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Heal v. Anderson

Court of Appeals of Iowa

April 17, 2019

JAMES HEAL, Plaintiff-Appellant,
v.
BRIAN ANDERSON, Defendant-Appellee.

          Appeal from the Iowa District Court for Iowa County, Ian K. Thornhill, Judge.

         James Heal appeals the entry of a civil money judgment.

          John W. Pilkington of Nidey Erdahl Fisher Pilkington & Meier, PLC, Marengo, for appellant.

          Jennifer L. Zahradnik of Kollmorgen, Schlue & Zahradnik, P.C., Belle Plaine, for appellee.

          Considered by Tabor, P.J., and Mullins and Bower, JJ.

          MULLINS, JUDGE.

         In September 2011, following a business relationship between the parties gone bad, James Heal locked Brian Anderson out of the business. Heal v. Anderson, No. 16-0621, 2017 WL 1399861, at *1-2 (Iowa Ct. App. Apr. 19, 2017). Heal filed a petition at law against Anderson on September 22, alleging breach of an oral contract. Id. at *2. The next day, September 23, a temporary injunction was granted preventing Anderson from returning to the property associated with the business, a salvage yard, where many of Anderson's tools and inventory remained. Id. Anderson filed a counterclaim alleging breach of contract and conversion of his property; during trial, he raised additional claims of unjust enrichment and bailment, which the trial court found were tried by consent. Id.; see Iowa R. Civ. P. 1.457. "In December 2014, while the temporary injunction was in place, Heal allowed his son, Aaron Heal, to enter the property and operate the salvage yard, including access and use to all of the tools, equipment, and inventory which Anderson left on the property when locked out." Heal, 2017 WL 1399861, at *2.

         Following a September 2015 bench trial, the district court concluded Heal breached the parties' oral agreement, but the court did not award Anderson any damages in relation to that claim. Id. at *3. The court also found that Heal converted Anderson's property and awarded Anderson the full value of the converted property-$17, 675.00 for vehicles, $40, 035.23 for equipment, and $7280.00 in cash. Id. Heal appealed.

         On appeal, this court affirmed in part, reversed in part, and remanded the matter to the district court. We concluded because "Heal came into lawful possession of Anderson's property pursuant to the court-ordered injunction," a gratuitous bailment was established "and as such, Heal is only liable for the damage to and loss of Anderson's property if he was grossly negligent or acted in bad faith." Id. Because the evidence showed "some of Anderson's property was still in the buildings and [Heal] would return those items," this court concluded such "items have not been converted," and the appropriate remedy is for those items to be returned to Anderson. Id. at *4. Because no record was made concerning which items could be returned, we remanded the matter to the district court for further proceedings to "determine which items were disposed of by Heal after he obtained the injunction," noting such disposed of items have been converted along with the $7280.00 in cash and requiring Heal to pay damages for those items. Id. We also ordered, "if there are items that are returned to Anderson that were damaged while in Heal's care as a result of Heal's bad faith or grossly negligent actions, Heal is responsible for the reduced value." Id. We also concluded the district court's prior determination of the values of Anderson's property was supported by substantial evidence. Id. That list of valuations for the tools and equipment[1] is as follows:

Item No.

Description

Quantity

Value

1
Mac Tools
Various
$9144.26
2
Battery Charger
1
$300.00
3
Oxy-Act Torch
1
$900.00
4
Oxy-Act Tank
1
$400.00
5
Oxy-Act Cart
1
$100.00
6
LP Salamander
1
$80.00
7
Race Motor-355
1
$4000.00
8
Race Motor-360
1
$2000.00

9

Cylinder Heads/Race Motors

6

$3600.00

10

Aluminum Intake Manifolds

5

$750.00

11

Craftsman Tool Box

1

$400.00

12
Tie Down Straps
4
$300.00
13
Chain in Loader/HD Binder
1
$75.00
14
Surveillance System
1
$308.87
15
Sony TV
1
$50.00
16
Printers
2
$300.00
17
MAC AC Recovery Machine
1
$1200.00
18
305 V8 Motor ('34 International)
1
$2000.00
19
Transmission ('34 International)
1
$800.00
20
355 Small Block Motor
2
$4000.00
21
'34 International Parts
Various
$2500.00
22
Wheels and Tires
25
$3125.00
23
Router and Power
1
$327.10
24
Carburetor
1
$700.00
25
Signs
2
$200.00
26
Stereo Equipment
6
$450.00
27
MAC Mig Welder
1
$1800.00
28
MAC Mig Welder Tank
1
$125.00

29

Lincoln Welder

1

$100.00

Id. at *2.

         In September 2017, Aaron, Anderson, and counsel visited the property to ascertain the presence and condition of the foregoing items. An evidentiary hearing was held in October. The court entered its remand ruling in February 2018. First, as to the tools and equipment, the court concluded items 6, 12, 13, 18, 19, 21, 29, and components of items 1 and 3 were still on the property and in "substantially the same condition as . . . when the bailment was created."[2] The court ordered these items to be returned to Anderson and for a corresponding reduction in the judgment against Heal in the amount of $6105.00. Next, the court concluded item 2 was still on the property and could be returned to Anderson but, because of Heal's "gross negligence in storing and caring for this item," its value would be reduced to $200.00. The court deducted this amount from the original judgment as well. The court found items 7 through 10, 17, 20, and 22 were still located on the property but, due to Heal's gross negligence in storing and caring for the items, they were valueless and, therefore, converted. The court found the remaining tools and equipment were no longer on the property, could not be returned to Anderson, and were thus converted. Finally, the court found all of the salvage vehicles remained on the property and could be returned to Anderson. As such, the court reduced the original judgment by $23, 980.00[3] and entered judgment against Heal in the amount of $41, 010.23. Heal appeals.

         On appeal, Heal challenges the district court's conclusion that he was grossly negligent in storing and caring for items 7 through 10, 17, 20, and 22. This is a challenge to the sufficiency of the evidence underlying the court's findings. Our review of sufficiency-of-the-evidence challenges is for legal error. See Estate of Hagedorn ex rel. Hagedorn v. Peterson, 690 N.W.2d 84, 87 (Iowa 2004). "In a law action, findings of fact are binding on us if supported by substantial evidence." Blackford v. Prairie Meadows Racetrack & Casino, Inc., 778 N.W.2d 184, 187 (Iowa 2010). "We view the evidence 'in the light most favorable to the trial ...


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