from the Iowa District Court for Jefferson County, Myron L.
appeal from adverse parts of the jury's verdicts and the
district court's denial of their motion for a new trial
in this civil action.
Gardner of Denefe, Gardner & Zingg, P.C., Ottumwa, for
E. Ballard and Abigail L. Brown of Leff Law Firm, L.L.P.,
Iowa City, for appellees.
P.J., and Tabor and McDonald, JJ.
Jeffrey Anderson, his wife Lori Anderson, and their business
Fabrication and Construction Services, Inc. appeal adverse
parts of the jury's verdicts found in favor of Anderson
Tooling, Inc. and its owners, Dean and Carol Anderson.
Appellants challenge several aspects of the jury's
verdicts and the court's denial of their motion for a new
trial, among other things. We affirm in part, reverse in
part, and remand.
Background Facts and Proceedings.
Anderson and Jeff Anderson are brothers. Dean is married to
Carol and Jeff to Lori. In or about 1996, Dean and Carol
started their business, Anderson Tooling, Inc., also called
ATI for short. ATI has many facets, but its primary focus is
"rigging"-moving large and heavy manufacturing
machines around the country. The company does more than just
move machinery, it also provides turnkey machine
installation. ATI also operates what is essentially a salvage
yard for big, unwanted manufacturing machinery and parts.
Unlike many of its competitors, if a client needs a big
machine removed and no longer wants it, ATI may accept the
machinery as a portion of its compensation for the
2005, Dean asked Jeff to come work for ATI. ATI was in need
of organization-particularly with respect to its
bookkeeping-and Jeff, who had a master's degree in
business administration, had experience managing
manufacturing facilities. Jeff had also performed some
consulting work for ATI in the past. Dean, Carol, Jeff, and
Lori met at Jeff and Lori's home to talk about details of
Jeff's employment. Jeff took notes of the conversation in
a note book.
and Dean's initials appear on the first page of the
notes. The notes indicate a base salary of $52,
000 and provide:
notes do not define profit or otherwise explain the use of
began working for ATI. Lori also began working for ATI as a
bookkeeper. Jeff worked for ATI until Dean fired him in 2011.
subsequently sued ATI, Dean, and Carol, asserting four
claims: violation of Iowa Wage Payment Collection Law, breach
of contract, tortious discharge, and interference with
contractual relations. ATI, Dean, and Carol answered,
asserted affirmative defenses, and made counterclaims against
Jeff for conversion, intentional interference with contracts,
interference with a prospective business advantage, breach of
fiduciary duty, and misappropriation of trade secrets. ATI
then sued Jeff's wife Lori and Jeff's business
Fabrication & Construction Services, Inc., also called
"FabCon, " asserting claims of breach of fiduciary
duty by Lori, conversion, intentional interference with
contracts, interference with prospective business advantage,
and conspiracy. The lawsuits were consolidated for trial.
trial commenced May 13, 2015. Differing accounts of events
leading to Jeff's firing were given by Jeff and Dean,
among others. Jeff claimed ATI, by way of Dean and Carol,
concealed profits to keep from having to pay Jeff a
percentage of that profit. Jeff asserted that when he called
Dean and Carol out on this, they fired him rather than paid
him, in breach of his contract and Iowa law. Conversely, Dean
and Carol claimed Jeff was fired for mismanaging ATI and
taking money from ATI he was not due. They also asserted he
gave ATI's customer list and rate information to FabCon,
Jeff's business, which FabCon, Jeff, and Lori used to
compete with ATI and later sold to another competitor. After
hearing almost two weeks of testimony and receiving over one
hundred and sixty exhibits, the matter was submitted to the
jury on June 3, 2015. The jury was given two verdict forms
with some sixty-eight special interrogatories, along with the
court's instructions. The first verdict form concerned
Jeff's claims against ATI, Dean, and Carol. With respect
to Jeff's claim that ATI violated the Iowa Wage Payment
Collection Law, the jury found ATI did not owe Jeff for
unpaid profit-sharing or for accrued vacation. On Jeff's
intentional-interference-with-a-contract claims, the jury
found Jeff did not have a contract with ATI with which to
breach or interfere. However, the jury did find Jeff was an
employee of ATI and was discharged by ATI for pursuing unpaid
wages, causing Jeff damages. On the line for "lost
earnings from discharge to present, " the foreperson
wrote, "$52, 000 37, 387.01 = 89, 387." The jury
also awarded Jeff $5000 for past emotional-distress damages
on the claim. The jury found ATI owed Jeff money, but that
neither Dean nor Carol abused the corporate privilege.
Finally, the jury awarded Jeff $52, 000 in punitive damages
against ATI, Dean, and Carol.
second verdict form concerned ATI's claims against Jeff,
Lori, and FabCon. The jury found no conversion of ATI's
property by Jeff, Lori, or FabCon. However, the jury found
ATI had prospective business relationships with which Jeff
intentionally and improperly interfered to ATI's
detriment and caused ATI damages of $336, 072.54. Though the
jury found that both Lori and FabCon knew of ATI's
prospective relationships, the jury found only FabCon
intentionally and improperly interfered with the potential
relationships, but that the interference did not cause ATI
not to enter into any of the prospective relationships.
Additionally, the jury found no breach of fiduciary duty by
Lori, but it found Jeff breached his fiduciary duty to ATI
and caused ATI damages of $436, 225.18. The jury also found
Jeff misappropriated ATI's trade secrets, but the
misappropriation did not cause ATI damages. On ATI's
conspiracy claim, the jury answered as follows:
No. 38: Did Jeffery Anderson commit any of the
wrongs of conversion, interference with a prospective
business advantage, breach of fiduciary duty, or
misappropriation of trade secrets?
"yes" or "no."