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Geiger v. Peoples Trust And Savings Bank

Court of Appeals of Iowa

September 25, 2019

JACQUELINE GEIGER and BRUCE TRACY, Plaintiffs-Appellants,
v.
PEOPLES TRUST AND SAVINGS BANK, CHRIS GOERDT and COUNTRY BANCORPORATION, Defendants-Appellees.

          Appeal from the Iowa District Court for Washington County, Joel D. Yates, Judge.

         Plaintiffs appeal from the district court's grant of defendants' motions for summary judgment on their claims against a bank and bank president for fraudulent misrepresentation and interference with contract.

          Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellants.

          Matthew Preston of Brady, Preston & Gronlund PC, Cedar Rapids, for appellees Peoples Trust and Savings Bank and Country Bancorporation.

          Raymond R. Rinkol Jr. of Bradley & Riley PC, Cedar Rapids, for appellee Chris Goerdt.

          Heard by Doyle, P.J., Blane, S.J. [*] and Lloyd, S.J.

          BLANE, SENIOR JUDGE.

         Plaintiffs brought an action for fraudulent misrepresentation and interference with contract when a bank allegedly breached an agreement to lend them money. The plaintiffs claimed this damaged their limousine business and a yet-to-be-developed wedding venue. The district court granted the bank, its holding company, and the bank's former president's motions for summary judgment because the plaintiffs' claims were barred by the statutes of frauds found in Iowa Code sections 535.17 and 622.32 (2017) and because it concluded the plaintiffs could not prove damages. Plaintiffs appeal contending the district court misapplied these statutes or an unsigned document authored by the bank president takes their claims outside the statutes of frauds.

         We conclude that plaintiffs' claims were a greater stretch than one of their limousines and that the district court correctly granted defendants summary judgment.

         I. BACKGROUND FACTS AND PROCEEDINGS

         The plaintiffs, Jacqueline Geiger and Bruce Tracy, allege Peoples Trust and Savings Bank (Peoples Bank) and its then-president, Chris Goerdt, made either a written or oral agreement to lend them money to develop property in Illinois into a wedding venue and event center, to be named Prairie Rose Event Center. Peoples Bank has its headquarters in Washington County, Iowa.

         Tracy once operated a long-held family farm in Illinois and currently operates a limousine business, Classic Thunder Limousine, in Riverside, Iowa. Tracy has "unresolved credit issues" that prevent him from obtaining a loan, including tax liens, bankruptcy, and repossessions. Tracy had not filed personal or business income tax returns for seventeen years.

         Tracy had sold his Illinois farm to his friend and investor, William Reichow. Reichow, Tracy, and Geiger agreed that Geiger should take out a loan to purchase the farm from Reichow, which Geiger and Tracy could then, with improvements, operate as the events center. Tracy was to run the financial end of the business. Geiger would hold the title in the farm and be named in all business documents. She would also run the operations side of the business. Meanwhile, Geiger purchased Classic Thunder, which Tracy continued to operate.

         Goerdt, president of Peoples Bank, learned of the planned event center in 2014. He became familiar with Geiger, Tracy, and Reichow. Tracy testified that in August 2015, Goerdt called him and Geiger to his office at the bank and presented them with a document labeled, "Easy & Simple Solution" (ESS). The document, handwritten on lined notebook paper, appears to set out a plan of action for refinancing the farm and Classic Thunder. Tracy testified Goerdt induced them to take out the loans for the farm land and Classic Thunder by saying they were "recommend[ed] from the FDIC" (Federal Deposit Insurance Corporation) and "already ha[d] the concurrence . . . [of] the bank board." Later on, in interrogatories and depositions, Geiger and Tracy reported they understood the document and their conversation with Goerdt as an agreement for Peoples Bank to lend them money to develop Prairie Rose Events Center.

         Geiger and Tracy executed two promissory notes with Peoples Bank. One note for $240, 000 was against the debt in Classic Thunder and named Tracy as the borrower, even though he no longer had an interest in the business. With a second note of $252, 000, Geiger bought the farm from Reichow. Geiger used the farm as collateral for the second note. Tracy was no longer owner of either the limousine business or the farm.[1]

         In December 2015, Goerdt resigned his position at the bank. In his resignation letter, he pointed to some organizational and management complaints with the bank's holding company, Country Bancorporation. In July 2016, Peoples Bank sent Tracy an acceleration notice telling him he was in default on the loans and demanding full payment. When it also became clear to Geiger and Tracy they were not going to receive a loan to develop the farm into the Prairie Rose Event Center, they filed a petition at law alleging fraudulent misrepresentation and interference with existing and prospective contracts and seeking a temporary injunction to prohibit Peoples Bank from initiating any proceedings against them in Illinois on the defaulted notes.

         Geiger and Tracy specifically claimed the ESS document and the conversation they had with Goerdt constitute a written and oral agreement for the bank to lend them enough money to fund the development of Prairie Rose. They joined Country Bancorporation as a defendant based on negligence in hiring, supervising, and retaining Goerdt at Peoples Bank. As damages, Geiger and Tracy alleged an "offset or judgment for any amount owed to Peoples" from the defaulted loans, lost profits from the unfinished Prairie Rose project, and lost profits from the limousine business.

         The defendants filed for summary judgment, asserting several affirmative defenses. Following a hearing, the trial court granted Goerdt and Peoples Bank's motions for summary judgment, which the court found rendered the claims against Country Bancorporation moot. Although Geiger and Tracy sought enlargement of the findings, the district court denied their motion. Geiger and Tracy appeal.

         II. SCOPE AND ...


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