from the Iowa District Court for Clayton County, John J.
Cannon appeals the district court's grant of summary
judgment to defendants. AFFIRMED IN PART, REVERSED IN PART,
M. O'Donohoe of Elwood, O'Donohoe, Braun & White,
L.L.P., Charles City, for appellant.
John Arenz, McKenzie R. Hill, and Brenton M. Tunis of
O'Connor & Thomas, P.C., Dubuque, for appellee
Bodensteiner Implement Company.
P. Nelson of Meyer, Lorentzen & Nelson, Decorah, for
appellee Windridge Implements, LLC.
Michael A. McEnroe and Erin Patrick Lyons of Dutton, Braun,
Staack & Hellman, P.L.C., Waterloo, for appellee Eck
& Glass, Inc., d/b/a EPG Insurance Inc.
Richard J. Kirschman of Whitfield & Eddy, P.L.C., Des
Moines, for appellee CNH America, LLC, d/b/a Case IH.
Considered by Vaitheswaran, P.J., and Doyle and Mullins, JJ.
action arises from Jason Cannon's purchase of a defective
tractor, for which Cannon brought numerous causes of action
against Bodensteiner Implement Company (Bodensteiner), ECK
& Glass, Inc., d/b/a EPG Insurance, Inc. (EPG), and CNH
America, LLC, d/b/a Case IH (CNH) (collectively, the
defendants). The defendants filed their respective
motions for summary judgment, which were granted by the
district court. Cannon appeals. Upon our review, we affirm in
part, reverse in part, and remand.
Background Facts and Proceedings
is an independent contractor who hauls manure in tanks and
spreads the manure across fields as fertilizer. Cannon's
business requires the use of a tractor to pull and operate
this equipment. In October 2012-the beginning of the fall
hauling season-Cannon found himself in need of a tractor.
Cannon had previously used John Deere equipment, he was
impressed by the Case IH tractors used by his
coworkers. Cannon communicated with Roger Monroe,
salesman at Bodensteiner, through whom Cannon had previously
acquired tractors. Bodensteiner is a John Deere dealership
that also deals in used farm equipment from other
manufacturers. Cannon asked Monroe if Bodensteiner had any
used Case IH tractors. Monroe was aware Cannon would use the
tractor for manure-hauling purposes. After inquiring, Monroe
learned Bodensteiner had a Case IH Magnum 305 at another
Case IH Magnum 305 (the tractor) was manufactured by CNH in
March 2008. The tractor was sold in April 2008 by a Case IH
dealer to a company that engaged in liquid-manure disposal.
As part of the sale, CNH issued a two-year limited warranty
to the original purchaser (the Case warranty). In addition, a
purchased protection plan (the PPP) issued, which states it
"is a contract between the Provider and the
Customer." "Provider" is defined as "EPG
Insurance, Inc., " and "Customer" is defined
as "the purchaser . . . or an assignee thereof."
The PPP provided extended coverage for specific parts of the
tractor from April 2010 until April 2013. To be covered by
the PPP, the labor for repairs had to be "approved
by" EPG and performed "by a service center
authorized by [EPG]." Here, that "service
center" was Windridge.
tractor was later traded to Bodensteiner in 2010. Monroe
spoke with the Bodensteiner salesman who took the tractor in
on trade. That salesman informed Monroe that, to the best of
his knowledge, it was a good tractor and it had passed a test
drive. Monroe informed Cannon of his conversation with the
other salesman and that the tractor had been in and through
Bodensteiner's shop and was ready to go. Monroe stated he
had no knowledge of the tractor having had issues but it had
previously been used in a manure-hauling operation. Both
Monroe and a mechanic at Bodensteiner indicated the Case IH
Magnum 305 model was a good tractor with adequate horsepower
for Cannon's purposes. Cannon understood, however,
neither Monroe nor the Bodensteiner mechanic had actually
seen the tractor he was purchasing; they were speaking
generically about tractors of that make and model. Based on
Cannon's past experience with Monroe and Bodensteiner, he
assumed Bodensteiner would have inquired about the tractor
and any past problems and had a mechanic inspect the tractor.
told Cannon he would not have the tractor brought from the
other dealership unless Cannon wanted it. In deposition
testimony, Cannon said: "[S]o I said I want the tractor.
If it is a good running tractor, if it is going to work for
me I want the tractor. He said it is fit, it is ready, it is
ready, it is field ready." Cannon further testified
Monroe had informed him the tractor was "ready to
go." Cannon chose not to go to where the tractor was to
inspect or test drive it but told Monroe he wanted the
October 6, 2012, Cannon signed a purchase agreement, paid
$1000 for the transport of the tractor, traded in his John
Deere tractor, and took possession of the tractor at issue.
Later that day, Cannon called Monroe to tell him he was
having mechanical problems. At that time, Monroe told Cannon
that when the tractor arrived from the other dealership the
tractor had been in Bodensteiner's shop and everything
tested out. Monroe claims he told Cannon there would
be no warranty given by Bodensteiner on the tractor.
the first few days of acquiring the tractor, Cannon
discovered a number of issues with it, including
malfunctioning of the turbo and the nineteenth gear. When
Cannon looked at the turbo, he discovered multiple bolts were
rusted and broken, a condition Cannon contends should have
been discovered by a mechanic's examination. Then the
hydraulic pump exploded, the transmission overheated, and the
November 2010, Cannon rented a tractor as Windridge performed
repairs on his tractor over the winter of 2010 to 2011. In
April 2011, the transmission overheated; following repairs,
Cannon used the tractor until October 2011, when the
transmission overheated again. Windridge again performed
repairs from October 2011 through the beginning of
2012. The tractor was returned to Cannon in
April 2012, at which time the transmission overheated and the
brakes failed. The tractor has not been usable since that
to Cannon, the tractor had a history of issues, including
brake failure. Some of the issues with the tractor manifested
as early as October 2008, when the tractor was still under
the Case warranty. Cannon was informed of this history by
Schermann's Implement, which had serviced the tractor
when it was owned by the original purchaser.
the above numerous attempts to resolve the issues with the
tractor, Cannon became convinced the tractor was unrepairable
and unusable. Neither the mechanics at Windridge nor the Case
mechanics have been able to tell Cannon what is wrong with
the tractor. EPG denies the tractor is unrepairable, as a
Case IH employee was working on a plan to have additional
diagnostics done but those efforts were halted when Cannon
April 2013, Cannon initiated this action. Following multiple
amendments, Cannon brought the following relevant
claims against the defendants: (1) fraudulent
misrepresentation (Bodensteiner), (2) breach of implied
warranties (Bodensteiner), (3) breach of the implied covenant
of good faith and fair dealing (Bodensteiner), (4) equitable
rescission (Bodensteiner), (5) breach of contract (EPG), (6)
negligent design, manufacture, assembly, testing, and warning
(CNH), (7) breach of implied and express warranties (CNH),
and (8) fraudulent concealment and nondisclosure (CNH). The
defendants filed their respective motions for summary
judgment, which Cannon resisted. In March 2015, a hearing
was held on the motions. On March 30, the district court
granted summary judgment on all of the above claims. Cannon
Standard and Scope of Review
review of the district court's grant of summary judgment
is for correction of errors at law. See Jones v. Univ. of
Iowa, 836 N.W.2d 127, 139 (Iowa 2013).
A court should grant summary judgment if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law. In
other words, summary judgment is appropriate if the record
reveals a conflict only concerns the legal consequences of
undisputed facts. When reviewing a court's decision to
grant summary judgment, we examine the record in the light
most favorable to the nonmoving party and we draw all
legitimate inferences the evidence bears in order to
establish the existence of questions of fact.
Id. at 139-40 (quoting Pitts v. Farm Bureau Life
Ins. Co., 818 N.W.2d 91, 96-97 (Iowa 2012)). "[A]
'factual issue is "material" only if "the
dispute is over facts that might affect the outcome of the
suit."'" Peak v. Adams, 799 N.W.2d
535, 542 (Iowa 2011) (quoting Phillips v. Covenant
Clinic, 625 N.W.2d 714, 717 (Iowa 2001)). The burden
rests with the movant to show the nonexistence of a material
fact. Pillsbury Co. v. Wells Dairy, Inc., 752 N.W.2d
430, 434 (Iowa 2008). However, "[t]he resisting party
must set forth specific facts showing that a genuine factual
issue exists." Peak, 799 N.W.2d at 542 (quoting
Huber v. Hovey, 501 N.W.2d 53, 55 (Iowa 1993)).
"[A] fact question is generated if reasonable minds can
differ on how the issue should be resolved."
Pillsbury, 752 N.W.2d at 434; see also Bank of
the W. v. Kline, 782 N.W.2d 453, 456-57 (Iowa 2010).
asserts separate claims against each of the defendants, all
of which were dismissed on summary judgment by the district
court. We address each claim in turn.
Claims Against Bodensteiner
Fraudulent Misrepresentation and Nondisclosure
elements of fraudulent misrepresentation are "(1)
representation, (2) falsity, (3) materiality, (4) scienter,
(5) intent to deceive, (6) reliance, and (7) resulting injury
and damage." Van Sickle Constr. Co. v. Wachovia
Commercial Mortg., Inc., 783 N.W.2d 684, 687 (Iowa 2010)
(citation omitted). With regard to fraudulent nondisclosure,
Cannon must also demonstrate a duty to disclose. See
Reynolds v. Solon State Bank, No. 07-0085, 2007 WL
4553648, at *5 (Iowa Ct. App. Dec. 28, 2007) ("The tort
of fraudulent nondisclosure may arise if a party fails to
disclose material information and the party had a duty to
communicate that information." (citing Wright v.
Brooke Grp. Ltd., 652 N.W.2d 159, 174 (Iowa 2002))).
"A duty of disclosure may arise 'from a relation of
trust, a relation of confidence, inequality of condition and
knowledge, or other circumstances as show[n] by a particular
fact situation.'" Id. (quoting Irons v.
Cmty. State Bank, 461 N.W.2d 849, 854 (Iowa Ct. App.
and intent to deceive are closely related elements of
[fraudulent misrepresentation], and the same general analysis
applies for each." Van Sickle, 783 N.W.2d at
688. "Scienter and intent to deceive may be shown when
the speaker has actual knowledge of the falsity of his
representations or speaks in reckless disregard of whether
those representations are true or false." Id.
appellate brief, Cannon asserts "the information
provided by Roger Monroe and the mechanic . . . about the
tractor being fit, ready to go, having been in the shop and
inspected are material misrepresentations." However, in
his deposition testimony, Cannon admitted he did not believe
Monroe knew these representations were false. He further
admitted he knew the mechanic had not seen the tractor and
the mechanic just discussed "the size of the tractor and
the horsepower, " that "it was a good tractor[,
and] that [Cannon] would be happy with the horsepower and
what [he] was getting." Cannon admitted the mechanic was
just talking generically about the make and model of the
tractor and that he had no disagreement with what the
mechanic had said. Cannon further stated he "honestly
c[ould]n't answer" whether he had "any reason
to believe . . . Monroe or anyone else at Bodensteiner
actually knew that there was something wrong with th[e]
tractor as far as the oil overheating and the brakes
now claims there is a dispute of fact on this issue because
"[c]learly Monroe wanted to sell a tractor" and
"Cannon indicated that any inspection of the tractor,
however cursory, would have revealed the broken off and
rusted bolts on the turbo." The assertion that Monroe
wanted to sell a tractor does not create an issue of fact. As
to the inspection claim, Cannon himself testified it would
require a mechanic to identify the issues with the
tractor.Regardless, neither of these purported
facts make the statements of Monroe and the mechanic-who had
not yet seen the tractor at issue-knowingly false. Finally,
Cannon claims "there is no evidence despite the
representations by Monroe that anyone . . . looked at the
tractor, got it into the shop, inspected it or tested it in
any manner." Monroe provided an affidavit stating
neither he nor any of the Bodensteiner staff "had any
knowledge of any defect or mechanical problem with the
[t]ractor." Cannon's claim that there is no evidence
supporting Monroe's statements does not create a
genuine issue of fact as to whether those statements were
true. As noted above, Cannon himself admitted he believed
Monroe was unaware of any problems with the tractor and the
mechanic was only talking generically about the make and
model of the tractor, not this specific tractor itself.
Cannon has provided no facts supporting the scienter and
intent elements of his claim or creating a genuine issue of
material fact as to those elements. Without a knowing
misrepresentation, Cannon's claim fails. See
Spreitzer v. Hawkeye State Bank, 779 N.W.2d 726, 735
(Iowa 2009) (noting fraudulent misrepresentation requires
"the defendant knew the representation was false");
see also Wright, 652 N.W.2d at 175 (noting a duty to
disclose may arise in a business transaction where
"matters [are] known to [the defendant] that [the
defendant] knows to be necessary to prevent [the
defendant's] partial or ambiguous statement of the facts
from being misleading"). Accordingly, Bodensteiner is
entitled to judgment as a matter of law on the fraudulent
misrepresentation and nondisclosure claims.
Breach of Implied and Express Warranties
alleges Bodensteiner breached the implied warranties of
merchantability and fitness for a particular purpose.
See Iowa Code §§ 554.2314, 554.2315
(2009). However, the two-page sales contract clearly,
conspicuously, and repeatedly disclaimed any warranties,
including implied warranties. See id. §
554.2316 (providing the means by which the implied warranties
of merchantability and fitness may be excluded); see also
id. § 554.1201(2)(j) ("Whether a term is
'conspicuous' or not is a decision for the
court."). The first page indicates:
IMPORTANT WARRANTY NOTICE: The John Deere warranty applicable
to new John Deere product(s) is printed on the back side of
this document. There is no warranty on used products. . . .
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS ARE NOT
MADE AND ARE ...