IN THE SUPREME COURT OF IOWA No. 18–1966
Submitted November 18, 2020—Filed December 23, 2020
BENSKIN, INC.,
Appellant,
vs.
WEST BANK,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Samantha J.
Gronewald, Judge.
Defendant Bank seeks further review of court of appeals decision
reversing order granting motion to dismiss. DECISION OF COURT OF
APPEALS AFFIRMED IN PART AND VACATED IN PART; DISTRICT
COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND
CASE REMANDED.
Waterman, J., delivered the opinion of the court, in which all
participating justices joined. McDermott, J., took no part in the
consideration or decision of the case.
Steven P. DeVolder (argued) of DeVolder Law Firm, P.L.L.C.,
Norwalk, and William W. Graham of Duncan Green, P.C., Des Moines, for
appellant. 2
Dennis P. Ogden (argued) and Thomas L. Flynn of Brick Gentry,
P.C., West Des Moines, for appellee. 3
WATERMAN, Justice.
Motions to dismiss are disfavored. Iowa is a notice pleading state.
Lawyers should exercise “professional patience” and challenge vulnerable
cases by summary judgment or at trial instead of through “premature
attacks on litigation by motions to dismiss.” Cutler v. Klass, Whicher &
Mishne, 473 N.W.2d 178, 181 (Iowa 1991). The court of appeals took such
admonitions to heart and reversed the district court’s ruling granting a
bank’s motion to dismiss its debtor’s pleadings, alleging breach of
contract, breach of the implied duties of good faith and fair dealing, fraud,
and slander of title. The district court, examining the four corners of the
debtor’s amended petition, had ruled that the contract and fraud claims
were time-barred, rejected the debtor’s discovery rule and equitable
estoppel arguments, and ruled the slander-of-title count failed to allege
the element of publication to a third party. The court of appeals applied
equitable estoppel to avoid the time-bar and held the slander-of-title count
was adequately pled. We granted the bank’s application for further review.
On our review, we determine that the district court correctly
dismissed this case on the pleadings, except for slander of title. We accept
as true the debtor’s factual allegations. The bank’s alleged wrongdoing—
failure to release encumbrances—took place in 2008, and the debtor
admittedly learned of the bank’s refusal by June 27, 2011, well within the
statute of limitations period. The contract and good-faith claims are
subject to a seven-year statute of limitations with no discovery rule and
that period expired in 2015. The fraud claim is governed by a five-year
statute of limitations with a discovery rule and that period expired in 2016.
The debtor did not file this lawsuit until May 18, 2018. Those claims are
time-barred and the equitable estoppel argument fails as a matter of law.
We agree with the court of appeals that slander of title was adequately 4
alleged. Recording statutes provide notice to the public and a wrongful
encumbrance on real estate is thereby “published.” For the reasons
explained more fully below, we vacate the decision of the court of appeals
in part and affirm the district court’s judgment dismissing all claims
except slander of title, which we reinstate.
I. Background Facts and Proceedings.
According to the amended petition, on October 6, 2006, Benskin,
Inc. entered into a written loan agreement with West Bank to borrow
$800,094. The loan was secured by guarantees from Martin and Susan
Benskin and a real estate mortgage on the corporation’s property in
Dickinson County. The terms of the loan were set forth in a promissory
note (the 2006 promissory note), loan guarantees, and a real estate
mortgage. The 2006 loan was renewed in a promissory note dated
August 1, 2007, with a maturity date of August 1, 2008.
On October 24, 2007, Benskin entered into a separate agreement
for a line of credit (the 2007 line of credit) with West Bank for up to
$2 million to purchase land for development. The terms were set forth in
a promissory note again secured by guarantees from Martin and Susan
Benskin and mortgages on the Dickinson County land and this time on
real estate Benskin owned in Polk County (the 2007 mortgages). Benskin
never borrowed against the line of credit. On May 30, 2008, the 2007
promissory note and mortgages matured. “On and after that date,
West Bank was obligated to release the 2007 Mortgages.” Benskin alleged,
10. At various times after May 30, 2008, West Bank, through its officers and employees, made multiple representations, now known to have been false, that it would take the steps necessary to release the 2007 Mortgages. 11. Despite its obligation to release the 2007 Mortgages, and contrary to its representations and promises to do so, West Bank failed and refused to release the 2007 5 Mortgages, even after repeated requests and demands from Plaintiff. 12. Defendant’s first express statement to Plaintiff refusing to release the 2007 Mortgages was on June 27, 2011. At least until that date, West Bank intentionally misled Plaintiff by making . . . false statements and promises leading Plaintiff to believe that West Bank was going to release the 2007 Mortgages and was taking procedural steps to do so.
On July 22, 2016, during the course of other litigation, Benskin further
alleged it
learned information indicating that at some time after the creation of the 2007 Line of Credit, West Bank internally altered its records so as to purport to show an unauthorized advance under the 2007 Line of Credit to pay off, before it was due, the 2006 Promissory Note. That action was wrongfully concealed by West Bank and was taken by West Bank without Plaintiff’s agreement, consent, or knowledge and was not discovered by Plaintiff until after July 22, 2016.
The alleged misuse of the line of credit occurred in 2008. Benskin’s
property remained encumbered by the 2007 mortgages.
On May 18, 2018, Benskin sued West Bank in a three-count petition
alleging breach of (I) the 2007 contracts, (II) the 2006 promissory note, and
(III) the implied duties of good faith and fair dealing. West Bank filed a
motion to dismiss on grounds that the seven-year statute of limitations in
Iowa Code section 524.221(2) (2018) barred all claims. Benskin responded by amending its petition to add count IV, alleging fraud, and count V,
alleging slander of title. West Bank withdrew its initial motion and filed a
new motion to dismiss, arguing section 524.221(2) barred counts I–III,
section 614.1(4) (five-year statute of limitations for fraud) barred counts
IV and V, and count V failed to state a claim upon which relief could be
granted because no publication to a third party was alleged. Benskin filed
a resistance that argued for the ten-year statute of limitations in section
614.1(5) and further argued that the discovery rule or equitable estoppel 6
avoided the limitations defense and the 2007 mortgage encumbrances as
public filings satisfied the publication element for the slander of title.
The district court granted West Bank’s motion to dismiss all claims.
The court ruled that equitable estoppel can apply to breach of contract
claims but determined that Benskin failed to allege a “specific statement
or action as the basis of its equitable estoppel claim” and rejected its
discovery rule argument. The court determined the first four counts were
time-barred and that count V failed to state a claim for slander of title
because no publication was alleged.
Benskin appealed, and we transferred the case to the court of
appeals. The court of appeals reversed and reinstated all claims, holding
that equitable estoppel was adequately pled to avoid a motion to dismiss
on the statute of limitations and that the slander-of-title claim was
adequately pled. We granted West Bank’s application for further review.
II. Standard of Review.
“We review a district court’s ruling on a motion to dismiss for the
correction of errors at law.” Shumate v. Drake Univ., 846 N.W.2d 503, 507
(Iowa 2014) (quoting Mueller v. Wellmark, Inc., 818 N.W.2d 244, 253 (Iowa
2012)). “For purposes of reviewing a ruling on a motion to dismiss, we
accept as true the petition’s well-pleaded factual allegations, but not its
legal conclusions.” Id. “[W]e will affirm a dismissal only if the petition
shows no right of recovery under any state of facts.” Rieff v. Evans, 630
N.W.2d 278, 284 (Iowa 2001) (en banc) (quoting Barnes v. State, 611
N.W.2d 290, 292 (Iowa 2000) (en banc)). We construe the petition in “its
most favorable light, resolving all doubts and ambiguities in [the plaintiff’s]
favor.” Id. (quoting Schreiner v. Scoville, 410 N.W.2d 679, 680 (Iowa 1987)).
“A defendant may raise the statute of limitations by a motion to
dismiss if it is obvious from the uncontroverted facts contained in the 7
petition that the applicable statute of limitations bars the plaintiff’s claim
for relief.” Venckus v. City of Iowa City, 930 N.W.2d 792, 809 (Iowa 2019)
(quoting Turner v. Iowa State Bank & Tr. Co. of Fairfield, 743 N.W.2d 1, 5
(Iowa 2007)); see also Mormann v. Iowa Workforce Dev., 913 N.W.2d 554,
557, 575 (Iowa 2018) (affirming order granting motion to dismiss and
noting that whether discovery rule and equitable estoppel apply “is often
a fact-intensive inquiry for which a ruling on a motion to dismiss or at the
summary judgment stage is often inappropriate. Yet, it is also true that a
plaintiff may plead himself out of court by alleging facts that provide the
[defendant] with a bulletproof defense and foreclose application of
equitable tolling.” (citation omitted)).
III. Analysis.
We will first address the applicable statute of limitations and
conclude the contract claims are governed by the seven-year limitation in
Iowa Code section 524.221(2) 1 and the fraud claim is governed by the
five-year limitation in section 614.1(4). We then determine that based on
the factual allegations in the amended petition, neither the discovery rule
nor equitable estoppel avoid those limitations. Finally, we determine that
the publication element of slander of title was adequately alleged because the recording statute provides notice to the public.
A. The Governing Statutes of Limitation.
1. Counts I and II, alleging breach of written contracts. The district
court ruled that Iowa Code section 524.221(2) provides the governing
statute of limitations for counts I and II of Benskin’s amended petition
alleging breach of written contracts. We begin with the statutory language.
1This banking statute provides that the period of six years begins on the date of
accrual that is either (a) “one year after the breach or failure of performance of a written contract” or (b) “one year after the date of such entry or entries.” Iowa Code § 524.221(2). Thus, the plaintiff has a total of seven years from the breach. 8
Iowa Code section 524.221(2) was amended in 2011 to shorten the
limitations period from eleven years 2 to seven with the addition of the
italicized language and now provides:
2. All causes of action, other than actions for relief on the grounds of fraud or mistake, against a state bank based upon a claim or claims founded on a written contract, or a claim or claims inconsistent with an entry or entries in a state bank record, made in the regular course of business, shall be deemed to have accrued, and shall accrue for the purpose of the statute of limitations one year after the breach or failure of performance of a written contract, or one year after the date of such entry or entries. No action founded upon such a cause may be brought after the expiration of six years from the date of such accrual.
2011 Iowa Acts ch. 87, § 2 (codified at Iowa Code § 524.221(2) (Supp.
2011)) (emphasis added). West Bank argues that the seven-year period of
limitations in Iowa Code section 524.221(2) commenced upon the 2008
breach and expired in 2015 to bar Benskin’s written contract claims.
Benskin argues that the ten-year statute of limitations for written
contracts in section 614.1(5) or the eleven-year limitation in the earlier
version of section 524.221(2) governs counts I and II and that
postamendment section 524.221(2) is inapplicable for two reasons: (1) its
effective date was July 1, 2011, and it cannot apply retroactively to contracts breached earlier; and (2) the contracts at issue or record entries
were not “made in the regular course of business.” We agree with
West Bank and the district court that the seven-year limitation in section
524.221(2) governs the contract claims and the limitation period expired
in 2015.
First, Benskin commenced this action in 2018, after the effective
date of the 2011 amendment. We apply the period of limitation that is in
2Prior to 2011, the claimant had ten years after the date of accrual, which was a year after the breach. Thus, we refer to the period of limitation as eleven years. Iowa Code § 524.221(2) (2011). 9
effect when the plaintiff sues. See In re Est. of Weidman, 476 N.W.2d 357,
363–64 (Iowa 1991) (en banc). We hold that the seven-year time-bar
governs the contract claims filed in 2018 even though the written contracts
were executed and allegedly breached before the 2011 amendment.
Second, we see no reason why these contracts (the commercial line
of credit, promissory notes, real estate mortgages, and personal
guarantees) at issue were not “made in the regular course of business”
within the meaning of Iowa Code section 524.221(2). We reject Benskin’s
argument that it can avoid the statutory limitations period simply by
omitting an allegation that the contracts or record entries were made in
the regular course of the bank’s business. And we reject Benskin’s
argument that it can avoid this time-bar by alleging the bank’s actions
were wrongful (that is, the bank “cooked the books”) and therefore outside
the scope of the statute. That argument goes to the merits of the
underlying claim rather than to the determination of the applicable
limitations period. To hold otherwise would eviscerate the statute.
Finally, we hold that section 524.221(2) governs Benskin’s written
contract claims against West Bank, a state bank, rather than the general
statute of limitations for written contracts in section 614.1(5). Section
524.221(2), as the more specific statute, controls. See MidWestOne Bank
v. Heartland Co-op, 941 N.W.2d 876, 883 (Iowa 2020) (“To the extent ‘there
is a conflict or ambiguity between specific and general statutes, the
provisions of the specific statutes control.’ ” (quoting Oyens Feed & Supply,
Inc. v. Primebank, 808 N.W.2d 186, 194 (Iowa 2011))); see also Iowa Code
§ 4.7 (“If a general provision conflicts with a special or local provision, they
shall be construed, if possible, so that effect is given to both. If the conflict
between the provisions is irreconcilable, the special or local provision
prevails as an exception to the general provision.”). The legislature 10
amended Iowa Code section 524.221(2) to shorten its limitation period
from eleven years to seven years. See 2011 Iowa Acts ch. 87, § 2 (codified
at Iowa Code § 524.221(2) (Supp. 2011)). “The evident purpose” of that
amendment “is to hasten resolution of such claims” against state banks
founded on written contracts. See MidWestOne Bank, 941 N.W.2d at 883
(quoting Farmers Coop. Co. v. Swift Pork Co., 602 F. Supp. 2d 1095, 1110
(N.D. Iowa 2009)) (addressing Iowa Code section 614.1(10)).
Benskin’s written contract claims accrued no later than 2008, when
West Bank failed to perform the written contract by not releasing the 2007
mortgages. Benskin did not file this action until 2018, over seven years
later. The district court correctly ruled that counts I and II are time-
barred.
2. Count III, alleging breach of duties of good faith and fair dealing.
The district court ruled that count III is also governed by the seven-year
period of limitation in Iowa Code section 524.221(2). Benskin argues that
count III is not covered by that provision because the claim is based on
the implied duty of good faith and fair dealing rather than for breach of a
written contract. Benskin relies on Legg v. West Bank, 873 N.W.2d 763,
774 (Iowa 2016). In Legg, the plaintiffs alleged that West Bank breached
implied and express duties of good faith by altering how it sequenced bank
card transactions without informing its customers. Id. at 772. Rather
than paying off the largest transactions first, as it had customarily done,
the bank paid off the smallest denomination checks first and then the
largest checks. Id. at 766–67. This resulted in more penalties for account
holders, including the plaintiffs. Id. at 767. The Leggs sued under Iowa
Code chapter 537 (consumer credit code), and our decision did not
mention section 524.221(2). Id. 11
“An express contract and an implied contract cannot coexist with
respect to the same subject matter, and the former supersedes the latter.”
Id. at 771 (quoting Chariton Feed & Grain, Inc. v. Harder, 369 N.W.2d 777,
791 (Iowa 1985) (en banc)). When the Leggs opened an account with
West Bank, the written agreement stated that West Bank “shall have an
obligation to Depositor to exercise good faith and ordinary care in
connection with each account.” Id. at 773. As such, we held that there
was “an express contract govern[ing] West Bank’s duty to act in good faith”
and that the plaintiffs did not have a claim based on an implied duty of
good faith. Id. at 773–74. We determined that Iowa Code section 614.1
set out the statute of limitations for express and implied covenants of good
faith. Id. at 774. A written contract had a ten-year period of limitation,
whereas an unwritten contract had a five-year period. Id. Because the
Legg’s claim rested on a written contract, the period of limitations was ten
years. Id.
Even though Benskin’s count III is based on implied duties of good
faith and fair dealing and alleges no written contract term expressly
requiring good faith, we conclude it is still subject to Iowa Code section
524.221’s statute of limitations. While we imply a duty of good faith and
fair dealing in commercial contracts, the implied duty “does not ‘give rise
to new substantive terms that do not otherwise exist in the contract.’ ”
Bagelmann v. First Nat’l Bank, 823 N.W.2d 18, 34 (Iowa 2012) (quoting
Mid-Am. Real Est. Co. v. Iowa Realty Co., 406 F.3d 969, 974 (8th Cir.
2005)); see also Am. Tower, L.P. v. Loc. TV Iowa, L.L.C., 809 N.W.2d 546,
550 (Iowa Ct. App. 2011) (“Implied contractual duty of good faith and fair
dealing in commercial contracts does not support an independent cause
of action for failure to act in good faith under a contract; instead, the duty
of good faith is meant to give the parties what they would have stipulated 12
for at the time of contracting if they could have foreseen all future problems
of performance.” (quoting 13 Richard A. Lord, Williston on Contracts
§ 38.15, at 24 (4th ed. Supp. 2011))). In other words, the implied duty
cannot exist without an underlying contract.
Iowa Code section 524.221 provides the statutory time period for
“[a]ll causes of action . . . against a state bank based upon a claim or
claims founded on a written contract.” Iowa Code § 524.221(2) (emphasis
added). Benskin’s claim for breach of a duty of good faith is “founded on”
written contracts subject to section 524.221’s seven-year statute of
limitation; it cannot exist without them. For the same reasons that this
more specific limitations period applies to counts I and II as compared to
the general limitations period provided in section 664.1, see MidWestOne
Bank, 941 N.W.2d at 883, we hold section 524.221(2) governs count III.
Benskin’s claims under count III accrued in 2008 when West Bank
failed to perform the written contract by not releasing the 2007 mortgages.
Benskin filed this lawsuit in 2018. The district court correctly ruled that
count III is time-barred.
3. Count IV, alleging fraud. The parties agree, and the district court
ruled, that Benskin’s fraud claim in count IV is governed by the five-year
statute of limitations in Iowa Code section 614.1(4). Section 614.1(4)
provides:
4. Unwritten contracts — injuries to property — fraud — other actions. Those founded on unwritten contracts, those brought for injuries to property, or for relief on the ground of fraud in cases heretofore solely cognizable in a court of chancery, and all other actions not otherwise provided for in this respect, within five years, except as provided by subsections 8 and 10.
Count IV’s fraud claim accrued, at the latest, by June 27, 2011, when
West Bank reneged on its prior promises and contractual obligation to 13
release the 2007 mortgages. Yet Benskin waited over six years to file its
lawsuit in 2018. The district court correctly ruled that count IV is time-
barred under Iowa Code section 614.1(4).
B. Benskin’s Equitable Estoppel and Discovery Rule
Arguments. The district court rejected Benskin’s equitable estoppel and
discovery rule arguments. The court of appeals, without reaching the
discovery rule, reversed and reinstated counts I–IV based on its conclusion
that Benskin adequately alleged equitable estoppel. In our view, Benskin’s
own allegations, as a matter of law, defeat application of the discovery rule
and equitable estoppel. See Mormann, 913 N.W.2d at 575 (noting “a
plaintiff may plead himself out of court by alleging facts that provide . . . a
bulletproof defense and foreclose application of equitable tolling”). 3
In Mormann v. Iowa Workforce Development, we recently reviewed
“the contours of equitable tolling” that “generally involve[] two doctrines,
the discovery rule and equitable estoppel.” Id. at 570. Importantly, “[i]n
order to invoke either theory of equitable tolling, the asserting party must
show reasonable diligence in enforcing the claim.” Id. “The party pleading
an exception to the normal limitations period has the burden to plead and
prove the exceptions.” Franzen v. Deere & Co., 334 N.W.2d 730, 732 (Iowa 1983); see also Skadburg v. Gately, 911 N.W.2d 786, 793 (Iowa 2018)
(“Although [defendant] has the burden of establishing the statute-of-
limitations defense, [plaintiff], as the party attempting to avoid the
limitations period, has the burden of demonstrating any exception.”). We
will address the discovery rule and equitable estoppel separately.
3Courts applying federal notice pleading standards recognize that although “complaints need not anticipate or meet potential affirmative defenses,” dismissal on the pleadings is appropriate when the plaintiff’s “allegations show that there is an airtight defense [such that he] has pleaded himself out of court.” Richards v. Mitcheff, 696 F.3d 635, 637, 638 (7th Cir. 2012). 14
1. The discovery rule. A threshold legal issue is whether the
discovery rule applies to claims governed by the statute of limitations in
Iowa Code section 524.221(2). We have previously held that the discovery
rule does not apply to statutes in which a specific event triggers the
running of the limitation period. See MidWestOne Bank, 941 N.W.2d at
884–85 (holding the discovery rule does not apply to Iowa Code section
614.1(10) and surveying cases holding the discovery rule inapplicable to
other statutes in which a specific event triggers the running of the
limitation period). Section 524.221(2) is such a statute because a specific
event triggers the running of the seven-year limitation period, namely, the
date of the breach or failure to perform a written contract, or when the
bank made the entry or entries in the bank’s records:
2. All causes of action, other than actions for relief on the grounds of fraud or mistake, against a state bank based upon a claim or claims founded on a written contract, or a claim or claims inconsistent with an entry or entries in a state bank record, made in the regular course of business, shall be deemed to have accrued, and shall accrue for the purpose of the statute of limitations one year after the breach or failure of performance of a written contract, or one year after the date of such entry or entries. No action founded upon such a cause may be brought after the expiration of six years from the date of such accrual.
Iowa Code § 524.221(2) (emphasis added). Moreover, a discovery rule
would run counter to the corresponding seven-year record retention
requirement for state banks. Section 524.221(1)(a) requires:
1. a. A state bank is not required to preserve its records for a period longer than seven years after the first day of January of the year following the time of the making or filing of such records, provided, however, that account records showing unpaid balances due to depositors shall not be destroyed.
It would make little sense to allow lawsuits to be asserted over seven years
after a breach, when the bank may no longer have the relevant records. 15
Finally, section 524.221(2) governs breach of contract actions
against state banks, and we generally refrain from applying a discovery
rule in breach of contract actions. See Hamm v. Allied Mut. Ins., 612
N.W.2d 775, 784 (Iowa 2000) (en banc) (“The general rule is that the
contract statute of limitations commences upon the date the contract is
breached.”); Brown v. Ellison, 304 N.W.2d 197, 201 (Iowa 1981) (applying
discovery rule to express and implied warranty claims arising from
defective construction of a well, while recognizing “strong authority
disfavoring the application of the discovery rule to actions based on
contract”), overruled on other grounds by Franzen, 334 N.W.2d at 732. We
hold that the discovery rule does not apply to Iowa Code section
524.221(2).
The discovery rule, however, can apply in a fraud action governed
by section 614.1(4). In Mormann, we noted “the discovery rule is not
available to toll the running of the filing requirements” when the “plaintiff
is on notice of a prima facie case.” 913 N.W.2d at 576; see also Hallett
Constr. Co. v. Meister, 713 N.W.2d 225, 231 (Iowa 2006) (“The discovery
rule tolls the statute of limitations until the plaintiff has discovered ‘the
fact of the injury and its cause’ or by the exercise of reasonable diligence should have discovered these facts.” (quoting K & W Elec., Inc. v. State, 712
N.W.2d 107, 116 (Iowa 2006))). Here, Benskin alleges the breach occurred
in 2008 and that it knew on June 27, 2011, that West Bank refused to
release the 2007 encumbrances. Benskin was therefore on notice of a
prima facie case by 2011. Benskin alleges it discovered additional facts
supporting its claims in 2016 (the bank’s improper use of the line of credit
to pay off the 2006 note), but as we made clear in Mormann,
[l]ater discovery of facts may make the claim stronger, but even under a relatively robust approach to the discovery rule, 16 the knowledge of facts sufficient to make a prima facie case . . . is sufficient to trigger the running of the filing limitations.
913 N.W.2d at 576–77 (footnote omitted); see also Hallett Constr. Co., 713 N.W.2d at 231 (“A claimant can be on inquiry notice without knowing ‘the
details of the evidence by which to prove the cause of action.’ ” (quoting
Vachon v. State, 514 N.W.2d 442, 446 (Iowa 1994))). Under the discovery
rule, the statute of limitations on Benskin’s fraud claim began running no
later than June 27, 2011, and its lawsuit filed over six years later is time-
2. Equitable estoppel. We agree with Benskin that equitable
estoppel can be asserted to avoid the statute of limitations defense in Iowa
Code section 524.221(2). This is because “even when a party has
knowledge of a prima facie case,” the defendant’s misrepresentations that
he “knows or should have known would lull the [plaintiff] into inaction may
provide a vehicle to toll the running of the filing limitation under the
equitable estoppel doctrine.” Mormann, 933 N.W.2d at 577. However, “the
circumstances justifying an estoppel end when ‘[the] plaintiff [becomes]
aware of the fraud, or by the use of ordinary care and diligence should
have discovered it.’ ” Christy v. Miulli, 692 N.W.2d 694, 702 (2005)
(alterations in original) (quoting Faust v. Hosford, 119 Iowa 97, 100, 93
N.W. 58, 59 (1903)). Those circumstances ended on June 27, 2011, when
West Bank expressly refused to release the encumbrances.
Benskin argues it had seven years from June 27, 2011 to file suit,
such that this action commenced on May 18, 2018, was timely filed. While
some jurisdictions give claimants the full statutory period going forward,
others merely give a “reasonable time.” 4 51 Am. Jur. 2d Limitation of
4Some courts allow the statutory limitation period after the conduct giving rise to estoppel ends. See, e.g., Ott v. Midland-Ross Corp., 600 F.2d 24, 33 (6th Cir. 1979) (“[W]e hold that Ott was at least entitled to the full amount of time allowed by Congress for the commencement of his action, undiminished by any period of time in which it might 17
Actions § 386, at 693–94 (2000) [hereinafter 51 Am. Jur. 2d]. Iowa falls
into the latter category.
In Christy v. Miulli, we set an outer limit by stating that when a
plaintiff becomes aware, or should have become aware, of the fraud, “the
plaintiff must file suit ‘within a period of time not exceeding the original
statutory period applicable to the particular cause of action.’ ” 692 N.W.2d
at 702 (quoting 51 Am. Jur. 2d § 386, at 694). But in Beeck v. Aquaslide
‘N’ Dive Corp., we noted the plaintiff must file suit “within the period of the
statute of limitations or, if [defendant] was estopped to assert the statute
of limitations, within a reasonable time after the estoppel ceased to be
operational.” 350 N.W.2d 149, 159 (Iowa 1984) (emphasis added).
We hold that under Iowa Code section 524.221(2), the plaintiff must
file suit within a reasonable period after the estoppel ends and does not
get a fresh seven years from that end date. We so hold because “estoppel
will not apply if a reasonable time remains within the limitations period
for filing the action once the lulling has ceased.” SiOnyx, LLC v.
Hamamatsu Photonics K.K., 332 F. Supp. 3d 446, 467 (D. Mass. 2018); see
also Barot v. Embassy of Republic of Zambia, 264 F. Supp. 3d 280, 291
appear that he was unlawfully induced to forego commencing his action by the unfair and inequitable conduct of Midland-Ross.”). Other courts do not define “reasonable time” by the statutory limitations period. See, e.g., Gregory v. Stallings, 468 P.3d 253, 262 (Idaho 2020) (“Even if a party is entitled to equitable estoppel, its preventative force ‘does not last forever’ ” but “only for a reasonable time after the party asserting estoppel discovers or reasonably could have discovered the truth.” (quoting Ferro v. Soc’y of Saint Pius X, 149 P.3d 813, 815–16 (Idaho 2006))); Butler v. Mayer, Brown & Platt, 704 N.E.2d 740, 745 (Ill. App. Ct. 1998) (holding that, when plaintiff waited eighteen months to sue, “equitable estoppel is unavailable . . . because he failed to sue within a reasonable time after defendant stopped offering the reassurances that plaintiff alleges lulled him into not filing suit”); Peterson v. Groves, 44 P.3d 894, 898 (Wash. Ct. App. 2002) (“Most jurisdictions, including Washington, adhere to the rule that estoppel to plead the statute of limitations does not last forever, and that the plaintiff must act within a reasonable time after discovering that the promises relied on were false.”). 18
(D.D.C. 2017) (“[The plaintiff] still had more than two years from that point
until the statute of limitations ran out . . . , which was a reasonable time
in which she could have filed suit. Therefore, this is not one of the rare
situations when this Court should apply the doctrine of equitable tolling.”
(citation omitted)), aff’d, 773 Fed. App’x 6 (D.C. Cir. 2019); Butler v. Mayer,
Brown & Platt, 704 N.E.2d 740, 745 (Ill. App. Ct. 1998) (“Under Illinois
law, equitable estoppel does not give a plaintiff the entire limitations period
measured from the date the defendant discontinues the conduct that
lulled the plaintiff into inaction. Equitable estoppel will not apply if the
defendant’s conduct ended within ample time to allow a plaintiff to avail
himself of his legal rights under the statute of limitations.”).
This requirement to file suit within a reasonable time after the
estoppel ends
implicitly contains the notion that the estoppel by inducement doctrine does not permit the indefinite and unlimited extension of the limitations period, and also allows a defendant to limit the period during which estoppel might otherwise apply, by taking affirmative steps to terminate whatever behavior or conduct arguably operates to induce a plaintiff not to sue.
51 Am. Jur. 2d § 386, at 694. West Bank ended any estoppel by its unequivocal affirmative communication to Benskin in June of 2011
refusing to remove the encumbrances.
“What constitutes a reasonable time appears to depend upon the
exigencies of the particular case.” Peterson v. Groves, 44 P.3d 894, 898
(Wash. Ct. App. 2002) (quoting Allan E. Korpela, Annotation, Promises to
Settle or Perform as Estopping Reliance on Statute of Limitations, 44
A.L.R.3d 482, § 5 (1972)). A period of time may be unreasonable if the
plaintiff did not show “reasonable diligence in bringing suit after the
conduct giving rise to the estoppel had terminated.” Id. In Butler v. Mayer, 19
Brown & Platt, the appellate court noted: “We have held that as little as six
months remaining in a statute of limitations period is ‘ample time’ for a
plaintiff to bring suit.” 704 N.E.2d at 745.
Here, Benskin waited an unreasonable time to file its claims as a
matter of law. The alleged breach occurred in 2008, giving Benskin no
more than seven years—until 2015—to commence this action. See Iowa
Code § 524.221(2). Benskin admits in its amended petition that it knew
by June 27, 2011, that West Bank expressly refused to release the 2007
encumbrances. At that time, Benskin still had about four years to file suit
within the original seven-year limitations period. Benskin alleges no
subsequent affirmative misrepresentations by West Bank after June 27,
2011, that lulled Benskin into inaction. “An omission theory of equitable
estoppel . . . simply is insufficient in the context of this case.” Mormann,
913 N.W.2d at 577. West Bank’s silence after June 27, 2011—including
its alleged failure to disclose the use of the line of credit in 2008—is not
enough to stop the time clock. See id.
Benskin argues that it reasonably delayed filing suit because it
believed it owed nothing on the recorded encumbrances. Benskin’s “zero
balance” theory fails for several reasons. First, even with a zero balance,
the encumbrance on the Polk County real estate, tied to a multi-million
dollar credit line, would have restricted Benskin’s ability to use the
property to borrow from another lender. Indeed, its amended petition
alleged that as a result of West Bank’s encumbrances, Benskin “sustained
special damages arising, among other things, from its inability to pursue
investment and financial opportunities available to it which required
unencumbered use of the Des Moines Properties.” Second, West Bank’s
express refusal to release the 2007 mortgages in 2011 put Benskin on
inquiry notice. It should have investigated the source of the payoffs on the 20
$800,094 renewed loan and six-figure activity on its line of credit. Waiting
nearly seven years until May 18, 2018, was unreasonable as a matter of
law. Third, Benskin did not plead its zero balance theory, and we cannot
rely on facts outside the four corners of the petition to reverse a ruling
granting a motion to dismiss. See Rieff, 630 N.W.2d at 284.
The district court correctly rejected Benskin’s equitable estoppel
argument. This legal issue was appropriately resolved by granting
West Bank’s motion to dismiss. See Venckus, 930 N.W.2d at 809.
Benskin effectively pled itself out of court. Mormann, 913 N.W.2d at 575
(“[A] plaintiff may plead himself out of court by alleging facts that provide
. . . a bulletproof defense and foreclose application of equitable tolling.”).
C. Slander of Title. The district court ruled that count V failed to
state a claim because Benskin did not adequately allege the element of
publication. See generally Belcher v. Little, 315 N.W.2d 734, 737 (Iowa
1982) (discussing publication element). Benskin cites two unpublished
opinions to support its argument that the publication element is satisfied
by filing the encumbrance on a public docket: Monroe v. Bank of America
Corp., No. 17–cv–248–JED–JFJ, 2018 WL 1875294, at *2 (N.D. Okla.
Apr. 19, 2018), and Nelson v. Bayview Loan Servicing, L.L.C., No. 5–12–
0419, 2014 WL 4629382, at *15 (Ill. App. Ct. Sept. 16, 2014). We left that
question open in Witmer v. Valley National Bank of Des Moines. 223 Iowa
671, 674, 273 N.W. 370, 371 (1937) (“Whether or not the commencement
of a foreclosure . . . is an uttering and publishing of slanderous words
against appellant’s title to land, we do not find it necessary to pass upon
and do not do so.”).
Recorded documents by definition are available to the general
public. A “record” under Iowa law is defined as “a process . . . to
incorporate a document or instrument into the public record.” Iowa Code 21
§ 331.601A(8) (emphasis added); see also id. § 331.606(4) (“A person may
view and copy an original or unaltered document or instrument in the
office of the recorder.”). Thus, a recorded encumbrance is effectively
published to the public at large. See Phillips v. Epic Aviation LLC, 234
F. Supp. 3d 1174, 1208–09 (M.D. Fla. 2017) (holding publication and
noting that recording meant that it was “ ‘always [] open to the public . . .
for the purpose of inspection thereof and of making extracts’ . . . [and] one
of the purposes of recording in the Official Records is to give notice to third
parties”) (second alteration in original) (quoting Fla. Stat. § 28.222(7)).
Other courts have held that recording satisfies the publication
element for the tort of slander of title. See, e.g., Fischer v. Bar Harbor
Banking & Tr. Co., 673 F. Supp. 622, 626 n.6 (D. Me. 1987) (“The filing of
liens, mortgages, and other encumbrances is a sufficient publication to
disparage or slander title.” (citing William L. Prosser, The Law of Torts
§ 122, at 943 (3d ed. 1964))), aff’d, 857 F.2d 4 (1st Cir. 1988); Shenefield
v. Axtell, 545 P.2d 876, 877, 878 (Or. 1976) (en banc) (holding “the
complaint sufficiently stated a cause of action for slander of title” where
the defendant had “maintained on the [county records] a claim of title to
the land held in trust for plaintiff”); see also Phillips, 234 F. Supp. 3d at
1208–09 (holding that “the recording of each of the three documents in the
Official Records satisfies the publication requirement in this case”);
Fountain Pointe, LLC v. Calpitano, 76 A.3d 636, 640, 643 (Conn. App. Ct.
2013) (affirming judgment of slander of title when the defendants
“recklessly record[ed] the mortgages and the lis pendens that they knew
were false”); Gasper v. Bank of Am., N.A., 133 N.E.3d 1037, 1046 (Ohio Ct.
App. 2019) (“The wrongful filing for the record of a document which casts
a cloud upon another’s title to or interest in realty is considered to be an
act of publication which gives rise to an action for slander of title.” (quoting 22
Smith Elec. v. Rehs, No. 18433, 1998 WL 103334, at *2 (Ohio Ct. App. Feb.
18, 1998))); Rorvig v. Douglas, 873 P.2d 492, 495, 498 (Wash. 1994)
(en banc) (holding the plaintiffs prevailed on their slander-of-title claim
involving the recording of a memorandum of agreement when there was
no final agreement between the parties); Kensington Dev. Corp. v. Israel,
419 N.W.2d 241, 244 (Wis. 1988) (“A knowingly false, sham or frivolous
claim of lien or any other instrument relating to real or personal property
filed, documented or recorded which impairs title is actionable in
damages.” (emphasis added)).
We find these authorities persuasive and now answer the question
we left open in Witmer. We hold that filing an encumbrance on a public
docket in the recorder’s office satisfies the publication element for slander
of title.
West Bank argues that Benskin failed to specifically allege the
encumbrance was filed pursuant to the recording statute. This argument
fails under our liberal standards for notice pleading. The allegations of
count V gave fair notice of the nature of the claim. By definition, to
constitute a slander of title, the complained-of encumbrance would have
been publicly filed. We construe Benskin’s amended petition in “its most
favorable light, resolving all doubts and ambiguities in [the plaintiff’s]
favor.” Rieff, 630 N.W.2d at 284 (quoting Schreiner, 410 N.W.2d at 680).
We reverse the district court’s ruling dismissing count V and affirm the
court of appeals decision that count V states a claim for slander of title.
West Bank raised the statute of limitations in district court and on
appeal as an alternative ground for dismissing the slander-of-title claim.
Neither the district court nor the court of appeals reached that ground,
and West Bank did not raise it in its application for further review.
Although the issue was minimally raised, it wasn’t briefed, and we decline 23
to reach it now. “A supreme court is ‘a court of review, not of first view.’ ”
Plowman v. Fort Madison Cmty. Hosp., 896 N.W.2d 393, 413 (Iowa 2017)
(quoting Cutter v. Wilkinson, 544 U.S. 709, 718 n.7, 125 S. Ct. 2113, 2120
n.7 (2005)). West Bank is free to renew its statute of limitations defense
to the slander-of-title claim on remand. 5
IV. Disposition.
For these reasons, we affirm the decision of the court of appeals
reinstating the slander-of-title claim and vacate the court of appeals
decision on equitable estoppel. We affirm the district court judgment
dismissing counts I through IV and reverse the judgment dismissing
count V. We remand the case for further proceedings on the
slander-of-title claim.
DECISION OF COURT OF APPEALS AFFIRMED IN PART AND
VACATED IN PART; DISTRICT COURT JUDGMENT AFFIRMED IN
PART, REVERSED IN PART, AND CASE REMANDED.
All justices concur except McDermott, J., who takes no part.
5The parties dispute which statute of limitations applies and whether the continuing wrong doctrine applies to slander of title.