Senahid Becirovic and Hajreta Becirovic v. Nedzad Malic and Aisa Malic ( 2024 )


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  •                     IN THE COURT OF APPEALS OF IOWA
    No. 24-0219
    Filed November 13, 2024
    SENAHID BECIROVIC and HAJRETA BECIROVIC,
    Plaintiffs-Appellees,
    vs.
    NEDZAD MALIC and AISA MALIC,
    Defendants-Appellants.
    ________________________________________________________________
    Appeal from the Iowa District Court for Dallas County, David Faith, Judge.
    In this consolidated appeal, Nedzad and Aisa Malic challenge the district
    court’s orders granting judgment in favor of homeowners Senahid and Hajreta
    Becirovic on the Becirovics’ claims of breach of oral contract and violation of the
    consumer protection code and awarding attorney fees and costs. AFFIRMED IN
    PART, REVERSED IN PART, AND REMANDED WITH INSTRUCTIONS.
    Christopher Stewart of Boles Witosky Stewart Law PLLC, Des Moines, for
    appellants.
    Daniel M. Manning Jr., Joel Templeman, and Mason W. Burkhart of Lillis
    O’Malley Olson Manning Pose Templeman LLP, Des Moines, for appellees.
    Heard by Tabor, C.J., Sandy, J., and Bower, S.J.*
    *Senior judge assigned by order pursuant to Iowa Code section 602.9206
    (2024).
    2
    BOWER, Senior Judge.
    In this consolidated appeal, Nedzad and Aisa Malic challenge the district
    court’s orders granting judgment in favor of homeowners Senahid and Hajreta
    Becirovic on the Becirovics’ claims of breach of oral contract and violation of the
    consumer protection code and awarding attorney fees and costs.1 Upon our
    review, we affirm in part, reverse in part, and remand with instructions.
    I.     Background Facts and Proceedings
    In August 2020, the Becirovics purchased a residential lot in Urbandale and
    hired JB Custom Homes to build a house on the property.2 Becirovic helped
    organize contractors for the project.       After the basement and garage were
    constructed, Becivoric contacted Malic to prepare an estimate for concrete work.
    Becirovic was referred to Malic “[b]ecause [Malic] had a lot of experience with
    Speck.”3 Malic met with Becirovic at the property in mid-October. Malic “measured
    everything,” and they discussed “the pricing, the design, the colors, [and] square
    footage” for the driveway, walkway, front porch, and decorative porch in the
    backyard. Malic followed up by sending Becirovic text messages with samples of
    designs and colors for the back porch. Becirovic agreed to pay Malic $13,635 for
    the project.
    Malic completed the work in November. Within “24 hours” Becirovic noticed
    cracks and unlevel paving and reported his concerns to Malic. Malic “came back
    1 For clarity, we refer to the parties collectively as “the Becirovics” and “the Malics.”
    We refer to Senahid and Nedvad individually as “Becivoric” and “Malic”
    respectively. We refer to Hajreta and Aisa by their first names.
    2 JB Custom Homes is Becirovic’s brother’s company.
    3 Prior to starting his own company, Malic worked at Speck USA for nearly twenty
    years, specializing in “concrete work.”
    3
    and checked” and “said he’ll fix it.” Malic replaced the front porch steps and
    walkway right away but said he needed to wait until warmer weather to repair the
    other areas. Meanwhile, as snow melted, Becirovic noticed water entering the
    house through the foundation as the back porch was slanted toward the house.
    He also observed the driveway was not connected to the rocks and dirt below as
    the foundation had washed out. He was concerned the driveway could not support
    weight. When Becivoric expressed his concerns to Malic, Malic responded that
    the problems were caused by “intervening forces,” including improper preparation
    and backfill by other contractors, poor weather conditions, and settlement of the
    dirt.   When Malic did not perform the additional repairs the following spring,
    Becirovic paid $4578.39 for Midwest Foundation Repair to provide a “temporary
    repair” to the concrete by “level[ing] up” the areas and sealing.
    In August 2022, the Becirovics filed suit against Malic, claiming breach of
    contract, breach of implied warranty of fitness for a particular purpose, breach of
    implied warranty of workmanlike construction, negligence, breach of express
    warranty, fraudulent misrepresentation, negligent misrepresentation, and violation
    of the consumer protection code under Iowa Code sections 714H.3 and 714H.5
    (2022). In February 2023, Malic filed a motion for leave to file a third-party petition
    against Iowa Contracting, Inc., stating it “completed some, if not all of the work
    performed and alleged to have been deficient by the Plaintiffs” and “any liability of
    Iowa Contracting, Inc. is directly tied to any of the liability of Nedzad Malic.” The
    district court granted the motion, and Iowa Contracting, Inc. was added as a third-
    party defendant. In August 2023, the Becirovics filed a motion to amend their
    petition to add Aisa as a defendant. Malic resisted the motion. Following the
    4
    hearing, at which neither Malic nor his counsel appeared, the court granted the
    motion, and Aisa was added as a defendant. Shortly thereafter, Malic filed a
    dismissal without prejudice of the third-party petition against Iowa Contracting, Inc.
    A bench trial was scheduled for October 23. The week before, Aisa filed
    her answer, along with a motion for leave to file a third-party petition against Edo
    Beganovic and R P Plumbing, stating they “completed some, if not all of the work
    performed and alleged to have been deficient by the Plaintiffs.” The Becirovics
    resisted the motion. Following a hearing, the court denied Aisa’s motion. The
    Malics filed an application for interlocutory appeal and request for stay of
    proceedings, which the supreme court denied.
    The case proceeded to trial, during which the court heard testimony from
    Becirovic, Hajreta, Malic, and Aisa. Malic presented himself as his own expert,
    and the Becirovics presented expert testimony from Zachary Dalton. Thereafter,
    the court entered an order in favor of the Becirovics, finding they were entitled to
    compensatory damages in the amount of $30,000, which it determined was the
    cost to repair the damage caused by the Malics’ breach of the parties’ oral contract.
    The court found it unnecessary to reach most of the Becirovics’ remaining claims,4
    but it addressed their claim alleging violations of the consumer protection code,
    which the court concluded the Becirovics had proved. Relating to that claim, the
    4 As the court noted, all but the Becirovics’ claim alleging violations under Iowa
    Code sections 714H.3 and 714H.5 “seek compensatory damages under
    alternative legal theories,” and because the court had found the Becirovics “are
    entitled to compensatory damages under Count I [alleging breach of oral contract]
    it is not necessary for the Court to determine whether they would also be entitled
    to the same damages under alternate theories.”
    5
    court awarded attorney fees in the amount of $22,559.50 and costs in the amount
    of $405.00, to be paid by the Malics.
    The Malics appealed both orders, and the supreme court consolidated their
    appeals and transferred the case to this court for resolution. Additional facts will
    be discussed below as relevant to the issues raised on appeal.
    II.      Motion for Leave to Amend
    At the outset, the Malics challenge the district court’s denial of Aisa’s motion
    for leave to file a third-party petition raising claims of negligence against Edo
    Beganovic and R P Plumbing.5 “The trial court has considerable discretion in
    granting or denying a motion for leave to amend; we will reverse only when a clear
    abuse of discretion is shown.” Reyes v. Int’l Van Lines, Inc., 9 N.W.3d 793, 797
    (Iowa Ct. App. 2024) (quoting Porter v. Good Eavespouting, 
    505 N.W.2d 178
    , 180
    (Iowa 1993)).      An abuse of discretion occurs when the court “exercises its
    discretion ‘on grounds clearly untenable, or to an extent, clearly unreasonable.’”
    In re Est. of Roethler, 
    801 N.W.2d 833
    , 837 (Iowa 2011) (citation omitted). “Our
    real inquiry in reviewing a trial court’s ruling on a motion to amend is whether the
    ruling lacks a solid legal basis.” Neylan v. Moser, 
    400 N.W.2d 538
    , 543 (Iowa
    1987).
    Iowa Rule of Civil Procedure 1.402(4) provides the requirements to amend
    a pleading. It states:
    A party may amend a pleading once as a matter of course at
    any time before a responsive pleading is served or, if the pleading is
    one to which no responsive pleading is required and the action has
    5 Aisa filed her motion on October 16, 2023. On the same day, the Malics
    collectively filed the same motion. On appeal, the Malics challenge only the court’s
    order denying Aisa’s motion.
    6
    not been placed upon the trial calendar, the party may so amend it
    at any time within 20 days after it is served. Otherwise, a party may
    amend a pleading only by leave of court or by written consent of the
    adverse party. Leave to amend, including leave to amend to conform
    to the proof, shall be freely given when justice so requires.
    Iowa R. Civ. P. 1.402(4).
    The Malics claim the district court abused its discretion in denying the
    motion to amend as “Aisa suffered damages without the benefit of the procedural
    right granted to her under Iowa Rule of Civil Procedure 1.246[(1)],” which states:
    At any time after commencement of the action a defending
    party, as a third-party plaintiff, may file a cross-petition and cause an
    original notice to be served upon a person not a party to the action
    who is or may be liable for all or part of the plaintiff’s claim. The third-
    party plaintiff need not obtain leave to file the cross-petition if it is filed
    not later than ten days after the filing of the original answer.
    Otherwise leave may be obtained by motion upon notice to all parties
    to the action.
    To support their contention, the Malics point to the fact Aisa “was not a party to the
    underlying action until September 12, 2023,” and she “had not engaged in any
    discovery nor participated in her husband’s lawsuit in any fashion prior to
    September 12, 2023.”        Accordingly, the Malics claim Aisa was not aware of
    potential third-party defendants “earlier in the litigation” and she “was in fact
    entitled to bring a third-party action as a matter of right.”
    “Impleader, or third-party practice, is the procedural device enabling the
    defendant in a lawsuit to bring into the action an additional party who may be liable
    to the defendant for all or part of any damages the defendant ultimately may owe
    the original plaintiff.” Caldwell v. Holiday Lake Owners’ Ass’n, Inc., No. 12-2191,
    
    2013 WL 3830217
    , at *3 (Iowa Ct. App. July 24, 2013) (quoting Jack H.
    Friedenthal, Mary Kay Kane & Arthur R. Miller, Hornbook on Civil Procedure § 6.9).
    7
    To avoid “the potential circuity and multiplicity of actions” on claims involving
    identical facts, our courts have “rejected a restrictive reading of Iowa’s impleader
    rule.” Id. (citation omitted).
    The following timeline of proceedings in this case is helpful in addressing
    this claim:
    Aug. 25, 2022  The Becirovics filed petition initiating lawsuit
    against Malic.
    Oct. 26, 2022  The district court filed an order setting trial for
    October 23, 2023.
    Feb. 13, 2023 The Becirovics filed answers to Malic’s
    interrogatories providing contact information for
    “Edo Beganovic, Backfill Operator” and “Robert
    Palmer, R P Plumbing, L.L.C.”
    Aug. 2, 2023   The Becirovics filed a motion for leave to amend
    their petition to add Aisa as a defendant.
    Sept. 7, 2023  The district court granted the Becirovics’ motion
    to amend, stating in part:
    “At the time for hearing, Plaintiff appeared by
    attorney Mason Burkhart.           Defendant and
    Counsel did not appear. The Court held that
    based upon a review of the file and the Motion
    and Resistance, that amending the Petition would
    not substantially change the issue in this matter
    and that with approximately 70 days until trial in
    this matter, the amendment would not prejudice
    the defendant. The Motion for Leave to Amend
    was granted.”
    Sept. 12, 2023 The Becirovics filed an amended petition naming
    Aisa as a defendant.
    Oct. 16, 2023  Aisa filed an answer, affirmative defenses, and
    third-party petition raising claims of negligence
    against Beganovic and R P Plumbing.
    Oct. 17, 2023  The Becirovics filed a resistance to the third-party
    petition, noting it “was filed just one (1) week
    before trial is scheduled to commence . . . .”
    Oct. 19, 2023  The district court denied the motion to add claims
    and third-party defendants.
    Oct. 20, 2023  The Malics filed motion to reconsider, amend, or
    enlarge, which the district court denied.
    Oct. 23, 2023  The Malics filed an application for interlocutory
    appeal, discretionary review, and request for stay
    of proceedings.
    8
    Nov. 6, 2023       The supreme court denied the Malics’ application
    for interlocutory appeal, discretionary review, and
    request for stay.
    Nov. 13, 2023      The bench trial took place.
    Jan. 9, 2024       The district court entered an order and judgment
    against the Malics.
    In its order denying the Malics’ motion to add third-party defendants, the
    district court stated in relevant part:
    The [Malics’] motion just days before trial is not based upon
    new information that the [Malics] have discovered. The claims and
    parties that [the Malics] wish to add were known or should have been
    known to the [Malics] at a much earlier date. There is no new
    evidence, new information or any failure to disclose evidence by the
    [Becirovics] that would excuse the failure of the [Malics] to seek such
    leave to amend days before trial is to commence.
    As pointed out in [the Becirovics’] resistance, motions to
    amend based on facts the defendant knew or should have known
    earlier in the litigation, may properly be denied by the district court
    judge. Allison-Kesley Ag Ctr., Inc. [v. Hildebrand], 485 N.W.2d [841,]
    846 [(Iowa 1992)]; see also Demery v. State, [No. 13-1449, 
    2015 WL 5968609
    ], at *2–3 (Iowa Ct. App. [Oct. 14,] 2015). This is because,
    where “[n]o good reason is shown why this new issue should not
    have been tendered at an earlier date, [t]he right to amend is never
    absolute.” Trask v. Gibbs, 
    200 N.W.2d 565
    , 568–69 (Iowa 1972).
    No good reason has been shown why the additional claims and third-
    party defendants could not have been added at an earlier date.
    However, under rule 1.246, because Aisa filed her cross-petition “not later
    than ten days after the filing of [her] original answer,” she was not required to obtain
    leave by the court. Rather, the rule provides her an absolute right to add the third-
    party defendants. See Iowa R. Civ. P. 1.246. Accordingly, the denial of Aisa’s
    motion was not within the court’s discretion. We therefore reverse the district
    court’s order denying the amended petition and remand for further proceedings
    relating to Aisa.
    9
    III.   Breach of Oral Contract
    The Becirovics’ petition alleged “[o]n or about October 24, 2020,” the
    Becirovics “entered into an oral contract with Defendants, Nedzad Malic and Aisa
    Malic”; “[t]he terms of the contract were clear, unambiguous and understood by all
    parties to the contract”; the Malics “breached the contract by failing to perform their
    obligations under the contract, including, but not limited to, failing to construct the
    project in a good and workmanlike manner and according to industry standards”;
    and the Becirovics “performed all of their obligations under the contract,” including
    paying the Malics $13,365.00 “to construct the project.” The district court found
    the Becirovics carried their burden to prove their claim. On appeal, the Malics
    contend the court erred in finding there was sufficient evidence of an oral contract
    between the parties and that the Malics breached the contract.6
    Our review is for the correction of errors at law. Dolly Invs., LLC v. MMG
    Sioux City, LLC, 
    984 N.W.2d 168
    , 173 (Iowa 2023). The district court’s findings of
    fact have the effect of a special verdict and are binding on us if supported by
    substantial evidence. Id.; Iowa R. App. P. 6.904(3)(a). “However, a district court’s
    conclusions of law or its application of legal principles do not bind us.” Iowa Mortg.
    Ctr., L.L.C. v. Baccam, 
    841 N.W.2d 107
    , 110 (Iowa 2013).
    6 Preliminarily, the Malics claim “there is nothing in the record” to find Aisa liable
    under either of the Becirovics’ successful claims. We disagree. Becirovic testified
    Malic told him he had “opened the company” with “his wife” and instructed him to
    “write [the] check to Aisa,” because “she’s in the company.” The Becirovics
    presented evidence of a text message from Malic asking Becirovic to make the
    check out to Aisa. Moreover, Malic acknowledged he and Aisa now “share
    ownership in [the] concrete business,” agreeing he is “a 70 percent owner of [the]
    concrete business and that [his] wife Aisa is a 30 percent owner.” We find this
    claim unpersuasive.
    10
    To prove a breach of contract claim, a party must show:
    (1) the existence of a contract; (2) the terms and conditions of the
    contract; (3) that it has performed all the terms and conditions
    required under the contract; (4) the defendant’s breach of the
    contract in some particular way; and (5) that plaintiff has suffered
    damages as a result of the breach. The first three elements address
    the existence of a contract. The last two elements address the
    breach of the contract and the damages caused by the breach.
    
    Id.
     at 110–11 (citation omitted).
    A.     Existence of Contract
    The Malics first challenge the sufficiency of the evidence on the first two
    elements. Specifically, they claim “[t]here was no meeting of the minds” between
    the parties and the evidence was insufficient to “establish the terms or conditions
    of the contract, specifically any proof of any alleged warranties entered into by the
    parties.”
    “The existence of an oral contract, as well as its terms and whether it was
    breached, are ordinarily questions for the trier of fact.” Gallagher, Langlas &
    Gallagher v. Burco, 
    587 N.W.2d 615
    , 617 (Iowa Ct. App. 1998). “To sustain proof
    of an oral contract, the terms must be sufficiently definite for a court to determine
    with certainty the duty of each party and the conditions relative to performance.”
    Seastrom v. Farm Bureau Life Ins. Co., 
    601 N.W.2d 339
    , 346 (Iowa 1999). If a
    contract appears to exist, “courts are reluctant to find it too uncertain to be
    enforceable.” Gallagher, 587 N.W.2d at 617. But if “the terms are not definite,
    courts are reluctant to impose reasonable terms on contracting parties.” Id.
    The question is whether the communications between Malic and Becirovic
    were definite enough to form a contract. See id. At the outset, we observe Malic
    admitted he “entered into an agreement with [the Becirovics] to pour a concrete
    11
    driveway and decorative patio on [the Becirovics’] property”; he “performed the
    concrete work on [the Becirovics’] property”; and “[the Becirovics] paid [the Malics]
    . . . $13,365.00 to pour the driveway and patio.” See Garland v. Branstad, 
    648 N.W.2d 65
    , 70 (Iowa 2002) (reiterating the “the well-settled rule that a party will be
    bound by admissions contained in a pleading”); Iowa Mortg., 841 N.W.2d at 111
    (“A stipulation of fact relieves a party from the inconvenience of proving the facts
    in the stipulation.”). Moreover, contrary to the Malics’ claim that “Malic continued
    to believe he was merely doing a favor for [the Becirovics] as family friends,” the
    Becirovics presented evidence of text messages between Malic and Becirovic
    detailing pricing, providing colors and designs for the back patio, and setting forth
    the timing for completion of the project. Becirovic further testified to additional
    communications with Malic (“not everything is texting”), explaining they “talk[ed] on
    the phone” and “met so many times” to discuss the details of the project.
    Eventually, the parties reached an agreement as to pricing for “nine bucks [for] the
    design concrete for square foot; and 4.50, the driveway, square foot.”
    Although Malic testified there was “not [an] agreement,” he acknowledged
    he “did agree to install a concrete driveway and patio on the property.” And when
    the work was complete, Malic “said he’s going to stop by [to] pick up the check.” 7
    Becirovic “had [a] check ready for him, [with] his name on it,” but Malic asked him
    to “write [the] check to Aisa” instead, which Becirovic did. On this issue, the district
    court found:
    7 Malic persisted he “never charge[d] him when I [fixed the] steps.”However, we
    view this testimony as support for the court’s finding the initial work was not
    completed as merely a “favor.”
    12
    [The Malics] admitted in their answers to [the Becirovics’]
    Petition and First Amended Petition that the parties entered into an
    oral contract, the terms of which were clear to all parties, under which
    [the Malics] agreed to construct a concrete driveway and decorative
    concrete patio on the [the Becirovics’] property and for which [the
    Becirovics] agreed to pay the [Malics] for the work. . . . However, at
    trial [the Malics] attempted to walk back that prior admission and
    claim that the work was done as a “favor” owing to the cultural affinity
    within the tight-nit Bosnian community. [The Malics] are bound by
    their admissions and, even if they were not, the Court does not find
    it credible that they agreed to accept more than thirteen thousand
    dollars to perform a major construction project as a “favor.”
    Since the existence of the contract is admitted and there is no
    dispute that [the Becirovics] performed by paying what they agreed
    to ($13,365), the only remaining elements are terms, breach and
    damages. As for terms, [the Malics] are again bound by their
    admission, specifically, that the terms were clear to all parties. In
    any event, the essential terms—complete a driveway and patio
    contract in exchange for money—were clear enough that Mr. Malic
    actually performed the work. . . . While one might wish for more
    detail as to the exact scope and specifications of the contract, the
    combination of admission and performance is more than enough to
    show that the parties understood the essential terms.
    (Internal citations omitted.)
    Contrary to the case upon which the Malics rely, Tjaden v. Rasmussen,
    No. 22-1027, 
    2023 WL 6620326
    , at *3 (Iowa Ct. App. Oct. 11, 2023), the evidence
    presented here was more than discussions of the terms of a “proposed contract”
    or submission of “estimates.”     After exchanging information on materials and
    pricing, Malic sent Becirovic the following message summarizing their discussion:
    “You have regular concrete, 1,534 square feet at four and a half dollars, and that
    comes to $6,903. Decorative concrete, you will have 748 square feet, and that will
    be at $9. That comes to $6,732. The total will be $13,635. Thank you.” Shortly
    thereafter, the agreed-upon work was performed (albeit unsatisfactorily), and the
    Becirovics paid the Malics the agreed-upon price. See Kidwell v. Davenport,
    No. 00-1255, 
    2002 WL 663526
    , at *3 (Iowa Ct. App. Apr. 24, 2002) (“The existence
    13
    of a contract does not depend on words alone. The understanding between the
    parties can be determined by the surrounding circumstances, acts, and conduct of
    the parties.”). The district court’s finding an oral contract existed between the
    Becirovics and the Malics is supported by substantial evidence. See Seastrom,
    601 N.W.2d at 346 (“Having viewed the evidence in the light most favorable to the
    plaintiffs, we conclude there was substantial evidence to support their claim of oral
    contract.”).
    B.      Breach and Damages
    The Malics further claim “should this court find the random and loose
    conversations between [the parties] established a contract, the district court erred
    in finding [they] breached the oral contract between the parties.” Specifically, the
    Malics claim the court’s findings concerning the cause of the concrete cracks were
    not supported by substantial evidence, alleging “a variety of factors came into play
    which were not the fault of Nedzad but instead were the fault of third parties, the
    state of Iowa’s weather patterns, Senahid’s own personal desires, and other work
    conducted on the [Becirovics’] property by other contractors.”
    On this issue, we do not review the evidence de novo. Rather, we view the
    evidence in the light most favorable to the judgment. City of Forest City v. Holland
    Contracting Corp., No. 11-0782, 
    2012 WL 170195
    , at *3 (Iowa Ct. App. Jan. 19,
    2012). “Evidence is substantial when reasonable minds accept the evidence as
    adequate to reach a conclusion. ‘Evidence is not insubstantial merely because we
    may draw different conclusions from it; the ultimate question is whether it supports
    the finding actually made, not whether the evidence would support a different
    14
    finding.’” Postell v. Am. Fam. Mut. Ins. Co., 
    823 N.W.2d 35
    , 41 (Iowa 2012)
    (internal citations omitted).
    Essentially, the Malics contend the court erred in relying on the testimony
    of the Becirovics’ expert, Zachary Dalton, rather than Malic’s testimony as his own
    expert. At trial, Dalton, a licensed contractor specializing in concrete work with
    over twenty years’ experience, opined the Malics’ work was “generally just over[all]
    poor craftsmanship.” Regarding the driveway, Dalton opined “the concrete work
    . . . is of substandard quality and well below the industry standards for the
    Des Moines Metro Area.” Regarding the front and back porches, Dalton opined
    “[t]he slope and slant seems to be off,” resulting in the stairs “not being level with
    the front entry,” the sidewalk panels leading to the house “hav[ing] fluctuating
    heights” creating a “safety hazard,” and the “stoop at the main entrance and the
    decorative patio . . . in the backyard both slant[ing] towards the foundation of the
    home.” Dalton acknowledged “[c]oncrete does crack” and “stamped patios are
    inherently uneven,” but he opined the concrete should still slope away from the
    house so water does not enter the foundation. In sum, Dalton reported:
    In my professional opinion, the work done by Malic is defective
    and will need to be fully removed and reinstalled. To deliver concrete
    of the workmanlike quality expected in the Des Moines Metro Area,
    repairing the concrete to have adequate strength, grade, and proper
    cosmetic appearance will require a whole demolition and repour of
    the driveway and the patio in the backyard.
    It is my estimation and professional opinion that the cost to
    remove the existing front driveway and backyard patio, regrade and
    prep the property, and to pour the concrete in a property manner that
    is to industry standards would require a minimum of $30,000.00.
    In contrast, Malic opined “as an expert in this field” that “the work [he]
    performed comported with industry standards and specifications.” However, Malic
    15
    agreed there was cracking to the Becirovics’ driveway, the panels were not even,
    the work completed “result[ed] in damage to the Becirovic property.” Specifically
    relating to the cracks to the driveway, Malic explained, “It happens”; “It’s concrete.”
    However, when he was asked, “Would you be happy and satisfied if this is how
    your driveway looked just a few months after it was poured?” Malic responded, “I’d
    say no, I’m not going to be happy.” Malic testified the poor finish of the concrete
    and the slope toward the foundation were caused “because dirt settled” and was
    “not packed correctly.”
    Where “the issue boiled down to a battle of the experts,” “the weight to be
    assigned the testimony of each witness is within the province of the fact-finder.”
    City of Forest City, 
    2012 WL 170195
    , at *3. Here, the district court found:
    Shortly after the project was completed, the [Becirovics]
    began to notice problems with the concrete, including cracking,
    popping and unlevel paving. Mr. Becirovic reported these concerns
    to Mr. Malic, who performed some repairs to the steps and walkway
    in front of the house, but informed [the Becirovics] that he was unable
    to repair the rest of the property until the weather improved and it
    was fit for pouring and sealing concrete. Ultimately, Mr. Malic did not
    perform additional repairs and in May of 2021, [the Becirovics] hired
    a different contractor, Midwest Foundation Repair, to fix the
    problems with the concrete, including sealing and leveling the
    concrete, at a cost of $4578.39.
    [The Becirovics] assert that the repairs by Midwest
    Foundation Repair were temporary, and that the concrete installed
    by Mr. Malic continues to be an ongoing problem, with further
    deterioration rendering it necessary to perform extensive additional
    repairs. [The Malics] dispute this, suggesting that [the Becirovics]
    have failed to prove that the repairs were temporary. However, [the
    Becirovics] submitted extensive evidence, including an expert report
    and live expert testimony, that Mr. Malic’s concrete work was
    substandard and below industry standards and show significant
    damage as well as other issues including a downward slanting
    staircase, uneven service sidewalk panels, and improper concrete
    elevations causing segments to concrete to slant towards the
    foundation of the home. Mr. Malic himself admitted on cross-
    examination that the concrete work on the Becirovic property
    16
    resulted in damage and that he would not be happy with it for his own
    driveway.
    The [Becirovics’] expert, Zachary Dalton, a licensed and
    registered contractor who runs a contracting business and has more
    than twenty years of experience in the industry, opined that based
    on the level of damage observed on the Becirovic property it would
    be necessary to fully remove and reinstall the concrete. He
    estimated that the cost to remove and pour the concrete in a proper
    manner to industry standard would require a minimum of $30,000.
    Mr. Malic presented himself as his own expert, which [the Becirovics]
    did not challenge, and generally denied both the severity of the
    damage and the asserted $30,000 cost of repairs but did not offer
    any comprehensive counter-analysis.
    On balance, the court found Mr. Dalton’s expert testimony
    more credible, based on superior qualifications, more
    comprehensive analysis of the damage, disinterest in the outcome
    of the matter and his comportment on the witness stand. [The
    Malics] attempted to discredit Mr. Dalton by pointing out minor
    discrepancies between his report and trial testimony elicited on
    cross-examination, but the court finds these actually add to his
    credibility since he was not defensive and readily admitted to any
    legitimate points. For instance, when asked about [the Malics’]
    theory that improper soil compaction could have contributed to the
    problem he agreed. He did not come off as someone there to
    intransigently defend a settled position. Mr. Dalton’s demeanor on
    the witness stand, his eye contact, his conversational explanatory
    style, all conveyed the sense of someone trying honestly to talk
    through the truth and get to the correct answer. Notwithstanding the
    minor discrepancies pointed out by [the Malics], Mr. Dalton
    consistently and credibly testified that the overall qualify of the work
    was subpar, resulting in damages so severe that they require repairs
    in the nature of a comprehensive rip-out and re-do at a cost of at
    least $30,000. Although [the Malics] attempted to deflect blame to
    third parties who performed the soil compaction, and to the weather,
    Mr. Dalton also credibly testified that a capable contractor would
    have taken those factors into consideration and would not have
    proceeded if they were uncomfortable.
    The Court finds that the preponderance of the evidence
    presented at trial is that the work performed or overseen by Nedzad
    Malic with respect to concrete work on the Becirovic property was
    subpar, not performed in a good and workmanlike manner, caused
    damage to the property, and that the cost to repair the damage is at
    least $30,000.
    Substantial evidence supports the district court’s findings. “[A]s ‘[t]he trier
    of fact,’ the district court—not us—‘has the prerogative to determine which
    17
    evidence is entitled to belief.’” Doyle v. Johnny B’s Constr., Inc., No. 23-0369,
    
    2024 WL 1295970
    , at *5 (Iowa Ct. App. Mar. 27, 2024) (second alteration in
    original) (quoting Tim O’Neill Chevrolet, Inc. v. Forristall, 
    551 N.W.2d 611
    , 614
    (Iowa 1996)).
    We further find substantial evidence supports the court’s findings relating to
    damages. The Malics concede the Becirovics “are entitled to damages” to place
    them in as good a position as they would have occupied had the contract been
    performed.      They argue, however, the district court’s award of $30,000 is
    “speculative” and “inconsistent with the record,” claiming they are only liable for
    $4578.39—the amount the Becirovics paid Midwest Foundation Repair for repairs.
    “Typically, the cost of correcting the defects or completing the omissions is
    the proper measure of damages in a defective construction case.” Reilly Const.,
    Co. v. Bachelder, Inc., No. 15-1192, 
    2016 WL 1696915
    , at *3 (Iowa Ct. App. Apr.
    27, 2016) (citing Serv. Unlimited, Inc. v. Elder, 
    542 N.W.2d 855
    , 858 (Iowa Ct. App.
    1995)). Dalton testified the work performed by the Malics was defective and
    needed “to be fully removed and reinstalled.” He estimated “the cost to remove
    the existing front driveway and backyard patio, regrade and prep the property, and
    to pour the concrete in a property manner that is to industry standards would
    require a minimum of $30,000.00.” The Malics disputed Dalton’s testimony but
    failed to present any evidence to rebut it.    The Malics also failed to present
    evidence to rebut Becirovic’s testimony that Midwest’s work was a “just a
    temporary repair.” Under this record, we cannot conclude the district court erred
    in determining damages based on the cost of repair. See Serv. Unlimited, Inc.,
    18
    
    542 N.W.2d at 858
     (“We find substantial evidence the cost of repair was not grossly
    disproportionate to the benefits obtained.”). We affirm on this issue.
    IV.    Ascertainable Loss under Section 714H.5
    The Becirovics’ petition alleged: “Iowa Code 714H.1 et seq., the Iowa
    Private Right of Action for Consumer Frauds Act (IPRACFA), gives consumers
    subject to certain unfair and deceptive acts and practices a private right of action”;
    the Becirovics “are both defined as ‘consumers’ pursuant to Iowa Code 714H.2(3)”;
    the Malics are “not in the class of entities excluded from IPRACFA under Iowa
    Code 714H.4”; the Malics “engaged in deception under IPRACFA” by
    “[m]isrepresenting that they were operating a legitimate business entity with work
    to be completed with competence of legitimate business in the field”; and “a result
    of the [Malics’] fraud, deception, and misrepresentations, [the Becirovics] have
    incurred damages to fix and repair the defective driveway and decorative patio
    constructed by [the Malics].” The IPRACFA defines “prohibited practices and acts”
    as follows:
    A person shall not engage in a practice or act the person
    knows or reasonably should know is an unfair practice, deception,
    fraud, false pretense, or false promise, or the misrepresentation,
    concealment, suppression, or omission of a material fact, with the
    intent that others rely upon the unfair practice, deception, fraud, false
    pretense, false promise, misrepresentation, concealment,
    suppression, or omission in connection with the advertisement, sale,
    or lease of consumer merchandise, or the solicitation of contributions
    for charitable purposes. For the purposes of this chapter, a claimant
    alleging an unfair practice, deception, fraud, false pretense, false
    promise, or misrepresentation must prove that the prohibited practice
    related to a material fact or facts.
    Iowa Code § 714H.3(1).
    19
    The district court found the Becirovics had proved a violation of the
    IPRACFA by showing the Malics “were not properly registered construction
    contractors under Iowa Code chapter 91C at the time the work was performed on
    [the Becirovics’] property.” Based on that prohibited act, the court granted the
    Becirovics’ “request for costs of the action and reasonable attorney fees under
    Iowa Code section 714H.5(2).” That section states:
    1. A consumer who suffers an ascertainable loss of money or
    property as the result of a prohibited practice or act in violation of this
    chapter may bring an action at law to recover actual damages. . . .
    2. If the court finds that a person has violated this chapter and
    the consumer is awarded actual damages, the court shall award to
    the consumer the costs of the action and to the consumer’s attorney
    reasonable fees.
    Id. § 714H.5 (emphasis added).
    On appeal, the Malics do not challenge the court’s determination they
    engaged in a prohibited practice or act under section 714H.3 by failing to be
    licensed. Instead, they challenge the court’s finding of liability, claiming in order
    for the court to award attorney fees and costs associated with the Becirovics’ claim,
    it must first have awarded “actual damages” under chapter 714H.5. According to
    the Malics, “[h]ere, the Court did not award actual damages under Iowa Code
    chater 714H but instead awarded compensatory damages under [the Becirovics’]
    common law breach of oral contract claim.” In other words, the Malics argue their
    “licensure status must have caused damages, outside of the damages [the
    Becirovics] allegedly already were faced with, to recover on their chapter 714H
    claim.”
    On this issue, the district court relied on Becirovic’s testimony that “he would
    not have hired [the Malics] had he been aware of the true facts,” i.e., that the Malics
    20
    were not properly registered or licensed. Specifically, Becirovic testified as follows
    about the Malics’ licensure status:
    Q. . . . Would you—would you have hired Mr. Malic or the
    Malics if you knew that Nedzad Malic was unlicensed, uninsured, and
    unbonded? A. Definitely no.
    ....
    Q. And you—you would never have incurred those damages
    if you had not hired the Malics? A. Correct.
    Q. And you would not be here today asking for the Court to
    award damages if you had hired someone other than the Malics?
    A. Correct.
    Q. Because if he—if the Malics had disclosed to you that they
    weren’t licensed, weren’t bonded, weren’t insured, you would have
    hired someone else? A. Correct.
    ....
    Q. . . . But you agree with me that concrete cracks; right?
    A. Correct.
    Q. And the fact that they weren’t licensed, bonded, or insured
    has nothing to do with your concrete cracking; correct? A. Well,
    safety issues. If something happens to the employee on property,
    he’s not insured, who’s going to cover that?
    Q. That didn’t happen; right? A. It—that can happen.
    Q. Okay. But it didn’t? A. Yeah.
    Aside from this testimony, the Becirovics presented no other evidence to
    support their claim for damages under section 714H.5.          We further note the
    Becirovics conceded no one was injured on the property because of the alleged
    deficiencies and the relevant portions of the project were in compliance with City
    code. Under this record, substantial evidence does not support the district court’s
    finding the Becirovics “suffer[ed] an ascertainable loss of money or property as the
    result of” the Malics’ licensure status. Becirovic agreed had he known the Malics
    weren’t licensed, he “would have hired someone else.” Quite simply, because the
    Becirovics would have spent the same amount (or potentially more) to pay a
    licensed concrete contractor to complete the same work they paid the Malics for,
    the Becirovics have not shown they sustained an ascertainable loss as a result of
    21
    the prohibited practice or act. See Poller v. Okoboji Classic Cars, LLC, 
    960 N.W.2d 496
    , 523 (Iowa 2021) (observing the plaintiffs failed to prove an ascertainable loss
    where “there is no showing that they would have paid less than this amount had
    [the defendant] complied with all of the provisions of the [Motor Vehicle Service
    Trade Practices Act,] MVSTPA”); McKee v. Isle of Capri Casinos, Inc., 
    864 N.W.2d 518
    , 533 (Iowa 2015) (“McKee made money on her gambling that evening, so she
    had no out-of-pocket loss.”). Accordingly, the Becirovics may not recover “actual
    damages” under section 715H.5. See Iowa Code § 715H.2(1) (limiting recovery
    of actual damages to consumers who suffer an ascertainable loss as the result of
    the prohibited practice or act).
    Under Iowa Code section 714H.5(2), attorney fees and costs may be
    awarded only “if a person has violated the chapter and the consumer ‘is awarded
    actual damages.’” Poller, 960 N.W.2d at 524. Here, because the Becirovics are
    not entitled to actual damages under chapter 714H, it follows they are not entitled
    to an award of attorney fees and costs. See id. (rejecting a claim for damages
    under section 714H.5, noting “although we have found a violation [of the consumer
    fraud act], we have awarded no damages. As a result, the Pollers are not entitled
    to attorney fees in this action”). We therefore reverse the district court’s order
    awarding attorney fees and costs to the Becirovics’ under Iowa Code
    section 714H.5.
    V.     Conclusion
    We reverse the district court’s order denying Aisa’s motion to add third-party
    defendants and remand for further proceedings relating to Aisa. We affirm the
    judgment in favor of the Becirovics on their breach-of-contract claim against the
    22
    Malics and the award of compensatory damages in the amount of $30,000. We
    reverse the judgment in favor of the Becirovics on their claim of violation of the
    consumer protection code and the award of attorney fees in the amount of
    $22,559.50 and costs in the amount of $405.00. We remand to the district court
    with instructions to enter judgment dismissing the Becirovics’ claim under
    chapter 714H.5.
    AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH
    INSTRUCTIONS.
    

Document Info

Docket Number: 24-0219

Filed Date: 11/13/2024

Precedential Status: Precedential

Modified Date: 11/13/2024