Conlon Construction Co. v. Tri-State Concrete Construction, Inc., Top Notch Plumbing Heating & Electrical, Inc., and Runde Electric, LLC

IN THE COURT OF APPEALS OF IOWA
_______________

No. 25-0499
Filed January 28, 2026
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Conlon Construction Co.,
Plaintiff/Counterclaim Defendant–Appellant,
v.
Tri-State Concrete Construction, Inc., Top Notch Plumbing Heating &
Electrical, Inc., and Runde Electric, LLC,
Defendants/Counterclaim Plaintiffs–Appellees.
_______________

Appeal from the Iowa District Court for Dubuque County,
The Honorable Monica Zrinyi Ackley, Judge.
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AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
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Jacob W. Nelson and Joseph J. Porter of Simmons Perrine Moyer Bergman
PLC, Cedar Rapids, attorneys for appellant Conlon Construction Co.

Jeremy N. Gallagher of Kintzinger, Harmon, Konrardy, P.L.C., Dubuque,
attorney for appellee Top Notch Plumbing, Heating & Electrical, Inc.

John D. Freund of Freund Law Firm, P.C., Dubuque, for appellee Runde
Electric, LLC.

Brian J. Kane of Kane, Norby & Reddick, P.C., Dubuque, for appellee Tri-
State Concrete Construction, Inc.
_______________

1
Considered without oral argument
by Schumacher, P.J., and Badding and Langholz, JJ.
Opinion by Schumacher, P.J.

2
SCHUMACHER, Presiding Judge.

Conlon Construction Co. raised several alternative challenges to
breach-of-contract counterclaims brought by subcontractors in Conlon’s
mechanic’s lien foreclosure suit against the owner and developer of the
Estates of Dubuque residential cooperative. Upon our review, we affirm the
court’s denial of Conlon’s motion to dismiss the subcontractor
counterclaims. But we reverse the court’s denial of Conlon’s motion to
compel arbitration and remand for further proceedings.

I. Background Facts and Proceedings

Following its work as general contractor for development of the
Estates of Dubuque, Conlon Construction Co. petitioned to foreclose two
mechanic’s liens totaling nearly $1.6 million against the property owner and
various other defendants.1 Three of those other defendants—subcontractors
Tri-State Concrete Construction, Inc.; Top Notch Plumbing, Heating &
Electrical; and Runde Electric, LLC—filed compulsory breach-of-contract
counterclaims alleging Conlon’s failure to pay under their subcontracts.
Conlon moved to dismiss the counterclaims, or alternatively, to compel
arbitration, arguing the subcontractors had “contractual obligations to
mediate the allegations” before filing for breach of contract. The district
court denied Conlon’s motions. Conlon appeals, claiming the district court
erred in denying its motion to compel arbitration against the subcontractors.

1
Specifically, Conlon’s foreclosure petition named the following defendants: The
Estates of Dubuque, a Vintage Cooperative Community; Fidelity Bank & Trust; Pella
Construction & Management Services, LLC; Heiar Brothers Fencing, Inc.; The Floor
Show Corporation d/b/a Home and Floor Show; Tri-State Concrete Construction, Inc.;
Top Notch Plumbing, Heating & Electrical, Inc.; Runde Electric, LLC; Future
Construction, LLC; and Dubuqueland Door, Co.

3
Preliminarily, we note the parameters of this appeal. Conlon does not
seem to challenge the district court’s denial of its motion to dismiss the
subcontractors’ counterclaims. See Schaefer v. Putnam, 841 N.W.2d 68, 74–75
(Iowa 2013) (noting a counterclaim is mature when the complaining party is
entitled to a legal remedy and “a party who fails to raise a compulsory
counterclaim loses the claim”). And after this appeal was filed,
subcontractors Top Notch and Runde filed notices with our supreme court
stating they had dismissed their counterclaims against Conlon.2 Therefore,
this appeal centers on whether the district court erred in denying Conlon’s
motion to compel arbitration against the remaining subcontractor, Tri-State.3

II. Standard of Review

We review Conlon’s claim for correction of errors at law. See Wesley
Ret. Servs., Inc. v. Hansen Lind Meyer, Inc., 594 N.W.2d 22, 29 (Iowa 1999);
see also Iowa Code § 679A.17(1)(a) (2024) (providing an appeal may be taken
as a matter of right from an order denying a motion to compel arbitration).

III. Discussion

Tri-State entered a contract with Conlon to provide concrete services
as a subcontractor for the Estates of Dubuque project in return for payment
by Conlon in the amount of $229,399. According to Tri-State, Conlon “failed
to pay.” Article 11 of the contract, titled “Dispute Mitigation and
Resolution,” states in relevant part:

2
And although not relevant to this appeal, we further observe that Conlon has also
dismissed its petition to foreclose its mechanic’s liens, and all other parties to the district
court proceeding appear have dismissed their claims and counterclaims.
3
Tri-State waived the filing of a responsive brief on appeal.

4
11.2 DISPUTES BETWEEN THE PARTIES If the dispute resolution
provisions between Constructor and Owner in the Subcontract
Documents do not permit consolidation or joinder with disputes of third
parties, such as Subcontractor, or if such dispute is only between the
Parties, then the Parties shall submit the dispute to the dispute resolution
procedures set forth in the section below.

11.3 CONSTRUCTOR–SUBCONTRACTOR DISPUTE
MITIGATION AND RESOLUTION

....

11.3.3 BINDING DISPUTE RESOLUTION If the matter is
unresolved after submission of the matter to a mitigation procedure or to
mediation [discussed above], except as provided in § 11.4, the Parties shall
submit the matter to the binding dispute resolution procedure selected
below:

11.3.3.1 ARBITRATION

 The Parties choose binding arbitration for any claim
or dispute arising out of or relating to this Agreement.[4] EACH
PARTY WAIVES THEIR RIGHT TO BE HEARD IN A
COURT OF LAW, with or without a jury. Arbitration does not
involve a judge or jury. Instead, an arbitrator with the power to
award damages and other appropriate relief will decide claims and
disputes. An arbitrator’s award shall be final and binding upon
the Parties, and judgment may be entered upon it in any court
having jurisdiction.

11.3.3.2 Neither Party may commence arbitration if the
claim or cause of action would be barred by the applicable
statute of limitations had the claim or cause of action been filed in
a state or federal court. Receipt of a demand for arbitration by the
person or entity administering the arbitration shall constitute the
commencement of legal proceedings for the purposes of

4
Paragraph 11.3.3.3 further states that an arbitration “shall use” “the current
[American Arbitration Association (AAA)] Construction Industry Arbitration Rules and
AAA administration.”

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determining whether a claim or cause of action is barred by the
applicable statute of limitations. If, however, a state or federal court
exercising jurisdiction over a timely filed claim or cause of action
orders that the claim or cause of action be submitted to arbitration,
the arbitration proceeding shall be deemed commenced as of the
date the court action was filed, provided that the Party asserting the
claim or cause of action files its demand for arbitration with the
person or entity administering the arbitration within thirty (30)
Days after the entry of such order.

....

11.3.3.4 LITIGATION

 Litigation in either the state or federal court having
jurisdiction of the matter in the location of the Project.

....

11.4 MULTIPARTY PROCEEDING All parties necessary to resolve a
matter agree to be parties to the same dispute resolution proceeding, if
possible. To the extent disputes between the Parties involve in whole or in
part disputes between Constructor and Owner, disputes between
Subcontractor and Constructor shall be decided by the same tribunal and
in the same forum as disputes between Constructor and Owner.

Relying on paragraph 11.4, the district court determined that once
Conlon petitioned to foreclose its mechanic’s liens for its work as general
contractor on the Estates of Dubuque project, matters arising from the
project “should all be addressed by one tribunal and not dealt with on a piece
meal basis when the dispute arises between more than one party to the
agreement.” Accordingly, the court allowed Tri-State’s counterclaim against
Conlon. But the court denied Conlon’s alternative motion to compel
arbitration against Tri-State, stating:
[Conlon] invoked its right to foreclose on mechanic’s liens before
it forced the parties into arbitration under the terms of the contract. It must
now live with that choice. Additionally, the Court indicated it agreed with
the [subcontractors], and continues to do so, that this is a multiparty action

6
with many moving parts. The contract establishes that the district court is
the proper arena in which to have the merits and rights and responsibilities
of all parties litigated and resolved.

As noted, the parties do not seem to dispute the court’s decision on
the compulsory nature of Tri-State’s counterclaim. However, Conlon argues
“compulsory counterclaims are arbitrable.” According to Conlon, “those
claims are just as much ‘subject’ to arbitration as non-compulsory
counterclaims are.” Indeed, Tri-State pled its counterclaim
“[n]otwithstanding the provisions of Article 11 . . . , which provide for
alternative dispute resolution procedures for disputes between the parties,”
noting that the claim “must be urged or lost.” Quoting North Iowa Steel Co. v.
Staley, 112 N.W.2d 364, 366 (Iowa 1961), Tri-State maintained that its
counterclaim “arose out of the same transaction as plaintiff’s claim but it is
set up in a separate declaration against plaintiff.”

The parties further agree this controversy is governed by the terms of
the contract, which includes an express agreement to arbitrate. “A provision
in a written contract to submit to arbitration a future controversy arising
between the parties is valid, enforceable, and irrevocable unless grounds exist
at law or in equity for the revocation of the contract.” Iowa Code § 679A.1(2).
Unless the encompassing contract falls within a statutory exception to
section 679A.1(2), none of which are applicable here, 5 the arbitration
provision is enforceable. See Pa. Life Ins. Co. v. Simoni, 641 N.W.2d 807, 811
(Iowa 2002). “On application of a party showing an agreement described in
section 679A.1 and the opposing party’s refusal to arbitrate, the district court

5
The three instances in which the statute validating arbitration agreements does
not apply are: (1) contracts of adhesion; (2) contracts between an employer and an
employee; and (3) with an exception not pertinent here, tort claims. Iowa Code
§ 679A.1(2)(a)–(c).

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shall order the parties to proceed with arbitration.” Iowa Code § 679A.2(1)
(emphasis added); see also ACCU Steel, Inc. v. Legacy Bldg. Sols., Inc., No. 16-
CV-00050, 2017 WL 11179922, at *2 (S.D. Iowa Aug. 30, 2017) (discussing
chapter 679A and observing “Iowa’s strong preference for arbitration
matches ‘a strong national policy in favor of arbitration’” (citation omitted)).

Here, neither party claims the arbitration provision of their contract is
unenforceable. See ACCU Steel, 2017 WL 11179922, at *2 (noting the parties’
agreement as to the validity of the arbitration provision at issue); but see
Wesley Ret. Servs., 594 N.W.2d at 26 (affirming the district court’s denial of a
motion to compel arbitration upon finding the claimant’s “tort claim is not
subject to the parties’ arbitration agreement” under the exception in section
679A.1(2)(c)). The key language of that provision, “The Parties choose
binding arbitration for any claim or dispute arising out of or relating to this
Agreement,” covers Tri-State’s breach-of-contract claim. See Iowa Code
§ 679A.1; Wesley Ret. Servs., 594 N.W.2d at 26 (noting that arbitration of
contract claims is to be compelled under chapter 679A). “[T]herefore the
breach-of-contract claim must be arbitrated.” ACCU Steel, 2017 WL
11179922, at *3.

Under these facts and circumstances, the district court erred in
declining to enforce the arbitration clause.6 See Pa. Life Ins., 641 N.W.2d at

6
Although not dispositive to our analysis under the particular facts and claim
presented here, we make two further observations. First, there was no delay in Conlon’s
asserting its right to arbitrate that would prejudice Tri-State or constitute a waiver of
Conlon’s right to arbitration. But see Mod. Piping, Inc. v. Blackhawk Automatic Sprinklers,
Inc., 581 N.W.2d 616, 621–22 (Iowa 1998) (holding piping contractor’s “conduct during
the eighteen-month period from the filing of the petition to the date of the motion to
compel arbitration was clearly inconsistent with asserting such a right” and such “conduct
prejudiced [sprinkler subcontractor] by forcing it to participate in discovery and requiring
it to spend money and expend other resources in preparation for trial which might not

8
812–13 (rejecting arguments concerning “inefficiencies in requiring
arbitration of some of the claims involving these parties, but not others,
[because] that is the agreement made by the parties” and finding the
arbitration provision in the parties’ contract was not waived “by commencing
the instant litigation”). We therefore reverse the portion of the court’s order
denying Conlon’s motion to compel arbitration against Tri-State. Because
that claim is severable, on remand, the district court shall stay the
proceedings regarding Tri-State’s claim pending the outcome of arbitration.
See Iowa Code § 679A.2(4); accord ACCU Steel, 2017 WL 11179922, at *4;

have been necessary in arbitration”), overruled on other grounds by Wesley Ret. Servs., 594
N.W.2d at 29; Liberty Builders, Inc. v. Horton, 521 S.E.2d 749, 753–54 (S.C. Ct. App. 1999)
(finding contractor “waived its right to arbitrate” and affirming denial of motion to stay
district court action to enforce arbitration clause where the parties had already engaged in
“litigation for two and one-half years,” finding the contractor’s “delay in demanding
arbitration until the litigation was nearly complete not only prejudiced the [property
owner] but enabled [the contractor] to ‘test the water before taking the swim’”).
Specifically, Conlon initiated its foreclosure petition in September 2024, Tri-State filed its
answer and counterclaim against Conlon in November, and Conlon filed its motion to
dismiss, or alternatively, to compel in December.
Second, Tri-State was not the party that initiated the district court action. See
generally Schaefer, 841 N.W.2d at 77–78 (holding “Iowa Code section 654A.6 does not
require a creditor to seek mediation before asserting a compulsory counterclaim against a
creditor. . . . Rather, we view the jurisdictional prerequisite provision only as requiring a
creditor to first comply with the mandatory mediation requirements before it starts a civil
action in the manner prescribed by the rules of civil of procedure. The provision has no
effect on compulsory counterclaimants, who do not start civil actions.”); Clinton Nat’l
Bank v. Kirk Gross Co., 559 N.W.2d 282, 284 (Iowa 1997) (finding a contractor, who
entered into a contract with a bank for remodeling work, did not waive its right to
arbitration of a breach-of-warranty claim filed by the bank by filing a mechanic’s lien
against the bank for remaining payment on the contract). Indeed, enforcement of the
arbitration clause under these circumstances protects the rights of both Conlon (to comply
with the parties’ contractual arbitration clause) and Tri-State (to adhere to the time
requirements to file a compulsory counterclaim).

9
see also generally JAKS Props., LLC v. St. Croix Hospice, LLC, No. 17-1198,
2018 WL 5846088, at *9 (Iowa Ct. App. Nov. 7, 2018) (remanding with
instructions regarding the stay of litigation pending arbitration).

AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.

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