American Wagyu Breeders, LLC. v. Sarah Bailey and Estate of Eric C. Bailey

CourtCourt of Appeals of Iowa
DecidedJanuary 9, 2025
Docket23-1237
StatusPublished

This text of American Wagyu Breeders, LLC. v. Sarah Bailey and Estate of Eric C. Bailey (American Wagyu Breeders, LLC. v. Sarah Bailey and Estate of Eric C. Bailey) is published on Counsel Stack Legal Research, covering Court of Appeals of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Wagyu Breeders, LLC. v. Sarah Bailey and Estate of Eric C. Bailey, (iowactapp 2025).

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 23-1237 Filed January 9, 2025

AMERICAN WAGYU BREEDERS, LLC, Plaintiff-Appellee,

vs.

SARAH BAILEY and ESTATE OF ERIC C. BAILEY, Defendants-Appellants. ________________________________________________________________

Appeal from the Iowa District Court for Johnson County, Paul D. Miller,

Judge.

The defendants appeal the district court’s entry of judgment following a jury

trial in which the defendants were found liable for breach of contract and fraudulent

misrepresentation and assessed damages. AFFIRMED.

Siobhan Briley of Pugh Hagan Prahm PLC, Coralville, for appellants.

Jason J. O’Rourke and Jenny L. Juehring of Lane & Waterman LLP,

Davenport, for appellee.

Heard by Tabor, C.J., and Ahlers and Sandy, JJ. 2

SANDY, Judge.

Where’s the beef? That is the pivotal question brought before us in this

case. Despite days of trial and years of litigation, we are left just as confused now

as the day the original petition was filed. We only know that a full-blood black

Wagyu bull named Michiyoshi disappeared into thin air. Sarah Bailey and the

estate of Eric Bailey (together, the “Baileys”) appeal the district court’s entry of

judgment following a jury trial in which they were found liable for breach of contract

and fraudulent misrepresentation and assessed damages. The jury found the

Baileys breached a livestock agreement with American Wagyu Breeders, LLC

(AWB) under which they were to care for Michiyoshi. The jury also found the

Baileys made fraudulent misrepresentations to AWB concerning Michiyoshi, and it

awarded AWB damages of $460,000.

The Baileys argue the district court (1) abused its discretion in excluding the

proposed Exhibit L, (2) abused its discretion in excluding testimony relating to

Sarah’s character for truthfulness, (3) abused its discretion in accepting the jury’s

award of speculative and excessive damages, and (4) committed a combination of

errors that cumulatively denied the Baileys a fair trial. AWB requests appellate

attorney fees pursuant to its livestock agreement with the Baileys. Finding no

abuses of discretion, we affirm the district court. We also award AWB its appellate

attorneys’ fees.

I. Background Facts and Proceedings

In November 2012, AWB and the Baileys entered an agreement under

which the Baileys would board and be allowed to use Michiyoshi. This dispute

arose following a breeder’s discovery in 2016 that a bull the Baileys provided for 3

collection was not Michiyoshi as claimed by the Baileys but, in fact, a different black

Wagyu bull they owned named Hirashige. To this date, Michiyoshi’s fate is

unknown. The Baileys claimed they had only one other bull at their West Branch

farm around the time they boarded Michiyoshi. That animal was Hirashige, also

known as Romeo, but the Baileys claimed to have sold him to a friend shortly

before or shortly after Michiyoshi arrived at their farm. According to that timeline,

Michiyoshi would have been the only bull on the Baileys’ farm by December 2012.

In April or May 2014, the Baileys sent a bull that was meant to be Michiyoshi

to Hawkeye Breeders Service, Inc. (Hawkeye Breeders) in Adel to have semen

collected. The bull the Baileys sent to Hawkeye Breeders was returned to the

Bailey farm in September 2014. In 2015, the Baileys sent the same bull to a farm

in Oklahoma for boarding. In 2016, the same bull was again sent to Hawkeye

Breeders to have semen collected. While the bull was there, DNA testing was

conducted and it was determined that the bull the Baileys sent to Hawkeye

Breeders in 2014 and to Oklahoma in 2015 was actually Hirashige, who the Baileys

claimed had died long before. At the time of trial it remained unclear what

happened to Michiyoshi.

Michiyoshi had been developed and owned by AWB, whose sole member

was Nick Bell. Bell had worked with a well-known Wagyu breeder to develop the

embryo that eventually became Michiyoshi. He claimed that Michiyoshi’s rare

genetics produced offspring with high-quality meat. Michiyoshi was registered with

the American Wagyu Association as a 100% full blood Wagyu bull. When a full-

blood Wagyu bull is registered with the AWA, the owner is required to submit a

blood or hair sample so that the AWA can confirm the DNA and keep the DNA on 4

file, which Nick did when he registered Michiyoshi. In 2012, Bell sought to have

Michiyoshi boarded and cared for, which led to his relationship with the Baileys.

The Baileys lived on a farm near West Branch and had farmed and raised

cattle for many years. They raised Wagyu cattle and owned the business Bailey

American Wagyu. Sarah testified that they began purchasing Michiyoshi’s semen

in 2011 because it would produce good meat for the Baileys to sell. The Baileys

also used semen from Hirashige, whom they bought from another bull owner, Mike

Goodell, in January 2012. Before being sold, Goodell registered Hirashige with

AWA. The AWA kept Hirashige’s DNA on file and tattooed his AWA registration

number in his ear. The Baileys began boarding Hirashige in fall 2011—shortly

before purchasing him. Eric regularly worked with Hirashige, knew what he looked

like, and trained him for livestock shows. The Baileys claimed that Hirashige was

the only bull kept on their farm in 2011.

In July 2012, Sarah visited Bell’s farm in Michigan with her son to see

Michiyoshi because the Baileys were interested in boarding the bull in exchange

for rights to use his semen on their herd. Michiyoshi was the only animal on Bell’s

farm. Following that visit, the Baileys continued to reach out to Bell about boarding

Michiyoshi. In November they exchanged a draft livestock agreement over email.

Later that month the Baileys agreed to board Michiyoshi and drove to Bell’s

farm to pick him up on November 25. They signed the livestock agreement upon

arriving and transported Michiyoshi back to their farm the following morning. Bell

provided the Baileys with a certificate of veterinary inspection for Michiyoshi, which

is required when a bull is transported between states. Two days after Michiyoshi

arrived at the Bailey farm, Sarah emailed Bell photos of Michiyoshi at the farm 5

which showed him with two ear tags that Bell testified had been in Michiyoshi’s

ears at the time of the Bailey pickup. The Baileys testified they left the tags in until

Hawkeye Breeders removed them in May 2014.

Conflicting evidence was presented as to what animals were present on the

Bailey farm when Michiyoshi arrived. Eric testified that Hirashige had been sold to

cattle farmer Molly Erenberger and left before Michiyoshi arrived on November 26.

Yet Sarah testified that Hirashige was on their farm when they first brought

Michiyoshi and that the bulls were kept in different pens. At trial, she claimed that

she sold Hirashige to Erenberger and hauled the bull to Erenberger’s farm shortly

after Michiyoshi arrived on November 26. She could not recall the specific date of

Hirashige’s sale to Erenberger.

When the dispute over the bull’s identity first arose, Sarah told Bell’s wife

that Hirashige left the Bailey farm within a week of Michiyoshi’s arrival. But in

interrogatories she claimed to have sold Hirashige in “2013 or 2014.” Sarah and

Eric both claimed Hirashige was no longer in their possession after being sold.

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