b/a Dalton Ag
Products, Inc., and CNH Corp. a/k/a CNH American, LLC a/s/o DMI, Inc. are collectively
referred to herein as “the Appellees.”
4
A court should grant summary judgment if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to
a judgment as a matter of law. In other words, summary judgment
is appropriate if the record reveals a conflict only concerns the legal
consequences of undisputed facts. When reviewing a court’s
decision to grant summary judgment, we examine the record in the
light most favorable to the nonmoving party and we draw all
legitimate inferences the evidence bears in order to establish the
existence of questions of fact.
Id. at 139-40 (quoting Pitts v. Farm Bureau Life Ins. Co., 818 N.W.2d 91, 96-97
(Iowa 2012)). “[A] ‘factual issue is “material” only if “the dispute is over facts that
might affect the outcome of the suit.”’” Peak v. Adams, 799 N.W.2d 535, 542
(Iowa 2011) (quoting Phillips v. Covenant Clinic, 625 N.W.2d 714, 717 (Iowa
2001)). The burden rests with the movant to show the nonexistence of a material
fact. Pillsbury Co. v. Wells Dairy, Inc., 752 N.W.2d 430, 434 (Iowa 2008).
However, “[t]he resisting party must set forth specific facts showing that a
genuine factual issue exists.” Peak, 799 N.W.2d at 542 (quoting Huber v. Hovey,
501 N.W.2d 53, 55 (Iowa 1993)). “[A] fact question is generated if reasonable
minds can differ on how the issue should be resolved.” Pillsbury, 752 N.W.2d at
434; see also Bank of the W. v. Kline, 782 N.W.2d 453, 456-57 (Iowa 2010).
III. Analysis
In its appeal, Nationwide contends the district court erred in granting
summary judgment, arguing (1) the release unambiguously discharges the
Shaws’ claims against the Appellees; (2) extrinsic evidence establishes the
release unambiguously discharges the Shaws’ claims against the Appellees;
(3) conversely, if the release does not unambiguously discharge claims against
the Appellees, there is an ambiguity in the release and thus extrinsic evidence
5
should be considered; and (4) if the release does not discharge claims against
the Appellees, the contract should be reformed to reflect the true intent of the
parties.
A. The Release
Enforcement of the releases at issue is governed by contract law
principles. See Peak, 799 N.W.2d at 543. Contract “[i]nterpretation is the
process for determining the meaning of the words used by the parties in a
contract.” Pillsbury, 752 N.W.2d at 435. Absent consideration of extrinsic
evidence, the interpretation of a contract is a legal issue. Id. “[C]onstruction of a
contract is the process a court uses to determine the legal effect of the words
used” and is always reviewed as a legal issue. Id. at 436-37.
“The cardinal rule of contract interpretation is to determine what the intent
of the parties was at the time they entered into the contract.” Id. at 437; see also
Peak, 799 N.W.2d at 543 (“In the construction of written contracts, the cardinal
principle is that the intent of the parties must control . . . .” (quoting Iowa R. App.
P. 6.904(3)(n))). Though “[t]he most important evidence of the parties’ intentions
at the time of contracting is the words of the contract,” the court “may look to
extrinsic evidence, including ‘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.’” Peak, 799
N.W.2d at 544 (citation omitted); see also Pillsbury, 752 N.W.2d at 436
(“[A]lthough we allow extrinsic evidence to aid in the process of interpretation, the
words of the agreement are still the most important evidence of the party’s
intentions at the time they entered into the contract.”). Further, we interpret a
6
contract as a whole, see Iowa Fuel & Minerals, Inc. v. Iowa State Bd. of Regents,
471 N.W.2d 859, 863 (Iowa 1991), so as to give effect to all provisions, see
Carter v. Bair, 208 N.W. 283, 283 (Iowa 1926).
Nationwide contends the releases clearly and unambiguously establish
the parties’ intent to release all claims against the Appellees. This contention
requires consideration of contribution claims under Iowa law.
Iowa Code section 668.5(1) (2013) provides “[a] right of contribution exists
between or among two or more persons who are liable upon the same indivisible
claim for the same injury, death, or harm, whether or not judgment has been
recovered against all or any of them.” Where, as here, the party seeking
contribution has settled with the claimant, contribution is available “only if the
liability of the person against whom contribution is sought has been
extinguished.” Iowa Code § 668.5(2); see also Haut v. Frazer, No. 14-0537,
2014 WL 6721258, at *1-2 (Iowa Ct. App. Nov. 26, 2014) (affirming the grant of
summary judgment where the party seeking contribution failed to establish the
injured party had discharged the third party’s liability).
In the case of a release, Iowa Code section 668.7 governs: “A
release . . . or similar agreement entered into by a claimant and a person liable
discharges that person from all liability for contribution, but it does not discharge
any other persons liable upon the same claim unless it so provides.” The Iowa
Supreme Court has interpreted the “unless it so provides” clause as “requir[ing]
the identification of any tortfeasor that is to be released.” Aid Ins. Co. v. Davis
Cty., 426 N.W.2d 631, 635 (Iowa 1988). While noting “the easier course would
require naming these parties,” the court did not require such a rigid rule when the
7
released parties “are otherwise sufficiently identified in a manner that the parties
to the release would know who was to be benefitted.” Id. at 633.
In so finding, the Aid court reasoned:
The legislature in signifying that a release did not discharge a
tortfeasor “unless it so provides” indicates that the release should
contain a proviso or stipulation of the tortfeasors to be released. An
interpretation which allows a general, rather than a specific
designation of tortfeasors would run contrary to and defeat the
requirement that the release “provide” who is to be released.
. . . Requiring a party to name or otherwise identify the
parties they intend to release will clarify their respective rights and
will minimize the possibility of mistake regarding a release’s effect.
Id. at 634.
Here, the releases provide,2 inter alia, that in consideration for the
settlement amounts received, the Shaws
release, acquit, and forever discharge [FCC] and its insurer,
[Nationwide], and all of their employees, agents, volunteers,
officers, directors, insurers, reinsurers, successors, related
companies, predecessors and assigns (“the Settling Parties”), from
all actions, causes of action, claims, demands, damages, costs,
expenses, and compensation.
The releases further indicate they
contemplate[] any and all actions, causes of action, claims,
demands, and losses that were, or that could have been, pursued,
embraced and litigated as a result of the Accident. The Shaws
hereby further covenant and agree that they will not institute in the
future any complaints, suits, actions, causes of action, in law or in
equity against the Settling Parties, for or on account of any
damages, loss, injury or expenses in consequence of the Accident,
known, or unknown, past, present or future.
2
Michael Shaw signed a separate release from the rest of the Shaw family. The
quotations are taken from the release signed by the rest of the Shaw family. In
Michael’s release, the quoted portions are substantively the same, with statements
made in the singular rather than the plural.
8
Of crucial import, not a single reference is made in either release
regarding the discharge of a third party’s liability. To the contrary, the releases
are uniquely and specifically targeted to “the Settling Parties”—of which there is
no dispute, and the releases clearly provide, the Appellees are not members.
See generally Maytag Co. v. Alward, 112 N.W.2d 654, 656 (Iowa 1962) (noting
“the rule expressio unius est exclusio alterius—the expression of one thing of a
class implies the exclusion of others not expressed” is applied “in the
construction of contracts as well as statutes”).
The releases do contain provisions requiring the Shaws to “cooperate fully
with all reasonable efforts of the Settling [P]arties to pursue contribution,
indemnity, subrogation or any other claims against third parties to whatever
extent possible, including the provision of truthful testimony at a deposition
and/or trial in the subsequent litigation.” These clauses, however, stand only for
the proposition the Shaws will comply with their obligation to assist in these suits
insofar as they exist; they do not purport to create an independent right for
Nationwide to pursue these causes of action. Further, there is no proviso that
the Shaws have waived or discharged their rights insofar as those rights might
estop Nationwide from pursuing the above enumerated claims.
The instant releases are even less inclusive in identifying purportedly
released third-parties than the boiler-plate releases rejected in Aid—which
discharged liability as to “all other persons, firms, or corporations, known or
unknown, who are, or might be claimed to be liable”—and its progeny. Aid, 426
N.W.2d at 632; see also Britt-Tech Corp. v. Am. Magnetics Corp., 463 N.W.2d
26, 29 (Iowa 1990) (finding the boiler-plate release that discharged liability of “all
9
other persons, firms or corporations, known or unknown” did not satisfy the
specificity requirements established in Aid). Ultimately, any reference to—let
alone the requisite “specific identification” of—a discharged third party is wholly
absent.
To avoid this facial omission, Nationwide seeks to enter extrinsic evidence
establishing the parties’ intent to discharge the Shaws’ claims against the
Appellees. Nationwide provides sworn affidavits from the Shaws, a sworn
affidavit from the Shaws’ attorney, amended releases, and deposition testimony
and settlement notes from a Nationwide representative, all of which support
Nationwide’s contention the releases were meant to discharge the Shaws’ claims
against the Appellees. These extrinsic documents, however, serve only to alter
the otherwise unambiguous language of the releases and are thus inadmissible.
See Wellman Sav. Bank v. Adams, 454 N.W.2d 852, 856 (Iowa 1990) (finding
extrinsic evidence could not be introduced “to vary, add to, or subtract from a
written agreement” where extrinsic evidence sought to be introduced went to the
intent of a contracting party); Bankers Trust Co. v. Woltz, 326 N.W.2d 274, 276
(Iowa 1982) (“The offer of extrinsic evidence was not an attempt to interpret the
language actually used by the parties; it was an attempt to vary or alter language
in the written agreement, and as such was inadmissible. Extrinsic evidence
offered to show ‘what the parties meant to say’ instead of ‘what was meant by
what they said’ is not admissible . . . .” (citations omitted)); Uhl v. City of Sioux
City, 490 N.W.2d 69, 73 (Iowa Ct. App. 1992) (“It goes without saying that
10
[extrinsic evidence] cannot be used to vary or alter language in the written
agreement.”).3
Here, the unambiguous language of the releases does not sufficiently
identify the Appellees as discharged parties as required by Iowa law and
jurisprudence. See Aid, 426 N.W.2d at 633-35.4 We affirm the district court’s
conclusion the releases are unambiguous and, per those unambiguous terms, do
not discharge liability as to the Appellees.
B. Reformation
Nationwide argues the district court erred in granting summary judgment
on its request that the court reform the releases to reflect the intent of the
contracting parties.
“Iowa law permits reformation of a written agreement that fails to reflect
the ‘true agreement’ between the parties.” Peak, 799 N.W.2d at 545 (citation
omitted); see also State, Dep’t of Human Servs. ex rel. Palmer v. Unisys Corp.,
637 N.W.2d 142, 151 (Iowa 2001) (“When the understanding of the parties was
not correctly expressed in the written contract, equity exists to reform the contract
to properly express the intent of the parties.”). To warrant reformation, there
must be
a definite intention or agreement on which the minds of the parties
had met [that] preexisted the instrument in question. There can be
3
We further note, the releases purport to be “the entire agreement between the parties
hereto.” “When the parties adopt a writing or writings as the final and complete
expression of their agreement, the agreement is fully integrated.” C & J Vantage
Leasing Co. v. Wolfe, 795 N.W.2d 65, 85 (Iowa 2011). “When an agreement is fully
integrated, the parol-evidence rule forbids the use of extrinsic evidence introduced solely
to vary, add to, or subtract from the agreement.” Id.
4
Nationwide requests, in the alternative, that we overturn the court’s holding in Aid. We
are not, however, at liberty to overturn Iowa Supreme Court precedent. See Figley v.
W.S. Indus., 801 N.W.2d 602, 608 (Iowa Ct. App. 2011).
11
no reformation unless there is a preliminary or prior agreement,
either written or verbal, between the parties, furnishing the basis for
rectification or to which the instrument can be conformed.
Peak, 799 N.W.2d at 545 (quoting Sun Valley Iowa Lake Ass’n v. Anderson, 551
N.W.2d 621, 636 (Iowa 1996)). “Iowa law permits a party to avoid a release only
upon proof that both parties were mistaken about an essential fact.” Id. “The
mistake must have been both mutual and material.” Gouge v. McNamara, 586
N.W.2d 710, 713 (Iowa Ct. App. 1998).
The party seeking reformation has the burden of establishing entitlement
to reformation by clear, satisfactory, and convincing proof. Kufer v. Carson, 230
N.W.2d 500, 503 (Iowa 1975). “The term clear and convincing has been held to
connote establishment of facts by more than a preponderance of evidence but
something less than establishing a factual situation beyond a reasonable doubt.”
Id.
Generally, a writing will be reformed only if the party seeking
reformation clearly and convincingly establishes that it does not
express the true agreement of the parties because of fraud or
duress, mutual mistake of fact, mistake of law, mistake of one party
and fraud or inequitable conduct on the part of the other. Ultimately
equity will grant relief if an instrument as written fails to express the
true agreement between the parties without regard to the cause of
the failure to express the agreement as actually made, whether it is
due to fraud, mistake in the use of language, or anything else which
prevented the instrument from expressing the true intention of the
parties.
Id. at 504.
In support of its request for reformation, Nationwide submitted affidavits
from the Shaws stating they “understood that the settlement agreement released
all claims [the Shaw family] had against product manufacturers, suppliers, and/or
distributors arising out of the accident, including claims [the Shaw family] had
12
against [the Appellees].” Moreover, the Shaws “were informed at the mediation
that Nationwide [] intended to seek contribution from these parties for funds they
paid to [the Shaws].” The Shaws also executed reformed releases “releas[ing],
acquit[ting], and forever discharg[ing] any and all claims [had] against product
manufacturers, suppliers, and/or distributors arising out of the Accident, including
without limitation claims [had] against [the Appellees].”
Nationwide also provided an affidavit from the Shaws’ attorney, in which
she stated: “It was expressly discussed before and during mediation that . . . all
other claims against any other potentially liable parties, including Defendants
herein, would be reserved to [FCC] and Nationwide [] in a third-party action.”
She further attested “it was understood between the [parties], that [the Shaws]
would be foregoing their claims against all other potentially liable entities besides
[FCC] and Nationwide [], in favor of permitting [FCC] and Nationwide [] to take
those claims.” Finally, Nationwide provided the deposition testimony and notes
of its representative that indicated Nationwide was settling with the intent to seek
contribution from potentially liable third parties.
In granting summary judgment, the district court reasoned:
Because Nationwide has failed to establish that the true
intent of the Shaws, at the time the releases were executed, was to
discharge[] the Defendants from liability, Nationwide is not entitled
to reformation. It is not clear that the Shaws intended to release
the Defendants from liability at the time the settlement agreement
was executed. In fact, the evidence potentially indicates the
opposite conclusion.
In the reply to plaintiff’s resistance to motion for summary
judgment, filed August 28, 2014, PGI provides evidence that the
Plaintiff knew the identity of the Defendants “as early as November
8, 2011, more than one year prior to execution of the releases.” If
the identities of the Defendant were known, and they were not
13
included within the language of the release agreements, that
indicates that it was not the intent of the parties to release the
Defendants from liability by execution of the releases. Further, as
explained above, the language of the releases themselves may
provide evidence that the Defendants were intentionally excluded
as released parties under the release agreements because “third
parties” were not included in the “Settling Parties” category.
Although it is not certain that the Defendants were intentionally
excluded as parties to be discharged from liability under the
releases, it is equally uncertain they were intended to be included.
Nationwide has failed to establish a definite intention of the parties
not reflected in the original releases so as to justify reformation in
this case. Therefore, Nationwide is not entitled to reformation.
Nationwide contends the district court erred in its conclusion, as the court
impermissibly weighed the facts and reached a factual determination rather than
deny summary judgment based upon the admitted factual dispute. We agree.
At summary judgment, the burden rests with the movant to show the
nonexistence of a material fact and that the undisputed facts entitle the movant to
judgment as a matter of law. Goodpaster v. Schwan’s Home Serv., Inc., 849
N.W.2d 1, 6 (Iowa 2014). Nationwide, as the party resisting summary judgment,
“must set forth specific facts showing the existence of a genuine issue for trial.”
Cemen Tech, Inc. v. Three D Indus., L.L.C., 753 N.W.2d 1, 5 (Iowa 2008)
(quoting Hlubek v. Pelecky, 701 N.W.2d 93, 95 (Iowa 2005)). The district court is
required to view the evidence in the light most favorable to Nationwide, as the
nonmoving party. See Goodpaster, 849 N.W.2d at 6. “Even if facts are
undisputed, summary judgment is not proper if reasonable minds could draw
from them different inferences and reach different conclusions.” Id. (citation
omitted).
Here, Nationwide and the Appellees clearly dispute whether the Shaws
and Nationwide agreed to and intended the releases to discharge the liability of
14
the Appellees, and therefore excluded the Appellees by mutual mistake. Both
parties have identified evidence supporting their respective desired outcomes.
Specifically, Nationwide has provided numerous statements and records from the
settlement process in support of its contention the contracting parties intended
the Shaws to discharge the liability of the Appellees. In reviewing this evidence,
the district court determined “it is not certain that the Defendants were
intentionally excluded as parties to be discharged from liability under the
releases, it is equally uncertain they were intended to be included.” In so finding,
the district court identified a material, factual dispute. On motion for summary
judgment, this is where the district court’s inquiry should have ended. See
Clinkscales v. Nelson Secs., Inc., 697 N.W.2d 836, 841 (Iowa 2005) (“[A] court
deciding a motion for summary judgment must not weigh the evidence, but rather
simply inquire whether a reasonable jury faced with the evidence presented
could return a verdict for the nonmoving party.”).
The Appellees put forth numerous arguments in support of their position
that summary judgment was proper.5 First,6 the Appellees argue the newly-
executed releases fail for lack of consideration. In so arguing, the Appellees fail
to cite any law to support the proposition that reformation itself requires additional
5
Because the Appellees largely join in each other’s arguments, their arguments are
discussed collectively.
6
The Appellees also argue Nationwide failed to preserve error on this claim because
Nationwide first raised reformation in response to the motions for summary judgment
and did not seek to amend the petition to affirmatively assert reformation. Here, the
issue of reformation was fully argued and briefed by the parties in the summary
judgment proceedings and ruled upon by the district court; we therefore find error was
preserved. See Thomas A. Mayes & Anuradha Vaitheswaran, Error Preservation in Civil
Appeals in Iowa Perspective on Present Practice, 55 Drake L. Rev. 39, 48 (Fall 2006)
(explaining that “[a]s a general rule, the error preservation rules require a party to raise
an issue in the trial court and obtain a ruling from the trial court”).
15
or separate consideration from that provided in the original contract. Numerous
courts outside this jurisdiction have held that when parties sign a subsequent
agreement that merely clarifies or explains the terms of the original contract, no
new or additional consideration is required. See Farmers Alliance Mut. Ins. Co.
v. Hulstrand Constr., Inc., 632 N.W.2d 473, 475-76 (N.D. 2001) (listing cases).
Regardless, Nationwide is not seeking to enforce the amended releases;
Nationwide simply proffers them as further evidence to support its request the
original releases be reformed.
Second, the Appellees contend the reformed releases violated the statute
of limitations.7 Again, Nationwide does not put forth the amended releases as
independently enforceable contracts; they are presented as evidence of the
contracting parties’ intent. Further, numerous cases follow “[t]he general rule . . .
that reformation relates back to the date of the reformed instrument as to the
parties thereto.” Great Atl. Ins. Co. v. Liberty Mut. Ins. Co., 773 F.2d 976, 979
(8th Cir. 1985) (citation omitted) (applying Illinois law); see also Nash Finch Co.
v. Rubloff Hastings, L.L.C., 341 F.3d 846, 850 (8th Cir. 2003) (applying Nebraska
law and holding “the general rule is that a contract, once reformed, relates
back—in its effective form—to the original date of execution”); M.T. Straight’s
Trust v. C.I.R., 245 F.2d 327, 330 (8th Cir. 1957) (“It is a general rule that as
7
Iowa Code section 668.6(3)(a) states a party must “discharge[] the liability of the
person from whom contribution is sought by payment made within the period of the
statute of limitations applicable to the claimant’s right of action and must have
commenced the action for contribution within one year after the date of that payment.”
The injury at issue occurred in October 2011. The Appellees contend that since a two-
year statute of limitations applies, the liability had to have been discharged by October
29, 2013. The amended releases were executed on October 6, 2014. Moreover, receipt
of payment was acknowledged by the original releases in November 2012; thus, any
claim for contribution based on the amended releases would be untimely.
16
between parties to an instrument a reformation relates back to the date of the
instrument, but that as to third parties who have acquired rights under the
instrument, the reformation is effective only from the date thereof.” (citation
omitted)).
Third, the Appellees aver that consideration of Nationwide’s extrinsic
evidence is improper. Of note, the district court’s ruling was premised, at least in
part, on the extrinsic evidence provided by the Appellees.8 Regardless, “parol
evidence is admissible in actions for the reformation of legal instruments so long
as the evidence is relevant and material.” Montgomery Props. Corp. v. Econ.
Forms Corp., 305 N.W.2d 470, 474 (Iowa 1981). To interpret Iowa Code section
668.7, as suggested by the Appellees, to preclude consideration of extrinsic
evidence for reformation considerations would functionally result in the inability to
ever revise a release. See Blackman v. Folsom, 200 N.W.2d 542, 543 (Iowa
1972) (“[P]arol evidence is admissible in an equitable action for reformation of a
contract to establish fraud or mistake. In the absence of such a salutary
exception to the parol evidence rule, it would be virtually impossible to establish
the grounds relied on.”). There is no statutory or legislative indication this was
the intended result. See generally Aid, 426 N.W.2d at 635 (cautioning, when
interpreting section 668.7, the court “d[id] not, at this time, state that all
identification in the release must be made by the court as a matter of law without
taking into account extrinsic evidence”). To the contrary, numerous cases have
considered extrinsic evidence when reviewing requests for reformation, see, e.g.,
8
Specifically, the district court considered extrinsic evidence establishing Nationwide
knew the identities of the Appellees more than a year before the releases were signed.
17
Johnston Equip. Corp. v. Indus. Indem., 489 N.W.2d 13, 18 (Iowa 1992) (“When
a party seeks reformation of a policy so that it will match the parties’ intentions,
extrinsic evidence is admissible to prove what their intentions were.”); Wellman
Sav. Bank, 454 N.W.2d at 857 (affirming the district court’s refusal to allow
extrinsic evidence at the legal portion of the hearing even though the court
allowed extrinsic evidence at the reformation hearing), even within the framework
of section 668.7, see Peak, 799 N.W.2d at 544-45 (discussing extrinsic evidence
within the framework of reformation of releases).
Fourth, the Appellees argue allowing reformation would somehow
contravene public policy and prejudice the Appellees. But the purpose of
reformation is “to uphold the intent of the parties to the contract,” Unisys Corp.,
637 N.W.2d at 151, and cure mistakes in the expression of a contract, Soults
Farms, Inc. v. Schafer, 797 N.W.2d 92, 108-09 (Iowa 2011). See also Hearne v.
Marine Ins. Co., 87 U.S. 488, 490 (1874) (“Where the agreement as reduced to
writing omits or contains terms or stipulations contrary to the common intention of
the parties, the instrument will be corrected so as to make it conform to their real
intent. The parties will be placed as they would have stood if the mistake had not
occurred.”). Further, the purpose behind the language in section 668.7, as
outlined by the court in Aid, was to respond to the doctrine that the release of one
tortfeasor releases all others. 426 N.W.2d at 633. The impetus was to protect
injured parties who, when previously employing boiler-plate release language,
had been barred from complaining they had no intention to release unnamed
tortfeasors. Id. The Appellees have not provided any consideration toward these
releases nor relied upon the releases to their detriment. And allowing
18
reformation does not extend the statute of limitations, as the initial contribution
claim was timely brought. Here, correcting the language to accurately reflect the
mutual intent of the contracting parties does not unfairly prejudice nonparties to
the contract, such as Appellees, or otherwise contravene public policy.
Finally, the Appellees argue generally that the releases are not ambiguous
and there is no clear, satisfactory, and convincing evidence of mistake. As to the
former argument, the concern in reformation is not if the contract is ambiguous—
as the issue is not one of interpretation—it is whether the contract “reflect[s] the
real agreement of the parties.” Kufer, 230 N.W.2d at 503. The Appellees again
fail to cite a case supporting their claim that ambiguity is required and numerous
cases have found contrarily. See, e.g., Rosen v. Westinghouse Elec. Supply
Co., 240 F.2d 488, 491 (8th Cir. 1957) (“We think it is not necessary, as a
prerequisite to the reformation of an instrument to conform to the intention of the
parties, that the instrument on its face be ambiguous. It is a universal rule of
equity in suits to reform written instruments that parol evidence is admissible to
establish mutual mistake and to show how the instrument should be corrected to
reflect the actual intent of the parties thereto.”); In re Estate of Munawar, 981
A.2d 584, 587 n.1 (D.C. 2009) (“[F]acial ambiguity is not a requirement for
reformation, which merely ‘remedies a mistake as to expression,’ where ‘the
writing does not accurately express the parties’ mutual agreement.’” (alterations
and citations omitted)). As to the latter argument, it is not the role of the court on
summary judgment to resolve disputes of fact and determine whether Nationwide
has proven its case, but rather to identify whether a genuine issue of material fact
exists. See Milford v. Metro. Dade Cty., 430 So. 2d 951 (Fla. Dist. Ct. App. 1983)
19
(“The [appellee’s] argument that the release in question, since it so specifically
and deliberately limited the parties to be released, could not have been the
product of mutual mistake, raises at best a question of fact to be resolved by the
trial court at an evidentiary hearing to be held on the appellant’s motion to reform.
All we decide is that there exists a genuine issue of material fact as to whether
the release, upon which the summary judgment was founded, expressed the
intent of the parties and that, therefore, summary judgment was precluded.”).
Because, based on the specific facts identified by Nationwide, there is a genuine
issue of fact regarding the agreement and intent of the contracting parties, the
court erred in granting summary judgment on the reformation issue.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.