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Shelby County Cookers, L.L.C. v. Utility Consultants International, Inc.

Court of Appeals of Iowa

January 23, 2014

SHELBY COUNTY COOKERS, L.L.C., Plaintiff-Appellee,
v.
UTILITY CONSULTANTS INTERNATIONAL, INC., Defendant-Appellant

Editorial Note:

This decision has been referenced in a "Decisions Without Published Opinions" table in the North Western Reporter.

Appeal from the Iowa District Court for Shelby County, James M. Richardson, Judge. Utility Consultants International appeals the district court's ruling on Shelby County Cookers's motion for summary judgment.

Brett Ryan of Watson & Ryan, P.L.C., Council Bluffs, for appellant.

James G. Powers and April N. Hook of McGrath, North, Mullin & Kratz, P.C. L.L.O., Omaha, Nebraska, for appellee.

Heard by Vogel, P.J., and Mullins and McDonald, JJ. Mullins, J., concurs; McDonald, J., dissents.

OPINION

VOGEL, P.J.

Utility Consultants International (UCI) appeals the district court's ruling on Shelby County Cookers's (SCC) motion for summary judgment. The district court held there was a contract between SCC and UCI, but that UCI was only entitled to a contingency fee based on its review of four utility bills completed during the pendency of the contract. The court further held, pending payment of any refund fee, UCI's breach-of-contract counterclaim was not ripe, and dismissed UCI's other two counterclaims. UCI argues the district court erred when it found UCI was only entitled to a contingency fee based on its review of four utility bills, because SCC repudiated the contract and thus prevented UCI from fully performing. UCI also argues the court erred when it held the breach-of-contract claim was not ripe and when it dismissed UCI's counterclaims. Because we conclude the district court correctly determined the scope of the contract was limited to the four bills UCI reviewed, UCI's breach-of-contract claim was not ripe, and UCI's counterclaims are without merit, we affirm.

I. Factual and Procedural Background

In July of 2011, UCI contacted SCC through an unsolicited phone call and informed SCC it was in the business of conducting reviews of utility billings for possible errors. UCI spoke with Troy Schaben, the plant controller for SCC. After the phone call, Schaben forwarded to UCI four utility bills for UCI to review. On August 9, 2011, UCI informed Schaben that, after reviewing the utility bills, SCC was likely entitled to a large refund, though the amount and type was not specified.

A contract was signed on the same day by Schaben on behalf of SCC. In its entirety, the contract stated:

This agreement authorizes UTILITY CONSULTANTS INTERNATIONAL, INC. to pursue refunds and bill reductions, on your behalf, on your utility billings.
If UTILITY CONSULTANTS INTERNATIONAL, INC. is successful in obtaining a refund(s) for your company(ies), your fee obligation is 50% of the refund(s). Payable only if and when a credit has been applied to your account or a check has been issued to you. The future cost reductions, as defined by when the utility adjusts your account(s) strictly accrue to you.
If you accept our money saving proposal, please sign where indicated.

After the contract was signed, UCI informed SCC that it believed a large refund was possible due to the overpayment of sales tax. UCI requested more utility bills so it could conduct a further review. Schaben informed UCI that Brad Poppen, SCC's secretary/treasurer, would need to approve the release of any more bills due to the fact this was now a sales tax issue. On September 2, SCC requested that UCI provide information regarding the scope of services UCI intended to provide to SCC, or SCC would terminate the contract. UCI never furnished this information, nor agreed to enter into a contract with more specific terms. Consequently, SCC terminated its agreement by letter dated September 20, 2011, which stated:

As has previously been indicated to you, Shelby County Cookers, LLC disputes it has a valid contract with Utility Consultants International, Inc. concerning the pursuit of refunds. You have previously forwarded to me what you contend is a contract and I have told you that the person signing it was not authorized to sign on behalf of the company, and in addition, it is not supported by consideration
Regardless of these issues, you are hereby notified that to the extent that any such agreement is valid, it is hereby TERMINATED effective as of today's date.

Before the contract was entered into, UCI's review of the sales tax was never mentioned. During the hearing, David Dawson, the owner of UCI, admitted to the following:

Q: Aren't you concerned that if you put sales tax out there on the website or you told a customer that it was a sales tax review, that they would go ahead and hire their own accountant to do it or they would do it themselves? . . .
. . . A: No. Yes, I guess they could do it on their own if ...

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