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Quality Egg, LLC v. Hickman's Egg Ranch, Inc.

Court of Appeals of Iowa

February 20, 2019

QUALITY EGG, LLC, Plaintiff-Appellant,
v.
HICKMAN'S EGG RANCH, INC., Defendant-Appellee.

          Appeal from the Iowa District Court for Wright County, Christopher C. Foy, Judge.

         Plaintiff appeals a jury verdict finding it was not entitled to recover from defendant on an open account. REVERSED AND REMANDED.

          G. A. Cady III and Megan R. Rosenberg of Cady & Rosenberg Law Firm, P.L.C., Hampton, for appellant.

          Robert Malloy and Justin L. Sullivan of Malloy Law Firm, LLP, West Des Moines, for appellee.

          Heard by Vogel, C.J., Vaitheswaran, J., and Danilson, S.J. [*]

          VOGEL, CHIEF JUDGE.

         In 2002, Quality Egg, LLC (Quality Egg), entered into an oral contract with Hickman's Egg Ranch, Inc. (Hickman's) to sell eggs. In April 2008, Quality Egg received a check from Hickman's that it determined was "short pay." In March 2014, Quality Egg brought suit against Hickman's, asserting Hickman's was due and owing upon an open account. Hickman's responded by asserting various defenses. After a 2017 trial, the jury returned a verdict against Quality Egg's claim.[1] We find the admission of oral testimony by Hickman's did not violate the statute of frauds. However, we reverse and remand for a new trial based on the district court's failure to include jury instructions pertaining to Quality Egg's open-account claim.[2]

         I. Background Facts and Proceedings

         Quality Egg, [3] an Iowa egg producer, sold shell eggs to Hickman's. The two companies entered into an oral contract in 2002, and the price for the eggs adjusted frequently using a pre-agreed formula involving the national Urner Barry Market. The business relationship continued smoothly until April 2008, when Quality Egg received a check from Hickman's it determined to be far short of the amount due on the account. The check included "pallet adjustments" as a credit to the amount Hickman's owed Quality Egg, and the adjustments were in the amount of $579, 126.39. Despite this billing discrepancy, the parties continued to do business together until 2011. On March 31, 2014, Quality Egg filed a petition against Hickman's seeking to recover the amount due on the account. The petition asserted Hickman's "purchased eggs from [Quality Egg] upon open account" and Hickman's was "presently due and owing upon said account." Hickman's filed an answer (and a counterclaim) on June 2, asserting it "purchased some eggs from [Quality Egg] pursuant to [an] oral contract; however [Hickman's] denies that [Quality Egg's] petition accurately reflects the transaction between the parties."

         The first jury trial was held in May 2016, and judgment was entered in favor of Hickman's.[4] Quality Egg appealed to our court on an evidentiary issue, and we reversed and remanded for a new trial.[5] The second jury trial was held on October 3 to 6, 2017. The jury returned a verdict against Quality Egg's open-account claim, and Quality Egg appeals.

         II. Standard of Review

         "The district court's ruling on a jury instruction will not be disturbed absent an abuse of discretion. We will not find an abuse of discretion unless it was exercised on grounds or for reasons clearly untenable or to an extent clearly unreasonable." McIntire v. Muller, 522 N.W.2d 329, 332 (Iowa Ct. App. 1994) (citations omitted). In addition, "[w]e review a decision by the district court to admit oral evidence of a contract under an exception to the statute of frauds for corrections of errors at law." Kolkman v. Roth, 656 N.W.2d 148, 151 (Iowa 2003).

         III. Jury Instructions

         Quality Egg asserts the district court failed to instruct the jury on an open account, depriving the jury of the ability to decide the specific elements of its open-account claim. It claims such failure is reversible error because the only instructions given were as to a breach of contract-appropriate only for the totally separate counterclaim of Hickman's. Hickman's responds that instructing the jury on an open account was unnecessary, as the "factors for an open account and breach of contract [are] nearly identical."

Parties to lawsuits are entitled to have their legal theories submitted to a jury if they are supported by the pleadings and substantial evidence in the record. Iowa law requires a court to give a requested jury instruction if it correctly states the applicable law and is not embodied in other instructions.

Sonnek v. Warren, 522 N.W.2d 45, 47 (Iowa 1994) (internal citations omitted). "Parties are not, however, entitled to any particular instruction if the issue is adequately covered in other instructions." Hutchinson v. Broadlawns Med. Ctr., 459 N.W.2d 273, 275 (Iowa 1990). "Jury instructions are to be considered as a whole and, as long as the jury has not been misled, there is no reversible error." Wilco ...


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