HITTERS, INC., Plaintiff-Appellee, vs. HARRIOTT BROTHERS, L.L.C., CHARLES HARRIOTT, and JAMES HARRIOTT, Defendants-Appellants. CHARLES HARRIOTT a nd JAMES HARRIOTT, Plaintiffs-Appellants, vs. CARLTON O. TRONVOLD, Individually and as Trustee of the CARLTON O. TRONVOLD TRUST Dated 9/29/92, and HITTERS, INC., Defendants-Appellees. HITTERS, INC., Plaintiff-Appellee, vs. CHARLES HARRIOTT a nd JAMES HARRIOTT, Defendants-Appellants.
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IN THE COURT OF APPEALS OF IOWA
No. 7-480 / 06-1271
Filed November 15, 2007
HITTERS, INC.,
Plaintiff-Appellee,
vs.
HARRIOTT BROTHERS, L.L.C., CHARLES
HARRIOTT, and JAMES HARRIOTT,
Defendants-Appellants.
_______________________________________________________________
CHARLES HARRIOTT and JAMES HARRIOTT,
Plaintiffs-Appellants,
vs.
CARLTON O. TRONVOLD, Individually and as
Trustee of the CARLTON O. TRONVOLD TRUST
Dated 9/29/92, and HITTERS, INC.,
Defendants-Appellees.
_______________________________________________________________
HITTERS, INC.,
Plaintiff-Appellee,
vs.
CHARLES HARRIOTT and JAMES HARRIOTT,
Defendants-Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Linn County, Thomas L. Koehler,
Judge.
Minority shareholders appeal from district court rulings denying their
motion for new trial and determining the debt claims of the shareholders following
verdict and judgment entry in favor of the majority shareholder. AFFIRMED AS
MODIFIED.
2
Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for
appellants.
James E. Shipman of Simmons Perrine, P.L.C., Cedar Rapids, for
appellee Hitters, Inc.
Thomas D. Wolle of Moyer & Bergman, P.L.C., Cedar Rapids, for appellee
Carlton O. Tronvold.
Heard by Mahan, P.J., and Miller and Vaitheswaran, JJ.
3
MILLER, J.
Minority shareholders, Charles and James Harriott, appeal from district
court rulings denying their motion for new trial and determining the debt claims of
the shareholders following verdict and judgment entry in favor of the majority
shareholder, Carlton O. Tronvold, trustee of the Carlton O. Tronvold trust. We
affirm the judgment of the district court as modified.
I.
BACKGROUND FACTS AND PROCEEDINGS.
This is the third appeal arising from a failed business venture that began in
1994 when James Harriott approached Tronvold and proposed they build a “first
class softball facility” in Cedar Rapids, Iowa.
See Harriott v. Tronvold, 671
N.W.2d 417 (Iowa 2003); Hitters, Inc. v. Harriott Bros., L.L.C., No. 02-1941 (Iowa
Ct. App. Nov. 26, 2003). Tronvold was an experienced real estate investor and
businessperson. He considered himself to be a “surrogate father” to James and
“wanted to be able to help him realize a dream . . . to be in business for
[him]self.”
To that end, Tronvold filed articles of incorporation for Hitters, Inc. on June
15, 1994, and transferred land he owned near Cedar Rapids to the corporation in
return for 1000 shares of stock. One month later, Tronvold gifted 200 of the 1000
shares to James and 200 of the 1000 shares to James’s brother, Charles
Harriott. Charles was hired to manage the facility. He was to earn $40,000 per
year. The three shareholders were named directors of the corporation, James
was elected president, Tronvold was elected vice-president, and Charles was
elected secretary/treasurer.
4
The corporation borrowed $484,000 from Farmers State Bank for
construction of the sports complex. The facility opened for business in May 1995
and lost money every year thereafter. In 1995, 1996, and 1997, Tronvold and
the Harriotts contributed cash to the corporation in proportion to their ownership
interests. 1
The Harriotts testified they contributed money to the corporation
because Tronvold told them “before we even incorporated” if the “business ever
needs cash that we all put in proportionally to our equity of what we own” or they
would “lose [their] interest” in the corporation.
Tronvold became increasingly dissatisfied with Charles’s management as
the facility continued to lose money. By the end of 1998, the corporation did not
have enough money to make the December loan payment in full.
At a
shareholders’ meeting in December 1998, Tronvold insisted the corporation hire
a new manager or he would not “put any more money into this business.” The
brothers did not want to hire a new manager.
A shareholders’ meeting was held in January 1999 where Charles was
removed from the board of directors and replaced by Tronvold’s long-time friend,
Vince Arioso. In February 1999 after the loan went into default, the Harriotts
made a payment to cure the default. Despite the money the corporation was
losing, the Harriotts decided to continue to operate the facility in an attempt to
minimize their losses. Tronvold, meanwhile, was exploring options for the sale of
the facility.
The Harriotts filed a declaratory judgment action against Tronvold and the
corporation in November 1999 seeking in relevant part a declaration as to
1
Charles and James each contributed a total of $35,268.65, while Tronvold put in a
total of $105,770.03.
5
whether their contributions to the corporation should be considered debt or
equity. In an amended petition, the Harriotts alleged breach of an oral contract to
contribute to the corporation to cover cash shortfalls, breach of an oral contract to
sell the assets of the corporation, and interference with contractual relations with
the corporation.
The board voted to treat the shareholders’ contributions through the end of
1999 as debt of the corporation at a special meeting of the board of directors in
October 2000.
The board also voted to terminate Charles’s employment as
manager of the facility effective January 1, 2001, which triggered the dissolution
provisions of the shareholders’ buy-sell agreement.
Another shareholders’
meeting was consequently held in March 2001 during which Tronvold voted for
dissolution of the corporation. The board also approved a resolution prohibiting
any “shareholder, director, employee or other person or entity” from operating the
facility “in the 2001 season.”
Despite the board’s directive, the Harriotts continued to operate the
facility.
Hitters accordingly filed a petition requesting injunctive relief, an
accounting, and damages in April 2001. The lawsuits were consolidated, and the
matter proceeded to trial by jury in September 2001. 2
At the close of the
Harriotts’ case, Tronvold moved for a directed verdict, which the district court
granted. The Harriotts appealed. Our supreme court held the district court erred
in granting a directed verdict on the Harriotts’ claim that Tronvold breached an
oral contract to contribute money to the corporation to cover cash shortfalls.
2
Hitters dismissed its claims for damages before trial. The parties also stipulated
before trial that the corporation would agree to be bound by the court’s determination
regarding the classification of the corporate contributions, and the corporation would not
pursue its remaining claims for an injunction and an accounting until after the trial.
6
Harriott, 671 N.W.2d at 423. The matter was remanded back to the district court
for trial limited to the issue of “whether Tronvold breached a contract with the
Harriotts that if a shareholder failed to contribute to the cash shortfalls, in
proportion to his ownership interest, his interest in the corporation would be
forfeited.” Id.
The Harriotts continued to operate the facility through 2005. They were
not able to obtain a liquor license in 2002 under the corporation’s name because
it was being dissolved. “[T]o keep the business running,” the Harriotts “created
Harriott Brothers, LLC and applied for a liquor license.” Hitters attempted to stop
the Harriotts from operating the facility by requesting injunctive relief and filing an
action for forcible entry and detainer, but its efforts were not successful. Hitters
also filed another lawsuit against the Harriotts and Harriott Brothers, L.L.C. in
August 2002 again seeking an accounting and damages arising from the
Harriotts’ continued unauthorized operation of the facility.
The case proceeded to a jury trial in September 2005. Before trial, the
parties agreed if the jury found there was no breach of the alleged oral
agreement, the trial court would decide the extent and amount of all corporate
debt claims of the shareholders in a separate evidentiary hearing. Following a
lengthy trial, the jury found there was an oral agreement, but they found Tronvold
did not breach that agreement.
The district court accordingly dismissed the
Harriotts’ breach of oral contract claim against Tronvold. The Harriotts filed a
motion for new trial, claiming the “jury’s finding there was no breach of the
contract is not supported by the evidence, or is inconsistent with the finding there
7
was a contract, under the evidence that was submitted to the jury.” The district
court denied the motion.
The ballpark was sold for $860,000 in 2006. After the sale of the property,
a hearing was held on June 1, 2006, to determine the shareholders’ claims for
reimbursement from the corporation. The district court entered a detailed ruling
on June 28, 2006, rejecting any debt claims the Harriotts asserted they incurred
for operating the facility from 2001 through 2005 and finding they were
responsible for real estate taxes incurred during that time period.
The court
determined Charles was entitled to any unpaid salary “for the operation of Hitters
for as long as he served in the legitimate role of manager of the ballpark,” but it
rejected James’s claim for compensation for his role in managing the facility.
The court treated the contributions the shareholders made to the corporation
from its inception as debt of the corporation.
Finally, the court concluded
Tronvold should be reimbursed for his personal attorney fees and the attorney
fees he paid on behalf of the corporation. The court accordingly found Tronvold
was owed $482,425 from the corporation, while James was entitled to
$87,197.70 and Charles was entitled to $88,468.74, with the shares of each
Harriott reduced by one-half of certain real estate taxes for 2004 and 2005 that
had been paid by Hitters as closing costs when the ballpark was sold.
The Harriotts appeal. They claim the district court erred in denying their
motion for new trial because the jury’s verdict was not supported by sufficient
evidence.
They also claim the district court erred in its distribution to the
shareholders of the proceeds from the sale of the corporation’s real estate.
8
II.
SCOPE AND STANDARDS OF REVIEW.
Our review of a district court’s ruling on a motion for 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). When the motion
and ruling are based on discretionary grounds, our review is for abuse of
discretion. Id. However, when the motion and ruling are based on a claim the
trial court erred on issues of law, our review is for correction of errors at law. Id.
If a verdict “is not sustained by sufficient evidence” and the movant’s
substantial rights have been materially affected, it may be set aside and a new
trial granted. Iowa R. Civ. P. 1.1004(6); Olson v. Sumpter, 728 N.W.2d 844, 850
(Iowa 2007). ”Because the sufficiency of the evidence presents a legal question,
we review the trial court’s ruling on this ground for the correction of errors of
law.” 3 Estate of Hagedorn ex rel. Hagedorn v. Peterson, 690 N.W.2d 84, 87
(Iowa 2004).
The Harriotts assert our review of the district court’s ruling determining the
debt of the corporation is de novo because the matter was tried in equity. We
consider and review a case in the same manner as the district court tried the
case. Molo Oil Co. v. City of Dubuque, 692 N.W.2d 686, 690 (Iowa 2005). The
Harriotts filed their action at law and demanded a jury, although the parties later
agreed to a bench trial. See Bricker v. Maytag Co., 450 N.W.2d 839, 840-41
(Iowa 1990) (finding it was “clear that the trial itself was conducted in the manner
of a law action” where the plaintiffs filed the action at law and demanded a jury
3
Tronvold asserts a ruling on a motion for new trial based on whether the jury’s verdict is
supported by sufficient evidence is reviewed for abuse of discretion. We believe Estate
of Hagedorn, 690 N.W.2d at 87, states the correct standard of review applicable to the
facts presented by this case.
9
but later agreed to a bench trial). The district court ruled on objections as they
were made during the hearing, which is “the hallmark of a law trial, not an
equitable proceeding.” Sille v. Shaffer, 297 N.W.2d 379, 381 (Iowa 1980). We
agree with Tronvold this case was tried at law. Thus, our review of the district
court’s ruling determining the debt of the corporation is also for correction of
errors at law. Iowa R. App. P. 6.4.
III.
MERITS.
A.
Motion for New Trial.
The Harriotts claim the district court erred in overruling their motion for
new trial because the jury’s verdict finding Tronvold did not breach the parties’
oral agreement is not supported by the evidence. 4 The jury found there was “an
oral agreement that shareholders forfeited all ownership in the corporation by
failing to contribute to the future cash shortfalls in proportion to their stock
ownership.” However, they found Tronvold did not breach that oral agreement.
The Harriotts argue the jury’s finding that Tronvold did not breach the parties’ oral
agreement is not supported by the evidence because “[t]he undisputed evidence
showed that Harriotts continued to make payments to the cash shortfalls . . . and
[Tronvold] did not make payments.”
We view the evidence in the light most favorable to the jury’s verdict when
reviewing a motion for new trial. Estate of Pearson ex rel. Latta v. Interstate
4
Tronvold argues the Harriotts waived their claim that the jury’s verdict was inconsistent
because they failed to raise the inconsistency before the jury was discharged. We first
note Tronvold’s argument in this regard is based on facts outside of the record. We
cannot and will not consider facts for which there is no record support. Alvarez v. IBP,
Inc., 696 N.W.2d 1, 3 (Iowa 2005). Furthermore, the Harriotts do not appear to be
arguing the jury’s verdict is inconsistent. Instead, they assert the “verdict is not
sustained by sufficient evidence.” We therefore reject Tronvold’s argument.
10
Power & Light Co., 700 N.W.2d 333, 345 (Iowa 2005); see also Iowa Mut. Ins.
Co. v. McCarthy, 572 N.W.2d 537, 543 (Iowa 1997) (viewing the evidence “in the
light most favorable to the jury’s verdict” in assessing the sufficiency of the
evidence). We are generally reluctant to interfere with a jury verdict and give
considerable deference to a trial court’s decision not to grant a new trial. Condon
Auto Sales & Serv., Inc. v. Crick, 604 N.W.2d 587, 594 (Iowa 1999).
In order to prevail on a breach of a contract claim, the complaining party
must show “it has performed all the terms and conditions required under the
contract.” Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224
(Iowa 1998). The jury was so instructed in Instruction No. 11, which provided
that the Harriotts must prove, among other things, that they “have done what the
contract requires.” The record contains substantial evidence the Harriotts did not
comply with their obligations under the contract, not contributing the cash
shortfalls of the corporation after 1997 in proportion to their ownership interests,
and that their failure to do so occurred at least as early as Tronvold’s failure to
contribute. 5
Furthermore, the evidence showed that Tronvold was willing to
continue making contributions in 1998 if the corporation obtained a new
manager. The Harriotts, however, refused to change managers and Charles
continued to manage the facility. Based on this evidence the jury could have
5
James Harriott did not contribute to a cash shortfall in 1998, and Charles Harriott
contributed only $785 for that year, substantially less than his share of the cash shortfall.
In late 1998 Tronvold also declined to contribute to the 1998 shortfall. In 1999 James
contributed $25,895.70, Charles contributed nothing, and Tronvold contributed nothing.
In 2000 James contributed $11,000, Tronvold contributed nothing, and it appears that
Charles contributed $6500. (Although the Harriott’s brief indicates Charles contributed
nothing in 2000, an exhibit introduced during the jury trial portion of the case suggests
he contributed $6500 in 2000, and after the later, non-jury trial the court found he had
contributed $6500 after 1998.) In 2001 Tronvold and James made contributions, and
Charles did not.
11
concluded it was the Harriotts that breached the parties’ oral agreement by not
performing their obligations under the contract. Viewing the evidence in the light
most favorable to the jury’s verdict, we conclude there was sufficient evidence in
the record supporting the jury’s finding that Tronvold did not breach the parties’
oral agreement. 6
B.
Shareholders’ Debt Claims.
1.
Pre-1998 contributions.
The Harriotts first argue the district court erred in “giv[ing] effect to the
October, 2000 action of the Board of Directors recharacterizing pre-1998
contributions as debt rather than equity.”
In support of their argument, they
assert the contributions the shareholders made in 1995, 1996, and 1997 were
“booked as equity in the corporate records and on the tax returns,” but they do
not refer us to places in the record supporting this assertion. 7 Upon our own
review of the record and appendix, it appears the Harriots’ assertion is without
evidentiary support. The contributions the shareholders made to the corporation
in 1995, 1996, and 1997 were labeled as “paid-in capital” on the corporation’s tax
returns and “Shareholder Basis Schedule,” and no additional shares of stock
were issued. There was no specific designation for those years as to whether
the contributions were “debt” of the corporation or “equity” of each shareholder.
6
We find it unnecessary to address the additional bases upon which Tronvold argues
the jury could have found he did not breach the oral agreement.
7
We note the use of summarized evidence without citation violates Iowa Rules of
Appellate Procedure 6.14(1)(d) and (f). Tratchel v. Essex Group, Inc., 452 N.W.2d 171,
174 (Iowa 1990). “Courts should not be required to search the record to verify the facts
. . . and are warranted in ignoring uncited contentions, especially in cases where the
record is voluminous.” Id.
12
We agree with the district court that the board’s vote to treat the
shareholders’ contributions to the corporation as debt was protected by the
business judgment rule, which “limit[s] secondguessing of business decisions”
that were “made by those whom the corporation has chosen to make them.”
Hanrahan v. Kruidenier, 473 N.W.2d 184, 186 (Iowa 1991). We, like the district
court, find the decision of the board was “reasonably prudent, in good faith, and
not in Tronvold’s self interest.” See id. (“When directors act in good faith in
making a business decision, when the decision is reasonably prudent, and when
the directors believe it to be in the corporate interest, there can be no liability.”).
As the district court acknowledged, “[w]hen the board resolved in October
2000 that all shareholder contributions should be treated as corporate debt, it
was unknown to Tronvold (or the board of directors) whether the decision would
benefit either Tronvold or the Harriotts.” Arioso questioned Tronvold as to the
propriety of his proposal that “all money provided to the corporation by the
shareholders after the incorporation which can be verified should be treated as
debt of the corporation” before voting.
He seconded the motion only after
learning the contributions were “treated as paid in capital” for which no additional
stock was issued. Based on the foregoing, we conclude the district court did not
err in finding the board’s decision that the shareholders’ contributions be treated
as debt was within the standard for the business judgment rule.
2.
The Harriotts’ compensation.
At the June 2006 hearing, Charles claimed he was entitled to $40,000 per
year while James sought $20,000 per year for their efforts in operating the
ballpark from 1999 through 2005. The district court found “the corporation had
13
an agreement to pay Charles Harriott the sum of $40,000.00 per year so long as
he remained the manager of the ballpark.” The court accordingly determined
Charles was owed $46,666.74 in unpaid wages from 1998 through 2000 but
denied his claims for compensation for 2001 through 2005. The court found
James was not entitled to any compensation for his role in managing the facility
because he did not have an agreement with the corporation. The Harriotts assert
the district court erred in failing to award James any compensation for his efforts
in managing the facility and in failing to award Charles compensation for his
management of the facility from 2001 through 2005 under implied-in-fact and
implied-in-law contract theories.
We conclude neither theory supports the
Harriotts’ claims for compensation.
“A contract implied in fact is to every intent and purpose an agreement
between the parties.” City of Pella v. Fowler, 215 Iowa 90, 97, 244 N.W. 734,
737 (1932). Thus, an implied-in-fact contract “rests upon consent.” Id. It is clear
the Harriotts operated the facility from 2001 through 2005 without the consent of
the board or the corporation’s majority shareholder, as evidenced by the petitions
for injunctions and other legal actions filed by the corporation. The evidence also
suggests the brothers operated the facility “over Tronvold’s objections” in 1999
and 2000.
Furthermore, the record is devoid of evidence suggesting the
corporation consented to pay James $20,000 per year for his role in operating
the facility. We therefore conclude the Harriotts should not recover under an
implied-in-fact contract theory.
The Harriotts’ unauthorized operation of the facility also prevents their
recovery under an implied-in-law contract theory. In order to recover under such
14
a theory, the Harriotts must show they conferred a benefit upon the corporation
to their own detriment. Iowa Waste Sys., Inc. v. Buchanan County, 617 N.W.2d
23, 30 (Iowa Ct. App. 2000).
“The underlying policy issue surrounding a
recognizable claim of unjust enrichment is, regardless of the legal position of the
parties, a situation has arisen making it inequitable or unjust not to order
restitution.” Id. at 31 (noting unjust enrichment is the “modern designation” for
contracts implied in law).
The Harriotts claim their operation of the facility
benefited the corporation because they reduced the mortgage to $180,000.
However, Tronvold testified the “Harriotts’ operation of the park brought nothing
to the table other than the continual losses that they had when operating the
park.”
His testimony established the brothers’ actions actually harmed the
corporation because they hindered his efforts to sell or lease the real estate.
Furthermore, the Harriotts’ defiant operation of the facility does not appeal to the
“underlying sense of justice” implicit in an unjust enrichment claim. Id. We agree
with the district court that “[b]oth brothers knew . . . they were operating without
authority and both, nevertheless, were willing participants.” The district court did
not err in rejecting the Harriotts’ claims for compensation.
The district court also did not err in ordering the Harriotts to pay the real
estate taxes incurred during the years they operated the ballpark without the
consent of the board and the majority shareholder.
As stated, the brothers
knowingly took on the operation of the facility despite the directives of the board
and the majority shareholder. They created their own company so that they
could continue to run the ballpark after the process to dissolve the corporation
commenced. See Iowa Code § 490.1405(1) (2001) (“A dissolved corporation . . .
15
shall not carry on any business except that appropriate to wind up and liquidate
its business and affairs.”). The district court appropriately concluded, “When the
Harriotts chose to operate the ballpark in defiance of the board of directors, they
did so on their own and not ‘in trust’ for Hitters.” Thus, we agree with the district
court that “any profit . . . generated . . . remain[s] the property of the Harriotts. By
the same token, the . . . real estate taxes payable during that time frame are
business expenses of the Harriotts and their L.L.C., rather than expenses of the
corporation.”
3.
Attorney Fees.
Finally, we turn to the Harriotts’ claim that the district court erred in
allowing Tronvold to be reimbursed for his personal attorney fees. In Holden v.
Constr. Machinery Co., 202 N.W.2d 348, 367 (Iowa 1972), our supreme court
held a majority shareholder was entitled to indemnification for reasonable
attorney fees and expenses incurred in defense of the minority shareholder’s
nonderivative action.
See also Iowa Code § 490.851(1) (authorizing a
corporation to indemnify “an individual who is a party to a proceeding because
the individual is a director” under certain circumstances). Tronvold sustained
substantial attorney fees in defending himself in the protracted litigation initiated
against him by the minority shareholders arising from actions he performed as a
director of the corporation. The district court did not err in finding Tronvold was
entitled to reimbursement from the corporation for the reasonable attorney fees
and expenses he personally incurred in defending the Harriotts’ action.
16
The Harriotts also argue the district court erred in allowing Tronvold to be
reimbursed for the attorney fees he paid on behalf of the corporation. 8
The
board’s decision to retain counsel for the corporation to defend the Harriotts’
lawsuits and to attempt to restrain them from continuing their unauthorized
operation of the ballpark is protected by the business judgment rule.
See
Hanrahan, 473 N.W.2d at 186. A corporation is “entitled to defend itself” when it
is “under attack.” Rowen v. LeMars Mut. Ins. Co., 230 N.W.2d 905, 915 (Iowa
1972). Tronvold testified he believed obtaining counsel for the corporation was
appropriate because the attorneys “were defending Hitters and taking action
consistent with Hitters’ board of directors to prevent the Harriotts from continuing
the operation of the park as was directly opposed to what the board of directors
had indicated.”
We find no error in the district court’s determination that
Tronvold’s decision to obtain counsel for the corporation to represent its interests
in the litigation and carry out the wishes of the board was “in good faith, . . .
reasonably prudent, and with the belief that the actions were in the best interests
of the corporation.” See, e.g., Iowa Code § 490.830(5)(b) (contemplating that a
director may rely on legal counsel in discharging his corporate duties).
We have considered the Harriotts’ claims regarding alleged billing errors
and duplicative entries related to the claims for attorney fees and expenses.
Upon review of the record, it appears the initial law firm for the corporation, White
& Johnson, P.C., in one instance billed the corporation twice for the same
8
Although the Harriotts do not cite any authority in support of their contention that the
trial court “should not have allowed attorney fees and expenses purportedly incurred by
the corporation,” we will address their argument. See Harrington v. Univ. of N. Iowa, 726
N.W.2d 363, 367 n.4 (Iowa 2007) (stating “failure to cite authority” in support of an issue
may be deemed a waiver of that issue); see also Iowa R. App. P. 6.14(1)(c).
17
service. The August 2000 bill reflects a charge for “Third-Party Services invoice
#981379 for 3 investigator’s time and expenses” in the amount of $1393.53. The
September 2000 bill contains an identical charge in the same amount.
We
therefore reduce the amount the district court determined Tronvold was due from
the corporation by $1393.53. In addition, the amounts paid to White & Johnson,
P.C., and which the trial court found Tronvold was owed from Hitters, include
$5000 withdrawn from a Hitters account in December 1998 and paid to White &
Johnson, P.C., shortly thereafter. We therefore further reduce the amount due
Tronvold by an additional $5000.
We conclude the rest of the Harriotts’ claims concerning alleged billing
errors and duplicative entries are without merit. Substantial evidence supports
the district court’s findings as to the expenses and attorney fees incurred by
Tronvold and the corporation. See Iowa R. App. P. 6.14(6)(a) (“Findings of fact
in a law action . . . are binding upon the appellate court if supported by
substantial evidence.”). The remainder of the district court’s order determining
the shareholders’ debt claims is therefore affirmed.
IV.
CONCLUSION.
Viewing the evidence in the light most favorable to the jury’s verdict, we
conclude there was sufficient evidence in the record supporting the jury’s finding
that Tronvold did not breach the parties’ oral agreement. We therefore affirm the
district court’s denial of the Harriotts’ motion for new trial. We also conclude the
district court did not err in determining the extent and amount of the
shareholders’ claims for reimbursement from the corporation with one exception.
The amount the district court determined Tronvold was due from the corporation
18
should be reduced by $1393.53 due to a duplicative charge by the attorneys for
the corporation, and $5000 that was in fact paid by the corporation. Tronvold is
accordingly due $476,031.47 from the corporation. The remainder of the district
court’s order determining the shareholders’ debt claims is affirmed.
AFFIRMED AS MODIFIED.
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