United States v. Roger Koch

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 06-2825
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Jan Reis, *
*
Plaintiff/Counter *
Defendant - Appellee, *
* Appeal from the United States
v. * District Court for the
* Southern District of Iowa.
Hulon Walker, *
*
Defendant/Counter *
Plaintiff - Appellant. *
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Submitted: January 8, 2007
Filed: June 25, 2007
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Before LOKEN, Chief Judge, BYE and SHEPHERD, Circuit Judges.
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LOKEN, Chief Judge.
Jan Reis served as director of quality assurance and chief operating officer for
Care Initiatives, a non-profit corporation headquartered in West Des Moines, Iowa.
Reis commenced this diversity action against Hulon Walker, the corporation’s
president and chief executive officer, asserting state law claims for assault, battery,
and intentional infliction of emotional distress based on allegations that during her
employment Walker made unwanted sexual advances. After Walker counterclaimed
for abuse of process, Reis moved to dismiss her claims without prejudice and
Walker’s counterclaim for failure to state a claim on which relief can be granted. The

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1The Honorable RONALD E. LONGSTAFF, United States District Judge for
the Southern District of Iowa.
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district court 1 granted both motions. Walker appeals the dismissal of his counterclaim.
We review a Rule 12(b)(6) dismissal de novo, accepting the claimant’s allegations of
fact as true and affirming “only if it is clear that no relief could be granted under any
set of facts that could be proved consistent with the allegations.” Ring v. First
Interstate Mortgage, Inc., 984 F.2d 924, 926 (8th Cir. 1993) (quotation omitted). We
affirm.
Abuse of process under Iowa law is the use of legal process in an improper or
unauthorized manner. The second element, which is “difficult to establish,” requires
at a minimum proof that the defendant “used the legal process primarily for an
impermissible purpose or illegal motive.” Johnson v. Farm Bureau Mut. Ins. Co., 533
N.W.2d 203, 209 (Iowa 1995). Typically, that means a motive to obtain some
advantage collateral to the allegedly abusive process. Thus, abuse of process cases
usually involve “some form of extortion.” Schmidt v. Wilkinson, 340 N.W.2d 282,
284 (Iowa 1983) (quoting Restatement (Second) of Torts § 682 cmt. b). The demand
for collateral advantage that evidences an impermissible purpose “may precede the
issuance of process and still be actionable, so long as the process does in fact issue at
the defendant’s behest, and as part of the attempted extortion.” Fuller v. Local Union
No. 106 of United Bhd. of Carpenters & Joiners, 567 N.W.2d 419, 422 (Iowa 1997)
(quotation omitted).
Because Iowa is a notice pleading State, the Supreme Court of Iowa has held
that it was error to dismiss an abuse-of-process complaint alleging that defendant
“improperly used the civil process against plaintiffs primarily to accomplish purposes
for which the civil process was not designed.” Schmidt, 340 N.W.2d at 283. Like the
complaint in Schmidt, Walker’s counterclaim set forth this allegation, almost
verbatim. If the complaint had stopped with this notice pleading, it would no doubt

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have survived a threshold motion to dismiss. But, again like the complaint in
Schmidt, Walker’s complaint went on to allege an improper purpose. In Schmidt,
plaintiff, a police officer, alleged that defendant sued primarily for the purpose of
avoiding criminal prosecution. The Supreme Court of Iowa stated that this
“conceivably states a form of extortion.” 340 N.W.2d at 285. Here, Walker alleged
that Reis “made a financial demand on Care Initiatives in exchange for releasing
alleged claims against Care Initiatives and . . . Walker” and then “instituted these
proceedings . . . for her stated purpose of coercing a settlement from Care Initiatives.”
The district court concluded this is not an improper purpose as a matter of Iowa law.
We agree.
The Supreme Court of Iowa has repeatedly held that, because settlements are
favored, commencing a lawsuit or adding a claim to gain leverage for a settlement, or
in the expectation of a settlement, is not an abuse of that process. See Johnson, 533
N.W.2d at 209; Wilson v. Hayes, 464 N.W.2d 250, 267 (Iowa 1990); Brody v. Ruby,
267 N.W.2d 902, 905-06 (Iowa 1978); see also Asay v. Hallmark Cards, Inc., 594
F.2d 692, 695 (8th Cir. 1979). Walker argues that these cases are distinguishable
because Reis directed her settlement demand to Care Initiatives, a third party, and
“there is no Iowa authority for the proposition that attempting to extort payment from
a third party by threatening litigation against another is not abuse of process.” That
may be literally true. But there is Iowa authority that judicial process is not abusive
simply because the settlement being pursued by use of the process includes parties
other than the target of that process.
In Wilson v. Hayes, after successfully defending a medical malpractice suit,
defendant sued the plaintiff’s attorney for abuse of process, alleging that the attorney
continued to pursue the malpractice claim on behalf of his client, instead of dismissing
the suit, in order to obtain a personal release for the attorney. The attorney of course
was a not a party to the malpractice suit. But the Supreme Court of Iowa nonetheless
rejected this abuse-of-process claim, concluding that seeking a personal release for the

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attorney fell within the rule in its earlier Brody decision that pursuit of settlement is
not an abuse of process. 464 N.W.2d at 267.
Here, the district court concluded that, because Care Initiatives was Reis’s
employer, and because Walker’s alleged misconduct was employment related, “it is
at least understandable why plaintiff would choose to take her settlement demands
directly to Care Initiatives.” We conclude this was a sound application of the
Supreme Court of Iowa’s decisions in Brody and Wilson. Reis made a “financial
demand” to settle her yet-unasserted claims against both Care Initiatives and Walker.
Settlement of the entire dispute obviously required resolution of all claims. In these
circumstances, it was not an abuse of process to commence a lawsuit asserting her
claims against Walker for the purpose of settling the entire dispute, regardless whether
the prior settlement demands were directed to Care Initiatives.
Relying on our decision in Asay, 594 F.2d at 695-96, Walker further argues that
his counterclaim should not have been dismissed because he also alleged that he has
suffered mental anguish and collateral damage to his personal and business reputation.
But these were damage allegations, not allegations of an additional purpose that could
satisfy the improper purpose element of the tort of abuse of process. To assert the
theory that Reis commenced the lawsuit for the improper purpose of damaging
Walker’s reputation would require amending his counterclaim. Such an amendment
was filed in the district court in Asay, 594 F.2d at 694, but not here. We decline to
consider a theory not preserved in the district court.
The judgment of the district court is affirmed.
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