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Doyle v. Otto

Court of Appeals of Iowa

January 9, 2020

GERI DOYLE and GERI DOYLE, INC., Plaintiffs-Appellants,
v.
MARK OTTO and OTTO LAW OFFICE, PLLC, Defendants-Appellees.

          Appeal from the Iowa District Court for Jasper County, Martha L. Mertz, Judge.

         The plaintiff appeals the grant of summary judgment to an attorney on her malpractice claims. AFFIRMED.

          Billy J. Mallory of Brick Gentry, P.C., West Des Moines, for appellants.

          Thomas M. Boes and Janice M. Thomas of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellees.

          Heard by Doyle, P.J., and Tabor and Schumacher, JJ.

          TABOR, JUDGE

         Real estate brokerage owner Geri Doyle split from her business partner, Caren DeVoe. As part of DeVoe's buyout, Doyle signed a covenant prohibiting her from competing in the real estate business in Jasper County for ten years. When Doyle joined a different real estate company and began advertising properties in Jasper County, DeVoe reminded her of the noncompete covenant. Doyle responded by seeking a declaratory judgment that the noncompete clause was unenforceable. Doyle also pursued malpractice claims against Mark Otto, the attorney who drafted the covenant and alleged other tort claims against the attorney and DeVoe.[1] The district court granted Otto's motion for summary judgment. We uphold the grant of summary judgment but on a different ground than embraced by the district court.

         I. Facts and Prior Proceedings

         In 2003, Doyle and DeVoe were real estate agents and broker associates working for a company in Newton. After several years, they decided to form their business. They opened Doyle & DeVoe, LLC in 2005 and Doyle & DeVoe Properties, LLC in 2010. In 2015, Doyle sold her interest in the companies to DeVoe's husband, Philip Clevenger. Together, the parties hired attorney Mark Otto to draft the purchase agreement. Otto previously had represented both parties in personal and business matters.

         The parties disagree about how contract negotiations unfolded. Otto asserts Doyle negotiated the terms independently with Clevenger and Devoe and Otto merely memorialized those terms for the parties to sign. Doyle recalls she engaged in some discussions with Clevenger and DeVoe, and further talks ensued after they hired Otto. Doyle testified in her deposition she agreed to have Otto act as their attorney. She did not ask Otto to represent her alone nor did she compensate him. But she assumed he was "going to watch over my best interest." She also testified the parties arrived at all the important terms by talking in person. Otto was not present during those discussions. She said Clevenger "gave [Otto] the terms" after she and Clevenger negotiated them.

         Otto prepared a mutual letter of intent reducing those terms to a formal writing. In an April 20 email, he circulated the draft along with a waiver-of-conflict form. Otto asked the parties to inform him of any changes. The first draft included a provision that Doyle would "covenant not to compete in the business of Doyle & DeVoe LLC for a period of ten (10) years in the Iowa Counties of Jasper, Poweshiek, Marion, Marshall," and some parts of Polk County. This provision appeared under the "Consideration" heading.

         After receiving the draft, Doyle called Clevenger, and they agreed to limit the regional restriction to Jasper County. The parties communicated this and other changes to Otto. On April 21, Otto circulated an updated draft with the new language setting out "a covenant not to compete in the business of Doyle & DeVoe LLC for a period of ten (10) years in Jasper County."

         The next day, Doyle spoke to Otto, expressing her dissatisfaction with the length of the noncompete clause. She testified, "[H]e says, most likely if this went to court ever it would not hold up maybe two to three years." She explained the parties agreed to ten years because Clevenger and DeVoe insisted on that term as a condition of the sale.

         Otto testified he told both parties "ten years was on the outside of what is normal and what a court might allow." He thought, depending on the circumstances, "a court might reform a ten-year covenant" because "most covenants are two to three years" and "[d]epending on the circumstances, three to five may be appropriate" but a decade "was on the outside of what I've seen or what I've perceived as reasonable."

         Despite these discussions, the parties made no further edits to the noncompete clause. On April 23, Otto sent the parties a revised letter of intent. Doyle read the draft and suggested no further changes. The ...


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