Jay Straight and Lori Straight v. Hagie Manufacturing Company, LLC

IN THE COURT OF APPEALS OF IOWA
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No. 25-0326
Filed March 11, 2026
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Jay Straight and Lori Straight,
Plaintiffs–Appellants,
v.
Hagie Manufacturing Company, LLC,
Defendant–Appellee.
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Appeal from the Iowa District Court for Harrison County,
The Honorable Jennifer Benson Bahr, Judge.
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AFFIRMED
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James W. Russell (argued) of Wickham & Geadelmann, P.L.L.C., West Des
Moines, attorney for appellants.

Dana W. Hempy (argued) and Katie L. Graham of Nyemaster Goode, P.C.,
Des Moines, attorneys for appellee.
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Heard at oral argument
by Greer, P.J., and Schumacher and Chicchelly, JJ.
Opinion by Greer, P.J.

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GREER, Presiding Judge.

Jay and Lori Straight (the Straights) appeal from a district court order
granting summary judgment in favor of Hagie Manufacturing Company, LLC
(Hagie). The Straights argue the district court incorrectly concluded that the
economic loss doctrine barred their claims. On our review, we determine that
the economic loss doctrine applies as the Straights’ remedy lies in contract,
so we affirm.

I. Background Facts and Proceedings.

The Straights are farmers in Harrison County. In December 2015, the
Straights purchased a used Hagie 2014 STS12 Model Sprayer (the sprayer)
with its sprayer booms for use in their farming operation. The sprayer is a
large, four-wheeled machine with a 1,000-gallon tank to store chemicals. The
Straights used the sprayer to spray herbicides, fungicides, and insecticides on
their fields.

The sprayer was manufactured in 2014 and came with a warranty “for
a period of lesser of: two (2) years or 1000 hours from the date of delivery.”
The warranty was transferable to subsequent purchasers if there was still
time remaining on the warranty. The warranty expressly disclaimed liability
“for damages, including special, incidental or consequential damages or
injuries (damage and repairs of equipment itself, loss of profits, rental or
substitute equipment, loss of good will, etc.) arising out of or in connection
with performance of the equipment or its use by the customer.” The
Straights did not purchase an extended warranty.

The Straights received the sprayer sometime in early 2016. The
warranty was in effect until April 28, 2016.

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In June 2018, Hagie issued a product improvement program (PIP)
letter for the sprayer regarding its outer leg weldments. The letter informed
customers that Hagie had “identified a potential safety issue with [the
sprayer]. Cracking may occur on the front outer leg weldments where the
outer leg inserts into the mainframe of the machine. Failure to inspect and/or
repair may result in leg failure and damage to the machine.”

Hagie sent these PIP letters to customers, recommending they have
their sprayers inspected and, if needed, repaired. Customers could have their
sprayers repaired at Hagie’s cost, even if their machine was outside the
warranty period.

In July 2018, the Straights had work done on the sprayer. Hagie asserts
that this work was done in accordance with the PIP. The Straights dispute
receiving the PIP letter or having work done on the sprayer in accordance
with the PIP.

In August 2019, Hagie issued an updated PIP letter for the sprayer’s
outer legs. This letter instructed customers to “contact your dealer to have
the front legs replaced” and to inspect the legs daily until they could be
replaced. The Straights dispute that they received this letter. It is
undisputed, however, that the Straights did not have the sprayer’s legs
replaced in accordance with this PIP prior to the incident at issue in this case.

In the spring or early summer of 2020,1 the Straights’ son, Jackson,
was operating the sprayer in a field when the front axle broke. According to
Jackson, the sprayer “popped” and fell to the ground. Jackson was not
injured. There was no damage to the sprayer’s chemical tank, although some

1
The parties do not agree on the exact incident date, but the date of the incident
is not relevant to our analysis.

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of the chemicals did continue to run down the sprayer’s booms until Jackson
could turn the sprayer off. The Straights disposed of the chemicals remaining
in the sprayer’s tank.

On August 10, 2023, the Straights filed their petition bringing
negligent failure to warn, manufacturing defect, design defect, and
negligence claims against Hagie. The Straights sought damages for the
sprayer itself, the chemicals in the sprayer at the time, and for loss-of-use
damages for the period of time the sprayer was being repaired.

Hagie denied the Straights’ claims and asserted, as an affirmative
defense, that the Straights’ claims were barred by the economic loss doctrine.
On October 7, 2024, Hagie filed a motion for summary judgment, arguing
that the economic loss doctrine barred all of the Straights’ claims.

On January 6, 2025, after a hearing, the district court granted
summary judgment in favor of Hagie on three of the four claims in the
Straights’ petition. The court concluded that the economic loss doctrine
barred all claims except for the Straights’ failure-to-warn claim. The court
also concluded the Straights could seek damages for the cost of their lost
chemicals.

Hagie filed a motion to reconsider, which the Straights resisted. On
January 28, after a hearing, the court granted Hagie’s motion, dismissing all
of the Straights’ claims, including their claims for damages based on the loss
of chemicals from the sprayer and from the failure to warn. The Straights
appeal.

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II. Standard of Review.

We review summary judgment rulings for “correction of errors of
law.” Hollingshead v. DC Misfits, LLC, 937 N.W.2d 616, 618 (Iowa 2020).
“Summary judgment is appropriate only when the record shows no genuine
issues of material fact and the moving party is entitled to judgment as a matter
of law.” Hedlund v. State, 930 N.W.2d 707, 715 (Iowa 2019). “We review the
facts in the record in the light most favorable to the nonmoving party and
draw every legitimate inference in favor of the nonmoving party.”
Hollingshead, 937 N.W.2d at 618 (cleaned up). A legitimate inference is
“rational, reasonable, and otherwise permissible under the governing
substantive law.” Peak v. Adams, 799 N.W.2d 535, 543 (Iowa 2011) (citation
omitted).

The moving party “has the burden of showing the absence of a
genuine issue of material fact.” Hollingshead, 937 N.W.2d at 618 (citation
omitted). There is a genuine issue of fact “if reasonable minds can differ on
how an issue should be resolved.” Banwart v. 50th St. Sports, L.L.C., 910
N.W.2d 540, 544 (Iowa 2018) (citation omitted). A material fact is one that
“might affect the outcome of a lawsuit.” Id.

III. Analysis.

On appeal, the Straights assert this is a case of first impression as to
how our courts should apply the economic loss doctrine. They contend the
economic loss doctrine does not apply to their claims, and the district court
incorrectly granted summary judgment in Hagie’s favor. According to the
Straights, the sprayer’s axle breaking was a “sudden and dangerous
occurrence.” For that reason, they claim they can bring tort claims seeking
damages for the sprayer itself and attached booms as well as the chemicals

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inside the sprayer, which they claim are “other property.” From Hagie’s
perspective, the economic loss doctrine applies and Straights only have
contractual remedies. On our review, we conclude the district court properly
granted summary judgment in Hagie’s favor.

A. Economic Loss Doctrine.2 “The well-established general rule is
that a plaintiff who has suffered only economic loss due to another’s
negligence has not been injured in a manner which is legally cognizable or
compensable.” Nebraska Innkeepers, Inc. v. Pittsburgh–Des Moines Corp., 345
N.W.2d 124, 126 (Iowa 1984). Put another way, “a plaintiff cannot maintain
a claim for purely economic damages arising out of a defendant’s alleged
negligence.” Determan v. Johnson, 613 N.W.2d 259, 261 (Iowa 2000)
(cleaned up).

Our supreme court has refined the general rule to differentiate
between contract and tort. “[T]he line to be drawn is one between tort and
contract rather than between physical harm and economic loss.” Id. at 262
(citation omitted). “When . . . the loss relates to a consumer or user’s
disappointed expectations due to deterioration, internal breakdown or
non-accidental cause, the remedy lies in contract.” Id. (citation omitted); see
also Restatement (Third) of Torts: Liab. for Econ. Harm § 3 cmt. a
(A.L.I. 2020) (“A buyer of a product disappointed by its performance cannot
sue its maker in tort for negligence. Courts have long recognized that the law
of warranty is better suited than the law of tort to address such cases, and that

2
Iowa’s application of the economic loss doctrine has been described by some
authors as an “intermediate rule.” See Jeffrey L. Goodman, Daniel R. Peacock & Kevin J.
Rutan, A Guide to Understanding the Economic Loss Doctrine, 67 Drake L. Rev. 1, 27 (2019)
(“While it operates in a manner substantially similar to the majority rule—in that it bars
recovery of economic loss in tort in most circumstances—it is different in that its
application of the economic loss doctrine is not absolute.”).

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contracts between the parties determine the allocation of economic losses
that arise from the transaction.”). “Tort theory, on the other hand, is
generally appropriate when the harm is a sudden or dangerous occurrence,
frequently involving some violence or collision with external objects,
resulting from a genuine hazard in the nature of the product defect.”
Determan, 613 N.W.2d at 262 (citation omitted).

“The line between tort and contract must be drawn by analyzing
interrelated factors such as the nature of the defect, the type of risk, and the
manner in which the injury arose.” Id. (cleaned up). However,
“[n]otwithstanding our adherence to this multi-factor test, we have required
at a minimum that the damage for which recovery is sought must extend
beyond the product itself.” Id. On this point, Hagie asserts that the inquiry
ends here because the damage did not extend beyond the sprayer.

So, we turn to our case law for guidance. Iowa courts have considered
whether the economic loss doctrine applies in a variety of cases. The
Straights allege that their claim is most similar to American Fire & Casualty
Co. v. Ford Motor Co., 588 N.W.2d 437, 438 (Iowa 1999). At oral argument,
Straights characterized the core issue as whether American Fire is still good
law or whether Determan abrogated its holding. We do not find the analysis
to be so simple. In American Fire, a pickup “truck caught fire causing
property damage to the truck and its contents.” Id. at 438. The truck
owner’s insurance company, as subrogee for the truck owner, sued the truck
manufacturer in tort. Id. The manufacturer filed a motion to dismiss based
on the economic loss doctrine, which was granted. Id. The subrogee
appealed. On appeal, our supreme court reversed, concluding that the
economic loss doctrine did not bar the subrogee’s tort claims seeking
damages for the truck as well as its contents. Id. at 439–40. The court noted

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that prior cases in which the economic loss doctrine applied involved only
“the loss of the benefit of [the] bargain” and had a “lack of danger created by
the defective product.” Id. at 439. Because fire was a “sudden and highly
dangerous occurrence,” the economic loss doctrine did not apply to bar the
subrogee’s tort claims for damages for the truck and its contents. Id. at 440.

Hagie asserts that the Straights’ claim is most similar to Determan in
which the economic loss doctrine barred the plaintiff’s tort claims. 613
N.W.2d at 263–64. In Determan, a home purchaser sued the prior owners—
who built the home—for damages after the purchaser discovered serious
structural issues with the home. Id. at 263. “Specifically, the structural
support for the roof was woefully inadequate and the moisture barrier in the
walls had been improperly installed.” Id. Given the significant structural
issues with the home, the purchaser’s experts testified that it was possible
the home’s roof would collapse, but the roof had not collapsed at the time of
the lawsuit. Id. The purchaser sued the prior owners, “seeking recovery
under several different negligence theories.” Id. at 261. The purchaser
sought damages for “expenses she has and will incur to repair the defects in
the home’s construction.” Id. at 263.

Our supreme court, in concluding the economic loss doctrine applied
to the purchaser’s claims, noted, “Although these defects present a genuine
safety hazard to persons and property, that risk has not come to pass.” Id.
The court looked to the recovery requested—repair of the defective
construction—and determined that the requested damages were not due to
a “sudden or dangerous occurrence,” instead “the plaintiff’s damages result
from the deterioration of the house due to its poor construction.” Id.
Because “the plaintiff’s claim is based on her unfulfilled expectations with
respect to the quality of the home she purchased,” the court determined that

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her remedy was in contract law and the economic loss doctrine applied to her
tort claims. Id.

We find this case to be more like Determan than American Fire. Here,
the sprayer’s axle “popped” and broke. The Straights do not allege that the
sprayer collided with an external object, nor was Jackson injured. When
asked in his deposition, Jackson, who was the only person in the sprayer at
the time of the failure, stated that “I was coming down the hill, and it just
popped.” No one described the incident as violent, and the broken axle did
not cause any personal injury or damage to property beyond the sprayer itself
as only the sprayer cab, axle, and booms required repair. Based on the
description of the axle breaking, and considering the PIP letters, it appears
the axle broke due to “deterioration,” “internal breakdown,” or some other
“non-accidental cause.” In our view, the Straights seek damages for their
unfulfilled expectations resulting from the sprayer breaking down. See Am.
Fire, 588 N.W.2d at 439 (“[C]ontract law protects a purchaser’s expectation
interest that the product will be fit for its intended use.”).

Although the Straights, in their briefing and at oral argument,
emphasize that the axle failure was a violent, sudden, and dangerous
occurrence, that characterization alone is not determinative. See Conveyor
Co. v. SunSource Tech. Servs., Inc., 398 F. Supp. 2d 992, 1011 (N.D. Iowa 2005)
(finding “no suggestion in Iowa cases that a ‘sudden or dangerous
occurrence,’ standing alone, will transform what is otherwise a contract or
breach of warranty claim into a strict products liability claim, in the absence
of personal injury or property damage extending beyond damage to the
product itself”); see also Ziel v. Energy Panel Structures, Inc., No. 19-0508,
2020 WL 4498064, at *5 (Iowa Ct. App. Aug. 5, 2020) (finding hazardous

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nature of a building collapse did not provide an exception to the economic
loss doctrine).

We instead consider not only the type of risk, but also the nature of the
defect, the manner in which injury occurred, and the types of damages to be
recovered. See Determan, 613 N.W.2d at 263; see also Annett Holdings, Inc. v.
Kum & Go, L.C., 801 N.W.2d 499, 506 (Iowa 2011) (applying the four factors
together). Here, the nature of the defect claimed was improper welding and
a faulty front axle, the risk involved a possibility of a malfunction or
breakdown, and the damages requested were for the repair of the sprayer and
its components—all related to economic losses. Likewise, the Straights did
not meet the threshold requirement “at a minimum . . . the damage for which
recovery is sought must extend beyond the product itself.” See Determan,
613 N.W.2d at 262. Thus, Straights remedy lies in contract, not tort.

We therefore determine that the Straights’ claims are covered by the
economic loss doctrine. See Van Sickle Constr. Co. v. Wachovia Com. Mortg.,
Inc., 783 N.W.2d 684, 693 (Iowa 2010) (“The rationale for this limitation on
recovery is that purely economic losses usually result from the breach of a
contract and should ordinarily be compensable in contract actions, not tort
actions.” (cleaned up)). For that reason, the district court properly granted
summary judgment in favor of Hagie.

B. Other Property. Finally, we address the Straights’ claim that the
chemicals in the sprayer constitute “other property” that was damaged when
the sprayer broke. Jackson’s father, Jay Straight, testified in his deposition
that the chemicals escaped the sprayer through a boom damaged in the
breakdown and the chemicals that remained in the sprayer tank were no
longer useable. To make that determination, we look to the cases applying
the economic loss doctrine.

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In Determan, the court considered the entire home rather than its
component parts. 613 N.W.2d at 263–64. For example, the sagging roof and
improperly installed moisture barrier caused damage to the walls and ceilings
of the home. Id. The court did not consider the sagging roof separately from
the moisture barrier separately from the damaged ceilings and walls. Id.
Importantly, the court did not find that the damaged ceiling and walls
constituted “other property.” Id. at 264.

Conversely, American Fire permitted recovery for the truck as well as
its contents. 588 N.W.2d at 439–40. A vehicle’s contents, such as the
owner’s personal property, are not part of the truck itself. Without the
contents, the truck still functions as intended. Because the contents were not
part of the truck itself, they constituted other property for which the plaintiff
could seek damages. Id.

Turning to the facts of this case, we conclude that the chemicals in the
sprayer do not constitute other property or transform the Straights’ contract
claims into tort claims. The chemicals were part of the sprayer as a fully
integrated system. See Restatement (Third) of Torts: Prods. Liab. § 21 cmt. e
(A.L.I. 1998) (“When the product or system is deemed to be an integrated
whole, courts treat such damage as harm to the product itself. When so
characterized, the damage is excluded from the coverage of this Restatement.
A contrary holding would require a finding of property damage in virtually
every case in which a product harms itself and would prevent contractual
rules from serving their legitimate function in governing commercial
transactions.”). The core function of the sprayer is to spray chemicals on
fields. Without the chemicals, the sprayer would not function as intended.
Because the chemicals in the sprayer’s chemical tank are an integral part of

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the sprayer, the Straights’ claim for damages does not extend beyond the
sprayer itself.

IV. Conclusion.

Because the Straights’ claims are barred by the economic loss doctrine,
we find no error of law in the district court’s summary judgment ruling and
therefore affirm.

AFFIRMED.

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