CourtListener 3169213

IN THE COURT OF APPEALS OF IOWA

No. 15-0601
Filed January 13, 2016

GEHRKE, INC.,
Plaintiff-Appellee,

vs.

STEEPLE CHASE FARMS, LLC
and THE NEW MODERN
CONCEPTS, INC.,
Defendants-Appellants.
_______________________________

STEEPLE CHASE FARMS, LLC
and THE NEW MODERN
CONCEPTS, INC.,
Counterclaim-Plaintiffs,

vs.

GEHRKE, INC.,
Counterclaim-Defendant.
________________________________________________________________

Appeal from the Iowa District Court for Hardin County, Kurt L. Wilke,

Judge.

A property owner and a general contractor appeal the district court’s ruling

in favor of a subcontractor. AFFIRMED.

Brian Rickert, Michael R. Blaser, and Brant D. Kahler of Brown, Winick,

Graves, Gross, Baskerville & Schoenebaum, P.L.C., Des Moines, for

appellants/counterclaim appellants.

Stephen E. Doohen of Whitfield & Eddy, P.L.C., Des Moines, for appellee.

Heard by Potterfield, P.J., and Doyle and Tabor, JJ.
2

TABOR, Judge.

A hog confinement facility under construction in Hardin County incurred

damage to its concrete manure pits following heavy rains over Memorial Day

weekend in 2013. The facility’s owner and a general contractor1 brought claims

against the excavation subcontractor for negligence, breach of contract, breach

of express and implied warranties, indemnification and contribution, and unjust

enrichment. The district court, recognizing the plaintiffs alleged five counts,

found “the sum total” of their claims came “down to a question of negligence.”

The court decided if the plaintiffs were unable to establish negligence on the part

of the subcontractor “then all of their theories fail.” The court ruled the

subcontractor was not negligent and dismissed the other four claims. On appeal,

the plaintiffs contend the record lacks substantial evidence to support the court’s

determination the subcontractor was not negligent. They also contend the court

erred in dismissing the other four claims “for failure to prove negligence” without

providing a more detailed analysis.

Because substantial evidence underpins the court’s finding the

subcontractor was not negligent and because the same allegations of negligent

workmanship form the basis for the plaintiffs’ other claims, we affirm.

I. Background Facts and Proceedings

Construction. Farmer Steve Liston contacted Iowa Select Farms, a pork

production company based in Iowa Falls, about selling a parcel of his land for a

1
Steeple Chase Farms, LLC and New Modern Concepts, Inc. were the defendants in
the original mechanic’s lien foreclosure action brought by Gehrke, Inc., but it is their
counterclaims at issue on appeal. We will refer to them jointly as the plaintiffs or as New
Modern unless a specific designation to Steeple Chase is warranted.
3

hog confinement facility. In return for the land sale, Liston wanted a manure

easement for crop fertilizer. Liston negotiated the deal with William Foley, Iowa

Select’s chief financial officer. Foley also manages Steeple Chase Farms, a

single member L.L.C. owned by Jeffrey Hanson, Iowa Select’s chief executive

officer. Hanson’s wife, Debora, owned New Modern Concepts, Inc., which acted

as the general contractor on construction projects undertaken by Steeple Chase.

Steeple Chase bought a rectangular 4.5 acre lot from Liston located near

Owasa and bordering the south side of county road D-35. Foley submitted plans

for a two-building, 4800-head hog confinement to Hardin County and the Iowa

Department of Natural Resources (DNR). Foley testified obtaining a permit was

not an “in-depth process.” Foley planned to situate rectangular hog buildings

lengthwise, west to east, eighty feet apart. Foley placed the western sides of the

buildings one hundred feet from the west lot line and the eastern sides sixty feet

from the east lot line. Foley, who did not obtain site elevations before planning

the layout, located the driveway on the west side. Liston’s corn bins were west of

the hog facility’s lot line.

After Foley submitted his proposal, the county informed him the county

intake tile was located in the ditch on the south side of D-35 and north of the

proposed north building. The county tile line ran under the center of the

proposed confinement buildings before exiting in the southeast corner of the lot.

The county required Steeple Chase to reroute the county tile so it did not run

under the new buildings. Steeple Chase received the necessary approvals to go

forward.
4

The diagram below illustrates the facility plan Foley created.

The Owasa lot also contained farm tile lines running north/south through

the lengths of both buildings. Foley did not know the Owasa site contained tile

lines. Foley testified an excavator generally would reroute smaller diameter farm

tile as a part of its overall bid, but he expected to pay extra if an excavator had to

reroute a county tile line due to its larger diameter. Foley also expected the
5

excavator to look at the topography in advance and determine how to dig and

where to pile the over-dig or spoils.

New Modern, the general contractor, did not perform any of the

construction itself; it hired experienced subcontractors. Adjacent landowner

Liston recommended Foley use Gehrke, Inc. for the excavation because its

owner, Steve Gehrke, had done previous drainage projects for Liston. Foley

contacted Gehrke for help in locating the county tile. Thereafter, Foley solicited a

bid from Gehrke, who had extensive experience in digging manure pits. In

Gehrke’s twenty-eight years as an excavation contractor, he had dug pits for

roughly 800 to 1000 confinement buildings, including past work for New Modern.

Gehrke kept a map of the drainage tiles on Liston’s farm because he had

completed tile work for Liston. In general, surface water flowed across the

Steeple Chase lot from the southwest corner toward the northeast corner. Based

on the map showing numerous tiles in a cross-hatch pattern on the acreage sold

to Steeple Chase, Gehrke knew the lot was wet ground.

In April 2013, shortly after New Modern told Gehrke the driveway would be

located on the west side of the lot, Gehrke submitted a written quote to the

general contractor for $34,500 in excavation services (manure pits under each

building, including rough and final backfills and rock spreading) and for $5200 to

reroute the county tile. On April 25, 2013, New Modern accepted Gehrke’s

written offer by issuing a purchase order to Gehrke detailing those items and

agreeing to pay the prices Gehrke quoted. The purchase order also asked

Gehrke to install a silt fence for $1060 and provide rock for $2878.84. Gehrke
6

agreed and did so. New Modern contends Gehrke’s April bid and its purchase

order constitutes the parties’ contract.

Gehrke ran site elevations on the lot before digging and learned the

ground one hundred feet to the east of the southwest corner was slightly more

than two feet higher than the ground at the southwest corner. He concluded the

“water naturally drains to the west on the south side of the property for the first

hundred feet. And then after that, the water goes to the east.” Gehrke also

learned the east end of the site was higher; therefore, more water would be

running on the west end of the site.

Gehrke started work in late April. A few days into his work, Gehrke asked

New Modern’s site manager Darrell Hunt if the driveway could be moved to the

east side of the buildings. Hunt knew the east side was higher, did not disagree

with Gehrke’s idea, and passed the request on to Foley. Hunt did not ask Liston

if moving the driveway to the east was possible. Based on the flow of surface

water shown by his elevations, in Gehrke’s opinion the driveway and truck

access on the east end of the lot “would have been much better for this site.”

Specifically,

[They could] flip flop the distance they bought from Steve Liston,
take 100’ off the east end, and move the 60’ . . . to the west end.
They wouldn’t have been buying any more acres total. It would
have been a much better way to deal with the water problems.

Foley declined Gehrke’s request to move the driveway, which would have

required him to resubmit the plans and likely would have resulted in a delay.

Foley testified he understood, based on his observations of the site, “the area on

the east side would be higher in elevation than the area on the west side where
7

the driveway entrance now existed.” But Foley also knew Liston was happy with

Foley’s layout because Liston “wanted the driveway where I show it in the

diagram because it would give him an additional route into his bin site. That’s

part of what went into the thought process.”

So the driveway remained on the west side of the lot, turning east to run

between the buildings. During Gehrke’s exploration to locate existing tiles, he

dug on the north side of the north building and on the south side of the south

building. During his tile exploration, Gehrke “disturbed” the soil in those areas so

it was no longer the “virgin ground” needed to support cement trucks. In fact,

one cement truck that attempted to pour from the north got stuck up to its axle

and had to be pulled out. Gehrke reinstalled the county tile along the east end of

the lot. Before he dug the hole for the north pit, Gehrke installed a discharge tile

from the north pit to the county intake to “take care of water” that would run into

the hole for the pit and “to help drain the site.” Expert witness Jason Kreft, the

excavation subcontractor New Modern usually hired, was not critical of Gehrke

running this tile line to keep the north pit dry.2

Gehrke and Hunt both recalled meeting at the site and discussing the

location of the excavation spoils. According to Gehrke, when Hunt asked what

2
New Modern expected and hired Gehrke to come back to the site to do backfill and the
final grading after other subcontractors had completed their work. Gehrke testified he
planned to return after the buildings were poured and hook the discharge tile to the
“Form-A-Drain pipe” or tile line that the concrete subcontractor was responsible for
placing around the buildings. While Gehrke did not tell anyone from New Modern “to
turn the switch off in the intake so that it wouldn’t backflow,” Gehrke was not on the site
during the time of the rain, and the concrete subcontractor had finished pouring the
buildings. On the existing record, we are unable to conclude Gehrke’s action regarding
the discharge tile was somehow improper.
8

Gehrke was doing, Gehrke explained: “We can’t get trucks on the north and

south side because I disturbed them all” in locating tile and rerouting the farm tile

and the county tile. “The [virgin soil in the] center is the only thing left to do.”

Gehrke stated he needed to shove the spoils on the east lot area so the trucks

could access the lot through the driveway on the west. Gehrke testified Hunt did

not disagree or voice any concerns about that plan. According to Hunt, although

he had concerns about Gehrke piling dirt on the east, Gehrke had explained that

“was working the best for him on the way it laid.” Hunt relied on Gehrke’s

expertise, and Hunt did not push the issue.

On cross-examination Hunt testified, if an excavation subcontractor was

doing something Hunt knew was “not going to work” or did not meet DNR

requirements, Hunt would bring the matter to the subcontractor’s attention and

either force the subcontractor to do it correctly or “kick him off the job.” Thus, it is

undisputed Gehrke chose where to put the excavation spoils based on the land’s

elevations, the driveway location, and the cement trucks’ need for “virgin” ground.

It is also undisputed Hunt did not object or require Gehrke to move the spoils to a

different location before allowing the concrete subcontractor to perform its work.

As part of his excavation contract, Gehrke rerouted the existing south tiles

into a new main tile he installed south of the south building. Gehrke created an

intake for the new south main on the southwest side of the south building.

Gehrke piled the spoils as discussed with Hunt—along the south and north

lengths of the south building area, along the east side of the lot, and on the

northeast length of the north building. Because the cement trucks needed
9

access to the west driveway, Gehrke did not place any spoils on the west side of

the lot.

Gehrke finished excavating the pits in the first week of May 2013.

Thereafter, Hunt arranged for Alewelt Inc., the concrete subcontractor, to pour

the foundations. Alewelt poured the south building first and finished the north

building on the Wednesday or Thursday before Memorial Day. No other

subcontractors had yet performed work on the buildings.

Nine inches of rain fell on Sunday and Monday of the holiday weekend.

Foley observed the site on Tuesday. The rainstorm had not damaged the south

building’s concrete, and the south building held eight to twelve inches of water in

its pit, consistent with the rainfall totals. But the north building’s pit was infiltrated

and flooded with three to four feet of water, an amount inconsistent with the

rainfall totals. Excess water caused the north building to “float” and the concrete

to crack.

After the rain storm, New Modern paid Gehrke $22,500. New Modern

hired Alewelt to tear out and replace the north building’s cement at a cost of

$78,597.86. Alewelt finished in mid-June 2013. Gehrke submitted a bill for

$8715 to New Modern in August 2013. A few days later, New Modern’s attorney

sent a demand letter to Gehrke, stating New Modern had suffered about

$100,000 in damage to the north pit, and based on its investigation, “the north

barn was not sufficiently bermed, as the south barn was, to avoid water from

infiltrating the pit.”
10

Bench Trial. Gehrke filed a mechanic’s lien, and New Modern answered

and filed counterclaims alleging negligence, breach of contract, breach of

express and implied warranty, indemnification/contribution, and unjust

enrichment. The parties settled the lien dispute, and the district court held a

bench trial on New Modern’s five counterclaims in February 2014. Because New

Modern raises a substantial-evidence challenge on appeal, we discuss the trial

testimony in some detail.

Foley testified Hunt coordinated the subcontractors to keep the project

moving, and New Modern expected Hunt to be on the project site at least once a

week. Foley explained that New Modern, as the general contractor, had “the

ultimate responsibility to the customer,” here Steeple Chase. But Foley “still

expect[ed] the subs to perform their various tasks in a workmanship like manner.”

Foley testified New Modern expected the excavator to account for the water flow

on the site and keep water out of the pits. Despite not taking elevations, Foley

believed the water flow on the lot was obvious, running from the southwest

directly to the west end of both hog barns.

On the Tuesday morning after the rainstorm, Foley noticed Gehrke had

not placed “any berm or build-up of dirt around the north pit” to prevent water

from getting into the north pit. Foley believed blocking the east side of the lot

with spoils “clearly impeded” the “water’s ability to flow on out.” Foley opined, if

Gehrke had “not pushed all the dirt to the east end and blocked the natural flow

of water, it appears that [damage to the north pit] could have been easily

avoided.”
11

On cross-examination, Foley acknowledged he declined Gehrke’s request

to move the driveway to the east side of the lot due to the probable delay (thirty

to ninety days) in completing the project. Foley admitted putting the driveway on

the east “possibly” would have changed where Gehrke placed the dirt. Foley

also admitted: “Q. If under our hypothetical, the driveway goes on the east side

and spoiled dirt is piled on the west side, that . . . would have protected both of

these buildings; right? A. If that’s how he would have chose to do it.”

Foley suggested he had seen other sites where the spoils were piled in

the center but admitted he did not know the total width required by the cement

trucks to maneuver between the buildings. Foley then suggested if Gehrke had

extended the berm on the south side of the south building “just to the west of the

south building on the southwest corner of the site, from where the water was

flowing” onto the site, those spoils would not have prevented the cement trucks

from driving between the bins, but would have protected the north pit. Foley was

“fairly certain” his extended-berm solution would not have backed up surface

water onto Liston’s property. In any event, Foley did not believe a southwest

berm that routed the water towards Liston’s property was a problem because the

water entering Steeple Chase’s lot at the southwest corner came from Liston’s

land and Steeple Chase had no obligation to keep that water on its lot.

On cross-examination, Foley acknowledged that water standing in the

north ditch was atypical and resulted from the heavy rains. Foley also admitted

the flooded county intake in the north ditch might be higher than Gehrke’s

discharge tile line in the bottom of the north pit. Based on the amount of rain, it
12

was possible Gehrke’s discharge tile line intended to move water out of the north

pit to keep it dry “actually had just the opposite effect.” Foley concluded there

was no way to determine how much of the water inside the north pit came from

the flooded county intake and how much came from the flow of surface water.

Dwaine Bundy, an expert witness for New Modern, opined if Gehrke had

properly “bermed up” the outside of the north pit before the concrete

construction, “the concrete would not have had to be replaced.” Bundy also

criticized Gehrke for piling dirt on the east side of the lot. When asked if

extending the berm on the south side of the south building further west as

proposed by Foley would have helped protect the north pit, Bundy testified “it

would,” except for the water flowing directly east from Liston’s grain bin area, “we

got to have that coming to the north.”

Bundy did not know Gehrke had asked to have the driveway placed on the

east side, which would have allowed space for the spoils along the west side of

both buildings. When asked whether Gehrke’s proposal “wouldn’t have been a

better outcome in this case given what we know about the slope of the water,”

Bundy answered it “might have been.” When asked whether Gehrke putting a

similar size berm around the north pit as around the south pit would have

worked, Bundy replied:

I believe it would, except the fact the water had to run
someplace. And [the picture] shows the arrow where the water
from part of that went to the east. And that part of the water would
have not been part of the water up against a berm on the west side
or the north side, so that would be the case in this situation.
Q. So now we’ll never know if a berm would have held the
water on the north pit because Mr. Gehrke didn’t put one in;
correct? A. That would be correct.
13

(Emphasis added.)

New Modern also called Jason Kreft as an expert witness. Kreft was an

experienced excavator whose business made a profit doing projects for New

Modern, though he testified he was neither being paid nor promised any

particular work for providing his opinion. Kreft had concerns about Gehrke piling

dirt on the east end because it would “probably catch water . . . if the water got in

there, it can’t get out.” If Kreft had been hired to excavate the Owasa site, he

would have piled dirt completely around all four sides of each building and would

have had the cement trucks pour from the outside of the buildings, not from a

center aisle. But Kreft did not know any details about Gehrke being required to

reroute the county tile. On cross-examination, Kreft agreed the Owasa lot was

naturally a wet site and acknowledged nine inches of rain falling in a twenty-four-

hour period “would be a lot.” Kreft agreed it is more difficult for an excavator to

handle spoils on a “wet site” because the dirt “sloughs off and doesn’t stay in a

pile.” According to Kreft, if trucks were to drive in the center aisle of a wet site,

then the excavator would need to keep the dirt in the center aisle “virgin.” Kreft

testified, if hypothetically the driveway was placed on the east side so that

Gehrke, knowing he did not have to worry about access of trucks on the west

side, “piled a windrow of dirt along the west side,” the fact of Gehrke “putting dirt

on that end” would have “gone a long ways toward protecting the north building.”

Michael Tacchia Jr., who poured the concrete, agreed the Owasa lot was

a wet site. He testified to needing thirty to forty feet of “virgin” ground to optimally

operate his pump truck between the two buildings.
14

Gabriel Snakenberg, a self-employed excavator who had previously

worked for Gehrke, Inc., testified as an expert witness for Gehrke. Snakenberg

said an excavator’s job is to keep the pit floor dry so the concrete contractor can

pour the foundation and to move the spoils so the other contractors can complete

the site work. According to Snakenberg, an excavator cannot place the spoils so

water is directed onto neighboring property. Snakenberg reviewed Gehrke’s

elevations and agreed the ground between the two buildings “is lower in the

center of the buildings than it is either on the west or east end” by roughly two

feet. Snakenberg testified, because the dirt was disturbed to reroute the county

tile on the north side of the north building, it was not an option to have concrete

pump trucks on the north side of the north building. Snakenberg also testified if

Gehrke had added a berm on the north building’s south side, the space

remaining would not have accommodated the cement trucks. Snakenberg had

no problem with Gehrke placing spoils in a windrow on the east side of the

property—he “had no more places to go with his spoiled dirt since his property

was so tight.”

When Gehrke took the witness stand, he acknowledged his company had

an obligation to excavate the site in a reasonable manner to prevent the

accumulation of water. Gehrke agreed the north building’s concrete cracked and

had to be replaced. Gehrke explained he did not put spoils along the north

building’s south length because “water would have ponded” between the

buildings as it was “two feet lower in the center.” Gehrke testified putting a berm

on the north building’s south length and cutting a channel to the east would not
15

have eliminated the pond—the middle’s center is ninety-nine feet and the east

end is slightly over one-hundred feet—a “foot and a half higher on the east end

already, so water could have never flowed to the east.” Gehrke testified his

elevations showed that even if he had not put spoils on the east, the water would

not have flowed through there.

Engineer James Tometich testified on Gehrke’s behalf. According to his

report, “[W]hen the flood occurred and the county tile could not handle the

amount of water, it back flowed into the excavated pits and created” the

infiltration of the north pit. Tometich opined the berms that Foley and New

Modern’s experts suggested Gehrke should have installed on the north pit “would

not have been an effective method of controlling the flood waters. The soil was

super saturated (full of water) and would not have held up like an earthen dam.

The water would have ultimately back-flowed into the excavations through the

previously installed tile lines.”

Tometich also discussed the roles of general contractor New Modern and

its subcontractors.

A General Contractor (GC) is in charge of the entire job.
The GC hires subcontractors to perform many aspects of the work.
The GC schedules the work and when one [sub]contractor is
complete, the next one comes in and does the next portion. If a
subcontractor’s work is not done correctly, the GC is responsible for
requiring corrections of the work prior to the next contractor coming
in. The fact that the concrete foundations were poured on Gehrke’s
work indicates that the work was complete and acceptable;
otherwise the GC would not have let the concrete subcontractor
continue their work . . . . It is clear that [Gehrke’s] work was
accepted by the GC [New Modern].
16

At the close of the evidence, Gehrke’s attorney argued that in New

Modern’s counterclaims for breach of either contract or warranty, “the breach

would be negligence.” Similarly, New Modern’s trial brief to the court stated its

“counterclaims plead multiple theories of recovery for the same wrong; namely,

Gehrke’s defective work and failures on the site resulted in [New Modern]

incurring $78,597.86 in damages to tear out, replace, and re-pour the north

building concrete pit.” (Emphasis added.)

March 2015 District Court Ruling. The district court understood that

New Modern advanced five counterclaims, but decided they all boiled down to

whether Gehrke fulfilled its obligation to excavate the site in a “reasonable

manner.” The court held that if New Modern was “unable to establish negligence

on the part of Gehrke, then all of [its] theories fail.”

The court specifically found, at the time of the rain storm, there “was no

dirt piled on the west or south side of the north building since that was the access

area for trucks to get to and between the building sites. Piling dirt in those

locations would have prevented such access.” The court concluded New Modern

“failed to establish negligence on the part of Gehrke or that the alleged

negligence of failure to extend a berm to the west was a proximate cause of

damage” to New Modern. Specifically, the court found:

[U]nder the requirements of the job that was presented to Gehrke, it
acted reasonably in accomplishing its work. Due to the shortness
of space from the buildings to the western boundary, an extended
berm would likely have accomplished nothing except anger the
neighbor [Liston]. Further, water backflowing from the ditch into the
north building excavation was just as likely to have been the cause
of damage as surface water flowing across the property.
17

New Modern’s post-trial motion asked the court to enter specific findings

on its four other counterclaims. The court declined, and New Modern timely

appealed.

II. Standard of Review

New Modern’s counterclaims were tried at law. Thus, we review for

correction of errors at law, and the district court’s findings of fact “shall have the

effect of a special verdict.” Iowa R. App. P. 6.907. The trial court’s findings of

fact are binding upon us if supported by substantial evidence. Iowa R. App. P.

6.904(3)(a). We view the evidence in the light most consistent with the court’s

judgment. R.E.T. Corp. v. Frank Paxton Co., 329 N.W.2d 416, 419 (Iowa 1983).

“Our deference to the trial court's finding of facts does not extend to its

determinations of law.” Id.

III. Substantial Evidence

New Modern contends substantial evidence does not support the court’s

determination Gehrke was not negligent. To succeed on its negligence claim,

New Modern had to prove “the existence of a duty to conform to a standard of

conduct to protect others, a failure to conform to that standard, proximate cause,

and damages.” St. Malachy Roman Catholic Congregation v. Ingram, 841

N.W.2d 338, 346 (Iowa 2013). On appeal, this court does not reweigh the

evidence to see if it would have reached a different conclusion. See R.E.T.

Corp., 329 N.W.2d at 419 (“Evidence can be contradictory and remain

substantial.”). Here, the fighting issues were whether Gehrke failed to conform to
18

a standard of care and whether Gehrke’s action or inaction in placing the spoils

caused the undisputed damages.

The record contains conflicting evidence with both parties presenting

expert testimony to support their contentions. The district court believed and

credited Gehrke’s evidence and rejected some of New Modern’s evidence. In

our review, we “are keenly aware of the trial court’s superior vantage point to

make credibility determinations due to its ability to consider firsthand the

demeanor and appearance of the parties.” Neimann v. Butterfield, 551 N.W.2d

652, 654 (Iowa Ct. App. 1996).

Foley and New Modern’s experts were critical of Gehrke’s excavation

process, citing his failure to (1) place berms around the north pit, (2) extend the

berm along the south building to the west lot line, and (3) recognize placing dirt

along the east would impede water flow. The plaintiffs alleged Gehrke’s

defective workmanship resulted in the flooding of the north pit. But both the

cross-examination of New Modern’s witnesses about those alleged failures—as

well as the testimony of Gehrke and his witnesses—provided substantial support

for the district court’s ruling. For instance, New Modern’s own expert explained

lengthening the south windrow to the west lot line would have done nothing to

handle the water entering directly from the west corn bin area. Testimony also

made clear such an extension (1) would not have prevented water from flowing

around the windrow and onto Liston’s land and (2) an excavator is not allowed to

place the spoils in a manner that temporarily diverts surface water onto another’s

property.
19

The evidence showed Gehrke was working on a tight site; he could not

have added a windrow to the north pit’s south side and still have left room for

cement trucks. Moreover, given Gehrke’s undisputed measurements of the site

elevations, adding dirt to the south side of the north pit also was not feasible due

to the higher elevation on the east side and the lower elevation in the center

aisle. Based on these elevations, adding a windrow along the north pit’s south

side would have caused a two-foot pond to form in the only area for cement

trucks access. Finally, the evidence supports the district court’s conclusion

Gehrke could not place dirt on the west side of the north building due to the

driveway access for cement trucks. Accordingly, given this tight lot’s elevations

and driveway placement, substantial evidence supports the district court’s finding

Gehrke did not breach a standard of care in regard to the failures claimed by

New Modern.

The district court also concluded New Modern failed to prove the

causation element of negligence because “water backflowing from the ditch into

the north building excavation was just as likely to have been the cause of

damage as surface water flowing across the property.” Foley’s testimony alone,

as detailed above, provides substantial evidence to support this conclusion.

Further, Foley’s testimony is consistent with the views of Gehrke’s expert.

Accordingly, the district court’s ruling on causation is likewise well-rooted in the

record.
20

IV. Other Counterclaims

New Modern contends the district court erred in dismissing its other claims

(breach of contract, breach of express and implied warranties, indemnification

and contribution, and unjust enrichment) solely on the premise it did not prove

Gehrke’s negligence. In a related issue, New Modern argues the court erred in

declining to make findings of fact and conclusions of law on its counterclaims

other than negligence. We will address these issues in a combined analysis.

A. Error Preservation. Gehrke asserts New Modern did not preserve

error. We find no merit to this challenge. New Modern pleaded the four non-

negligence counts in its counterclaim. Its trial brief listed the elements to be

proven in a contract action and provided a general definition of “implied warranty”

in construction contracts. New Modern’s motion under Iowa Rule of Civil

Procedure 1.904 alleged the court did not rule “on their other four counterclaims”

and asked the court to “amend and enlarge its findings and conclusions” in order

“to address and rule on each of [its] separate counterclaims.” The district court

declined, ruling:

As stated in this court’s ruling, all of the counterclaimants’
counterclaims were founded on alleged negligence of [Gehrke].
This court specifically found that counterclaimants failed to prove
negligence on the part of [Gehrke]. Having failed to do so, there
was no breach of contract, no breach of express or implied
warranties, no basis for indemnification or contribution, and no
unjust enrichment on the part of [Gehrke].

Thus, the district court did rule on the other claims, and error was

preserved for appellate review. See Meier v. Senecaut, 641 N.W.2d 532, 537

(Iowa 2002).
21

B. Discussion

New Modern contends the court erred because its other counts require

proof of elements distinct from the components of its negligence claim.3

Contract. The district court determined its finding that Gehrke’s actions

or inactions did not constitute a failure to meet the standard of care (i.e. Gehrke’s

workmanship was not defective and it was not at “fault” in tort) also resolved New

Modern’s claim Gehrke breached their contract. We agree under the specific

circumstances of this case. First, New Modern’s trial brief stated it was pleading

“multiple theories of recovery for the same wrong; namely, Gehrke’s defective

work and failures on the site.” Second, New Modern’s evidence cited the same

three alleged failures by Gehrke, discussed above in the negligence analysis, as

constituting defective workmanship for all of its claims.

The court’s standard-of-care conclusion in tort was based on its findings

(1) “Gehrke acted appropriately in all respects” and (2) “under the requirements

of the job that was presented to Gehrke, it acted reasonably in accomplishing its

work.” The same findings that support the court’s conclusion New Modern could

not recover for defective workmanship in tort also support the court’s conclusion

New Modern could not recover for defective workmanship in contract—i.e.,

3
New Modern does not advance a separate argument concerning its counterclaims for
indemnification and contribution or unjust enrichment in its appellant’s brief. Similar to
its trial brief, New Modern discusses those concepts only in parentheticals included in a
string of case citations. Because those claims are not separately argued, we decline to
consider them on appeal. See State v. Mann, 602 N.W.2d 785, 788 n.1 (Iowa 1999)
(noting random mention of an issue, without analysis or argument, is insufficient to
prompt appellate consideration). New Modern’s argument concerning those claims in its
reply brief comes too late. See Sun Valley Iowa Lake Ass’n v. Anderson, 551 N.W.2d
621, 642 (Iowa 1996) (declining to consider argument raised for first time in reply brief).
22

Gehrke’s work was not defective as alleged by the three specifications of

negligence and thus Gehrke did not breach the construction contract. See

Pursell Constr., Inc. v. Hawkeye-Sec. Ins. Co., 596 N.W.2d 67, 68 (Iowa 1999)

(combining the analysis of tort and contract claims alleging defective

workmanship where both claims were based on the contractor’s alleged failure to

put the basement at the correct level); McPherrin v. Jennings, 24 N.W. 242, 243

(Iowa 1885) (recognizing a party’s negligent acts in caring for a horse

“constitutes a breach of contract, and the [tort] action is based upon this breach”);

see also Hilsman v. Phillips, No. 08-0289, 2009 WL 249885, at *4 (Iowa Ct. App.

Feb. 4, 2009) (recognizing the “same specifications of negligence” claimed by the

plaintiff were also the plaintiff’s basis for the alleged breach in the contract claim).

As in McPherrin, the defective workmanship New Modern alleged

constituted “fault” in negligence, i.e. failing to properly berm the site, was the

identical workmanship alleged to have breached the contract. See McPherrin, 24

N.W. at 244. Although more detail in the court’s ruling might have clarified the

issues, the district court did not err in summarily concluding New Modern failed to

prove Gehrke’s defective workmanship constituted a “breach” of the contract.

Additionally, to be successful on its contract claim, New Modern had to

prove Gehrke’s excavation “caused” the damages. See Royal Indem. Co. v.

Factory Mut. Ins. Co., 786 N.W.2d 839, 846 (Iowa 2010). Foley testified it was

impossible to determine what damage to the north pit was caused by surface

water flowing into the pit and what amount of infiltration was caused by backflow

from the north pit discharge tile. We read the district court decision as rejecting
23

New Modern’s position that Gehrke’s actions caused damage to the property.

The court opined the back flow of water from the ditch was “just as likely to have

been the cause of damage” as the surface water flowing across the lot. We find

the court’s conclusion on causation specific enough to be an independent reason

for rejecting New Modern’s claim Gehrke breached the contract.

Implied Warranty. New Modern raises the same challenge to the court’s

summary resolution of its claim for breach of the implied warranty of workmanlike

construction.4 New Modern contends Gehrke “breached the implied warranty of

workmanlike construction by excavating and grading around a North Building pit

that did not stay dry throughout the remainder of the construction process.”

Gehrke counters that New Modern, as a sophisticated general contractor, is not

the kind of party that the implied warranty was intended to protect. See Rosauer

Corp. v. Sapp Dev., L.L.C., 856 N.W.2d 906, 910 (Iowa 2014) (holding “the

potential class of plaintiffs is limited to innocent homebuyers for whose benefit we

created the warranty”).

Assuming without deciding that general contractor New Modern can seek

to enforce an implied warranty of workmanlike construction against its

subcontractor, Gehrke, we find New Modern’s implied-warranty claim is defeated

by the same failure to show either fault or causation as we discussed in rejecting

the breach-of-contract claim.

4
New Modern does not substantively discuss Gehrke’s alleged breach of an “express”
warranty until its reply brief. Accordingly, we decline to address that issue separately.
See Sun Valley Iowa Lake Ass’n, 551 N.W.2d at 642.
24

New Modern contends the district court erred in focusing on whether

Gehrke acted reasonably in performing the excavation work, instead of

examining the “end result” of his grading. For this contention, New Modern relies

on Reilly Constr. Co. v. Bachelder, Inc., No. 14-0817, 2015 WL 1331634, at *1

(Iowa Ct. App. Mar. 25, 2015) (holding contractor’s approval of site selection for

pond that failed to hold water was a breach of implied warranty of workmanlike

construction). Contrary to New Modern’s suggestion, Bachelder does not stand

for the proposition that the implied warranty of workmanlike construction creates

an absolute guarantee or strict liability for the excavator’s work. In Bachelder, we

determined the contractor miscalculated the soil conditions before digging and

thereby failed to construct a viable pond. See id. at *6 (citing Ideal Heating Co. v.

Kramer, 102 N.W. 840, 840–41 (Iowa 1905)). Bachelder did not hold that minus

some miscalculation, the contractor would still have breached the implied

warranty. Thus, to prove Gehrke breached an implied warranty of workmanlike

construction, New Modern must show some miscalculation or faulty work by

Gehrke that resulted in the damages, not simply that the pits did not stay dry.

New Modern did not prove Gehrke miscalculated the elevations or the

optimal placement of the berms on the hog facility site as it was laid out by Foley

nor that such miscalculations resulted in the water damage to the north building.

Accordingly, the district court properly dismissed New Modern’s warranty claims.

AFFIRMED.