from the Iowa District Court for Des Moines County, Shawn R.
automobile owner whose minor son crashed into a horse trailer
appeals the award of property damages to the insurance
company that paid claims to its customer who owned the
J. Wilharber and Clarissa A. Bierstedt of Peddicord, Wharton,
LLP, West Des Moines, for appellant.
L. Merrill of Lubinus Law Firm, PLLC, Des Moines, for
Considered by Vaitheswaran, P.J., and Potterfield and Tabor,
Warth gave her minor son permission to drive her Ford Taurus
in June 2014. He failed to yield at an intersection on
Highway 34 in Burlington and crashed into a horse trailer
owned by Sally Prickett and insured by State Farm Insurance
(State Farm). In this appeal, Warth challenges the district
court's award of $12, 373 in damages to State Farm. She
alleges the district court improperly admitted several
exhibits relied upon to establish the amount of damages to
the trailer. Because the exhibits contained inadmissible
hearsay and did not fit within the business-records or
residual exceptions cited by the district court, we reverse
the damage award and remand for further proceedings.
Facts and Prior Proceedings
7, 2014, Alana McNutt was driving a Dodge Truck and pulling a
horse trailer owned by her mother-in-law, Sally Prickett,
when the collision occurred. Prickett had purchased an
insurance policy from State Farm to cover the trailer. In
December 2015, State Farm, as Prickett's subrogee, filed
a petition seeking $16, 406 in damages from Warth. In June
2017, Warth conceded liability for the accident, leaving the
amount of damages as the remaining issue for trial.
bench trial in July 2017, plaintiff State Farm called
adjuster Lisa Stichter as its only witness. Through
Sticher's testimony, State Farm offered two exhibits.
Exhibit 1 was an invoice addressed to Prickett from Sam's
Body Shop for $2, 792 for towing and storage from June 7 to
September 22, 2014. Exhibit 2 was an invoice dated July 29,
2014, addressed to Prickett from 4-Star Trailers, Inc.
(4-Star), showing an "Estimate Only" of $12, 373
for parts and labor. The district court admitted these
exhibits over Warth's hearsay and lack-of-foundation
Farm also presented testimony from Prickett by deposition.
Prickett, a veterinarian, testified she designed the
four-horse trailer and had it custom made with special
features such as a dressing room. Prickett testified although
the trailer was built twenty years earlier, it was in
"pristine condition" before the collision. Through
Prickett's deposition testimony, State Farm offered four
additional exhibits. Exhibit 3 included photographs of the
damaged trailer. Exhibit 4 was a copy of a cashier's
check from Prickett to Sam's Body Shop. Exhibit 5 was a
letter dated June 26, 2014, from Ted Nitzel of Central States
Trailers (Central States) providing a pre-accident valuation
for the 1995 trailer. Exhibit 6 was a letter dated September
19, 2014 from Prickett's attorney to State Farm agreeing
to settle her claim for the trailer with State Farm for the
sum of $15, 903.
August 9, 2017, the district court entered a trial order on
damages, concluding State Farm was "entitled to damages
in the amount of $12, 373.03 for repair for the
trailer." The court decided the remaining amount sought
by State Farm was "not reasonable and not supported by
the evidence." Warth filed a motion for a directed
verdict and a motion to vacate the damage award. The district
court reaffirmed its order on damages. The court also noted
it was "firmly convinced the Defendant's hearsay
objections are subject to the business records exception
under Iowa Rule of Evidence 5.803(6) and the residual hearsay
exception based on the exhibits' circumstantial
guarantees of trustworthiness under Iowa Rules of Evidence
[5.807]." Warth now appeals.
Scope and Standards of Review
generally review decisions admitting evidence for an abuse of
discretion. State v. Paredes, 775 N.W.2d 554, 560
(Iowa 2009). But we review hearsay rulings for legal error.
Id. This standard of review extends to determining
whether statements fall within an exception to the general
prohibition on hearsay evidence. Id. If we find
evidence improperly admitted in this nonconstitutional
context, we employ a harmless-error analysis. See State
v. Sullivan, 679 N.W.2d 19, 29 (Iowa 2004).
Warth contends the district court improperly admitted four
Exhibit 1: An invoice directed to Prickett from Sam's
Body Shop showing the cost of towing and storage from June 7
to September 22, 2014 totaled $2792.
Exhibit 2: An invoice from [4-Star] estimating the expected
cost of parts and labor to fix the horse trailer at $12, 373