from the Iowa District Court for Linn County, Mitchell E.
and Jennifer Skogman appeal the district court's default
judgment order entered in their favor.
J. Skogman of Elderkin & Pirnie, P.L.C., Cedar Rapids,
Emerson and Paula Emerson, Cedar Rapids, pro se appellees.
Considered by Potterfield, P.J., and May and Greer, JJ.
POTTERFIELD, PRESIDING JUDGE.
Erick and Jennifer Skogman appeal the district court's
default judgment order entered in their favor against
defendants Rick and Paula Emerson. The Skogmans argue the
district court erred by (1) dismissing Paula as a defendant
for all but the Skogmans' holdover tenant claim; (2)
holding the Skogmans were not entitled to damages for some of
their construction costs for renovating; and (3) refusing to
award punitive damages to the Skogmans.
Background Facts and Proceedings
appeal arises out of a real estate transaction between
siblings Erick and Jennifer Skogman and Rick Emerson. The
Skogmans and Rick entered into a contract under which the
Skogmans agreed to sell a home to Rick for $115, 000 on or
around October 16, 2013. The property was sold "as
is." It had been built in the 1920s, had its original
electric wiring and plumbing, and would require
"significant materials and labor to update." Part
of that labor was to be supplied by Rick, who agreed to
"replace windows and roof by June 1, 2014" in lieu
of a down payment. Monthly payments for the home were set at
$1000 plus 1/12 of annual real estate taxes, special
assessments, and annual insurance premiums, starting on
December 1, 2013. The contract increased the monthly payment
to $1200 starting December 1, 2016.
Rick fulfilled the terms of the contract. He replaced the
windows, consistently made the monthly payments, and told the
Skogmans he had replaced the roof, as agreed to. But Rick
eventually began to fall behind on the payments, and in April
2017, the Skogmans filed a notice of foreclosure. Pursuant to
the notice and Iowa Code section 656.4 (2017), Rick had
thirty days to either make the owed payments or forfeit the
property, the payments he had made, and any improvements he
had made to the property. He did not make the payments or
vacate by the deadline. He and his wife, Paula, refused to
vacate the property, and, on May 15, the Skogmans filed an
affidavit in support of forfeiture. The next day, the
Skogmans filed a notice to quit, and under the contract Rick
and Paula became holdover tenants as of May 16, 2017.
Skogmans regained the property on June 13, 2017, and found it
would need significant repairs. The back half of the roof had
never been completed, despite earlier affirmative statements
from Rick that it had. The property was flea-infested, and
trash had been strewn throughout the building. The second
floor had been completely gutted, and some of the larger
fixtures- such as the refrigerator and a vanity-were missing.
The electric wiring was exposed throughout the second floor.
Part of the kitchen floor had also been removed.
Skogmans determined they would take a significant financial
hit if they sold the property as it was. They determined the
entire building would need to be renovated to attract a
buyer. In the end, they spent $29, 488 renovating the
property. It is undisputed that the Skogmans went to
significant lengths to minimize the cost of renovating the
building. They called in favors with business associates to
get services performed cheaply, bargain hunted supplies and
materials, and performed or supervised some of the
renovations themselves. After completely restoring the second
floor and making significant renovations to the rest of the
building, they sold the home for $130, 000 in December 2017.
Skogmans initiated this suit on July 13, 2017. The complaint
alleged five causes of action. Count I claims Rick and Paula
were holdover tenants under Iowa Code section 562.2 between
May 16 and June 13, allowing the Skogmans to double the rent
for that period pursuant to statute; count II claims Rick and
Paula intentionally damaged the home; count III claims Rick
fraudulently misrepresented that he had installed the roof;
count IV claims Rick and Paula intentionally inflicted
emotional distress on the Skogmans by leaving a "used
marital aid" for them to find in the house and for
threatening statements Rick made to the Skogmans concerning
the eviction; and count V claims Rick and Paula abused
process by threatening to file criminal charges against the
and Paula were served the petition on July 13 but did not
file an answer. On September 6, the Skogmans sent the
Emersons a notice of intent to file for default judgment. The
Emersons did not respond until their prospective counsel
filed an appearance with the district court on September 15,
requesting an additional twenty days to address the case and
file an answer. The district ...