Grinnell Mutual Reinsurance Company v. Curry Yard Art, Inc.

IN THE COURT OF APPEALS OF IOWA

No. 23-2027
Filed April 9, 2025

GRINNELL MUTUAL REINSURANCE COMPANY,
Plaintiff / Counterclaim Defendant-Appellee,

vs.

CURRY YARD ART, INC.,
Defendant / Counterclaim-Plaintiff-Appellant.
________________________________________________________________

Appeal from the Iowa District Court for Poweshiek County, Joel D. Yates,

Judge.

A landscaping company appeals from a declaratory judgment finding its

insurance coverage was voided by material misrepresentations. AFFIRMED.

Fred L. Dorr, West Des Moines, for appellant.

Sean M. O’Brien and Benjamin J. Kenkel of Dickinson, Bradshaw, Fowler,

& Hagen, P.C., Des Moines, for appellee.

Considered without oral argument by Ahlers, P.J., and Badding and

Langholz, JJ.
2

BADDING, Judge.

In August 2020, a now-infamous derecho windstorm blew through eastern

Iowa. The storm damaged buildings, equipment, and inventory at Curry Yard Art,

Inc. The company filed claims with its insurer, Grinnell Mutual Reinsurance

Company. But after paying nearly $125,000 toward the claims, Grinnell grew

suspicious that the claims were inflated.

Grinnell filed this action seeking a declaratory judgment that it owed no

further claims payments under the insurance policy. Following a bench trial, the

district court found that Curry Yard Art’s owner had misrepresented the extent of

damage his business sustained, voiding all coverage under the policy. Curry Yard

Art appeals.

I. Background Facts and Proceedings

Curry Yard Art, Inc. was a landscaping business owned and operated by

Richard Curry,1 who ran the company out of a shop near Montezuma. He also

kept landscaping equipment and inventory on site. Curry’s business and its assets

were insured under multiple coverages set forth in a Commercial Lines Insurance

Policy issued by Grinnell Mutual Reinsurance Company (“Grinnell”).

On August 10, 2020, a destructive derecho hit eastern Iowa. Curry

submitted a claim under the Grinnell policy, seeking payment to compensate for

wind damage to Curry Yard Art’s buildings and other assets. An independent

adjuster who visited the property on August 21 took photographs of the damage to

1 For purposes of this opinion, we generally refer to “Curry” when describing the

conduct and contentions of Curry Yard Art, Inc. There is no dispute that Richard
Curry was an officer of Curry Yard Art at all times relevant to this appeal.
3

Curry’s shop and compiled a report estimating a $41,865 replacement cost value

for that building. The report also estimated a $15,894 replacement cost for a

second building, referred to in the record as “Building 2,” which Curry claimed as

a total loss. The damage to Building 2 was neither inspected nor photographed

because “all of the debris . . . [was] removed” at the time of the adjuster’s visit.

Instead, the adjuster’s estimate for that building was “based on [a] description

given by [Curry].”

Grinnell paid Curry $49,253 for the wind damage to both buildings. It also

paid $4571 for losses to Curry’s nursery stock and equipment. Curry considered

these amounts insufficient, and Grinnell agreed to perform a re-inspection of the

building damage. Meanwhile, Curry made additional claims for lost business

income, temporary repairs, debris removal, damage to a Kubota excavator, and

damage to a greenhouse. Grinnell paid nearly all of Curry’s claims, remitting an

additional $70,960 in insurance proceeds. But the parties continued to disagree

about the value of Building 2. Curry submitted a proof-of-loss form claiming policy

limits of $36,400 for damage to that structure, which he alleged had been

renovated shortly before it was destroyed in the storm.

Grinnell asked Curry for documentation on the improvements to Building 2,

but Curry said he had “nothing on that” other than the phone number of a contractor

he had hired to perform them—“an Amish guy” known as “Buddy.” In an

examination under oath2 with Grinnell’s attorney, Curry described Building 2 as a

2 The commercial property claims manager for Grinnell testified that an
“examination under oath” is used to obtain “all the facts and information that’s
being claimed and presented” by the insured “so that we know exactly what was
happening and what’s being claimed.”
4

structure with a rock foundation and “beams that went in the ground.” The floor

was fake hardwood, and the exterior was finished with metal siding and a metal

roof. Curry said he used the space as an office and sale room. He could not testify

to the size of the building in its preexisting or improved form, and he had no record

of the labor or material costs from the renovation.

Grinnell denied further coverage, alleging Curry had made material

misrepresentations about the “existence of an addition/improvement to

‘Building 2.’” Grinnell also asserted Curry had made misrepresentations about

claims for lost business income and damage to a John Deere Gator. Grinnell

advised Curry that these misrepresentations voided coverage under the policy’s

“Concealment, Misrepresentation or Fraud” condition:

This Coverage Part is void in any case of fraud by you as it
relates to this Coverage Part at any time. It is also void if you or any
other insured, at any time, intentionally conceal or misrepresent a
material fact concerning:
1. This Coverage Part;
2. The Covered Property;
3. Your interest in the Covered Property; or
4. A claim under this Coverage Part.

In response to the decision, Curry provided a letter from the former owner of the

property stating “[t]here were two buildings on the property at the time of sale”

including a large shop and a “12' x 16' building” used for storage. Grinnell was not

swayed.

In October 2021, Grinnell petitioned for declaratory judgment, asking the

district court to void the policy.3 Curry filed a counterclaim, seeking a declaration

3 Grinnell’s petition did not seek recovery of claims payments already made to

Curry or a declaration regarding the propriety of those payments.
5

that his losses were covered and that Grinnell’s claim-handling practices were

“improper and unlawful.” Following a bench trial, the district court found Curry had

made material misrepresentations to Grinnell about his claims and, consequently,

the policy was “null and void.”

Curry appeals, claiming the district court applied the incorrect standard of

proof and overlooked relevant facts in reaching its decision. Curry also asserts the

district court erred by ignoring “Grinnell’s unlawful claims handling practices” and

declining to enter a judgment awarding damages to Curry.

II. Standard of Review

Our review of a declaratory judgment action “depends upon how the action

was tried to the district court.” Van Sloun v. Agans Bros., 778 N.W.2d 174, 179

(Iowa 2010). To determine whether the action was tried at law or in equity, which

dictates the proper standard of review, we look at “the pleadings, relief sought, and

nature of the case.” Id. (cleaned up). Both parties invite us to apply a de novo

review because that is the appropriate standard for cases tried in equity. W. States

Ins. v. Cont’l Ins., 602 N.W.2d 360, 362 (Iowa 1999). But actions on a contract—

including an insurance policy—are ordinarily “treated as actions at law unless

specific equitable issues are involved.” IMT Ins. v. Roberts, 401 N.W.2d 228, 229

(Iowa Ct. App. 1986). The matter was also docketed as a law action, and the

district court sustained objections during the parties’ testimony—“the hallmark of a

law trial.”4 City of Riverdale v. Diercks, 806 N.W.2d 643, 651 (Iowa 2011) (cleaned

up). Accordingly, we are not convinced the court tried the matter in equity.

4 We note, however, the court’s rulings sustaining objections were “minor and did

not have a significant effect on the proceedings.” Passehl Est. v. Passehl, 712
6

Despite our reservations, we will use a de novo standard of review because

we would reach the same conclusion under a review for correction of errors at law

and because the parties appear to agree the action was tried in equity. See City

of Davenport v. Shewry Corp., 674 N.W.2d 79, 82 (Iowa 2004) (reviewing a case

de novo for those reasons); accord Albert v. Conger, 886 N.W.2d 877, 880 (Iowa

2016). Even with a de novo review, we give “great weight” to the court’s factual

findings where the testimony is conflicting because “the trial court is in a far better

position to weigh the credibility of witnesses than the appellate court.” Albert, 886

N.W.2d at 880; accord Hora v. Hora, 5 N.W.3d 635, 645 (Iowa 2024).

III. Analysis

The district court found that “[m]uch of this case comes down to credibility.”

It “placed great emphasis on the testimony given by Richard Curry,” whom it “did

not find . . . to be credible.” On appeal, Curry contends the court should have

applied a heightened standard of proof in resolving this case, given Grinnell’s

allegations of “civil fraud.” He argues that the “trial court’s singular focus on [his]

testimony” was incorrect and that the “court should have reviewed the entire record

in order to determine whether Plaintiff Grinnell had satisfied its burden of proof by

clear, satisfactory, and convincing evidence.” See State ex rel. Miller v. Rahmani,

472 N.W.2d 254, 257 (Iowa 1991) (discussing the burden of proof “in the area of

civil fraud”).

N.W.2d 408, 414 (Iowa 2006); see also Sille v. Shaffer, 297 N.W.2d 379, 381 (Iowa
1980) (observing that a court’s rulings on objections do not prevent a de novo
review where no one claims the court improperly excluded evidence).
7

Grinnell asserts that Curry failed to preserve error on this argument because

the district court’s order does not state the standard it applied and Curry did not

seek clarification through a motion under Iowa Rule of Civil Procedure 1.904(2).5

We agree. Even if error had been preserved, we would reject Curry’s argument

because, as our supreme court explained in Holliday v. Rain & Hail L.L.C., what

Grinnell

had to prove here was not common-law fraud for damages. Rather
it had to prove a contractual defense . . . to void the polic[y] based
simply on intentional concealment or misrepresentation; there was
no language indicating that [Grinnell] had to prove all the elements
of common-law fraud.

690 N.W.2d 59, 64 (Iowa 2004).

Like the policy at issue in Holliday, the policy here allowed Grinnell to

decline coverage if Curry “intentionally conceal[ed] or misrepresent[ed] a material

fact concerning . . . [t]he Covered Property . . . or [a] claim under this Coverage

Part.” Interpreting a similar policy provision, the Iowa Supreme Court has held that

a misrepresentation about the extent of a claimed loss is “material” if the property

at issue “is the object of the insurance policy which covers it.” Webb v. Am. Fam.

Mut. Ins., 493 N.W.2d 808, 811 (Iowa 1992). It makes no difference whether a

misrepresentation is “minor compared to the policy limits or undisputed loss”—any

material false claim can preclude recovery. Id. However, “mere mistaken

recollections” are not enough to void a policy. Id.

5 The parties’ pretrial briefs did not discuss the standard to be applied, and neither

offered argument on that issue at trial. Instead, they agreed to make their legal
arguments in proposed rulings submitted to the district court via email. Cf. Iowa
R. Electronic P. 16.404 (“Legal briefs and memoranda must be electronically
filed.”). As a result, we do not have those arguments in the record before us.
8

Curry does not dispute the materiality of the misrepresentations alleged by

Grinnell; he disputes the district court’s conclusion that he made any

misrepresentations at all. Defending his claim for damage to Building 2, Curry

points to the policy’s declarations page—which lists two buildings for coverage—

as well as the letter from the former owner and aerial photographs depicting the

property before the derecho. But this evidence misses the point. The record is

clear that a shed-like second structure existed on the property sometime before

the derecho.6 The district court did not make a contrary finding. Rather, it

concluded that the “alleged improvements” Curry cited in support of his policy-

limits claim “did, in fact, not occur.” Whether the record supports that determination

is the relevant question here.

At trial, counsel for Grinnell asked Curry to describe his improvements to

Building 2. Curry noted several of the upgrades he had discussed in his

examination under oath, including new roofing, new siding, new flooring, and a roll-

up door. But parts of his description departed from his prior statements. For

instance, Curry testified that Building 2 was built on parallel “skids” that allowed it

to be moved, contrary to his prior representation the structure was built on “beams

that went in the ground.” He also testified that the remodeled building featured an

attached deck and “barn wood” walls. Curry had previously described metal siding

during his examination under oath. He had not mentioned a deck.

6 To be sure, Grinnell raised questions at trial regarding whether Building 2 was

removed from the property before the derecho. It introduced a photograph taken
by Curry’s neighbor in June 2020 showing no building in the place where a shed-
like structure had been depicted by aerial photographs. Curry testified that
Building 2 was not pictured in the photo because he had temporarily moved it while
a bulldozer leveled the ground.
9

Other elements of Curry’s testimony conflicted with his allegations of a

substantial renovation project. Curry acknowledged that the building had no

plumbing at the time of the storm and that its only source of electricity was an

extension cord from his shop. He also testified that there were no formal plans for

the improvements—he just “told the [contractor] what [he] wanted it to look like,

and [the contractor] did his best to come up with what [Curry] wanted.” Curry

maintained that his contractor was an Amish man called Buddy who “worked

around.” At the time of trial, Curry still did not know Buddy’s last name or where

he lived, and nobody had been able to reach him.

Grinnell’s expert witness, architect Dirk Westercamp, testified that he

reviewed public records and located no building permits for Curry’s alleged

improvements. Westercamp further testified that, upon studying photographs of

the property, he found no signs of a “rock” foundation with “beams that went in the

ground.” Westercamp also examined debris-pile photos taken eleven days after

the derecho, finding no evidence of the new construction materials described by

Curry. Westercamp opined that Building 2 was, at most, a “dilapidated temporary

structure . . . without footings, foundations or other substantial anchorage.” He

placed the building’s value “between $1,183 and $3,236.” According to

Westercamp, if Curry’s $36,400 claim was accurate, then Building 2’s cost per-

square-foot would have exceeded the price of hospital construction.

The district court credited the testimony of Grinnell’s expert over Curry’s

inconsistent account of a never-photographed, never-documented, only-recently-

completed remodeling project. We decline to disturb that determination on appeal.

See Hora, 5 N.W.3d at 645 (noting “the district court has a front-row seat to the
10

live testimony, viewing the demeanor of both the witness as she testifies and the

parties while they listen”). Deferring to the district court’s credibility determination,

we agree with the court’s conclusion on our de novo review that Curry

misrepresented the value of his improvements to Building 2.

Curry’s material misrepresentation about Building 2 was sufficient to void all

further coverage under the policy. See Webb, 493 N.W.2d at 812. We therefore

do not reach Curry’s arguments regarding the district court’s other factual findings.

We likewise find moot Curry’s separate claim that the district court should have

awarded him “damages” under the policy.

This leaves us with two other issues raised by Curry on appeal—neither of

which is properly before us. First, Curry argues that the district court failed to

consider “Grinnell’s unlawful claims handling practices.” Because Curry did not

seek enlargement of the court’s ruling under rule 1.904(2), that claim is not

preserved. See UE Loc. 893/IUP v. State, 928 N.W.2d 51, 60 (Iowa 2019).

Second, Curry contends he was entitled to additional policy proceeds under the

doctrine of reasonable expectations, see Luigi’s, Inc. vs. United Fire & Cas. Co.,

959 N.W.2d 401, 407 (Iowa 2021), because there “was no indication on the

opening pages of the insurance policy agreement of any condition or limitation to

[his] coverage.” Among other problems, Curry raised this argument for the first

time in his reply. So we do not consider it further. See State v. Zacarias, 958

N.W.2d 573, 581 (Iowa 2021).
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IV. Conclusion

For these reasons, we affirm the ruling of the district court declaring the

policy void and releasing Grinnell from any further payment obligation.

AFFIRMED.