SHARON KAY SUSIE, Plaintiff-Appellant, vs. GROVER BENNETT, Defendant-Appellee.
Annotate this Case
Download PDF
IN THE COURT OF APPEALS OF IOWA
No. 6-833 / 06-0116
Filed November 30, 2006
SHARON KAY SUSIE,
Plaintiff-Appellant,
vs.
GROVER BENNETT,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Woodbury County, John D.
Ackerman (summary judgment), and Michael S. Walsh (trial), Judges.
Plaintiff appeals the district court’s judgment for defendant on her claim for
damages relating to a real estate transaction. AFFIRMED.
Robert B. Deck, Sioux City, for appellant.
Timothy Scherle of Bikakis, Mayne, Arneson, Karpuk & Hindman, Sioux
City, for appellee.
Considered by Mahan, P.J., and Miller, J., and Hendrickson, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2005).
2
HENDRICKSON, S.J.
Sharon K. Susie appeals from a district court ruling granting defendant’s
motions for summary judgment on Counts I and II, and dismissing Count III after
a trial. Susie, in her petitions, claimed damages from Bennett in three small
claims actions relating to problems she had encountered with the purchase of
real estate from Bennett.
The actions were consolidated and transferred to
district court. On appeal to this court, we affirm.
I.
Background Facts & Proceedings
On February 27, 1998, Sharon and Larry Susie entered into a contract
with Grover Bennett for the purchase of real estate in the sum of $55,000
payable in monthly installments. 1 In May 2002, Bennett brought a foreclosure
action based on Susie’s failure to make the contract payments. In her response
to the foreclosure action Susie claimed that Bennett had breached the terms of
the real estate contract in that (1) there was an abandoned well on the property
for which she had incurred expenses to repair, (2) Bennett failed to inform Susie
where the property was receiving its water supply, (3) Bennett failed to disclose
hazardous materials were buried on the property, and (4) Bennett failed to
disclose that a tax assessment would ultimately be placed against the property
for what is called the Malloy Road Water Main Project.
On January 13, 2003, the district court entered a decree of foreclosure
concluding that there was a balance due on the contract of $35,394.94 for
principal and interest through November of 2002, plus interest at the rate of
1
Larry Susie is no longer a party to the proceedings. It appears Sharon Susie is now
the sole party in interest under the contract.
3
seven percent thereafter on the unpaid balance. The court specifically ruled that
Susie had failed to prove that Bennett had concealed or misrepresented the
physical condition of the property or its improvements before the parties entered
into the purchase contract. The court also concluded that Susie had failed to
prove she had relied on any concealment or misrepresentations and that Susie
had purchased the property in an “as is condition without any warranties.”
This court affirmed the decision of the trial court on November 26, 2003,
discussing the Susies’ affirmative defense of equitable estoppel, as follows:
The district court determined the Susies failed to show they
detrimentally relied on any concealment or misrepresentation by
Bennett when they entered into the contract. For the most part, the
incidents which the Susies cite as causing detrimental reliance
occurred after the contract was signed. The auction of the
property, the failure of the well, and the Groundwater Hazard
Statement all occurred after the closing. Because they did not
happen before the contract was signed, the Susies could not have
relied upon Bennett’s conduct in entering into the contract.
Bennett v. Susie, No. 03-0198 (Iowa Ct. App. Nov. 26, 2003). An application for
further review was denied by the supreme court.
On or before March 22, 2004, Susie paid the full amount Bennett claimed
was due under the real estate contract and on that date Bennett delivered a
warranty deed to Susie.
Thereafter, on April 6, 2004, Susie filed three small claims actions against
Bennett. The claims were consolidated and transferred to the district court. The
court ordered Susie to recast the claims into one petition, which was filed on
February 28, 2005. The recast petition made allegations in three counts for
damages. The first count alleged that after the purchase of the property pursuant
4
to the 1998 real estate contract Bennett intentionally and/or negligently damaged
the well and pump and other equipment which serviced the well. The second
count
claimed
damages
based
upon
alleged
misrepresentations
in
a
Groundwater Hazard Statement warranting the property to be free from solid
waste and hazardous waste. The third count sought damages based on an
outstanding tax assessment at the time Bennett delivered a warranty deed for the
property.
Bennett filed motions for summary judgment in his favor on each count of
the recast petition. The motion was resisted by Susie. The district court granted
summary judgment on Counts I and II of the recast petition, concluding the
claims by Susie were compulsory counterclaims to the foreclosure action. The
court stated with respect to Count I:
It is this Court’s conclusion that the claim relating to any
actions of Mr. Bennett (which occurred before or after the signing of
the contract) had matured as of 5/24/02. At that time, the claim she
had against Mr. Bennett was not the subject of a pending action.
Nor was the presence of indispensable parties of whom jurisdiction
could not be acquired necessary to adjudicate the claim. The Court
further finds that this claim arises out of the transaction or
occurrence that was the bases of Mr. Bennett’s foreclosure action
as that has been defined by Iowa case law. This Court concludes
that there is a logical relationship between Ms. Susie’s claim and
the foreclosure action. If there wasn’t such a logical relationship,
why else would Ms. Susie raise these facts as an affirmative
defense in the foreclosure action? Ms. Susie testified that one of
the reasons she got behind in her contract payments in the first
year of the contract was because of the expenses she incurred
fixing the well . . . .
The district court’s grant of summary judgment on Count II was based on the
same reasoning.
5
The court denied summary judgment on Count III, but concluded, after a
hearing, that the final installment of the special assessment which came due after
Bennett had given a warranty deed to Susie was Susie’s obligation since she
unilaterally chose to pay the special assessment in installments. She had paid
all of the installments except the last one, which did not come due until after she
received the warranty deed from Bennett.
Susie filed a motion pursuant to Iowa Rule of Civil Procedure 1.904(2),
which the district court overruled. Susie now appeals.
II.
Standard of Review
Our review is for the correction of errors at law. Iowa R. App. P. 6.4.
III.
Summary Judgment
Summary judgment is appropriate only when there are no genuine issues
of material fact and the moving party is entitled to judgment as a matter of law.
Iowa R. Civ. P. 1.981(3); Kistler v. City of Perry, 719 N.W.2d 804, 805 (Iowa
2006).
A court should view the record in the light most favorable to the
nonmoving party. Eggiman v. Self-Insured Servs. Co., 718 N.W.2d 754, 758
(Iowa 2006).
“In a nutshell, the summary judgment procedure does not
contemplate that a district court may try issues of fact, but must determine only
whether there are issues to be tried.” Parish v. Jumpking, Inc., 719 N.W.2d 540,
543 (Iowa 2006).
A.
Susie contends the district court erred by granting summary
judgment to Bennett on Count I, because that claim was not mature at the time
she filed her answer to the foreclosure action, and thus it was not a compulsory
6
counterclaim.
She claims Bennett damaged the pump and well after she
purchased the property, but before he transferred possession. She states she
knew of the damage to the pump and well prior to the foreclosure litigation, but
did not know the damage had been caused by Bennett.
Iowa Rule of Civil Procedure 1.241 provides:
A pleading must contain a counterclaim for every claim then
matured, and not the subject of a pending action, held by the
pleader against any opposing party and arising out of the
transaction or occurrence that is the basis of such opposing party’s
claim, unless its adjudication would require the presence of
indispensable parties of whom jurisdiction cannot be acquired. A
final judgment on the merits shall bar such a counterclaim, although
not pleaded.
The objective of this rule is to avoid a multiplicity of suits and dispose of all
related issues in a single case. Hettinger v. Farmers & Merchs. Sav. Bank, 436
N.W.2d 377, 379 (Iowa Ct. App. 1988).
A cause of action matures when a claimant has sustained actual loss or
resulting damage. Stoller Fisheries v. American Title Ins. Co., 258 N.W.2d 336,
341 (Iowa 1977); Raymon v. Norwest Bank Marion, N.A., 414 N.W.2d 661, 664
(Iowa Ct. App. 1987). In Walters v. Iowa-Des Moines National Bank, 295 N.W.2d
430, 433 (Iowa 1980), the supreme court stated:
When the foreclosure action was started, it was clear Iowa-Des
Moines would not provide the financing which Walters says it had
agreed to provide. Walters knew this. The claim had then
matured, if indeed it had not done so earlier.
Similarly, in Raymon, 414 N.W.2d at 664, we determined that where a party
alleged he had sustained damages prior to an earlier foreclosure action, his
7
claims based on those damages should have been brought as a compulsory
counterclaim in the foreclosure proceedings.
The district court found, “Ms. Susie knew of the problems relating to the
well as early as 1988 and had incurred expenses to repair/improve the well prior
to the filing of the foreclosure action in June of 2002.” In fact, Susie raised a
counterclaim regarding the well based on principles of equitable estoppel in the
foreclosure action. We determine Susie’s claims regarding the well had matured
at the time of the foreclosure action, and should have been brought as a
compulsory counterclaim under rule 1.241.
We further conclude that her
assertion she did not know the alleged damage was caused by Bennett is not
supported by the record.
B.
Susie claims the district court erred in granting summary judgment
to Bennett on Counts I and II because the court relied on evidence outside the
record. She asserts the court improperly considered the trial transcript from the
foreclosure action. She points out that Bennett submitted only a portion of the
transcript from the foreclosure case, and the district court should only have
considered those pages, not the entire transcript.
If Susie believed the district court relied on evidence outside the record,
she should have alerted the district court to this issue by filing a motion following
entry of the summary judgment ruling. See Bill Grunder’s Sons Constr., Inc. v.
Ganzer, 686 N.W.2d 193, 198 (Iowa 2004). Where an issue is not raised in
resistance to a motion for summary judgment, and is not included in a motion
pursuant to Iowa Rule of Civil Procedure 1.904(2), it is waived. Davison v. State,
8
671 N.W.2d 519, 521 (Iowa Ct. App. 2003).
We conclude Susie failed to
preserve error on this issue by raising it before the district court.
We find no error in the district court’s grant of summary judgment in this
case.
IV.
Special Assessment
The real estate contract provided Susie would be responsible for all
special assessments which arose after March 1, 1998. Thereafter, on April 26,
1999, the City of Sioux City made a special assessment against Susie’s property
for $1161.60 for the Malloy Road Water Main Project. Susie sought permission
from the City to pay the special assessment in installments, and the City agreed.
Susie made payments in 2001, 2002, 2003, and 2004, and a final payment was
due in 2005.
In the meantime, in May 2002, Bennett filed a petition to foreclose the real
estate contract.
The district court entered judgment against Susie for
$35,394.94, which was the amount due under the contract, plus attorney fees.
After the appeal process was completed, Bennett sought payment of $50,463.39,
which included the judgment of $35,394.94, interest of $3156.65, costs of
$349.42, and attorney fees of $11,562.38. Susie paid this amount, and in March
2004, received a warranty deed, which stated the property was “free and clear of
all liens and encumbrances . . . .”
In Count III, Susie claimed that after receiving the warranty deed she
learned the special assessment against the property for the water project had not
been paid in full, and she requested damages against Bennett due to his alleged
9
misrepresentation in the warranty deed that the property was “free and clear of
all liens and encumbrances . . . .”
The district court noted the amount which Susie paid in the foreclosure
judgment did not include any payment for the special assessment. The court
found, “The contractual obligation of the plaintiffs to pay the special assessments
was not nullified by the foreclosure decree or the giving of the warranty deed,
and that obligation remained in effect.”
The court concluded the real estate
contract did not merge into the warranty deed with regard to Susie’s obligation to
pay off the special assessment.
On appeal, Susie contends her obligation under the contract to pay the
special assessment did not continue after the foreclosure decree. She states
that upon foreclosure of the contract, the contract obligations merged into the
judgment. She asserts that because Bennett did not request payment for the
special assessment in the foreclosure action, he cannot now claim she had
responsibility for paying the special assessment.
The general rule in Iowa is that a deed in fulfillment of a real estate
contract merges the provisions of the contract into the deed. In re Estate of
Epstein, 561 N.W.2d 82, 86 (Iowa Ct. App. 1996). It is also the rule, however,
if the contract contain collateral agreements or conditions which are
not incorporated in the deed, and which are not inconsistent with
the terms of the deed as executed, the contract will be deemed to
live, for the purpose of the enforcement of such collateral
agreements or conditions.
Lovlie v. Plumb, 250 N.W.2d 56, 62 (Iowa 1977) (citation omitted).
A party
claiming a contract has not merged into the deed has the burden of proof on this
10
issue. Id. Whether collateral provisions are merged into a deed depends upon
the intention of the parties. Phelan v. Peeters, 260 Iowa 1359, 1362, 152 N.W.2d
601, 603 (1967).
As the district court noted, there was no reason to include any provisions
concerning the special assessment in the warranty deed. Under the terms of the
real estate contract, the responsibility to pay the special assessment clearly lay
with Susie. Susie was required to pay the City for the special assessment, not
Bennett, so the amount of the special assessment was not included in the
judgment for Bennett. Susie’s obligation to pay the special assessment was
collateral to the transfer of title in the deed. We determine the district court did
not err in concluding the obligation to pay the special assessment did not merge
into the warranty deed.
Susie also asks the court to give effect to the provision in the warranty
deed that the property was free and clear from liens and encumbrances. She
asserts that due to this language, Bennett should be responsible to pay the
special assessment. The district court stated, “Even though the deed warrants
that title is being given free from any liens or encumbrances, the deed does not
specifically mention the special assessment in dispute here.”
The court
concluded there was no express conflict between the contract and the deed.
Susie claims the case of Gray v. Van Gordon, 187 Iowa 835, 840, 174
N.W. 588, 590 (1919), undermines the district court’s conclusion. Gray, 187
Iowa at 839-40, 174 N.W. at 589-90, noted that covenants collateral to the deed
do not necessarily merge into the deed, but found the deed at issue there
11
specifically covered special assessment liens, and so the provisions of the
contract merged in to the language of the deed.
In the present case, the
provision for special assessments is collateral to the deed, and was not
specifically covered in the deed.
We find no error in the district court’s
conclusion on this issue.
We affirm the decision of the district court.
AFFIRMED.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
