Opinion
No. 1-279 / 00-1132.
Filed January 9, 2002.
Appeal from the Iowa District Court for Iowa County, DAVID S. GOOD, Judge.
Fobian Farms appeals a district court ruling granting Gateway Cooperative's motion for summary judgment on Fobian Farms' breach of contract action. AFFIRMED.
Gregg Geerdes, Iowa City, for appellant.
Jeffrey S. Ritchie and John C. Wagner of John C. Wagner Law Offices, P.C., Amana, for appellee.
Heard by HUITINK, P.J., and MAHAN and ZIMMER, JJ.
I. Background Facts and Proceedings .
Between November 1, 1979 and October 31, 1989 Gateway Cooperative (Gateway) entered into successive grain bin leases with Fobian Farms, Inc. (Fobian). Near the end of the last lease period Gateway and Fobian entered into negotiations for renewal. On September 27, 1988 Gateway extended a written offer to pay $20,000 per year for future rental of the bins. Both parties agree Fobian rejected this offer and negotiations continued. Fobian asserts the parties agreed to extend the lease another three years at $24,000 per year but Gateway repudiated the contract in a July 17, 1989 letter. Gateway made no rental payments following the termination of the lease in October 1989. In 1995 Fobian sold the bins to Gateway by warranty deed, making no reservation or exception for rent past due.
Fobian filed this action on May 5, 1999, alleging Gateway breached the claimed lease renewal agreement. The trial court subsequently granted Gateway's motion for summary judgment. The court found that because Fobian's claim was based on an oral contract, it was barred by the five-year statute of limitations on oral contracts and the statute of frauds. The court also noted that Fobian's warranty deed did not preserve any rights to lease payments, which might have been owing to Fobian as owner of the property.
On appeal Fobian argues the district court erred in finding: (1) the claimed renewal agreement was an oral contract effectively barred by the statute of limitations and statute of frauds; (2) the 1995 conveyance by warranty deed precluded recovery under the previous contract; and (3) no contract existed between the parties.
II. Standard of Review .
Summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 237(c). The burden of showing that there is no genuine issue of material fact is upon the party moving for summary judgment. Sandbulte v. Farm Bureau Mut. Ins. Co., 343 N.W.2d 457, 464 (Iowa 1984). On appeal we examine the record in the light most favorable to the party opposing the motion to determine if the movant has met his or her burden. Id.
III. The Merits .
The dispositive issue is which of two statutes of limitations applies to Fobian's breach of contract claim against Gateway. Under Iowa Code section 614.1 (1989), actions brought on oral contracts are governed by a five-year statue of limitations, while those founded on written contracts may be brought within ten years. A contract is considered written for purposes of the statute of limitations if the essential facts establishing liability of the defendant are clear on the face of the writing. Matherly v. Hanson, 359 N.W.2d 450, 454 (Iowa 1984); Lamb v. Withrow, 31 Iowa 164, 168 (1870). If parol evidence is necessary to make the contract complete, then the contract must be treated as oral for purposes of the statute of limitations. See Matherly, 359 N.W.2d at 454.
Fobian relies on the minutes of two meetings of Gateway's board of directors. The minutes from the January 23, 1989 meeting state:
After much discussion on the Fobian bin lease Dave Roberts moved the board offer Mr. Fobian a three year lease at $24,000.00 per year. Second by Jim Wardenburg. Motion carried.
Gateway's February 27, 1989 minutes also state:
Dave Roberts moved that the coop rent the bin site from Carl Fobian for 3 yrs at $24,000.00 a year. Second by Carl D. Maas. Motion carried.
Fobian contends that because the minutes of Gateway's board meetings contain the essential terms of a contract they constitute a written contract for purposes of the statute of limitations. We disagree.
The language of the minutes cited is ambiguous and, absent extrinsic evidence, it is unclear whether they were intended as the completion of an agreement between the parties. Where a writing does not show upon its face that it is intended as the final acceptance of an agreement, but instead may be construed as a mere plan of action or proposition to form a contract, it will not be considered a contract for purposes of the statute of limitations. See Baker v. Johnson County, 33 Iowa 151, 153 (1871) (minutes of board of supervisors not written contract for purpose of statute of limitations where writing was mere declaration of board's purpose preserved in writing). Although the holding in Baker v. Johnson County is dated, it is nevertheless consistent with more recent pronouncements by courts in other jurisdictions. See Held v. Held, 137 F.3d 998, 1001 (7th Cir. 1998) (writing must be more than evidence of liability to constitute written contract); Texas W. Ry. Co. v. Gentry, 8 S.W. 98, 101 (TX 1888) (corporate minutes constitute contract only where writing is intended as completion of previous agreement). Under these circumstances, the trial court correctly granted Gateway's motion for summary judgment. Because the resolution of this issue is dispositive, we need not address the remaining issues raised.
AFFIRMED.