Cooley Pumping, LLC v. Greg Melcher and Lisa Melcher

IN THE COURT OF APPEALS OF IOWA

No. 20-1146
Filed October 6, 2021

COOLEY PUMPING, LLC,
Plaintiff-Appellee,

vs.

GREG MELCHER and LISA MELCHER,
Defendants-Appellants.
________________________________________________________________

Appeal from the Iowa District Court for Grundy County, David P. Odekirk,

Judge.

Greg and Lisa Melcher appeal a district court order in favor of Cooley

Pumping, LLC and dismissal of their counter claims. AFFIRMED AND

REMANDED.

Bruce J. Toenjes of Nelson & Toenjes, Shell Rock, for appellants.

Mark W. Fransdal and Bradley M. Strouse of Redfern, Mason, Larsen and

Moore, PLC, Cedar Falls, for appellee.

Heard by Mullins, P.J., and May and Ahlers, JJ.
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MULLINS, Presiding Judge.

Greg and Lisa Melcher appeal a district court order in favor of Cooley

Pumping, LLC and dismissing their counterclaims related to the design and

installation of their septic system. The Melchers raised several issues on appeal

including arguments that the district court applied incorrect legal standards, newly

discovered evidence should have led to a new trial, and the district court made

multiple errors in awarding attorney fees and costs.

I. Background Facts and Proceedings

Greg and Lisa Melcher are homeowners in a rural area of Grundy County.

Cooley Pumping, LLC, is a company located in Grundy County that performs

design and installation of septic systems in Grundy and other counties in Iowa.

The Melchers contacted Cooley Pumping in 2017 to design and install a new septic

system on their property. The Melchers’ prior system was declared noncompliant

by Grundy County. Cooley Pumping visited the Melchers’ home to discuss the

specifics of the system and its location on the property. Cooley Pumping’s

proposal for the system was accepted by the Melchers in March. Cooley Pumping

submitted an application to the Grundy County Sanitarian, which was approved on

April 11, the same day a site inspection was performed. The sanitarian approved

installation for a 1250 gallon septic tank with two laterals totaling 180 feet. The

Melchers have only ever used two of the three bedrooms located in the home, and

the evidence shows there was some confusion over how many bedrooms the

home actually has. Cooley Pumping relied on the sanitarian’s loading calculation

and knowledge of the soil type and characteristics to determine the size of the

system and its components. The sanitarian relied on her prior experience with
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neighboring properties and USDA soil surveys to aid her calculation and

determination that a conventional system was appropriate.

At no time did the sanitarian or Iowa Department of Natural Resources

(DNR) representatives who were consulted, neither of which had personal

experience with the Melcher property, have any hesitation about installing a

conventional system. No percolation test was performed on the property because

it was not required by Grundy County. Although no six-foot test hole was dug on

the Melchers’ property, the hole dug for installation was adequate for Cooley

Pumping to determine there would be no problem with the water table.

Cooley Pumping’s owner, Paul Cooley, was on site the morning of the

installation but was called away to another worksite. Cooley left another fully

certified installer, B.H., on the property to oversee installation. The Melchers’

property has a number of limiting characteristics including geothermal lines, a well,

trees, gardens, a pond, a shed, and a slope in elevation. Cooley Pumping also

contracted to pump out, disable, and backfill the old septic system. In order to

accommodate limiting factors, B.H. made the decision to relocate the tank

approximately ten feet from the location the parties planned for it. The Melchers

were informed and made no objection. The sanitarian was unable to visit the day

of installation so Cooley Pumping took photos of the site for approval. The system

was backfilled the same day, and a final inspection was conducted on April 24.

The Melchers raised a number of complaints related to installation and

deviations from the original plan drawn by the parties.1 They insisted the lids were

1A few minor issues were addressed and corrected by Cooley Pumping that have
not been a part of this litigation.
4

too high and a significant amount of dirt would need to be loaded on the property

to make them level with the ground. In order to accommodate the cost of

landscaping, the Melchers withheld the last $1000.00 of their payment to Cooley

Pumping. The sanitarian and B.H. visited the Melcher property to address pending

complaints, take measurements, and complete a soil probe. No issues with the

system were found and no alterations were recommended.

The Melchers refused to complete the payment of the contract price.

Cooley Pumping began a small-claims proceeding to recover the remaining

payment and a finance charge. The Melchers made counterclaims, and the

proceedings were removed to the district court. Over the course of litigation, the

Melchers made two motions for summary judgment, which were denied. Multiple

expert witnesses were consulted and testified at trial. Trial was held on September

18 through 20, 2019, and completed on October 9. Post-trial briefing was

submitted and the record was closed in November. The district court’s ruling was

filed February 27, 2020, in favor of Cooley Pumping. At that same time, the

Melchers became aware that the sanitarian and B.H. had engaged in an

extramarital affair at some point. The Melchers filed motions for new trial and to

reconsider, alleging the district court made a number of errors and that the affair

was newly discovered evidence. Cooley Pumping also pursued its right to recover

attorney fees and costs. Extensive litigation began again. A hearing on the post-

trial motions and fees was held on June 24. The district court entered its order on

August 31, again in favor of Cooley Pumping. The Melchers appeal. Following

the notice of appeal, Cooley Pumping filed a supplemental request for attorney

fees, which was granted. The Melchers appeal the supplemental award.
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II. Standards of Review

Claims centered on the contract between the parties and alleged breach

are reviewed for correction of errors at law. Meincke v. Nw. Bank & Trust Co., 756

N.W.2d 223, 227 (Iowa 2008). “We view the evidence in the light most favorable

to the judgment” and examine whether the district court’s fact findings are

supported by substantial evidence. Id. “Evidence is substantial when reasonable

minds accept the evidence as adequate to reach a conclusion.” Id. We ask

whether the evidence “supports the finding actually made, not whether the

evidence would support a different finding.” Id. (quoting Raper v. State, 688

N.W.2d 29, 36 (Iowa 2004)).

Rulings on motions for new trial based on newly discovered evidence are

reviewed for abuse of discretion. Benson v. Richardson, 537 N.W.2d 748, 762

(Iowa 1995). We ask if the district court clearly abused its discretion “on untenable

grounds or acted unreasonably.” Id. “We likewise review for abuse of discretion

rulings allowing or disallowing expert testimony challenged as untimely and ‘accord

the trial court broad discretion.’” Hagenow v. Schmidt, 842 N.W.2d 661, 670 (Iowa

2014) (quoting Klein v. Chi. Cent. & Pac. R.R., 596 N.W.2d 58, 60–61 (Iowa 1999)),

overruled on other grounds by Alcala v. Mariott Int’l, Inc., 880 N.W.2d 699 (Iowa

2016). “We review a district court’s denial of a new trial for failure to administer

substantial justice for abuse of discretion.” Crow v. Simpson, 871 N.W.2d 98, 105

(Iowa 2015).

Attorney fee disputes that require courts to engage in statutory

interpretation are reviewed for correction of errors at law. Van Sloun v. Agans

Brothers, Inc., 778 N.W.2d 174, 182 (Iowa 2010). In the absence of a statutory-
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interpretation issue, review of an attorney-fee award is for an abuse of discretion.

GreatAmerica Leasing Corp. v. Cool Comfort Air Conditioning & Refrigeration, Inc.,

691 N.W.2d 730, 732 (Iowa 2005).

III. Discussion

A. Contractual Claims

The Melchers argue the district court erred in applying the wrong legal

standard to their breach claim, using that allegedly improper standard as a bar to

their counterclaims, and that the analysis was flawed.

1. Standard of Compliance

The parties agree that the standard of review for these contractual claims is

for correction of errors at law but disagree about the necessary level of compliance

required to meet that standard. The Melchers argue that strict compliance with the

applicable administrative code is necessary. Cooley Pumping argues that

substantial compliance is the correct standard.

The DNR controls water pollution within the state, including private sewage

disposal systems. Iowa Code § 455B.172(1), (2) (2018). The DNR regulations for

private sewage disposal systems are contained in 567 Iowa Administrative Code

Chapter 69. County health boards are tasked with adopting the minimum

standards set forth by the DNR but may adopt more stringent standards provided

that they are consistent with the minimum standards set forth in the administrative

code. Iowa Code § 455B.172(3), (4).

The Melchers argue the district court applied the standard of substantial

performance in error, pointing toward its citation to cases involving mechanics

liens. Although Cooley Pumping did not bring their claim through a mechanic’s
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lien, our supreme court has said that “[t]he concept of substantial performance in

the mechanic’s lien context is derived from contract law.” Flynn Builders, L.C. v.

Lande, 814 N.W.2d 542, 546 (Iowa 2012). And, in applying the standard of

substantial performance to a mechanic’s-lien issue, our supreme court also

borrowed its definition from contract law. Id. “In the area of contracts, ‘[s]ubstantial

performance is performance without a material breach, and a material breach

results in performance that is not substantial.’” Id. (quoting II E. Allan Farnsworth,

Farnsworth on Contracts § 8.16, at 518 (3d ed. 2004)). “[T]he burden of proof

regarding the performance of the contract rest[s] on the plaintiff. Although the

burden of proof regarding the showing of substantial compliance rests with the

plaintiff-contractor, the defendant-homeowner has the burden of showing any

defects or incompletions.” Moore’s Builder & Contractor, Inc. v. Hoffman, 409

N.W.2d 191, 194 (Iowa Ct. App. 1987) (citations omitted).

The Melchers cite to Ales v. Merritt, a breach-of-contract case also dealing

with a sewage issue, in which the seller of a home warranted the plumbing system

was in working order. 486 N.W.2d 592, 593, 595 (Iowa Ct. App. 1992). In Ales,

the court noted that the system did not comply with the applicable plumbing

standards. Id. at 595. Another issue entwined with the applicable standard was

whether the septic system actually worked. Id. Ultimately, the court found the

system “did not properly treat or dispose of sewage thus could not be said to be in

working order.” Id. The court’s conclusion rested on the fact that the system in

place failed to “properly treat and dispose of sewage,” meaning it didn’t perform its

essential function and was not in the condition warranted by the contract. Id. That

analysis is supported by a recent pronouncement of our supreme court that
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“substantial performance ‘excuses contractual deviations or deficiencies which do

not severely impair the purpose underlying a contractual provision.’” Homeland

Energy Sols., LLC v. Retterath, 938 N.W.2d 664, 701 (Iowa 2020) (quoting SGD

Macerich Props. L.P. v. Stanek Inc., 648 N.W.2d 581, 586 (Iowa 2002)).

We find no error in applying the substantial performance standard because

our supreme court has noted its applicability on both contract and mechanic’s-lien

issues.

2. Melchers’ Counterclaims

The Melchers argue the district court erred in finding that Cooley Pumping’s

substantial performance was a bar to their counterclaims. Substantial

performance is a defense, not a bar, to warranty claims. Moore’s Builder &

Contractor, Inc., 409 N.W.2d at 195. If the district court declined to consider the

counterclaims merely because Cooley Pumping substantially performed on the

contract, we would be forced to reverse and remand. Id. But, that is not what

happened. In its February 2020 order, the district court specifically found no

material deviations from the contract terms existed.

The Melchers have failed to prove a material breach of
contract by Cooley Pumping. The Melchers received the working
septic system that they have only partially paid for.
....
While there are technical deviations from the terms of the
Chapter 69 regulations, none are material unless and until there is
some impact on the functionality of the system or impact on the
health of the owner or public.

The district court also found the Melchers failed to prove “that the septic system

has or will fail” or that it created unsanitary conditions on the property, and

ultimately that the Melchers suffered only speculative damages.
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Following the Melchers’ motion to reconsider, enlarge, or amend pursuant

to Iowa Rule of Civil Procedure 1.904(2), the district court said again that the

Melchers failed to prove the system was not fit for its intended use or that the work

was performed in any way less than a workmanlike manner. From the record, it is

clear that the district court did consider the counterclaims, including warranty

issues. Because the district court did not bar the counterclaims, but instead

considered substantial performance as a defense, we find no error.

3. Contract Analysis

The Melchers argue the district court’s analysis is incorrect because Cooley

Pumping breached the contract in that it did not comply with chapter 69, no

showing of current harm was required, the Grundy County Sanitarian had no

discretion to excuse the breach, Cooley Pumping failed to substantially perform,

the warranty was breached, and hearsay evidence was given too much weight.2

Cooley Pumping does not dispute the applicability of the local ordinances

or chapter 69. It argues, instead, that it substantially complied with the applicable

ordinances and regulations, and rendered complete performance. The Melchers

cite four ways the septic system violates the applicable regulations: (1) the system

is undersized, (2) the laterals are not level, (3) the laterals are not equal in length,

and (4) there is insufficient treatment soil under the laterals.

We have already established that the district court did not err in applying

the substantial-performance framework and will apply it here. “[A] technical, exact

2 The Melchers argued the district court relied too heavily on hearsay statements
of former DNR employee Dan Olson. They failed to cite to any authority to support
their argument. We deem the argument waived. Iowa R. App. P. 6.903(2)(g)(3).
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and perfect performance is not necessary. Substantial performance is all that is

required. Where there is substantial performance the builder is entitled to the

contract price less reasonable damages on account of slight defects in

performance.” Huffman v. Hill, 65 N.W.2d 205, 206 (Iowa 1954). Cooley Pumping

bears the burden to prove it substantially performed to be entitled to full payment.

Farrington v. Freeman, 99 N.W.2d 388, 391 (Iowa 1959). Defects in performance

may result in a deduction. Id.

“Substantial performance,” as defined by the cases, permits only
such omissions or deviations from the contract as are inadvertent or
unintentional, are not due to bad faith, do not impair the structure as
a whole, are remediable without doing material damage to other
parts of the building in tearing down and reconstructing, and may
without injustice be compensated for by deductions from the contract
price.

Id. (quoting Littell v. Webster Cnty., 131 N.W. 691, 694 (Iowa 1911)). “Once a

contractor has met its burden to show substantial performance, the homeowner

has the burden to show any defects or incompletions which may be deducted from

the contract price.” Nepstad Custom Homes v. Krull, 527 N.W.2d 402, 406 (Iowa

Ct. App. 1994).

The district court provided the following discussion and found Cooley

Pumping substantially complied with the contract:

Cooley Pumping installed a system for the Melchers which was
permitted and approved by the Sanitarian for its size, location, and
design. The work was done pursuant to a contract. All of the
features described in the contract were installed, and the system has
performed as intended and expected [since installation]. There had
been no failures, backups, or surface water linked to the septic
system. Six thousand dollars of the modest $7000 cost of this
system was paid, but $1000 was withheld because the Melchers
claimed 30 tons of dirt was needed in the back yard to bring the lids
“flush to the ground,” in spite of the fact that the contract said Cooley
Pumping would complete the area only to “ROUGH GRADE.”
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. . . . The location of the tank was raised as an issue because
Melchers claimed that the contract provided for its placement directly
north of the apple tree and on top of a geothermal line. That is not
consistent with the recommendations of Dan Olson at the DNR. The
Melchers also claim that the tank was set too high, but they have
done nothing to finish the grading and landscaping around the tank,
and the tank has never experienced any freezing. The Melchers
have no out-of-pocket expenses to claim as damages because
nothing has been done to fix the alleged defect. The septic system
has at all times worked as it was intended.
The Sanitarian was aware at some time prior to her final
inspection that the location of the tank was moved 10 feet or less
from its original planned location to make it a more optimal location.
She did not find this to be a significant change in the design. There
is no evidence that this change was material or caused any
problems.

We disagree with the district court to the extent that the contract specified the

Melchers would receive four risers.3 Four were initially installed, but two were

removed to bring the lids closer to the ground.

The district court found the deviations from chapter 69 were “technical,” and

were not “material unless and until there [was] some impact on the functionality of

the system or impact on the health of the owner or public.” The alleged defects of

the system are only, in fact, defects if we find strict compliance with chapter 69 is

the applicable standard. But the language contained in chapter 69 concedes that

perfect compliance is unnecessary. The DNR grants regulative power to the

counties. Iowa Code § 455B.172(4). Both the DNR and administrative authorities,

including local health boards, may grant variances from the regulations when

necessary. Iowa Admin. Code rs. 567-69.1(2), .22. Grundy County defines the

3Risers are concrete cylinders set over the opening of the tank to elevate the lids.
The contract specified that two risers would be stacked on each opening, for a total
of four risers.
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administrative authority to include the County Sanitarian. Grundy Cnty., Iowa

Ordinances 7.02.02(6) (2004).

The evidence presented at trial shows there were minor deviations from the

original plans developed, but that nothing has hindered the performance of the

system. Even though the Melchers point to minor changes, in all other respects,

they received the septic system they contracted to receive. The evidence also

reveals that any deviations from the original plan were approved by the Grundy

County Sanitarian, who had the discretion to grant variances. Iowa Admin. Code

rs. 567-69.1(2), .22. On our review of the record, substantial evidence was

presented to support the district court’s finding that Cooley Pumping substantially

performed on the contract and is not in breach. Homeland Energy Sols., LLC, 938

N.W.2d at 701. Furthermore, we agree with the district court that Cooley Pumping

performed its obligations “in a substantially workmanlike manner and the septic

system is fit for its intended use.” The Melchers’ warranty claims thus fail.

The Melchers take issue with the district court’s requirement of present

harm for an award of damages and argue they should be allowed to recover for

future damages. The Melchers ask that damages be awarded based on

substantial evidence of the probability that the lifespan of the system will be shorter

than it should be. “Under Iowa law, when a contract has been breached the

nonbreaching party is generally entitled to be placed in as good a position as he

or she would have occupied had the contract been performed.” Midland Mut. Life

Ins. Co. v. Mercy Clinics, Inc., 579 N.W.2d 823, 831 (Iowa 1998). “Under this

theory of damages, the nonbreaching party’s recovery ‘is limited to the loss he has

actually suffered by reason of the breach; he is not entitled to be placed in a better
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position than he would have been in if the contract had not been broken.’” Id.

(emphasis added) (quoting 22 Am. Jur .2d Damages § 45 (1988)). Applying this

legal framework, the Melchers have suffered no damages. They have not proved

that the system has failed or malfunctioned in any way. They have not completed

the landscaping they claim is required to restore their property. While the system’s

ultimate failure is, or may be, foreseeable at some future point, we have no way to

predict if, when, or to what extent that may occur. It is possible that they system

may have a traditional life expectancy. Like the district court, we find the damages

requested are speculative and there are no damages to award at this time.

B. Evidentiary Claims

The Melchers argue the district court erred in failing to grant a new trial

based on newly discovered evidence, the verdict failed to do substantial justice,

and the late designation of an expert witness should not have been allowed.

1. Newly Discovered Evidence

The Melchers argue that the existence of an extramarital relationship

between the Grundy County Sanitarian and B.H., the Cooley Pumping employee

who led the installation of the Melcher’s system, created bias between the two

witnesses and materially affected the Melchers’ substantial rights. During oral

arguments on the Melchers’ post-trial motions, B.H. testified that the affair occurred

in January 2020. The sanitarian also testified, but reported that the affair occurred

in late January 2020 and lasted into early February. Both testified that the affair

did not exist prior to 2020 and was over in February of that year. The Melchers

became aware of the relationship on February 24, 2020, and confirmed it with

family members of the sanitarian and B.H. on February 27. The Melchers then
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filed their motion for new trial, arguing that the relationship between B.H. and the

sanitarian created bias, that the witnesses coordinated their testimony, and that

they had engaged in spoliation.

Cooley Pumping contests error preservation on the spoliation argument.

The hearing transcript reveals that the witnesses were questioned about the fact

that they deleted text messages that would have exposed the affair to their

spouses even though they were subject to a litigation hold requiring them to retain

records. The trial transcript reveals that the Melchers did raise spoliation in oral

arguments, but the district court rested its decision solely on whether the

relationship itself was newly discovered evidence. “It is a fundamental doctrine of

appellate review that issues must be both raised and decided by the district court

before we will decide them on appeal.” Meier v. Senecaut, 641 N.W.2d 532, 537

(Iowa 2002). The only comment the district court made regarding the phone

records were that they were “consistent with the testimony of [the sanitarian and

B.H.] concerning the timeframe of their relationship.” Although we do assume “that

the district court rejected claims not specifically addressed” in an order, that

assumption is “only to guide our review of an incomplete or sparse record when

preservation of error is not at issue.” Id. at 539–40. In this case, it does not appear

that the district court made any finding related to spoliation and only considered

whether the relationship at issue met the standard to grant a new trial. Because

the district court did not rule on the spoliation issue, it is not preserved for our

review. Id. at 537.

The Melcher’s moved for a new trial pursuant to Iowa Rule of Civil

Procedure 1.1004(7), which allows a party to move for a new trial upon the
15

discovery of “[m]aterial evidence, newly discovered, which could not with

reasonable diligence have been discovered and produced at the trial.”

A party seeking a new trial on such grounds must demonstrate three
things: (1) the evidence is newly discovered and could not, in the
exercise of due diligence, have been discovered prior to the
conclusion of trial; (2) the evidence is material and not merely
cumulative or impeaching; and (3) the evidence will probably change
the result if a new trial is granted.

Benson, 537 N.W.2d at 762. When considering the first element of the Benson

test, the evidence must have both (1) “existed at the time of trial” and (2) “for

excusable reasons, the party was unable to produce at the time.” Id. at 762–63.

Trial was held in September and October of 2019, and all of the evidence in the

record points to the affair taking place in January and February of 2020. Thus, no

evidence of any affair existed because it had not yet taken place. Id. In order to

qualify as newly discovered evidence that would lead to a new trial, it must have

existed at the time of the trial. Id. We agree with the district court’s decision to

deny the motion for new trial.

2. Expert Witness Designation

The Melchers argue the district court erred in denying the motion to strike

an allegedly late-designated expert witness, Tim Rozendaal.

Courts are granted broad discretion to consider motions to strike expert

witnesses challenged as untimely. Hagenow, 842 N.W.2d at 670. Iowa Rule of

Civil Procedure 1.500(d) requires that disclosure of experts occur “(1) No later than

90 days before the date set for trial; or (2) Within 30 days after the other party’s

disclosures if the evidence is intended solely to contradict or rebut evidence on the

same subject matter identified by another party under rule 1.500(2)(b) or (c).”
16

Cooley Pumping informed the Melchers on July 11, 2019 that Tim

Rozendaal would perform a time-of-transfer evaluation. They requested that the

evaluation occur within three weeks so that the September trial could still occur. A

hearing was held on July 31 to determine the parameters of the evaluation, who

may be present, and whether interaction would be permitted. The evaluation

occurred on August 1, and Rozendaal’s report was provided to the Melchers on

August 19. That information was then updated on August 28. Cooley Pumping

did not file the designation of expert witness with the court until August 29.

The initial disclosure of Rozendaal was sixty-nine days before trial. The

evaluation was forty-eight days before trial. The report was provided to the

Melchers thirty days before trial and was then supplemented twenty-one days

before trial. By the language of the rule, deadlines were missed. Iowa R. Civ.

P. 1.500(d). However, the Melchers had approximately three weeks from the

notification that Rozendaal would perform the evaluation until it occurred. The

Melchers appeared for a hearing to be heard about the conduct of the parties on

their property. It appears that the Melchers were present during the test. On our

review of the record, no prejudice resulted from the late designation and the

expert’s admission was not an abuse of discretion. See Hagenow, 842 N.W.2d at

670.

3. Substantial Justice

The Melchers argue that the district court erred in failing to grant a new trial.

They allege that when the record is viewed as a whole, considering numerous legal

errors and witness issues, the verdict does not do substantial justice between the

parties.
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“[A] trial court has inherent power to grant a new trial when a verdict fails to

administer substantial justice.” Crow, 871 N.W.2d at 108. If the district court

makes a determination that substantial justice was not done, it may grant a new

trial pursuant to Iowa Rule of Civil Procedure 1.1004 if “the reason the verdict fails

to administer substantial justice [is] apparent in the record to justify” the new trial.

Id. The Melchers point to legal errors, biased witnesses, a noncompliant system,

and the lack of a remedy. However, our review has already established that the

alleged legal errors, witness issues, and complaints regarding the system’s

compliance were correctly determined by the district court. The Melcher’s received

a functional system that substantially complies with the applicable regulations and

contract provisions. We find no apparent justification for a new trial and no abuse

of discretion. Id.

C. Fees and Costs

The Melchers argue the district court erred in awarding attorney fees and

costs of the litigation and that the district court lacked jurisdiction to award fees

after the appeal was taken. Cooley Pumping requests an award of appellate

attorney fees.

1. Attorney Fees and Costs

The Melchers argue the district court erred in awarding attorney fees

because their post-trial motions should have been granted and fees that were

associated with a case involving Cooley Pumping’s insurer were unrelated to the

case at issue.

“When judgment is recovered upon a written contract containing an

agreement to pay an attorney fee, the court shall allow and tax as a part of the
18

costs a reasonable attorney fee to be determined by the court.” Iowa Code

§ 625.22 (emphasis added). “Costs shall be recoverable by the successful against

the losing party.” Id. § 625.1 (emphasis added). The parties do not dispute the

fact that the contract included an agreement that if litigation resulted from the

contract, “the prevailing party in said legal action shall be entitled to recover its

reasonable attorney’s fees and costs of litigation related to said legal action.” “The

district court is considered an expert in what constitutes a reasonable attorney fee,

and we afford it wide discretion in making its decision.” GreatAmerica Leasing

Corp., 691 N.W.2d at 733. The applicant bears the burden to prove “the services

were reasonably necessary and that the charges were reasonable in amount.”

Landals v. George A. Rolfes Co., 454 N.W.2d 891, 897 (Iowa 1990). Courts may

consider factors including “the time necessarily spent, the nature and extent of the

service, the amount involved, the difficulty of handling and importance of the

issues, the responsibility assumed and results obtained, the standing and

experience of the attorney in the profession, and the customary charges for similar

service.” Id.

This case began with a $1000.00 dispute in small claims court for the unpaid

balance on the Melchers’ account with Cooley Pumping. The Melchers’

counterclaims removed the case to the district court. We agree with the district

court’s rendition of the litigation following the change, “involv[ing] extensive

discovery and pretrial litigation (including two motions for summary judgment), a

lengthy trial and post-trial briefs.” Litigation before the district court began in

December 2017 and was not complete until December 2020. The parties

appeared before the court for three hearings before the three and one-half day trial
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and appeared again for post-trial motions. The district court’s decision on attorney

fees and costs involves all of the factors described in Landals. Id. We have

already found the district court did not err in denying the Melchers’ post-trial

motions. Furthermore, we agree with the district court that any fees that may

overlap with the Melchers’ claim involving the insurer are “reasonable in light of the

issues relevant to the defense of the claims in” this matter. We also agree with the

district court that, “had the [Melchers] prevailed they would have likely submitted a

similarly large request for attorney fees and costs relative to the amount of

damages they were claiming.” Finding nothing clearly unreasonable or untenable

on our review of the record, we find no abuse of discretion. GreatAmerica Leasing

Corp., 691 N.W.2d at 732.

2. Jurisdiction Following Notice of Appeal

The Melchers argue that the notice of appeal, filed September 3, 2020,

divested the district court of jurisdiction to consider attorney fees.

Although this issue relates to an attorney-fee award, because it calls

jurisdiction into question, we review for correction of errors at law. In re Marriage

of Engler, 532 N.W.2d 747, 748 (Iowa 1995). Generally, when one party files a

notice of appeal, jurisdiction rests solely with the appellate court. In re Estate of

Tollefsrud, 275 N.W.2d 412, 417 (Iowa 1979). But that rule is not without

exception. “[A] trial court retains jurisdiction to proceed as to issues collateral to

and not affecting the subject matter of the appeal.” Id. at 418. Attorney fees may

be considered “separate and distinct” from underlying matters that transfer

jurisdiction on the filing of an appeal. Landals, 454 N.W.2d at 897.
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In its February 27, 2020 order, the district court found Cooley Pumping

should receive fees and costs following the filing of fee affidavits. Cooley Pumping

then filed its motion for fees and costs, and litigation on that issue began. The

record reveals that on June 24, prior to the hearing on post-trial motions, Cooley

Pumping filed a supplemental affidavit, increasing the amount requested in fees.

The initial request listed fees in the amount of $100,091.00 and costs in the amount

of $4653.38. The supplemental request was for an additional $34,560.05 in fees.

The district court ruled on the post-trial motions on August 31. The procedural

history described in that ruling lists the original motion for fees and costs, but does

not list the supplemental motion. In its analysis, the district court left out the

supplemental request again. The Melchers filed a notice of appeal on September

3. On September 15, Cooley Pumping filed an application for the district court to

rule on its supplemental request; the Melchers resisted. The district court’s ruling

on September 21 granted all but $213.30 of the supplemental request.

The district court reviewed the supplemental request through the factors

presented in Landals, and awarded $34,346.75. 454 N.W.2d at 897. The fees

were related to the Melchers’ “post-judgment motions and resistances,” which

were equally contentious to trial. Although it would have been tidier for the district

court to consider the supplemental request and rule on it with the other fees, the

district court did not lack jurisdiction to rule on the supplemental award after the

notice of appeal was filed. The August 31 order considered all of the fees incurred

by Cooley Pumping through March 3, 2020. The supplemental request related to

the ensuing post-trial litigation, which was extensive. Because the requests related

to distinct phases of litigation, trial and post-trial, and the supplemental request
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had no impact on the substantive issues of the August 31 ruling that was on appeal,

we find the district court retained jurisdiction to rule on the collateral matter of

supplemental attorney fees.

3. Appellate Attorney Fees

Cooley Pumping requests an award of appellate attorney fees. The

Melchers resist, arguing only that Cooley Pumping should not prevail on appeal

and should receive no fee award. “Although a party entitled to attorney fees under

a contract may be entitled to reasonable attorney fees on appeal,” appellate courts

are best equipped to consider the request by examining an affidavit listing the fees

requested. Van Sloun, 778 N.W.2d at 184. In the absence of an affidavit, we find

Cooley Pumping is entitled to appellate attorney fees, but remand to the district

court for its consideration of an appropriate award after an attorney fee affidavit is

filed. See In re Marriage of Heiar, 954 N.W.2d 464, 473–74 (Iowa Ct. App. 2020).

IV. Conclusion

On our review of the record, we find the district court applied the correct

standard of compliance to the contractual issues presented and substantial

evidence was presented to support the conclusion that Cooley Pumping

substantially performed the terms of the contract. Cooley Pumping’s substantial

performance was appropriately considered as a defense to the Melchers’

counterclaims. Furthermore, we agree with the district court’s denial of motions

for new trial because there was no newly discovered evidence that existed at the

time of trial, no prejudice resulted from the late designation of an expert witness,

and substantial justice was done between the parties. Finally, we find no abuse of
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discretion in the district court’s calculation or award of attorney fees or costs. We

remand for a determination of appellate attorney fees.

AFFIRMED AND REMANDED.