Hawkeye By-Products, Inc. v. State

419 N.W.2d 410, 1988 Iowa Sup. LEXIS 26, 1988 WL 11204
CourtSupreme Court of Iowa
DecidedFebruary 17, 1988
Docket86-808
StatusPublished
Cited by12 cases

This text of 419 N.W.2d 410 (Hawkeye By-Products, Inc. v. State) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hawkeye By-Products, Inc. v. State, 419 N.W.2d 410, 1988 Iowa Sup. LEXIS 26, 1988 WL 11204 (iowa 1988).

Opinions

CARTER, Justice.

Plaintiff Hawkeye By-Products, Inc. (Hawkeye) is engaged in the business of operating animal rendering plants. In 1984, it was contemplating construction of a plant in Adair County, Iowa. Legal requirements in force at the time required approval of the facility by the Iowa Department of Agriculture. See Iowa Code § 167.8 (1985).

Because Hawkeye was required to make an election with regard to exercising an option for the real estate on which the proposed plant was to be located, it pressed the department and particularly Donald McCracken, one of its employees, for an indication as to whether its application would be favored. Hawkeye asserts that McCracken assured it that the necessary approval would be forthcoming if local authorities did not object. This assurance, in conjunction with the tentative approval of [411]*411the site by the Adair County Board of Supervisors, caused Hawkeye to exercise an option on the site location, purchase necessary equipment, and incur other related expenses estimated at $312,000.

Subsequently, when the county board of supervisors formally withheld approval of the plant location, the department refused to issue the required permit. An administrative hearing was then held on the matter as prescribed by agency rule. See 30 Iowa Admin.Code 12.23. This resulted in a final agency decision on February 12, 1985, denying a license to operate a rendering plant at the proposed site.

On February 4, 1986, Hawkeye commenced an action for damages against the State and Donald McCracken on theories of negligent misrepresentation, fraudulent misrepresentation, and promissory estop-pel. Plaintiff Frank Swenderoski joined in this action seeking damages he allegedly sustained in his individual capacity in reliance on the aborted rendering plant project. By special appearance, defendants asserted the defense of sovereign immunity. The district court dismissed plaintiffs’ claims on that theory, and they have appealed. For reasons which we indicate, we affirm the judgment of the district court.

I. Negligent or Fraudulent Misrepresentation.

In seeking to sustain the district court’s judgment, the State contends that the denial of the permit was “the failure to exercise or perform a discretionary function,” an activity for which the State is expressly relieved from liability under Iowa Code section 25A.14(1) (1985). We do not believe that the issue may be properly decided on this basis. In reviewing plaintiffs’ claims, it appears that they are not contending that the State’s denial of a permit was improper on the merits. They are instead alleging that the State’s assurances that the permit would be granted were recklessly or negligently made in a manner calculated to produce detrimental reliance on their part. As a result, the case cannot be determined simply on the basis of a discretionary function.

In describing the type of claim which may be pursued against the State of Iowa or its instrumentalities or agencies, the legislature has employed both language of inclusion and exclusion. Claims cognizable under Iowa Code chapter 25A (1985) include:

a. Any claim against the state of Iowa for money only, on account of damage to or loss of property or on account of personal injury or death, caused by the negligent or wrongful act or omission of any employee of the state while acting within the scope of the employee’s office or employment, under circumstances where the state, if a private person, would be liable to the claimant for such damage, loss, injury, or death.
b. Any claim against an employee of the state for money only, on account of damage to or loss of property or on account of personal injury or death, caused by the negligent or wrongful act or omission of any employee of the state while acting within the scope of the employee’s office or employment.

Iowa Code § 25A.2(5)(a), (b) (1985). The provisions of the chapter, however, do not apply with respect to certain claims. These include:

Any claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.

Iowa Code § 25A.14(4) (emphasis added). Assuming that the false assurances for project approval which were given plaintiff by the State or its agents were of a nature otherwise actionable as misrepresentation, see Beeck v. Kapalis, 302 N.W.2d 90, 95 (Iowa 1981), we conclude that the exclusionary language of section 25A.14(4) supports the State’s entitlement to sovereign immunity. As we stated in Greene v. Friend of Court, Polk County, 406 N.W.2d 433, 436 (Iowa 1987), “[t]he latter section identifies excluded claims in terms of the type of wrong inflicted.” Here, the gravamen of plaintiffs’ claim is misrepresentation, deceit, and interference with contract rights. The district court was correct [412]*412in concluding that such claims will not lie against the sovereign.

II. Claims Founded on Promissory Estoppel.

Faced with these statutory impediments to a claim founded on actionable misrepresentation, plaintiffs urge that we should permit recovery against the State in the present action under a theory of promissory estoppel such as that embraced within Restatement (Second) of Contracts § 90 (1981). We reject this claim for two reasons.

First, we believe that in adopting the exceptions set forth in section 25A.14 the legislature intended to preclude all claims based on the type of conduct described in the exclusionary language. See Greene, 406 N.W.2d at 436. The statute is designed to relieve the State from liability for the false or inaccurate representations of its employees to the extent that such liability would extend to the acts of private parties. There would be little purpose in such a statutory scheme if it could be circumvented merely by a shift of legal theory.

A second reason for failing to allow a claim against the State under plaintiffs’ promissory estoppel theory is that the facts fail to meet the criteria for waiver of state immunity in contract cases. In Kersten Co. v. Iowa Department of Social Services, 207 N.W.2d 117 (Iowa 1973), this court based the right of individuals to recover against the state on express contracts on the need for mutuality of remedy in order to insure fairness. As we expressly noted in that decision:

[T]he ... [State] cannot function without countless day-to-day contractual dealings. Of course, the State expects the other contracting parties to honor these obligations. It can — and does — seek redress when they fail to do so.
Just as certainly they

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419 N.W.2d 410, 1988 Iowa Sup. LEXIS 26, 1988 WL 11204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hawkeye-by-products-inc-v-state-iowa-1988.