City of Schaller Dismisses Suit Against General Excavating Inc and North American Special Insurance Company

In the Iowa District Court in and for SAC County
Case No: 02811 LACV019385 Title: CITY OF SCHALLER VS. GENERAL

EXCAVATING INC ET AL

NOTICE REGARDING ELECTRONIC FILING

This case has been converted to an electronic case by Order of the Court.

New rules apply to electronically filed cases.
Because your case has been converted to an electronic case, it is now governed by Chapter 16 Rules Pertaining
to the Use of the Electronic Document Management System.

What is required of you?

You must register to use the Electronic Document Management System (EDMS).
If you haven't already registered, please log on to the Iowa Judicial Branch eFiling website at
https://www.iowacourts.state.ia.us/EFile to register.

You are required to have a current e-mail account for use with EDMS. Registration requires you to understand
and agree to comply with the rules that govern electronic filing, contained the Chapter 16 Rules Pertaining to
the use of the Electronic Document Management System, available on the Iowa Judicial Branch eFiling website.

Your registration constitutes your request for, and consent to, electronic service of court-generated documents
and documents filed electronically by other parties. When you have completed your registration, you can begin
filing and viewing documents on your case and receiving notifications of filings, and events.

EXCEPTIONS: For good cause, the court may authorize you to submit a document in paper. Upon showing of
exceptional circumstances, the chief judge of the district in which a case is pending may grant you an exemption
from registering and filing electronically.

You must protect private information when using EDMS.
Division VI of Chapter 16 Rules Pertaining to the Use of the Electronic Document Management System
specifies personal information that is now considered protected by the court, as well as what you must do to
keep protected personal information out of the public documents you eFile.

Training and technical support are available for EDMS.
Technical support for the Iowa Judicial Branch eFiling website is available at 1-877-369-8324. If you have
questions about court procedures related to electronic filing, contact your county clerk of court office.

E-FILED 2013 MAR 13 6:05 PM SAC - CLERK OF DISTRICT COURT
We look forward to your comments and suggestions
as we implement electronic filings in the Iowa Courts

In The Iowa District Court for the Second Judicial District

In re the conversion of paper files
to electric documents
Administrative Order

Iowa Court Rule 16.102 authorizes a chief judge to order the conversion of paper court files to an
electronic file of any case not subject to the Rules Pertaining to the Use of the Electronic Document
Management System (EDMS). It is in the best interest of all for the Court to have access via EDMS to pending
files that exist at the time a county clerk of court office implements EDMS. Accordingly:

It is so Ordered that:

1. Each Clerk of Court may take action to convert paper case files that are pending and will likely
appear on a future court schedule as soon as implementation of EDMS begins in their respective
counties.
2. The Clerk shall work with the local Court to identify specific documents that are to be scanned in
each case type. Upon implementation of electronic filing in the County, the security level of
these electronic records shall be as identified by the EDMS Business Advisory Committee.
3. The Clerk shall send the Notice Regarding Electronic Filing to the attorneys and parties
appearing pro se.
4. Once notified, counsel of record or parties appearing pro se shall apply the rules pertaining to
protection of personal privacy (Iowa Ct.R.16.602 through 16.607) to all future filings in that
case.
5. After being notified of commencement of the electronic filing in that County, attorneys, parties
appearing pro se and all other shall file all future filings on that case electronically.

It is so Ordered:

Dated 3rd day of November, 2010
/s/ Kurt L. Wilke
Kurt L. Wilke, Chief Judge of the Second
Judicial District of Iowa
E-FILED 2013 MAR 13 6:05 PM SAC - CLERK OF DISTRICT COURTRecipient List
Case ID : 02811 LACV019385 - CITY OF SCHALLER VS. GENERAL
Event Cd : NOOT
ALAN EDWARD FREDREGILL filed
In the Iowa District Court in and for SAC County

Case No: 02811 LACV019385 Title: CITY OF SCHALLER VS. GENERAL

NOTICE REGARDING ELECTRONIC FILING

This case has been converted to an electronic case by Order of the Court.

New rules apply to electronically filed cases.
Because your case has been converted to an electronic case, it is now governed by Chapter 16 Rules Pertaining
to the Use of the Electronic Document Management System.

What is required of you?

You must register to use the Electronic Document Management System (EDMS).
If you haven't already registered, please log on to the Iowa Judicial Branch eFiling website at
https://www.iowacourts.state.ia.us/EFile to register.

You are required to have a current e-mail account for use with EDMS. Registration requires you to understand
and agree to comply with the rules that govern electronic filing, contained the Chapter 16 Rules Pertaining to
the use of the Electronic Document Management System, available on the Iowa Judicial Branch eFiling website.

Your registration constitutes your request for, and consent to, electronic service of court-generated documents
and documents filed electronically by other parties. When you have completed your registration, you can begin
filing and viewing documents on your case and receiving notifications of filings, and events.

EXCEPTIONS: For good cause, the court may authorize you to submit a document in paper. Upon showing of
exceptional circumstances, the chief judge of the district in which a case is pending may grant you an exemption
from registering and filing electronically.

You must protect private information when using EDMS.
Division VI of Chapter 16 Rules Pertaining to the Use of the Electronic Document Management System
specifies personal information that is now considered protected by the court, as well as what you must do to
keep protected personal information out of the public documents you eFile.

Training and technical support are available for EDMS.
Technical support for the Iowa Judicial Branch eFiling website is available at 1-877-369-8324. If you have
questions about court procedures related to electronic filing, contact your county clerk of court office.

We look forward to your comments and suggestions
as we implement electronic filings in the Iowa Courts

In The Iowa District Court for the Second Judicial District

In re the conversion of paper files
to electric documents
Administrative Order

Iowa Court Rule 16.102 authorizes a chief judge to order the conversion of paper court files to an
electronic file of any case not subject to the Rules Pertaining to the Use of the Electronic Document
Management System (EDMS). It is in the best interest of all for the Court to have access via EDMS to pending
files that exist at the time a county clerk of court office implements EDMS. Accordingly:

It is so Ordered that:

1. Each Clerk of Court may take action to convert paper case files that are pending and will likely
appear on a future court schedule as soon as implementation of EDMS begins in their respective
counties.
2. The Clerk shall work with the local Court to identify specific documents that are to be scanned in
each case type. Upon implementation of electronic filing in the County, the security level of
these electronic records shall be as identified by the EDMS Business Advisory Committee.
3. The Clerk shall send the Notice Regarding Electronic Filing to the attorneys and parties
appearing pro se.
4. Once notified, counsel of record or parties appearing pro se shall apply the rules pertaining to
protection of personal privacy (Iowa Ct.R.16.602 through 16.607) to all future filings in that
case.
5. After being notified of commencement of the electronic filing in that County, attorneys, parties
appearing pro se and all other shall file all future filings on that case electronically.

It is so Ordered:

Dated 3rd day of November, 2010
/s/ Kurt L. Wilke
Kurt L. Wilke, Chief Judge of the Second
Judicial District of Iowa
E-FILED 2013 MAR 13 6:05 PM SAC - CLERK OF DISTRICT COURTRecipient List
Event Cd : NOOT
E-FILED 2013 MAR 14 8:52 AM SAC - CLERK OF DISTRICT COURT
Notice Id: 2CA010
IOWA DISTRICT COURT FOR SAC COUNTY

CITY OF SCHALLER - OTHER PIN

Plaintiff(s),

vs.

GENERAL EXCAVATING INC
NORTH AMERICAN SPECIALTY INSURANCE CO

Defendant(s).

Trial Scheduling Order

Case No : 02811 LACV019385

Date Petition Filed : 10/15/12

Case Type : Civil

Trial Type : Jury

Expected Length of Trial : 4 Days

The amount in controversy exceeds $10,000 : Yes

Nature of Case : Surety Bond

APPEARANCES:
Plaintiff(s)/Petitioner(s) : Alan Fredregill
Defendant(s)/Respondent(s) : Drew Gentsch

IT IS SO ORDERED:

TRIAL : Trial of this case is set for trial on 03/19/14 at 09:00 AM in the District Court in the courthouse
of the above-named county.

PRE-TRIAL CONFERENCE (Check one)
A pre-trial conference shall be held on The conference may be held telephonically with prior
approval of the court.
A pre-trial conference shall be held upon request.

NEW PARTIES. No new parties may be added later than 180 days before trial or .

TRANSCRIPTS AND RECORDS. All required agency records and prior criminal transcipts shall be
filed within 30 days of the date of this order or by .

PLEADINGS. Pleadings shall be closed 60 days before trial or .
E-FILED 2013 APR 01 10:42 AM SAC - CLERK OF DISTRICT COURT

DISCOVERY. All written discovery shall be served no later than 90 days before trial. All depositions
shall be completed no later than 60 days before trial. Or, all discovery shall be completed by .

EXPERT WITNESS.
a. A party who intends to call an expert witness, including rebuttal expert witnesses, shall certfiy to
the court and all other parties the expert's name, subject matter of expertise and qualifications, within
the following time period, unless the Iowa Code requires an earlier designation (See, e.g. Iowa Code
668.11):

(1) Plaintiff: 210 days before trial or .
(2) Defendant/Third Party Plaintiff: 150 days before trial or .
(3) Third-Party Defendant/Others/Rebuttal: 90 days before trial or .

b. This section does not apply to court appointed experts.

(The pleadings, discovery, and expert witness deadlines may be amended, without further leave of court, by
filing a Stipulated Amendment to Scheduling Order with the clerk listing the dates agreed upon and signed by all
counsel and self-represented litigants. Such an Amendment shall not serve as a basis for a continuance of the
trial date or affect the date for pre-trial submissions.)

PRE-TRIAL SUBMISSIONS. At least seven (7) days before trial, counsel for the parties and self-
represented litigants shall:

a. File a witness and exhibit list with the clerk, serve a copy on opposing counsel and self-
represented litigants and exchange exhibits. Rules governing exhibits and exhibit lists:
(1) Plaintiff shall use numbers and Defendant shall use letters. Pre-trial exhibit lists shall identify
each exhibit by letter or number and description. Exhibits shall be marked by counsel before trial.
(2) Immediately before commencement of trial, the court shall be provided with a bench copy,
and the reporter with a second copy, of the final exhibit list, for use in recording the admission of
evidence.
(3) In non-jury cases, immediately before commencement of trial, the court shall be provided with
a bench copy of all exhibits identified on the exhibit lists.
(4) Within 5 days after the filing of an exhibit list, counsel and self-represented litigants shall file
with the clerk, and serve on each party, any identification, authentication, and foundation objections to
the exhibits listed; otherwise such objections shall be deem WAIVED for trial purposes.

b. File with the clerk, and deliver to the Trial Judge, Motions in Limine, with supporting legal
authority.

c. File with the clerk, and deliver to the Trial Judge, all proposed jury instructions in a form to be
presented to the jury, including a statement of the case, the stock jury instruction numbers and verdict
forms. (The court shall be provided the instructions in written form and by either E-mail attachment;
USB Thumb drive download; or on a CD-ROM with MS Word compatible format.)

d. Deliver to the Trial Judge and opposing counsel/self-represented litigants a concise trial brief
addressing factual, legal and evidentiary issues, with a citation to legal authorities.

MOTIONS. All motions, including motions for summary judgment and except motions in limine, shall
be filed with the clerk of court's office at least 60 days before trial, with copies to the assigned judge.

SETTLEMENT CONFERENCE. (Check one)
A settlement conference shall be held on . All parties with authority to settle must be present.
A settlement conference may be held upon request.

SETTLEMENTS. The parties shall have the responsibility of immediately notifying the court
administrator of settlement.

LATE SETTLEMENT FEES. Late settlement fees under Iowa Rule of Civil Procedure 1.909 are
applicable.

CONTINUANCES. Continuances are discouraged and shall only be granted for good cause.
Motions to continue are governed by Iowa Rule of Civil Procedure 1.910. In the event the trial date is
continued, all time deadlines in this order and stipulated amendments shall remain in effect relative to
the new trial date unless the court approves new deadlines.

NOTICE. A failure to comply with any of the provisions of this order or an amendment to scheduling order
may result in sanctions being imposed by the court pursuant to Iowa Rule of Civil Procedure 1.602(5) including
limitation and exclusion of evidence and witnesses and payment of costs or attorney fees. The original of
this order shall be filed at the time the trial date is obtained. The court shall resolve disputes regarding oral
agreements on scheduling by reference to this scheduling order or any written amendments to this order.

Dated : 04/01/13
/s/ Kellie Orres
________________________________
Judge of the District Court/Court Designee

Original filed with the Clerk of Court
Copies to: counsel of record/self-represented litigants/assigned judge.
E-FILED 2013 APR 01 10:42 AM SAC - CLERK OF DISTRICT COURTRecipient List
Event Cd : OSTR
BENJAMIN B ULLEM filed
DREW J GENTSCH filed
ROSALYND J KOOB filed
IN THE IOWA DISTRICT COURT FOR SAC COUNTY
CITY OF SCHALLER,
Plaintiff,
v.
GENERAL EXCAVATING, INC. AND
NORTH AMERICAN SPECIALTY
INSURANCE COMPANY,
Defendants.
No. LACV019385
NOTICE OF SERVING DISCOVERY
COMES NOW Defendant, North American Specialty Insurance Company, provides
notice of service of discovery by regular mail on the Plaintiff pursuant to Iowa Rule of Court
16.401(2). The following discovery requests were mailed to the Plaintiffs attorney at the
address shown below on June, 4, 2013:
1. Supplemental Answers to Plaintiffs Interrogatories
WHITFIELD & EDDY, P.L.C.
317 Sixth Avenue, Suite 1200
Des Moines, IA 50309-4195
Telephone: (515) 288-6041
Fax: (515) 246-1474
email: ullem@whitfieldlaw.com
email: gentsch@whitfieldlaw.com
By: /s/ Drew J. Gentsch
Drew J. Gentsch AT0002739
Benjamin B. Ullem AT0008031
ATTORNEYS FOR DEFENDANT
INSURANCE COMPANY
E-FILED 2013 JUN 04 4:43 PM SAC - CLERK OF DISTRICT COURT
Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street
P.O. Box 3086Sioux City, Iowa 51102
ATTORNEYS FOR PLAINTIFF
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing instrument
was served upon all parties to the above cause or to
each of the attorneys of record herein at their respective
addresses disclosed on the pleadings on
June 4, 2013.
By: X U. S. Mail eMail
Hand Delivered Overnight Courier
Certified Mail Other: ____________
FAX
Signature: /s/ Makenzie J. Moburg
E-FILED 2013 JUL 03 9:38 AM SAC - CLERK OF DISTRICT COURT
INTHEIOWADISTRICTCOURT FORSACCOUNTY
CITYOF SCHALLER,
Plaintiff,
v.
GENERALEXCAVATINGINC., and
NORTHAMERICANSPECIALTY
INSURANCECOMPANY.
Defendants.
LawNo. LACV019385
PLAINTIFF'SNOTICEOF
SERVINGSUPPLEMENTAL
DISCOVERYRESPONSES
COMESNOW, Plaintiff, City of Schaller, and hereby gives notice of serving Plaintiffs
Fifth Supplemental Response to Defendant North American Specialty Insurance Company's
Request for Production of Documents, Plaintiffs Supplemental Answers to Defendant North
American Specially Insurance Company's Supplemental Interrogatories and Plaintiffs Third
Supplemental Answers to Defendant North American Specialty Insurance Company's
Interrogatories by U.S. Mail on this dayof August, 2013.
MEIDMANLAWFIRM, L.L.P.
OX]CA
ALANEyFREDRRGILL, AT0002712
ROSALYNDJ. kjOB, AT0004380
SARAHK. KLEBER, AT0004282
1 128 Historic 4th Street
P.O. Box 3086
Sioux City, Iowa 51102
Phone: 712-255-8838
Facsimile: 712-258-6714
Email: al an. fredrea11 1 V7 hei dinanI aw.com
Email: ro/..koob@hcidmanlaw.com
Email: sarah.klebcr@heidmanlaw.com
ATTORNEYSFORPLAINTIFF
E-FILED 2013 AUG 09 8:10 AM SAC - CLERK OF DISTRICT COURT
Copy to viaEDMS:
Benjamin B. Ullem
DrewJ. Gcntsch
WHITFIELD&EDDY, P.L.C.
ATTORNEYSFORDEFENDANT
INSURANCECOMPANY
PROOFOFSERVICE
I certifythat atruecopyof thisdocument was
served uooneachoftheattorneysof record of ail
parlies to this actionat theaddresses disclosed
bythe pleadings on 1 20
By; Mail HHand Delivered
?Facsimile ^Other EQtiqfk
ii ' *
Signatuij
E-FILED 2013 AUG 09 8:10 AM SAC - CLERK OF DISTRICT COURT
Notice Id: 2CA101

IOWA DISTRICT COURT FOR SAC COUNTY

CITY OF SCHALLER - OTHER PIN,

Plaintiff / Petitioner,

vs.

NORTH AMERICAN SPECIALTY INSURANCE
CO
,

Defendant / Respondent.

Case No: 02811 LACV019385

Amended Trial Notice

The above entitled matter is hereby scheduled for jury trial on 03/18/14 at 09:00 AM .

Trial will now begin on March 18th instead of March 19th

/s/ Kellie Orres
-----------------------------------
Designee of the Court

Clerk to provide copies or notice
of this document to attorneys of record,
parties appearing pro se and
judge if assigned

Docket Code = OSTR
E-FILED 2013 AUG 12 2:52 PM SAC - CLERK OF DISTRICT COURTRecipient List
Event Cd : OSTR
BENJAMIN B ULLEM filed
DREW J GENTSCH filed
ROSALYND J KOOB filed
E-FILED 2013 AUG 12 2:52 PM SAC - CLERK OF DISTRICT COURT
E-FILED 2013 OCT 04 8:53 AM SAC - CLERK OF DISTRICT COURT
E-FILED 2013 OCT 04 8:53 AM SAC - CLERK OF DISTRICT COURT
E-FILED 2013 OCT 21 3:44 PM SAC - CLERK OF DISTRICT COURT
1
CITY OF SCHALLER,
Plaintiff,
v.
INSURANCE COMPANY,
Defendants.
No. LACV019385
DEFENDANT, NORTH AMERICAN
SPECIALTY INSURANCE COMPANY'S,
MOTION FOR SUMMARY JUDGMENT
AND REQUEST FOR HEARING
COMES NOW Defendant, North American Specialty Insurance Company (hereinafter
referred to as NAS), and for its Motion for Summary Judgment to Plaintiffs Petition, states
as follows:
1. This case arises out of a construction contract between the City of Schaller
(hereinafter Schaller) and General Excavating, Inc. (hereinafter Gen Ex) for the 2008
Wastewater Improvements for the City of Schaller Section 2 Collection System
Improvements (hereinafter Project). Schaller brought suit against not only Gen Ex, but also
against the performance bond issued by North American Specialty Insurance Company
(hereinafter NAS) for alleged damages to the asphalt surface of the road due to settlement of
the utility trench.
3. In support of the present motion, NAS states that the pleadings on file, along
with the Affidavit in Support of Motion for Summary Judgment, the Statement of Undisputed
Facts, and Memorandum of Authorities in Support of Motion for Summary Judgment
demonstrate conclusively that there is no issue as to any material facts and that Schaller failed
E-FILED 2013 DEC 03 4:37 PM SAC - CLERK OF DISTRICT COURT
2
to timely file suit under the plain language of the bond contract in this matter. As such, NAS
is entitled to summary judgment against the claims of Schaller.
WHEREFORE Defendant, North American Specialty Insurance Company, requests
that the Court, after review of the parties pleadings and hearing, enter summary judgment
against the City of Schaller, dismissing all claims against North American Specialty Insurance
Company, assess costs to Plaintiff and for such further relief as the Court deems just.
Respectfully Submitted,
/s/ Drew J. Gentsch___________________
Telephone: (515) 288-6041
Fax: (515) 246-1474
INSURANCE COMPANY
Clerk to email copy to:
Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
1128 Historic 4
th
Street
P.O. Box 3086
Notice ID: 2RCV29


PLAINTIFF(S),
vs.
INSURANCE CO
,
DEFENDANT(S).

Case No. 02811 LACV019385

O R D E R
The Defendant North American Specialty Insurance Company has filed a Motion
for Summary Judgment. A hearing on that motion will now be scheduled.
IT IS, THEREFORE, THE ORDER OF THE COURT as follows:
1. A Hearing is scheduled on 01/13/2014 at 11:00 AM at the Sac Co. Courthouse,
100 NW State St., Sac City, Iowa.
2. If the parties so desire, they may participate in this hearing via conference
call to be initiated by counsel for the Defendant North American Specialty Insurance
Company. The Court may be reached at 712-662-7419.

If you need assistance to participate in court due to a disability, call the disability coordinator at
641-421-0990. Persons who are hearing or speech impaired may call Relay Iowa TTY (1-800-735-2942).
Disablity coordinators cannot provide legal advice.

CLERK TO FURNISH COPIES TO:
1 of 3
ALAN EDWARD FREDREGILL
ROSALYND J KOOB
DREW J GENTSCH
BENJAMIN B ULLEM
2 of 3
State of Iowa Courts
Case Number Case Title
LACV019385 CITY OF SCHALLER VS. GENERAL EXCAVATING INC ET
AL
Type: ORDER SETTING HEARING
So Ordered
Electronically signed on 2013-12-04 15:50:45
3 of 3
E-FILED 2013 DEC 18 11:32 AM SAC - CLERK OF DISTRICT COURT
E-FILED 2013 DEC 18 11:32 AM SAC - CLERK OF DISTRICT COURT
INTHEIOWADISTRICTCOURTFORSACCOUNTY
CITYOF SCHALLER, ) LawNo. LACVO1 9385
)
Plaintiff, )
)
v- )
)
GENERALEXCAVATINGINC., and ) PLAINTIFF'SRESISTANCETO
NORTHAMERICANSPECIALTY ) DEFENDANT, NORTHAMERICAN
INSURANCECOMPANY, ) SPECIALTYINSURANCECOMPANY'S
) MOTIONFORSUMMARYJUDGMENT
Defendants. )
COMES NOWPlaintiff, Cityof Schaller, by and through the undersigned counsel, and
herebyresists Defendant, North AmericanSpecialtyInsurance Company's Motion for Summary
Judgment Filed onor about December 3, 201 3 and in support thereofstates:
1 . Genuine issues of material fact remain which preclude the application of the
contractual limitations period involved in this case and prevent the entryofjudgment as a matter
of law.
2. Genuine issues of material fact remain regarding whether the City's issuance of
the Certificate of Substantial Completion somehow bars the City from recovering under the
performance bond and prevent the entryofjudgment as amatter oflaw.
3. Defendant, North AmericanSpecialty Insurance Company's ("NAS") Motion for
Summary Judgment should be denied for reasons set out in (1 ) Plaintiff's Response to NAS"
Statement of Undisputed Material Facts and Plaintiffs Statement of Additional Disputed
Material Facts; (2) Plaintiffs Brief inResistance; (3) the Affidavit of BrianWoodke; and (4) the
Affidavit of Sarah Kleber. which are being filed contemporaneously herewith and arc
incorporated bythis reference.
WHEREFORE, Plaintiff, City of Schaller, respectfully requests the Court deny the
Defendant, North American Specialty Insurance Company's Motion for SummaryJudgment, in
its entirety, as well as anyand all other reliefthe Court deemsjust and equitable.
Respectfullysubmitted this 201 1 1 dayof December, 201 3.
HEIDMANLAWFIRM, L.L.P.
ALANCT. FREDEC)ILL' AT00027 1 2
ROSALYNDJ. KDDB, AT0004380
SARAHK. KLEBER, AT0004282
1 1 28 Historic4thStreet
P.O. Box 3086
SiouxCity, Iowa 51 1 02
Phone: 71 2-255-8838
Facsimile: 71 2-258-671 4
Email: alan.l'redreqi I l@hcidmanlaw.com
Email: roz.koob@heidmanlaw.com
Email: sarah.kleber@.heidmanlaw.com
Copyto viaEDMS:
TimothyRcicks
General Excavating, Inc.
1 25 N. WhitneySt.
Carroll. IA51 401 -2838
BenjaminB. Ullem
DrewJ. Gentsch
3 1 7 SixthAvenue, Suite 1 200
Des Moines, 1 A 50309-41 95
INSURANCECOMPANY
trnrf-f, .k PR00FOFSERVICE
LSff, a ,ru6C0Dyof ,his document was
P= rti= s I'd MsTi- 01 the attorneys of reccrd of all P- . es othisactionat ihe addresses disclosed
lhePleadings on Or- "dp n*
By:
?Facsimile jSLOt(ier_ED!v6^

CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


address shown below on December 19, 2013:
1. Supplemental Response to Plaintiffs Request for Production of Documents.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street

December 23, 2013.

FAX

Signature: /s/ Linda S. Pirkle
1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

DEFENDANT NORTH AMERICAN
SPECIALTY INSURANCE COMPANY'S
REPLY BRIEF IN SUPPORT OF ITS
MOTION FOR SUMMARY JUDGMENT

referred to as NAS), and for its Reply Brief in Support Motion for Summary Judgment to
Plaintiffs Petition, states as follows:
In essence, the City of Schaller erroneously alleges in resistance to NASs motion for
summary judgment that the statute of limitations stated in the bond should not apply based
upon settlement discussions between two independent parties, General Excavating and the City
of Schaller, and not including NAS. The Citys argument is two pronged: One, that somehow
settlement discussions extend work as the City defines the term, and; Two, that NAS should
be estopped from enforcing terms of the bond because of the settlement negotiations of two
independent and distinct entities not including NAS. Each of these issues will be handled in
turn in the following paragraphs.
Settlement Discussions Are Not Work
Schaller would have the Court believe that some specialized definition tailored to its
needs is required to understand the simple meaning of the bond contract terms. However, the
2

plain meaning of the terms is sufficient to understand the simple language of the bond contract
that Schaller selected and incorporated into the contract documents in this case.
As the Iowa Supreme Court has stated with regard to contract interpretation:
[A]lthough we allow extrinsic evidence to aid in the process of interpretation, the words
of the agreement are still the most important evidence of the party's intentions at the time
they entered into the contract.

Pillsbury Co., Inc. v. Wells Dairy, Inc., 752 N.W.2d 430, 436 (Iowa 2008).
When a contract is not ambiguous, it will be enforced as written, Spilman v. Board of
Directors, 253 N.W.2d 593, 596 (Iowa 1977), but when there are ambiguities in a
contract they are strictly construed against the drafter. Village Supply Co. v. Iowa Fund,
Inc., 312 N.W.2d 551, 555 (Iowa 1981); Fashion Fabrics of Iowa v. Retail Investors
Corp.266 N.W.2d 22, 27 (Iowa 1978); Rector v. Alcorn, 241 N.W.2d 196, 202 (Iowa
1976).

Iowa Fuel & Minerals, Inc. v. Iowa State Bd. of Regents, 471 N.W.2d 859, 862-63 (Iowa 1991).
According to Merriam-Websters online dictionary, cease is defined as:
:to stop happening; to end;
to stop doing (something).

According to Merriam-Websters online dictionary, work is defined as:
:a job or activity that you do regularly especially in order to earn money:
the place where you do your job:
the things you do especially as part of your job.

Therefore, the plain meaning of the term ceased working can be readily distilled to mean to
stop the things you do especially as part of your job. See Merriam-Websters Online
Dictionary, www.merriam-webster.com, last visited on December 27, 2013.
NAS supported its motion for summary judgment with an affidavit from General
Excavating stating that it had ceased performing work on the subject project by June 11, 2010.
Pursuant to an affidavit in support of Schallers resistance, seeding work may have been
performed by Gen Ex as late as July 2, 2010. While this would appear to create a fact
3

question, it is not a material question of fact because, assuming without agreeing that July 2,
2010 is the last work performed by Gen Ex on the project, the lawsuit was still filed well past
the two year statute of limitations stated by the bond when Schaller filed on October 15, 2012.
After July 2, 2010, Schaller can only point to settlement discussions between itself and
Gen Ex, and not evidence, to attempt to show what it alleges as work. Such discussions are
not sufficient evidence of work pursuant to the plain meaning of the terms of the bond
demanded by Schaller to withstand summary judgment as requested by NAS.
Schallers Facts Fail To Demonstrate Estoppel Against NAS
Schaller mistakenly alleges that the case of Christy v. Miulli is controlling to
demonstrate estoppel against NAS to halt the operation of the bonds plain terms. However,
the Christy case is clearly distinguishable as it is based upon a medical malpractice case
wherein the doctor defendant intentionally mislead the Plaintiff as to the nature of the death
complained of in the wrongful death suit. See Christy v. Muilli, 692 N.W.2d 694 (Iowa 2005).
A case more on point for the instant case is Northwest Limestone Co., Inc. v. Iowa DOT, 499
N.W.2d 8 (Iowa 1993). In the Northwest Limestone case the Court examined an allegation of
estoppel against a surety company based upon the course of settlement discussions that
exhausted a statute of limitations under the public improvements statute. See id. at 12. In that
case, the surety continued to discuss settlement with the plaintiffs up to the expiration of the 60
day period contemplated by the statute, and requested that the plaintiffs diary ahead their
discussion of settlement beyond the 60 day period. See id. The Court held that such
discussions of settlement gave no assurances of payment or extension of the applicable
timeline, and therefore dismissed the plaintiffs claims as untimely. See id.
4

In this case, the settlement discussions alleged are not even alleged to involve NAS, let
alone demonstrate any assurance that NAS would pay the claim or extend the limitations period
under the bond. Nevertheless, just like in the Northwest Limestone case, the settlement
discussions herein are insufficient to generate a judgment in favor of Schaller under the bond.
As a result, there can be no estoppel against NAS in this case, and the bond contracts plain
terms apply. Therefore, summary judgment should be entered on Schallers claim against
NAS herein for untimely filing.

/s/Drew J. Gentsch______________________
Telephone: (515) 288-6041
Fax: (515) 246-1474

INSURANCE COMPANY
Clerk to email copies to:

Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
5

1128 Historic 4
th
Street
P.O. Box 3086

1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

SUPPLEMENTAL REPLY BRIEF IN
SUPPORT OF ITS MOTION FOR
SUMMARY JUDGMENT

referred to as NAS), and for its Supplemental Reply Brief in Support Motion for Summary
Judgment to Plaintiffs Petition, states as follows:
The Supreme Court of Iowa issued a new Opinion on January 10, 2014. See Osmic v.
Nationwide Agribusiness Ins. Co., No. 12-1295, (Iowa filed January 10, 2014) (copy attached
for ease of reference). While the case is not directly on point due to its handling of an
underinsured motorist insurance policy, rather than a case of suretyship, it is instructive in key
aspects of the instant case. See id. Namely, the Court recognized its previous case law that
allows parties to modify the limitations period for filing suit, so long as the limitation is
reasonable. See id. at 9. Despite the plaintiffs argument that the contractual limitation period
should not apply to him because he was not a party to the contract, the Court referenced
Restatement Second of Contracts Section 309 in refuting the plaintiffs argument, stating:
Where there is a contract, the right of a beneficiary is subject to any limitations imposed by
the terms of the contract. Id. at 12. Further commentary in the Restatement applies the
E-FILED 2014 JAN 10 2:49 PM SAC - CLERK OF DISTRICT COURT
2

rational of the Section to surety relationships. RESTAMENT (SECOND) CONTRACTS, 309
cmt. b (Illustration 8).
Given the Courts recent pronouncement in the Osmic matter, the two year limitation
period stated in the bond at issue herein is presumptively reasonable, especially in light of the
one year limitation period that is allowed in relation to performance bonds in Iowa pursuant to
Iowa Code Section 573.6.

/s/Drew J. Gentsch______________________
Telephone: (515) 288-6041
Fax: (515) 246-1474
INSURANCE COMPANY

Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
1128 Historic 4
th
Street
P.O. Box 3086

IN THE SUPREME COURT OF IOWA

No. 121295

Filed January 10, 2014

ESAD OSMIC,

Appellee,

vs.

NATIONWIDE AGRIBUSINESS INSURANCE COMPANY,

Appellant.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Black Hawk County,
David F. Staudt, Judge.

An insurer seeks further review of a court of appeals decision
affirming the denial of the insurers motion for summary judgment based
upon the statute of limitations in an insurance policy. DECISION OF
COURT OF APPEALS VACATED; JUDGMENT OF DISTRICT COURT
REVERSED AND CASE REMANDED WITH INSTRUCTIONS.

Sharon Soorholtz Greer and Thomas L. Hillers of Cartwright,
Druker & Ryden, Marshalltown, for appellant.

James F. Kalkhoff of Dutton, Braun, Staack & Hellman, P.L.C.,
Waterloo, for appellee.


2
MANSFIELD, Justice.
We must decide whether a policy provision limiting the time to file
an action to recover underinsured motorists benefits is binding on a
passenger who was injured while riding in the named insureds vehicle.
The passenger brought this action approximately one month after the
deadline set forth in the policy, which required suit to be commenced
within two years after the date of the accident.
We conclude the passenger, as an insured and a third-party
beneficiary of the policy, does not have greater rights than the
policyholder. Thus, the passenger cannot avoid the contractual time
limitation unless the policyholder under similar circumstances would
have been able to avoid it. Because the record, when viewed in the light
most favorable to the passenger, does not demonstrate either that the
policys time limit was unreasonable or that the insurer should be
equitably estopped from enforcing it, we hold the insurers motion for
summary judgment should have been granted. Accordingly, we vacate
the decision of the court of appeals, reverse the order of the district
court, and remand for entry of summary judgment in favor of the
insurer.
I. Facts and Procedural Background.
On May 23, 2009, Esad Osmic, his wife, and his children were
riding as passengers in a Ford Explorer owned and operated by Esads
brother Selim. Some members of Selims immediate family were also
riding in the vehicle. As the Explorer was traveling northbound on
Washington Street/Highway 218 in Waterloo, a Nissan Sentra that was
owned and driven by Rochelle Heasley entered the highway. According to
witnesses, Heasleys Nissan cut across two lanes without clearance to do
so. This forced Selim to take immediate evasive action. He swerved to

3
avoid being hit, but as a result, he lost control of the Explorer. It ended
up rolling over in the grass embankment next to the highway. Selim was
ejected from the vehicle.
The police responded to the accident. Heasley was cited for
improper merging. At the time, Heasley was insured by Progressive
Insurance, with coverage limits of $50,000 per claim and $100,000 per
occurrence. Selim had coverage with Nationwide Agribusiness Insurance
Company (Nationwide), including underinsured motorist (UIM) coverage.
In October 2009, Esad began treatment for right shoulder pain
which he attributed to the May 2009 accident. Arthroscopy was
recommended in November 2009, and Esad eventually underwent this
procedure in November 2010.
Meanwhile, in June 2010, approximately thirteen months after the
accident, Esads counsel submitted a representation letter to Nationwide.
Nationwides claims representatives thereafter contacted the office of
Esads counsel and left phone messages approximately once a month for
the next eight months asking for Esads medical records. In addition, a
letter was sent on December 3, 2010, to Esads counsel requesting those
records.
On September 13, 2010, a Progressive claims representative
advised Nationwides claim representative that Progressive had settled
with Selim and his family for $65,000, leaving only $35,000 in remaining
coverage for the accident.
On March 7, 2011, Esads attorney submitted a demand on
Heasleys Progressive policy on behalf of Esad and his two children. He
asserted that Esad had suffered a right shoulder injury, a left inguinal
hernia, and a low back injury as a result of the accident. He also
maintained that the children had suffered both physical and

4
psychological injuries from the accident. The demand letter sought
$178,500 for Esad and $13,000 each for the two children. The letter
added, The statute is rapidly approaching in this matter. I hope to hear
from you soon to see if these matters can be resolved. At that time,
approximately ten weeks remained before the May 23, 2011 expiration of
the two-year statute of limitations to bring suit against Heasley. See
Iowa Code 614.1(2) (2011) (requiring actions based on personal injury
to be brought within two years).
Upon receipt of this letter, Progressive informed Esads attorney
that only $35,000 remained on its policy to cover claims arising from the
May 23, 2009 accident. Progressive offered to pay $25,000 to Esad and
$5000 for each of his children to settle the claims.
In response to the offer from Progressive, Esads counsel finally
initiated contact with Nationwide by phone on March 25, 2011. During
the conversation, Nationwide requested a copy of the demand letter to
Progressive and copies of Esads and his childrens medical records.
On March 28, 2011, Esads counsel provided Nationwides claims
representative with a copy of his demand letter to Progressive, along with
copies of his clients medical records and medical bills. The letter also
summarized the status of Progressives remaining insurance coverage
and its outstanding settlement offer of $25,000 for Esad and $5000 each
for the two children. The letter further stated:
Please provide me with a copy of your declaration page
so I know and can confirm for my client what the
underinsured limits are. Also, please advise in writing if I
may proceed with settling with Progressive for the amount
identified above.
I realize I have not provided you with the three year
prior medical records. I should have those in the very near
future and will forward them to you immediately. If you
need anything further, please advise. I look forward to

5
hearing from you to conclude the claim with the tortfeasor as
our statute is running.
On April 1, 2011, Esads attorney sent Nationwide a letter
enclosing medical records for Esad for the three years prior to the
accident. The letter reiterated:
Please advise as to your policy limits as soon as
possible and also provide me with a copy of the declaration
page. Also, please let me know if I may proceed to settle the
case with Progressive for the tortfeasors limits as previously
explained. I look forward to hearing from you in the very
near future.
On April 12, 2011, Nationwides claims representative wrote back
to Esads attorney. She granted consent to settle the claims with
Progressive for $25,000, $5000, and $5000, respectively. She added,
Regarding your request for a copy of the Declaration page, I do not have
consent from our Insured to provide this information. Finally, she
stated:
I am currently reviewing the information provided
regarding Esads injury. I have had the opportunity to
review the claim information pertaining to the claims of [the
children] and it appears the settlement offers presented by
Progressive of $5,000 for each of these claims will adequately
indemnify them . . . .
I am aware of the fast approaching statute expiration
date and will be in contact with you regarding the
underinsured claim of Esad once I have had the opportunity
to review the information you have provided.
On May 4 and May 11, Esads attorney sent additional medical
records and an additional medical bill to Nationwide.
On May 27, 2011, Nationwides claims representative wrote Esads
attorney, advising that the UIM coverage under Selims policy has now
expired per the contract language which states Underinsured Motorists
coverage will be barred unless suit filing is commenced within two years
after the date of the accident. The letter enclosed a copy of the policys

6
UIM endorsement. The policy language limiting the time to bring suit
read, [A]ny suit against us under this [UIM] Coverage will be barred
unless commenced within two years after the date of the accident.
Esad brought this action against Nationwide and Westfield
National Insurance Company (his own insurance carrier) on June 23,
2011, alleging he had suffered damages in excess of the Progressive
policy limits and seeking recovery on both Nationwides and Westfields
UIM coverage. Nationwide then moved for summary judgment, claiming
Esads petition was untimely because he had failed to file it within the
policys two-year deadline. Esad resisted the motion. Nationwide
supported its motion with an affidavit from its claims representative, but
Esad did not submit an affidavit or other statement from his attorney.
Esad did, however, furnish an affidavit from Selim. Therein, Selim stated
he would have granted consent to share the declarations page for the
Nationwide policy with Esad if asked.
The district court denied Nationwides motion, citing several
considerations. First, the court emphasized that Esad was not a party to
Nationwides insurance policy. As the court put it, The court knows of
no reason that Esad should be bound by contractual provisions in which
he did not participate. The court further found that even though
Nationwide had not waived its statute of limitations defense, it
intentionally did not provide plaintiff with a copy of the policy which
would have revealed the contractual limitations within the two-year time
period. The court noted Nationwides agreement that it would have
provided a copy of the relevant policy language if requested. Lastly, the
district court observed that Nationwide could have completed its claims
investigation and responded to Esads UIM claim before the contractual

7
limitations period expired. For this combination of reasons, the court
denied Nationwides summary judgment motion.
We granted Nationwides application for an interlocutory appeal
and transferred the case to the court of appeals. In a well-written and
lively opinion, the court of appeals upheld the district courts ruling.
Initially, it determined the contractual two-year period of limitation in
Selims Nationwide insurance policy was valid and enforceable as to
Selim. However, the court also found Nationwide had a duty under the
facts of the case to advise Esads attorney of the contractual deadline for
bringing UIM claims under the policy. As the court explained:
Esad was not a party to the Nationwide policy and had no
knowledge of the contractual time limitation for filing suit.
Nationwide had knowledge of Esads claim within the
contractual time limitation, but chose to withhold the
information until after the limitations period expired.
One member of the panel dissented from this ruling, reasoning that
third-party beneficiaries are bound by contractual provisions, that Esads
attorney never asked for the policy itself, and that the requested
declarations page would not have provided any information regarding
the contractual limitations period.
We granted Nationwides application for further review.
II. Standard of Review.
We review the district courts summary judgment ruling for errors
at law. Iowa R. App. P. 6.907; Farm Bureau Life Ins. Co. v. Holmes
Murphy & Assocs., Inc., 831 N.W.2d 129, 133 (Iowa 2013). We can
resolve a matter on summary judgment if the record reveals a conflict
concerning only the legal consequences of undisputed facts. Boelman v.
Grinnell Mut. Reins. Co., 826 N.W.2d 494, 501 (Iowa 2013). When the
facts related to the limitations issue are undisputed, the enforceability of

8
the contractual limitations period is a question of law for the court.
Robinson v. Allied Prop. & Cas. Ins. Co., 816 N.W.2d 398, 401 (Iowa
2012).
III. Legal Analysis.
A. The Terms of the Policy. We begin our analysis with a review
of the policy. See, e.g., Thomas v. Progressive Cas. Ins. Co., 749 N.W.2d
678, 68182 (Iowa 2008). Our first step in insurance coverage matters is
to consider what the policy itself says. Id. at 683 (internal quotation
marks omitted). Interpretation requires us to give meaning to
contractual words in the policy. Boelman, 826 N.W.2d at 501.
Under Iowa Code section 516A.1, UIM coverage must be included
in every motor vehicle liability insurance policy unless the insured rejects
it. See Iowa Code 516A.1; Robinson, 816 N.W.2d at 402. Selims policy
contained a UIM endorsement. That endorsement provided:
We will pay compensatory damages which an insured
is legally entitled to recover from the owner or operator of an
underinsured motor vehicle because of bodily injury
caused by an accident.
The endorsement defined insured to include [a]ny other person
occupying your covered auto. Hence, Esad was an insured for
purposes of the UIM coverage. Additionally, as noted above, the
endorsement provided that any suit against us under this [UIM]
Coverage will be barred unless commenced within two years after the
date of the accident.
The policy also had a separate declarations page that identified the
Ford Explorer as an insured vehicle, indicated the vehicle had UIM
coverage with limits of $100,000 per person and $300,000 per accident,
and disclosed the premium charged to Selim for that coverage.

9
B. The Reasonableness of the Contractual Two-Year Limit on
Filing Suit. Because UIM claims are contractual, they are presumptively
subject to a ten-year statute of limitations. See Iowa Code 614.1(5);
Robinson, 816 N.W.2d at 402; Douglass v. Am. Family Mut. Ins. Co., 508
N.W.2d 665, 666 (Iowa 1993), overruled on other grounds by Hamm v.
Allied Mut. Ins. Co., 612 N.W.2d 775, 784 (Iowa 2000). However, we have
held that parties to an insurance contract can modify the deadline for
bringing suit. See Robinson, 816 N.W.2d at 402 ( Under general
contract law, it is clear that the parties may agree to a modification of
statutory time limitations . . . . Iowa has long recognized the rights of
insurers to limit time for claims, irrespective of a legislative imprimatur
on such provisions. (quoting Douglass, 508 N.W.2d at 66667)); Faeth
v. State Farm Mut. Auto. Ins. Co., 707 N.W.2d 328, 334 (Iowa 2005);
Nicodemus v. Milwaukee Mut. Ins. Co., 612 N.W.2d 785, 787 (Iowa 2000).
Our caselaw indicates a contractual limitation of the statutory deadline
is enforceable if it is reasonable. See Robinson, 816 N.W.2d at 402;
Nicodemus, 612 N.W.2d at 787 (The basic rule was established in
Douglass: a contractual limitations provision is enforceable if it is
reasonable.).
In certain prior cases, we have upheld contractual limitations
provisions that require suit to be brought for UIM or uninsured motorist
(UM) benefits within two years of the accident. See Robinson, 816
N.W.2d at 409; Douglass, 508 N.W.2d at 668. There is no question that
the two-year contractual limit was reasonable in this case. Esad was
represented by counsel who made contact with Nationwide nearly a year
before the two-year limitations period ran out. Esad could have sued for
UIM benefits during that period. There was no barrier in the insurance
policy to his doing so. See Robinson, 816 N.W.2d at 403; cf. Faeth, 707

10
N.W.2d at 335 (finding a two-year limitations period unreasonable where
the provision left the insured no time to file suit after the claim accrued);
Nicodemus, 612 N.W.2d at 78889 (holding a two-year limitations period
was unreasonable because there was no contractual basis for bringing
the suit until after the limitations period had expired). This is not even a
case where the insured failed to appreciate the extent of her injuries.
See Robinson, 816 N.W.2d at 403. At least six months prior to the
expiration of the two-year contractual limitations period, Esad knew the
extent of his injuries, and at least two months before the end of that
period, Esads attorney knew Progressives coverage for those injuries
would be inadequate.
1

C. Esads Rights Under Selims Policy. Esad argues, however,
that he is not the policyholder and therefore cannot be bound to all the
terms of Selims contract with Nationwide. We cannot accept this
proposition.
A policy of automobile liability insurance is a contract, therefore
generally governed by those accepted rules applicable to contracts. Gen.
Cas. Co. of Wis. v. Hines, 261 Iowa 738, 745, 156 N.W.2d 118, 122
(1968); see Talen v. Emprs Mut. Cas. Co., 703 N.W.2d 395, 407 (Iowa
2005) (Insurance policies are contracts between the insurer and the
insured and must be interpreted like other contracts . . . .).

1
Esad concedes in his brief that he knew the extent of his injuries on November
11, 2010, when arthroscopic surgery on him revealed a torn shoulder labrum. He
argues the limitations period should not have commenced until that date, based on the
discovery rule. This is incorrect. We have previously stated an insurance company
has the ability, if it so chooses, to clearly articulate the applicable limitations period for
claims against the tortfeasor and the insurer, and the event upon which the limitations
period begins to run. Hamm, 612 N.W.2d at 784. Nationwides policy stated that any
suit for recovery of UIM benefits would be barred unless commenced within two years
after the date of the accident.

11
A contract may benefit and give rights to third parties. See RPC
Liquidation v. Iowa Dept of Transp., 717 N.W.2d 317, 320 (Iowa 2006)
( A third party . . . has an enforceable right by reason of a contract
made by two others . . . if the promised performance will be of pecuniary
benefit to [the third party] and the contract is so expressed as to give the
promisor reason to know that such benefit is contemplated by the
promisee as one of the motivating causes of his making the contract.
(quoting Vogan v. Hayes Appraisal Assocs., Inc., 588 N.W.2d 420, 42324
(Iowa 1999))). We have adopted the Restatement (Second) of Contracts
section 302 concerning third-party beneficiaries. See RPC Liquidation,
717 N.W.2d at 319; Midwest Dredging Co. v. McAninch Corp., 424 N.W.2d
216, 224 (Iowa 1988). Illustration 4 to that section indicates a
beneficiary of a life insurance policy would be considered a third-party
beneficiary of the life insurance contract. See Restatement (Second) of
Contracts 302 cmt. c, illus. 4, at 441 (1981).
When an insurance contract extends coverage to someone like
Esad who is not the policyholder, this additional insured becomes a
third-party beneficiary of the contract. As the Wisconsin Court of
Appeals has put it:
Jones also made an uninsured motorist claim against State
Farm. Once Jones opted to make that claim, we hold that he
was properly bound to the provisions of the policy relating to
that claim. Functionally, the insurance policy made Jones a
third-party beneficiary of the contract. When a right has
been created by a contract, the third party claiming the
benefit of the contract takes the right subject to all the terms
and conditions of the contract creating the right.
Jones v. Poole, 579 N.W.2d 739, 741 (Wis. Ct. App. 1998); see also
Travelers Ins. Co. v. Warren, 678 So. 2d 324, 326 n.2 (Fla. 1996)
(characterizing lawful occupants of an insured vehicle as third party
beneficiaries to the named insureds policy); 2 William J. Schermer &

12
Irvin E. Schermer, Automobile Liability Insurance 26:19 (4th ed. 2013)
(The fact that a Class II or additional insured (such as a pedestrian or
passenger) is not a signatory to the contract does not exempt such an
insured from the application of policy conditions and requirements to
which a named insured is subject. A Class II insured is deemed a third-
party beneficiary of the policy and bound by all its provisions when a
claim for uninsured motorist coverage is made against the policy.).
However, the rights of a third-party beneficiary are controlled by
the terms of the contract. See Olney v. Hutt, 251 Iowa 1379, 1383, 105
N.W.2d 515, 518 (1960) (The [third-party beneficiarys] rights can rise
no higher than those of the promisee.); Restatement (Second) of
Contracts 309 cmt. b, at 459 (Where there is a contract, the right of a
beneficiary is subject to any limitations imposed by the terms of the
contract.).
Thus, Esad is subject to the provisions of Selims insurance policy,
including the one requiring any suit under the UIM coveragei.e.,
regardless of claimantto be brought within two years of the accident.
See Williams v. Progressive Ne. Ins. Co., 839 N.Y.S.2d 381, 382 (App. Div.
2007) (holding that a passenger seeking UM benefits is a third-party
beneficiary of the insurance policy and subject to any provisions of the
policy that apply to all insureds).
An injured person who makes a claim for uninsured
motorist benefits under a policy to which he is not a
signatory is in the category of a third party beneficiary.
Historically, this Court has held that third party
beneficiaries are bound by the same limitations in the
contract as the signatories of that contract. The third party
beneficiary cannot recover except under the terms and
conditions of the contract from which he makes a claim.
Johnson v. Pa. Natl Ins. Cos., 594 A.2d 296, 299 (Pa. 1991); see also Ex
parte Dyess, 709 So. 2d 447, 45051 (Ala. 1997) (noting that an insured

13
who did not sign the policy and is seeking UM benefits is a third-party
beneficiary of the policy and cannot pick and choose the portions of the
contract that he wants to apply); Jeanes v. Arrow Ins. Co., 494 P.2d
1334, 1337 (Ariz. Ct. App. 1972) (finding that a passenger seeking UM
benefits has become a third party beneficiary and must abide by the
terms of the contract in order to obtain benefits under a UM policy);
Bantz v. Bongard, 864 P.2d 618, 623 (Idaho 1993) ([A] third party
beneficiary of an insurance policy must comply with all the terms and
provisions of an insurance policy which apply to that beneficiary.).
Allgor v. Travelers Ins. Co., 654 A.2d 1375, 1379 (N.J. Super. Ct. App.
Div. 1995) (As an intended third-party beneficiary of the contract,
plaintiff in this case simply does not have greater rights than his father
has as the named insured and maker of the contract.).
2

D. Is There an Affirmative Duty to Advise an Insured of the
Policys Limitations Period? The next question is whether Nationwide
had an affirmative duty to disclose the contractual deadline for filing suit
to Esads attorney. The court of appeals found that it did. For the
reasons discussed herein, we respectfully disagree.
We have previously said, An insurer does not have the duty to
warn its policyholders that the time period for filing suit against it is
running out. Morgan v. Am. Family Mut. Ins. Co., 534 N.W.2d 92, 100
(Iowa 1995), overruled on other grounds by Hamm, 612 N.W.2d at 784. In

2
Of course, obligations that an insurer owes to an insured under Iowa law would
apply here. Our point is simply that Esad is bound by the policy terms to the same
extent as Selim, the policyholder.
It should be noted, however, that Iowa Code section 507B.4(19) (2011)now
Iowa Code section 507B.4(3)(s) (2013)which indicates it is an unfair insurance
practice for an insurer to fail to provide upon a reasonable request, information to
which that individual is entitled, applies only to a policyholder or applicant. Esad is
neither of these.

14
Morgan, the plaintiffs alleged their insurer, American Family Mutual
Insurance Company (American Family) acted in bad faith when it refused
to pay benefits under the Morgans uninsured motorist policy for injuries
suffered by their daughter during an automobile accident. Id. at 94. The
Morgans did not learn the full-extent of their daughters injuries until
more than a year after the accident. Id. at 95. Sixteen months after the
accident, and approximately eight months before the expiration of a two-
year contractual limitations period that was added to their policy by
American Family the year before the accident, the Morgans informed
American Family of their intention to seek damages under the uninsured
motorist policy. Id. at 95, 98. After reviewing the claim, American
Family denied it about six weeks before the contractual limitations period
expired. Id. at 95. The Morgans filed suit eighteen months later, sixteen
months after the deadline for filing suit had passed. Id. Among other
things, the Morgans argued American Family failed to warn them of the
approaching deadline and, therefore, should be barred from asserting the
limitations period defense. Id. at 100. We explained:
The Morgans also assert American Family should be
estopped from asserting the contractual limitations defense
because when it denied the Morgans claim for uninsured
motorist benefits on July 8, 1987, it did not alert them that
it intended to rely on the limitations provision as a defense
after August 19, 1987. The Morgans argue that American
Family should have warned them of the approaching
limitations deadline. We disagree. An insurer does not have
the duty to warn its policyholders that the time period for
filing suit against it is running out. We also note the
Morgans are in a poor position to complain that they were
not warned about the approaching limitation period because
they retained an attorney to represent them in this matter
six months before the limitation period ran, yet did not bring
suit until January 1989.
Id. at 100.

15
We believe Morgan controls here.
3
Just as there is no general duty
to affirmatively disclose the limitations deadline to policyholders, no duty
arises to affirmatively disclose it to additional insureds. Any other
conclusion would undermine the principle, just discussed, that a third-
party beneficiarys rights under a contract do not exceed those of the
primary party. Notably, Esad, like the Morgans, had retained counsel
well before the limitations period ran.
The Morgan approach appears to be in accord with prevailing
caselaw. A number of authorities indicate that an insurer has no
affirmative obligation to disclose a contractual limitations period, such as
by providing a copy of the insurance policy, absent a specific request.
The plaintiff here argues that although defendant did
not refuse to deliver the policy, the failure to deliver was in
essence a tacit refusal to deliver. He maintains since he did
not have the policy and was not aware of the provision
requiring suit against the company be brought within one
year of the loss, the company should be estopped from
asserting that provision.
We disagree. The plaintiff here, unlike in [Union Fire
Inc. Co. v.] Stone, [152 S.E. 146 (Ga. Ct. App. 1930)] never
requested a copy of the policy, and the defendant never
refused to give the policy. Defendants failure to deliver the
policy did not amount to a tacit refusal to deliver.
Schoonover v. Am. Family Ins. Co., 572 N.E.2d 1258, 1265 (Ill. App. Ct.
1991) (citing cases). In Schoonover, the court held summary judgment
should be granted based upon a policys contractual statute of
limitations when the insureds attorney never asked for a copy of the
policy, even though a copy had not been provided to the insured. Id. at
1266 (citing prior cases).

3
Notably, our court decided Morgan after Weber v. State Farm Mut. Auto. Ins. Co.,
873 F. Supp. 201, 209 (S.D. Iowa 1994) (finding an insurance company had a duty to
disclose coverage to injured passengers considered insureds under the policy).

16
Where the insurer wrongfully and unjustifiably
withholds the policy from the insured, the insurer may be
estopped from relying on the suit limitation clause. . . .
On the other hand, an insurers failure to provide a
copy of a policy did not create a waiver or estoppel regarding
the policys limitation provision under the following
circumstances:
. . . .
There was no request for a copy of the policy.
17 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d 238:22, at
238-40 to -41 (2005) [hereinafter Couch on Insurance 3d].
Esad cites us to decisions from Indiana and Ohio, but we find
them unpersuasive here. In Stewart v. Walker, the Indiana Court of
Appeals declined to enforce a contractual limitations period for bringing a
UM lawsuit as to a passenger in the insured vehicle. 597 N.E.2d 368,
37476 (Ind. Ct. App. 1992). In that case, the third-party beneficiary,
Stewart, had written the insurer to advise it of the claim three months
before the expiration of the limitations period, had asked the insurer to
advise if it needed any further information . . . to process this uninsured
motorist claim, and had received no response until after the limitations
period. Id. at 374. The court found an affirmative duty to disclose the
limitations period, flowing from the insurers overall duty of good faith:
We cannot but conclude that a duty of good faith dealing
certainly must include an obligation to inform such a
claimant of conditions precedent in the insurance contract,
the more so when the nonparty claimant has asked whether
the insurer requires any additional information in order to
process the claim.
Id. at 37576.
However, subsequent authority from the Indiana Supreme Court
has clarified that Indiana does not recognize a general duty of disclosure,
based on principles of good faith, running from insurers to third-party

17
beneficiaries. See Cain v. Griffin, 849 N.E.2d 507, 51112 (Ind. 2006). In
the Indiana Supreme Courts view, Stewart was driven by the facts and
circumstances of [that] case. See id. at 512 (quoting Stewart, 597
N.E.2d at 376). As the Indiana Supreme Court explained in Cain,
Stewart was correctly decided because the insurance company had
attempted to rely upon a third-party insureds failure to comply with a
condition that the same insurance company had refused to disclose.
See id.
The facts of Esads situation differ significantly from those in
Stewart. Here, Esad was represented by counsel who contacted
Nationwide nearly a year before the expiration of the contractual
limitations period. Esads counsel then failed to respond to a series of
inquiries from Nationwide over many months. When Esads counsel
resumed contact with Nationwide, he never asked about policy
conditions or asked for a copy of the policy itself. In any event, the
lesson of Cain is that Indiana does not recognize a broad-based duty on
the part of insurers to affirmatively disclose contractual limitations
periods to third-party beneficiaries.
Esad also relies on an Ohio case that found a three-year
contractual limitations period unenforceable as to a nonpolicyholder.
See Wilson v. Ohio Cas. Ins. Co., 923 N.E.2d 1187, 1190 (Ohio Ct. App.
2009). In Wilson, the plaintiff was injured while driving a vehicle owned
and insured by his employer and later brought a UM/UIM claim. See id.
at 118889, 1191. The court noted that under Ohio law, insurance
companies have a duty of good faith to inform insureds of limitations
periods when faced with potential claims. Id. at 1190. [W]here the
insurer has been made aware that an insured has a potential claim
under a policy providing UM/UIM coverage, the insurer must inform the

18
insured of any applicable limitations period contained in the policy. Id.
at 1191. The court found no reason to distinguish insureds who are not
policyholdersi.e., third-party beneficiaries, such as Wilsonfrom other
insureds. Id. at 119091. As the court put it, [T]o restrict the notice
requirement to the policyholder itself would be to ignore the contractual
duty that the insurer owes to insureds other than the policyholder. Id.
at 1190.
But Ohios approach is incompatible with our insurance law
precedent. As we have previously noted, Iowa law does not place a
general duty upon insurers to notify policyholders of contractual
limitations periods. See Morgan, 534 N.W.2d at 100. Wilson thus cannot
be squared with Morgan.
E. Equitable Estoppel. We now turn to the question whether
Nationwide, under the facts and circumstances of this case, is estopped
from asserting the statute of limitations.
4

Our caselaw recognizes a defendant can be estopped from
asserting the statute [of limitations] as a defense when it would be
inequitable to permit the defendant to do so. Christy v. Miulli, 692
N.W.2d 694, 701 (Iowa 2005). To successfully establish equitable
estoppel, the plaintiff has the burden to show by clear and convincing
evidence:
(1) The defendant has made a false representation or has
concealed material facts; (2) the plaintiff lacks knowledge of
the true facts; (3) the defendant intended the plaintiff to act

4
The district court found that Nationwide had not engaged in conduct
amounting to a waiver of the contractual limitations period, and Esad does not
challenge that determination on appeal. See Talen, 703 N.W.2d at 409 ([W]e can
discern nothing in [the insurers] communication that suggests a waiver of policy
defenses.); see also Hook v. Lippolt, 755 N.W.2d 514, 527 (Iowa 2008) ([W]aiver is the
intentional relinquishment of a known right. (Internal quotation marks omitted.)).

19
upon such representations; and (4) the plaintiff did in fact
rely upon such representations to his prejudice.
Hook, 755 N.W.2d at 52425 (quoting Christy, 692 N.W.2d at 702); see
Morgan, 534 N.W.2d at 100 (To establish estoppel, the Morgans must
prove by clear and convincing evidence a false representation or
concealment of material facts by American Family, lack of knowledge on
the part of the Morgans, intention by American Family that the
representation or concealment be acted on, and reliance by the Morgans
to their prejudice.).
We note that Esad was represented by an attorney during the
relevant time period; all of Nationwides interactions were with Esads
counsel. Yet the summary judgment record contains neither an affidavit
nor a professional statement from Esads counsel.
We find that summary judgment record insufficient to raise a
genuine issue of material fact as to equitable estoppel. The record does
not show misrepresentation or concealment, nor does it show plaintiffs
reliance on a misrepresentation or concealment. Nationwide did not
refuse to provide a copy of the policy (which contains the UIM
endorsement); rather, Esads counsel never asked for one.
[F]ailure to provide a copy of a policy [does] not create [an]
estoppel regarding the policys limitation provision . . . [when] [t]here was
no request for a copy of the policy. 17 Couch on Insurance 3d 238:22,
at 23841; see First Fed. Sav. & Loan of New Castle Cnty. v. Nationwide
Mut. Fire Ins. Co., 460 A.2d 543, 54647 (Del. 1983) (holding that an
insurers silence after receipt of a settlement demand approximately
two months before the contractual limitations period ran did not amount
to an estoppel and did not foreclose summary judgment in favor of the
insurer); Schoonover, 572 N.E.2d at 1266 (affirming summary judgment

20
despite plaintiffs claim of estoppel where the plaintiff was represented by
counsel and the defendant insurer was not asked to provide, and did not
refuse to provide, a copy of the insurance policy).
5

Even if the record contained evidence of misrepresentation or
concealment, Esad would be hard-pressed to establish any kind of
reliance without an affidavit or professional statement from his counsel.
Esad was continuously represented by counsel from June 2010 onward,
approximately eleven months before the expiration of the contractual
limitations period. There is no evidence in this record regarding what (if
any) consideration or investigation Esads counsel gave to the statute of
limitations, what time period Esads counsel thought he had to bring
suit, whether Esads counsel was aware the policy had a two years after
the date of accident statute of limitations, whether he was aware that we
upheld such a clause in the UM context twenty years ago,
6
and whether
he contacted Selim or Selims counsel to obtain a copy of the policy (or if
not, why not). See Morgan, 534 N.W.2d at 100 (We also note the
Morgans are in a poor position to complain that they were not warned
about the approaching limitation period because they retained an
attorney to represent them in this matter six months before the

5
Nationwide was asked to provide the declarations page. This would have shown
the dollar amounts of the policyholders particular coverages but not general terms and
conditions, such as contractual deadlines for filing suit. Nationwide declined to provide
the declarations page without Selims permission. Nationwide contends it would have
provided a copy of the standard policy provisions, including the contractual limitations
period, if asked. Regardless, for summary judgment purposes, the key point is that
Nationwide was not asked. Had Esads counsel asked for a copy of the policy and
Nationwide refused to provide it, this would be a different case.
6
See Douglass, 508 N.W.2d at 667 (noting that [a]n uninsured motorist
provision that allows two years to sue . . . grants as many rights as the plaintiff would
have in the case of an insured tortfeasor).

21
limitation period ran . . . .); see also Greeson v. Acceptance Ins. Co., 738
So. 2d 1201, 1205 (La. Ct. App. 1999) (affirming dismissal of a case
based on the contractual limitations period where [t]he evidence
produced by plaintiff does not establish that he withheld suit in reliance
on any words or actions of the defendant or its adjuster and [t]he
plaintiff [did] not explain why he did not seek information about the
policy provisions in a more timely manner). In short, Esad cannot prove
reliance either.
The court of appeals observed that Esads counsel said the
following in his March 28, 2011 letter:
I realize I have not provided you with the three year
prior medical records. I should have those in the very near
future and will forward them to you immediately. If you
need anything further, please advise. I look forward to
hearing from you to conclude the claim with the tortfeasor as
our statute is running.
In the court of appeals view, the request to the insurer to advise [i]f you
need anything further could have triggered a duty to disclose the
contractual limitations period.
We respectfully disagree. This request came in the context of a
promise to provide requested medical records. There was subsequent
correspondence between the parties. In its April 12 letter, after granting
formal consent to the proposed settlement with Progressive, Nationwides
claim representative turned to the UIM issues. In the final paragraph of
her letter, she wrote, I am aware of the fast approaching statute
expiration date and will be in contact with you regarding the
underinsured claim of Esad once I have had the opportunity to review
the information you have provided. While we agree with the court of
appeals that this reference to the fast approaching statute expiration

22
date did not actually inform Esad of the contractual time period, at a
minimum it should have heightened counsels sensitivity to the
possibility of a contractual limitations period corresponding to the
statutory limitations period for tort claims arising out of the accident.
Notably, we have no statement from Esads counsel describing his
reaction at the time to this sentence of Nationwides letter, although Esad
had the burden of proof on estoppel.
In affirming the district courts denial of summary judgment, the
court of appeals reasoned, Nationwide had knowledge of Esads claim
within the contractual time limitation, but chose to withhold the
information until after the limitations period expired. We agree the
summary judgment record supports this inference. The question,
however, is whether it is enough to overcome the contractual limitations
period. We think not. Regardless of Nationwides underlying motive, in
the absence of a duty to disclose the limitations period or conduct
amounting to an estoppel, it may enforce the limitations clause in its
insurance contract. See Stahl v. Preston Mut. Ins. Assn, 517 N.W.2d
201, 20405 (Iowa 1994) (affirming summary judgment for the insurer
based on the contractual limitations period and stating it found nothing
in the record indicating that Preston Mutual made any representations to
lull Stahl into delaying the filing of his action until after the limitations
period had expired); cf. Wendt v. White Pigeon Mut. Ins. Assn, 418
N.W.2d 374, 376 (Iowa Ct. App. 1987) (finding an insurers false
representation that it would pay the homeowners claim after a favorable
disposition of the arson charge against his estranged wife amounted to
an estoppel to assert a contractual limitations period).

23
IV. Conclusion.
For the foregoing reasons, we vacate the court of appeals decision,
reverse the judgment of the district court, and remand with directions to
enter summary judgment in favor of Nationwide.
DECISION OF COURT OF APPEALS VACATED; JUDGMENT OF
DISTRICT COURT REVERSED AND CASE REMANDED WITH
INSTRUCTIONS.
All justices concur except Wiggins, J., who concurs specially.
Hecht and Appel, JJ., join this special concurrence.


24
#121295, Osmic v. Nationwide Agribus. Ins. Co.
WIGGINS, Justice (special concurrence).
I concur in the result, but write separately regarding the majoritys
third-party beneficiary analysis. When interpreting an insurance policy,
courts must look to the language of the policy to determine the rights of
the parties, not how other courts have treated similar issues. See
Ferguson v. Allied Mut. Ins. Co., 512 N.W.2d 296, 299 (Iowa 1994) (stating
the court must look to the meaning of the words used in the contract).
The analysis in this case should have been from the standpoint of an
insured, not of a third-party beneficiary, because under the terms of the
policy, Esad Osmic was an insured. The Underinsured Motorists
Coverage Insuring Agreement of the policy provided, Insured as used in
this endorsement means . . . any other person occupying your covered
auto.
The reason we should analyze this case from the standpoint of an
insured is that I am not satisfied a third-party beneficiary has the same
rights as an insured under our law. An insurance company has a duty
to exercise reasonable care to disclose underinsured motorist coverage to
an insured. See Weber v. State Farm Mut. Auto. Ins. Co., 873 F. Supp.
201, 209 (S.D. Iowa 1994) (applying Iowa law to find the insurance
company had a duty to disclose coverage to passengers insured under a
policy). One treatise describes this duty as follows:
Once an insurer has received notice of an occurrence,
there is no reason to restrict the obligation to disclose
relevant information about the insureds rights and duties.
If the insurers employees or claims representatives process
the claim without additional input from the claimants, full
responsibility rests on those individuals. If additional
actions by claimants or beneficiaries are required, the
insurer should be obligated to provide them complete
information about the coverages that may provide benefits,

25
what needs to be done, when it needs to be done, and all
ancillary rights. Anything less falls short of the insurers
contractual obligations.
2 Alan I. Widiss & Jeffrey E. Thomas, Uninsured and Underinsured
Motorist Insurance 19.13, at 203 (rev. 3d ed. 2005). The Supreme
Court of Pennsylvania described the duty between an insurance
company and its insured as follows:
The duty of an insurance company to deal with the insured
fairly and in good faith includes the duty of full and complete
disclosure as to all of the benefits and every coverage that is
provided by the applicable policy or policies along with all
requirements, including any time limitations for making a
claim.
Dercoli v. Pa. Natl Mut. Ins. Co., 554 A.2d 906, 909 (Pa. 1989) (emphasis
added).
Applying these principles, I would find that Nationwide met its
obligations to Osmic as an insured. First, Osmics attorney requested a
copy of the declaration page and not the policy itself. Nationwide had a
duty to provide the declaration page to Osmic in response to his request.
See Iowa Code 507B.4(19) (2011) (making it an unfair insurance
practice for an insurer to fail or refuse to furnish any policyholder or
applicant, upon reasonable request, information to which that individual
is entitled). By informing Osmics attorney they were not entitled to the
declaration page, Nationwide committed an unfair claim settlement
practice by [f]ailing to acknowledge and act reasonably promptly upon
communications with respect to claims arising under insurance policies.
Id. 507B.4(10)(b). Even with these practices, a genuine issue of fact is
not engendered to allow this case to proceed to trial because the
declaration page would not include the applicable statute of limitations
language.

26
Moreover, the insurance company gave Osmics attorney notice
that the statute of limitations under the policy was fast approaching in
its April 12 letter. There, Nationwide stated, I am aware of the fast
approaching statute expiration date and will be in contact with you
regarding the underinsured claim of Esad once I have had the
opportunity to review the information you have provided. At this point
in time, Osmic had over a month, a sufficient amount of time, to request
the policy or ask Nationwide what it meant by the fast approaching
statute expiration date and file suit if a settlement could not be reached.
Thus, I would come to the same conclusion as the majority because
Nationwide gave its insured notice of the impending statute of limitations
and Osmic failed to do anything further in response to the notice.
At the very least, the lesson to learn from this case is that an
insured who may be entitled to benefits under underinsured motorist
coverage should request the insurance company to provide a copy of the
policy or clarify his or her rights under the coverage as soon as
practicable.
Hecht and Appel, JJ., join this special concurrence.

2RCV01

PLAINTIFF(S),
vs.
INSURANCE CO
,
DEFENDANT(S).


O R D E R

The captioned-matter was set for summary judgment on this date. The Court notes that
this matter is set for trial on March 18, 2014. As is the customary practice within the
district, any dispositive motions should be assigned to the Presiding Judge. In this case
it is Judge Kurt Stoebe. The Court has informed Judge Stoebe of this matter and has
contacted the parties. The Court trusts that Judge Stoebe will address the issues.

Counsel of Record
Judge Kurt Stoebe
1 of 2
E-FILED 2014 JAN 13 11:09 AM SAC - CLERK OF DISTRICT COURT
AL
Type: OTHER ORDER
So Ordered
2 of 2

CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


address shown below on January 17, 2013:
1. Trustees Joint Response to Plaintiffs Request for Production of Documents; and
2. Trustees Joint Answers to Interrogatories Propounded by Plaintiff.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street

January 20, 2014.

By: U. S. Mail eMail
Certified Mail X Other: EDMS
FAX


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

NOTICE OF SERVING NOTICES OF
DEPOSITIONS

16.401(2). The following Notice of Depositions were mailed to the Plaintiffs attorney at the
1. Notice of Deposition of Brian Mastbergen;
2. Notice of Deposition of Representative of City of Schaller;
3. Notice of Deposition of Erwin Kirkvold;
4. Notice of Deposition of Edward Prost, Jr., P.E.
Telephone: (515) 288-6041
Fax: (515) 246-1474

INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street

January 20, 2014.

By: U. S. Mail eMail
Certified Mail X Other: EDMS
FAX

2RCV01

PLAINTIFF(S),
vs.
INSURANCE CO
,
DEFENDANT(S).


O R D E R

Defendant North American Specialty Insurance company has filed a Motion for
Summary Judgment. The Court finds this motion should be set for hearing.
IT IS THEREFORE ORDERED Motion for Summary Judgment shall come before the
Court on February 6, 2014, at 10:30 a.m. The Court will be available by telephone at
515-332-1806.
IT IS FURTHER ORDERED the movant shall initiate the conference call for any party
that wishes to participate telephonically.

Counsel of Record
Pro Se Plaintiff
Pro Se Defendant
1 of 2
AL
Type: OTHER ORDER
So Ordered
2 of 2

CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


1. Amended Notices of Depositions of City of Schaller Representative, Edward Prost,
and Brian Masterbergen.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street

January 31, 2014.

FAX

E-FILED 2014 FEB 06 2:14 PM SAC - CLERK OF DISTRICT COURT

CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


address shown below on February 10, 2014:
1. Supplemental Response to Plaintiffs Request for Production of Documents, Bates
Nos. NAS 000642 to 001525.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street

February 10, 2014.

FAX


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


1. Supplemental Response to Plaintiffs Request for Production of Documents.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street

February 10, 2014.

FAX


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


Nos. NAS 001526 to 001530.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street
P.O. Box 3086

February 12, 2014.

FAX

IN THEIOWADISTRICTCOURT FOR SACCOUNTY
CITYOF SCHALLER, ) LawNo. LACV019385
)
Plaintiff, )
)
v. )
)
GENERAL EXCAVATINGINC.. and ) PLAINTIFF'SNOTICEOF
NORTHAMERICAN SPECIALTY ) SERVINGSUPPLEMENTAL
INSURANCECOMPANY. ) DISCOVERYRESPONSES
)
Defendants. )
COMESNOW. Plaintiff, City of Schaller, and hereby gives notice of serving Plaintiffs
Tenth Supplemental Response to Defendant North American Specialty Insurance Company's
Request for Production of Documents and Sixth Supplemental Answers to Defendant North
AmericanSpecialty Insurance Company's Interrogatories onthis I4 '11 day ofJanuary. 2014 .
HEIDMAN LAWFIRM, L.L.P.
Jo
ALANE. FREDKUvjILL, AT00027I2
ROSALYNDJ. KOOB. AT0004 380
SARAHK. KLEBER. AT0004 282
1 128 I listoric 4 th Street
P.O. Box 3086
Sioux City, Iowa 5 1 102
Phone: 712-255-8838
Facsimile: 712-258-6714
Email: aI an. frodrogi 1 11 "I hoi dmanI a\v. com
Email: roz. koob^hoi dman1 aw.com
Email: allvson.dirkson@heidnianla\v.com
Copy lo:
BenjaminB. Ullcm
DrewJ. Gentsch
Des Moines, 1A 50309-4 195
INSURANCECOMPANY
Timothy Reicks
General Excavating, Inc.
1 25 N. Whitney St.
Carroll. IA514 01-2838
PROOFOFSERVICE
1 certifythat atruecopyof this document was
served uooneach of the attorneys of record of all
parties to this actionat the addresses disclosed
bythe pleadings on.
By; ?U.S. Mail ?Hand Deliverer
?FacsiiTjjle nthpr^-O
Signature
1

IN THE IOWA DISTRICT COURT IN AND FOR SAC COUNTY

CITY OF SCHALLER, )
)
Plaintiff, )
) Case No. LACV!"#$%
&s. )
) ORDER
'ENERAL E(CAVATIN' INC., an) )
NORTH A*ERICAN SPECIALTY )
INSURANCE CO*PANY, )
)
Defen)ants. )

On February 7, 2013, the Motion for Summary Judgment to plaintiffs petition filed by
efendant !orth "meri#an Spe#ialty $nsuran#e %ompany &hereinafter referred to as !"S' #ame
before the %ourt for telephoni# hearing( !"S appeared by "ttorney re) *entsh( +he %ity of
S#haller appeared through "ttorney "llyson ir,sen(
+his #ase arose as a result of problems stemming from a publi# )or,s pro-e#t in S#haller,
$o)a( $t is undisputed that 200. the %ity of S#haller &%ity' #ontra#ted )ith *eneral /0#a1ating,
$n#( &*en( /0(' to perform )or, relating to the repla#ement or repair of se)er lines in the #ity
streets( !"S pro1ided bonding for the pro-e#t(
+he %ity issued a #ertifi#ate of substantial #ompletion on !o1ember 20, 2002( +his
#ertifi#ate states 3" definiti1e list of items to be #ompleted or #orre#ted, is atta#hed hereto( +his
list may not be all4in#lusi1e, and the failure to in#lude any items on su#h list does not alter the
responsibility of the #ontra#tor to #omplete all )or, in a##ordan#e )ith the #ontra#t do#uments(5
On "pril 12, 2010, the %ity identified tren#h #ompa#tion problems )hi#h are a
substantial #ause for this la)suit( "dditional )or, )as performed on July 2, 2010( %ontinuing
problems e0isted and *en( /0( /ngaged )ith the %ity in 1arious remedies through at least
E-FILED 2014 FEB 17 11:21 AM SAC - CLERK OF DISTRICT COURT
2

September, 2011( +he %ity filed this suit in O#tober, 2012( +here is a #ontra#tual t)o4year
statute of limitations(
+he parties ha1e pro1ided numerous and lengthy e0hibits( +he plaintiffs relian#e on the
e0hibits re1ealed the e0isten#e of fa#tual 6uestions )hi#h render summary -udgment
inappropriate(
3Summary -udgment is appropriate if the re#ord establishes 7no genuine issue as to any
material fa#t and 7the mo1ing party is entitled to a -udgment as a matter of la)( Knudson v.
Tiger Tots Community Child Care Center, !o( 1240700 &Slip( Op( at 3' &$o)a "ppeals Jan( 2,
2013' &6uoting Virden v. Betts and Beer Constr. Co., 898 !(:( 2d .09, .08 &$o)a 2003'
&6uoting $(;(%i1(<( 1(2.1'(
+here are numerous fa#t 6uestions )hi#h the %ourt )ould need to resol1e in order to
grant the plaintiffs summary -udgment( One of the primary fa#tual issues is )hether the
dis#ussions bet)een *en( /0( and the %ity of S#haller from !o1ember 20, 2002 through
2011should be #hara#teri=ed as )or, to #omplete the pro-e#t or settlement negotiations( :hile
su#h a determination in1ol1es 6uestions of la), the resolution also in1ol1es issues of material
fa#t(
+he %ity has also raised a defense of estoppel against !"$S based on the alleged
assuran#es of *en( /0( to either #omplete the pro-e#t or remedy the problems( !"$S relies on
Osmic v. Nationwide Agribusiness Ins. Co., !o( 1241229 &Jan( 10, 201> $o)a'( +he probati1e
1alue of the #ase is 1ery limited sin#e the only rele1ant holding pertains to the #ontra#tual
redu#tion of the statute of limitations( +he %ourts dis#ussion of the do#trine of e6uitable
estoppel is in#on#lusi1e on the ultimate issue, but is instru#ti1e on the importan#e of the
3

resolution of disputed fa#t in determining )hether e6uitable estoppel e0ists( +he fa#ts in Osmic
related to the insuran#e #arriers refusal to pro1ide a #opy of the poli#y( +hese fa#ts are 6uite
dissimilar to the present #ase( ;ather, the issue of estoppel here relates to *en( /0(s
negotiations )ith the %ity, its attempts to #ure the defe#t and its unfulfilled promises to properly
#omplete the )or,(
"gain, the do#trine of e6uitable estoppel re6uires the %ourt to resol1e disputed issues of
fa#t and interpret their import( " motion for summary -udgment )here there are disputed fa#ts
and intentions of the parties #annot be resol1ed by the %ourt )ithout ad-udi#ating fa#t 6uestions(
"s e1ident during oral arguments, !"$S #hara#teri=es the a#tions and ina#tions of *en( /0( as
remedies )hile the %ity #hara#teri=es them as steps to #omplete the pro-e#t( +hese are important
fa#t #on#lusions )hi#h #an only be rea#hed through a determination of the intent of *en( /0( and
the %ity( $ntent is a matter of fa#t determination(
IT IS ACCORDIN'LY ORDERED that the Motion of efendant !orth "meri#an
Spe#ialty $nsuran#e %ompany for summary -udgment is denied(

Cle+, to P+o&i)e Co-ies to?
%ounsel of ;e#ord
%ourt "dministration
Type: OTHER ORDER
LACV019385 CITY OF SCHALLER VS. GENERAL EXCAVATING INC ET AL
So Ordered
Electronically signed on 2014-02-17 11:21:27 page 4 of 4

CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


No. NAS 001531-001532.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street
P.O. Box 3086

February 18, 2014.

FAX


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


No. NAS 001533-002858.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street
P.O. Box 3086

February 21, 2014.

FAX


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385


No. NAS 002859-004351.

Telephone: (515) 288-6041
Fax: (515) 246-1474


INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street
P.O. Box 3086

February 25, 2014.

FAX

1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

MOTION TO STRIKE JURY DEMAND
AND REQUEST FOR EXPEDITED
HEARING

referred to as NAS), and for its Motion to Strike the Jury Demand in Plaintiffs Petition,
states as follows:
1. On February 17, 2014 the Court in this matter denied the Motion for Summary
Judgment filed by NAS back on December 3, 2013 in this matter. See Court Docket.
2. As a result, this matter is proceeding to trial, and pursuant to Plaintiffs Petition,
a jury trial is sought.
3. Had the Motion for Summary Judgment been granted on the issues of law, this
motion would not be required.
4. In the interest of judicial economy and not wasting citizens and the parties
valuable time in preparation for and attending a jury trial, this motion should receive expedited
attention from the Court.
5. This matter is proceeding pursuant to Iowa Code Chapter 573, the Public
Improvement Statutes. See Plaintiffs Petition, generally.
2

6. Defendant, General Excavating, Inc. defaulted in this litigation. See Court
Docket.
7. Iowa Code Section 573.16 allows parties to a Public Improvement to bring an
action in equity in the county where the improvement is located to adjudicate all rights to said
fund, or to enforce liability on the bond. I.C. 573.16 (2013).
8. Actions in equity are triable to the Court, not a jury. See Moser v. Thorp Sales
Corp., 312 N.W.2d 881, 896 (Iowa 1981).
9. As the only remaining Defendant, the proceedings alleged against NAS are
under the bond provided pursuant to Iowa Code Chapter 573, and therefore equitable in nature.
that the Court, after review of the parties pleadings and setting this matter for immediate
hearing, enter an Order striking the Jury demand requested by the City of Schaller and for
such further relief as the Court deems just.

/s/Drew J. Gentsch______________________
Telephone: (515) 288-6041
Fax: (515) 246-1474
INSURANCE COMPANY

3

Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
1128 Historic 4
th
Street
P.O. Box 3086

Judge Stoebe

CITY OF SCHALLER, )
)
Plaintiff, ) Case No. LACV!"#$%
)
&s. ) FINAL PRETRIAL ORDER
)
'ENERAL E(CAVATIN' INC., an) )
)
Defen)ants. )
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Trial is currently scheduled to commence in this matter on March 18, 2014. In
order to facilitate the Court and the attorneys in the preparation for and the conduct of the
trial, the Court enters the following retrial !rder.
IT IS THE ORDER OF THE COURT that on or "efore March 4, 2014, the
attorneys for the parties shall file all pretrial motions, including motions in limine, if any,
and shall also file a statement indicating that they ha#e re#iewed all the pleadings and
responses to disco#ery and that no changes are necessary or that they ha#e "een fully
supplemented and no further supplementation will "e necessary after March 4, 2014.
IT IS THE FURTHER ORDER OF THE COURT that on or "efore March 12,
2014, counsel for the parties shall meet and prepare a retrial Compliance $tatement
containing the following%
1. & 'oint statement of the case suita"le to read to the 'ury panel.
2. Their estimate of the length of the trial, the length of time that it will "e
necessary for them to conduct their #oir dire e(amination, the length of time they
estimate will "e necessary for each to conduct their opening statement, a time estimate of
the laintiff)s case in chief, and a time estimate for the *efendant)s case in chief.
+. & list of all undisputed facts and a list of all genuine issues of material fact
which are in dispute.
4. laintiff)s legal theories of reco#ery, laintiff)s elements of damages, and
the *efendant)s defenses.
,. & list of all witnesses to "e called, e(cluding impeachment witnesses- and
a list of all depositions e(pected to "e used at trial, e(cept for cross e(amination.
.. That the attorneys shall meet prior to March 11, 2014, to e(change
e(hi"its and mar/ e(hi"its and that they shall attach to the retrial Compliance $tatement
a list of e(hi"its with a "rief description of each and designate as to each% 0a1 that they
will "e admitted without o"'ection- 0"1 that the foundational o"'ections will "e wai#ed-
0c1 that the document shall "e o"'ected to, with the specification of legal grounds for the
o"'ection.
2. & list of all /nown e#identiary pro"lems.
8. & list of all /nown scheduling pro"lems.
3. & time estimate for the closing argument of laintiff and *efendant.
10. & list of re4uested uniform instructions "y num"er and attach to the
retrial Compliance $tatement any altered or special instructions which are re4uested.
11. & 'oint statement of all portions of the trial which the parties want
reported "y the official court reporter pursuant to the rules promulgated "y the Iowa
$upreme Court including 'ury selection, opening statements, closing statements, 5side6
"ars7 with the 'udge, return of #erdict, etc.
IT IS THE FURTHER ORDER OF THE COURT that a final pretrial
conference shall "e held in this matter on *a,-. !/, 0!1, at !!2 a.3. This hearing
will "e held at the CALHOUN Co4nt5 Co4,t.o4se, Ro-67ell Cit5, Io7a. The Court
has set aside one hour for this pretrial conference. &ll counsel shall "e personally
present. &ll pending motions shall "e heard at the final pretrial conference.
IT IS THE FURTHER ORDER OF THE COURT that counsel are notified
that sanctions may "e imposed for noncompliance or late compliance with this !rder.

Cler/ to pro#ide copies to%
Counsel of 8ecord
9nrepresented arties
Type: OTHER ORDER
So Ordered
1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

REPLY IN SUPPORT OF ITS MOTION
TO STRIKE JURY DEMAND

referred to as NAS), and for its Reply in Support of its Motion to Strike the Jury Demand in
Plaintiffs Petition, states as follows:
1. The City of Schaller (the City) alleges that there are legal issues to be tried as
a basis for resisting the motion to strike the jury demand.
2. As far back as December 18, 2012 the City sought a default judgment from the
Court, not a jury, to hear and assess damages for entry of a default judgment against General
Excavating, Inc. See the Citys Application for Default Judgment filed December 18, 2012.
3. Even in the unlikely event that the Court would agree with the Citys assertion
that there are legal issues remaining is a sufficient basis for a resistance to the pending motion,
the City waived its right to a jury trial in this matter by seeking the Courts entry of judgment
on the default.
2

4. The motion to strike the jury demand filed on February 27, 2014 was filed in
advance of the Courts new Scheduling Order of February 28, 2014 and its deadline of March
4, 2014 for pre-trial motions.
that the Court, after review of the parties pleadings and arguments, enter an Order striking the
Jury demand requested by the City of Schaller and for such further relief as the Court deems
just.

/s/Drew J. Gentsch______________________
Telephone: (515) 288-6041
Fax: (515) 246-1474
INSURANCE COMPANY

Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
1128 Historic 4
th
Street
P.O. Box 3086

Judge Stoebe


each of the attorneys of record herein via EDMS.

Signature:_/s/ Linda S. Pirkle_____________________
1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

RESISTANCE TO THE CITYS
STATEMENT OF COMPLIANCE

referred to as NAS), and for its Resistance to the City of Schallers (City) Statement of
Compliance, states as follows:
1. The City makes inappropriate assertions in its statement of compliance regarding
striking affirmative defenses of NAS. As the assertions do not appear to be actual motions,
NAS reserves its right to present its defenses as allowed by law in this matter.
2. The City also fails to comply with the Courts requirement in the February 28,
2014 Final Pretrial Order that no further supplementation be necessary. To the extent that the
City is actually limiting its reservation to only the unlikely award of attorneys fees,
professional fees, and liquidated damages, then NAS likely has no objection, but reserves its
right to rebut the same. However, if the City is attempting to reserve further rights to
supplement its damages generally, NAS objects based upon the status of the case and the
Courts Final Pretrial Order, and requests that the Court disallow any further evidence of
2

damages beyond those disclosed pursuant to the various scheduling Orders and Rules of Civil
Procedure.
that the Court, enter an appropriate Order limiting the assertions in the City of Schallers
Statement RE: Review of Pleadings and Discovery Responses and for such further relief as the
Court deems just.

/s/Drew J. Gentsch______________________
Telephone: (515) 288-6041
Fax: (515) 246-1474
INSURANCE COMPANY

Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
1128 Historic 4
th
Street
P.O. Box 3086

Judge Stoebe



Signature:__/s/ Linda S. Pirkle____________________
1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

SPECIALTY INSURANCE
COMPANY'S WITNESS AND
EXHIBIT LIST

COMES NOW Defendant, North American Specialty Insurance Company and submits
its Witness and Exhibit List as follows:
WITNESSES

1. Brian Golbach;
2. Doug Clement;
3. Art Reicks and/or other representatives of General Excavating, Inc.;
4. Erwin Kirkvold;
5. Marsha Woodke;
6. Clyde Wandrey; and
7. Representatives of the City of Schaller.

EXHIBITS

A. Performance Bond;
B. Kirkvold letter of January 21, 2008;
C. Standard Form of Agreement Between Owner and Engineer dated April 14, 2008,
including all Addendums;
D. Kirkvold email chain ending November 25, 2008, at 9:56 a.m.;
E. USGS Elevations of the City of Schaller Map;
F. Matt Reicks email dated May 7, 2009, at 11:25 a.m.;
G. Kirkvold email chain ending June 26, 2009, at 1:36 p.m.;
H. Change Order No. 1;
I. Kirkvold email chain ending July 27, 2009, at 9:08 a.m.;
J. Schaller Clerk email dated August 26, 2009, at 10:23 a.m.;
2

K. Kirkvold email dated October 8, 2009, at 2:24:46 p.m.;
L. Kirkvold email chain ending November 3, 2009, at 11:57:42 a.m.;
M. Kirkvold email chain ending November 6, 2009, at 11:31 a.m.;
N. Change Order No. 2;
O. Kirkvold Project Notes from May 19, 2009 through July 23, 2010;
P. Clyde Wandrey Project Notes dated July 7, 2009 through November 20, 2009;
Q. Clyde Wandrey documents regarding time and cost on project;
R. CTS Testing Reports;
S. Certificate of Substantial Completion;
T. Application for Partial Payment No. 5;
U. Schaller Clerk email chain ending January 11, 2010, at 7:35 a.m.;
V. Marsha Woodke letter dated February 10, 2010;
W. CV and Fee Schedule of Doug Clements;
X. Reports of Doug Clements;
Y. Acknowledgment of Payment at Obligations dated July 7, 2011;
Z. Plaintiffs Answers to Defendant North American Specialty Insurance Companys
Interrogatories (Sixth Supplement) February 14, 2014;
AA. Plaintiffs Response to Defendant North American Specialty Insurance
Companys Request for Admissions;
BB. Deposition of Marsha Woodke;
CC. Deposition of Clyde Wandrey;
DD. Deposition of Brian Mastbergen;
EE. Deposition of Edward Prost; and
FF. Deposition of Erwin Kirkvold.

This party also gives notice of the intent to introduce any exhibit listed on Plaintiffs
Exhibit List, and to do any of the following:
1. To present sufficient evidence to lay the foundation for the introduction of any
witness or exhibit.
2. To rebut, by witness and/or exhibit, any evidence presented by any other party
in this case.
3. To offer summaries and demonstrative exhibits.
4, Create enlargements and/or highlights of any listed exhibits.

3


/s/Drew J. Gentsch______________________
Telephone: (515) 288-6041
Fax: (515) 246-1474
INSURANCE COMPANY

Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
1128 Historic 4
th
Street
P.O. Box 3086

Judge Stoebe


each of the attorneys of record herein via EDMS on
March 10, 2014.

CITYOF SCHALLER,
Plaintiff,
v.
INSURANCECOMPANY,
Defendants.
)
LawNo. LACV019385
PLAINTIFF'SEXHIBITLIST
COMESNOWPlaintiff, City of Schaller. by and through its attorneys of record, and
identifies the following exhibits which may be offered at trial scheduled to beginon March 18.
2014. By listing an exhibit, Plaintiff does not guarantee that it will offer it into evidence, nor
docs listing an exhibit waive any objection that Plaintiff might have to the exhibit, nor does it
permit any other party to use the exhibit for any purpose. Plaintiff may use or offer any
additional exhibits necessary to rebut Defendant's evidence and exhibits. Plaintiff reserves the
right to supplement its exhibits for impeachment, foundationand/or rebuttal.
DATEDthis IQ dayof March. 2014.
: IEIDMANLAWFIRM. L.L.P.
-iff
ALANE.jFRgJDREGILL, AT0002712
ROSALYNTTJ. KOOB, AT0004380
ALLYSONC. DIRKSEN, AI00I0908
P.O. Box 3086
Phone: 712-255-8838
Facsimile: 712-258-6714
Email: alan.rrcdreuill@hcidmanla\v.com
Email: ro/.kooh@heidmanla\v.com
Hmail: allvson.clirksenfaJheidmanlaw.com
Copy to viaEDMS:
ATTORNEYSFORPLAINT1FF
BenjaminB. Ullcm
DrewJ. Gentsch
TimothvReicks
PROOFOFSERVICE
I certifythat atrue copyof this document was
se'ved uooneach of the attorneysof record of all
parties tothis actionat the addresses disclosed
bythe pleadings on 1 1 , 20 Jol
By: ?U.S. Mail
?Facsimile
?Hand Delivered
r BDM
Signatura
HOther
PLAINTIFF'SEXHIBITS
Ex.# Description Admit No Fdn. Obj. Other Obj.
1 Project Manual
2 Bid
3
EJCDCStandard FormofAgreement BetweenOwner and Contractor
onthe Basis ofaStipulated Price
4 Standard General Conditions of the ConstructionContract
5 Performance Bond
6 Notice to Proceed
7 Excerpt of Project Manual, p. 01400-4
8
Excerpt of Project Manual, Section02221Trench Excavation, Backfill
and Compaction
9
Excerpt of Project Manual, Section02223Roadway Unclassified
Excavationand Subgrade Preparation
10 CTSTesting Results
11 Clyde's Notebook
12 Substantial Completionwith December 22, 2009Punch List
13 April 14, 2010, letter fromKirkvold toGE
14 May3, 2010letter fromCityAttorneytoGE
15 May28, 2010, letter fromCityAttorneytoGE
16 June 11, 2010letter fromKirkvold toGE
17
Geotechnical Engineering Report (August 9, 2010)-
TerraconReport
18 September 14, 2010letter fromCityAttorneytoGE
19 February4, 2011letter fromCityAttorneytoGEand NAS
20 February 16, 2011email fromNAS(Lewis) toCityAttorney
21 February 17, 2011email fromCityAttorneyto NAS(Lewis)
22 April 4, 2011, letter fromCityAttorneytoGE
23 May18, 2011letter fromCityAttorneytoGE
24
June 10, 2011letter fromDGRengineer BrianMastbergen, P.E. to
City- DGRReport
25 July7, 2011email fromCityAttorneyto NAS
26
TimReicks signature for GEacknowledgingPayment Obligations
dated July7, 2011
27
July8, 2011, email fromGE's Mary Reicks toCity's attorneywith
examples of other places where the slurryseal patch remedyhad
beeninuse for at least five years
28 July8, 2011Letter fromCityAttorneytoGE
29 July8, 2011letter fromCityAttorneytoCity
30
August 11, 2011 Letter fromTerracontoCity-
TerraconReport
31 August 12, 2011, letter fromCityAttorneytoGEand NAS
32 December 8, 2011email fromFrankAlampi toSKK
33 December 13, 2011emails fromSKK to FrankAlampi
34
May29, 2012 letter fromDGRtoCityAttorney-
DGRReport
35 October 10, 2012, letter fromCityAttorneyto NAS
36 DGRPlans, Specs, &Drawings
37
September 19, 2013TerraconObservationReport toCity-
TerraconReport
38
January 10, 2014 letter fromEd Prost to RJK-
TerraconReport
39
A-HPhotos
40 Damages Spreadsheet
41 Costs of project completion
42 SchnoonBids &Change Orders
43 DGRInvoices
44 TerraconInvoices
45 Rehab Systems
46 Noll Excavation
47 Attorneys Fees
48 BrownSupplyCo.
49 Blacktop Services Co.
50 Hancock
51 Smith Concrete
52 Diagram

CITY OF SCHALLER,

Plaintiff,

v.

GENERAL EXCAVATING, INC., and
INSURANCE COMPANY,

Defendants.

Case No. LACV019385

DEFENDANT
INSURANCE COMPANYS
PROPOSED
JURY INSTRUCTIONS

COMES NOW, Defendant North American Specialty Insurance Company,
(NAS), by and through its undersigned attorneys Drew J. Gentsch and Amos E. Hill of the
law firm Whitfield & Eddy, PLC, and hereby submits to the Court its proposed jury
instructions
1
to be read to the jury at the close of all the evidence in this case. Defendant
requests the following Iowa Civil Jury Instructions:
100.2- Duties of Judge and Jury, Instructions as Whole
100.3- Burden of Proof, Preponderance of Evidence
100.4-Evidence.
100.5- Deposition Testimony
100.6- Interrogatories
100.9- Credibility of Witnesses
100.11- Hypothetical Question, Expert Testimony
100.12- Opinion Evidence, Expert Witness
100.13 Contradictory Statements, Non-Party, Witness Not Under Oath
100.14 Contradictory Statements, Non-Party, Witness Under Oath
100.15- Statements by a Party Opponent
100.18- General Instruction to Jury
100.20- Corporate Party

1
Although NAS has filed these jury instructions as requested by the Court, NAS objects to this case being
tried to a jury. NAS believes instead that Iowa law mandates that this equity matter be tried to the Court.
100.21- Cautionary Instructions-Jurors Notes
220.1 Breach of Contract / Fraud-Expectation Interest
200.38- Quotient Verdict
400.7- Mitigation of Damages
700.3- Proximate Cause- Defined
2400.1-Essentials for Recovery (Modified)
2400.5- Terms- Interpretation
2400.6- Breach-Definition
Verdict Form with Interrogatories


Respectfully submitted,
Telephone: (515) 288-6041
Fax: (515) 246-1474
email: hill@whitfieldlaw.com

Amos E. Hill AT0010177

INSURANCE COMPANY

Original Filed.
Copy to:

Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street
P.O. Box 3086
ATTORNEYS FOR THE CITY

each of the attorneys of record herein by EDMS on
March 12, 2014..

By _/s/ Linda S. Pirkle
INSTRUCTION NO. ______:

My duty is to tell you what the law is. Your duty is to accept and apply this law.

You must consider all of the instructions together because no one instruction includes all
of the applicable law.

The order in which I give these instructions is not important.

Your duty is to decide all fact questions.

Do not be influenced by any personal likes or dislikes, sympathy, bias, prejudices or
emotions.

Authority:
Iowa Civil Jury Instruction No. 100.2-Duties of Judge and Jury, Instructions as Whole
(Unmodified)
Rousher v. Dixon, 231 Iowa 993.2 N.W.2d 600 (1942)
INSTRUCTION NO. _____:

Whenever a party must prove something they must do so by the preponderance of the
evidence.

Preponderance of the evidence is evidence that is more convincing than opposing
evidence. Preponderance of the evidence does not depend upon the number of witnesses
testifying on one side or the other.

Authority:
Iowa Civil Jury Instruction No. 100.3- Burden of Proof, Preponderance of Evidence
(Unmodified)
Mabrier v. A.M. Servicing Corporation of Raytown, 161 N.W.2d 180 (1968)

You shall base your verdict only upon the evidence and these instructions.

Evidence is:

1. Testimony in person or by deposition;
2. Exhibits received by the court;
3. Stipulations which are agreements between the attorneys;
4. Any other matter admitted (e.g. answers to interrogatories, matters which
judicial notice was taken, etc.)

Evidence may be direct or circumstantial. The weight to be given any evidence is for you
to decide.

Sometimes, during a trial, references are made to pre-trial statements and reports,
witnesses depositions, or other miscellaneous items. Only those things formally offered
and received by the court are available to you during your deliberations. Documents or
items read from or referred to which were not offered and received into evidence, are not
available to you.

The following are not evidence:

1. Statements, arguments, questions and comments by the lawyers;
2. Objections and rulings on objections;
3. Any testimony I told you to disregard;
4. Anything you saw or heard about this case outside the courtroom.

Authority:
Iowa Civil Jury Instruction No. 100.4- Evidence (Unmodified)
Iowa Rules of Evidence.

Certain testimony has been read into evidence from a deposition. A deposition is
testimony taken under oath before the trial and preserved in writing. Consider that
testimony if it had been given in court.

Authority:
Iowa Civil Jury Instruction No. 100.5- Deposition Testimony (Unmodified)
Iowa Rules of Civil Procedure 1.704
Farley v. Seiser, 316 N.W.2d 857 (Iowa 1982)

During this trial, you have heard the word interrogatory. An interrogatory is a written
question asked by one party of another, who must answer it under oath in writing.
Consider interrogatories and the answers to them as if the questions had been asked and
answered in court.

Authority:
Iowa Civil Jury Instruction No. 100.6 Interrogatories (Unmodified)
Iowa Rule of Civil Procedure 1.509

You will decide the facts from the evidence. Consider the evidence using your
observations, common sense, and experience. You must try to reconcile any conflicts in
the evidence; but, if you cannot, you will accept the evidence you find more believable.

In determining the facts, you may have to decide what testimony you believe. You may
believe all, part, or none of any witnesses testimony.

There are many factors which you may consider in deciding what testimony to believe,
for example:

1. Whether the testimony is reasonable and consistent with other evidence
you believe;
2. The witnesses appearance, conduct, age, intelligence, memory and
knowledge of the facts; and
3. The witnesses interest in the trial, their motive, candor, bias and
prejudice.

Authority:
Iowa Civil Jury Instruction No. 100.9- Credibility of Witnesses (Unmodified)
Burger v. Omaha & C.B. St. Ry. Co., 139 Iowa 645, 117 N.W. 35 (1908)

Any expert witness was asked to assume certain facts were true and to give an opinion
based on that assumption. This is called a hypothetical question. If any fact assumed in
the question has not been proved by the evidence, you should decide if that omission
affects the value of the opinion.

Authority:
Iowa Civil Jury Instruction No. 100.110- Hypothetical Question, Expert Testimony
(Unmodified)
Cody v. Toller Drug Co., 232 Iowa 475, 5 N.W.2d 824 (1942)

You have heard testimony from persons described as experts. Persons who have become
experts in a field because of their education and experience may give their opinion on
matters in that field and the reason for their opinion.

Consider expert testimony just like any other testimony. You may accept it or reject it.
You may give it as much weight as you think it deserves, considering the witness
education and experience, the reasons given for the opinion, and all the other evidence in
the case.

Authority:
Iowa Civil Jury Instruction No. 100.12- Opinion Evidence, Expert Witnesses
(Unmodified)
Crouch v. National Livestock Remedy Co., 210 Iowa 849, 231 N.W. 323 (1930)
INSTRUCTION NO. _______

You have heard evidence claiming [name of witness] made statements before this trial
while not under oath which were inconsistent with what the witness said in this trial.

Because the witness did not make the earlier statements under oath, you may use them
only to help you decide if you believe the witness.

Decide if the earlier statements were made and whether they were inconsistent with
testimony given at trial. You may disregard all or any part of the testimony if you find
the statements were made and they were inconsistent with the testimony given at trial, but
you are not required to do so.

Do not disregard the testimony if other evidence you believe supports it or if you believe
it for any other reason.

Authority:
Iowa Model Civil Jury Instruction 100.13- Contradictory Statements, Non-Party, Witness
Not Under Oath
Iowa R. Evid. 5.613; State v. Barry, 549 N.W.2d 316, 318 (Iowa App. 1996) (A prior
inconsistent statement of a witness not under oath may be considered for impeachment
purposes only).

Comment
This instruction should be given when a non-party witness has made a prior inconsistent
statement while not under oath. If the non-party witness made a prior inconsistent
statement under oath, then Instruction 100.14 should be given. If the non-party witness
has made prior inconsistent statements both under oath and not under oath, then both
Instruction 100.13 and Instruction 100.14 should be given to clarify and distinguish the
two forms of statements for the jury.

INSTRUCTION NO. _______

You have heard evidence claiming [name of witness] made statements before this trial
while under oath which were inconsistent with what [name of witness] said in this trial.
If you find these statements were made and were inconsistent, then you may consider
them as part of the evidence, just as if they had been made at this trial.

You may also use these statements to help you decide if you believe [name of non-party
witness]. You may disregard all or any part of the testimony if you find the statements
were made and were inconsistent with the testimony given at trial, but you are not
required to do so. Do not disregard the trial testimony if other evidence you believe
supports it, or if you believe it for any other reason.

Authority:
Iowa Model Civil Jury Instruction 100.14- Contradictory Statements, Non-Party, Witness
Under Oath
A prior inconsistent statement of a witness given under oath is substantive evidence
which may be considered for any purpose. State v. Thompson, 397 N.W.2d 679, 683 n.2
(Iowa 1986): Iowa R. Evid., 5.801(d)(1)(A).


You have heard evidence claiming [name of party] made statements before this trial
[while under oath] [and] [while not under oath].

If you find such a statement was made, you may regard the statement as evidence in this
case the same as if [name of party] had made it under oath during the trial.

If you find such a statement was made and was inconsistent with [name of partys]
testimony during the trial you may also use the statement as a basis for disregarding all or
any part of [name of partys] testimony during the trial but you are not required to do so.
You should not disregard [name of partys] testimony during the trial if other credible
evidence supports it or if you believe it for any other reason.

Authority:
Iowa Civil Jury Instruction No. 100.15- Statements by a Party Opponent (Unmodified)

Upon retiring you shall select a foreman or forewoman. It will be his or her duty to see
discussion is carried on in an orderly fashion, the issues are fully and freely discussed,
and each juror is given an opportunity to express his or her views.

Your attitude at the beginning of your deliberations is important. It is not a good idea for
you to take a position before thoroughly discussing the case with the other jurors. If you
do this, individual pride may become involved and you may later hesitate to change an
announced position even if shown it may be incorrect. Remember you are not partisans or
advocates, but are judges-judges in facts. Your sole interest is to find the truth and do
justice.

Authority:
Iowa Civil Jury Instruction No. 100.18-General Instruction to Jury (Unmodified)

The fact that the City or defendant is a corporation should not affect your decision. All
persons are equal before the law, and corporations, whether large or small, are entitled to
the same fair and conscientious consideration by you as any other person.

Authority:
Iowa Civil Jury Instruction No. 100.20-Corporate Party (Unmodified)

During the trial, you have been allowed to take notes. You may take these with you to the
jury room to use in your deliberations. Remember, these are notes and not evidence.
Generally, they reflect the recollection or impressions of the evidence as viewed by the
person taking them, and may be inaccurate or incomplete.

Upon reaching a verdict, leave the notes in the jury room, and they will be destroyed.

Authority:
Iowa Civil Jury Instruction No. 100.21- Cautionary Instruction- Jurors Notes
(Unmodified)
Iowa Rule of Civil Procedure 1.926(1)


The measure of damages for breach of a contract is an amount that would place the City
in as good a position as it would have enjoyed if the contract had been performed.

The damages you award for breach of contract must be foreseeable or have been
reasonably foreseen at the time the parties entered into the contract].

In your consideration of the damages, you may consider the following:

Authority:
Iowa Civil Jury Instruction No. 220.1 Breach of Contract/Fraud-Expectation Interest
Yost v. City of Council Bluffs, 471 N.W. 2nd 836 (Iowa 1991)
Air Host Cedar Rapids v. Airport Commission, 464 N.W. 2nd 450 (Iowa 1990)
Hoffman v. National Medical Enterprises, Inc., 442 N.W. 2nd 123 (Iowa 1989)
Potter v . Oster, 426 N.W. 2nd 148 (Iowa 1988)
Ritam Corporation v. Applied Concepts, Inc., 387 N.W. 2nd 619 (Iowa App. 1986)

In arriving at an item of damage you cannot arrive at a figure by taking down the estimate
of each juror as to an item of damage, and agreeing in advance that the average of those
estimates shall be your item or damage.

Authority:
Iowa Civil Jury Instruction No. 200.38- Quotient Verdict (Unmodified)
Moose v. Rich, 253 N.W.2d 565 (Iowa 1977)
Sheker v. Jensen, 241 Iowa 583, 41 N.W.2d 679 (1950)
Manna v. McIntosh, 519 N.W.2d 815 (Iowa App. 1994)

I am giving you _____ verdict forms [and special interrogatories]. During the first six
hours of deliberations, excluding meals and recesses outside your jury room, your
decision must be unanimous. If you all agree, the verdict [and interrogatories] must be
signed by your foreman or forewoman.

After deliberating for six hours from _____ o'clock ___.m. excluding meals or recesses
outside your jury room, then it is necessary that only (seven) (six)* of you agree upon the
answers to the questions. In that case, the verdict [and interrogatories] must be signed by
all (seven) (six)* jurors who agree.

When you have agreed upon the verdict [and interrogatories] and appropriately signed it,
tell the Court Attendant.

Note: *Use if a juror has been excused during the trial.

Comment
Authority:
Iowa Civil Jury Instruction No. 300.1 Return of Verdict Forms of Verdict

VERDICT FORM

We, the Jury, find in favor of the defendant and against the Plaintiff.

___________________________________
FOREMAN OR FOREWOMAN*

*To be signed only if verdict is unanimous.

_________________________ _________________________
Juror** Juror**
_________________________ _________________________
Juror** Juror**
_________________________ _________________________
Juror** Juror**
_________________________
Juror**

**To be signed by the jurors agreeing to it after six hours or more of deliberation.

Authority:
Iowa Civil Jury Instruction No. 300.3- Single Plaintiff- Single Defendant Cases Not
Governed by Chapter 668 Defendants Verdict


NAS claims that The City failed to mitigate its damages by not exercising ordinary care
in order to reduce, minimize or limit its alleged damages in the following particulars:

a) By not selecting a lower cost, reasonable fix to the alleged street
settlement; and
b) By waiting to begin repair of the alleged street settlement after over three
years from when the issue was first identified.
..

The City has a duty to exercise ordinary care to reduce, minimize, or limit its damages;
however, The City has no duty to do something that is unreasonable under the
circumstances, such as undertake action which is unreasonably expensive or intrusive or
to undertake action which imposes unreasonable inconvenience. To prove NAS claim of
failure to mitigate, NAS must prove all of the following:

1. There was something The City could do to mitigate its damages;
2. Requiring The City to do so was reasonable under the circumstances;
3. The City acted unreasonably in failing to undertake the mitigating
activity or in taking action which enhanced the Citys damages; and
4. The Citys failure to undertake the mitigating activity proximately caused
an identifiable portion of its damages.

If NAS has proven all of these numbered propositions, then NAS has proved this defense,
and you shall determine the amount of the damages which the City failed to mitigate.
This amount will be used in answering the special interrogatory no. _____ in the Verdict
Form. If NAS has failed to prove one or more of these numbered propositions, then NAS
has not proved the City failed to mitigate its damages, and you shall enter 0 in
answering the special interrogatory no. _____ in the Verdict Form.

Authority:
Iowa Civil Jury Instruction 400.7-Comparative Fault/Mitigation (Modified)

The conduct of a party is a proximate cause of damage when it is a substantial factor in
producing damage and when the damage would not have happened except for the
conduct.

Substantial means the partys conduct has such an effect in producing damage as to
lead to reasonable person to regard it as a cause.

Authority:
Iowa Civil Jury Instruction 700.3-Proximate Cause-Defined (Unmodified)


In order to recover from NAS in this case, the City must prove all of the following
propositions:
1. The parties were capable of contracting
2. The existence of a contract
3. The consideration
4. The terms of the contract.
5. The City has done what the contract requires.
6. NAS has breached the contract.
7. The amount of any damage attributable to NAS.

If the City has failed to prove any of these propositions, the City is not entitled to
damages. If the City has proved all of these propositions, then you will consider the
defense of mitigation of damages as explained in Instruction No. ________.]

Authority:
Iowa Civil Jury Instruction 2400.1- Essentials for Recovery (Modified)
Powell v. McBlain, 222 Iowa 799, 269 N.W. 883 (1936)
Port Huron Machinery Co. v. Wohlers, 207 Iowa 826, 221 N.W. 843 (1928)

In determining the terms of the contract you may consider the following:

1. The intent of the parties along with a reasonable application of the
surrounding circumstances;

2. The intent expressed in the language used prevails over any secret
intention of either party;

3. The intent may be shown by the practical construction of a contract by the
parties and by the surrounding circumstances;

4. You must attempt to give meaning to all language of a contract. Because
an agreement is to be interpreted as a whole, assume that all of the
language is necessary. An interpretation which gives a reasonable,
effective meaning to all terms is preferred to an interpretation which
leaves a part of the contract unreasonable or meaningless;

8. The meaning of a contract is the interpretation a reasonable person would
give it if they were acquainted with the circumstances both before and at
the time the contract was made; and

5. Where the general and specific terms in the contract refer to the same
subject, the specific terms control.

Authority:
Iowa Civil Jury Instruction 2400.5- Terms - Interpretation (Modified)
INSTRUCTION ______:

A breach of the contract occurs when a party fails to perform a term of the contract.

Authority:
Iowa Civil Jury Instruction No. 2400.6-Breach-Definition (Unmodified)
Metropolitan Transfer Station, Inc. v. Design Structures, Inc., 328 N.W.2d 532 (Iowa
App. 1982)
Sheer Const., Inc. v. W. Hodgman and Sons, Inc., 326 N.W.2d 328 (Iowa 1982)

1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

Case No. LACV019385

DEFENDANT
INSURANCE COMPANYS
PRE-TRIAL BRIEF

COMES NOW, Defendant North American Specialty Insurance Company, (NAS),
by and through its undersigned attorneys Drew J. Gentsch and Amos E. Hill of the law firm
Whitfield & Eddy, PLC, and hereby submits this Pre-Trial Brief to the Court:
INTRODUCTION
Plaintiff City of Schaller (the City) is a municipal corporation in Sac County, Iowa
which undertook certain improvements to several of its streets including, among other things, the
installation of new sewer lines, backfill and compaction of the trench excavations, and placement
of new asphaltic cement pavement upon the surface of the streets afterwards. This project was
known as the 2008 Wastewater System Improvements for the City of Schaller Section 2-
Collection System Improvements (herein the Project). The Project was designed for the City
by Erwin Kirkvold, the Citys retained engineer.
To carry out those improvements under the Project, the City contracted with
Defendant General Excavating (Gen Ex), a corporation with its principal place of business in
2

Carroll County, Iowa which provides services as a general contractor.
1
On April 13, 2008, the
City entered into a written contract (the Contract) with Gen Ex relating to the Project. In
connection with the Contract, Gen Ex was required to post, as germane to this case, a payment
and performance bond pursuant to Iowa Code 573.2.
Defendant North American Specialty Insurance Company (NAS) issued the subject
performance bond (the Performance Bond). The Performance Bond contains a penal sum
provision, which limits NAS total potential exposure under the bond to $579,206.25.
Work commenced on the project in 2008. Throughout the course of construction,
Clyde Wandrey, the Citys designated Representative under the Contract, was present to oversee
the construction, and participated in the owner-involved decisions on behalf of the City. The
evidence presented at trial will reflect that Gen Ex wrapped up the vast majority of its work on
the Project in advance of the winter of 2009. As a result, the City declared this project
Substantially Complete on November 20, 2009, and referenced an attached punch list. See
Exhibit B, Certificate of Substantial Completion
The undisputed evidence of record will establish that Gen Ex performed no physical
work on the Project site after July 2, 2010.
After substantial completion of the Project, the City discovered alleged deficiencies in
the work performed by Gen Ex. The City brought in Terracon DeWild, Grant Recker and
Associates Company (DGR) to investigate the alleged deficiencies, and they made findings
that, essentially, constituted a complete reconstruction of the Project. DGRs conclusions are
disputed by Doug Clement, expert for NAS. Most particularly, Mr. Clement notes that the plans
as designed by the Citys engineer were faulty from the start based upon a lack of soils

1
As of the date of filing of this pre-trial brief, Gen Ex has not filed an answer or other responsive pleading to the
Citys Petition. NAS assumes that a default will be entered should no Gen Ex representatives appear at the time of
trial of this matter.
3

investigation, and failing to adequately take into account fluctuating groundwater levels relative
to the differential soils of the trench and remaining undisturbed subgrade beneath the streets.
Clement is anticipated to testify further that the improvements proposed by the City, for which
they seek damages from NAS in this lawsuit, constitute not only a complete reconstruction of
the Project, but also betterments and improvements from the agreed-upon scope of construction.
Clement will also testify, and the balance of the evidence will show, that the Citys
self-mitigation efforts were untimely and inadequate, creating or contributing to additional
damages of its own making for which they seek to recover against NAS under the bond.
Specifically, the City has only undertaken to repair one street (Perth), although it claims the
damage continues to worsen on many of the streets which were within the scope of the Project.
The evidence will also show that other more simple and inexpensive fixes would have very
likely eliminated the issues of which the City complains.
The City issued a notice of default to Gen Ex in July of 2011. On October 15, 2012,
the City filed the present lawsuit against Gen Ex and NAS, seeking damages from each on the
grounds that each had breached their respective contracts with the City.
ARGUMENT FOR TRIAL
As is addressed in greater detail, below, the Citys claim against NAS is founded in
breach of contract and based upon the Performance Bond. As such, NAS has maintained, and
reaffirms herein, that this case is one which should be tried in equity, to the Court, rather than to
a civil jury. To that end, NAS filed with this Court a Motion to Strike Jury Demand on February
27, 2014 which was resisted by the City on March 3
rd
, and to which a Reply made by NAS on
March 7
th
.
4

Regardless of whether the Court or a civil jury is made factfinder, the Court will be
required to determine two preliminary legal issues relating to liability: (1) Were the Citys
claims made in this proceeding timely and appropriate under the terms of the Performance
Bond, or should an exception to Iowa law be created whereby settlement negotiations act to toll
claims periods? and (2) Did the Citys acceptance of the project bar its claims in the present
litigation? Whether ultimately heard by the Court or a jury, and should those two preliminary
legal hurdles to liability identified above be somehow overcome by the City, the final liability
issues to be decided by the Court will be whether the City met its burden to establish that the
alleged deficiencies were the result of negligent construction rather than the faulty design
prepared by Erwin Kirkvold as the Citys engineer on the Project, and the extent of damages, if
any, including mitigation issues.
In the unlikely event that liability against NAS is found and damages are considered
against NAS, this Court will be asked to apply the penal sum limitation in the Performance
Bond, determine whether the $500 per day liquidated damages clause in the Performance Bond
is reasonable under the circumstances and should be enforced, and determine the extent to which
the Citys damages are barred (or reduced by) the Citys failure to mitigate its damages.
I. LIABILITY ISSUES

The Citys claim against NAS is couched in breach of contract pursuant to Iowa Code
Chapter 573. See Petition. Specifically, the City alleges that [p]ursuant to paragraph 2 of the
Performance BondNorth American is now in breachfor filing to cure [Gen Ex]s default.
Citys Petition at para. 13-14.
To prove a breach of contract claim under Iowa law, a party must show:
(1) the existence of a contract; (2) the terms and conditions of the contract; (3) that it
has performed all the terms and conditions required under the contract; (4) the
5

defendants breach of the contract in some particular way; and (5) that plaintiff has
suffered damages as a result of the breach.

Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224 (Iowa 1998). The first
three elements address the existence of a contract. Id. The last two elements address the breach
of the contract and the damages caused by the breach. Id. A breach of a contract occurs when a
party fails to perform a term of the contract. Metropolitan Transfer Station, Inc. v. Design
Structures, Inc., 328 N.W.2d 532 (Iowa App. 1982); Sheer Const., Inc. v. W. Hodgman and
Sons, Inc., 326 N.W.2d 328 (Iowa 1982).
At the time of trial of this matter, the City will be unable to establish elements #3 and
#4 relating to its claim for breach against NAS because its claims under the Performance Bond
against NAS were procedurally inappropriate and untimely and because it cannot prove that the
work of Gen Ex (for which NAS would be responsible pursuant to the Performance Bond) was
the proximate cause of its damages, rather than the design which it warranted. See U.S. v.
Spearin, 248 U.S. 132 (1918).
A. THE CITYS CLAIMS ARE UNTIMELY UNDER THE EXPRESS
PROVISIONS CONTAINED IN THE BOND.

The City failed to appropriately follow the terms of its bond document and is untimely
in bringing this suit. The Performance Bond provides, at paragraph/section 8, that:
Any proceeding, legal or equitable, under this Bond may be instituted in
any court of competent jurisdiction in the location in which the Work or
part of the Work is located, and shall be instituted within two years after
the Contractor Default or within two years after Contractor ceased
working or within two years after Surety refuses or fails to perform its
obligations under the Bond, whichever occurs first.

Performance Bond, para. 8 (emphasis added).
The undisputed evidence of record clearly establishes that Gen Ex did not perform any
physical work on the Project after July 2, 2010, and further that the present lawsuit was not filed
6

by the City against NAS until October 15, 2012. Under these basic facts alone, this Court should
dismiss the Citys claims as procedurally untimely and barred by the terms of their own contact.
The Citys response to the issue of timeliness appears to be two-fold: Either (1) The
settlement negotiations between the parties constituted work such that it tolled the contractual
proceedings limitation period; or (2) that the two-year limitations period is unreasonable in light
of the ongoing settlement negotiations between the parties, so their failure to comply with the
contractual time limitations for commencing proceedings should be excused. As will be borne
out by the evidence, testimony and arguments by counsel at the time of trial of this matter, both
of these arguments fail under the terms of the Performance Bond and Iowa law. See Northwest
Limestone Co. v. Iowa DOT, 499 N.W. 2d 8 (Iowa 1993).
B. THE CITYS ACCEPTANCE OF THE PROJECT PRECLUDES
ITS CLAIMS AGAINST NAS.

As the Iowa Supreme Court has stated, in the absence of fraud or mistake, acceptance of
the work bars and estopps the city for defects known or discoverable by reasonable attention on
the part of the engineer in the performance of his duty in inspecting the work. Osceola v.
Gjellefald Construction Co., 279 N.W. 590, 594 (Iowa 1938). See also Elliott Consolidated
School District v. Busboom, 227 F. Supp. 858, 862 (S.D. Iowa 1964). The Court went on to
state that the rule in these cases is that acceptance of the work in the absence of fraud or mistake
is a complete bar to recovery on the construction bond and that such fraud or mistake to
overcome the acceptance must be alleged and proved. Gjellefald, 279 N.W.2d at 594. The
basis for the legal doctrine, that acceptance of the work bars recovery on the construction bond,
is that it would be unjust and inequitable, where the city has an engineer who is, in fact, an agent
of the city, whose duty it is to inspect the work as it progresses, and to pass on the quality of the
materials to be used . . . to permit the city to wait until the work was finished and then complain
7

of violations of the specifications and which might require the contractor to rebuild the entire
[project] when, had the engineer spoken at the proper time as the work progressed, the matters
complained of could have been easily remedied. Id. at 593-94.
The evidence at the time of trial will show that the City certified the Project as
substantially complete on November 20, 2009. Thereafter, the City exerted ownership and
control over, and freely used, the roads in question. Because the City accepted the Project,
subject to the punch list items, it should be estopped from recovering or, at the very least, its
alleged damages reduced under the Performance Bond. See Gjellefald, 279 N.W.2d at 594

C. GEN EX (AND, THEREFORE, NAS) IS NOT RESPONSIBLE FOR
INADEQUATE OR INEFFECTIVE DESIGN OR INSPECTION ON
BEHALF OF THE CITY.

At the time of trial of this matter, the City will be unable to meet its burden of proof
with respect to liability for the alleged deficiencies of which it complains. NAS anticipates that
the evidence presented by the City will not meet its burden of proof with respect to the liability
of NAS for the allegedly negligent construction, vis--vis deficiencies in the Citys impliedly-
warranted design prepared by the Citys contractually-designated engineer on the Project, Erwin
Kirkvold. Further, the evidence will reveal that Clyde Wandrey, the Citys designated
Representative under the Contract, was present to oversee the construction, and participated in
the owner-involved decisions on behalf of the City, including specifically the approval of any
and all fill material utilized in the trench. Finally, the evidence will show that the Citys
engineer passed the testing and inspections called for in the contract without issue, and the City
accepted work now complained of by issuing a Certificate of Substantial Completion and paying
for the work.

8

II. DAMAGES

In connection with its breach of contract claim against NAS, the City seeks an
amount sufficient to compensate [the City] for all sums needed to complete the repair work
required under the [C]ontract, for additional legal, design professional and delay costs, along
with liquidate damages, and costs of this action. Petition at p. 3.
Should this case get beyond the sizable threshold of bond conditions and timeliness
limitations, such that damages are being considered, NAS believes that the evidence presented at
trial will reflect that: (1) The City is not entitled to liquidated damages under the law of Iowa
2

and the facts of this case; (2) The City has significantly overstated, and speculated regarding, its
alleged damages; (3) Any purported damages must be reduced by the Citys fault in failing to
mitigate its damages; and (4) Any damages awarded must be limited to the penal sum of
$579,206.25 under the Performance Bond.
MOTIONS IN LIMINE
On February 4, 2014, NAS filed with this Court Motions in limine regarding the
presentation of evidence and testimony regarding the scope and extent of damages conceivably
recoverable by the City, in accordance with the operative bond documents and Iowa law. In
addition to evidentiary matters relating to the Citys anticipated proof relating to its burden of
establishing liability, NAS Motions in Limine also address the evidentiary issues associated
with the Citys valuation of its damages noted above. To the extent NAS Motions in Limine
relate to the factual and legal arguments set forth in this Pre-Trial Brief, such arguments are
incorporated herein as though set forth in full.

2
See, e.g., Rohlin Constr. Co. v. City of Hinton, 476 N.W.2d 78, 80 (Iowa 1991).
9

Telephone: (515) 288-6041
Fax: (515) 246-1474

INSURANCE COMPANY

Original to:
Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street
P.O. Box 3086


each of the attorneys by EDMS on the 12
th
day of
March, 2014.

Signature:__/s/ Linda S. Pirkle___________________

CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

Case No. LACV019385

DEFENDANT
INSURANCE COMPANYS
SPECIAL VERDICT FORM

COMES NOW, Defendant North American Specialty Insurance Company, (NAS), by
and through its undersigned attorneys Drew J. Gentsch and Amos E. Hill of the law firm
Whitfield & Eddy, PLC, and hereby submits the following proposed special verdict form.
Telephone: (515) 288-6041
Fax: (515) 246-1474

INSURANCE COMPANY

Original filed.

Copy to:

Alan Fredregill
Rosalynd Koob
Sarah Kleber
1128 Historic 4
th
Street
P.O. Box 3086


March 12, 2014.

Signature:_/s/ Linda S. Pirkle____________________
Please answer the following questions in the order they appear.
1. Did Schaller prove that it appropriately and timely proceeded in regard to the
performance bond?

Yes ___________
No ___________

If your answer is no, then answer no further questions.

2. Did Schaller prove that NAS breached the terms of the performance bond?

Yes ___________
No ___________

If your answer is no, then answer no further questions.

3. What is the total amount of damages Schaller proved that it suffered as a result of the
breach of the Construction Project.

$__________________

4. What is the total amount of damages that Schaller failed to mitigate.

$__________________

5. On Schallers claims for damages, we find the following percentage of fault attributable
to:

Schaller. ___________%
NAS/General Excavating, Inc. ___________%
TOTAL ________100%

___________________________________
Foreperson *

___________________________________ ____________________________________
Juror ** Juror **

___________________________________ ____________________________________
Juror ** Juror **

___________________________________ ____________________________________
Juror ** Juror **

___________________________________
Juror **

* To be signed only if the verdict is unanimous
** To be signed by the jurors agreeing thereto after six hours or more of deliberation

1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

SPECIALTY INSURANCE
COMPANY'S AMENDED WITNESS
AND EXHIBIT LIST

COMES NOW Defendant, North American Specialty Insurance Company and submits
its Witness and Exhibit List as follows:
WITNESSES

1. Brian Golbach;
2. Doug Clement;
3. Tim Reicks and/or other representatives of General Excavating, Inc.;
4. Erwin Kirkvold by video deposition;
5. Marsha Woodke;
6. Brian Woodke;
7. Clyde Wandrey; and
8. Representatives of the City of Schaller.

EXHIBITS

A. Performance Bond;
B. Kirkvold letter of January 21, 2008;
C. Standard Form of Agreement Between Owner and Engineer dated April 14, 2008,
including all Addendums;
D. Kirkvold email chain ending November 25, 2008, at 9:56 a.m.;
E. USGS Elevations of the City of Schaller Map;
F. Matt Reicks email dated May 7, 2009, at 11:25 a.m.;
G. Kirkvold email chain ending June 26, 2009, at 1:36 p.m.;
H. Change Order No. 1;
I. Kirkvold email chain ending July 27, 2009, at 9:08 a.m.;
2

J. Schaller Clerk email dated August 26, 2009, at 10:23 a.m.;
K. Kirkvold email dated October 8, 2009, at 2:24:46 p.m.;
L. Kirkvold email chain ending November 3, 2009, at 11:57:42 a.m.;
M. Kirkvold email chain ending November 6, 2009, at 11:31 a.m.;
N. Change Order No. 2;
O. Kirkvold Project Notes from May 19, 2009 through July 23, 2010;
P. Clyde Wandrey Project Notes dated July 7, 2009 through November 20, 2009;
Q. Clyde Wandrey documents regarding time and cost on project;
R. CTS Testing Reports;
S. Certificate of Substantial Completion;
T. Application for Partial Payment No. 5;
U. Schaller Clerk email chain ending January 11, 2010, at 7:35 a.m.;
V. Marsha Woodke letter dated February 10, 2010;
W. CV and Fee Schedule of Doug Clements;
X. Reports of Doug Clements;
Y. Acknowledgment of Payment at Obligations dated July 7, 2011;
Z. Plaintiffs Answers to Defendant North American Specialty Insurance Companys
Interrogatories (Sixth Supplement) February 14, 2014;
AA. Plaintiffs Response to Defendant North American Specialty Insurance
Companys Request for Admissions;
BB. Deposition of Marsha Woodke;
CC. Deposition of Clyde Wandrey;
DD. Deposition of Brian Mastbergen;
EE. Deposition of Edward Prost; and
FF. Deposition of Erwin Kirkvold.

This party also gives notice of the intent to introduce any exhibit listed on Plaintiffs
Exhibit List, and to do any of the following:
1. To present sufficient evidence to lay the foundation for the introduction of any
witness or exhibit.
2. To rebut, by witness and/or exhibit, any evidence presented by any other party
in this case.
3. To offer summaries and demonstrative exhibits.
4, Create enlargements and/or highlights of any listed exhibits.
3


/s/Drew J. Gentsch______________________
Telephone: (515) 288-6041
Fax: (515) 246-1474
INSURANCE COMPANY

Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
1128 Historic 4
th
Street
P.O. Box 3086

Judge Stoebe


March 12, 2014.

______________________________________________________________________________

CITY OF SCHALLER, )
) LAW NO. LACV019385
Plaintiff, )
)
vs. )
)
GENERAL EXCAVATING, INC. and ) PLAINTIFFS REQUESTED
NORTH AMERICAN SPECIALTY ) JURY INSTRUCTIONS
INSURANCE COMPANY, )
)
Defendants. )
)
______________________________________________________________________________

100.1 Statement of the case.

In this case, the Plaintiff City of Schaller (Schaller) alleges that it is a municipal
corporation in Sac County, Iowa, and that Defendant General Excavating, Inc. (General
Excavating) is a company that Schaller contracted with on April 13, 2009, to build a project called
Schallers 2008 Wastewater System Improvements and Collection System Improvements.
Defendant North American Specialty Insurance Company (North American) is the bonding
company for the project.

The contract required General Excavating to install new sewer lines under Schallers
streets, backfill and compact the trench excavations, and then place new asphaltic cement paving
upon the surface of the streets afterwards.

Schaller alleges that General Excavating breached its contract because the backfill,
compaction and re-paving were not completed in accordance with contract specifications. As a
result, settling has occurred in the pavement, and other portions of the contract remain unfulfilled,
including repair and remediation of damages caused in the performance of the contract and final
application of sealcoat for the blacktop. Schaller alleges damages for the costs of repair, fees for
design professional, attorney fees, and other damages allowed under the contract.

Schaller alleges that it declared General Excavating to be in default on its contract, and that
Defendant North American Surety has failed to cure that default, which is a violation of North
Americans performance bond.

General Excavating is in default in this matter and has not contested Schallers claims.
Defendant North American now stands in the position of General Excavating. North American
denies Schallers claims. North American also claims that Schaller has failed to mitigate its
damages, and that the cost of the repairs is less than claimed by Schaller.
Do not consider this summary as proof of any claim. Decide the facts from the evidence
and apply the law which I will now give you.

100.2 Duties Of Judge And Jury, Instructions As Whole. My duty is to tell you what the law
is. Your duty is to accept and apply this law.

You must consider all of the instructions together because no one instruction includes all of the
applicable law.

The order in which I give these instructions is not important.

Your duty is to decide all fact questions.

Do not be influenced by any personal likes or dislikes, sympathy, bias, prejudices or emotions.

Authority

Roushar v. Dixon, 231 Iowa 993, 2 N.W.2d 660 (1942)

100.3 Burden Of Proof, Preponderance Of Evidence. Whenever a party must prove
something they must do so by the preponderance of the evidence.

Preponderance of the evidence is evidence that is more convincing than opposing evidence.
Preponderance of the evidence does not depend upon the number of witnesses testifying on one
side or the other.

Authority

Mabrier v. A.M. Servicing Corporation of Raytown, 161 N.W.2d 180 (1968)

100.4 Evidence. You shall base your verdict only upon the evidence and these instructions.

Evidence is:

1. Testimony in person or by deposition.

2. Exhibits received by the court.

3. Stipulations which are agreements between the attorneys.

4. Any other matter admitted (e.g. answers to interrogatories, matters which judicial notice was
taken, and etc.).

Evidence may be direct or circumstantial. The weight to be given any evidence is for you to
decide.

Sometimes, during a trial, references are made to pre-trial statements and reports, witnesses'
depositions, or other miscellaneous items. Only those things formally offered and received by the
court are available to you during your deliberations. Documents or items read from or referred to
which were not offered and received into evidence, are not available to you.

The following are not evidence:

1. Statements, arguments, questions and comments by the lawyers.

2. Objections and rulings on objections.

3. Any testimony I told you to disregard.

4. Anything you saw or heard about this case outside the courtroom.

Authority

Iowa Rules of Evidence

100.5 Deposition Testimony. Certain Testimony has been read into evidence from a deposition.
A deposition is testimony taken under oath before the trial and preserved in writing. Consider that
testimony as if it had been given in court.

Authority

Iowa R. Civ. P. 1.704
Farley v. Seiser, 316 N.W.2d 857 (Iowa 1982)

100.6 Interrogatories. During this trial, you have heard the word 'interrogatory'. An
interrogatory is a written question asked by one party of another, who must answer it under oath in
writing. Consider interrogatories and the answers to them as if the questions had been asked and
answered here in court.

Authority

Iowa R. Civ. P. 1.509

100.9 Credibility Of Witnesses. You will decide the facts from the evidence. Consider the
evidence using your observations, common sense and experience. You must try to reconcile any
conflicts in the evidence; but, if you cannot, you will accept the evidence you find more believable.

In determining the facts, you may have to decide what testimony you believe. You may believe all,
part or none of any witnesses' testimony.

There are many factors which you may consider in deciding what testimony to believe, for
example:

1. Whether the testimony is reasonable and consistent with other evidence you believe;

2. The witnesses' appearance, conduct, age, intelligence, memory and knowledge of the facts;
and,

3. The witnesses' interest in the trial, their motive, candor, bias and prejudice.

Authority

Burger v. Omaha & C.B. St. Ry. Co., 139 Iowa 645, 117 N.W.35 (1908)

100.12 Opinion Evidence, Expert Witness. You have heard testimony from persons described as
experts. Persons who have become experts in a field because of their education and experience
may give their opinion on matters in that field and the reasons for their opinion.

Consider expert testimony just like any other testimony. You may accept it or reject it. You may
give it as much weight as you think it deserves, considering the witness' education and experience,
the reasons given for the opinion, and all the other evidence in the case.

Authority

Crouch v. National Livestock Remedy Co., 210 Iowa 849, 231 N.W. 323 (1930).

100.15 Statements By A Party Opponent. You have heard evidence claiming [name of party]
made statements before this trial [while under oath] [and] [while not under oath].

If you find such a statement was made, you may regard the statement as evidence in this case the
same as if [name of party] had made it under oath during the trial.

If you find such a statement was made and was inconsistent with [name of party]'s testimony
during the trial you may also use the statement as a basis for disregarding all or any part of [name
of party]'s testimony during the trial but you are not required to do so. You should not disregard
[name of party]'s testimony during the trial if other credible evidence supports it or if you believe it
for any other reason.

100.18 General Instruction To Jury. Upon retiring you shall select a foreman or forewoman. It
will be his or her duty to see discussion is carried on in an orderly fashion, the issues are fully and
freely discussed, and each juror is given an opportunity to express his or her views.

Your attitude at the beginning of your deliberations is important. It is not a good idea for you to
take a position before thoroughly discussing the case with the other jurors. If you do this,
individual pride may become involved and you may later hesitate to change an announced position
even if shown it may be incorrect. Remember you are not partisans or advocates, but are judges -
judges of the facts. Your sole interest is to find the truth and do justice.

100.21 Cautionary Instruction - Juror's Notes. During the trial, you have been allowed to take
notes. You may take these with you to the jury room to use in your deliberations. Remember, these
are notes and not evidence. Generally, they reflect the recollection or impressions of the evidence
as viewed by the person taking them, and may be inaccurate or incomplete.

Upon reaching a verdict, leave the noted in the jury room, and they will be destroyed.

Authority

Iowa R. Civ. P. 1.926 (1)

100.23 Use of Electronic Devices.

You may not communicate about this case before reaching your verdict. This includes cell phones,
and electronic media such as text messages, Facebook, MySpace, LinkedIn, YouTube, Twitter,
email, etc.
Do not do any research or make any investigation about this case on your own. Do not visit or view
any place discussed in this case, and do not use Internet maps or Google Earth or any other
program or device to search for or to view any place discussed in the testimony. Also, do not
research any information about this case, the law, or the people involved, including the parties, the
witnesses, the lawyers, or the judge. This includes using the Internet to research events or people
referenced in the trial.

This case will be tried on evidence presented in the courtroom. If you conduct independent
research, you will be relying on matters not presented in court. The parties have a right to have this
case decided on the evidence they know about and that has been introduced here in court. If you do
some research or investigation or experiment that we do not know about, then your verdict may be
influenced by inaccurate, incomplete or misleading information that has not been tested by the trial
process, including the oath to tell the truth and by cross-examination. All of the parties are entitled
to a fair trial, rendered by an impartial jury, and you must conduct yourself so as to maintain the
integrity of the trial process. If you decide a case based on information not presented in court, you
will have denied the parties a fair trial in accordance with the rules of this state and you will have
done an injustice. It is very important that you abide by these rules. [Failure to follow these
instructions may result in the case having to be retried and could result in you being held in
contempt and punished.]

It is important that we have your full and undivided attention during this trial.

200.38 Quotient Verdict. In arriving at an item of damage you cannot arrive at a figure by
taking down the estimate of each juror as to an item of damage, and agreeing in advance that the
average of those estimates shall be your item of damage.

Authority

Moose v. Rich, 253 N.W.2d 565 (Iowa 1977)
Sheker v. Jensen, 241 Iowa 583, 41 N.W.2d 679 (1950)
Manna v. McIntosh, 519 N.W.2d 815 (Iowa App. 1994)

220.1 Breach Of Contract/Fraud-Expectation Interest. The measure of damages for breach
of a contract is an amount that would place the City of Schaller in as good a position as it would
have enjoyed if the contract had been performed.

The damages you award for breach of contract must be foreseeable or have been reasonably
foreseen at the time the parties entered into the contract.

In your consideration of the damages, you may consider the following:

a. The costs incurred by the City of Schaller to repair the streets
a. The costs the City of Schaller will incur in the future to repair the streets
b. The Citys attorney fees in this action
c. The costs of design professionals retained by the City of Schaller to remedy the streets
d. Liquidated damages in the amount of $500.00 per day caused by the delayed
nonperformance of General Excavating

Authority

Yost v. City of Council Bluffs, 471 N.W. 2nd 836 (Iowa 1991)
Air Host Cedar Rapids v. Airport Commission, 464 N.W. 2nd 450 (Iowa 1990)
Hoffman v. National Medical Enterprises, Inc., 442 N.W. 2nd 123 (Iowa 1989)
Potter v . Oster, 426 N.W. 2nd 148 (Iowa 1988)
Ritam Corporation v. Applied Concepts, Inc., 387 N.W. 2nd 619 (Iowa App. 1986)

Comment

Note: Instructions 220.1 and 220.2 are alternative instructions. The proper instruction in a given
case will depend on the evidence.

300.1 Return Of Verdict - Forms Of Verdict. I am giving you _____ verdict forms [and
questions]. During the first six hours of deliberations, excluding meals and recesses outside your
jury room, your decision must be unanimous. If you all agree, the verdict [and answers to
questions] must be signed by your foreman or forewoman.

After deliberating for six hours from _____ o'clock ___.m. excluding meals or recesses outside
your jury room, then it is necessary that only (seven) (six)* of you agree upon the answers to the
questions. In that case, the verdict [and questions] must be signed by all (seven) (six)* jurors who
agree.

When you have agreed upon the verdict [and answers to questions] and appropriately signed it, tell
the Court Attendant.

2400.1 Essentials for Recovery. Plaintiff must prove all of the following propositions:

1. The amount of any damage defendant has caused.

General Excavating has breached the contract in this case. If the plaintiff has failed to prove the
amount of damage defendant has caused, the plaintiff is not entitled to damages. If the plaintiff has
proved the amount of damage defendant has caused, the plaintiff is entitled to damages in some
amount.

Authority

Powell v. McBlain, 222 Iowa 799, 269 N.W. 883 (1936)
Port Huron Machinery Co. v. Wohlers, 207 Iowa 826, 221 N.W. 843 (1928)

300.2 Single Plaintiff - Single Defendant - Cases Not Governed by Chapter 668 - Plaintiffs
verdict.

______________________________________________________________________________

CITY OF SCHALLER, ) Law No. LACV019385
)
Plaintiff, )
)
v. )
)
GENERAL EXCAVATING INC., and ) PLAINTIFFS VERDICT FORM
NORTH AMERICAN SPECIALTY )
INSURANCE COMPANY, )
)
Defendants. )
______________________________________________________________________________

VERDICT NO. 1.

We, the Jury, find in favor of the plaintiff City of Schaller and fix the amount of its
recovery against the defendants General Excavating, Inc. and North American Specialty Insurance
Company, in the amount of $_____________________________dollars.

______________________________________
FOREMAN OR FOREWOMAN*

*To be signed only if verdict is unanimous.

____________________________ _____________________________
Juror** Juror**
____________________________ _____________________________
Juror** Juror**
____________________________ _____________________________
Juror** Juror**
____________________________
Juror**

**To be signed by the jurors agreeing thereto after six hours or more of deliberation.
CITYOF SCHALLER,
Plaintiff,
v.
INSURANCECOMPANY,
Defendants.
LawNo. LACV019385
PLAINTIFF'SPARTIALRESISTANCE
TONORTHAMERICANSPECIALTY
INSURANCECOMPANY'S
MOTIONSINLIMINE
Comes now, Plaintiff City of Schaller ("City") by and through the undersigned counsel,
and hereby resists, inpart, Defendant North American Specialty Insurance Company's ("NAS")
Motions inLimine as follows:
1. GoldenRule Argument
The City does not resist the entry of an Order in Limine prohibiting any party from
offering Golden Rule arguments on the issue of liability or damages to the extent that it is
equally applicable to all parties.
2. Offers ofCompromise
The City resists the entry of an Order in Limine prohibiting evidence of compromise to
the extent that it would restrict the City from offering relevant evidence. Although the City
disputes that certain evidence of General Excavating Inc. ("General Excavating") providing
work, services and documentation on the project through July, 201 1 was merely "settlement
discussions," NAS' motion should be denied if it would bar the admissibility of such evidence.
Such evidence is relevant to the statute of limitations defense NASis likelyto assert.
IowaRule ofEvidence 5.408 states:
Evidence of(1) furnishing or offering or promising to furnish, or (2) accepting or
offering or promising to accept, a valuable consideration in compromising or
attempting to compromise a claim which was disputed as to either validity or
amount, is not admissible to prove liabilityfor or invalidity of the claim or its
amount. Evidence of conduct or statements made in compromise negotiations is
likewise not admissible. This rule does not require the exclusionof any evidence
otherwise discoverable merely because it is presented in the course of
compromise negotiations. This rule also does not require exclusion when the
evidence is offered for another purpose, such as proving bias or prejudice of a
witness, negativing a contentionofundue delay, or proving aneffort to obstruct a
criminal investigationor prosecution.
Iowa R. Evid. 5.408 (emphasis added). Offers of compromise are inadmissible only for the
purposes ofproving liability or invalidity ofthe claim or its amount. The rule expressly permits
use of this evidence for other purposes. When offers of compromise are offered for another
purpose and are relevant to that purpose, they are admissible. Miller v. Component Homes, Inc.,
356 N.W.2d 213, 215-16 (Iowa 1984).
It is expected that NAS will defend this action based on the statute of limitations
contained in the Performance Bond contract. The Performance Bond explained that a legal
actionmust be brought withintwo years after the contractor "ceased working" onthe project. In
resistance to NAS' Motionfor Summary Judgment, the City explained specific instances ofwork
provided by General Excavating that occurred within two years of when this case was filed.
General Excavating' s actions inthese examples were defined as work bythe contract documents
and the Performance Bond. As the Court inferred in its Order denying NAS' Motion for
Summary Judgment, General Excavating's actions are issues of fact relevant to the statute of
limitations issue. See Order dated February 17, 2014 at p. 2.
It is also expected that NAS will argue that the statutory statute of limitations contained
within Iowa Code section 573.6(c) stating "[t]hat no provision of this bond or of any other
contract shall be valid which limits to less than one year from the time of the acceptance of the
work the right to sue on this bond for defects in the quality of the work or material not
discovered or knownto the obligee at the time such work was accepted" bars recovery under the
bond. The Order in Limine requested by NAS would likely prevent the City from offering
relevant evidence to showthat the City never "accepted" the work and to showthat this statute
section573.6(c) invalidates the contractual statute of limitations period because NASappears to
consider much of the City's and General Excavating' s actions after the date of Substantial
Completionas "settlement discussions." Such an Order inLimine would deprive the Court and
thejuryfrom hearing relevant evidence to this issue.
The City does not intend to use any offers of compromise, ifany exist, to prove liability
or invalidity of the claim or amount. However, the City is afraid that NAS' Motion in Limine
goes beyond these prohibited uses to also prohibit thejury fromhearing relevant evidence that is
helpful to the jury. Accordingly, the Court should deny NAS' Motionin Limine. If, however,
the Court enters an Order in Limine prohibiting evidence of compromise solely for the purpose
ofproving liability for or invalidityofthe claimor its amount pursuant to IowaRule ofEvidence
5.408, this Order inLimine should be equally applicable to all parties.
3. Expert TestimonyNot Disclosed
The City resists the entry of an Order in Limine prohibiting expert testimony not
disclosed to the extent it prohibits the City from eliciting the testimony of individuals with
professional backgrounds or expertise as fact witnesses. The City has disclosed Brian
Mastbergen and Ed Prost as experts and intends to offer their expert opinions. However, other
witnesses that the City may call may also have professional backgrounds that although capable
of offering expert opinions will merely be called to offer their personal observations and first
hand knowledge or to offer foundation. Accordingly, the Court should deny NAS' Motion in
Limine. Ifthe Court enters an Order in Limine prohibiting expert testimony not disclosed, this
Order inLimine should be equally applicable to all parties.
4. Cap onDamages
The City resists NAS's purported Motion in Limine with respect to capping damages at
the penal sum ofthe bond. "The primary purpose of a motioninlimine is to preclude reference
to potentially prejudicial evidence prior to the trial court's definitive ruling on its admissibility."
Ray v. Paul, 563 N.W.2d 635, 638 (Iowa Ct. App. 1997). Arequest for an "Order in Limine
limitingthe damages awarded to the City" is an improper use ofamotioninlimine. See Lewis v.
Buena VistaMut. Ins. Ass'n, 183 N.W.2d 198, 201 (Iowa 1971) ("The motion [inlimine] should
be used, ifused at all, as a rifle and not as a shotgun, pointing out the objectionable material and
showing whythe material is inadmissible and prejudicial.").
NAS has failed to describe what, if any, evidence it is attempting to preclude by this
purported Motion in Limine. The Plaintiff should be able put on evidence showing all of its
damages. It would be entirely impractical for the Plaintiffto have to ensure at any giventime it
is not offering evidence that cumulatively goes over a set number of damages. Any imposition
of a damage cap as applied to NAS, if necessary, should be imposed by the Court inposttrial
rulings.
Further, the penal sum of the bond is an improper cap for a bond for public
improvements. Iowa Code section 573.6(2) permits, under some circumstances, a surety to be
liable for the amount ofthe bond plus twenty percent ofthe total contract price. Bd. ofSup'rs of
WinneshiekCnty. v. StandardAppliance Co., 249 Iowa438, 443, 87 N.W.2d 459, 462 (1958).
More importantly. General Excavating is still a defendant in this case. The damages of
the Citycaused by General Excavating's breach ofcontract are not limited byany penal sum ofa
bond. UponGeneral Excavating's failure to appear, NASspecifically requested that the issue of
the damages attributable to General Excavating be tried at the same time as the issues between
NASand the City rather thanat the hearing ondefault judgment. Accordingly, the Court should
deny NAS' MotioninLimine.
5. Evidence ofLiquidated Damages
Plaintiffresists NAS's MotioninLimine with respect to evidence ofliquidated damages.
The contract documents betweenGeneral Excavating and the Cityshowthat the parties mutually
agreed upon a liquidated damages provision in the amount of $500.00 for each day after
substantial completionuntil the final work is complete ifthe "Contractor shall neglect, refuse, or
fail to complete the remaining Workwithinthe Contract Time or any proper extension" until the
project is ready for final payment.
Iowalawfavors liquidated damage clauses because ofthe cost efficiency. RohlinConst.
Co., Inc. v. City ofHinton, 476 N.W.2d 78, 79-80 (Iowa 1991). The American LawInstitute
similarly"shows no hostilitytoward liquidated damages." Id. at 80 (citing Restatement (Second)
of Contracts 356(1) (1981) ("The parties to a contract may effectively provide inadvance the
damages that are to be payable inthe event ofbreach as long as the provisiondoes not disregard
the principle of compensation.")). The determination of the enforceability of a liquidated
damage clause is dependent onthe court's constructionofthe contract. Id. at 79.
The City should be entitled to discuss the liquidated damages clause it negotiated with
General Excavating at trial. General Excavating's failure to appear is an admission as to its
liability for liquidated damages. Nothing contained inthe case of RohlinConstruction Co., Inc.
v. City ofHintonrequires aplaintiff to put forth expert testimony to prove the reasonableness of
a liquidated damages clause in a contract. Unlike in Rohlin where the contractor merely
performed late, here, General Excavating's breach disrupted the City's use of the streets much
more than anticipated by the project. Extensive repairs to some of the City's streets have been
done and additional streets are slill in need of repair as a result of General Excavating's breach.
Such repairs disturbed the use of these streets by the City and City residents to a greater extent
than the anticipated disruption had there been no breach. Further, the issue of whether the
liquidated damages clause is reasonable in this case is inextricably entwined with the other
damage issues. The Court should deny NAS' Motionin Limine regarding liquidated damages.
WHEREFORE, Plaintiffthe City ofSchaller, respectfully requests that the Court enter an
order denying Defendant North American Specialty Insurance Company's Motion in Limine in
part as set forth inthis resistance and for any further or other reliefdeemed appropriate.
DATEDthis 13 1 day of March. 2014.
HEIDMANLAWFIRM, L.L.P.
By:.
ALANE. FREDREGILL, AT0002712
ROSALYNDJ. KOOB. AT0004380
ALLYSONC. DIRKSEN, AT0010908
P.O. Box 3086
Phone: 712-255-8838
Facsimile: 712-258-6714
Email: alan.frcdreuill^/'heidmanlaw.com
Email: roz.koob@heidmanlaw.com
Email: allvson.dirksen(a).heidmanlaw.com
Copy to via EDMS:
Benjamin B. Ullem
DrewJ. Gentsch
Timothy Reicks
PROOFOFSERVICE
I certifythat a true copyof this document was
dSU Z e2C? .0f ! 'ea! ,omeys of rccord of nil
parlies to this actionat the addresses disc/osed
bythe pleadings on pn 1^
By. ? U.S. Mail ? Hand Delivered
? Facsimila ^Qihsr f-ntV\
1


CITY OF SCHALLER,

Plaintiff,

v.

INSURANCE COMPANY,

Defendants.

No. LACV019385

APPEARANCE

COMES NOW the law firm of Whitfield & Eddy, P.L.C., 317 Sixth Avenue, Suite 1200,
Des Moines, IA 50309-4195, by and through attorney, Amos E. Hill, and hereby enters its
appearance in the above-captioned matter, on behalf of Defendant North American Specialty
Insurance Company.

317 Sixth Ave., Suite 1200
Telephone: 515-288-6041
Facsimile: 515-246-1474
Email: hill@whitfieldlaw.com

By: /s/ Amos E. Hill
ATTORNEYS FOR DEFENDANT NORTH
AMERICAN SPECIALTY INSURANCE
COMPANY

2


Alan E. Fredregill
Rosalynd J. Koob
Sarah K. Kleber
1128 Historic 4
th
Street
P.O. Box 3086

Judge Stoebe



Signature:__/s/ Tricia Little____________________
2RCV01

PLAINTIFF(S),
vs.
INSURANCE CO
,
DEFENDANT(S).


O R D E R

The Court has been advised that this matter has been settled.
IT IS ACCORDINGLY ORDERED that the parties shall file all documents necessary to
resolve this matter within thirty (30) days.

Counsel of Record
1 of 2
AL
Type: OTHER ORDER
So Ordered
2 of 2
IN THE SUPREME COURT OF IOWA
No. 14-0345

Sac County No. LACV019385

PROCEDENDO

CITY OF SCHALLER,
Plaintiff-Appellee,
vs.
GENERAL EXCAVATING, INC.,
Defendant,
and
NORTH AMERICAN SPECIALITY
INSURANCE COMPANY,
Defendant-Appellant.
________________________________________________________________________
To the Iowa District Court for the County of Sac :
Whereas, there was an appeal from the district court in the above-captioned case to
the supreme court. The appeal is now concluded.
Therefore, you are hereby directed to proceed with diligence and according to the law
in the same manner as if there had been no appeal.

In witness whereof, I have hereunto set my
hand and affixed the seal of the supreme
court.

1 of 3
E
L
E
C
T
R
O
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C
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Y

F
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D

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,

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Copies to:
Drew Gentsch
317 6th Ave. Suite 1200
Des Moines, IA 50309
Alan Edward Fredregill
1128 Historic 4th Street
Po Box 3086
Sioux City, IA 51102
Sac County Clerk Of Court
100 Nw State Street Suite 12
Sac City, IA 50583

2 of 3
14-0345 City of Schaller v. General Excavating
So Ordered
3 of 3

CITY OF SCHALLER, )
)
Plaintiff, )
) Case No. LACV!"#$%
&s. )
) ORDER SETTIN' STATUS
'ENERAL E(CAVATIN', INC., an) ) CONFERENCE
)
Defen)ants. )

This matter was scheduled for trial on March 18, 2014. Prior to the initiation of the trial,
the matter was reported to be settled and the trial was cancelled. The parties were ordered to file
all necessary settlement documents within 30 days.
The parties contacted the ourt and re!uested an e"tension and the ourt #ranted the
e"tension without enterin# an order.
The matter continues to be pendin#. $ status hearin# should be held to determine the
appropriate disposition.
IT IS ORDERED that this matter shall come before the ourt for a status hearin# on
+,ne !-, .!/, at "0# a.1. at t2e HU*3OLDT COUNTY COURTHOUSE, Da4ota Cit5,
Io6a. $ personal representati%e of each party and their counsel shall be personally present for
the status hearin#. NO TELEPHONIC APPEARANCES WILL BE PERMITTED.

Cle74 to P7o&i)e Co8ies to&
ounsel of 'ecord
(nrepresented parties
E-FILED 2014 MAY 09 1:44 PM SAC - CLERK OF DISTRICT COURT
Type: OTHER ORDER
So Ordered
E-FILED 2014 MAY 09 1:44 PM SAC - CLERK OF DISTRICT COURT
2RCV01

PLAINTIFF(S),
vs.
INSURANCE CO
,
DEFENDANT(S).


O R D E R

A status hearing is scheduled in this matter for June 16, 2014, at 9:30 a.m. at the
Humboldt County Courthouse, Dakota City, Iowa. A dismissal with prejudice has been
filed. The Court finds the status hearing is unnecessary.
IT IS THEREFORE ORDERED the status hearing scheduled on June 16, 2014, at 9:30
a.m. in the Humboldt County Courthouse is cancelled.

Counsel of Record
1 of 2
AL
Type: OTHER ORDER
So Ordered
2 of 2

City of Schaller Dismisses Suit Against General Excavating Inc and North American Special Insurance Company

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City of Schaller Dismisses Suit Against General Excavating Inc and North American Special Insurance Company

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In the Iowa District Court in and for SAC County

Case No: 02811 LACV019385 Title: CITY OF SCHALLER VS. GENERAL

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