Shelli R. Freer, Individually and as Administrator of the Estate of Michael Sansom, Individually v. DAC, Inc. d/b/a Prairie House

• Court: Supreme Court of Iowa
• Decided: June 14, 2019
• Docket: 17-1825
• Status: Published

Opinion

IN THE SUPREME COURT OF IOWA No. 17–1825

Filed June 14, 2019

SHELLI R. FREER, Individually and as Administrator of the Estate of NICOLE J. SANSOM and MICHAEL SANSOM, Individually,

Appellants,

vs.

DAC, INC. d/b/a PRAIRIE HOUSE,

Appellee.

Appeal from the Iowa District Court for Jackson County, Mark J.

Smith, Judge.

The plaintiffs challenge the district court’s grant of motion to enforce

settlement agreement and dismissal of plaintiffs’ posttrial motion as moot.

AFFIRMED.

Thomas W. Kyle of Hupy and Abraham, S.C., P.C., Milwaukee, WI, for appellants.

Patrick L. Woodward and Ryan F. Gerdes of McDonald, Woodward

& Carlson, P.C., Davenport, for appellee. 2

CHRISTENSEN, Justice.

Plaintiffs appeal the district court’s dismissal of their posttrial

motion. Upon review, we consider plaintiffs’ posttrial motion waived.

Accordingly, plaintiffs did not preserve any issues for appellate review. We

affirm the district court’s order entering judgment for defendant.

I. Background Facts and Proceedings.

A jury trial was held on the wrongful death of Nicole Sansom.

During deliberations, counsel for each party entered into a high-low

settlement agreement. The written agreement consisted of the plaintiff

Freer 1 emailing a one-liner to the defendant DAC, Inc. and DAC emailing

a one-liner in response:

Freer: “They agree to the high low of 100k to 1 million.”

DAC: “Confirmed. Now we wait and see what the jury does.”

Later that same day, the jury determined DAC was not liable and awarded

no damages. On July 25, 2017, the district court entered judgment for

DAC. On August 2, Freer filed a timely posttrial combined motion for new

trial and change of venue. See Iowa R. Civ. P. 1.1007 (posttrial motion for

new trial must be filed within fifteen days after filing of the verdict). The

posttrial motion alleged violation of a granted motion in limine, errors by the district court in denying Freer’s motions for mistrial and failing to

notify counsel of jury communications, and undue influence of DAC over

the jury. DAC resisted and filed a motion to enforce the high-low

settlement agreement and to strike Freer’s posttrial motion.

On October 13, the district court held a hearing on the motions. It

granted DAC’s motion to enforce the settlement agreement and deemed

Freer’s posttrial motion moot. The district court pronounced this

1Because Shelli Freer and Michael Sansom are in the same position in this appeal, we will refer to them both as “Freer.” 3

judgment from the bench. Nonetheless, on November 7, before the entry

of a written order on the posttrial motion, Freer appealed. 2 DAC timely

cross-appealed the district court’s judgment. See Iowa R. Civ. P.

6.101(2)(b) (notice of cross-appeal must be filed within ten days after the

filing of a notice of appeal). On appeal, Freer argues it was error for the

district court to determine the posttrial motion as moot. She also asserts

the high-low settlement agreement does not preclude the district court

from hearing arguments and rendering a determination as to the propriety

of the posttrial motion. Freer lastly contends the district court abused its

discretion in denying the motions for mistrial. DAC argues the district

court erred in denying its motion to exclude expert testimony and in

granting Freer’s motion in limine.

We retained the appeal. However, we determined the jurisdictional

requirement of Iowa Rule of Appellate Procedure 6.101(1)(b) was not met.

Rule 6.101(1)(b) requires “[a] notice of appeal must be filed within 30 days

after the filing of the final order or judgment.” Iowa R. App. P. 6.101(1)(b)

(emphasis added). We previously addressed this jurisdictional

requirement in Lutz v. Iowa Swine Exps. Corp., 300 N.W.2d 109, 112 (Iowa

1981). We concluded “an oral order may be probative evidence as to the

effective time of an order, but until it is in some manner reduced to writing

and filed there is no competent evidence of the rendition of such order.”

Id. To support this conclusion, we cited caselaw stating “[t]he reason for

requiring orders to be made in writing and recorded is that the court might

change its ruling before the order is signed and entered.” Id. at 111–12.

2Freer’s posttrial motion for new trial tolled the thirty-day period within which to

file an appeal. Iowa R. App. P. 6.101(1)(b) (providing a notice of appeal must be filed thirty days after the filing of the order on the motion for new trial); Lutz v. Iowa Swine Exps. Corp., 300 N.W.2d 109, 110 (Iowa 1981). 4

The jurisdictional rule at issue in Freer’s appeal expressly identified

that a final order or judgment must be filed before an appeal can be

pursued. See Iowa R. App. P. 6.101(1)(b). Accordingly, we remanded to

the district court for the limited purpose of entry of a written order, nunc

pro tunc, on the posttrial motion. 3 On February 15, 2019, the district

court filed a written order that enforced the high-low settlement agreement

and denied Freer’s posttrial motion. 4

II. Standard of Review.

A motion to enforce a settlement agreement is reviewed for

correction of errors at law. Wright v. Scott, 410 N.W.2d 247, 249–50 (Iowa

1987). “The district court has authority to enforce settlement agreements

made in a pending case.” Gilbride v. Trunnelle, 620 N.W.2d 244, 249 (Iowa

2000).

III. Analysis.

Upon review, we consider Freer’s posttrial motion waived. A moving

party is deemed to have waived and abandoned a posttrial motion when

that party files a notice of appeal. IBP, Inc. v. Al-Gharib, 604 N.W.2d 621,

628 (Iowa 2000); In re Estate of Herron, 561 N.W.2d 30, 32 (Iowa 1997).

Freer is the same party who filed the posttrial motion and who filed the

notice of appeal. Therefore, Freer is deemed to have waived and

abandoned her posttrial motion. See Lemke v. Albright, 383 N.W.2d 520,

522 (Iowa 1986) (reasoning if the abandonment of a posttrial motion

perfected the appeal, logically an appeal is not abandoned by relying on a

posttrial motion to extend time for appeal beyond the thirty-day period). A

3See Iowa R. App. P. 6.1004 (“The appropriate appellate court may on its own motion . . . remand a pending appeal to the district court, which shall have jurisdiction to proceed as directed by the appellate court.”). 4On February 18, 2019, the district court entered a second written nunc pro tunc order to correct a typographical error in the February 15 order. 5

jurisdictional problem will not arise because the appeal is considered

taken as a matter of right. IBP, Inc., 604 N.W.2d at 628. “An appeal is

taken and perfected by filing a notice of appeal with the clerk of court

where the order, judgment or decree was entered.” Wolf v. City of Ely, 493

N.W.2d 846, 848 (Iowa 1992) (en banc). In filing the notice of appeal, Freer

divested the district court of jurisdiction over the posttrial motion. See

IBP, Inc., 604 N.W.2d at 628 (“Additionally, once the appeal is perfected,

the district court loses jurisdiction to rule on the motion, and any such

ruling has no legal effect.”). “The general rule that the district court loses

jurisdiction when an appeal is perfected has application when the appeal

is taken before the filing of posttrial motions.” Wolf, 493 N.W.2d at 848

(holding notice of appeal conferred jurisdiction onto the appellate court

and divested the district court of jurisdiction to rule on the posttrial

motion). Therefore, Freer waived the posttrial motion and divested the

district court of jurisdiction. See IBP, Inc., 604 N.W.2d at 628.

Our consideration of the jurisdictional issue is not precluded by the

law of the case doctrine, which is “discretionary when applied to a

coordinate court or the same court’s own decisions.” Bowling v. Pfizer,

Inc., 132 F.3d 1147, 1150 (6th Cir. 1998). Further, “[i]ssues such as

‘subject matter jurisdiction’ or ‘appellate jurisdiction’ may be ‘particularly

suitable for reconsideration.’ ” Kennedy v. Lubar, 273 F.3d 1293, 1299

(10th Cir. 2001) (quoting 18 Charles Alan Wright et al., Federal Practice &

Procedure § 4478, at 799 n.32 (1981)). This is not a case where the

appellate court has rendered a decision and remanded the case to the

district court. See Lee v. State, 874 N.W.2d 631, 646 (Iowa 2016).

IV. Conclusion.

Given the procedural circumstances of this case, Freer has not

preserved any issues for appellate review. We therefore affirm the district 6

court’s July 25, 2017 order entering judgment for DAC. DAC’s cross-

appeal is dismissed as moot.

All justices concur except Mansfield, J., and Cady, C.J., and

Waterman, J., who dissent. 7 #17–1825, Freer v. DAC, Inc. MANSFIELD, Justice (dissenting).

I respectfully dissent. The court’s decision violates the law of the

case, disregards the recent nunc pro tunc order, and leaves the plaintiffs

with an undeserved take-nothing judgment. I would reach the merits and

affirm the district court’s enforcement of the high-low settlement

agreement.

I. A Quick Recap of the Facts.

The basic facts are these. The case was submitted to the jury on July 18, 2017. While the jury was out, on the morning of July 19, the

parties entered into a high-low agreement with $100,000 as the low and

$1 million as the high.

Later on the 19th, the jury returned a defense verdict. The district

court entered a take-nothing judgment on the jury verdict on July 25.

At this point, the posttrial wheels began to turn. On August 2, the

plaintiffs moved for a new trial and for change of venue. On August 10,

the defendant DAC, Inc. filed a resistance to the plaintiffs’ posttrial

motions and a motion to enforce the high-low settlement. On August 16,

the plaintiffs resisted DAC’s motion to enforce the settlement. A hearing on these motions took place on October 13. The district

court stated that the high-low agreement controlled and that it was not

going to rule on the plaintiffs’ posttrial motions because it considered them

moot. The court also put on the record that when it had notified plaintiffs’

counsel of the defense verdict, counsel had responded, “Thank God we

entered into a high-low settlement agreement.”

No written order was entered following the October 13 hearing.

However, the plaintiffs filed a notice of appeal on November 7. The appeal

proceeded for the next year and three months. 8

On February 1, 2019, after we had heard oral argument on the

appeal, we entered the following order:

Upon consideration, the court concludes it lacks jurisdiction to hear the appeal because no written ruling on the parties’ posttrial motions was filed. See Iowa R. App. P. 6.101(1)(b). In accordance with rule 6.1004, this matter is remanded to the district court for the limited purpose of the entry of a written ruling, nunc pro tunc, on the parties’ posttrial motions.

On February 18 and 19, the district court entered a nunc pro tunc

written order granting DAC’s motion to enforce settlement and determining

that the plaintiffs’ posttrial motions were moot.

The parties’ (and my) expectation was that the court would now

reach the merits and determine whether the high-low agreement had

indeed mooted the posttrial motions. Instead, the court now treats

everything that has happened in this case since July 25, 2017, as a

nonevent. I disagree.

II. The Majority Disregards Both Law of the Case and the Nunc Pro Tunc Order.

For one thing, the law of the case applies. Correct or not, we made

a ruling on February 1. In reliance on that ruling, the district court

entered a nunc pro tunc order. Upon return of the case to our court, the

February 1 ruling controls. See Lee v. State, 874 N.W.2d 631, 646 (Iowa

2016) (“It is a familiar legal principle that an appellate decision becomes

the law of the case and is controlling on both the trial court and on any

further appeals in the same case.”).

Furthermore, this is more than a typical law-of-the-case scenario.

The situation actually described in the majority opinion—i.e., a party filing

an appeal during the pendency of posttrial motions—no longer exists. The

district court has entered a nunc pro tunc order, thus fixing the very 9

absence of a written order the majority complains about. The entry of the

nunc pro tunc order moots the issue raised here by the majority. In

Wirtanen v. Provin, the trial court entered a nunc pro tunc order while the

appeal was pending before us in January 1980. See 293 N.W.2d 252, 255

(Iowa 1980). The nunc pro tunc order by its terms related back to

December 1978, prior to the filing of the notice of appeal. Id. We held that

for purposes of determining jurisdiction, we should regard the nunc pro

tunc order as having been entered before the notice of appeal. Id. at 256.

Additionally, the majority opinion leads to an impractical and

potentially unfair result. The plaintiffs should receive either $100,000 or

an opportunity to challenge the jury verdict in this case. Yet the court’s

decision leaves them with neither by affirming a take-nothing judgment.

Despite the majority’s decision, one hopes that DAC will honor its

view of the high-low settlement agreement and pay the plaintiffs $100,000.

But if DAC doesn’t, what happens next? The plaintiffs would have to file

a new lawsuit to enforce the settlement agreement and would now face

various obstacles in doing so. For example, does res judicata bar a brand

new lawsuit? Or suppose DAC decides to adopt the plaintiffs’ view of the

high-low settlement in the wake of the majority’s ruling.

Moreover, even if the majority were correct that the only appeal

before us is from the original take-nothing judgment, the majority would

still need to address the plaintiffs’ argument on pages 30–34 of their brief

that the district court abused its discretion in denying a mistrial.

Appellant’s Br. at 30–34. This argument is not based on the high-low

agreement or the posttrial motions. It is an argument that applies to the

original July 25, 2017 judgment entered on the jury verdict. So under the

majority’s logic, it has to be considered. 10

For all these reasons, I would reach the merits of whether the high-

low settlement agreement is binding.

III. The High-Low Agreement Is Enforceable Under These Specific Circumstances.

Turning to whether this high-low agreement precludes posttrial

motions, there are several relevant precedents from other jurisdictions.

In Smith v. Settle, the Virginia Supreme Court held that a high-low

agreement foreclosed the plaintiffs from challenging jury instructions

posttrial. 492 S.E.2d 427, 429 (Va. 1997). It then determined that the

high-low agreement should be set aside because the plaintiffs had

repudiated it by refusing the tender of the “low” figure of $350,000. Id.

The court reasoned,

Finding nothing in counsel’s statement implying that a “properly instructed” jury was part of the agreement or that either party could seek post-verdict relief in the trial court, we will not rewrite the agreement to impose provisions that are neither stated nor implied therein. The plaintiffs’ unjustified refusal of the tender prevented performance of the agreement and gave Smith the right to regard it as terminated. Therefore, we conclude that the court erred in enforcing the high-low agreement.

Id. (citations omitted).

On the other hand, in Leibstein v. LaFarge North America, Inc., the

United States District Court for the Eastern District of New York said in

dicta that a high-low agreement entered into during jury deliberations

would not bar the plaintiffs from raising juror misconduct during voir dire.

767 F. Supp. 2d 373, 375–78 (E.D.N.Y. 2011). Notably, in that case the

basis for challenging the verdict did not come to light until after the jury

returned its verdict. See id. at 375.

In Matamoros v. Tovbin, the New York Appellate Division in a very

brief opinion said that the trial court properly considered the merits of 11

posttrial motions because “[t]he parties’ so-called ‘high-low’ agreement did

not expressly prohibit the making of the subject postverdict motion and

cross motion.” 919 N.Y.S.2d 95, 95–96 (App. Div. 2011).

Finally, in Reynolds v. Allied Emergency Services, PC, the parties had

entered into a high-low agreement prior to trial that expressly provided,

“No party will retain any appeal rights.” 193 So. 3d 625, 627 (Miss. 2016).

The Mississippi Supreme Court held that this agreement did not foreclose

the plaintiff from seeking a new trial—as opposed to an appeal—based on

erroneous jury instructions. Id. at 633.

The lesson I draw from this authority is that a high-low agreement

is just like any other contract, and it is therefore difficult to make blanket

generalizations. Sometimes the high-low agreement has precluded

posttrial motions; sometimes it hasn’t. The proper approach for a

reviewing court is to apply standard principles of contract interpretation

to the specific agreement at hand. See, e.g., Restatement (Second) of

Contracts §§ 202, 203, 204, 206, 207, at 86–107 (Am. Law Inst. 1981).

Here, several factors favor DAC’s position that the high-low precludes the

plaintiffs’ posttrial motions.

First, the agreement was entered into during jury deliberations. At

that time all the grounds for the subsequently filed posttrial motions were

already known. This is not a case where the agreement was entered into

first and then the grounds for the posttrial motions appeared later. In this

circumstance, it would have been reasonable for the plaintiffs’ counsel to

spell out an exception to the high-low that he already knew about.

Second, the agreement—such as it was—was drafted by the

plaintiffs’ counsel, not DAC’s counsel. 12

Third, as the district court noted, when told of the jury’s verdict, the

plaintiffs’ counsel said, “Thank God we entered into a high-low settlement

agreement.”

Accordingly, I agree with the district court’s interpretation of this

high-low agreement and would affirm the district court’s nunc pro tunc

order.

Cady, C.J., and Waterman, J., join this dissent.