from the Iowa District Court for Marion County, Martha L.
review from the Iowa Court of Appeals.
seeks further review of a decision affirming an adverse
summary judgment. DECISION OF COURT OF APPEALS
VACATED; DISTRICT COURT JUDGMENT REVERSED AND
J. Mallory and Allison M. Steuterman of Brick Gentry, P.C.,
West Des Moines, for appellant.
M. Davison of Heiny, McManigal, Duffy, Stambaugh &
Anderson, P.L.C., Mason City, for appellee.
case, we consider whether the district court correctly held
that a seller of auction services of certain machinery is
entitled to summary judgment on a claim brought by a buyer of
those services under the Iowa Door-to-Door Sales Act (DDSA),
Iowa Code chapter 555A (2017). In addition, we must consider
whether the district court erred in dismissing without
prejudice a declaratory action count of the petition
challenging, among other things, the underlying sales
contract because of an invalid execution by a third party and
because of fraud in the inducement.
the district court dismissed both claims, the buyer appealed.
We transferred the case to the court of appeals. The court of
appeals affirmed the district court.
granted further review. For the reasons expressed below, we
vacate the decision of the court of appeals. We reverse the
judgment of the district court and remand the case to the
district court for further proceedings consistent with this
Factual and Procedural Background.
this case involves an appeal of a district court order
granting a motion for summary judgment, we review the facts
in the light most favorable to the nonmoving party.
Crippen v. City of Cedar Rapids, 618 N.W.2d 562, 565
(Iowa 2000). The nonmoving party offered evidence that showed
that Todd Morris attended an agricultural trade show with his
wife, Lacey Morris. While at the trade show, they visited a
friend's booth. Steffes Group, Inc., which provides
services that include farm equipment auctions and appraisals,
had a booth next to the friend's booth.
Lacey was talking to her friend, Morris spoke with Duane
Norton, a Steffes Group representative. Morris owned some
equipment, including a tractor, which he claimed he used for
playing around his farm, hunting purposes, food plots, and
maintaining his house and property. Morris and Norton
discussed the possibility of auctioning some of Morris's
equipment. Norton told Morris there was an upcoming auction
suitable for Morris's equipment, but they would have to
act quickly to get his equipment into the auction. Morris
left his contact information with Norton.
thereafter, Norton called Morris to find out when he could
come to the Morris residence to view the equipment. Morris
explained that he would be out of town. Norton responded that
he only needed to see the equipment. Morris did not object to
Norton visiting his residence to view the equipment while he
was absent but informed Norton that any of the business
associated with the equipment should be with himself and not
his wife. Morris then gave Norton Lacey's cell phone
number. Norton and Lacey arranged a time for Norton to come
to the Morris residence.
Norton arrived at the residence, Lacey took Norton to the
garage to view the equipment. Norton jotted down some notes
about the equipment and associated identification numbers.
Afterwards, Norton and Lacey went into the residence and sat
in the kitchen, where Norton began filling out a document.
Norton listed on the document the various pieces of equipment
that Lacey had shown him and asked her to sign the document.
point while they were in the kitchen, Lacey and Norton each
spoke with Morris by telephone. According to Morris and
Lacey, Norton told each of them that the document was merely
a nonbinding "asset list" to get the equipment into
the auction. Norton also reiterated the necessity of moving
quickly before the auction. During his telephone conversation
with Norton, Morris told Norton there was a lien on one of
the pieces of equipment-a tractor-and he was unwilling to
part with the tractor for less than a certain amount. Since
Morris had been unable to get in touch with his banker, they
agreed to identify this amount later. Morris told Lacey that
she could sign the document in his name, and she did so.
fact, however, the document was a consignment contract. The
contract provided that Morris employed Steffes Group to sell
the identified equipment at auction and that the equipment
"may not be sold or withdrawn prior to the auction
except by mutual agreement." Under the contract, all
property was to be sold for cash to the highest bidder. The
contract does not state that Morris could cancel the contract
and Norton did not provide a notice of cancellation form.
Norton also did not tell Morris or Lacey that they could
cancel the contract. The equipment to be sold pursuant to the
contract included a tractor, a rototiller, a mower, a
fertilizer spreader, a planter, and various other equipment.
the next few weeks before the auction, Morris and Norton
communicated several times. At one point, Morris text
messaged Norton asking if he would be able to approve or deny
the sale price during the auction. Norton responded by text
message that they could protect the sale price by putting a
reserve on the tractor ahead of time. The two then spoke by
phone. Norton explained Steffes Group's reserve process
to Morris, informing him that Steffes Group would watch the
bidding and if the reserve was not going to be met then
Steffes Group would bid the reserve and return the tractor to
Morris. With that understanding, Morris asked Norton to put a
reserve on the tractor for $20, 000. Subsequently, on the day
before the auction, the parties again confirmed that the
reserve on the tractor was $20, 000.
auction, the tractor sold for $14, 500. Lacey attended the
auction. The tractor's sale price concerned her because
it was less than the reserve amount. She phoned Morris, who
was at a job site. Morris told her not to worry because
Norton had assured him that if the tractor was not going to
sell for at least $20, 000 it would be pulled from the
auction and returned to Morris.
phoned Norton numerous times later that day but was unable to
get in touch with him. The next day, Morris went to the
auction site to get his tractor. The tractor was gone. Morris
found a field hand at the site and, using the field
hand's phone, was able to get in touch with Norton.
Norton told Morris that he would "make this right"
and offered to reduce the commission from some of the other
items that sold. Morris refused as these amounts would be
significantly less than the difference between the
tractor's reserve and the sale price. Morris demanded the
return of the tractor, and Norton told him that he would not
District Court Proceedings.
filed a two-count petition in the Marion County District
Court. In count I, Morris claimed a violation of the DDSA.
Morris alleged that a Steffes Group sales representative
personally solicited the transaction at his personal
residence; that the sales representative did not furnish the
plaintiff with a notice of cancellation as required by Iowa
Code section 555A.3; that the sales representative did not
inform him in any manner of the right to cancel or perform
the other duties of a seller under Iowa Code section 554A.4;
that he had provided notice of cancellation of the
transaction on multiple occasions; and that he had demanded,
to no avail, the return of his property and any payments made
under the transaction. Morris alleged that a violation of the
DDSA is also a violation of the Iowa Consumer Frauds Act,
under Iowa Code chapter 714. Morris sought injunctive relief,
compensatory damages, interest, and attorney fees.
count II, Morris sought a declaratory judgment concerning the
parties' rights. In addition to the facts alleged under
count I, Morris alleged that he did not execute the written
agreement and that the written agreement was induced by
fraud. He further asserted that he sent a notice of
cancellation to the defendant but that the defendant refused
to cancel the transaction or take other action as a result of
the cancellation. Morris asserted that a controversy existed
between the parties regarding their rights and sought a
declaration that the alleged agreement was void, that he
provided a valid cancellation of the contract, and that he
rightly cancelled the transaction. Although styled as seeking
a declaratory judgment, Morris sought various other remedies
under count II, including the return of all property and a
judgment for compensatory damages, interest, costs, and
answer to count I, Steffes Group denied all of Morris's
allegations claiming that the transaction was subject to the
DDSA and its various cancellation and notice provisions.
Steffes Group specifically denied that its sales
representative personally solicited the transaction at
answer to count II, Steffes Group incorporated its denials
with respect to the DDSA. Steffes Group also denied
allegations that the execution of the written contract was