author: NEUMAN, Justice.

text:
    Dennis MILLER, Appellant, v. The BOARD OF MEDICAL EXAMINERS OF the STATE OF IOWA, Appellee.
    No. 97-2118.
    Supreme Court of Iowa.
    April 26, 2000.

      Michael M. Sellers, West Des Moines, for appellant.
    Thomas J. Miller, Attorney General, and Theresa O’Connell Weeg, Assistant Attorney General, for appellee State.
   NEUMAN, Justice.

The Iowa State Board of Medical Examiners (board) charged the respondent, Dennis G. Miller, an osteopathic physician practicing in Wellman, Iowa, with substandard treatment of patients under his care. The board’s case centered on Miller’s prescription practices. Following a contested case hearing, the board imposed a two-year probation coupled with compulsory continuing education and restrictions on Miller’s ability to prescribe controlled substances.

Miller challenged the board’s decision by petitioning for judicial review in accordance with Iowa Code section 17A.19 (1997). The district court affirmed the board. On Miller’s appeal, we find no error warranting reversal and, therefore, affirm the judgment of the district court.

I. Background.

The board’s investigation was prompted by two calls i’eceived in 1990 and 1991, expressing concern about Miller’s prescription practices. One call came from a licensed pharmacist, the other from a Pharmacy Board investigator. A preliminary investigation led the board’s disciplinary committee to recommend that a selection of Miller’s patient files be subjected to peer review.

A two-member peer review committee (composed of two internal medicine specialists, one of whom was also certified in geriatrics) examined the medical records for twelve of Miller’s patients. Following the examination, the committee expressed four areas of concern: the amount and frequency of scheduled drug prescriptions, antibiotic usage, open prescriptions and instructions for tranquilizers, and availability of call coverage.

During the disciplinary hearings that followed, a three-member panel of the board heard directly from the physician who prepared the peer review committee’s report. The panel also had before it substantial documentary evidence in the form of pharmacy records covering the patients whose medical records had been reviewed. Also called to testify were the director of nursing at a nursing home serviced by Miller, as well as the facility’s owner. For his part, Miller elicited the opinion of an independent osteopathic physician who had examined the same records. That physician, however, corroborated most of the findings of substandard practice highlighted by the State’s witnesses. Only Miller himself (and, to some degree, the nursing home owner) attempted to justify the prescription practices revealed by the record.

Based on the testimony and exhibits sketched above, the panel concluded that Miller deviated from the applicable standard of care from early 1989 until at least 1993. Its written findings, adopted in full by the entire board upon Miller’s appeal, summarized the respondent’s deficiencies as follows, stating that he

(a) inadequately evaluated patients on an individual basis before prescribing anti-depressant and anxiolytic medications, failed to adequately document the reasons for the medications, and failed to adequately follow up on the patient’s use of the medications to determine if therapeutic effect had been achieved and if the medications could be decreased or discontinued. In addition, the Respondent inappropriately prescribed a dosage range in some cases, allowing nursing personnel to determine the exact dosage to be administered.
(b) prescribed antibiotics for prolonged periods as treatment for urinary tract infections without determining that the infections had recurred or documenting the recurrence of the infections. In addition, the Respondent inappropriately prescribed different antibiotics to the same patient, at the same time, allowing the patient to choose which antibiotic was most effective.
(c) prescribed narcotic and anxiolytics medications to patients with non-terminal chronic pain without adequately pursuing and documenting use of available alternatives to narcotics and controlled medications. In addition, the Respondent prescribed inappropriately large amounts of narcotics for inappropriately long periods of time to patients who were diagnosed with substance abuse or dependence. The Respondent’s records indicate that refills were freely provided by telephone, even when patients claimed their medications had been lost or stolen. The Respondent often failed to refer these patients to pain clinics, psychiatrists or psychologists, or to other specialists. In some cases, he ignored the recommendations of specialists to reduce or discontinue use of narcotics and anxiolytics.

The panel found insufficient proof to support a claim that Miller deviated from the applicable standard of care with respect to prescribing for himself and his family. It likewise found the record lacking in proof with regard to any impropriety in Miller’s practice of providing alternative physician coverage when unavailable to his patients.

Based on the foregoing findings, the board placed Miller on probation for two years subject to the condition that he secure sixty hours of continuing education in the treatment of urinary tract infections, medical treatment of the elderly, and record keeping, as well as an approved course in management of chronic pain patients. He was directed, during the period of his probation, to maintain thorough and written treatment plans for all patients for whom he prescribed controlled drugs to treat chronic pain, and to make those records available at all times for board inspection. Finally, Miller was directed to cease telephone refills for prescriptions of controlled medications.

On Miller’s petition for judicial review, the district court affirmed the board’s ruling in its entirety. This appeal by Miller followed. Further facts will be detailed as they pertain to the issues under review.

II. Scope of Review.

Our inquiry on appeal from judicial review of agency action is limited to whether the district court correctly applied the law. Arora v. Board of Med. Exam’rs, 564 N.W.2d 4, 6 (Iowa 1997). We are bound, as is the trial court, by the agency’s factual findings “unless a contrary result is demanded as a matter of law.” Eaves v. Board of Med. Exam’rs, 467 N.W.2d 234, 237 (Iowa 1991). Constitutional claims are reviewed by this court de novo. Rosen v. Board of Med. Exam’rs, 539 N.W.2d 345, 348 (Iowa 1995).

III. Issues on Appeal.

Although Miller differs with the judgment reached by the board concerning his prescription practices, his appeal only indirectly challenges the board’s proof. He insists, by way of explanation for the appeal, that probation is a “life sentence” because insurers will now “drop” him from their lists of approved physicians. He seeks reversal, rather than rehearing, mindful that his probationary term will have been completed by the time this decision is filed. He claims to seek redress for alleged statutory and constitutional violations, not only for himself, but on behalf of all physicians who might face such disciplinary procedures in the future.

Miller poses four principal contentions for our consideration: (1) The composition of the disciplinary panel, which included only two licensed professionals, violated the equal protection clauses of the Iowa and United States Constitutions; (2) the board’s policy of destroying original investigative materials upon filing the complaint requires reversal as a matter of law; (3) the peer review proceedings employed by the board violated due process; and (4) the doctrine of laches, as well as the lack of patient complaints, deprives the board of jurisdiction to sanction him. We shall consider the arguments in turn.

A. Composition of disciplinary panel. Iowa Code chapter 272C generally governs the regulation of professional and occupational licensees with respect to continuing education and discipline. Section 272C.6 provides that disciplinary hearings shall be conducted by the licensing board “or by a panel of not less than three board members who are licensed in the profession.” An express exception to this provision, however, is found in Iowa Code section 147.103A(6). That statute, pertinent to physicians and surgeons, provides that disciplinary matters “shall be heard by the board, or by a panel of not less than three board members, at least two of which are licensed in the profession....” Iowa Code § 147.103A(6) (emphasis added). Miller challenges the constitutionality of section 147.103A(6), claiming that the panel which heard his case — composed of two licensed physicians and one lay board member — violated his right to equal protection of the laws. See U.S. Const, amend. XIV; Iowa Const, art. I, § 6.

At the outset Miller concedes that the statutory scheme at issue involves neither a suspect classification nor a fundamental right. Thus he agrees that no more exacting standard than the rational basis test applies. See Ruden v. Parker, 462 N.W.2d 674, 676 (Iowa 1990). Under that familiar analysis, the statute enjoys a presumption of constitutionality which can only be overcome by proof that the law is patently arbitrary and bears no rational relationship to a legitimate governmental interest. Glowacki v. Board of Med. Exam’rs, 501 N.W.2d 539, 541 (Iowa 1993). Miller has not met that proof burden here.

The board offered two reasonable explanations for the legislative rationale underlying section 147.103A(6), both of which were accepted by the district court. First, the same bill which enacted section 147.103A(6) also amended section 147.14(2) by adding another public member to the board. See 1992 Iowa Acts ch. 1183, § 2. Thus the bill reflects a legislative intent to increase lay participation on the medical board, a goal consistent with the significant public health and safety issues involved in the regulation of physician practice.

Second, reducing the number of licensed physicians required to sit on each panel facilitates the prompt hearing of disciplinary matters. Given the number and frequency of these hearings, the statute strives to ensure that physicians are not deterred from serving on the board by an overly burdensome hearing schedule.

Contrary to the argument advanced by Miller, we are not convinced that reducing physician participation on disciplinary panels necessarily translates to reduced understanding of the technical aspects of the complaints. The majority of each panel is still composed of the physician’s peers. Expert testimony received on disputed issues, combined with the opportunity for cross examination by the respondent, minimizes any substantial risk that technical claims or defenses will be misunderstood. Moreover, the imposition of discipline still requires the majority vote of the full board, a tribunal comprised of seven licensed physicians and three public members. See Iowa Code § 272C.6(5).

This court has previously held, in the context of the lower evidentiary standard applicable to physician disciplinary actions, that “[t]he State is free to deal with different professions differently without violating the equal protection guarantees established under the federal and state constitutions.” Eaves, 467 N.W.2d at 237. That same observation holds true here. Medical board decisions involve important issues of public health and safety. Section 147.103A(6) advances the State’s interest in avoiding unnecessary delay in decision making while satisfying the legislative commitment to public oversight. The statute easily meets the rational basis standard, thereby defeating Miller’s equal protection claim. The district court was correct in so ruling.

B. Destruction of investigative files. Miller’s second appellate challenge gives us more pause. In sworn testimony before the hearing panel, the board’s investigator revealed a board policy that calls for the destruction of the investigator’s “field files” immediately upon the filing of a formal complaint against a respondent. In other words, any handwritten notes or memoranda relied on by the investigator in the preparation of the report, but not included as an attachment, are destroyed. As a result these materials are not available for examination through discovery. Miller contends the board’s policy contravenes Iowa Code section 272C.6(4) as interpreted by this court in Doe v. Board of Physical Therapy & Occupational Therapy Exam’rs, 320- N.W.2d 557 (Iowa 1982). He also argues the policy’s implementation in his case deprived him of a fair hearing.

The State counters that Miller reads section 272C.6(4) and Doe too broadly. All pertinent evidence, it maintains, was incorporated into the investigative report submitted to the board and made available for examination by Miller. Miller did not request production of the field notes in discovery. Nor did he deny the prescription regimens revealed by the voluminous documentary evidence admitted at trial. He merely took issue with the experts’ characterization of the treatments as substandard. Thus the board insists that no prejudice has been shown by its failure to preserve the field files for Miller’s examination.

The district court agreed that Miller suffered no prejudice by the destruction of the investigators’ field notes in this case. It hastened to add, however, that it was “deeply disturbed” by revelation of the board’s policy. So are we. The deliberate destruction of investigative files casts doubt on the integrity of the entire disciplinary process. The board provides virtually no explanation for its practice. It merely claims that everything material to the complaint is incorporated in the complaint. By its conduct, however, the board has necessarily shifted the inquiry from what it provided to the respondent, to speculation about what it withheld.

The board insists, and we have no reason to doubt, that its “practice upon filing of formal charges [is] to provide a copy of the investigative file to the physician upon request.” It believes this practice comports with section 272C.6(4). That statute provides, in pertinent part:

[A]ll complaint files, investigation files, other investigation reports, and other investigative information in the possession of a licensing board or peer review committee acting under the authority of a licensing board or its employees or agents which relates to licensee discipline are privileged and confidential, and are not subject to discovery, subpoena, or other means of legal compulsion for their release to a person other than the licensee and the boards, their employees and agents involved in licensee discipline, and are not admissible in evidence in a judicial or administrative proceeding other than the proceeding involving licensee discipline.

Iowa Code § 272C.6(4). In Doe, this court interpreted section 242C.6(4) to mean that disclosure of materials contained in a complaint file “is barred unless or until a disciplinary proceeding against the licensee is initiated.” Doe, 320 N.W.2d at 561. Thus, in the absence of formal proceedings against the licensee, we upheld the licensing board’s decision to withhold a complainant’s identity. Id. Implicit in our decision, however, was the recognition that the type of information protected from public scrutiny by section 272C.6(4) is just the kind of material a respondent in a formal complaint proceeding might want to examine. See id. at 560. The statute calls for disclosure of “other investigative information in the possession of a licensing board ... or [its] agents” relating to licensee discipline. Material in the hands of the board’s investigator plainly fits that description. We thus hold that the board’s policy of destroying field files upon the filing of a formal complaint violates Iowa Code section 272C.6(4).

We are nevertheless convinced, as was the district court, that the board’s failure to comply with section 272C.6(4) does not entitle Miller to relief. He has failed to prove that his substantial rights have been prejudiced by the board’s action. See Iowa Code § 17A.19(8). As already noted, the board’s case consisted primarily of extensive documentary proof and persuasive expert testimony largely unrefuted by the respondent. While the board’s policy could prejudice substantial rights of another respondent, it has not done so here. No error warranting reversal appears.

C. Peer review process. Miller next takes issue with the peer review process utilized in this case. He claims he was disadvantaged by the peer review panel’s failure to seek his input before reporting to the board, and this failure denied him due process. The board responds that administrative rules implementing the statutory disciplinary process authorized the input Miller seeks, but he never requested it. It was upon this basis that the district court rested its ruling.

The governing administrative rule at issue is Iowa Administrative Code rule 653 — 12.50(5). The rule states:

Investigation of allegations. In order to determine if probable cause exists for a hearing on the complaint, the executive director or someone designated by the executive director shall cause an investigation to be made into the allegations of the complaint or the executive director may refer the complaint to a registered peer review committee for investigation, review and report to the board. In this regard, the person complained of may be furnished with information concerning the complaint and given the opportunity to informally present a position or defense respecting the allegations of the complaint prior to the commencement of a contested case. This position or defense may be submitted in writing but a personal conference with the executive director, investigator or peer review committee may be had as a matter of right upon request.

Iowa Admin. Code r. 653 — 12.50(5) (1990) (emphasis added). Miller contends that, contrary to the dictates of the rule, the board maintains a firm policy of refusing to furnish any information to a respondent or counsel regarding whether a peer review report is being sought or has been obtained. To support his claim he cites Iowa Administrative Code rule 653— 1.12(2). That rule embodies, in general, the policy regarding nondisclosure of investigative files discussed in the previous section of this opinion. The rule states:

All information in licensee complaint and investigation files maintained by the agency for purpose of licensee discipline are required to be withheld from the subject prior to the filing of formal charges and the notice of hearing in a licensee disciplinary proceeding.

Id. r. 653 — 1.12(2). He points to nowhere in this record where he made any attempt to secure the board’s or the executive director’s compliance with rule 653— 12.50(5).

The record plainly reveals that Miller was aware of the board’s investigation because he was interviewed by the board’s investigator and furnished the medical records requested of him. Through that interview, the district court reasoned, Miller had an opportunity to present his position to the board and cast the investigator’s examination of his medical records in the most favorable light. We agree. The record further supports the court’s finding that Miller made no request to meet personally with the peer review committee. Thus he has no one to blame but himself for the alleged failure of the process to work to his advantage.

As for Miller’s additional claim that rule 653 — 12.50(5) entitles licensees to exercise all the options it contains (i.e., to confer with the executive director, investigator or peer review committee), the district court correctly observed that the rule’s use of the disjunctive “or” directly contradicts Miller’s argument. See Casteel v. Iowa Dep’t of Transp., 395 N.W.2d 896, 898 (Iowa 1986) (word “or” is disjunctive, not conjunctive). There is merit in Miller’s claim that “[ejnabling physicians, as professional people, to have a reasonable and adequate opportunity to defend themselves does nothing more than enable the Board and its panels to do a better, more responsible, and more credible job of imposing discipline where it is deserved.” But we find no support in this record for his claim of “anti-physician” bias by the executive director or deliberate restriction of his right to be heard. The assignment of error is without merit.

D. Laches and other miscellaneous complaints. Finally, Miller challenges the authority of the board to proceed against him in this matter, given the passage of time and absence of patient complaints against him. The district court found no legal or factual support for these contentions. Our review of the record leads us to the same conclusion.

Miller’s laches defense rests on his claim that much of the documentation relied upon was six to seven years old by the time it was considered by the hearing panel. The board contests this characterization of the record. It points out that the complaints against Miller were first received in 1990 and 1991, and most of the patient files relied upon for its decision involved Miller’s treatment of patients through mid-1992. When the investigation and peer review inquiries are factored in, roughly four and one-half years elapsed between the first complaint and the formal filing of charges against Miller.

The board concedes that devoting three years to investigating this matter was perhaps longer than the “ideal” but was not unreasonable. We are inclined to agree. Our view is fortified by a decision relied upon by Miller, Sahu v. Board of Medical Examiners, 537 N.W.2d 674 (Iowa 1995).

In Sahu, this court joined those jurisdictions willing to recognize a laches defense in a professional disciplinary action, but applying it to bar the action only if (1) the delay is unreasonable, and (2) prejudice to the licensee is established. Sahu, 537 N.W.2d at 676; see also Committee on Prof'l Ethics & Conduct v. Wunschel, 461 N.W.2d 840, 846 (Iowa 1990) (requiring convincing proof of unreasonable delay and prejudice to establish lach-es defense in lawyer disciplinary action). “[M]ere passage of time is insufficient to bar the proceedings.” Sahu, 537 N.W.2d at 676. In Sahu, a delay of seven years (resulting from federal prosecution of the respondent-physician on criminal charges) was found insufficient to sustain a laches defense in the absence of proof of prejudice. Id. So also here, we do not believe the time spent on investigation and peer review was unreasonable, given the number of patients, extent of medical and pharmacy records, and variety of quality of care issues involved.

Nor has Miller demonstrated that he was prejudiced by the time taken to resolve the inquiry. The case rested on review of medical treatment documented in patients’ records. Unavailability of fact witnesses or significant alteration of conditions were therefore not relevant concerns. Cf. Iowa Admin. Code r. 653 — 12.50(4) (“Timely filing [of the initial complaint] is required to ensure the availability of witnesses and to avoid initiation of an investigation under conditions which may have been significantly altered during the period of delay.”). The only alleged limitation on proof presentation cited by Miller actually reveals additional inquiry by board members concerning Miller’s records after extensive review of those same materials by both parties’ expert witnesses. It appears that any confusion in the record stemmed from Miller’s inadequate record keeping, not delay in the proceedings. In sum, Miller was accorded a full opportunity to review the documents upon which the board relied for its charges, to conduct discovery, to depose and cross examine the board’s investigator and peer review committee members, and to mount a full defense to the charges at the disciplinary hearing. No prejudice has been shown.

We are likewise unconvinced by Miller’s claim that the board lacks authority to discipline him because no patients complained about his care. The position Miller takes is contrary to the law governing physician discipline. Iowa Code section 272C.3 authorizes the licensing board to review and investigate alleged acts or omissions involving substandard care, whether “upon written complaint or upon its own motion pursuant to other evidence received.” See also Iowa Code § 148.6(2)(g) (authorizing discipline for repeated departure from minimum standard of acceptable practice; actual injury to patient need not be established); Iowa Admin. Code r. 653— 12.4(2)(b) (same). The focus of these proceedings illustrates the importance of these rules. Miller was charged with inappropriate prescribing of controlled substances to patients suffering from chronic but non-terminal conditions. The record reveals that patients who receive large quantities of controlled substances for pain are not likely to file complaints with the board. This is particularly true of patients with a history of substance abuse. Thus it is in the public interest for other professionals- — such as the pharmacist, director of nursing, and law enforcement personnel involved here — to serve as reliable sources of complaint information to the board.

We have considered all of the arguments advanced by Miller, whether discussed or not, and find no basis for reversal. The medical board’s decision to impose a two-year probationary period upon Miller, accompanied by strict supervision of his prescription practices, is clearly a matter resting within its area of expertise. See Burns v. Board of Nursing, 495 N.W.2d 698, 699 (Iowa 1993). The district court was correct in so finding. We therefore affirm the judgment of the district court.

AFFIRMED.

All justices concur except LARSON, J., who takes no part.

      . A physician is not ordinarily entitled to a stay pending appeal. See Iowa Code § 148.7(9); Glowacki v. Board of Med. Exam’rs, 501 N.W.2d 539, 542 (Iowa 1993) (sustaining applied constitutional challenge to § 148.7(9) by physician whose professional competency was not at issue).


source: Caselaw Access Project

author: SNELL, Justice.

license: Public Domain

text:
    Robert H. HENDRICKS and Sandra S. Hendricks, Appellees, v. GREAT PLAINS SUPPLY COMPANY, Appellant, v. Colony Plumbing & Heating, Inc., Appellant, and State Farm Fire & Casualty Company, Appellee.
    No. 98-689.
    Supreme Court of Iowa.
    April 26, 2000.

      Michael McDonough of Moyer & Bergman, P.L.C., Cedar Rapids, for appellant Great Plains Supply Company.
    Kevin H. Collins and Nancy J. Penner of Shuttleworth & Ingersoll, P.C., Cedar Rapids, for appellant Colony Plumbing & Heating, Inc.
    David L. Riley of Yagla, McCoy & Riley, P.L.C., Waterloo, for appellees Hendricks and State Farm Fire & Casualty Company.
    Considered by LARSON, P. J., and LAVORATO, SNELL, TERNUS, and CADY, JJ.
   SNELL, Justice.

The defendants appeal and the plaintiffs cross-appeal from the entry of a judgment in an action arising from the destruction of the plaintiffs’ newly constructed home. We affirm with respect to all issues except the district court’s award of damages, and we remand for the entry of a judgment in accordance with this opinion.

I. Background Facts and Proceedings

Robert and Sandra Hendricks built a new home in Marion, Iowa. Great Plains Supply Company provided materials and labor for some of the construction, including the installation of cellulose insulation in the attic. Colony Plumbing & Heating, Inc. installed the fireplace and chimney. The Hendricks moved into the home around Thanksgiving 1993.

The home was destroyed by fire on Saturday, February 12, 1994. An investigation of the fire scene revealed no radiation shield had been installed to maintain clearance around the chimney flue where it passed into the attic, and insulation which had been improperly packed in around the flue had ignited.

An employee of Great Plains, Ivan Anderson, heard about the fire on the news and visited the scene on February 13. He spoke withJVtrs. Hendricks and asked her if she knew what had happened. She indicated the fireplace was being considered as a cause of the fire. Within a short time after that, Anderson reported the incident to Linda Scott, the claims person for Great Plains at its home office in Minneapolis.

The Hendricks were insured under a homeowner’s policy issued by State Farm Fire & Casualty Company. They contacted their insurance agent on February 13, and he informed the claims department about the fire. »State Farm retained a fire investigator, John Woodland, to investigate the cause and origin of the fire. Woodland investigated the fire scene on February 15. Dick Seifers, an adjuster with Federated Insurance Company, Colony’s insurer, was also on the scene of the fire on February 15, and he took thirty-two photographs. At some point while Woodland and Seifers were both at the fire scene, Woodland indicated to Seifers that it did not appear Colony was responsible for the fire.

Woodland sought authorization from State Farm to use the services of James Belina, an engineer, to investigate the fire. State Farm approved the request and Beli-na went to the scene of the fire investigation with Woodland on February 16.

State Farm paid the Hendricks for their loss. The remnants of the home were demolished approximately seven weeks after the fire to make way for the construction of a new home. On October 31, 1995, the Hendricks and State Farm filed a sub-rogation action against Great Plains, alleging its negligence in installing the insulation had caused the fire. Great Plains counterclaimed alleging the Hendricks had committed a breach of contract by failing to procure fire and extended coverage (builder’s risk) insurance which named Great Plains as an insured.

On December 28, 1995, Great Plains filed a third-party petition for contribution against Colony Plumbing & Heating, claiming the fire was attributable to Colony’s work in installing the fireplace and chimney flue. The Hendricks subsequently filed a cross-petition on April 4, 1996, against Colony asserting a similar negligence claim. Great Plains later filed a third-party cross-petition against State Farm, alleging State Farm had negligently misrepresented the existence of builder’s risk insurance and that State Farm should be estopped from denying the existence of such coverage.

Following a bench trial, the district court found Great Plains and Colony were each fifty percent at fault and entered judgment against them for $378,969.21. The court dismissed all other claims. Great Plains and Colony separately appeal and the Hendricks cross-appeal.

II. Scope of Review

This case was tried to the court as a law action and our review is for the correction of errors at law. Hamilton v. First Baptist Elderly Hous. Found., 436 N.W.2d 336, 338 (Iowa 1989). The district court’s findings of fact have the effect of a jury verdict and are binding on us if supported by substantial evidence. Grinnell Mut Reins. Co. v. Voeltz, 431 N.W.2d 783, 785 (Iowa 1988). Evidence is substantial when a reasonable mind would accept it as adequate to reach the same findings. Id. Evidence is not insubstantial merely because it would have supported contrary inferences. Id.

We construe the district court’s findings broadly and liberally. Id. In case of doubt or ambiguity we construe them to uphold, rather than defeat, the judgment. Id. A corollary rule prohibits us from weighing the evidence or the credibility of the witnesses. Id.

III. Causation

Both defendants contend the evidence was insufficient to support the district court’s finding that the fire was caused by the ignition of insulation which had been packed in around the chimney flue. There was evidence that the manufacturer’s instructions called for the installation of an attic radiation shield around the chimney flue to maintain a safe clearance from combustibles. Likewise, the insulation packages warned that barriers should be used to keep the insulation away from light fixtures and flues. No radiation shield was installed and no barriers were used to keep the insulation from being packed around the chimney flue. There was also evidence indicating inadequate vertical support caused a separation in the seam of the chimney flue which could have allowed flue gases to escape and contribute to the fire.

When the fire was first discovered, the plaintiffs observed it coming from the roof area in the back of their home. This was consistent with the physical, photographic, and expert evidence which indicated that heat from the chimney flue ignited the cellulose insulation. There was sufficient evidence to support the trial court’s findings of causation, and we affirm.

IY. Spoliation of Evidence

The defendants contend the district court erred by not sanctioning the Hendricks and State Farm for spoliation of evidence. They argue Woodland’s and Be-lina’s testimony should have been excluded because State Farm failed to notify defendants they were targets of a subrogation claim until nearly a year after the fire, and after the fire scene had been demolished. The defendants contend the trial court should have held State Farm had a duty to preserve the evidence.

The defendants also dispute that a finding of bad faith is required before sanctions may be imposed for spoliation of evidence in a civil action. They ask that the standard be modified to allow for the imposition of sanctions in the absence of bad faith or an intent to destroy evidence. The defendants alternatively argue the record does not support the trial court’s finding of a lack of bad faith by State Farm.

The intentional destruction of evidence is referred to as spoliation, and when it is established the fact finder may draw the inference that the evidence destroyed was unfavorable to the party responsible for its spoliation. State v. Langlet, 283 N.W.2d 330, 333 (Iowa 1979).

Spoliation involves more than destruction of evidence. Application of the concept requires an intentional act of destruction. Only intentional destruction supports the rationale of the rule that the destruction amounts to an admission by conduct of the weakness of one’s case.

Id. Iowa remedies for spoliation of evidence include imposing discovery sanctions, barring duplicate evidence where fraud or intentional destruction is indicated, and instructing on an unfavorable inference to be drawn from the fact that evidence was destroyed. Meyn v. State, 594 N.W.2d 81, 34 (Iowa 1999).

We agree with the trial court’s assessment that the evidence does not support a finding of an intentional destruction of evidence. Woodland and Belina extensively photographed the fire scene and preserved portions of the flue pipe, wire, and insulation located in the area of the fire’s origin. This evidence was preserved and available for examination by the defendants.

The defendants argue the fire started elsewhere in the home and the entire fire scene, not just evidence from where the fireplace flue entered the attic, should have been preserved. Three days after the fire, Colony had an insurance adjustor present at the scene who took thirty-two photographs. Ivan Anderson, a representative of Great Plains, was also present at the fire scene and was told the fireplace may have been involved. Both Colony and Great Plains were aware a fire had destroyed a new home for which they had recently provided construction services. Nothing in the record suggests they would have been precluded from further visiting the fire scene and conducting an additional investigation had they sought to do so. The plaintiffs were not required to preserve the fire scene indefinitely, and the demolition of the home in April 1994, did not constitute the spoliation of evidence.

Given the facts of this case, we need not reach the question of whether the bad faith element required in criminal spoliation claims also applies in civil actions. Likewise, we need not determine whether under different circumstances a plaintiff might be obligated to notify potential defendants of possible claims and give them a reasonable opportunity to examine a fire scene before its destruction. See, e.g., Howell v. Maytag, 168 F.R.D. 502 (M.D.Pa.1996); Baliotis v. McNeil, 870 F.Supp. 1285 (M.D.Pa.1994); Northern Assurance Co. v. Ware, 145 F.R.D. 281 (D.Me.1993).

V. Subrogation

Great Plains asserts State Farm had no right to pursue a subrogation claim against it. It argues its contract with the Hendricks required them to maintain fire and extended coverage (builder’s risk) insurance that would have protected Great Plains from liability for the loss. It maintains that by virtue of this agreement the Hendricks became Great Plains’ insurer. Great Plains reasons that since an insurer cannot bring a subrogation claim against its insured, State Farm (whose rights rise no higher than those of the Hendricks) also could not bring a subrogation claim.

This argument must fail. There was substantial evidence in the record that the plaintiffs acquired builder’s risk insurance as required by their contract with Great Plains. State Farm admitted the existence of builder’s risk insurance in its response to a request for admissions and in the testimony of Terry Eovaldi, its operations supervisor for personal lines. State Farm also completed a form for Great Plains confirming that the Hendricks had builder’s risk insurance. Nothing in the contract required that Great Plains be named as an insured, and the Hendricks were not the insurer for Great Plains. As a result, State Farm was not precluded from pursing a subrogation claim against Great Plains.

In addition, Great Plains’ argument must also fail because the builder’s risk coverage had ceased at the time of the fire. Great Plains had acquiesced to the Hendricks’ occupation of the home for nearly two months prior to the fire even though it had not yet been paid in full. Under its contract with the Hendricks, Great Plains had agreed that the owners’ occupancy of the home signified its completion. Testimony from State . Farm’s representative established that the builder’s risk insurance coverage ceased when the home was completed and occupied. Great Plains’ status as an “insured” would not have made any difference as the builder’s risk coverage had expired and had reverted to regular homeowner’s coverage at the time of the fire.

Great Plains alternatively argues that because of the inclusion of a builder’s insurance requirement in the agreement, the Hendricks waived their right to seek recovery for the fire damage. The parties’ agreement contains no reference to a waiver, and we decline to read such a significant limitation into the contract.

VI. Negligent Misrepresentation

Great Plains argues State Farm negligently misrepresented that it had issued builder’s risk coverage and it should be estopped as a matter of law from denying the existence of such insurance. It contends the Hendricks’ “Dwelling Under Construction Endorsement” covered only the temporary quarters in which they resided and did not include their new home while it was under construction.

The duty to use reasonable care in supplying information applies only to persons engaged in the business or profession of supplying information to others. Fry v. Mount, 554 N.W.2d 263, 266 (Iowa 1996). Without facts to show a person is in the business of supplying information to others, no duty arises. Id.

Assuming, without deciding, that State Farm was in the business of supplying information to others, Great Plains cannot establish that there was a misrepresentation. State Farm admitted that the coverage obtained by the Hendricks included builder’s risk coverage for their home while it was under construction. Even if the “Dwelling Under Construction Endorsement” referred only to the Hendricks’ temporary living quarters, Great Plains cannot demonstrate that it was injured by the alleged misrepresentation. In the preceding section of this opinion we found the purported builder’s risk coverage ceased to exist upon the plaintiffs’ occupancy of the house. The fire which destroyed the home would not have been covered by the builder’s risk coverage and would not have provided any relief from liability to Great Plains. The claim of negligent misrepresentation is rejected.

VII. Equitable Estoppel

Colony claims the district court erred by failing to find the Hendricks’ claim was barred by the doctrine of equitable estop-pel. Colony contends that on February 15, 1994, State Farm’s fire investigator, John Woodland, represented to Colony’s insurance adjustor, Richard Seifers, that Colony was not responsible for the fire.

Colony maintains it was misled by Woodland’s statements, and by State Farm’s later silence, about the possibility of litigation, and as a result it did not bother to conduct an independent investigation of the fire scene. Colony contends it was prejudiced as a result and State Farm should have been estopped from pursuing a negligence claim against it.

Application of the doctrine of equitable estoppel is based on the concept that one who has made certain representations should not thereafter be permitted to change his or her position to the prejudice of one who has relied thereon. Fernandez v. Iowa Dep’t of Human Servs., 375 N.W.2d 701, 708 (Iowa 1985). It may be utilized when injustice would otherwise result. Id. The elements of equitable estop-pel are well established:

1)> a false representation or concealment of material facts;
2) lack of knowledge of the true facts on the part of the actor;
3) intention that it be acted upon; and
4) reliance thereon by the party to whom made, to his prejudice and injury-

Id. Equitable estoppel may not be established if any one of these elements is lacking. Id.

The trial court rejected Colony’s estoppel claim finding State Farm was not bound by Woodland’s statements. We agree with its holding that Woodland was not acting as State Farm’s agent. A basic element of agency law is that whatever an agent does within the scope of the agent’s actual authority binds the agent’s principal. Gabelmann v. NFO, Inc., 571 N.W.2d 476, 481 (Iowa 1997).

Actual authority to act is created when a principal intentionally confers authority on the agent either by writing or through other conduct which, reasonably interpreted, allows the agent to believe that he has the power to act. Actual authority includes both express and implied authority. Express authority is derived from specific instructions by the principal in setting out duties, while implied authority is actual authority circumstantially proved.

Dillon v. City of Davenport, 366 N.W.2d 918, 924 (Iowa 1985) (citations omitted).

Apparent authority is authority which, although not actually granted, has been knowingly permitted by the principal or which the principal holds the agent out as possessing. Magnusson Agency v. Public Entity Nat’l Co.-Midwest, 560 N.W.2d 20, 25-26 (Iowa 1997). Apparent authority must be determined by what the principal does, rather than by any acts of the agent. Id. The burden of showing that an agent acted within the scope of the agency’s actual or apparent authority is on the party claiming that such authority existed. Waukon Auto Supply v. Farmers & Merchants Sav. Bank, 440 N.W.2d 844, 847 (Iowa 1989).

Colony relies on our decision in Briney v. Tri-State Mutual Grain Dealers Fire Insurance Co., 254 Iowa 673, 117 N.W.2d 889 (1962), to argue State Farm should be bound by the representations made by Woodland. In Briney, we held knowledge obtained by an insurance adjustor, even when the adjustor was an independent contractor hired for one job at a time, was imputed to the insurer. Briney, 254 Iowa at 683, 117 N.W.2d at 895. Essential to our analysis in that case was our recognition that an adjustor is clothed with the authority to adjust a loss with an insured and his powers and authority are coextensive with the business entrusted to his care. See id.

In the present case Woodland was not retained to adjust or compromise any claim on behalf of the insurer. Instead, he was merely hired to investigate the cause of a fire which destroyed property covered under a policy issued by the insurer. State Farm was not bound to accept Woodland’s findings or conclusions of causation. Nothing in the record supports a finding that State Farm conferred actual authority upon Woodland to make binding representations regarding the liability of potential defendants. Nor is there evidence that State Farm knowingly permitted or held Woodland out to possess such authority.

Colony cannot establish that State Farm made a fraudulent misrepresentation or concealed a material fact. We need not address whether it can establish any of the other elements of equitable estoppel.

VIII. Damages

In their cross-appeal, the Hendricks assert the trial court erred in failing to award damages based on the replacement cost of their home. The district court awarded the plaintiffs the following amounts of damages:

$ 60,116.66 (personal property)
$ 1,000.00 (property not readily subject to valuation, e.g., photos)
$ 5,852.65 (living expenses incurred
while home was being rebuilt) $312,000.00 (damage to home)
$378,969.21 (total)

On appeal, the plaintiffs challenge only the amount awarded for the damage to their home. They claim the cost to rebuild their home was $408,423 and the district court erred in failing to award them damages based on that amount.

“It is axiomatic that the principle underlying allowance of damages is that of compensation, the ultimate purpose being to place the injured party in as favorable a position as though no wrong had been committed.” Dealers Hobby, Inc., v. Marie Ann Linn Realty Co., 255 N.W.2d 131, 134 (Iowa 1977). Where the injury is such that the premises may be restored to as good condition as they were before being damaged, the measure of recovery is the fair and reasonable cost and expense of such restoration. Schiltz v. Cullen-Schiltz, 228 N.W.2d 10, 21 (Iowa 1975).

“The general rule in Iowa for repairs or for replacement is the fair and reasonable cost of replacement or repair, but not to exceed the value of the property immediately prior to the loss or damage.” State v. Urbanek, 177 N.W.2d 14, 16 (Iowa 1970). An appraiser, Randy Roy, testified regarding the value of the plaintiffs’ home before the fire. He utilized two methods of valuation. Using a cost-approach method he valued the property at $467,436. Relying on an analysis of comparable sales, he determined the value of the plaintiffs’ property was $450,000. Roy testified this latter figure was probably the more accurate valuation of what the plaintiffs’ property was worth before the fire.

The plaintiffs argued that since the replacement cost ($408,423) did not exceed the pre-fire valuation ($450,000), the trial court should have awarded them $408,423 for the cost of rebuilding their home. Conversely, the defendants argued the pre-fire valuation of the home should be reduced by the value of those portions of the property which were not damaged by the fire. Citing the cost-approach figures used in Roy’s appraisal, they contended the pre-fire valuation should be calculated as follows:

$450,000 (pre-fire value of property)
- 32,136 (value of basement foundation)
$417,864
- 20,000 (value of detached garage)
$397,864
- 70,000 (value of land)
$327, 864
- 15,000 (value of on-site improvements, -_ well and septic)
$312,864 (defendants’ pre-fire valuation of home)

The district court held the plaintiffs’ recovery was limited to a cost-approach valuation of $312,000, and it noted that was the amount for which the Hendricks had insured their home.

On appeal, the plaintiffs contend they were entitled to the replacement cost of the residence. We agree. Our case law provides that a party may recover the replacement cost if it does not exceed the value of the property prior to injury. See id. In determining the value of the plaintiffs’ residence before the fire, we use the value of the home in its entirety, even if that includes portions of the home which were allegedly undamaged by the fire and were utilized in the reconstruction. Those portions of the home are integral parts of the residence and contribute to an enhanced value that exceeds the value of its separate parts. It is that value, the sum all of the parts, to which the plaintiffs are entitled to be restored.

The defendants’ valuation arguments also fail for other reasons. First, we note that the $408,423 replacement cost included Novak Construction’s obligation to demolish the existing house and burn or haul away debris. The plaintiffs were entitled to recover this clean up cost as an element of damages separate from the replacement cost of rebuilding their home. See Schütz, 228 N.W.2d at 21 (expenses incurred as part of clean up operation are recoverable).

We also note that the plaintiffs invested a considerable amount of then-own time and effort in overseeing some of the subcontracting for their first house and they contributed “sweat equity” toward its construction. They did not do this during the rebuilding of their home and apparently placed responsibility for its construction entirely in the hands of Novak Construction. The defendants cannot expect the plaintiffs to again expend considerable time and personal labor in order to reduce the replacement cost occasioned by the defendants’ negligence.

Finally, we note there was no evidence indicating the replacement costs were excessive. The Hendricks’ new home was virtually identical to the home which had been destroyed by fire, and they did not use the highest bidder for its reconstruction. Under the circumstances of this case, we find as a matter of law $408,423 was the fair and reasonable cost of replacement.

We hold the district court should have awarded the following damages:

$ 60,116.66 (personal property)
$ 1,000.00 (property not readily subject to valuation, e.g., photos)
$ 5,852.55 (living expenses incurred
while home was being rebuilt) $408,423.00 (replacement cost for damage _ to home)
$475,392.21 (total)

This case is remanded for entry of a judgment in accordance with this opinion.

IX. Conclusions

In conclusion, we hold there was sufficient evidence to support the district court’s findings regarding the cause of the fire and the defendants’ liability therefore. We hold no spoliation of evidence occurred as the defendants were aware of the fire before the destruction of the fire scene and the plaintiffs’ investigators preserved physical and photographic evidence from the site of the origin of the fire.

We hold the plaintiffs had acquired builder’s risk insurance coverage from State Farm, State Farm made no negligent misrepresentations regarding the existence of the coverage, the defendants were not insureds under the policy, the coverage had ceased prior to the fire, and State Farm was entitled to pursue a subro-gation claim against Great Plains. We hold the plaintiffs were not equitably es-topped by the statements of its fire investigator from pursuing a negligence claim against Colony. Finally, we hold the plaintiffs were entitled to recover damages for the replacement cost of their home as above stated.

AFFIRMED ON APPEAL, REVERSED ON CROSS-APPEAL, AND REMANDED WITH DIRECTIONS.

      . We note that Great Plains had the Hendricks present a form to State Farm to confirm the existence of their builder's insurance, and that form indicated the builder's risk coverage automatically expired "upon completion and payment in full.” It is the terms of the Hendricks' coverage with Slate Farm, not the language in this form, which governs when the builder's risk coverage ceased. The builder’s risk coverage had ceased at the time of the fire, even though Great Plains had not yet been paid in full.


author: LARSON, Justice.

text:
    CITY OF HIAWATHA, A Municipality, Appellant, v. CITY DEVELOPMENT BOARD, Appellee, City of Cedar Rapids, Intervenor-Appellee, and Michael Bradnan, et al., Intervenors-Appellees.
    No. 98-713.
    Supreme Court of Iowa.
    April 26, 2000.

      James P. Craig and Randal J. Scholer of Moyer & Bergman, P.L.C., Cedar Rapids, for appellant.
    Thomas J. Miller, Attorney General, and Christie J. Scase, Assistant Attorney General, for appellee City Development Board.
    David F. McGuire, Cedar Rapids, for intervenor-appellee City of Cedar Rapids.
    Dean A. Spina of Bradley & Riley, P.C., Cedar Rapids, for intervenors-appellees Michael Bradnan, et al.
   LARSON, Justice.

This case involves the annexation of Linn County land in a voluntary annexation proceeding under Iowa Code chapter 368 (1995). The City Development Board approved Cedar Rapids’ application despite claims by the City of Hiawatha that the proceedings were fatally flawed. The district court affirmed the board’s action, and we affirm the district court.

I. Facts and Prior Proceedings.

In 1996 a group of property owners in Linn County, apparently concerned their area was going to be annexed by another city, submitted voluntary applications to the City of Cedar Rapids requesting it to annex their land. See Iowa Code ch. 368. The territory in question consisted of 944.63 acres, of which 84.53 acres were included without the consent of the owners. Under the statute, territory may be annexed that includes property by noncon-senting owners provided the nonconsent-ing land does not amount to more than twenty percent. This is known as an “80/20” annexation. See Iowa Code § 368.7(1).

Pursuant to chapter 368, the City of Cedar Rapids sent a copy of the annexation proposal to the nonconsenting owners in the proposed annexation area. See Iowa Code § 368.7(1). The city also sent a copy to the cities of Hiawatha and Robins, the Linn County Board of Supervisors, the East Central Iowa Council of Governments, and the affected public utilities, all pursuant to statute. See Iowa Code § 368.7(3). Cedar Rapids also published notice of an upcoming city council meeting to be held December 11, 1996, regarding the council’s consideration of the voluntary annexation applications. At that meeting, the city council voted to annex the land in question.

Cedar Rapids filed its request for approval of annexation with the City Development Board on December 12,1996. The board notified the cities of Cedar Rapids, Hiawatha, and Robins, as well as the Linn County Board of Supervisors, the Linn County attorney, the East Central Iowa Council of Governments, and the Iowa Department of Transportation.

On January 16, 1997, the board received a petition for involuntary annexation from the City of Hiawatha, which included territory within the Cedar Rapids voluntary annexation proposal.

The board held a public hearing on February 20, 1997. On March 13, 1997, the board met to deliberate on the Cedar Rapids proposal. The board approved the annexation request by a vote of four out of five members. The fifth member “passed” in order to study the issue more. (Under Iowa Code section 368.7(1), when territory includes property of nonconsenting owners, the measure must pass by a four/fifths vote of the board.) The board issued its findings of fact and conclusions of law approving the Cedar Rapids voluntary application on March 19,1997.

Hiawatha filed a petition for judicial review of the board’s decision. The board answered, and the City of Cedar Rapids and a group of property owners favoring annexation to Cedar Rapids intervened in support of the annexation pursuant to Iowa Code section 17A.19(2) and Iowa Rule of Civil Procedure 76.

II. The Issues and Standard of Review.

Four issues are raised on appeal. The first issue is raised by some of the interve-nors who contend the appellant, City of Hiawatha, failed to properly preserve its right to judicial review. They claim Hiawatha failed to serve or mail copies of its petition for judicial review to all required parties. The remaining three issues concern Hiawatha’s claims of error by the board in (1) including nonconsenting properties to attain the required contiguity between Cedar Rapids and the territory to be annexed, (2) finding the Cedar Rapids annexation was not contrary to the best interests of the annexed area, and (3) incorrectly applying the presumption of validity of voluntary annexation proceedings provided by Iowa Code section 368.6.

Iowa Code section 368.22 governs our scope of review. City of Waukee v. City Dev. Bd., 590 N.W.2d 712, 716 (Iowa 1999). Section 368.22, together with the relevant provisions of Iowa Code chapter 17A, are the “exclusive means by which a person or party who is aggrieved or adversely affected by agency action may seek judicial review of that agency action.” Waukee, 590 N.W.2d at 716 (quoting Iowa Code § 368.22). Our review is limited to questions “relating to jurisdiction, regularity of proceedings, and whether the decision appealed from is arbitrary, unreasonable, or without substantial supporting evidence.” Id.

III. The Jurisdiction Issue.

Several of the private landowners who desired to be annexed to Cedar Rapids intervened in the judicial review proceeding in district court pursuant to Iowa Code section 17A.19(2). These landowners raised a threshold issue as to the court’s jurisdiction to consider the petition for judicial review, claiming the City of Hiawatha failed to serve copies of the petition for judicial review as required by Iowa Code section 17A.19(2), which provides in part:

Within ten days after the. filing of a petition for judicial review the petitioner shall serve by the means provided in the Iowa rules of civil procedure for the personal service of an original notice, or shall mail copies of the petition to all parties named in the petition and, if the petition involves review of agency action in a contested ease, all parties of record in that case before the agency. Such personal service or mailing shall be jurisdictional. The delivery by personal service or mailing referred to in this subsection may be made upon the party’s attorney of record in the proceeding before the agency. A mailing shall be addressed to the parties or their attorney of record at their last known mailing address.

The intervenors contend the court lacked jurisdiction because Hiawatha failed to serve some of the parties in the administrative proceeding. A “party” under chapter 17A “means each person or agency named or admitted as a party or -properly seeking and entitled as of right to be admitted as a party.” Iowa Code § 17A.2(8).

Here, some of the property owners who had appeared at the board hearing were not served with copies of the petition for judicial review. They were not shown as parties in that proceeding. All parties of record and intervenors were served either personally or through their attorneys. The petitioner was not required to serve copies on other persons, as some of the intervenors contend, simply because they had been signers on the petition for annexation filed with the City of Cedar Rapids or because they had physically participated in the board hearing. We reject the jurisdiction argument and proceed to the merits of the appeal.

IV. The Contiguity Issue.

Hiawatha contends the annexation to Cedar Rapids is not permissible because Cedar Rapids and the area to be annexed do not meet the statutory requirements for contiguity. See Iowa Code § 368.7(1). Specifically, Hiawatha contends that neither of the two possible connections between Cedar Rapids and the annexed area (a parcel of nonconsenting property and a public road) is permissible under the statute.

Hiawatha characterizes the board’s action as “aggressive use of a nonconsenting property” to obtain the nexus required by statute. The statute provides:

All of the owners of land in a territory adjoining a city may apply in writing to the council of the adjoining city requesting annexation of the territory.

Iowa Code § 368.7(1). The terms “territory” and “adjoining” are defined by statute:

1. “Adjoining ” means having a common boundary for not less than fifty feet. Land areas may be adjoining although separated by a roadway or waterway.
14. “Territory ” means the land area or areas proposed to be incorporated, annexed, or severed, whether or not contiguous to all other areas proposed to be incorporated, annexed, or severed. Except as provided for by an agreement pursuant to chapter 28E, “territory” having a common boundary with the right-of-way of a secondary road extends to the center line of the road.

Iowa Code § 368.1.

Hiawatha contends that the fifty-foot connection must be made with voluntary parcels. We specifically rejected that argument in a case decided after the board and the district court decided the present case. Waukee, 590 N.W.2d at 717. In that case, the City of Clive attempted to annex a voluntary parcel that was only contiguous to the territory to be annexed through an involuntary parcel. Id. at 714-15. We held that the language of section 368.7(1), “land in a territory adjoining a city,” requires only that “the entire land area to be annexed share a common boundary with the city to which annexation is sought.” Id. at 717. The territory Clive sought to annex, we said,

encompasses all of the voluntary and involuntary parcels mentioned. Although not all of the parcels adjoin or share a common boundary with the city of Clive, all of the parcels are contiguous to each other in the sense that there is no parcel that does not share a boundary with a parcel included in the territory to be annexed. In addition, one of the parcels is contiguous to the city of Clive.

Id. Under that case and the wording of section 368.7(1), all parcels proposed to be annexed under section 368.7(1), both voluntary and involuntary, must be viewed as a whole. When the annexation area here is considered as a whole, including consenting and nonconsenting owners, the area is contiguous to Cedar Rapids within the meaning of the statute.

Hiawatha asks us to overrule Waukee and hold that nonconsenting land cannot bridge the annexing and annexed areas. In making this argument, Hiawatha relies on a sentence in section 368.7(1) that was not discussed in Waukee: “All of the owners of land in a territory adjoining a city may apply ... requesting annexation of the territory.” (Emphasis added.) The significance of the word “all” in this section, according to Hiawatha, is that implicitly anything less than all adjoining landowners cannot form the required nexus. It is true, as Hiawatha notes, we did not address this specific argument in Waukee because it was not raised. Nevertheless, we held the express language of the first sentence of section 368.7(1) suggested the opposite interpretation: the word “adjoining” immediately follows the word “territory,” which means both voluntary and involuntary parcels are considered together. Waukee, 590 N.W.2d at 717. We reaffirm that holding in Waukee and reject Hiawatha’s argument that nonconsenting parcels cannot bridge the two areas.

V. The Best Interests of the Urbanized Area.

Iowa Code section 368.7 favors annexation by voluntary proceedings by giving them priority:

If one or more applications for a voluntary annexation and one or more petitions for an involuntary annexation or incorporation for a common territory are submitted to the board within thirty days of the date the first application or petition was submitted to the board, the board shall approve the application for voluntary annexation, if the application meets the applicable requirements of this chapter, unless the board determines by a preponderance of the evidence that the application was filed in bad faith, or that the application as filed is contrary to the best interests of the citizens of the urbanized area, or that the applicant cannot within a reasonable period of time meet its obligation to provide services to the territoi"y to be annexed sufficient to meet the needs of the temtory.

Iowa Code § 368.7(4) (emphasis added). Hiawatha contends the annexation must fail under the second enumerated basis: that annexation of the area “is contrary to the best interests of the citizens of the urbanized area.”

Resolution of this issue turns largely on how we interpret “urbanized area.” The Code defines it as “any area of land within two miles of the boundaries of a city.” Iowa Code § 368.1(15). This definition, according to Hiawatha, would necessarily include the City of Hiawatha in the urbanized area because it is within two miles of the area to be annexed. According to its argument, the interests of Hiawatha’s residents were not given proper consideration in light of the fact the city had spent considerable sums of money to expand its public service capability in anticipation of the city’s expansion.

We reject this argument because we believe the legislature did not intend to include a city as part of an “urbanized area.” If we considered a city to be part of the urbanized area, this would in effect allow the annexation of an existing city, a power clearly beyond the scope of chapter 368. Also, to interpret “urbanized area” to include the area of the city within two miles of its borders would mean that, in a large city, the interior of the city would not be considered urbanized area because it would not be within two miles of the perimeter of the city. An interpretation of urbanized area as urged by Hiawatha would not be a reasonable interpretation. See Iowa Code § 4.4(3).

We interpret “urbanized area” to mean an area of land within two miles of the boundaries of a city, but not including land within the city itself. We reject Hiawatha’s arguments that the board erred in not considering the best interests of Hiawatha’s residents in applying Iowa Code section 368.7(4) and that the board erred in not finding the proposed annexation was contrary to the best interests of the urbanized area. The board properly applied the statute, and its finding that the annexation was not contrary to the best interests of the urbanized area is supported by substantial evidence.

VI. The “Preference” for Voluntary Annexation and the Presumption of Validity for Voluntary Annexations Under Iowa Code Chapter 368.

In 1991 the Iowa Legislature amended chapter 368 by establishing a preference for voluntary proceedings when both a voluntary and involuntary proceeding coexist. See Iowa Code § 368.7(4). The legislature also added language to the statute that established a presumption of validity for voluntary proceedings. See Iowa Code § 368.6. The presumption of validity of voluntary annexations states:

It is the intent of the general assembly to provide an annexation approval procedure which gives due consideration to the wishes of the residents of territory to be annexed, and to the interests of the residents of all territories affected by an annexation. The general assembly presumes that a voluntary annexation of territory more closely reflects the wishes of the residents of territory to be annexed, and, therefore, intends that the annexation approval procedure include a presumption of validity for voluntary annexation approval.

Iowa Code § 368.6 (emphasis added).

Hiawatha claims the board “overstated, overemphasized and erroneously- relied upon the preference accorded to voluntary annexation requests under chapter 368” and failed to fully consider the merits of the application. This argument is based on the fact the board relied largely on the best interests of the territory to be annexed without due consideration of the best interests of others, including Hiawatha.

For the reasons previously discussed, the main consideration under section 368.7(4) is the best interests of the residents of the urbanized area, not of the area in general. The best interests of residents of adjoining areas, such as Hiawatha, are not determinative. The board properly applied the procedural and substantive requirements of section 368.7(4) and did not give undue weight to the statutory preference for voluntary proceedings. Further, the board rendered its decision without any expressed reliance on the presumption of validity .under Iowa Code section 368.6, so we reject Hiawatha’s argument that the presumption was improperly applied.

We reject Hiawatha’s argument that the board misapplied the presumption of section 368.6 or the preference for voluntary annexations under section 368.7(4).

VII. Summary and Conclusions.

We summarize our opinion as follows: (1) the district court had jurisdiction of the judicial review petition because Hiawatha notified all necessary parties, (2) the petition for annexation was not flawed for lack of contiguity between Cedar Rapids and the area to be annexed because under Waukee nonconsenting tracts may provide the necessary nexus, (3) the “urbanized area” under Iowa Code section 368.7(4) includes land within two miles of a city but does not include land within the City of Hiawatha, (4) the board did not err in finding the annexation was not contrary to the best interests of the urbanized area, and (5) the board did not improperly apply the preference for voluntary annexations or the presumption in favor of their validity. Accordingly, we affirm the district court.

AFFIRMED.

All justices concur except LAVORATO, J., who takes no part.


author: CARTER, Justice.

text:
    STATE of Iowa, Appellee, v. Kevin Bruce MOORE, Appellant.
    No. 99-300.
    Supreme Court of Iowa.
    April 26, 2000.
    John T. Breitbach and Brenda K. Wall-richs, Cedar Rapids, for appellant.
    Thomas J. Miller, Attorney General, Karen Doland, Assistant Attorney General, J. Patrick White, County Attorney, and Michael Brennan, Assistant County Attorney, for appellee.
   CARTER, Justice.

Defendant, Kevin Bruce Moore, was convicted following a bench trial of driving while under the influence (OWI), second offense, in violation of Iowa Code section 321J 2 (1997). He now appeals, challenging ⅛0 district court>s mling on a motion to evidence. He contends that ,, . . , . , ,, , on the evening of his arrest the law en- „ , ... , ... , , . forcement officer stopped the motor vehicle he was driving without reasonable cause to do so. He urges that evidence subsequently gathered, including the chemical test results obtained under the implied consent law, was the product of an illegal stop and should have been suppressed. After reviewing the record and considering the arguments of the parties, we reject defendant’s contention and affirm the judgment of the district court.

Viewed most favorably toward the trial court’s findings, the evidence revealed the following facts. Defendant was picnicking in Macbride State Park in Johnson County on the evening of June 13, 1998. At about 10:30 p.m., he decided to leave the park. He drove through the camping area toward the main highway in his Dodge pickup. Near the park’s shower facility, he was waved down by a Department of Natural Resources park ranger, who held the credentials of a peace officer. See Iowa Code § 801.4(ll)(g) (“peace officer” includes Department of Natural Resources officers as authorized by section 456A.13). When the ranger detected the smell of alcohol on defendant, she radioed for help from the Iowa State Patrol. A state trooper soon arrived on the scene and arrested defendant for OWI. The sufficiency of the evidence to sustain defendant’s conviction on that charge is not at issue, only the legality of the investigatory stop initiated by the park ranger.

In his motion to suppress, defendant urged that the park ranger did not have a reasonable belief that he was violating or had violated any law or that he posed a specific threat to anyone’s safety. At the suppression hearing, the park ranger testified that she stopped defendant in order to warn him that his speed, although less than the posted limit of twenty miles per hour, posed a danger to campers based on the circumstances then existing in the park. She testified that parked vehicles along the campsites obstructed the view of campers entering on the roadway and also obstructed the view that motorists would have of campers that might step out on the road. In expanding on that point, she testified:

[At] that time of the evening there’s a lot of people, like I said earlier, taking their kids up to use the restroom before retiring for the evening, and the campground was full and there were a lot of people in the campground in a small area.

In denying defendant’s motion to suppress, the district court stated:

Well, I’m going to deny the motion to suppress evidence, the reason being the DNR has a safety role in protecting campers within the Macbride State Park. The evidence, as I heard it, is that the ranger asked the defendant to pull over and stop because she believed he was traveling too fast for the safety of the campers who were overnight in the campgrounds. Whether or not someone was actually on the roadway I don’t think is the thrust of the issue in that the evidence is it was a full campground. There were numerous individuals camping, families camping, and that there are no sidewalks provided for the safety of people walking here and there around that campground. She believed that the defendant was traveling at a speed apparently up to fifteen miles per hour which could provide a safety hazard. For this reason, she stopped the defendant and asked him to pull over. I believe that’s a legitimate policing function, and, therefore, deny the motion to suppress based on an unconstitutional stop.

We agree with the district court that the ranger was acting within her legal authority in stopping defendant’s vehicle. Park rangers are peace officers who possess the authority to supervise and direct the actions of persons in the park, whether on foot, bicycle, or riding in a motorized vehicle. Iowa Code §§ 456A.13, .24(12). Although defendant makes a plausible argument that his driving did not constitute a criminal violation, the park ranger nevertheless could have reasonably concluded that it posed a threat to the safety of other persons in the park. Although apparently no one was actually on or approaching the roadway at the time defendant was directed to stop his vehicle, this was something that might have occurred at any moment in the dark of night.

Law enforcement officers are charged with duties that go beyond enforcement of the criminal law, and when in the performance of such duties they come upon evidence of crime, it does not violate the Fourth Amendment to gather it for purposes of preparing a criminal prosecution. The Supreme Court recognized this reality in Cady v. Dombrowski, 413 U.S. 433, 93 S.Ct. 2523, 37 L.Ed.2d 706 (1973). In that case, the Court made the following observations:

Local police officers, unlike federal officers, frequently investigate vehicle [operation] in which there is no claim of criminal liability and engage in what, for want of a better term, may be described as community caretaking functions....
... The constitutional difference between searches of and seizures from houses and similar structures and from vehicles stems both from the ambulatory character of the latter and from the fact that extensive, and often noncriminal contact with automobiles will bring local officials in “plain view” of evidence, fruits, or instrumentalities of a crime, or contraband.

Cady, 413 U.S. at 441-42, 93 S.Ct. at 2528, 37 L.Ed.2d at 714-15.

We recognized and applied the principle espoused in Cady in State v. Mitchell, 498 N.W.2d 691 (Iowa 1993). In that case, we concluded that the Iowa State Patrol was charged with public safety duties that extend beyond crime detection and investigation. Mitchell, 498 N.W.2d at 694 (“When evidence is discovered in the course of performing legitimate community caretak-ing or public safety functions, the exclusionary rule is simply not applicable.”).

In the present case, the park ranger’s authority to stop defendant’s vehicle was derived from two sources. First, it is specified in Iowa Code section 321.285 that

[a]ny person driving a motor vehicle on a highway shall drive the same at a careful and prudent speed not greater than nor less than is reasonable and proper, having due regard to the traffic, surface, and width of the highway and of any other conditions then existing.

The ways of travel in state parks are public highways if open to the general public. Iowa Code §§ 321.1(78), 461A.8. Although a violation of section 321.285 may be a misdemeanor, see Iowa Code section 321.482, we believe the statute confers a public safety function on Iowa peace officers as well as a law enforcement function. The second source of the park ranger’s authority is found in Iowa Code section 461A.3, which grants to the Department of Natural Resources and its employees regulatory authority in regard to “proper public access” within the state park system. Either or both of these statutes support the park ranger’s action in stopping defendant’s vehicle. We have considered all issues presented and conclude that the judgment of the district court should be affirmed.

AFFIRMED.