Romare Homes, Inc. v. Lincoln Savings Bank

IN THE COURT OF APPEALS OF IOWA
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No. 25-0271
Filed January 28, 2026
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Romare Homes, Inc.,
Plaintiff–Appellant,
v.
Lincoln Savings Bank,
Defendant–Appellee.
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Appeal from the Iowa District Court for Polk County,
The Honorable Lawrence P. McLellan, Judge.
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AFFIRMED
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Trevor A. Jordison (argued), and Billy J. Mallory, of Mallory Law,
Urbandale, attorneys for appellant.

Joseph Porter (argued), Lynn Wickham Hartman, and Philip A. Burian of
Simmons Perrine PLC, Cedar Rapids, attorneys for appellee.
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Heard at oral argument
by Greer, P.J., and Schumacher and Chicchelly, JJ.
Opinion by Chicchelly, J.

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CHICCHELLY, Judge.

Romare Homes, Inc. (Romare) appeals the district court’s ruling
granting summary judgement for Lincoln Savings Bank (LSB) in a contract
dispute. Romare argues the district court erred when it concluded (1) Iowa
Code section 535.17(4) (2024) does not allow admission of an opposing-party
statement of a former employee of LSB, and (2) LSB was entitled to summary
judgment. Upon our review, we affirm.

BACKGROUND FACTS AND PROCEEDINGS
In August 2021, Romare was preparing to develop approximately
thirty units of residential real estate. To acquire the real estate, they secured
a loan from LSB. In April 2022, Romare secured another loan for the
construction and development of the properties.

A few months later, Romare wanted to expand the project and sought
an additional loan in excess of two million dollars. Romare dealt with LSB’s
vice president Doug Parker. Parker told Romare this request required a
meeting with LSB’s commercial lending manager. The parties take differing
views of the result of this meeting. Romare argues the additional loan was
approved and they could move forward with the two-million-dollar expansion
of their project. But LSB says the meeting resulted in the first step towards
approval of the additional loan.

Romare alleges they began construction of the project based on
assurances they received from LSB. Over the course of months, Romare says
they received verbal confirmation of the loan but received no funding or loan
documentation. In December 2023, LSB advised Romare to stop
construction on the project until further notice. Romare submitted a formal

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loan application to LSB in February 2024. But LSB denied the application
just a month later.

Romare filed this action seeking enforcement of the loan alleging
breach of contract, negligent misrepresentation, and promissory estoppel.
LSB responds stating no lending agreement existed between Romare and
LSB, and even if such agreement did exist, enforcement is barred by the
statute of frauds codified in Iowa code section 535.17. The district court
agreed with LSB and granted summary judgment in their favor. Romare now
appeals.

DISCUSSION
I. Statute of Frauds

Romare first argues Iowa Code section 535.17(4) allows for the
introduction of an affidavit of a former vice president of LSB acknowledging
the existence of the loans. This is a question of statutory interpretation, so
our review is for correction of errors at law. Doe v. State, 943 N.W.2d 608,
609 (Iowa 2020). Our task is “to determine the ordinary and fair meaning”
of the statute at issue. Id. at 610. In making that determination, we consider
the relevant statutes as a whole and in context and “not just isolated words
and phrases.” Id. (quoting In re Est. of Melby, 841 N.W.2d 867, 879 (Iowa
2014)). “Generally, when we conclude the express language of the statute is
plain and the meaning is clear, we need not proceed any further with our
analysis.” Cianzio v. Iowa State Univ., 14 N.W.3d 716, 721 (Iowa 2024).

Iowa Code section 535.17(4) states:

Notwithstanding subsections 1 and 2, a credit agreement or modification of a
credit agreement which is not in writing, but which is valid in other respects, is enforceable
if the party against whom enforcement is sought admits in court that the agreement or

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modification was made, but no agreement or modification is enforceable under this
subsection beyond the terms admitted. Romare argues the affidavit of Doug Parker
qualifies an admission by LSB that renders the loans enforceable despite not
being in writing. Parker, who left his employment with LSB, did not work for
LSB at the time he executed the affidavit. Because he was not an agent of
LSB at the time, LSB argues they cannot be bound by the affidavit of a former
employee. We must decide whether the language “the party against whom
enforcement is sought” includes former employees. See Iowa Code §
535.17(4). We conclude it does not.

A credit agreement is not enforceable unless it contains all material
terms and “is signed by the party against whom enforcement is sought.”
Iowa Code § 535.17(2); see also Cnty. Bank v. Shalla, 20 N.W.3d 812, 814–815
(Iowa 2025). An employer’s representative is “a person empowered to act
for [the employer], including an agent, an officer of a corporation or
association, and a trustee, executor, or administrator of an estate.” Iowa
Code § 554.1201(2)(ah). There is no doubt that Parker was an agent or officer
of LSB during his employment. But the agency relationship only exists when
the employer “manifests assent to another person (an ‘agent’) that the agent
shall act on the principal’s behalf and subject to the principal’s control, and
the agent manifests assent or otherwise consents so to act.” Soults Farms,
Inc. v. Schafer, 797 N.W.2d 92, 100 (Iowa 2011) (quoting Restatement (Third)
of Agency § 1.01, at 17 (Am. L. Inst. 2006)). That means the agency
relationship ends when the employment relationship does. See id.

Romare responds that these statements were made by Parker during
his employment relationship with LSB and therefore qualify as opposing-
party statements under Iowa Rule of Evidence 5.801(d)(2)(D). Under rule
5.801(d)(2)(D), a statement is admissible against an opposing party if “made

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by the party’s agent or employee on a matter within the scope of that
relationship and while it existed.” The statements must be made within the
scope of the employment relationship. See Annear v. State, 454 N.W.2d 869,
873 (Iowa 1990) (finding statement allegedly made by an employee
inadmissible because it met the criteria for hearsay facially and the plaintiffs
failed to make the foundational showing the declarant was speaking within
the scope of employment); see also Gulbranson v. Duluth, Missabe & Iron Range
Ry. Co., 921 F.2d 139, 142 (8th Cir. 1990) (noting that to admit the evidence
under the federal equivalent of rule 5.801(d)(2)(D), the proffering party must
“lay a foundation to show that an otherwise excludible statement relates to a
matter within the scope of the agent’s employment”). “The continuing
employment requirement assumes there is insufficient reliability in a
statement made by a former agent or employee (potentially disgruntled), who
no longer has the employment relationship at risk when making statements
contrary to the former employer’s interest.” 7 Laurie Kratky Doré, Iowa
Practice Series: Evidence § 5.801:14 (Nov. 2025 Update).

While Romare alleges the statements they seek to introduce were
made within the scope of Parker’s employment, the affidavit was executed
over a year after his employment with LSB ended. And we find his
statements do not qualify as in-court admissions under Iowa Code section
535.17(4) because Parker cannot make admissions on behalf of LSB after his
employment relationship has ended. So, we affirm the district court’s
determination that Iowa Code section 535.17(4) bars Romare’s claims.

II. Summary Judgment

Romare’s second argument is that the district court erred in granting
summary judgment for LSB on the breach of contract claim. Romare argues
there was a genuine issue of material fact that it entered a credit agreement

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with LSB. But we have resolved the threshold questions confirming that
there was not a written credit agreement that satisfies the statute of frauds
and that Parker was not an employee who could confirm an oral
understanding, so we do not reach this issue.

CONCLUSION
Because we conclude the affidavit of LSB’s former employee did not
qualify as an opposing-party admission under Iowa Code section 535.17(4),
we find that enforcement of the alleged agreement is barred by the statute of
frauds. Thus, we conclude summary judgment was appropriate and affirm
the district court in its entirety.

AFFIRMED.

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