from the Iowa District Court for Polk County, Michael D.
appellant appeals the district court's grant of summary
judgment concluding the Iowa Uniform Residential Landlord and
Tenant Act does not apply to retirement facilities and
appellant had no other claims against the retirement facility
as a matter of law.
M. Craig and Emily A. Kolbe of Ahlers & Cooney, P.C., Des
Moines, for appellant.
William J. Miller of Dorsey & Whitney, LLP, Des Moines,
behalf of her mother, Cheryl Albaugh challenges the district
court's grant of summary judgment in favor of a
"senior adult congregate living facility" as
defined in Iowa Code chapter 523D. Iowa Code §
523D.1(11) (2016). She sued the facility after it would not
return her mother's entrance fee or supplemental amount
when her mother had to vacate the facility for health
reasons. Albaugh argued the agreement between her mother and
the facility violated Iowa Code chapter 562A, the Iowa
Uniform Residential Landlord and Tenant Act (IURLTA). She
also presented several other claims, including consumer
fraud, breach of fiduciary duty, breach of the implied
covenant of good faith and fair dealing, and
unconscionability. The district court granted the
facility's motion for summary judgment, concluding the
IURLTA did not apply to the facility and the facility was
entitled to judgment as a matter of law on all other claims.
We affirm the district court judgment on appeal for the
reasons discussed below.
Background Facts and Proceedings.
Albaugh holds power of attorney for her mother, Shirley
Voumard, a former resident of The Reserve on Walnut Creek
(Reserve) from October 2007 to September 2014. The Reserve is
a member-owned, nonprofit senior adult congregate living
facility in Urbandale, Iowa, that is governed by a board of
directors and "offers residents the opportunity to enjoy
retirement without the hassle of home ownership." It
provides housing and supportive services to its residents
with periodic charges in consideration of an entrance fee.
These supportive services include various home healthcare
services, maintenance, communal activities, security,
transportation, and dining options.
become a member of the Reserve, "an individual or couple
must be 60 years old, of sufficiently good health to live an
independent life, and must be able to meet certain minimum
financial requirements." Voumard entered into a contract
with the Reserve called an "application agreement"
(agreement) on September 27, 2007, to obtain a membership
interest in the Reserve and the right to occupy a two-bedroom
apartment there. Voumard agreed to pay certain fees to cover
the Reserve's operation expenses. She agreed to pay a
$64, 975 entrance fee and a $63, 557 supplemental amount upon
signing the agreement. She also agreed to pay a varying monthly
fee that was originally set at $1078 "in advance of the
first day of each succeeding month until such Resident's
Residential Membership is transferred as detailed in these
Covenants of Occupancy." In doing so, Voumard agreed to
pay the monthly charges "until the earlier of (i) the
date [her] Residential Membership is transferred as provided
in Article 7, or (ii) the date [her] Residential Membership
is terminated as provided in Article 12."
This agreement contained the following bold-faced language:
i. Upon disbursement of such Entrance Fee and such
Supplemental Amount to the uses and purposes of the
Corporation the Corporation will have no further obligation
to refund or return such Entrance Fee or such Supplemental
Amount to Applicant.
ii. Applicant's ability to recover such Entrance Fee and
such Supplemental Amount will depend entirely on the
Applicant's ability to assign or transfer his Membership
in the Corporation to another person or persons.
iii. The Monthly Charge is subject to fluctuation.
iv. Upon the transfer of Applicant's Membership in the
Corporation to another person or persons there is no
guarantee the Applicant will recover the entire Entrance Fee,
the entire Supplemental Amount, or such other funds as may
have accrued during Applicant's residency within the
Development pursuant to Article 7 of the Covenants of
v. Should Applicant default under the terms of the Covenants
of Occupancy, which default is not cured in a manner deemed
satisfactory by the Corporation, Applicant's Residential
Membership shall be terminated and all of Applicant's
right, title and interest in and to such Entrance Fee, such
Supplemental Amount, and such other funds as may have accrued
during Applicant's residency within the Development
pursuant to Article 7 of the Covenants of Occupancy shall be
forfeited by Applicant and become the sole and separate
property of the Corporation, and the Corporation shall have
the right and authority to transfer Applicant's Apartment
to an assignee or transferee. Upon such transfer, the
Corporation, in its sole discretion, shall have the right to
deduct all Monthly Charges by Applicant and other expenses
due and payable upon transfer.
above the signature line, the agreement stated, "This
Agreement will supersede any prior understandings and
agreements and constitutes the entire agreement between us,
and no oral representations or statements shall be considered
a part hereof." Voumard elected Albaugh as her personal
representative on the agreement. Thus, pursuant to the
agreement, Albaugh was appointed to receive copies of the
agreement, "the [Reserve's] Articles of
Incorporation, Bylaws, Covenants of Occupancy and all other
notices, disclosures, or forms required to be delivered to
[Voumard] under Chapter 523D of the Iowa Code."
August 2014, the Reserve began contacting Albaugh about
Voumard's inability to care for herself. The Reserve
contacted Albaugh multiple times, and Voumard was
subsequently diagnosed with dementia. After Voumard's
doctor determined she could no longer live independently,
Albaugh notified the Reserve that Voumard would be vacating
her unit as of September 13, in order to move into an
assisted living facility.
has not sold or transferred Voumard's unit either to a
third party or to the Reserve. In accordance with the
agreement, the Reserve has continued to bill Voumard pursuant
to the agreement after she moved out of the Reserve. Albaugh
has requested the Reserve refund Voumard's entrance fee
and supplemental amount. The Reserve continues to deny this
request. On February 5, 2015, the Reserve sent Albaugh a
notice of default informing her that Voumard's rights
under the agreement would be terminated and her entrance fee
and supplemental amount would be deemed forfeited if
Voumard's unpaid charges were not paid within thirty
days. Voumard's unpaid charges totaled $5132 at the time
the Reserve sent the notice. Albaugh disputed these charges
and requested a refund of Voumard's entrance fee and
supplemental amount as a rental deposit pursuant to the
March, the Reserve's elected board of directors announced
a change to the Reserve's financial structure due to the
increase in "Type A" units the Reserve owned
through default or donation. Type A units came with a higher
monthly fee than Voumard's "Type B" unit. Due
to the Reserve's increase in Type A units, the Reserve
allowed these units to be transferred for an entrance fee of
$5000. The Reserve did not change the monthly charges for
these units, and the board of directors declared,
"Please be assured that there will be no
'steering' of prospects away from member-owned units
up for transfer, and we'll continue working hard on
moving all available units."
Reserve subsequently implemented a leasing program in July to
allow members to lease their units to qualified individuals
and to allow the Reserve to lease Reserve-owned units
"at market-competitive lease rates." According to
the Reserve's marketing director, this program has
increased demand and led to a waiting list for units at the
Reserve. Though Albaugh communicated with the Reserve's
marketing director about marketing and transferring
Voumard's membership interest, the record is unclear
concerning the extent of these marketing efforts. Since
Voumard vacated her unit at the Reserve, Albaugh has
repeatedly requested a full refund of Voumard's entrance
fee and supplemental amount. The Reserve continues to deny
these requests, and it declared Voumard in default on March
August 24, Albaugh filed a lawsuit in district court against
the Reserve in which she presented seven claims. First, she
argued the agreement between Voumard and the Reserve violated
the IURLTA. Second, Albaugh claimed the Reserve violated Iowa
Code chapter 523D, governing retirement facilities. Third,
she alleged the Reserve engaged in consumer fraud in
violation of Iowa Code chapter 714H. Fourth, Albaugh
maintained the Reserve breached its fiduciary duties to
Voumard. Fifth, Albaugh maintained the Reserve breached the
implied covenant of good faith and fair dealing. Sixth, she
argued Voumard should no longer be held to the terms of her
agreement with the Reserve due to impossibility of
performance or frustration of purpose. Finally, Albaugh
challenged the enforceability of the agreement, claiming it
was unconscionable. The Reserve brought in the Essex
Corporation as a third-party defendant in its capacity as the
former manager of the Reserve to seek indemnity and
filed a motion for partial summary judgment on December 11,
2017, requesting the district court enter judgment that the
agreement between Voumard and the Reserve is subject to the
IURLTA and relief consistent with that judgment. The Reserve
filed a motion for summary judgment on December 20, arguing
the agreement is not subject to the IURLTA and challenging
Albaugh's other claims as a matter of law. The Essex
Corporation filed a motion for summary judgment in which it
argued it had no liability to the Reserve to the extent the
Reserve had no liability to Albaugh and, alternatively, the
undisputed facts fail to establish a basis for a claim of
contribution or indemnity as a matter of law.
26, 2018, the district court denied Albaugh's motion for
partial summary judgment and granted the Reserve's motion
for summary judgment. In doing so, the district court
concluded that "the legislature did not otherwise intend
for [the IURLTA] to be applicable to an arrangement governed
by chapter 523D" and Albaugh's other claims failed
to generate any genuine issue of material fact. The district
court granted Essex Corporation's motion for summary
judgment, noting there was no "need to consider the
claims against the [Essex Corporation] . . . in the absence
of a direct claim by [Albaugh] against the [Reserve]."
Albaugh filed a timely notice of appeal on June 14, and we
retained the appeal.
Standard of Review.
review of a district court ruling on a motion for summary
judgment is for correction of errors at law. Jahnke v.
Deere & Co., 912 N.W.2d 136, 141 (Iowa 2018).
"Summary judgment is proper when the moving party has
shown 'there is no genuine issue as to any material fact
and the moving party is entitled to judgment as a matter of
law.'" Id. (quoting Homan v.
Branstad, 887 N.W.2d 153, 163 (Iowa 2016)). We review
the district court ruling on any statutory interpretation
issues presented in a motion for summary judgment for
correction of errors at law. Id.
presents several claims on appeal. First, she argues the
IURLTA applies to the Reserve and requests relief based on
the Reserve's alleged violations of the IURLTA. Second,
Albaugh claims the Reserve committed consumer fraud. Third,
she maintains the Reserve breached its fiduciary duty to
Voumard. Fourth, Albaugh proclaims the Reserve also breached
the implied covenant of good faith and fair dealing. Finally,
she asserts the Reserve's agreement with Voumard was
The Applicability of the IURLTA to Retirement
contends the district court erred in granting the
Reserve's motion for summary judgment based on its
conclusion that the IURLTA is inapplicable to the Reserve and
other retirement facilities governed by Iowa Code chapter
Code chapter 523D is entitled "Retirement
Facilities" and is applicable to a provider who executes
a contract for housing and one or more "supportive
services" in a facility that "is or will be located
in this state" and where the contract "requires or
permits the payment of an entrance fee." Iowa Code
§§ 523D.1, .2. Some examples of supportive services
include activity services, housekeeping, dining options,
emergency nursing care, and transportation. Id.
§ 523D.1(12). As a provider that contracts with
residents to supply this sort of housing and living services
in an Iowa facility, the Reserve is considered a retirement
facility and thus governed by chapter 523D.
other hand, "[t]he IURLTA generally defines the legal
rights and obligations of a landlord and tenant" in a
rental agreement. Lewis v. Jaeger, 818 N.W.2d 165,
178 (Iowa 2012). A" 'rental agreement' means an
agreement . . . embodying the terms and conditions concerning
the use and occupancy of a dwelling unit and premises."
Iowa Code § 562A.6(11).
crux of Albaugh's claim against the Reserve concerning
the IURLTA is that Voumard's $64, 975 entrance fee and
$63, 557 supplemental amount should be refunded to Voumard
because they are improper rental deposits under the IURLTA.
This brings us to the fundamental issue: whether the fees
permitted by chapter 523D are rental deposits subject to the
reconcile Chapter 523D and the IURLTA by considering the
rules of statutory construction. See Citizens'
Aide/Ombudsman v. Miller, 543 N.W.2d 899');">543 N.W.2d 899, 902 (Iowa
1996) ("The controversy arises only when [the statutes]
are jointly brought to bear on the facts. . . . We therefore
proceed to a consideration of the rules of statutory
construction."). Under these rules," '[t]he
primary purpose of statutory construction is to determine
legislative intent,' gleaned from the words used by the
legislature." Simon Seeding & Sod., Inc. v.
Dubuque Human Rights Comm'n, 895 N.W.2d 446, 461
(Iowa 2017) (quoting State v. McCoy, 618 N.W.2d 324,
325 (Iowa 2000) (en banc)). To ascertain legislative intent,
we examine "the language used, the purpose of the
statute, the policies and remedies implicated, and the
consequences resulting from different interpretations."
Des Moines Flying Serv., Inc. v. Aerial Servs.,
Inc., 880 N.W.2d 212, 220 (Iowa 2016) (" '[A]
statute should not be interpreted to read out what is in a
statute as a matter of clear English' and should not
render terms superfluous or meaningless." (quoting 1A
Norman J. Singer & Shambie Singer, Statutes and
Statutory Construction § 21:1, at 163 (7th ed.
2009))). Further, legislative intent is also derived from the
statute's subject matter and object to be accomplished.
See Homan, 887 N.W.2d at 166. In doing so,
"[w]e assess the entire statute and its enactment to
'give the statute its proper meaning in
context.'" Aerial Servs. Inc., 880 N.W.2d
at 220 (quoting Sanon v. City of Pella, 865 N.W.2d
506, 511 (Iowa 2015)). "We will not consider what the
legislature 'should or might have said' when it
construed a statute." Homan, 887 N.W.2d at 153
(quoting Iowa R. App. P. 6.904(3)(m) ("In
construing statutes, the court searches for the legislative
intent as shown by what the legislature said, rather than
what it should or might have said.")).
turn to the relevant statutory provisions to determine
whether the fees regulated under chapter 523D are subject to
the IURLTA. Iowa Code section 523D.1 provides, in relevant
4. "Entrance Fee" means an initial or
deferred transfer to a provider of a sum of money or other
property made or promised to be made as full or partial
consideration for acceptance of a specified individual in a
facility if the amount exceeds either of the following:
a. Five thousand dollars.
b. The sum of the regular periodic charges for six
months of residency. Iowa Code §
523D.1(4)(a)-(b). The provision of the
IURLTA on which Albaugh relies provides,
12. "Rental Deposit" means a deposit of
money to secure performance of a residential rental
agreement, other than a deposit which is exclusively in
advance payment of rent.
Iowa Code § 562A.6(12). Chapter 562A further defines a
rental deposit and states,
1. A landlord shall not demand or receive as a security
deposit an amount or value in excess of two months' rent.
3. a. A landlord shall, within thirty days from the
date of termination of the tenancy . . . return the rental
deposit to the tenant or furnish to the tenant a written
statement showing the specific reason for withholding of the
rental deposit or any portion thereof. . . . The landlord may
withhold from the rental deposit only such amounts as are
reasonably necessary for the following reasons:
(1) To remedy a tenant's default in the payment of rent
or of other funds due to the landlord pursuant to the rental
(2) To restore the dwelling unit to its condition at the
commencement of the tenancy, ordinary wear and tear excepted.
(3) To recover expenses incurred in acquiring possession of
the premises from a tenant who does not act in good faith in
failing to ...