Amended June 27, 2016 Kathryn Winger and Timothy Potts v. Cm Holdings, L.L.C.

IN THE SUPREME COURT OF IOWA
No. 14–0199
Filed June 24, 2016
Amended June 27, 2016
KATHRYN WINGER and TIMOTHY POTTS,
Appellants,
vs.
CM HOLDINGS, L.L.C.,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Richard G.
Blane II, Judge.
Plaintiffs and defendant seek further review of court of appeals
decision ordering a new trial in a wrongful-death action arising from a
fatal fall from an apartment balcony. DECISION OF COURT OF
APPEALS VACATED; DISTRICT COURT ORDER AFFIRMED IN PART
AND REVERSED IN PART; CASE REMANDED FOR NEW TRIAL.
Robert G. Rehkemper and Cory F. Gourley of Gourley, Rehkemper
& Lindholm, P.L.C., for appellants.
Brenda K. Wallrichs of Lederer Weston Craig PLC, Cedar Rapids,
and Michael A. Carmoney and Jack W. Leverenz of Carmoney Law Firm,
PLLC, Des Moines, for appellee.
2
WATERMAN, Justice.
This wrongful-death action arises from a fatal fall from an
apartment balcony and presents several issues on the applicability of the
doctrine of negligence per se to an alleged municipal housing code
violation. The thirty-two-inch high balcony railing complied with the
local housing code when the apartment complex was constructed in
1968, but unless exempted under a grandfather provision, it is ten
inches shorter than the current housing code allows. Before the
accident, a local housing inspector cited the landlord for that code
violation. The inspector reasoned that an attached plastic lattice
modified the railings to eliminate grandfather status. The landlord did
not appeal that finding but rather ordered the higher railings and asked
for an extension of time to install them. The City of Des Moines Housing
Appeal Board (HAB), without a contested hearing, found the property
was in violation but granted a three-month extension to install compliant
railings and suspended the $1090 fine. The plaintiffs’ daughter fell over
the original railing to her death three days later.
The plaintiffs filed a premises liability action alleging the thirty-
two-inch railing violated the local housing code. Their expert testified the
forty-two-inch railing would have prevented the accident. The district
court ruled the landlord was bound by the HAB’s determination that
forty-two-inch railings were required and rejected the landlord’s
arguments that the property was grandfathered out of the current code
or that the HAB’s extension of time to install higher railings excused tort
liability. The court instructed the jury that the landlord’s violation of the
housing code constituted negligence per se and limited the jury to
deciding causation, comparative fault, and damages. The jury found the
3
landlord sixty-five percent at fault, the plaintiffs’ daughter thirty-five
percent at fault, and awarded combined total damages of $1,750,000
($1,137,500 after reduction for comparative fault). In posttrial rulings,
the district court concluded the doctrine of negligence per se did not
apply to a local housing code and ordered a new trial. Both sides
appealed, and we transferred the case to the court of appeals, which
affirmed with one judge dissenting and another specially concurring. We
granted the applications for further review by both sides.
For the reasons explained below, we hold that the doctrine of
negligence per se applies to the violation of a municipal housing code
and is not limited to statewide laws. Additionally, the district court
correctly rejected the landlord’s argument that the old code applied as a
matter of law. The HAB’s extension of time for the landlord to comply
with the code merely suspended administrative penalties without
excusing tort liability. The district court, however, erred by instructing
the jury on the basis that the new code applied as a matter of law. The
HAB’s determination of a code violation does not have preclusive effect in
this wrongful-death action. On remand, the parties may present
evidence on whether prior modifications eliminated grandfather status.
Accordingly, we vacate the decision of the court of appeals, reverse the
district court’s posttrial rulings, and remand this case for a new trial.
I. Background Facts and Proceedings.
On July 23, 2011, twenty-one-year-old Shannon Potts came to the
Grand Stratford Apartments in Des Moines after work to socialize with
friends. She arrived at their second-floor apartment around 1:30 a.m.
slightly intoxicated and watched movies with a small group. She
continued drinking until about 4 a.m. when her friends hid the alcohol.
Shannon asked one to talk with her privately on the balcony. They
4
talked for about twenty minutes before her friend returned inside to get
another drink. While inside, her friend heard a scream and a crash.
Shannon had gone over the railing. Her friends ran downstairs and
found her unresponsive. A bystander called 911. Shannon was rushed
to the hospital with a fractured neck and crushed spine and was
pronounced dead there. Toxicology tests indicated she was intoxicated
at the time of her fall and had marijuana and Xanax in her bloodstream.
Mark Critelli was the sole owner of the Grand Stratford Apartments
until February 15, just over five months before Shannon’s fatal fall. This
apartment complex consists of a duplex and three larger buildings
constructed in 1968. The apartments were built to comply with the 1968
housing code which required guardrails between thirty- and thirty-four
inches high. Des Moines, Iowa, Municipal Code § 24-28.06 (1962). The
original black iron railings are thirty-two inches high and remained in
place when Shannon fell forty-three years later. In 1979, the
Des Moines, Iowa, Municipal Code was amended to require guardrails of
forty-two inches in height. Des Moines, Iowa, Municipal Code § 14-10(b)
(1979). The 1979 Code included a grandfather provision stating that
“[g]uardrails which were installed prior to the passage of this subchapter
and were in conformance with the Health and Safety Housing Code then
in effect may be allowed to remain if in structurally sound condition.” Id.
In 2005, the guardrail ordinance stated, “Multiple family dwellings with
porches, balconies or raised floor surfaces located more than 30 inches
above the floor or below grade shall have guards not less than 42 inches
in height.” Des Moines, Iowa, Municipal Code § 60-127(c) (2005). The
grandfather provision was revised to state, “Any structure that was in
compliance on the day previous to the adoption of this code will be
5
allowed to remain.” Id. § 60-5. The ordinance was admitted into
evidence without objection.
The HAB found Critelli was a “habitual violator” of the code. All
properties under his ownership were put on an accelerated inspection
schedule. In 2009, Critelli attached a forty-eight-inch high white plastic
lattice to the guardrails with zip ties. The lattice served as a privacy
screen to shield each balcony from view. Although Critelli received
numerous notices of violations regarding this property, none addressed
the guardrails before February 2011.
Eddie Leedom is a city inspector assigned to the Neighborhood
Inspection Unit. He inspected the Grand Stratford Apartments on
February 10 and found 106 code violations, including the guardrail
height, broken window screens, and a broken garbage disposal. Leedom
concluded the plastic lattice was an alteration to the guardrails that
triggered a duty to comply with the current forty-two-inch guardrail
requirement. He spoke with the director of the HAB who agreed the
thirty-two-inch guardrails were too low.
On February 15, Eric Estes and Merle Laswell formed CM Holdings
with Mark Critelli to acquire a controlling ownership interest in the
Grand Stratford Apartments. The property was in disrepair, and
CM Holdings began renovating the apartments to increase their rental
value. As part of their renovation plan, the new owners vacated two of
the apartment buildings but permitted tenants to remain in the third.
Estes and Laswell planned to allow tenants to move from the
unrenovated building into the newly renovated buildings as upgrades
were completed.
Estes received the notice of violations on February 24. The
violations were not prioritized, so Estes gave the list of violations to his
6
general contractor without identifying which violations to address first.
By March 31, CM Holdings had fixed fifty-eight violations. On an
inspection on July 5, Leedom noted only six remaining violations. He
imposed a $1090 fine for the guardrail-height violations. By July 13, the
only remaining infraction was the height of the guardrails, and
CM Holdings had ordered new forty-two-inch guardrails.
After each inspection, Leedom sent CM Holdings a notice listing
the violations and the remedial action required. Each notice contained a
notification of the right to appeal the inspection, stating,
APPEALS: Under section 60-102(a)
(1) Any owner objecting to a violation cited in this
Inspection Notice may file a written appeal with
the Neighborhood Inspection Division requesting
a hearing before the Housing Appeals Board. An
appeal shall be filed within 10 days of the date of
the Inspection Notice. Upon the discretion of the
Neighborhood Inspection Officer for good cause
shown, an untimely appeal may be accepted.
....
At this hearing the appellant shall have the opportunity to be
heard, the right to call witnesses and to be represented by
counsel.
CM Holdings never appealed any of the notices of violation.
On July 13, ten days before the accident, Estes and Laswell
appeared on behalf of CM Holdings at a regularly scheduled HAB meeting
to request an extension of time to bring the property into compliance and
to suspend the $1090 fine. CM Holdings was one of four property
owners present requesting extensions at the monthly meeting, and all
received extensions. Leedom and the HAB members applauded the
progress CM Holdings had made on improving the properties. A board
member asked if they could restrict access to the balconies until higher
7
railings were installed, and Estes replied that he did not know. Estes
explained,
[T]he only reason they are not in compliance is because of
the height. The code has changed. I mean they are all in
good shape and they are, you know they’re functional. . . .
[W]e have ordered all new railings for it.
Estes told the board that CM Holdings wanted to replace the decking and
patio doors on the twelve units at issue at the same time, which would
take fifteen days after the materials arrived. He also stated, “[The
guardrails] are all in good condition. They’re just not the right height.” A
board member replied,
Obviously, these folks are doing what they need to do to get
this taken care of, but, you know, I don’t want my name
associated with the kid that falls off the balcony because the
railings aren’t the right height.
Estes admitted the guardrail height was a health and safety issue but
reminded the board that the guardrails had been at that height for forty-
five years without an accident. The board granted CM Holdings until
October 7 to fix the violation. Neither the board nor CM Holdings raised
the issue of whether the existing guardrails were grandfathered under
the housing code.
The HAB issued a notice of its decision on July 20, stating,
The above referenced property has been found to be in
violation of the Municipal Code of the City of Des Moines,
Iowa. The property was not brought into compliance as
ordered by the Notice of Violation issued by the
Neighborhood Inspection Division. The case was referred to
the Housing Appeals Board (HAB) and the Board ordered the
following:
The HAB granted an extension until 10-07-2011 to
complete the repairs and suspended the $1,090.00 fine.
However, the board also made a part of that motion that if
repairs are not completed by the same date, this case will be
referred to the Legal Department for prosecution. . . .
Shannon Potts fell over the balcony rail to her death three days later.
8
On June 19, 2012, Shannon’s parents, Kathryn Winger, the
executor of Shannon’s estate, and Timothy Potts (the plaintiffs) filed a
lawsuit on behalf of Shannon’s estate and for loss of consortium. On
September 5, 2013, CM Holdings moved for summary judgment on the
ground that the extension from the HAB to install higher guardrails was
a legal excuse precluding tort liability. On September 26, the plaintiffs
moved for partial summary judgment on the ground that the violation of
the forty-two-inch guardrail requirement constituted negligence per se as
a matter of law. CM Holdings resisted the plaintiffs’ motion on several
grounds: the HAB extension, the grandfather clause, and a legal
argument that the doctrine of negligence per se does not apply to a local
ordinance. The district court deferred ruling on the cross-motions for
summary judgment until trial.
The jury trial began on November 4, 2013, and lasted five days.
Housing inspector Leedom testified as follows regarding housing code
compliance:
Q. Safety codes periodically change over time; is that
true? A. That’s true.
Q. Do you know when that apartment was originally
built? A. No, I don’t.
Q. Do you know if those 32-inch guardrails complied
with the building code that may have existed when the
building was originally built? A. I have to assume that they
did. It would have to be inspected then.
Q. Now, as a general proposition, if the code changes,
does that automatically mean that everybody has to go
immediately update their property? A. No.
Q. And, in fact, if a code changes, absent any other
circumstances, does a property remain compliant so long as
it was compliant with the previous code? A. Yes.
Q. What circumstances can arise that require a
property owner to bring an older property up into compliance
with a new code? A. If a portion of that property were to be
decayed, defective to the point that it has to be replaced; or if
that portion of the property had been altered in any way that
did not meet the code of today.
9
Q. Explain what type of alterations trigger a
requirement that a property owner bring a particular
building up to compliance. A. If someone makes an addition
to a piece of property or if someone takes something away
from it, anything that they might do to change the way it is
used and a safety factor of it.
Q. So if a particular part of a building has its use or
its safety changed, then that can be one of those alterations
that trigger the property owner to bring the building into
compliance with the current code? A. Yes.
Q. Did that happen with respect to 531 35th Street?
A. Yes.
Q. Explain that for the jury. A. The guardrails on the
balconies at 531 had been altered, and the fact that they had
— they’d put latticework attached to the guardrails to raise
the height of the guardrail, and the extended height was
nothing but latticework.
That made an alteration in the way it looked, it made
an alteration in the way it was used, and it made an unsafe
alteration.
Q. Explain how you felt that addition of the
latticework could be unsafe for someone that would have
been standing on that deck or balcony. A. Well, the
additional height that was made by putting the latticework
there, the latticework was not a material that would be
strong enough to be used as a guardrail. It was just flimsy.
The plaintiffs introduced pictures of the latticework. The plaintiffs
then questioned Leedom regarding why the latticework was an alteration.
Q. That difference in height was one of the problems
that you felt required the change and the alteration of this
property to be brought in compliance with the Des Moines
Housing Code? A. Yes.
Leedom testified the property was in violation of the city ordinance.
Q. [T]he guardrail was at 32 inches; the latticework
went up above that? A. Correct.
Q. On July 23, 2011, was CM Holdings, L.L.C.,
violating the law in that respect with respect to that
property? A. I can say they were in violation of the city
ordinance, yes.
CM Holdings cross-examined Leedom about which code provisions
applied to the Grand Stratford apartments:
Q. As far as you know, all of the components of this
building were in full compliance with the building and the
10
housing codes that would have been in effect back at that
time in 1968? A. Yes.
Q. Back then 32-inch guardrails would meet the code
at that time? A. Probably, Yes.
Q. Housing and building codes do change over time.
You talked about that? A. Yes.
Q. The height requirement for guardrails on new
construction today is 42 inches in height? A. Correct.
Q. Now, you acknowledged earlier that under the law
that owners of existing property are not required to bring
their building up to code every time that code changes?
A. That’s correct.
Q. As a general rule? A. Yes.
Q. As a general rule, as long as the building is in
compliance with the existing code on the day before the
change takes place, then the building is deemed to be in
compliance right on through; correct? A. Yes.
Q. We call that routinely grandfathered in? A. That’s
what it’s called, yeah.
....
Q. If I look at the first paragraph there [of the
Des Moines Municipal Housing Code section 60-5], the very
last sentence of that first paragraph, I’m just going to read it,
if you could follow along and confirm I’m reading it correctly.
“Any structure that was in compliance on the day
previous to the adoption of this code will be allowed to
remain.” Did I read it correctly? A. Yes.
Q. That’s the grandfather clause; right? A. That’s
what it’s called. That’s the laymen’s term, yes.
....
Q. [Y]ou never indicated any specific reason for the
requirement that those railings be upgraded to the current
code, not in those written reports; correct? A. Just the
height requirement.
Q. You indicate the height requirement but never
indicated a reason why the new 42-inch requirement would
be triggered? A. No.
....
Q. You stated that it was the attachment of that
plastic lattice to the rails themselves that you feel triggered
the requirement to bring the railings up to the current code?
A. Yes.
....
Q. The guardrails themselves—and here I’m talking
about the actual metal guardrail that provides protection for
11
people who go on the balconies—those guardrails were never
actually modified by putting the lattice in place.
It added an additional, just trying to—adding those
plastic lattice pieces didn’t change the guardrails themselves;
right? A. It gave the perception of a higher guardrail.
Q. But it didn’t actually change the physical
properties of the metal rails themselves? A. No.
Q. Now, when you walk out on one of these balconies
and you look at the guardrail with the lattice attached, the
lattice would be on the outside of the railings; right? A. I
believe it was.
....
Q. The view of the actual railing is not blocked per se
by the lattice? A. The view of the iron is not, no. It’s not
covered up.
Q. In any event, this particular issue that you found
was never specifically identified on the inspection notices.
You simply indicated that the new height requirement of 42
inches was in effect? A. Yes.
On redirect, the plaintiffs probed how Leedom concluded that it
was an alteration.
Q. There was some discussion about your
determination that the latticework was a change of use of the
guardrails with [CM Holdings’ counsel]. Do you recall that
discussion? A. Yes.
Q. Was it the change of effect that you felt that might
have on the perception of someone out there in terms of their
safety that caused you to call it a change of use? A. Yes.
You could see that the latticework is being broken and
busted off above the original iron guardrail.
Q. And, once again, did you state that that felt to you
like a false sense of security for someone that was out there
with that latticework around there? A. Yes.
Q. After you made the determination that adding the
latticework to the guardrail was a change of use, did you talk
to anybody else about that determination? A. Yes.
Q. Who did you talk to? A. I talked to my supervisor.
Q. Who was your supervisor back in 2011?
A. Jack Hanson.
Q. And what position did he hold at or for the City
back in 2011? A. He agreed that it would be an alteration of
the handrail—or guardrail. I’m sorry. Guardrail.
12
The chairman of the HAB, Richard Bason, testified about the grandfather
status:
Q. [D]o you recall whether or not the railings were
complaint with the Des Moines Code? A. No. That’s why
[Leedom] brought them before the board. They were not in
compliance from the standpoint of — as I recall, at the
original time that Mr. Leedom inspected the property they
were found to be — there was something added. They were
changed.
And therefore, because of that, he faulted the property
because of this change, whether it was a latticework or
something.
Prior to that it had passed code, I believe, many times
—inspection. It passed inspection. But it’s not uncommon
that when different inspectors go out, just because it passed
the last four times doesn’t mean that he didn’t catch it this
time.
But the case here is the fact that it was changed. The
uses of it had been changed, modified. And that was, I
believe, the main reason he faulted it as being then —
because it was changed, it eliminated the grandfather in his
mind. And, therefore, he was bringing it and saying, Okay,
we got to make it to current code. That’s the best I can
remember on it.
The plaintiffs’ expert, Richard Hinrichs, a professor at Arizona
State University, testified regarding why guardrails are required to be
forty-two inches high:
The International Building Code is based on—that they
arrived at the 42-inch minimum height based on where the
average person’s center of gravity falls when standing. And
I’m sure that there was originally research done in order to
arrive at that height of 42 inches.
But essentially if you have a 42-inch-high guardrail,
for the vast majority of people, except for the tallest
individuals, that 42 inches will be above the height, the
standing height, of one’s center of gravity.
And if you have something that’s above the center of
gravity, you’re less likely to fall over it than if something is
below the center of gravity. There’s something very important
about that point that we call the center of gravity and how
high it is relative to the top of the guardrail.
13
CM Holdings proposed a jury instruction in pretrial submissions
stating that if the jury found the apartments were grandfathered out of
the guardrail requirement, it would not be negligent 1 and another
proposed instruction regarding legal excuse based on the HAB’s
extension of time to correct the violations. 2 At trial, the plaintiffs moved
for a directed verdict on liability, and CM Holdings moved for a directed
verdict on two grounds: legal excuse based on the HAB extension and the
grandfather provision. The district court denied CM Holdings’ motion
and granted the plaintiffs’ motion, ruling that the failure to install forty-
two-inch railings constituted negligence per se.
During the jury instruction conference, CM Holdings did not reoffer
the proposed jury instructions regarding the grandfather clause or legal
excuse. The court, over CM Holdings’ objection, gave instruction 15,
which stated,
You are instructed that the Court has determined as a
matter of law that pursuant to the Des Moines Municipal
Housing Code the Defendant was required before July 23,
1The proposed instruction stated,
The Des Moines Housing Code contains the following provision in respect
to multi-family dwellings:
Section 60-5. Scope, applicability and exceptions.
Any structure that was in compliance on the day previous
to the adoption of this code will be allowed to remain.
If you find that the Des Moines Housing Code Sec. 60-5 applied to
[the Grand Stratford Apartments] on July 23, 2011, you must
find the defendant was not in violation of the Des Moines Housing
Code Section 60-127, and was not negligent as alleged in part ___
of Instruction No. ____.
2That proposed instruction stated,
If you find that Defendant CM Holdings had a valid extension of time
issued by the City of Des Moines Housing Appeals Board to repair the
guardrails that was in effect on July 23, 2011, you must find that
defendant was not negligent as alleged in part ___ of Instruction No. ____.
14
2011, to install guardrails that were at least 42 inches in
height on the balcony of Apartment No. 9 at 531–35th Street
Des Moines, Iowa.
Defendant’s violation of law is negligence as to
Instruction No. 16.
CM Holdings objected to this negligence per se instruction as follows:
At this point, based upon the rulings of the Court, that
verdict form appears to — although Defendant disagrees
with the ruling, it appears that the verdict form is set up in a
manner that doesn’t unfairly highlight that issue [the
violation of the municipal housing code] yet again. . . .
....
[W]ith regard to the verdict form and more as a general
matter, Defendant does object and would urge the Court to
reconsider its ruling on the legal issues regarding its finding
that there was a violation of the Municipal Housing Code.
....
Defendant does believe that it’s an error, that it would
be an error, to find that any of Defendant’s conduct was
negligence per se under the record presented to the Court
and would object to the jury being instructed to that and
would object to the verdict form that does not have a specific
question in which the jury would determine whether or not
Defendant was at fault.
The court overruled the objections without modifying the instruction.
Because the jury was instructed the court had already determined
that CM Holdings was negligent, the special verdict directed the jury to
decide the remaining issues of causation, comparative fault, and
damages. The jury returned a verdict on November 13, finding the
defendant’s fault caused the plaintiffs’ damages. The jury further found
Shannon was thirty-five percent at fault and CM Holdings was sixty-five
percent at fault and awarded the plaintiffs $1,750,000 before the
reduction for Shannon’s fault.
On December 20, CM Holdings moved for judgment
notwithstanding the verdict (JNOV) and a new trial, claiming the district
15
court erred in finding a violation of the ordinances constituted negligence
per se. 3 On February 6, 2014, the district court granted the motion for a
new trial. The district court ruled that the ordinance, as incorporated in
Iowa’s Uniform Residential Landlord Tenant Act (IURLTA), Iowa Code
section 562A.15 (2011), did not establish a sufficiently specific standard
of care to allow plaintiffs to establish negligence per se.
Plaintiffs appealed, arguing that the district court properly found
negligence per se applied during trial, and CM Holdings cross-appealed
on the issues of the grandfather clause and the legal-excuse doctrine.
The plaintiffs responded to the cross-appeal by arguing CM Holdings
could not collaterally attack the HAB’s determination that the guardrails
violated the housing code. We transferred the case to the court of
appeals. A divided court of appeals affirmed on both appeals with three
separate opinions. The majority held that our decision in Griglione v.
Martin, 525 N.W.2d 810 (Iowa 1994), required a statewide standard for a
statute or ordinance to establish negligence per se. The majority
concluded the district court correctly set aside the verdict because
“compliance with an ordinance that may or may not be grandfathered
does not constitute conclusive proof of reasonableness.” The
concurrence concluded the IURLTA created a statewide standard that
satisfied Griglione but that our decision in Montgomery v. Engle, 179
N.W.2d 478, 484 (Iowa 1970), precluded a negligence per se instruction
because it held that “evidence of violation of the [housing] ordinance . . .
is prima facie evidence of negligence.” The dissent argued the jury
verdict should be reinstated because the ordinance set a specific
3CM Holdings also moved for remitter or new trial on grounds the damages
awarded were excessive but has not pursued that argument on appeal.
16
standard of conduct and our cases do not require a statewide standard.
The remaining issues were not addressed by the court of appeals.
Both parties applied for further review, which we granted.
II. Standard of Review.
“The scope of our review of a district court’s ruling on a motion for
a new trial depends on the grounds raised in the motion.” Clinton
Physical Therapy Servs., P.C. v. John Deere Health Care, Inc., 714 N.W.2d
603, 609 (Iowa 2006) (quoting Richards v. Anderson Erickson Dairy Co.,
699 N.W.2d 676,678 (Iowa 2005)). The question of whether a duty exists
is a question of law reviewed for correction of errors at law. See id. (“[I]f
the motion was ‘based on a legal question, our review is on error.’ ”
(quoting Richards, 699 N.W.2d at 678)); Porter v. Iowa Power & Light Co.,
217 N.W.2d 221, 228 (Iowa 1974) (“The question of existence of duty is a
matter of law for the court.”). “We are slower to interfere with the grant
of a new trial than with its denial.” Bryant v. Parr, 872 N.W.2d 366, 376
(Iowa 2015) (quoting Cowan v. Flannery, 461 N.W.2d 155, 157 (Iowa
1990)).
“Whether the elements of issue preclusion are satisfied is a
question of law.” Emp’rs Mut. Cas. Co. v. Van Haaften, 815 N.W.2d 17,
22 (Iowa 2012) (quoting Grant v. Iowa Dep’t of Human Servs., 722 N.W.2d
169, 173 (Iowa 2006)).
“We review a district court judgment on a ruling for judgment
notwithstanding the verdict for corrections of errors at law.” Spreitzer v.
Hawkeye State Bank, 779 N.W.2d 726, 734 (Iowa 2009). “We examine
whether substantial evidence supports each element of the claim . . . in a
light most favorable to the nonmoving party.” Id. “Evidence is
substantial if a jury could reasonably infer a fact from the evidence.” Id.
17
(quoting Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 391 (Iowa
2001)).
III. Analysis.
The central fighting issue on appeal is whether CM Holdings was
negligent as a matter of law by failing to replace the thirty-two-inch high
balcony guardrails with forty-two-inch high guardrails. We must resolve
several related questions. First, CM Holdings argues—and the court of
appeals ultimately concluded—that under Griglione, only breach of a
specific statewide statute or rule can constitute negligence per se, while
the breach of a local ordinance cannot. We disagree and hold that the
breach of a specific safety-related requirement in a municipal ordinance
with the force of law may constitute negligence per se.
Second, CM Holdings argues its property was grandfathered out of
the forty-two-inch high guardrail requirement. The plaintiffs argue that
CM Holdings is bound by the HAB’s determination that its thirty-two-
inch balcony guardrails with the attached lattice violated the code. The
district court ruled that CM Holdings could not “collaterally attack” the
HAB determination. We reframe the issue as one of issue preclusion and
hold that the HAB finding is not preclusive in this tort action.
Third, CM Holdings contends the HAB’s extension of time to install
forty-two-inch railings excused its tort liability in the interim. We affirm
the district court’s ruling rejecting that legal excuse.
Finally, we conclude neither side was entitled to a directed verdict
on the grandfather issue under the existing record. That issue must be
litigated on remand.
A. Can a Violation of a City Ordinance Constitute Negligence
Per Se? The court of appeals construed Griglione to hold that only the
breach of a statewide standard can constitute negligence per se and
18
affirmed the order granting a new trial on that basis. The court of
appeals understandably relied on this language from Griglione:
We believe rules of conduct that establish absolute
standards of care, the violation of which is negligence per se,
must be ordained by a state legislative body or an
administrative agency regulating on a statewide basis under
authority of the legislature. That is the position espoused in
Restatement (Second) of Torts § 286 (1965) and followed by
this court in Jorgensen [v. Horton, 206 N.W.2d 100, 102
(Iowa 1973)]. We are persuaded that, for purposes of civil
damages actions based on allegedly negligent actions by
municipal employees, this principle is sound.
525 N.W.2d at 812. The plaintiffs argued that language is dicta, but the
court of appeals concluded that language is controlling. We note that
language was unnecessary to the decision and is not supported by the
cited authorities. We resolve the issue by overruling Griglione.
Our court has long recognized the violation of a municipal safety
ordinance can be negligence per se. See Hedges v. Conder, 166 N.W.2d
844, 850–51 (Iowa 1969) (holding party could be negligent per se for
failing to follow city ordinance requiring use of crosswalks); Kisling v.
Thierman, 214 Iowa 911, 915, 243 N.W. 552, 554 (1932) (adopting
general rule that violation of rules of the road in statutes or ordinances
constitute negligence per se); Tobey v. Burlington, Cedar Rapids & N. Ry.,
94 Iowa 256, 265, 62 N.W. 761, 764 (1895) (holding violation of speed
limit ordinance was negligence per se). However, the district court and
court of appeals questioned the viability of this line of cases based on
what we recently said in Griglione, a case that did not involve a municipal
ordinance or code with the force of law.
The fighting issue in Griglione was whether the violation of a local
police department’s internal operating procedures constituted negligence
per se. Paula Blythe received threatening phone calls from Rodney
Griglione, her former paramour. 525 N.W.2d at 811. She called the
19
Mt. Pleasant Police Department, and the responding police officer,
Steven Martin, while interviewing her inside her trailer, heard someone
yelling profanities outside. Officer Martin stepped outside in the dark
and looked around with his flashlight. Id. He saw Griglione climbing
over a fence with a large knife in his right hand. Id. Griglione ran
towards Officer Martin, who drew his pistol and fired three times, fatally
wounding Griglione. Id. at 811–12.
Griglione’s widow sued Officer Martin, arguing that he was
negligent per se for violating his department’s operating procedures by
using deadly force and failing to call for backup or identify himself as a
police officer before shooting. Id. at 812. The preamble to the operating
procedures stated,
The following Police Department Standard Operating
Procedures are guidelines that are suggested for occurrences
as specified as follows. They will never replace good, sound
judgment or common sense, but when confronted with an
unfamiliar situation should serve as an aid to the Officer.
Id. The provisions regarding deadly force included the following
statement:
The Deadly Force Policy is written to guide officers before the
fact in approaching a potentially critical situation and not
merely to assist in assessing the possible liability after the
fact. The use of deadly force in effecting an arrest shall be
based on the concept of protection of the officer or other
person from the use, or threat of use of deadly force.
Id.
We concluded that violations of the department’s internal operating
procedures were not negligence per se for two reasons. Id. First, we held
that the operating procedures “do not involve the delineation of that type
of precise standard required to invoke the negligence per se doctrine.”
Id. Second, we stated that only the violation of a rule applying
20
“statewide” could constitute negligence per se and cited Jorgensen and
the Restatement (Second) of Torts section 286, in support of that
proposition. Id. That statement was broader than necessary to decide
the narrow issue of whether an officer’s violation of his department’s
internal procedures is negligent per se. We could have answered “no”
without addressing local ordinances that have the force of law.
Moreover, the cited authorities contradict the proposition that only
violations of statewide standards constitute negligence per se. In
Jorgensen, we considered whether the defendant’s failure to follow a
standard in a private construction safety code was negligence per se.
206 N.W.2d at 102. We said,
Statutes and ordinances such as these under discussion are
a legislative prescription of a suitable precaution, or a fixing
by law of the standard of care which is required under the
circumstances, and it must follow that a failure to observe
the standard of care thus fixed by law is negligence.
Id. (emphasis added) (quoting Kisling, 214 Iowa at 915, 243 N.W. at 554).
We ultimately held breach of the private safety code did not establish
negligence per se, but we noted four times in that opinion that an
ordinance may serve as the basis for negligence per se. Id. at 102–03.
Similarly, the Restatement (Second) of Torts expressly includes
ordinances as a basis for a standard of care the violation of which is
negligent per se. Restatement (Second) of Torts § 286, at 25 (Am. Law
Inst. 1965) (“The court may adopt as the standard of conduct of a
reasonable man the requirements of a legislative enactment . . . .”); id.
§ 286 cmt. a (“ ‘Legislative enactment’ includes both statutes and
ordinances.”). The Restatement (Third) of Torts continues to recognize
that the violation of a local ordinance is negligence per se. See
Restatement (Third) of Torts: Liab. for Physical & Emotional Harm § 14
21
cmt. a, at 154–55 (Am. Law Inst. 2010) (“This Section most frequently
applies to statutes adopted by state legislatures, but equally applies to
regulations adopted by state administrative bodies, ordinances adopted
by local councils, and federal statutes as well as regulations promulgated
by federal agencies.”).
CM Holdings and the court of appeals relied on Montgomery for the
proposition that the violation of a municipal safety ordinance is merely
evidence of negligence rather than negligence per se. 179 N.W.2d at
483–84. In Montgomery, we did not conclude the violation of an
ordinance can never be negligence per se; rather we used a fact-specific,
case-by-case approach for determining “whether the alleged ordinance
violation constitutes negligence per se or merely prima facie evidence of
negligence . . . . Each case has been decided in light of the purpose and
intent of the statute or ordinance involved.” Id. at 483. In Montgomery,
the plaintiff was injured falling down a stairway that lacked a railing. Id.
at 480–81. The city municipal code required handrails on stairway exits.
Id. at 481. We noted “the primary purpose of these statutes appears to
be protection from fire hazards.” Id. (quoting Lattner v. Immaculate
Conception Church, 255 Iowa 120, 129, 121 N.W.2d 639, 645 (1963)).
We said that the violation of a statute is not negligence per se “unless the
plaintiff [is] a member of the class the statute is designed to protect and
the harm is one the enactment is designed to protect.” Id. (quoting
Lattner, 255 Iowa at 129, 121 N.W.2d at 645). The plaintiff was not
fleeing a fire—he was walking down the stairs. Id. at 478–81.
Accordingly, we determined that the defendants’ violation of the
ordinance should have been submitted to the jury with a prima facie
negligence instruction rather than a negligence per se instruction. Id. at
484.
 22
We now conclude the scope of the class of people protected by the
municipal handrail ordinance was viewed too narrowly in Montgomery as
persons fleeing fires, rather than a broader class of people using such
stairways routinely to enter or exit the apartment. To the extent
Montgomery is inconsistent with our opinion today, we overrule it.
In Koll v. Manatt’s Transportation Co., a truck driven by Michael
Manatt and owned by Manatt’s Transportation Company backed over
David Koll, killing him. 253 N.W.2d 265, 267 (Iowa 1977). The plaintiff
alleged the truck lacked equipment required by OSHA and IOSHA
regulations, specifically a backup alarm audible above the surrounding
noise level. Id. at 269. Koll’s estate sued Manatt’s and argued the
defendant’s violation of the regulation constituted negligence per se. We
held that the
violation by an employer of an OSHA or IOSHA standard is
negligence per se as to his employee. Such a violation is
evidence of negligence as to all persons who are likely to be
exposed to injury as a result of the violation.
Id. at 270. Accordingly, Koll was unable to establish negligence per se
against Manatt’s Transportation Company because he was not Manatt’s
employee. Id.
In Wiersgalla v. Garrett, we reiterated the governing standard as
follows:
[I]f a statute or regulation . . . provides a rule of conduct
specifically designed for the safety and protection of a certain
class of persons, and a person within that class receives
injuries as a proximate result of a violation of the statute or
regulation, the injuries “would be actionable, as . . .
negligence per se.” To be actionable as such, however, “the
harm for which the action is brought must be of the kind
which the statute was intended to prevent; and the person
injured, in order to recover, must be within the class which
[the statute] was intended to protect.”
23
486 N.W.2d 290, 292 (Iowa 1992) (citations omitted) (quoting Koll, 253
N.W.2d at 270). We hold this standard applies equally to municipal
ordinances.
The ordinance at issue here requires forty-two-inch high guardrails
on second floor or higher balconies. The obvious purpose for requiring a
forty-two-inch high guardrail on balconies above ground level is to
protect persons from getting killed or injured falling off the balcony.
Shannon clearly was within the scope of persons intended to be
protected from injury by the municipal ordinance. The requirement is
sufficiently specific to prescribe a standard of care the violation of which
constitutes negligence per se. See O’Neil v. Windshire Copeland Assocs.,
L.P., 197 F. Supp. 2d 507, 510 (E.D. Va. 2002) (ruling that apartment
owner was negligent per se for having balcony guardrail lower than
required by city building code); Heath v. La Mariana Apartments, 180
P.3d 664, 669–70 (N.M. 2008) (violation of guardrail spacing requirement
in ordinance would be negligence per se but for grandfather provision
excusing landlord from obligation to upgrade railings to current code); cf.
Brichacek v. Hiskey, 401 N.W.2d 44, 47 (Iowa 1987) (holding Des Moines,
Iowa, Municipal Code provision that required a “working lock” lacked the
requisite specificity for negligence per se); Struve v. Payvandi, 740
N.W.2d 436, 442–43 (Iowa Ct. App. 2007) (holding statutory requirement
to maintain heating appliances in a safe and working order was not
specific enough to support negligence per se theory).
CM Holdings’ argument that only a violation of a statewide law can
be negligent per se conflicts with Iowa’s public policy encouraging local
control over residential housing for public health and safety. See
generally Iowa Code § 364.1 (permitting a city to “exercise any power and
perform any function it deems appropriate to . . . preserve and improve
24
the peace, safety, health, welfare, comfort, and convenience of its
residents”); Star Transp. Co. v. Mason City, 195 Iowa 930, 953, 192 N.W.
873, 882 (1923) (“When power to regulate, license, and control is vested
by the legislature in city councils, there is a broad presumption in favor
of the validity of the ordinance . . . .”). The legislature has specifically
allowed local housing ordinances more stringent than statewide
standards in the IURLTA. See Iowa Code § 562A.15(1)(a) (requiring the
landlord to follow greater duties imposed by local building or housing
codes that materially affect health and safety). 4 Our legislative
enactments thus tolerate local variations in housing codes. Although
building codes may differ on either side of a city’s boundary, buildings
are in fixed locations. Building owners will not have to deal with
inconsistent local codes at a single location.
We see no good reason to limit application of the negligence per se
doctrine to laws of statewide application. The negligence per se doctrine
also applies to local ordinances. We next address whether the district
court correctly instructed the jury that CM Holdings violated the
ordinance as a matter of a law.
B. Does the Jury Instruction on Negligence Per Se Require a
New Trial? CM Holdings argues it was entitled to a directed verdict
because the grandfather provision in the ordinance applies as a matter of
law to permit the thirty-two-inch guardrails, or alternatively, the HAB’s
extension of time to install forty-two-inch guardrails excused tort
liability. The district court rejected those arguments, ruling during trial
4In Crawford v. Yotty, we left open the question whether “the IURLTA imposes
statutory duties that are applicable to visitors of tenants.” 828 N.W.2d 295, 304 (Iowa
2013), overruled on other grounds by Alcala v. Marriott Int’l, Inc., ___ N.W.2d ___, ___ &
n.3 (Iowa 2016). We need not answer that question here because the municipal
ordinance protects visitors as well as tenants using the apartment’s balcony.
25
that CM Holdings could not “collaterally attack” the HAB’s determination
that it violated the guardrail-height ordinance and the extension was not
a legal excuse for tort liability. The district court instructed the jury that
the court had already determined CM Holdings had violated the
ordinance and that violation constituted negligence per se. The district
court then ordered a new trial based on its posttrial ruling that the
ordinance did not support a negligence per se theory. Because we
reverse that posttrial ruling above, we must decide whether it was
prejudicial error to give that jury instruction. We conclude the HAB
finding of a violation cannot be used by plaintiffs offensively in this tort
action, and the HAB extension does not excuse tort liability. Whether
the grandfather provision applies is a mixed question of law and fact to
be decided on remand.
1. Is CM Holdings bound by the HAB finding that it violated the
guardrail ordinance? “Collateral estoppel” is also known as “issue
preclusion.” Winnebago Indus., Inc. v. Haverly, 727 N.W.2d 567, 571
(Iowa 2006). “Issue preclusion prevents parties ‘from relitigating in a
subsequent action issues raised and resolved in [a] previous action.’ ”
Emp’rs Mut. Cas. Co., 815 N.W.2d at 22 (quoting Soults Farms, Inc. v.
Schafer, 797 N.W.2d 92, 103 (Iowa 2011)). The doctrine serves several
purposes: protecting parties from the vexation of relitigating identical
issues, furthering judicial economy by reducing unnecessary litigation,
and avoiding the problem of two authoritative but conflicting rulings on
the same question. Id. We have given preclusive effect to an agency’s
adjudicatory decisions in subsequent court proceedings under certain
circumstances. See, e.g., City of Johnston v. Christenson, 718 N.W.2d
290, 301–02 (Iowa 2006) (holding board of adjustment decision allowing
nonconforming use had preclusive effect against city challenging land
26
use in subsequent district court litigation); Gardner v. Hartford Ins.
Accident & Indem. Co., 659 N.W.2d 198, 206–07 (Iowa 2003) (holding
industrial commissioner’s approval of contested case settlement barred
employee’s subsequent bad-faith tort claim against his employer’s
insurer); Maquoketa Cmty. Sch. Dist. v. George, 193 N.W.2d 519, 521
(Iowa 1972) (holding a board decision on appeal from contested case that
students were not residents of school district had preclusive effect in
court action against parents to collect tuition). “[A]gency action may be
adjudicatory if the agency determines an individual’s rights, duties, and
obligations created by past transactions or occurrences.” Iowa Elec.
Light & Power Co. v. Lagle, 430 N.W.2d 393, 397 (Iowa 1988).
But we have cautioned against routinely according preclusive effect
to agency determinations because
[r]esolution of a[n administrative] dispute does not require
formal court-like proceedings, and informality is considered
a virtue of most administrative proceedings. When, however,
collateral estoppel effect is given issue determinations made
in an administrative proceeding, informality becomes a
problem. Judicial proceedings operate within a system
where each issue resolved is subject to appellate review.
Parties develop the crucial issues, introduce the important
evidence, and have an independent fact finder resolve legal
and evidentiary conflicts. The reviewability of this process
ensures clear and careful issue resolution.
Administrative proceedings are not structured with the
same goals in mind as those of formal court-like
proceedings, especially with regard to issue determinations.
Id. at 398 (quoting Rex R. Pershbacher, Rethinking Collateral Estoppel:
Limiting the Preclusive Effect of Administrative Determinations in Judicial
Proceedings, 35 Fla. L. Rev. 422, 452 (1983)). Thus, in Chamberlain,
L.L.C., v. City of Ames, we rejected a property owner’s request to apply
issue preclusion against a municipality. 757 N.W.2d 644, 649–50 (Iowa
2008). The owner planned to build an apartment complex with loft space
27
that could be used for sleeping. Id. at 646. Uncertain whether the lofts
would comply with the ceiling-height requirements of the Ames Housing
Code, the owner sought and obtained a code interpretation from a city
official allowing the proposed use. Id. at 646–47. After construction was
completed, the fire chief determined the ceiling height violated the code,
a finding upheld by the city’s board of appeals. Id. at 647. The city
issued a certificate of occupancy only after the owner barricaded the
lofts. Id. The owner appealed to the district court, which granted
summary judgment to the city. We affirmed because the city code
allowed the city to override the “initial interpretation” of its employee. Id.
at 650. Because the initial code interpretation was “not an adjudication
of rights unalterable by the city,” we held the owner could not use issue
preclusion against the city. Id. at 649–50. Accordingly, we did not
address the additional requirements for applying the doctrine.
CM Holdings failed to appeal the finding that its balcony railings
violated the code and instead sought and obtained an extension of time
to install new railings. We consider the HAB order an “adjudication of
rights” for purposes of applying issue preclusion. See id. We next must
determine whether the plaintiffs, who were not parties to the HAB
proceeding, satisfied the remaining requirements to apply issue
preclusion offensively against CM Holdings. 5
5The plaintiffs cite no cases applying issue preclusion against a property owner
in a civil action based on a prior agency determination of a housing code violation. An
Ohio appellate court rejected the use of issue preclusion based on unappealed building
code violations. Credit Reporting Serv., Inc. v. Joseph Sylvester Constr. Co.,
No. 98 CA 30, 1999 WL 669514, at *3 (Ohio Ct. App. 1999). There, the contractor failed
to appeal the building inspector’s notice of violation, and the building appeal board on
the owner’s appeal found code violations. Id. at *1. The owner sued the contractor for
the costs to remedy the violations, and the trial court entered summary judgment based
on the agency finding of code violations. The appellate court reversed, holding that the
doctrine of issue preclusion did not apply because the code violation was not “actually
litigated” before the board. Id. at *2. The Ohio appellate court found the contractor’s
28
The party invoking issue preclusion must establish four elements:
(1) the issue in the present case must be identical, (2) the
issue must have been raised and litigated in the prior action,
(3) the issue must have been material and relevant to the
disposition of the prior case, and (4) the determination of the
issue in the prior action must have been essential to the
resulting judgment.
Emp’rs Mut. Cas. Co., 815 N.W.2d at 22 (quoting Soults Farms, Inc., 797
N.W.2d at 104). “Although offensive use of issue preclusion is allowed in
Iowa[,] . . . it is more restrictively and cautiously applied than defensive
issue preclusion.” Gardner, 659 N.W.2d at 203 (quoting Buckingham v.
Fed. Land Bank Ass’n, 398 N.W.2d 873, 876 (Iowa 1987)). Offensive
issue preclusion involves two extra considerations:
(1) whether the opposing party in the earlier action was
afforded a full and fair opportunity to litigate the issues . . . ,
and (2) whether any other circumstances are present that
would justify granting the party resisting issue preclusion
occasion to relitigate the issues.
Emp’rs Mut. Cas. Co., 815 N.W.2d at 22 (quoting Soults Farms, Inc., 797
N.W.2d at 104). One circumstance in which issue preclusion does not
apply is when “the party sought to be precluded . . . did not have an
adequate . . . incentive to obtain a full and fair adjudication in the initial
action.” Restatement (Second) of Judgments § 28(5)(c) (Am. Law Inst.
1982); see Hunter v. City of Des Moines Mun. Hous. Auth., 742 N.W.2d
578, 585 (Iowa 2007) (applying section 28(2) of the Restatement (Second)
of Judgments); Dettmann v. Kruckenberg, 613 N.W.2d 238, 246, 249
(Iowa 2000) (discussing and applying “incentive to litigate” requirement
to affirm civil judgment giving preclusive effect to criminal conviction
establishing identity of driver in fatal accident). An adequate incentive
_________________________
“ample opportunity to litigate the issues in the notice by appealing to the Board” was
not sufficient to give the violations preclusive effect in the subsequent civil litigation. Id.
at *3.
 29
may be lacking when only a small dollar amount is at stake in the prior
proceeding. The United States Supreme Court, in the leading case on
offensive issue preclusion, cautioned that the doctrine should not be
applied against a defendant who “in the first action is sued for small or
nominal damages [and thus] may have little incentive to defend
vigorously.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 330, 99 S. Ct.
645, 651, 58 L. Ed. 2d 552, 561 (1979). In Dettmann, we quoted a
leading commentator’s observation “that preclusive effect is given to a
judgment only if the party precluded had the opportunity and incentive
to litigate the matter fully.” 613 N.W.2d at 246 (quoting Allan D. Vestal,
Issue Preclusion and Criminal Prosecutions, 65 Iowa L. Rev. 281, 340
(1980)). Thus, courts will decline to apply issue preclusion when the
party to be precluded lacked an incentive to litigate in the prior
proceeding. See, e.g., Bd. of Educ. v. Gray, 806 S.W.2d 400, 403 (Ky. Ct.
App. 1991) (declining to give unemployment compensation decision
preclusive effect in employee’s breach of contract action because of the
“minimal” amount at stake in the agency proceeding); 6 Hadley v.
6Other courts have upheld the offensive use of issue preclusion against a party
that litigated and lost an issue in an administrative proceeding, when the amount at
stake provided the incentive to litigate in the administrative forum. For example, in
Bellermann v. Fitchburg Gas & Electric Light Co., the Supreme Judicial Court of
Massachusetts affirmed a trial court ruling applying issue preclusion against an electric
utility in a civil action by its customers for damages resulting from a storm-related
power outage. 18 N.E.3d 1050, 1069 (Mass. 2014). The Department of Public Utilities
(DPU) had conducted a five-day adjudicatory hearing in which the utility was
represented by counsel. Id. The DPU issued a 215-page decision with numerous
findings on inadequacies in the utility’s storm preparedness and imposed a $4.6 million
fine while denying recovery of nearly $7 million in storm-related costs. Id. at 1066. The
Bellermann court rejected the utility’s argument that it lacked “an adequate incentive to
dispute its purported failures before the DPU.” Id. at 1067.
Similarly, in United States v. Karlen, the United States Court of Appeals for the
Eighth Circuit found an adequate incentive to litigate at the agency. 645 F.2d 635,
639–40 (8th Cir. 1981) (affirming district court ruling giving preclusive effect to an
agency decision). Merrill Karlen leased tribal land to graze cattle. Id. at 637. The
Bureau of Indian Affairs (BIA) canceled his lease for excessive hay cutting and assessed
30
Maxwell, 27 P.3d 600, 603–04 (Wash. 2001) (en banc) (concluding $95
fine for traffic violation provided insufficient incentive to appeal finding of
guilt or to justify use of issue preclusion in subsequent personal injury
lawsuit). 7 As the Washington Supreme Court recognized, “There must be
sufficient motivation for a full and vigorous litigation of the issue” in the
prior proceeding. Hadley, 27 P.3d at 604; see also 18 Charles A. Wright,
et al., Federal Practice and Procedure § 4423, at 612 (2d ed. 2002) (“The
most general independent concern reflected in the limitation of issue
preclusion by the full and fair opportunity requirement goes to the
incentive to litigate vigorously in the first action.”).
A settlement may provide another explanation for a lack of
incentive to litigate in the prior proceeding. See, e.g., Arizona v.
California, 530 U.S. 392, 414, 120 S. Ct. 2304, 2319, 147 L. Ed. 2d 374,
395 (2000) (declining to give preclusive effect to prior consent decree,
noting “settlements ordinarily occasion no issue preclusion”); Adam v.
State, 380 N.W.2d 716, 721 (Iowa 1986) (declining to give preclusive
_________________________
damages of $57,325. Id. Karlen requested a formal hearing. An administrative law
judge (ALJ) conducted a two-day de novo hearing in which Karlen was represented by
counsel. Id. at 637, 640. The ALJ issued a written ruling affirming cancellation of the
lease but setting aside the damage award for lack of jurisdiction. Id. at 637. The ALJ’s
decision was affirmed by the Interior Board of Indian Appeals. Id. Karlen did not seek
judicial review. Id. The tribe’s trustee later sued Karlen for money damages, and the
district court granted partial summary judgment against Karlen applying offensive issue
preclusion based on the ALJ’s decision terminating the lease for excessive haying. Id.
at 638. The Eighth Circuit affirmed, noting Karlen’s incentive to litigate the $57,325
damage assessment. Id. at 640.
7The Iowa Motor Vehicle Code provides that “No record of the conviction of a
person for any violation of this chapter or other traffic regulations less than a felony
shall be admissible as evidence in any court in any civil action.” Iowa Code § 321.489
(2011). We have applied that statute to hold convictions for traffic violations resulting
from a contested trial are not given res judicata effect in a subsequent civil action.
Berding v. Thada, 243 N.W.2d 857, 859–60 (Iowa 1976). Guilty pleas, however, may
come into evidence as admissions. Id. at 860. Guilty pleas and Alford pleas in which a
court found a factual basis for the plea may also be given preclusive effect in
subsequent civil actions. Emp’rs Mut. Cas. Co., 815 N.W.2d at 23–24.
31
effect to a prior district court ruling on a statutory exemption when the
losing party settled on appeal).
A key purpose of issue preclusion is to avoid the cost of
unnecessary litigation. Emp’rs Mut. Cas. Co., 815 N.W.2d at 22. We
would undermine that purpose if we gave preclusive effect to
administrative decisions informally resolving alleged violations because
raising the stakes preclusively would motivate parties to litigate instead
of settling the agency matter. See Salida Sch. Dist. R-32-J v. Morrison,
732 P.2d 1160, 1165 (Colo. 1987) (en banc) (declining to give preclusive
effect to unemployment compensation decision in wrongful-termination
lawsuit because to do so would result in more contested, lengthy
hearings causing “judicial economy [to] be frustrated, rather than
improved”). We do not want to discourage informal, voluntary
resolutions. See Peak v. Adam, 799 N.W.2d 535, 543 (Iowa 2011) (“The
law favors settlement of controversies.” (quoting Waechter v. Aluminum
Co. of Am., 454 N.W.2d 565, 568 (Iowa 1990))).
In our view, CM Holdings lacked an adequate incentive to litigate
the grandfather issue before the HAB. At that time, it only faced a $1090
fine (not a wrongful-death lawsuit) and essentially attained a compromise
settlement through the order that suspended that fine and granted its
requested extension to install the new railings. CM Holding’s new
owners had recently acquired multiple distressed properties and had
been working proactively with the city to correct numerous violations at
the apartment complexes. CM Holdings had already ordered new forty-
two-inch balcony guardrails for installation. It had every reason to pick
its battles with the housing officials and little or no reason to challenge
the finding of a violation in the very order that granted its requested
extension to install the new guardrails and suspended the fine. The cost
32
of an administrative appeal to litigate the grandfather issue presumably
would have greatly exceeded the $1090 fine.
We conclude the doctrine of offensive issue preclusion should not
apply here because CM Holdings, having obtained its requested
extension and suspension of the fine, lacked an adequate incentive to
appeal the violation. Accordingly, we hold the district court erred by
ruling that CM Holdings was bound by the HAB’s finding of a violation.
Because we resolve the question on this ground, we do not reach the
remaining requirements for offensive use of issue preclusion.
Alternatively, the plaintiffs argue CM Holdings is bound by
statements it made at the HAB meeting purportedly admitting the railing
violated the ordinance:
If a party testifies deliberately to a concrete fact, not as a
matter of opinion, estimate, appearance, inference, or
uncertain memory, but as a considered circumstance of the
case, his [or her] adversary is entitled to hold him [or her] to
it as an informal judicial admission.
Yockey v. State, 540 N.W.2d 418, 421 (Iowa 1995) (quoting Snittjer Grain
Co. v. Koch, 246 Iowa 1118, 1127, 71 N.W.2d 29, 34 (1955)). Estes’
statements were not made under oath and were insufficiently concrete to
establish a judicial admission. Estes and Laswell did not specifically
admit the guardrails violated the municipal code. See id. at 421 (holding
that a plaintiff who “expressly conceded during her testimony” that she
was not fired in retaliation “had the effect of an informal judicial
admission”). Although Estes said at the HAB meeting the guardrails with
the attached lattice “were just not the right height,” he also noted that
the “code ha[d] changed.” He stopped short of saying the grandfather
provision did not apply. Accordingly, the statements at the HAB meeting
fall short of a judicial admission in this tort action. Nor do we equate the
33
equivocal statements to a guilty plea or Alford plea for purposes of issue
preclusion under Employers Mutual Casualty Co., as the plaintiffs
contend. Such pleas require a judicial finding of a factual basis. Emp’rs
Mut. Cas. Co., 815 N.W.2d at 24. That requirement is not met here.
2. Was CM Holdings legally excused based on the HAB’s extension?
CM Holdings moved for a directed verdict and JNOV on grounds the
HAB’s extension of time to allow installation of forty-two-inch guardrails
excused tort liability. The district court correctly concluded the
extension merely suspended enforcement of the administrative penalty
and did not excuse tort liability.
“The legal excuse doctrine allows a person to avoid the
consequences of a particular act or type of conduct by showing
justification for acts that otherwise would be considered negligent.”
Rowling v. Sims, 732 N.W.2d 882, 885 (Iowa 2007). We have identified
four categories of legal excuse:
(1) anything that would make it impossible to comply
with the statute or ordinance;
(2) anything over which the [person] has no control
which places [him or her] in a position contrary to the
provisions of the statute or ordinance;
(3) where the [person] is confronted by an emergency
not of [his or her] own making, and by reason of such an
emergency, [he or she] fails to obey the statute; and
(4) where a statute specifically provides an excuse or
exception.
Hagenow v. Schmidt, 842 N.W.2d 661, 673 (Iowa 2014), overruled on
other grounds by Alcala, ___ N.W.2d at ___ & n.3. A jury may only be
instructed on the category of legal excuse that is supported by the
evidence. See id.
CM Holdings relies on section 60-101(3): “The housing appeals
board shall . . . [r]ule on requests for additional time, provided that the
34
granting of such additional time does not endanger the life, health or
safety of the occupants or the integrity of the structure.” Des Moines,
Iowa, Municipal Code § 60-101(3). An extension for time under this
section does not specifically excuse the violation. A request for time is
made when the HAB has determined there has been a violation of the
housing code. See id. § 60-85(a)(2). The notice granting an extension of
time explicitly states the Grand Stratford Apartments are in violation of
the housing code. The suspension of a fine and extra time to complete
repairs does not mean the property complies with the code during the
time allowed. To the contrary, the notice states, “The property was not
brought into compliance” with the code.
CM Holdings cites no case holding that an agency’s extension of
time to remedy code violations provides the property owner a legal excuse
in a third party’s tort action arising from the violation. We affirm the
district court’s ruling rejecting CM Holdings’ legal excuse.
3. Did the district court correctly rule the grandfather provision did
not apply as a matter of law? CM Holdings argues the forty-two-inch
guardrail requirement in the current municipal code did not apply to the
Grand Stratford Apartments based on the grandfather provision in the
housing code. The district court rejected that argument by erroneously
applying collateral estoppel based on the HAB finding 8 and did not
address this issue in its posttrial ruling granting a new trial. 9
8The district court order stated,
The Court also finds that since the Defendant did not file an appeal with
the HAB, the Notice of Inspection finding that the lattice did create a
change that required the guardrail to [be] updated to be in compliance
with the new code height of 42 inches, cannot now be collaterally
attacked by the Defendant in this lawsuit. As noted above, Defendant
never followed the appeal process, never filed an appeal from the city’s
35
The purpose of a grandfather provision for property owners is to
“avoid the harsh effect of the retroactive application” of a new rule of law.
See State v. Finders, 743 N.W.2d 546, 549 (Iowa 2008) (discussing the
grandfather provision in the sex offender residency restriction law).
Housing codes include grandfather provisions to avoid constitutional
challenges. As the Maine Supreme Court recently observed,
A grandfather clause, which allows the limited continuance
of nonconformities, is included in zoning ordinances in order
to avoid takings challenges. It is designed to strike a balance
between a municipality’s interest in abolishing
nonconformities and the interests of property owners in
maintaining land uses that were allowed when they
purchased their property.
Day v. Town of Phippsburg, 110 A.3d 645, 649 (Me. 2015) (citation
omitted).
The grandfather provision in the Des Moines housing code states:
The provisions of this article shall apply to the maintenance,
repair, equipment, use and occupancy of all residential
rental buildings and accessory structures now in existence
or hereafter constructed, rehabilitated, renovated or
converted to residential use within the corporate limits . . . .
Any structure that was in compliance on the day previous to
the adoption of this code will be allowed to remain.
Des Moines, Iowa, Municipal Code § 60-5 (emphasis added).
CM Holdings relies on trial testimony the thirty-two-inch balcony
railings were code-compliant the day before the current ordinance was
enacted in 2005 and therefore should be grandfathered. The plaintiffs
_________________________
determination, and never challenged that it was obligated to install 42
inch guardrails on the balconies.
9CM Holdings argued in its motion for judgment notwithstanding the verdict
that the guardrails were grandfathered in. The district court’s ruling on CM Holdings’
posttrial motions granted CM Holdings a new trial for instructing the jury that the
violation of a city ordinance could be negligence per se and stated “it is unnecessary to
address any other issues raised in Defendant’s post-trial motions.”
36
rely on trial testimony by the housing inspector and his supervisor that
latticework installed on the balcony railings after 2005 created a false
sense of security and triggered an obligation to upgrade the balcony
guardrails to the current forty-two-inch height requirement. The district
court never decided that specific issue, nor was it submitted to the jury.
Under the existing trial record, neither side was entitled to a directed
verdict. Although the district court correctly denied CM Holdings’
motions for a directed verdict and JNOV on the grandfather provision
under this record, it erred by granting the plaintiffs’ motion for partial
directed verdict and by instructing the jury, over defendant’s objection,
that the thirty-two-inch high balconies constituted negligence per se.10
That instructional error requires a new trial on liability and damages.
10The plaintiffs contend CM Holdings waived error on the grandfather defense by
failing to specifically object to the lack of a jury instruction on that issue or reoffer its
own jury instruction at the instruction conference. We disagree. CM Holdings
preserved error by objecting to the verdict form and Instruction No. 15 that instructed
the jury the court had already determined the failure “to install guardrails that were at
least 42 inches in height on the balcony” was a violation of law and was negligent.
CM Holdings’ objection to that instruction and verdict form invited the court to
reconsider its legal ruling and reiterated its disagreement with that ruling. That ruling
rejected the grandfather argument that had been briefed and argued in the motions for
summary judgment and motion for directed verdict, issues that were quite familiar to
the trial judge. Counsel for CM Holdings clearly articulated the perceived error in the
jury instructions:
Defendant does believe that it’s an error, that it would be an
error, to find that any of Defendant’s conduct was negligence per se
under the record presented to the Court and would object to the jury
being instructed to that and would object to the verdict form that does
not have a specific question in which the jury would determine whether
or not Defendant was at fault.
Accordingly, CM Holdings’ objection was sufficiently specific to alert the district court to
the legal error in its instruction and verdict form. See Iowa R. Civ. P. 1.924; Moser v.
Stallings, 387 N.W.2d 599, 604 (Iowa 1986) (“The objection must be sufficiently specific
to alert the trial court to the basis of the complaint so that if error does exist the court
may correct it before placing the case in the hands of the jury.”). We have never
required a party to offer its own jury instruction in addition to objecting to the court’s
instruction in order to preserve error.
37
See Bryant, 872 N.W.2d at 380 (“The general rule is that when a new
trial is granted, all issues must be retried.” (quoting McElroy v. State, 703
N.W.2d 385, 389 (Iowa 2005))); Heath, 180 P.3d at 670 (holding
negligence per se theory is inapplicable when balcony railings may be
grandfathered out of current building code). On remand, the parties may
litigate the grandfather issue.
IV. Conclusion.
For those reasons, we vacate the decision of the court of appeals
and reverse the district court’s posttrial rulings on the doctrine of
negligence per se. We affirm the district court’s ruling rejecting the legal-
excuse doctrine. We remand this case for a new trial consistent with this
opinion. Costs shall be assessed equally to the plaintiffs and the
defendant.
DECISION OF COURT OF APPEALS VACATED; DISTRICT
COURT ORDER AFFIRMED IN PART AND REVERSED IN PART; CASE
REMANDED FOR NEW TRIAL.