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Shams v. Hassan

Supreme Court of Iowa

December 15, 2017

SAMIR M. SHAMS, Appellee,
SONA HASSAN, Appellant.

         On review from the Iowa Court of Appeals. Appeal from the Iowa District Court for Polk County, Jeanie Kunkle Vaudt, Judge.

         The plaintiff seeks further review of a court of appeals decision vacating a judgment entered on a jury verdict and remanding for a new trial.DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT COURT JUDGMENT REVERSED AND CASE REMANDED.

          Steven C. Reed of Law Offices of Steven C. Reed, West Des Moines, for appellant.

          Andrew B. Howie of Shindler, Anderson, Goplerud & Weese, P.C., West Des Moines, for appellee.

          MANSFIELD, Justice.

          I. Introduction.

         This intrafamily dispute comes before us for the second time. A brother, leaving for Iraq for an extended period of time, entrusted his sister with blank checks he had signed in advance. The checks were to be used to pay bills of the brother and his adult children. On his return, the brother was dismayed to learn that the sister had written many checks to herself. She assured him, however, that his money had been invested in a land transaction and was still available to him whenever he needed it. The sister did provide some funds to her brother as he requested. However, when the brother later asked for all the money back, she told him it had been spent. The brother sued.

         The statute of limitations is a flash point in the lawsuit. If the brother's causes of action accrued when he learned the sister had written checks to herself (or earlier), the claims are time-barred. If they accrued only when he was told the money was gone, they are timely. The sister pled the statute of limitations in her answer and unsuccessfully moved for summary judgment and a directed verdict on that basis. Later, she submitted a proposed statute-of-limitations instruction for the jury. The district court declined to instruct the jury on the statute of limitations, and the jury returned a substantial damage verdict on several of the brother's legal theories. The sister now appeals.

         We conclude this case must be reversed and remanded for a new trial. Genuine factual disputes over the statute of limitations should be resolved by the factfinder-here, the jury. Moreover, although the sister's proposed statute-of-limitations instruction required editing and amplification before it could have been given to the jury, it was sufficient to alert the trial court to the need for an instruction in an area where no instruction was being given. Therefore, error was preserved. For these reasons, we affirm the decision of the court of appeals, reverse the district court's judgment, and remand for further proceedings.

         II. Factual and Procedural Background.

         Samir Shams emigrated from Egypt to the United States in 1971. In 1980, he came to Des Moines. He continued to live in the Des Moines area and held a variety of jobs until 2003, when he was hired to serve as an Arabic-English interpreter in Iraq.

         Before Shams left for Iraq, he underwent training in Virginia. He also spent time with his sister Sona Hassan, who lives in Maryland. Knowing he was going to be in Iraq for some time, Shams gave Hassan several books of signed blank checks from his Bankers Trust bank account in Windsor Heights. This account contained Shams's life savings, to which regular deposits of paychecks, disability payments, and IPERS payments were continuously added.

         Shams has three grown children who live in Iowa and Arizona. Shams and Hassan agreed that Hassan would use the presigned checks to pay any of Shams's bills that came to Hassan's attention or to take care of Shams's kids if they needed money. Hassan did not have permission to use the money for her own benefit.

         While Shams was in Iraq, he did not see cancelled checks or account statements for the Bankers Trust account. Upon his return to the United States in June 2006, Shams visited his brother in Arizona. His brother had been receiving the monthly mailings from the bank, and at that point Shams noticed cancelled checks made out to Hassan. Traveling thereafter from Arizona to Maryland, Shams asked Hassan about his money. Hassan responded, "Your money is safe." She explained that funds in the bank account had been used to buy land in Maryland for development, that the property would be resold at a profit to him, and that if he needed money all he had to do was to ask. Hassan's husband took Shams to see the land. Shams was satisfied at the time with this explanation.

         In 2009, Shams needed $50, 000 to buy a house and asked Hassan for the funds. She provided the $50, 000. However, the following year Shams asked her for the rest of his money and was told there was only $124, 000 left.

         It turned out that Hassan had written checks totaling $269, 980.66 to herself, many of which were initially deposited in other accounts. The parties later disputed vigorously and in excruciating detail who benefited from this money-Hassan and her immediate family or Shams and his immediate family.

         On July 26, 2011, Shams filed suit against Hassan in the Iowa District Court for Polk County, alleging breach of contract, conversion, bad faith, fraud, and breach of fiduciary duty. Hassan moved to dismiss for lack of personal jurisdiction, claiming she did not have minimum contacts with the State of Iowa. The district court granted the motion, and the court of appeals affirmed. On further review, we reversed. Shams v. Hassan, 829 N.W.2d 848, 860-61 (Iowa 2013). We concluded Hassan had sufficient contacts with Iowa for personal jurisdiction under the effects test for intentional torts set forth in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482 (1984). Shams, 829 N.W.2d at 857-60.

         On remand, in addition to answering Shams' claims, Hassan filed a counterclaim against Shams for defamation based on repeated statements he had made about her being a thief. Hassan also pled the statute of limitations as an affirmative defense. See Iowa Code § 614.1(4) (2011) (five-year statute of limitation for actions founded on unwritten contracts, brought for injuries to property, or for relief based on fraud). Hassan later filed a motion for summary judgment based on the statute of limitations. The district court denied the motion, ruling,

[Hassan] says that the applicable statutes of limitations began to run in 2006. [Shams] says they did not begin to run until 2010. [Hassan] says [Shams] should have known he was injured in 2006. [Shams] says he did not know of his injury until 2010. The Court finds that these opposing statements assert genuine issues of material fact that a jury must sort out.

         The case proceeded to a jury trial. Much of the two-week trial was spent going over particular checks, transfers, and expenditures. Neither side retained an accountant or any other type of expert or summary witness. Instead, both Shams and Hassan were called to the stand to testify on four separate occasions: once each in their own case, their opponent's case, their own rebuttal case, and their opponent's rebuttal case. Other relatives testified as well.

         Hassan moved for a directed verdict based on the statute of limitations. The arguments replayed the prior summary judgment arguments. Hassan maintained that Shams clearly knew by June 2006 that Hassan had not complied with the terms under which she was given authority to disburse checks on his bank account; yet he did not file suit until July 2011, over five years later. Shams countered that Hassan had made assurances in 2006 that his money was safe and he could continue to have it, and in fact did give him money as requested in 2009. According to Shams, the event triggering the obligation to bring suit did not occur until 2010, when Hassan refused to give him any more money. The district court denied the motion.

         Hassan also proposed a statute of limitations jury instruction as follows:

The defendant has raised as a defense to the plaintiffs' claims of oral contract, conversion, fraud and breach of fiduciary duty that the plaintiff cannot prevail on those claims or any one of those [claims] because he did not bring suit on such claims with[in] the time allowed by law. There are state statutes that specify how much time a person has to bring certain kinds of claims. These are called statutes of limitation. A person cannot recover on a claim that is brought after the time period that applies to a particular claim, even if it is only one day late.
The statute of limitation that applies to each of the above claims provides that the claim must be brought within five years of the date the incident occurred. The plaintiff brought his suit against the defendant on July 26, 2011. A claim for oral contract, conversion, fraud, and breach of fiduciary duty, based on acts or occurrences that took place more than five years before the date is barred by the statute of limitation. You must decide when each act or occurrence on which [he] bases his claim occurred. If any of these acts or occurrences took place more than five years before the plaintiff brought suit, then a claim based on that act or occurrence is barred by the statute of limitation.

         Shams' counsel objected to this instruction, pointing out "this instruction is more in tune as it is drafted for a personal injury action, because it talks in regards to acts or occurrences." He maintained that for the claims asserted in this case, the statute of limitations would not begin running just because some act on which the claim is based had occurred. For example, he noted, the statute of limitations on a breach of contract claim does not start when "the contract is entered into."

         The district court declined to give the proposed instruction. It explained,

I am going to let the case go to the jury without the instruction that Mr. Reed has proposed for the reasons that, A, it's not a stock; B, I don't think it applies; and C, as it is drafted, I believe the jurisdictions that Mr. Reed found the instruction located in, used it for purposes that were not associated with the kinds of claims we have asserted here. So for all of those reasons, I am going to not submit that instruction to the jury. But we've made a record for the benefit of counsel on why Mr. Reed thinks it should be submitted, when Mr. Anderson believes it is not to be submitted, and why the Court has ultimately concluded that that instruction should not be submitted.

         The case thus went to the jury without a statute-of-limitations instruction.

         The jury returned a verdict of $148, 501.60 for Shams on his conversion, breach-of-fiduciary-duty, and breach-of-contract claims, but not his fraud claim. The jury also returned an actual damage verdict of $14, 556.25 and a punitive damage verdict of $15, 000 for Hassan on her libel counterclaim.

         Hassan filed a motion for new trial on several grounds, including the failure to give her statute-of-limitations instruction. The district court denied the motion, stating in part,

The statute of limitations instruction [Hassan] proposed was properly withheld from the jury as to all of [Shams's] claims she asserts it applied to. This proposed instruction is not the law in Iowa and does not include the discovery rule. Furthermore, the evidence presented was sufficient for the jury to conclude that [Shams] and [Hassan] entered into a new oral agreement in June of 2006, and his claims for breach of contract, conversion, ...

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