IN THE SUPREME COURT OF IOWA NO IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR JEFFERSON COUNTY

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1 IN THE SUPREME COURT OF IOWA NO IN THE DISTRICT COURT OF THE STATE OF IOWA IN AND FOR JEFFERSON COUNTY ELECTRONICALLY FILED MAR 09, 2018 CLERK OF SUPREME COURT JEFFERY ANDERSON, Plaintiff-Appellant, vs. ANDERSON TOOLING, INC., DEAN E. ANDERSON, and CAROL A. ANDERSON, Defendants-Appellees. ANDERSON TOOLING, INC., Plaintiff-Appellee, vs. LORI J. ANDERSON and FABRICATION AND CONSTRUCTION SERVICES, INC., Defendants-Appellants. Case No. LALA No. LALA Consolidated with LALA APPEAL FROM THE IOWA DISTRICT COURT IN AND FOR JEFFERSON COUNTY THE HONORABLE MYRON L. GOOKIN APPELLANTS RESISTANCE TO APPLICATION FOR FURTHER REVIEW Steven Gardner Denefe, Gardner & Zingg, P.C. 104 S. Court St., P.O. Box 493 Ottumwa, Iowa Telephone: (641) Facsimile: (641) ATTORNEY FOR PLAINTIFFS 1

2 QUESTION PRESENTED FOR REVIEW I. WHETHER THE IOWA COURT APPEALS CORRECTLY APPLIED THE LAW OF CONSPIRACY IN REVERSING THE JUDGMENTS ENTERED AGAINST LORI AND FABCON. II. REQUEST FOR REVIEW OF ALL ISSUES RAISED ON APPEAL IF FURTHER REVIEW IS GRANTED 2

3 TABLE OF CONTENTS Cover Page... 1 Question Presented for Review... 2 Table of Contents... 3 Table of Authorities... 4 Statement Supporting Resistance to Further Review... 5 Statement of the Case... 6 State of the Facts Argument Conclusion Certificate of Compliance

4 TABLE OF AUTHORITIES Harsha v. State Sav. Bank, 346 N.W.2d 791 (Iowa 1984) Honeywell Inc., 347 N.W.2d 171 (Iowa 1984) Nesler v. Fisher and Co. Inc., 452 N.W.2d 191 (Iowa 1990) Page Cnty Appliance Center v. Honeywell Inc., 347 N.W.2d 171 (Iowa 1984) Rules Iowa R. App. P (1)(b) Iowa R. App. P (b)... 13, 16 Iowa R. App. P (1)(b)(1) and (2)

5 STATEMENT SUPPORTING RESISTANCE TO FURTHER REVIEW The Iowa Supreme Court should deny further review in this matter. First, the Court of Appeals correctly applied Iowa law. Second, the case does not present an issue of broad public importance that should ultimately be determined by the Iowa Supreme Court. Iowa R. App. P (1)(b)(1) and (2). 5

6 STATEMENT OF THE CASE The Appellants agree with the statement of the case set forth in the Application for Further Review with the following addition. On June 5, 2015, the jury returned verdicts on each of the claims in this case as follows: VERDICT FORM NO.1 WITH SPECIAL INTERROGATORIES REGARDING CLAIMS BY JEFFERY ANDERSON I. The jury found Anderson Tooling, Inc. had not violated the Iowa Wage Payment Collection Law. $0 amount awarded. (App. pp ). II. The jury found there was no Breach of Employment Contract by Anderson Tooling, Inc. $0 amount awarded. (App. pp ). III. The jury found there was Tortious Discharge by Anderson Tooling, Inc. $89, awarded for Lost Earnings From Discharge to Present and $5,000 awarded for Emotional Distress From Discharge to Present. (App. pp ). IV. The jury found no Intentional Interference with a Contract by Dean Anderson and Carol Anderson. $0 amount awarded. (App. pp ). V. The jury found Dean and Carol Anderson had not Pierced the Corporate Veil. $0 amount awarded. (App. pp ). VI. The jury found for Jeffery Anderson with regard to Punitive 6

7 Damages Special Interrogatories. $52,000 awarded. (App. pp ). VERDICT FORM NO.2 WITH SPECIAL INTERROGATORIES REGARDING CLAIMS BY ANDERSON TOOLING, INC. I. The jury found there was no Conversion by Jeffery Anderson. $0 amount awarded. (App. pp ). II. The jury found there was no Conversion by Lori Anderson. $0 amount awarded. (App. p. 107). III. The jury found there was no Conversion by Fabrication and Construction Services, Inc. $0 amount awarded. (App. pp ). IV. The jury found there was Interference with Prospective Business Relationships by Jeff Anderson. $336, amount awarded. (App. pp ). V. The jury found there was no Interference with Prospective Business Relationships by Lori Anderson. $0 amount awarded. (App. pp ). VI. The jury found there was no Interference with Prospective Business Relationships by Fabcon. $0 amount awarded. (App. pp ). VII. The jury found that Jeff Anderson Breached his Fiduciary Duty. $436, amount awarded. (App. p. 12). VIII. The jury found that Lori Anderson did not Breach her Fiduciary 7

8 Duty. $0 amount awarded. (App. pp ). IX. The jury found there was no damage from Misappropriation of Trade Secrets by Jeff Anderson. $0 amount awarded. (App. pp ). X. The jury found there were no damages to Anderson Tooling, Inc. as a result of conspiracy. $0 duplicative amount awarded. (App. p. 114). XI. The jury found there were no Punitive Damage Special Interrogatories. $0 amount awarded. (App. pp ). Post-trial motions were filed by each party contesting certain issues involved in the jury verdicts and seeking entry of judgments. Ruling on post-trial motions was issued by the court on September 17, (App. pp ). Ultimately, judgments were entered as follows: Judgment was entered in favor of Plaintiff, Jeffery Anderson, and against Defendant, Anderson Tooling, Inc., In the amount of $94, in compensatory damages plus $52,000 in punitive damages. Judgment was entered in favor of Counter-claim Plaintiff Anderson Tooling, Inc. and against Counter-claim Defendant Jeffery Anderson in the amount of $772, in compensatory damages. Judgment was entered in favor of Anderson Tooling, Inc. and against Lori Anderson and Fabrication Construction Services, Inc. for Conspiracy in 8

9 the amount of $772,

10 STATEMENT OF THE FACTS The District Court jury was instructed that in order for ATI to recover on a claim of conspiracy, it had to prove Jeff committed the wrongs of conversion, intentional interference with prospective business advantage, breach of fiduciary duty OR misappropriation of trade secrets and that Lori and Fabcon participated in a conspiracy with Jeff to appropriate funds and projects belonging to ATI. (App. pp ) (emphasis added). The Court of Appeals noted that the jury found that Lori and Fabcon participated in the conspiracy with Jeff to appropriate funds and projects belonging to ATI. (App. p. 114). The only tortious wrongs the jury found Jeff to have committed were interference with prospective business relationships and breach of fiduciary duties. (App. pp , 112). The jury awarded $0 damages for conspiracy. (App. p. 114). The Court of Appeals determined that the appropriation of funds and projects belonging to ATI fell outside the torts of interference with prospective business relationships and breach of fiduciary duties. The Court of Appeals determined that Jeff s tortious interference conduct cannot be the basis of a conspiracy to appropriate funds or projects belonging to ATI. (Decision pp ). The jury specifically found that Lori and Fabcon did not interfere with prospective business relationships or exercise wrongful 10

11 control or dominion over property belonging to ATI. (App. pp ). Therefore, the Court of Appeals found that Lori and Fabcon should not be held jointly and severally liable for that part of the judgment pertaining to the jury s damage award for Jeff s breach of fiduciary duty or interference with prospective relationships. (Decision, pp ). As a result, the Court of Appeals determined that the District Court erred in amending and modifying the judgments to provide judgments in favor of ATI and against Lori and Fabcon, jointly and severally. The Iowa Court of Appeals reversed the District Court in that regard. 11

12 ARGUMENT I. WHETHER THE IOWA COURT APPEALS CORRECTLY APPLIED THE LAW OF CONSPIRACY IN REVERSING THE JUDGMENTS ENTERED AGAINST LORI AND FABCON. The decision of the Iowa Court of Appeals was not erroneous and Further Review should be denied. The District Court Jury found that Lori Anderson and Fabcon did not interfere with ATI prospective business relations and did not breach fiduciary duties. (App. pp ). The jury further found although Lori Anderson and Fabcon participated in a conspiracy to appropriate funds and belonging to ATI, ATI suffered no damage as a result. (App. p. 114). The Iowa Court of Appeals therefore correctly concluded that any appropriation of funds and projects did not involve the torts of interference with perspective business relations or breach of fiduciary duty. (Decision pp ). This Court should therefore deny Further Review. The decision of the Iowa Court of Appeals does not conflict with Iowa Supreme Court precedent and does not involve issues of broad public importance. (Iowa R. App. P (1)(b). 12

13 II. REQUEST FOR REVIEW OF ALL ISSUES RAISED ON APPEAL IF FURTHER REVIEW IS GRANTED In the event the Court grants Further Review in this case, the Appellants request a review of all issues raised in the original appeal in accordance with Iowa R. App. P (b). This is discretionary with the Court and although the Court may limit its review to simply the issues raised by Appellee on the Application for Further Review, Appellants believe that, if Further Review is granted, all issues raised in the original appeal by Appellants are relevant and have merit for further review consideration by this Court. Those issues include: 1. THE JURY VERDICT FINDING THAT JEFF ANDERSON DID NOT HAVE A CONTRACT OF EMPLOYMENT WITH ATI IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND THE DISTRICT COURT SHOULD HAVE GRANTED A NEW TRIAL ON THIS ISSUE. Discussions in 2005 between Dean Anderson and Jeff Anderson resulted in an employment agreement. (App. pp. 392, 394, 401, 402, 1061). Jeff and Dean both initialed the employment agreement. (App. p. 1061). Bookkeeper Sheryll Norton recognized the initials of both Jeff and Dean. (App. pp ). Carol Anderson Admitted in her testimony that there 13

14 was an oral contact as she was present in the meeting in 2005 when Jeff was hired. (App. p. 808). Dean Admitted to company accountant Sheryll Norton that there was an agreement with Jeff and it needed to be placed on the books. (App. pp. 248, 249). The amount of deferred compensation, pursuant to the agreement, was placed on the books of the company. (App. p. 259). Bookkeeper Elizabeth Bell admitted she was aware of the contract between Dean, ATI and Jeff and in fact obtained a copy of the contract. (App. pp ). Dean admitted that he owed the money. (App. p. 372). The evidence established the contract of employment between Jeff Anderson and ATI. Dean and Carol Anderson, owners of ATI admitted that an offer of employment was made and accepted. There was clearly a contract of employment and the jury s verdict is not supported by substantial evidence. 2. THE JURY VERDICT FINDING THAT JEFFREY ANDERSON INTERFERED WITH PROSPECTIVE BUSINESS RELATIONS OF ATI IS INCONSISTENT WITH THE VERDICT FORM FINDING THAT THE CONDUCT OF JEFFREY ANDERSON WAS NOT DIRECTED SPECIFICALLY AT ANDERSON TOOLING. To recover on a claim for intentional interference with contractual relations, the jury is required to find specific intent to financially injure or 14

15 destroy the complaining party. See Nesler v. Fisher and Co. Inc., 452 N.W.2d 191, 199 (Iowa 1990); See Page Cnty Appliance Center v. Honeywell Inc., 347 N.W.2d 171, 177 (Iowa 1984); See Harsha v. State Sav. Bank, 346 N.W.2d 791, 799 (Iowa 1984). Here, the jury made a specific finding in answer to special interrogatory that Jeff Anderson s conduct was not directed at ATI. (App. p. 115). The Jury finding that Jeff s conduct was not directed at ATI is inconsistent with the required element that Jeff intended to financially injure or destroy ATI in order to support a verdict for interference with prospective business relations. 3. THE JURY VERDICTS FOR INTERFERENCE WITH PROSPECTIVE BUSINESS RELATIONSHIPS AND BREACH OF FIDUCIARY DUTY ARE NOT SUPPORTED BY THE EVIDENCE AND THE DISTRICT COURT SHOULD HAVE GRANTED A NEW TRIAL OR IN THE ALTERNATIVE JUDGMENT AS A MATTER OF LAW FOR JEFFREY ANDERSON ON THESE CLAIMS. ATI performed a few small jobs from American Ordinance in (App. p. 951). Performance of a few small jobs for American Ordinance in 2005 is not substantial evidence that ATI had a prospective relationship with this company in November Dean Anderson, owner of ATI, actually referred Fabcon to Riverbend 15

16 Industries and intermingled Fabcon and ATI employees in performing the work. (App. pp. 651, ). Fabcon s performance of work because Dean needed help, is not interference with prospective relations. (App. pp. 651, 655). As Dean himself requested Fabcon to perform the work, there is not substantial evidence to support a verdict. CONCLUSION For the reasons set forth above, this Court should deny further review. In the event Further Review is granted, the Court should review all issues raised in the original appeal pursuant to Iowa R. App. P (b). JEFFERY ANDERSON and LORI J. ANDERSON, APPELLANTS By: /s/ Steven Gardner Steven Gardner, AT DENEFE, GARDNER & ZINGG, P.C. 104 South Court Street P.O. Box 493 Ottumwa, Iowa Telephone: (641) Facsimile: (641) ATTORNEY FOR APPELLANTS 16

17 CERTIFICATE OF COMPLIANCE WITH TYPEFACE REQUIREMENTS AND TYPE-VOLUME LIMITATION The brief complies with the typeface requirements and type-volume limitation of Iowa Rs. App. P (1)(d) and 6.903(1)g(1) or (2) because: [X] This brief has been prepared in a proportionally spaced typeface using New Times Roman in font size 14 and contains 1,840 words, excluding the parts of the brief exempted by Iowa R. App. P (1)(g)(1) OR [ ] This brief has been prepared in a monospaced typeface using in and contains lines of text, excluding the parts of the brief exempted by Iowa R. App. P (1)(g)(2). Dated March 9, By: /s/ Steven Gardner Steven Gardner, AT DENEFE, GARDNER & ZINGG, P.C. 104 South Court Street P.O. Box 493 Ottumwa, Iowa Telephone: (641) Facsimile: (641) ATTORNEY FOR APPELLANTS 17

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