Van Otegham Dairy Partnership v. Spahn & Rose Lumber Company

• Court: Court of Appeals of Iowa
• Decided: May 21, 2025
• Docket: 24-0611
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 24-0611 Filed May 21, 2025

VAN OTEGHAM DAIRY PARTNERSHIP, Plaintiff-Appellant,

vs.

SPAHN & ROSE LUMBER COMPANY, Defendant-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Iowa County, Justin Lightfoot, Judge.

Van Otegham Dairy Partnership appeals from the district court’s ruling

granting Spahn & Rose Lumber Company’s motion for summary judgment.

REVERSED AND REMANDED.

Steve Eckley of Eckley Law PLLC, Des Moines, for appellant.

Kevin J. Caster, Jaime C. Watts, and Eric P. Martin of Shuttleworth &

Ingersoll, Cedar Rapids, for appellee.

Considered without oral argument by Tabor, C.J., and Ahlers and Sandy,

JJ. 2

SANDY, Judge.

Van Otegham Dairy Partnership (VODP) appeals from the district court’s

ruling granting Spahn & Rose Lumber Company’s (S&R) motion for summary

judgment. VODP argues the district court erred (1) “in concluding that boilerplate

fine print disclaiming responsibility for materials selection nullified S&R’s”

(a) “express warranty to complete a workmanlike barn” and (b) “express

agreement to design and build a dairy barn of good quality”; and (2) “because [the

district court’s] interpretation of the materials disclaimer violated the doctrine of

expectations.” We reverse the district court’s ruling granting summary judgment

as to counts one and four of VODP’s amended petition and remand for further

proceedings.

I. Background Facts and Proceedings

VODP operates a dairy farm out of Victor, Iowa. VODP created plans to

build an additional “free stall dairy loafing barn” in 2013. VODP’s plans included

requirements for specific features such as a large vehicle door, humidity-controlling

fans, and an automatic manure flushing system. The new barn needed to be

constructed in a way that prevented elevated levels of humidity from causing

corrosion. VODP explained that those requirements differ from a “simple pole barn

machine shed,” which typically only houses equipment that does not create a

humid environment. VODP asserted that “serious premature corrosion will occur

in the roof of an animal confinement facility like the [proposed barn] that does not

have . . . adequate corrosion protection.”

With those requirements in mind, Chuck Van Otegham, a partner at VODP,

sought to find a “turnkey” builder to construct the new dairy barn. Van Otegham 3

claimed to “[know] nothing about the design or building of a barn like this, or what

materials would be required, or even what the process was. [His] intent was to

find a competent builder, generally explain what [VODP] needed, and leave the

rest up to them.” After seeing an ad for S&R that prominently promoted the

company’s “OWN PROFESSIONAL DESIGN SERVICES TO CUSTOMIZE YOUR

PROJECT,” Van Otegham contacted the company and asked them to prepare a

bid. S&R sales representative Tom Voigtman informed Van Otegham that S&R

“had access to engineers” for design and confirmed that S&R “was capable of

properly doing the work.” Van Otegham never specified a preference for any

particular subcontractors and provided no design guidance beyond interior

dimensions for the barn.

The final proposal presented by S&R was handwritten within S&R’s

standard boilerplate form. The proposal was signed by Van Otegham and

Voigtman, on behalf of VODP and S&R, respectively. The proposal included

guarantees that S&P would engage in “[c]onstruction of a 100’ x 234’ dairy loafing

barn as per plans by L&L Sales Inc. and end elevations by Spahn & Rose LBR.

Co.” and that “[c]onstruction includes the material’s [sic] as listed on estimate

sheet’s [sic] dated 6/7/13.” Attached to the proposal was a materials list, which

both parties agree was part of the proposal and resulting contract. That materials

list disclaimed as follows:

Please examine this list carefully. This list only set [sic] forth the articles, quantities, grades and prices of materials listed and we do not warrant that the materials, quantities, and grades listed will satisfy buyer’s requirements. Buyer is responsible for determining his own requirements and selecting proper materials. 4

S&R subcontracted the construction and installation work to Country Boys

Construction (CBC). The barn was subsequently finished later that year.

At some point within the following eighteen months, the barn roof began to

leak. VOPD claims that the leaks caused “substantial losses to the dairy

operation.” A representative for the steel manufacturer determined that corrosion

in the metal banding bracing the metal roof caused the leaking. The parties agree

that eighteen months is premature for corrosion damage, which should last twenty-

five to thirty years according to S&R’s expert witness. The parties also agree there

is no evidence that any of the materials were defective. In his affidavit, Bennie

Borntrager, the sole member of CBC, asserted that using metal banding in contact

with metal roofing is not an accepted practice for the type of barn VODP contracted

for, that he had never seen metal banding used in that manner for a dairy farm,

and that he constructed VODP’s dairy barn with those materials because that is

what S&R provided him. S&R did not provide any materials or instructional design

that would have allowed for a gap between the metal banding and the metal roof,

such as rubber, vinyl, or some form of gasket.

VODP filed this suit in March 2022, alleging breach of express warranty,

breach of implied warranty of fitness for a particular purpose, breach of implied

warranty of workmanlike construction, and breach of contract against S&R. S&R

filed a motion for summary judgment in May 2023, arguing the statute of limitations

prohibited VODP’s claims for breach of implied warranty of fitness for a particular

purpose (count two) and breach of implied warranty of workmanlike construction

(count three). That motion was granted. S&R then filed its second motion for

summary judgment in January 2024, arguing VODP had failed to show a genuine 5

issue of material fact supporting its breach of express warranty (count one) and

breach of contract (count four) claims. The district court granted that motion in

March.

In its summary judgement order, the district court found that there was an

express agreement to complete work in a “good and workmanlike manner” and to

“produce definite and certain results.” But it also found that the materials list

disclaimer modified any such express warranty because the “amended petition

contends that [VODP]’s damages were caused by the material choices made by

[S&R, and] a finding that the contract places the responsibility to choose materials

on [VODP] would be fatal to counts one and four.”

VODP now appeals.

II. Standard of Review

“Summary judgment is appropriate if there is no genuine issue as to any

material fact, and the moving party is entitled to judgment as a matter of law.”

Kolarik v. Cory Intern. Corp., 721 N.W.2d 159, 162 (Iowa 2006). We review

summary judgment rulings for correction of errors at law. Susie v. Family Health

Care of Siouxland, P.L.C., 942 N.W.2d 333, 336 (Iowa 2020). We view the record

“in the light most favorable to [VODP].” Id. at 337.

III. Discussion

VODP argues the district court erred (1) “in concluding that boilerplate fine

print disclaiming responsibility for materials selection nullified S&R’s” (a) “express

warranty to complete a workmanlike barn” and (b) “express agreement to design

and build a dairy barn of good quality”; and (2) “because [the district court’s]

interpretation of the materials disclaimer violated the doctrine of expectations.” 6

VODP’s construction contract with S&R contained a provision stating that

“[a]ll work is to be completed in a workmanlike manner according to standard

practices.” VODP argues the district court erred in finding the materials list

disclaimer nullified both that express warranty and S&R’s express warranty to

“provide a design, materials, and construction process that would be consistent

with the [p]arties’ intent that [VODP] would end up with a barn of good quality.”

Our court has interpreted the phrase “a good and workmanlike manner” in

a construction contract to mean the builder should “produce definite and certain

results.” Reilly Const. Co. v. Bachelder, Inc., No. 14-0817, 2015 WL 1331634,

at *6 (Iowa Ct. App. Mar. 25, 2015) (citation omitted). Incompatibility of building

materials in a structure invokes the builder’s warranty to build the structure “in a

reasonably good and workmanlike manner, fit for the purpose intended.” Kirk v.

Ridgway, 373 N.W.2d 491, 492 (Iowa 1985) (cleaned up). An express warranty

can be modified by “words or conduct tending to negate or limit warranty.” Iowa

Code § 554.2316(1) (2013).

In our view, the factual issues that are in dispute have been confused. The

parties agree that the roof and metal bandings began to corrode long before they

should have. Neither party argues that the materials used were inherently

defective. VODP does not argue that the banding or roofing materials should not

have been used or that metal banding and metal roofing cannot concurrently be

used in a dairy barn.

Thus, VODP’s arguments involving failure of those parts would center on

design and construction flaws, not materials flaws. Such incompatibility invokes

the builder’s warranty to build a structure in a reasonably good and workmanlike 7

manner. See Kirk, 373 N.W.2d at 492. The fact that a design or construction flaw

manifests itself through a breakdown in the materials does not in itself imply a

problem with the materials list. High-quality, appropriate materials can be

damaged by poor workmanship (i.e., installation) or project design. And because

the roof and banding materials—if touching—would have rusted regardless of their

quality, the design and installation were clearly incompatible with the intended

purpose of this specific dairy barn. That is, a dairy barn that doesn’t rust and leak.

Yet S&R neveretheless argues that any corrosion of the barn’s materials

would be subject to the materials disclaimer. That interpretation leads to absurd

possibilities. If S&P used all the same materials but purposefully built a barn with

large holes in the roof, and the presence of those holes caused corrosion, would

the express warranties for a workmanlike product and good design and

construction still be nullified? If so, the materials disclaimer would fully absolve

S&R of any brazen failures in design and construction, because any such failures

would inherently involve the materials in some manner. That interpretation would

render the parties’ decision to include the express warranties completely

superfluous. See Iowa Code § 554.2316 (“[W]ords or conduct tending to negate

or limit [an express] warranty shall be construed wherever reasonable as

consistent with each other.”)

S&R appears to recognize the flaw in that argument and consequently spills

significant ink defending the district court’s order on grounds the district court did

not rule upon. In S&R’s view, it should not be held liable for defective design

because it was not contracted to provide design services. But the district court did

not grant summary judgment on that basis. The district court never found that S&R 8

did not provide design services. And as we have already emphasized, the phrase

“a good and workmanlike manner” in a construction contract means the builder

should “produce definite and certain results.” See Reilly Const. Co., 2015

WL 1331634, at *6 (citation omitted). Here, those definite and certain results were

to complete the construction of a dairy barn in a workmanlike manner. Of note,

the contract for services had no disclaimer relative to design and installation.

Whether S&R was contracted to provide design services and the degree to

which its failure to construct a workmanlike barn implicates its status as a designer

is not relevant to the issue of the materials disclaimer’s effect on S&R’s express

warranties. Instead, these issues demonstrate that there is a factual dispute over

the scope of VODP’s express warranty claims. It is true that the contract did not

expressly guarantee a specific design. But it is also true that S&R held itself out

as a design provider, expressly warrantied that it would construct a barn fit for dairy

production, knew VODP had no design knowledge, and did, in fact, design the

defective roof banding. VODP and S&R disagree as to whether S&R holds

responsibility for the design/installation flaws causing the breakdown of materials

in VODP’s dairy barn. Viewing these facts in the light most favorable to VODP,

the materials disclaimer provides no impediment to VODP’s claims on counts one

and four. That is, the claim is not that the materials were defective, or even that

they were the wrong materials, but how they were installed. It’s how they were

used not what was used.

On the record before us, we find a genuine factual dispute exists that should

be left to the factfinder and cannot be resolved on summary judgment. Because

we can decide this appeal on VODP’s primary arguments, we need not address 9

whether the contract was a contract of adhesion subject to the doctrine of

reasonable expectations.

IV. Conclusion

We accordingly reverse the district court’s order dismissing counts one and

four. We remand to the district court for further proceedings.