author: TERNUS, Justice.

text:
    In re the MARRIAGE OF Dennis L. DUGGAN and Rebecca A. Duggan. Upon the Petition of Dennis L. Duggan, Appellee, and Concerning Rebecca A. Duggan, Appellant.
    No. 01-1887.
    Supreme Court of Iowa.
    April 2, 2003.

      David H. Correll of Correll, Sheerer, Benson, Engels, Galles & Demro, PLC, Cedar Falls, for appellant.
    Max E. Kirk and Jen Bries of Ball, Kirk & Holm, P.C., Waterloo, for appellee.
   TERNUS, Justice.

In this appeal, the appellant, Rebecca Duggan, asks to be designated as the surviving spouse on her former husband’s pension plan, and asserts that she is entitled to one-half of any cost-of-living increases in the monthly benefit payable under the plan. We grant the requested relief. In doing so, we modify and affirm the court of appeals’ decision and affirm the district court judgment as modified.

I. Background, Facts and Proceedings.

Appellee, Dennis Duggan, and appellant, Rebecca Duggan, were married in 1965. They have five children. At the time of this action only the youngest child remained at home; another child was attending college. The couple’s other children were self-supporting adults.

Rebecca is a registered nurse and worked throughout the marriage, primarily at a local hospital. In January 2000, she voluntarily left her employment at the hospital to accept a position with Cedar Valley Hospice where she would only have to work thirty hours per week. Although this change resulted in a decrease in income, Dennis concurred in Rebecca’s decision to switch jobs. In 2000, Rebecca earned $24,340 from her employment with Hospice.

Dennis also worked consistently during the marriage. From 1972 until shortly before this action was filed, he worked as a firefighter with the Waterloo fire department. Due to his work schedule' — 'twenty-four hours on and then forty-eight hours off — he also worked other jobs in addition to his firefighter position. These jobs included home building and remodeling work, high school basketball coaching, and consulting on the safe handling of hazardous waste materials.

In August 2000 Dennis, then fifty-five years old, opted to take early retirement from the fire department. At the time, he was the assistant fire chief and earned $51,195 annually. Since his retirement Dennis has worked sporadically. Although he is in good health, he maintains that he would just “like to be retired” and does not intend to work for compensation in the future.

Upon retirement, Dennis became eligible to receive pension benefits through the Municipal Fire and Police Retirement System of Iowa (“System”). After consulting with Rebecca, he chose a guaranteed ten-year payout from among several payment options. Under this option, Dennis is guaranteed to receive ten years of monthly benefits. If he dies during the ten years, benefits for the remainder of the ten-year period are paid to his beneficiary. After ten years, Dennis will continue to receive his monthly benefit, but if he dies, the benefits will cease entirely. At the time of trial Dennis’s monthly pension benefit was $4132, with a guaranteed minimum payout of $446,256 over the remaining nine years of the ten-year period.

In October 2000 Dennis filed a petition for dissolution of marriage. Dennis was fifty-six years old at the time of trial; Rebecca was fifty-four. In its decree, the district court awarded the parties joint custody of their minor son, with primary physical care given to Rebecca. Dennis was ordered to pay $670 per month in child support, an obligation that would last less than two years given the age of their youngest child. No alimony was awarded.'

After a slight modification in a post-judgment ruling, the court awarded Dennis net marital property (after deducting his share of marital debt) having a value of $157,964 and Rebecca net marital property with a value of $167,550. Therefore, Rebecca received $9586 more than Dennis. Although both parties’ IRAs were distributed as marital property, Dennis’s pension benefits were not. The court treated these benefits as income to Dennis rather than as a marital asset and therefore ordered that Dennis was to retain all rights to his pension.

Rebecca’s appeal was transferred to the court of appeals. That court ruled the district court failed to make an equitable distribution of the parties’ assets when it did not include Dennis’s pension benefits as marital property. Therefore, it modified the district court decree by providing that the monthly pension payments should be divided equally between Rebecca and Dennis. The court of appeals also modified the distribution of the remaining marital property by dividing it equally between the parties, with each receiving $166,208.

II.Issues Presented on Further Review.

This court granted Rebecca’s petition for further review. In her petition Rebecca claims the court of appeals erred in three particulars: (1) failing to specifically order that she be designated as the surviving spouse for purposes of Dennis’s pension benefits; (2) failing to provide that Rebecca was to receive one-half of any cost-of-living adjustments to the monthly pension payments; and (3) failing to require Dennis to reimburse Rebecca for an amount equivalent to one-half of the benefits received by Dennis from the date of the original dissolution decree on September 27, 2001.

Although Dennis no longer disputes that Rebecca should be awarded one-half of his pension benefits, he resists her request to be named as the surviving spouse. He also contends it would be inequitable to now require him to reimburse Rebecca for the benefits he has already received and spent. Finally, he requests that we decrease his child support payments because that obligation was computed on the now-erroneous assumption he would receive his entire monthly pension check.

III. Scope of Review.

Dissolution actions, as equitable proceedings, are reviewed de novo. In re Marriage of Benson, 545 N.W.2d 252, 253 (Iowa 1996); Iowa R.App. P. 6.4. We give “weight to the fact findings of the trial court, especially when considering the credibility of witnesses,” but these findings do not bind us. In re Marriage of Knickerbocker, 601 N.W.2d 48, 51 (Iowa 1999); accord Iowa R.App. P. 6.14(6)(p).

IV. Distribution of Dennis’s Pension Benefits.

A. General legal principles governing pensions in dissolution actions. Iowa law requires that the assets of parties in a dissolution-of-marriage proceeding be divided equitably between them. See Iowa Code § 598.21(1) (2001) (listing factors to consider). “[P]ensions are characterized as marital assets subject to division in dissolution actions just as any other property.” Benson, 545 N.W.2d at 255. Although the particular benefits at issue in this case are derived from a statutory retirement plan, see generally Iowa Code chs. 410, 411 (providing for retirement system for police officers and fire fighters), this court has held that a fireman’s pension is marital property subject to division in a dissolution proceeding. See In re Marriage of Branstetter, 508 N.W.2d 638, 640-42 (Iowa 1993).

The issue in the present case goes a step beyond the divisibility of pension benefits, however. At stake here is the former spouse’s rights to such benefits in the event the retired employee-spouse dies first. Because the benefit plan at issue here is statutory in nature, we must look to chapters 410 and 411 in the first instance to determine the rights of a former spouse.

Although chapter 410 provides for the payment of pension benefits to a member’s “surviving spouse” under certain specified conditions, see Iowa Code § 410.10, a former spouse is not considered a “surviving spouse” unless “the division of assets in the dissolution of marriage decree ... grants the former spouse rights of a spouse under this chapter,” id. § 411.1(19) (now found at Iowa Code § 411.1(20) (2003)). The governing statutes and the System’s rules set out a procedure for granting the former spouse such rights. Chapter 411 permits the assignment of benefits payable under the retirement plan in order to enforce “marital property orders.” See Iowa Code § 411.13. The System has adopted by rule a model marital property order. See Mun. Fire & Police Ret. Sys. r. 12.10. One requirement for such an order is that it set out the “[e]x-tent (if any) to which a former spouse is to be treated as the surviving spouse upon the death of the member.” Id. r. 12.10(l)(d). This rule further provides that “[a] former spouse shall be treated as a surviving spouse only if specifically designated as such pursuant to section 411.1(19).” Id. r. 12.10(3)(a). If the dissolution decree states that the former spouse shall be designated as the surviving spouse, the System’s rules require the decree to also state “the dollar amount or percentage of the total surviving spouse benefit to be paid by the system to the former spouse.” Id. r. 12.10(3)(b).

B. Rebecca’s entitlement to sur-vivorship rights. Although the relevant statutes and rules set forth the procedure for designating a former spouse as the surviving spouse, the circumstances under which that designation should occur depend on the facts of each case and whether the allowance of survivorship rights effectuates an equitable distribution of the parties’ assets. Here, it has been properly determined that Dennis’s monthly benefits, earned entirely during the parties’ marriage, should be divided equally between Dennis and Rebecca. As noted earlier, these benefits are guaranteed for ten years. Under the court of appeals’ decision, Dennis and Rebecca will each receive one-half of these payments, but only during Dennis’s lifetime. Upon Dennis’s death the remaining benefits payable during the ten-year period will go to his designated beneficiary because the current dissolution decree makes no provision for Rebecca’s designation as the surviving spouse. Therefore, only by giving Rebecca survivorship rights as to her share of the payments can we ensure that she will receive her one-half share of Dennis’s pension plan.

Dennis argues that giving Rebecca sur-vivorship rights is unfair because she was not required to designate him as the beneficiary on her pension plan. We think, however, that the parties’ pension benefits are not sufficiently similar so as to require identical treatment. Rebecca’s pension plan was rolled into an IRA prior to the dissolution and the value of the IRA was included in the court’s division of marital property. Thus, Dennis has already received his share of Rebecca’s pension plan. Rebecca, on the other hand, will receive her share of Dennis’s pension benefits in the event of his untimely death only if she is designated as his surviving spouse. For this reason, we modify the disposition of this case by the court of appeals to provide for the designation of Rebecca as Dennis’s surviving spouse under his retirement plan to the extent of fifty percent of the benefits payable under the plan.

C. Rebecca’s entitlement to cost-of-living increases. Rebecca also complains of the court of appeals’ failure to award her one-half of any cost-of-living adjustments to the monthly benefits payable under Dennis’s retirement plan. Dennis contests Rebecca’s entitlement to a proportionate share of any increases, relying on language from our decision in Benson.

In Benson, this court stated that any posttrial increase .in pension benefits should not be considered marital property subject to division in the dissolution action. 545 N.W.2d at 255. In making this statement, we relied on the general rule that “[o]nly the net worth of the parties at the time of trial is .relevant in adjusting their property rights.” Id. (emphasis added). The rationale for this rule is the notion that “[a]n increase in pension rights resulting from contributions made after a decree of dissolution but before retirement is the result of efforts made after the dissolution” and therefore “should not be included in the allocation of assets of the marital estate.” In re Marriage of Klein, 522 N.W.2d 625, 628 (Iowa Ct.App.1994) (emr phasis added).

An examination of the rationale for The rule reveals why the rule does not apply in this case. While the cost-of-living increases at issue here will accrue after the parties’ marriage has been dissolved, they will also occur after the employee-spouse has retired. Thus, these increases are passive in the sense that they are not attributable to any efforts made by Dennis, the employee-spouse, after the dissolution. Rather, these increases flow from Dennis’s employment during the marriage; in other words, they are a result of the joint efforts of the parties. Thus, we hold cost-of-living adjustments accruing postdissolution should be treated as marital property where the employee-spouse is retired at the time of trial. See Moore v. Moore, 114 N.J. 147, 553 A.2d 20, 23 (1989) (holding that postretirement cost-of-living increases should be included in equitable distribution award to the extent they are attributable to portion of pension earned during the marriage). Accordingly, Rebecca is entitled to one-half of any such adjustments.

D. Repayment of pension benefits already received. Dennis asserts Rebecca should not receive her share of the pension benefits to the extent they have already been paid to him. To adopt this argument, however, would be contrary to the general rule that we divide the property the parties own at the time of the dissolution. See In re Marriage of Muelhaupt, 439 N.W.2d 656, 661 (Iowa 1989). We see no reason to depart from this rule and reduce Rebecca’s interest in this marital asset simply because Dennis has received more than his rightful share. Although he claims to have already spent the benefits paid to him, his exhaustion of this asset is no reason to reduce Rebecca’s share of the marital property. Dennis certainly has other assets that can be liquidated or used as collateral for a loan to repay Rebecca and thereby effectuate the equitable division of assets envisioned by Iowa law.

V. Division of Marital Property.

Having determined that the pension benefits are included as marital property and that each party should be awarded one-half the marital assets, we now turn to a division of those assets. From our review of the record it appears the court of appeals modified the district court’s distribution of the marital property using the figures set forth in the court’s initial decree. That decree was later corrected, however, in the court’s ruling on a posttrial motion. Using the figures set forth in the amended decree, we calculate the marital property — excluding the fireman’s pension benefits — to have a value of $329,916, and marital debt to total $4420. Under the court of appeals’ decision, which we affirm, Dennis and Rebecca are each entitled to one-half of the parties’ net assets. Thus, on remand, the district court should modify its distribution of the parties’ marital property to accomplish an equal division of their assets, taking into account any inequities in the assignment of marital debt.

VI. Child Support.

When the district court calculated Dennis’s child support obligation, it considered the pension benefits as income to Dennis. In view of the fact that the pension benefits have now been divided as marital property rather than being treated as income, Dennis asks us to recalculate his child support. (It appears from the record that Dennis’s obligation for child support has now ended because the parties’ youngest child is no longer a minor.) Rebecca asserts Dennis’s child support obligation is appropriate, arguing “[t]he parties are virtually the same age, have similar education and training, and are both capable of gainful employment.” She claimed before the district court that Dennis’s “lack of earned income is self-inflicted,” and asserts on appeal that it is unconscionable for Dennis to enjoy his retirement while she must continue to work. We agree.

Dennis has offered no reason for his failure to obtain employment other than his desire to be retired. Moreover, he suffers from no ailments or disabilities that prevent him from earning income as he did before his retirement. As the trial court found, “Dennis is in good health and is capable of working and earning additional income, at a management level position, teaching, consulting, or in construction.” Under our case law, “a party may not claim inability to pay child support when that inability is self-inflicted or voluntary.” In re Marriage of Foley, 501 N.W.2d 497, 500 (Iowa 1998). In view of Dennis’s earning ability and his voluntary choice to remain unemployed, we decline to adjust his child support obligation.

VII. Summary and Disposition.

We affirm the court of appeals’ modification of the district court’s decree with the following changes. Upon remand the district court shall require the preparation of a marital property order based on the System’s rule 12.10 that assigns to Rebecca one-half of the monthly pension benefits payable to Dennis, including one-half of any cost-of-living adjustments that have been made since Dennis retired and began receiving benefits. In addition, the order shall provide that Rebecca be designated as the surviving spouse for one-half of Dennis’s pension. For any payments received by Dennis from the date of the original dissolution decree through the date of the System’s implementation of the marital property order, Dennis shall be required to pay to Rebecca one-half of such payments. We leave it to the judgment of the district court to devise a workable repayment plan. The district court shall also reexamine its property distribution to effectuate an equal division of the parties’ marital assets. The parties shall be required to complete any additional documentation necessary to give effect to the court’s decree.

DECISION OF COURT OF APPEALS AFFIRMED AS MODIFIED; DISTRICT COURT JUDGMENT AFFIRMED AS MODIFIED; CASE REMANDED WITH DIRECTIONS.

      . The court of appeals also addressed the parties’ disputes concerning college education subsidies for the parties’ two youngest children and attorney fees. Because neither party challenges the court's resolution of these issues, we do not address these matters in our opinion.

      . Theoretically, we could guarantee that Rebecca receives her share of Dennis's pension plan by awarding her one-half the present value of the pension benefits. See In re Marriage of Branstetter, 508 N.W.2d at 642 (stating one way to divide pension benefits is "to assign a value to the benefits, based on their present worth, and award that amount”). Requiring Dennis to pay Rebecca this amount at this time may, however, work a hardship on Dennis since he must wait to receive his portion of the pension in the form of monthly payments. Due to this fact and the fact that neither party requests this method of distribution, we consider it no further.


source: Caselaw Access Project

author: STREIT, Justice.

license: Public Domain

text:
    SIOUX CITY COMMUNITY SCHOOL DISTRICT, Appellant, v. IOWA DEPARTMENT OF EDUCATION, Appellee.
    No. 01-1996.
    Supreme Court of Iowa.
    April 2, 2003.

      Dawn E. Mastalir of Berenstein, Moore, Berenstein, Heffernan & Moeller, L.L.P., Sioux City, for appellant.
    Thomas J. Miller, Attorney General, and Christie J. Scase, Assistant Attorney General, for appellee.
   STREIT, Justice.

This dispute began when the Sioux City Community School District decided not to provide bussing for students who live less than two miles from the school. Parents appealed this decision to the Western Hills Area Education Agency (AEA). The AEA found the route students would have to travel was unsafe and therefore reversed the school district’s decision. Both the Department of Education and district court affirmed the AEA’s decision. Because we find the school district did not abuse its discretion in deciding not to provide transportation, we reverse. •

I. Background and Facts

This case involves a dispute over the provision of transportation for ninety-four students to and from McKinley Elementary School in Sioux City, Iowa. Children who reside at the Regency Mobile Home Park in Sioux City live approximately one mile from their school. Prior to 1995, the Sioux City Community School District did not provide transportation for the children. Construction of a shopping center in 1995 disrupted the children’s route to school. The city required the developer of the project to pay for the childrens’ transportation- and to design a “safe route” the children could use to walk to school when the construction was completed. Though the project was completed in 1998, additional road construction continued and the school district exercised its discretion to temporarily provide transportation for the students until the. construction was complete and-sidewalks were installed.

In the fall of 2000, the construction was finished and the school district informed parents that it would no longer provide transportation for the students. - The only available route for the children to use was a sidewalk built on the right of way located between Gordon Drive, a four-lane highway and major business thoroughfare, and a frontage road serving local businesses. Parents appealed the decision, to the Western Hills Area Education Agency (AEA). The AEA found, the route between the mobile home park and the school was not reasonably safe for elementary students to travel. It concluded the school district’s decision to not provide transportation was not a proper discretionary act and ordered the school district to immediately resume transportation services for the students. The school district appealed and both the Iowa Department of Education (Department) and the district court affirmed the AEA’s decision. The school district appeals the decision of the Department claiming it exceeded its authority in ordering the school district to provide transportation.

II. Scope of Review

Our review of an administrative agency proceeding is governed by Iowa Code section 17A.19(8) (2001). S.E. Iowa Coop. Elec. Ass’n v. Iowa Utils. Bd., 683 N.W.2d 814, 818 (Iowa 2001). We are limited to correcting any errors of law made by the Department. Iannone v. Iowa Dep’t of Revenue & Fin., 641 N.W.2d 735, 738 (Iowa 2002) (citing Iowa Code § 17A.19(8)). We will grant the requested relief if the petitioning party’s substantial rights have been prejudiced and the agency exceeded its statutory authority or abused its discretion. Iowa Utils. Bd., 633 N.W.2d at 818.

To constitute, an abuse of discretion, the action must be unreasonable or lack rationality under the attendant circumstances. Iannone, 641 N.W.2d at 738; In re J.L.L., 414 N.W.2d 133, 135 (Iowa 1987). An abuse of discretion is synonymous with unreasonableness. Dawson v. Iowa Bd. of Med. Exam’rs, 654 N.W.2d 514, 518 (Iowa 2002) (citing Stephenson v. Furnas Elec. Co., 522 N.W.2d 828, 831 (Iowa 1994)). “A decision is unreasonable where it is not based on substantial evidence ... or is based on an erroneous application of the law.” City of Windsor Heights v. Spanos, 572 N.W.2d 591, 592 (Iowa 1997) (citing Frank v. Iowa Dep’t of Transp., 386 N.W.2d 86, 87 (Iowa 1986); 5 Am.Jur.2d Appellate Review § 695, at 365 (1995)). Evidence is substantial when “a neutral, detached, and reasonable person” would find it sufficient “to establish the fact at issue when the consequences from the establishment of that fact are understood to be serious and of great importance.” Iowa Code § 17A.19(10)(f)(1).

III. The Merits

The school district begins by challenging the applicable standard under which the Department has authority to review its decision. The school district’s argument shows a dichotomy of thought. On the one hand, the school district argues there can be no review of its discretionary decisions. On the other hand, the school district states if we review its discretionary decision, we can review only for an abuse of discretion. The Department did not precisely articulate the applicable scope of review for its review of the school district’s decision. In the Department’s decision, and implicitly on appeal, the Department urges the director may determine whether the school district’s decision was reasonable and “exercise[ ][its] own independent judgment and discretion.” The parties disagree over whether substantial credible evidence supports the school district’s decision not to provide transportation.

A. What is the proper scope of review?

Both parties concede the Department has authority to review the school district’s decision. However, they disagree over the appropriate standard of review the Department must apply in its review. We begin by briefly explaining the powers of the school district in transportation matters. Iowa Code chapter 285 gives the board of directors of a school district certain duties and powers over the provision of transportation. The school district argues its decision to not provide transportation in this case was a discretionary decision subject to review only for an abuse of discretion. The school district relies upon Iowa Code section 285.1 which provides the board of directors of every school district,

shall provide transportation ... for all resident pupils attending public school, kindergarten through twelfth grade, except that:
(а) Elementary pupils shall be entitled to transportation only- if they live more than two miles from the school designated for attendance....
(d) Boards in their discretion may provide transportation for some or all resident pupils attending public school ... who are not entitled to transportation....

Iowa Code § 285.1(1) (1999).

The code creates only one mandate for the school district. The school district must provide transportation to students who live more than two miles from school. Id. § 285.1(l)(a). Apart from this requirement, the school district is vested with discretionary authority to decide whether to provide transportation under other circumstances. Iowa Code section 274.1 supports this conclusion stating, “[e]ach school district ... shall have exclusive jurisdiction in all school matters....” Id. § 274.1. The school district’s decision to not provide transportation was discretionary in nature because the statute states the provision of transportation is' discretionary for students living less than two miles from school.

The parents properly challenged the school district’s discretionary decision pursuant to section 285.12 which directs the agency boards to hear and decide appeals in a transportation disagreement between a school patron and the board of a local district. Id. § 285.12. Section 285.12 provides, in part,

In the event of a disagreement between a school patron and the board of the school district, the patron if dissatisfied with the decision of the district board, may appeal the same to the area education agency board.... Either party may appeal the decision of the agency board to the director of the department of education.... The decision of the director shall be subject to judicial review in accordance with the terms of the Iowa administrative procedure Act.

Id. We begin our discussion by determining the extent to which the Department may review the school district’s action.

At first glance, our decision in Howell School Board District No. 9 v. Hubbartt appears to have addressed the issue of the proper scope of review of a. school district’s discretionary decision. See 246 Iowa 1265, 70 N.W.2d 531 (1955). In Howell, although the case may have been litigated under Iowa Code chapter 285, the central dispute was not the provision of transportation to students within two miles of a school. Rather, it focused on the, school district’s exclusive authority to assign a student to one school when the parent sought enrollment in another school in a different district. We emphasized there was no statute either giving or denying the state superintendent the authority to determine which school a pupil should attend. Id. at 1274, 70 N.W.2d at 535-36. Because the legislature had not directed otherwise, we held the school board’s decision in this regard concerned a matter within the “exclusive jurisdiction” and discretion of the local school board. Consequently, we found the state superintendent did not have authority to “determine matters within the exclusive jurisdiction of the local board.” Id. at 1274, 70 N.W.2d at 536.

Our decision in Howell must not be construed to mean discretionary decisions of the school district are immune from any type of review. Rather, in Howell, we addressed whether, when reviewing the school district’s action, it was proper for the state superintendent to examine the record, make his own independent determination, and substitute his judgment for the school district’s. Id. at 1267, 70 N.W.2d at 532. Because no statute conferred upon the state superintendent this broad scope of review, we found he exceeded his authority. That is, in Howell we stated an agency’s authority to review the school district’s decision is only as broad as that vested in it by statute or regulation.

Our holding in Howell was reinforced by our later decision in Board of Education in and for Franklin County v. Board of Education in and for Hardin County, where we briefly discussed Howell as it applies to discretionary actions. See 250 Iowa 672, 95 N.W.2d 709 (1959). The case dealt with the reorganization of a proposed school district. A statute applied to the facts of the case stating,

The state department shall have the authority to affirm the action of the joint boards, to vacate, to dismiss all proceedings or to make such modification of the action of the joint boards as in then-judgment would serve in the best interests of all the counties. This decision may be appealed to a court of record in one of the counties by any aggrieved party to the controversy....

Iowa Code § 275.8 (1958). Based upon this statute, we found the legislature delegated authority to the state Department of Public Instruction to review the substance of a decision made by the county board or boards or any school district. Bd. ofEduc. in and for Franklin County, 250 Iowa at 676, 95 N.W.2d at 712-13 (stating Howell is not applicable in view of the statutory amendment to section 275.8 of the 1958 Code). That is, the aggrieved party had a legal right to appeal to the Department of Public Instruction from the decision of the joint county boards. Because a specific statute in that instance gave authority to the state department to affirm, vacate, dismiss, or modify the actions of the school district, we found the state department did not exceed its authority in modifying the decision and order of the joint boards of education. Id. at 675, 95 N.W.2d at 711. Howell and Board of Education in and for Franklin County compel us in the present case to determine what statutory powers have been conferred upon the Department in reviewing the Sioux City Community School District’s decision.

In the case before us, the statute giving the school district discretion in the matter of transportation controls the standard we will use to review the school district’s decision. Administrative boards, commissions, and officers have no common-law powers.

The powers and duties of public office are measured by the terms and necessary implication of the grant of constitutional or statutory authority; in this regard, it has sometimes been stated that public officers have only those powers expressly granted or necessarily implied by statute....

63C Am.Jur.2d Public Officers and Employees § 231, at 670 (1997); 67 C.J.S. Officers § 107, at 378 (2002). “If broader powers are desirable, they must be conferred by the proper authority.” 63C Am. Jur.2d Public Officers § 231, at 671.

Nothing in Iowa Code section 285.12 suggests the scope of the Department’s review of the school district’s decision is de novo, allowing the Department to reverse the school district and substitute its own judgment. No statute gives the Department authority to override the school district’s ultimate decision because it determines the decision was wrong. Rather, where a statute provides for a review of a school district’s discretionary action, the review, by necessary implication, is limited to determining whether the school district abused its discretion. See 63C Am.Jur.2d Public Officers and Employees § 231, at 670; 67 C.J.S. Officers § 107, at 378.

Because the school district has discretion in the provision of transportation and the Department has authority to review decisions made pursuant to such discretion, its review is necessarily limited to the abuse of discretion standard. See id. We can find no statute in the Code of Iowa or in the Iowa Administrative Code which gives the Department more authority upon review than that necessary to determine whether the school district abused its discretion. In applying abuse of discretion standards, we look only to whether a reasonable person could have found sufficient evidence to come to the same conclusion as reached by the school district. Iowa Code § 17A.19(10)(f)(l). In so doing, we will find a decision was unreasonable if it was not based upon substantial evidence or was based upon an erroneous application of the law. Spanos, 572 N.W.2d at 592. Neither we nor the Department may substitute our judgment for that of the school district.

B. Did the school district abuse its discretion?

Before turning to the facts upon which the school district based its decision, we examine the nature of the AEA’s and Department’s actions. That is, we must determine whether the Department exceeded its scope of authority in ordering the school district to provide transportation. In overruling the school district’s decision to not provide transportation, the AEA stated,

the pathway between Regency Mobile Home Park and McKinley Elementary School is not reasonably safe for the elementary school students who must travel this route every school day. The AEA Board is concerned that children as young as kindergarten age face an unreasonably dangerous walk given the volume of traffic on Gordon Drive, the number and complexity of the crossings along Gordon Drive, and the fact that locating the sidewalks in the median [between Gordon Drive and the frontage road] makes it so the children are surrounded by traffic on Gordon Drive and the frontage road.

When the Department affirmed the AEA’s decision it reviewed the entire record. In so doing, the Department concluded,

The record shows that the [AEA] thoroughly evaluated the situation on Gordon Drive in addressing the transportation concerns of these parents and of the [school district]. The [AEA] was justified in making its own analysis of the facts in deciding to reverse the [school district’s] decision to discontinue the transportation being provided to the students residing at Regency. Although reasonable minds could differ over the judgment call that the [AEA] was called upon to make, the parents convinced the [AEA] that the [school district] exercised its discretion in an unreasonable way adverse to the health and safety of the students, as required by Iowa Code section 285.10(2) (2001). The [school district] has failed to show that the [AEA’s] decision was unreasonable.

(Emphasis added.) For the most part, the facts are undisputed but the parties have each emphasized different portions of the record.

The issue is whether the Department properly reviewed the school district’s decision for an abuse of discretion. The Department stated, “Although reasonable minds could differ over the judgment call that the [AEA] was called upon to make,” it went on to say the parents “convinced” the AEA that the school district’s decision was “adverse to the health and safety of the students.” By stating “reasonable minds could differ” over this discretionary decision, the Department conceded there was evidence supporting the school district’s decision. That is, the Department did not review the school district’s action for abuse of discretion but instead made its own judgment based upon the entire record. This conclusion is even more evident by the Department’s statement that the parents “convinced” the AEA the district’s decision was not correct. Such a statement shows the Department, like the AEA before it, considered the entire record and concluded the school district’s decision was wrong. The Department did not determine whether a reasonable person could have come to the same conclusion as the school district. The Department’s action exceeded its authority.

Under the appropriate standard, a reasonable person could have found substantial credible evidence supporting the school district’s decision. The sidewalk in question was constructed by the City of Sioux City in compliance with all of the applicable laws and ordinances. The school district created the District Traffic Safety Committee to study the area and make recommendations as to the safety of the route for school children. The safety committee was comprised of two members of the Public Works/Traffic Division, officers from the Sioux City Police Department, a member of the Woodbury County Sheriffs Department, two principals of the school district, the assistant superintendent, the district supervisor for transportation, the district director of operation and maintenance and the district safety manager. The safety committee members met several times to discuss the area around Gordon Avenue. The committee made visual inspections of the route and examined the traffic volume and patterns. Before making any conclusions, the committee consulted the Department of Motor Vehicle Safety, Department of Transportation, and the City of Sioux City. It discussed the safety of the route with various experts who all determined the area was safe for students to use. The committee made special note of the concerns of the AEA. It discussed numerous possibilities, aside from providing transportation to the students, that might increase the relative safety of the area.

The safety committee compared the nature of this particular sidewalk to others in the area that students must walk to get to school. It determined the traffic flow along Gordon Drive was regular, but not excessive, and the speed of the traffic was not extreme. In particular, it noted the presence of very little traffic during the morning and afternoon hours when children would be using the sidewalk along Gordon Drive. In general, the committee saw little traffic along the frontage road. The committee determined the distance between the sidewalk and Gordon Drive varies from five to twenty feet along the route. It concluded the distance between the sidewalk and the frontage road did not present any safety concerns. Because some parents complained snow removal was not regular on the sidewalk, the committee examined the maintenance of the area. Although there was one report of snow on the sidewalk preventing the students from using it, the safety committee determined the snow removal overall was reliable and the conditions were not dangerous for the students. Based upon these findings, the committee concluded, as a general matter, this particular sidewalk presents no more danger to the students than any other sidewalk in Sioux City.

As a result of its observations, the safety committee discussed installing crosswalk signage and other signage to signify the students’ presence. The committee recommended moving the location of a stop sign so a crosswalk could be striped across the road. It explored the possibility of adding a barricade along the route or creating a new sidewalk for students to use. The city agreed to construct a sidewalk that would redirect the student traffic, making their travel safer. Finally, to assist the children in safely arriving at school, the committee recommended new signage at one of the three points along Gordon Drive where the sidewalk is interrupted by entrances to businesses. Because the traffic engineers concluded additional signage would be a deterrent to safety, not a promotion of it, the committee did not recommend the installation any other traffic control devices.

The superintendent considered and accepted the committee’s findings and recommendations. In determining the school district would no longer provide transportation to these students, the superintendent considered the following: safety of the students, cost and reimbursement schedules of the State of Iowa, equitable treatment for all students in the Sioux City Community School District, statutory obligations, and the actual conditions of the route along Gordon Drive. The school board voted unanimously supporting the superintendent’s conclusion the route was safe.

Given the facts above, it can hardly be argued the school district did not carefully balance competing considerations in exercising its discretion determining whether it should bus these students to and from school. It did not make a denial of the parents’ request without first exploring the situation. In keeping with the findings of the safety committee, the school district made an informed decision and concluded it was not appropriate under the circumstances to provide transportation for these students. Taking into consideration the recommendations for safety improvement made by the commission, the school district determined this route was safe for the students to use. Legitimate concerns were raised about five-year-old students walking to school along this route, part of which comes within five feet of the highway and the penchant of such immature students to wander. These concerns were certainly considered by the school district; however, they did not render the route unsafe. Because a reasonable person could have found substantial evidence supporting the school district’s decision, we conclude the school district did not abuse its discretion.

IV. Conclusion

The school district by reason of statute has discretion in its provision of school transportation for students who live less than two miles from school. The Department has authority to review the school district’s discretionary decisions made pursuant to Iowa Code section 285.12. However, by necessary implication, the Department’s review is limited to determining whether the school district abused its discretion. The parents were required to show the school district’s decision was unreasonable and lacked rationality. The Department exceeded its authority by substituting its judgment for that of the school district. The record shows substantial credible evidence upon which a reasonable person could come to the same conclusion as did the school district. As such, we reverse the Department’s order compelling the school district to provide transportation services.

REVERSED.

      . Approximately one third of the elementary ■ school's entire student body must walk this path to get to and from school.

      . The school district considered the number and age of students who would use this route to get to school. The school district noted large groups of students were not using the sidewalk and, in fact, noted the presence of very few school children. The superintendent stated, "Walking is something children do. School and traffic officials work to provide the necessary learning experience and traffic controls/signage.” The school district noted the concerns based upon the age of the students are no different from the concerns a parent would have for any young child who walks to school unescorted. The concerns the parents voiced are not unique to this particular route and do not make this sidewalk unsafe.


author: LAVORATO, Chief Justice.

text:
    Mary Kay WILLIAMS, Appanoose County Treasurer, Appellant, v. Robert N. VAN SICKEL, Richard Van Sickel, Janet M. Hanes n/k/a Janet M. Longley, and Greg Wilson, Appellees.
    No. 01-2044.
    Supreme Court of Iowa.
    April 2, 2003.

      Robert F. Bozwell, Jr., Centerville, for appellant.

      Bradley M. Grothe of Orsborn, Bauerle, Milani & Grothe, L.L.P., Centerville, for appellees Robert N. Van Sickel, Richard Van Sickel, and Janet M. Longley.
    John A. Pabst of Pabst Law Firm, Albia, for appellee Greg Wilson.
   LAVORATO, Chief Justice.

Mary Kay Williams, the Appanoose County Treasurer, appeals from a district court judgment dismissing her action to obtain a personal judgment against the defendants, Robert N. Van Sickel, Richard Van Sickel, Janet M. Hanes (n/k/a Janet M. Longley) (collectively “Van Sickels”), and Greg Wilson for unpaid ad valorem real estate taxes, and granting the Van Sickels’ request for attorney fees. We affirm in part, modify in part, and remand with directions.

I. Background Facts.

On March 1, 1981, Greg Wilson entered into a buy-sell agreement with E.F. and Gertrude W. Van Sickel to purchase the assets of a fertilizer business in Appanoose County. The assets included some buildings, machinery, and equipment located on land leased from the Milwaukee Railroad.

Wilson agreed to make yearly payments toward the purchase price and to give the seller such “financing statements and security agreements as are necessary to establish a first lien in favor of the Seller on all of the properties being transferred.” In a separate document, in which E.F. assigned the lease with the railroad to Wilson, Wilson agreed to pay “all taxes and assessments accruing during the tax year in which this assignment takes place and subsequent years.” In this document, Wilson also agreed to be bound by the terms and conditions of the lease with the railroad.

Wilson took possession of the business at the time of the buy-sell agreement and operated it as Wilson Feed & Fertilizer Company. The transfer was noted on the county assessor’s property card and from there was placed on the tax-collection rolls. Wilson paid the taxes on the property and in 1983 or 1984 added two grain bins to the site.

E.F. Van Sickel died in 1984. In 1985, E.F.’s children, the Van Sickels, entered into a stipulation and settlement with the estate whereby the Van Sickels would receive the estate’s and Gertrude’s interest in the buy-sell agreement. In 1988, Gertrude, individually and as executor of the estate, assigned all right, title and interest in the buy-sell agreement to the Van Sick-els.

In the meantime, Wilson filed for bankruptcy in May 1988. He made payments on the buy-sell agreement until approximately 1985. Even though they never received payment from Wilson on the agreement, the Van Sickels took no action to enforce it or to repossess the property subject to the buy-sell agreement.

, The property card maintained by the county assessor for the property on the leased land listed the Van Sickels as owners, contracted to Wilson, as of December 1988. Robert Van Sickel was listed as the Van Sickels’ local representative. The property card indicated the assessed value of the property subject to the buy-sell agreement and the two grain bins (hereinafter “the property”) was $45,000. This figure was based on a 1984 assessment of the property by the State of Iowa.

In May 1990, Mary Kay Williams, the Appanoose County Treasurer, notified Robert Van Sickel that the property would be offered at the county’s annual tax sale in June. The treasurer knew at the time that she was not going to sell the property because, as she testified, a tax deed cannot be issued for buildings on leased land.

Upon receiving the notice, Robert Van Sickel contacted, the treasurer. He told her that he and his siblings held no ownership of the property because they had inherited only the contract seller’s right to payment.

Contrary to the notice, the treasurer did not offer for sale the property on the date of the June sale because the county could not issue a tax sale deed for buildings on leased land. She claimed that (1) buildings on leased land caused problems with the office’s computer software system and (2) the computer company advised her to issue tax sale certificates for such buddings so that the office could proceed 'with the tax sale application and the new year’s taxes.

Even though the property was not offered or sold on the day of the tax sale, the treasurer signed a “certificate of tax sale” on June 18, 1990. The tax sale certificate indicated that the property had been sold to Appanoose County at a tax sale on that date and that the total tax, penalty, and costs amounted to $10,763.

A year later — on April 15, 1991 — the treasurer sent a tax sale notice to Robert Van Sickel and Wilson. The notice listed Wilson as the “person in possession” and the Van Sickels as the “person in whose name the property described below is being taxed.” The notice described the property and stated that (1) the property had been sold on June 18, 1990 for the then delinquent and unpaid taxes against the property to Appanoose County, (2) a certificate of purchase had been issued to Appanoose County, and (3) “the right of redemption will expire and a deed for the said real estate will be made within ninety (90) days from the completed service of this notice.”

Robert Van Sickel testified that as he understood the notice, it gave him two choices: either redeem the property, or the county would take the deed. He thought the county was going to take the deed to the property and he and his siblings would not have any tax liability, so he took no further action.

Wilson testified that if he had known he had some responsibility for the taxes, he would have taken action. He continued to receive tax statements after his bankruptcy discharge, but did not receive any statements after 1991.

II. Proceedings.

In December 1997, the treasurer sued the Van Sickels and Wilson seeking a judgment against them for delinquent and unpaid “ad valorem real estate taxes” of $30,290.07 (later reduced to $26,167.00) against the property. (In 1991, machinery and equipment which were part of the property were no longer subject to taxation.) The petition alleged that pursuant to Iowa Code sections 445.3, 445.32, and 446.20 (1997),' the defendants were personally liable for the taxes either as owners in fact or as beneficial owners.

Later, the district court granted the defendants’ motions for summary judgment and dismissed the petition. The court concluded that the treasurer could not collect delinquent taxes pursuant to a tax certificate issued prior to April 1, 1992, the effective date of Iowa Code section 445.3. (Before passage of section 445.3, a county treasurer could only collect unpaid taxes for buildings on leased land by pursuing a distress warrant and selling the property pursuant to that warrant. See Iowa Code §§ 445.8, .32 (1991)). ..

Following the treasurer’s appeal and our transfer to the court Of appeals, that court held that the treasurer could not seek a personal judgment for delinquent taxes accrued prior to April 1, 1992. The court of appeals further held that a tax certificate was not necessary for the treasurer to seek a personal judgment for taxes accrued after April 1, 1992, and for that reason a claim for those taxes could proceed. In reaching these conclusions, the court of appeals relied on our decision in Hiskey v. Maloney, 580 N.W.2d 797, 799 (Iowa 1998) (holding that Iowa Code section 445.3, which permits the county to secure a personal judgment to collect delinquent real estate taxes, does not apply retroactively „to the collection of taxes included in tax sale certificates issued before April 1, 1992, the effective date of the amendments). The court of appeals affirmed in part, reversed in part, and remanded the case to allow the treasurer to proceed with the claim for delinquent taxes accruing after April 1, 1992.

On remand, the defendants pled, among other things, an affirmative defense of es-toppel. Following a bench trial, the district court ruled that the defendants had met their burden of establishing by clear, convincing, and satisfactory evidence their defense of estoppel. Therefore the treasurer was “estopped from claiming taxes accrued after April 1,1992.”

In addition, the district court concluded that even if the treasurer were not es-topped, she had failed to prove the defendants owned the property. Thus, the court concluded, a preponderance of the evidence failed to establish that either the Van Sickels or Wilson were lawful owners of the property.

Finally, the district court granted the Van Sickels’ request for attorney fees. The treasurer appealed, contending the district court erred in its findings and conclusions and in awarding attorney fees. The Van Sickels cross-appealed, seeking appellate attorney fees.

We recite additional facts as they relate to the issues we discuss.

III. Issues.

Because we conclude the ownership issue is dispositive of the appeal, we confine our discussion to it and to the issue of attorney fees.

IV. Scope of Review.

Before receiving evidence, the district court made the following record:

This case involves some mixed issues of law and equity. Counsel and I have discussed that in chambers, and what we are going to do is make an equitable record that will allow all equity issues to be preserved for appellate review de novo.... What that will mean in practical terms is that when objections are made, we’ll have the record preserved at those objections, but all offered evidence will come into the record and that will be subject to objections.

We interpret the district court’s remarks to mean that it was keeping the issues of law and equity separate but for convenience would take all evidence subject to objection.

The treasurer brought her action pursuant to section 445.3, which expressly provides that such suits are to be “commenced, tried, and prosecuted to final judgment the same as provided for ordinary actions.” Iowa Code § 445.3. Ordinary actions are tried at law. See Matter of Oseing, 296 N.W.2d 797, 800 (Iowa 1980) (“Special actions are tried as ordinary actions at law unless made triable in equity by statute.... ”). Because ownership is a predicate for the type of relief the treasurer is seeking, we conclude our review on the ownership issue is for corrections of errors of law.

Because our review is at law, we are bound by the district court’s findings on the ownership issue if substantial evidence supports those findings. Frontier Properties Corp. v. Swanberg, 488 N.W.2d 146, 147 (Iowa 1992). Evidence is substantial “if reasonable minds would find it adequate to reach the same conclusion even if we might draw a contrary inference.” Id.

V. The Ownership Issue.

As mentioned, the treasurer could seek personal judgment for taxes accruing after April 1,1992. The district court concluded that “the county’s record of the property ownership is unreliable and too weak to support personal judgment,” leading the court to further conclude there was a failure of proof as to the defendants’ ownership on or after April 1,1992. For reasons that follow, we agree.

A. The Van Sickels. The district court correctly interpreted the Van Sick-els’ interest arising from the assignment from Gertrude and E.F.’s estate as merely a right to receive contract payments. The buy-sell agreement also required Wilson to provide the financing statements and security agreements necessary to establish a security interest in favor of the seller. See Iowa Code § 554.2401(1) (“Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited in effect to a reservation of a security interest.”).

The district court found that after the assignment, the Van Sickels never took any affirmative action to exercise any of their collection options — such as repossession — when Wilson failed to make payments. The court further found that the Van Sickels did not want the business back and wanted to avoid environmental liabilities that might arise from a “defunct fertilizer facility.” Substantial evidence supports these findings.

Given the nature of the buy-sell agreement and a lack of action by the Van Sickels to enforce their collection options, we agree with the district court that “[a] preponderance of the evidence fails to demonstrate that the Van Sickels were the owners of the property.”

Apparently, the treasurer now agrees with this conclusion for she did not assert in her appellate briefs that the Van Sickels were owners who were liable for the taxes. Rather, she now asserts that Wilson should be responsible. We also note that in oral argument, the treasurer conceded the Van Sickels have no liability for the taxes.

B. Wilson. As to the treasurer’s claim that Wilson was the owner of the property and therefore responsible for payment of the delinquent taxes, the district court made the following findings rejecting that claim.

Wilson quit making payments under the buy-sell agreement in 1985, abandoned the property in early 1987, and filed bankruptcy in 1988. Sometime during this period, a liquidation company ended up with ownership of the two grain bins and sold them to James Wilson, Greg Wilson’s father.

In 1990, the county assessor visited the site, saw a pit filled with water, and recognized the hazard posed some possible liability. The local board of health had been alerted to the condition of the property. At this time the assessor confirmed the property had been abandoned for some time, it was in a dilapidated condition, and it was not worth what it had been appraised for in 1984. The assessor never entered any of this information on the property card. Nor did the assessor try to determine ownership even though the property had obviously been abandoned.

Record keeping regarding ownership of property on leased land in the assessor’s office is informal, leading to inaccuracies. The record keeping is premised on officials in various offices noticing a transfer, taking the initiative to pass the word along to other county officials, making factually and legally accurate notations, and keeping the data reasonably current with available information. The assessor also relies on information from the public. Once the assessor notes on the property card a change in title gleaned from transfer documents forwarded by the recorder, or through other information received, removing names from the card is far more rigorous. Unless a removal is noncontroversial, all names stay on.

Someone at some time had crossed Wilson’s name off the assessor’s property card, leaving a “current” reference to only the contract sellers. At some point, the assessor updated the property card to show the assignment of the seller’s interest in the buy-sell agreement to the Van Sickels. Robert Van Sickel was listed as the Van Sickels’ local representative.

County action commonly undertaken to monitor taxable property was conspicuously absent from 1984, when the State appraised the property, until 2000, when new ownership was documented. During that time the county assessor never inspected the property for the official purpose of monitoring what was there, determining who owned it, or seeking to re-value it in recognition of its obvious deterioration and obsolescence.

Over the years, none of the county’s tax records were adjusted to reflect various recorded railroad deeds that came through the recorder’s office. For example, a re-conveyance deed from Soo Line Railroad and CMC Real Estate Corporation was recorded July 24, 1989, but was never noted on the assessor’s property card. This deed purported to convey railroad land underlying the fertilizer business and transferred “all structures, fixtures and improvements located thereon.” (The original lease between E.F. Van Sickel and the railroad provided that the railroad could consider a failure to remove property following a termination of the lease an abandonment of the property to the railroad.)

In addition, the assessor failed to notice that a quitclaim deed between CMC Real Estate Corporation and the Chicago Milwaukee Corporation was recorded February 26, 1992, deeding the real estate “together with all the appurtenances, fixtures, tracks, signals, equipment and personal property, if any, owned ... and used in connection therewith.... ” On the same day, the Chicago Milwaukee Corporation made the same transfers to CMC Heartland Partners, which transfers also went unheeded.

The record reflects that CMC Heartland Partners conveyed the land in question to Carol M. and Raymond D. Johnson on May 26, 1998. This deed was recorded. On June 26, 2000, the district court entered a decree quieting title in the John-sons against the Van Sickels, Wilson, and the county. The decree quieted title not only to the land, but also to all buildings, structures and fixtures located on the land. The confusion regarding ownership was finally cleared up and the assessor’s records were adjusted to reflect ownership of the property in the Johnsons.

In 1998, when the Johnsons first inquired about the delinquent taxes, the assessor’s records did not reflect that Wilson had put the grain bins on the land after the buy-sell agreement was executed. Additionally, the records failed to disclose that Wilson’s father had bought the bins in 1988. The January 1, 2000 assessment reflected those facts for the first time. Without the bins the property was valued at $10,000, rather than the $45,400 valuation after the 1984 appraisal.

Substantial evidence supports all of these findings. Based on those findings the district court reached the following correct conclusions:

A preponderance of the evidence does not demonstrate that Wilson was a lawful owner of the taxed property either. He was the last owner that the county took note of, but he abandoned the property in 1988, and there were broad railroad transfers in the meantime, which may well have enveloped all of the deserted property on the site. The fact that the county did not react to the railroad transfers cannot serve as proof of Wilson’s ownership. It is the treasurer’s burden to prove that Wilson owes taxes accruing after April 1, 1992. She has failed to do that under the preponderance-of-the-evidence standard.
The sum of taxes the treasurer seeks to collect for past assessments on the grain bins cannot properly be collected from either the Van Sickels or Wilson. A preponderance of the evidence reveals that James Wilson has owned those improvements since about 1988, and he has not been made a party to this action.

VI. The Attorney Fee Issue.

The district court awarded the Van Sickels $16,222.36 in attorney fees. The treasurer contends the district court erred in awarding these fees. In awarding the fees, the district court relied on our decision in Hockenberg Equipment Co. v. Hockenberg’s Equipment & Supply Co., 510 N.W.2d 153 (Iowa 1993). The treasurer contends her conduct does not meet the high standard set in that case for an award of common law attorney fees.

Generally, a party has no claim for attorney fees as damages in the absence of a statutory or written contractual provision allowing such an award. Id. at 158. There is no such statutory or written contractual provision in this case. Therefore, the Van Sickels must find support for such an award under the common law. See id.

Whether to grant common law attorney fees rests in the court’s equitable powers. Id. Our review of this issue is therefore de novo. See id.; Iowa R.App. P. 6.4.

To obtain common law attorney fees, a party must prove “that the culpability of the [opposing party’s] conduct exceeds the ‘willful and wanton disregard for the rights of another’ ” standard required to prove punitive damages. Hockenberg Equip. Co., 510 N.W.2d at 159. The opposing party’s conduct “must rise to the level of oppression or connivance to harass or injure another.” Id. at 159-60. “Oppressive” conduct “denotes conduct that is difficult to bear, harsh, tyrannical, or cruel.” Id. at 159. “Connivance” is defined as “voluntary blindness [or] an intentional failure to discover or prevent the wrong.” Id. (citation omitted). “These terms envision conduct that is intentional and likely to be aggravated by cruel and tyrannical motives. Such conduct lies far beyond a showing of mere ‘lack of care’ or ‘disregard for the rights of another.’ ” Id.

Here, the district court found that the treasurer “issued a series of misleading documents, in the form of a tax sale certificate and a tax sale notice she now claims was ineffectual.” Additionally, the court found that the treasurer “fabricated records and certified them into pretrial discovery and then offered them as trial evidence. She testified falsely about her retrieval of records.... She sat on the county’s rights to seek collection, to the substantial detriment of the defendants.” In awarding the attorney fees, the court found that “[t]he totality of the treasurer’s actions here attain a level emblematic of ‘harsh, tyrannical’ motivations and an ‘intentional failure to discover or prevent the wrong.’ ” (Citation omitted.)

To understand the district court’s ruling, we need to put the court’s findings in context.

As mentioned, one of the affirmative defenses the Van Sickels and Wilson asserted was equitable estoppel premised on the treasurer’s April 15, 1991 notice, a defense the district court upheld. In addition, the Van Sickels asserted counterclaims for damages against the treasurer, also premised on that notice. The counterclaims were for fraudulent misrepresentation and negligent misrepresentation, both of which the district court dismissed following the bench trial.

The elements of equitable estop-pel include the following: the opposing party misrepresented or concealed material facts; the party relying on estoppel lacked knowledge of the true facts; the party misrepresenting or concealing the true facts intended the deceived party to act on those representations; and detrimental reliance by the party to whom the representations were made. Rubes v. Mega Life & Health Ins. Co., 642 N.W.2d 263, 271 (Iowa 2002).

Like the equitable estoppel defense, the fraudulent misrepresentation and negligent misrepresentation claims both include the element of reliance, which is important in understanding the significance of the treasurer’s conduct. See Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 400 (Iowa 2001) (plaintiff must prove reliance to establish claim of fraudulent misrepresentation); Barske v. Rockwell Int’l Corp., 514 N.W.2d 917, 924 (Iowa 1994) (reliance an element of negligent misrepresentation).

At trial, two letters the treasurer introduced into evidence became the source of much discussion and debate. The treasurer testified that once she determined the April 15, 1991 tax sale notice had been sent in error, she sent letters to Robert Van Sickel and Wilson. The letters explained that the tax sale notice had been sent in error and should be disregarded, and that the county would not be taking the deed. The treasurer claimed she found the letters approximately three months before the trial while emptying out a box of old records under her desk to make more legroom. The alleged discovery was also shortly after the district court denied the treasurer’s motion to dismiss the counterclaims.

The letters were not dated, and the treasurer provided no proof that the letters were mailed. Robert Van Sickel and Wilson testified they had never seen the letters.

Letters admitted into evidence that were dated 1990, 1992, and 1994 were typed on a typewriter, using preprinted letterhead. The letterhead used in the letters allegedly sent to Robert Van Sickel and Wilson shortly after the tax sale notice is identical to letterhead used in letters dated 1997, which were typed on a computer.

Marla Belloma, former employee of the treasurer, testified that the treasurer used letterhead stationary and a typewriter to type all correspondence in 1991. She also testified that there were no personal computers capable of producing letters like those allegedly sent to Robert Van Sickel and Wilson in the office in 1991.

Olive Hand, another former employee, testified about a tax sale of property owned by Gladys Depuy, which occurred in the late 1980s. Depuy claimed she had not received any notification that the property had been sold at a tax sale. Hand and two other co-employees looked through the correspondence file and could not find a letter from the treasurer to Depuy. The next day the file was on Hand’s desk, and the treasurer asked her to look in the file again for the letter. This time, Hand found a letter notifying Depuy that her property had been sold. Hand testified she believed the letter had been typed and put in the file for someone to find. Depuy eventually lost her home through the tax sale process.

On our de novo review, we agree with the district court that the treasurer had fabricated the two letters after the start of the lawsuit. The treasurer compounded the fraud by offering them as evidence at trial.

Obviously, her intent was to disprove the reliance element necessary for the es-toppel defense and the fraud counterclaims, thereby establishing her case against the defendants and defeating their counterclaims against her. At this point, we think the treasurer crossed the line, causing her conduct to rise to a level above “the willful and wanton disregard of the rights of another” standard required to prove punitive damages.

We agree with the Van Sickels that “[i]t is hard to imagine behavior that would be more oppressive or conniving than a public official creating documents which benefit herself to the detriment of those she is elected to represent.” Equally oppressive and conniving was her attempt to defraud the district court in her scheme to protect herself from liability.

Nevertheless, we think the attorney fee award should be modified by limiting the award to the time and effort the Van Sickels’ attorney expended after the treasurer claimed she discovered the two letters (approximately three months before trial) and embarked on her fraudulent scheme. In addition, the Van Sickels are entitled to appellate attorney fees because the treasurer continues to insist here that she did not fabricate the letters, causing the Van Sickels to defend once again against this claim.

VII. Disposition.

In sum, we conclude the treasurer failed to prove the Van Sickels or Wilson owed the taxes assessed after April 1, 1992. We therefore affirm the district court’s judgment dismissing the treasurer’s petition.

We further conclude the treasurer’s conduct rose to the level justifying an award of attorney fees incurred in the district court as well as on appeal. However, we modify the district court’s award as to the amount of fees awarded in the district court and remand the case for a new determination of such fees as we have directed.

On remand, the district court is also to determine the amount of appellate attorney fees the Van Sickels are entitled to recover.

AFFIRMED IN PART, MODIFIED IN PART, AND REMANDED WITH DIRECTIONS.


text:
    Andrew HARRISON, Appellee, v. EMPLOYMENT APPEAL BOARD and Victor Plastics, Inc., Appellants.
    No. 02-0184.
    Supreme Court of Iowa.
    April 2, 2003.

      Thomas D. Wolle of Moyer & Bergman, P.L.C., Cedar Rapids, for appellant Victor Plastics, Inc.
    Richard R. Ramsey, Des Moines, for appellant Employment Appeal Board.
    Jenny Schulz of Legal Services Corp. of Iowa, Cedar Rapids, for appellee.
   TERNUS, Justice.

This case involves the interplay between Iowa’s workplace drug testing law, Iowa Code section 730.5 (2001), and an employee’s eligibility for unemployment benefits. The appellant, Employment Appeal Board, denied unemployment benefits to the ap-pellee, Andrew Harrison, on the ground of misconduct based on Harrison’s positive drug test. The district court reversed the agency decision, concluding (1) the appellant employer, Victor Plastics, Inc., had not complied with the statutory requirements for the drug test that provided the basis for the Board’s finding of misconduct, and (2) as a consequence, the test results could not be used to support the Board’s finding. On the Board and employer’s appeal, we affirm.

I. Iowa’s Workplace Drug Testing Law.

Our examination of the facts of this case will be more meaningful if we first review the drug testing law against which the employer’s actions must be judged. Therefore, we begin with a discussion of those portions of section 730.5 that are pertinent to this appeal.

Iowa Code section 730.5 sets forth the requirements for workplace drug testing in the private sector. Prior to 1998, it prohibited “random or blanket drug testing of employees.” See Iowa Code § 730.5(2) (1997). In 1998, the legislature amended section 730.5 to permit such tests. 1998 Iowa Acts ch. 1011. Currently, section 730.5(4) states:

To the extent provided in subsection 8, an employer may test employees and prospective employees for the presence of drugs or alcohol as a condition of continued employment or hiring. An employer shall adhere to the requirements of this section concerning the conduct of such testing and the use and disposition of the results of such testing.

Iowa Code § 730.5(4) (emphasis added). The statute specifically permits the employer to use a confirmed positive drug test result “as a valid basis for disciplinary ... actions pursuant to the requirements of the employer’s written policy and the requirements of this section,” including “termination of employment.” Id. § 730.5(10) (emphasis added).

Subsection 7 of the statute outlines the testing procedures, stating that “[a]ll sample collection and testing for drugs or alcohol under this section shall be performed in accordance with” the specified conditions. Id. § 730.5(7) (emphasis added). The law requires that collected samples be split into two components. Id. § 730.5(7)(6). If an initial screening of the first portion is positive, the results must be confirmed by a second test of the same portion using a different chemical process than was used in the initial screening. Id. § 730.5(7)(/)(l). The second portion of the sample is reserved for “a second, independent confirmatory test as provided in paragraph ‘i’.” Id. § 730.5(7)(6). Paragraph “i” states in relevant part:

If a confirmed positive drug or alcohol test for a current employee is reported to the employer by the medical review officer, the employer shall notify the employee in writing by certified mail, return receipt requested, of the results of the test, the employee’s right to request and obtain a confirmatory test of the second sample collected pursuant to paragraph “b” at an approved laboratory of the employee’s choice, and the fee payable by the employee to the employer for reimbursement of expenses concerning the test. The fee charged an employee shall be an amount that represents the costs associated with conducting the second confirmatory test, which shall be consistent with the employer’s cost for conducting the initial confirmatory test on an employee’s sample. If the employee, in person or by certified mail, return receipt requested, requests a second confirmatory test, identifies an approved laboratory to conduct the test, and pays the employer the fee for the test within seven days from the date the employer mails by certified mail, return receipt requested, the written notice to the employee of the employee’s right to request a test, a second confirmatory test shall be conducted at the laboratory chosen by the employee.... If the results of the second test do not confirm the results of the initial confirmatory test, the employer shall reimburse the employee for the fee paid by the employee for the second test and the initial confirmatory test shall not be considered a confirmed positive drug or alcohol test for purposes of taking disciplinary action pursuant to subsection 10.

Id. § 730.5(7)(i) (emphasis added).

With this general frame of reference, we now turn to the facts of the case before us.

II. Background Facts and Proceedings.

Harrison was employed by Victor Plastics from January 31, 2000, to December 11, 2000, when he was terminated because he tested positive for marijuana in a random drug test. The test was conducted pursuant to an employer policy that provided for unannounced random testing of employees.

On December 4, 2000, Mercy Occupational Health, an independent company used by Victor Plastics to perform random drug testing of its employees, notified Victor Plastics that Harrison had been selected to be one of the employees tested that day. A urine sample was obtained from Harrison at the plant site.

On December 11, 2000, Mercy informed Harrison by telephone that his sample tested positive for marijuana. Mercy also faxed a report to Victor Plastics with the test results. That same morning Harrison called the company’s human resource manager, Chris VeVerka, and informed her that he had tested positive for marijuana. VeVerka testified at the later unemployment hearing that she informed Harrison during their phone conversation that he could pay to have a test done on the remaining sample and such a test would cost approximately $150. (The record shows the initial screening and the first confirmatory test had a combined cost to Victor Plastics of $80 to $100 per person.) She said Harrison declined the test, indicating he did not want to spend the money as he had just paid off his credit card and was going on a trip, and because the second sample would not test any differently than the first sample. Pursuant to a company policy stating “[a] confirmed positive drug test will result in termination,” VeV-erka then informed Harrison he was fired.

VeVerka confirmed in her testimony that Victor Plastics did not notify Harrison in writing that he could request a second test. Nor did VeVerka inform Harrison that if the second test was negative, Victor Plastics would have to reimburse him for the cost of the test. She did not do so, she explained, because Harrison was not interested in doing a second test. For the same reason, she thought it unnecessary to delay his termination in order to give him time to come up with the money.

Harrison’s testimony at the hearing was substantially the same as VeVerka’s. He said he told her he could not afford the test because he had just paid on his credit cards and had bought a nonrefundable plane ticket to visit a friend. He stated he did not consider borrowing the money for the test because he “[djidn’t have any time[;] [i]t was either you’re going to test or you’re not.” Harrison also denied smoking marijuana. He confirmed at the hearing that he had not received written notification from the company concerning his positive test results.

Subsequent to his termination, Harrison applied for unemployment benefits. A hearing officer denied his claim, ruling Harrison was disqualified from receiving benefits because he was discharged for misconduct. See Iowa Code § 96.5(2)(<¾) (“An individual shall be disqualified ■ for benefits ... [i]f the department finds that the individual has been discharged for misconduct in connection with the individual’s employment.”). The only factual basis for this disposition was Harrison’s positive drug test. Harrison appealed. After a hearing at which VeVerka and Harrison testified as outlined above, an administrative law judge upheld the hearing officer’s decision. Harrison’s intra-agency appeal to the Board was similarly unsuccessful.

Harrison then sought judicial review. He argued the drug test was illegal because Victor Plastics had not followed the requirements for random drug testing set forth in section 730.5 and, therefore, the test results could not be used as a basis for a finding of misconduct. The district court overturned the agency’s decision, holding that decision was affected by error of law. See Iowa Code § 17A.19(10)(c) (providing that court may reverse agency ruling affected by error of law). Relying on this court’s decision in Eaton v. Iowa Employment Appeal Board, 602 N.W.2d 553, 554 (Iowa 1999), the district court concluded an employer must comply with section 730.5 before the Board may rely on a positive drug test to deny unemployment benefits. Here, the court noted, Victor Plastics had failed to follow the requirements of section 730.5 in several significant particulars. The court concluded, therefore, that the Board erred in relying on Harrison’s positive drug test to support its finding of misconduct.

The employer and Board appeal the district court’s decision. Because the Board joined in the brief filed by the employer, references to the employer’s position and arguments on appeal apply equally to the Board.

III. Issues on Appeal.

On appeal, the employer contends the district court erroneously concluded that it had not complied with section 730.5 and that this failure precludes the company’s reliance on the drug test as a basis for its claim of misconduct. More specifically, Victor Plastics argues that it substantially complied with section 730.5 because the “reasonable objectives” of the statute were met despite the employer’s failure to comply with the “technical notice provisions” of the law. ■

Harrison contends the statute requires strict compliance with its terms as evidenced by the legislature’s frequent use of the word “shall.” See Iowa Code § 4.1(30) (stating use of the term “shall” implies a duty). Even if substantial compliance is sufficient, Harrison disputes that Victor Plastics substantially complied with the statutory requirements. He claims the employer failed to observe the notice provisions of the statute, failed to provide accurate information to him about the actual cost of a second confirmatory test, and failed to inform him that he would be reimbursed if the second test were negative. In addition, Harrison asserts Victor Plastics failed to present evidence that it complied with the statutory requirements regarding (1) random selection of employees, (2) proper collection and labeling of Harrison’s urine sample, (3) a proper chain of custody of the sample, (4) certification of the laboratory and training of the personnel involved in testing his sample, and (5) the chemical testing processes used. Finally, Harrison contends the company’s written drug policy violates section 730.5 because it states the company “has instructed its medical review officer that no explanation for the presence of this substance [marijuana] should be accepted.” See Iowa Code § 730.5(7)(c )(2) (“An employee ... shall be provided an opportunity to provide any information which may be considered relevant to the test .... ”); id. § 730.5(7)(g) (stating medical review officer must consider any information provided by employee). Based on these violations and deficiencies, Harrison argues, the employer failed to prove that Harrison was terminated from his employment on the basis of a “confirmed positive drug ... test result” within the meaning of section 730.5(10).

Although the parties dispute whether strict compliance with the statute is required or whether substantial compliance is sufficient, we do not find it necessary to resolve this disagreement. Even if we assume an employer need only substantially comply with the provisions of section 730.5, we do not think that level of compliance was shown in this case. In addition, we conclude the employer’s noncompliance with the notice requirements of the statute is sufficient to bar its reliance on Harrison’s drug test results to prove misconduct. Therefore, we do not address the sufficiency of the employer’s proof with respect to its compliance with the technical requirements for testing. Nor do we consider the validity of the employer’s drug testing policy.

IV. Scope of Review.

Iowa’s Administrative Procedure Act, Iowa Code chapter 17A, governs this court’s review of unemployment benefit cases. See Lee v. Employment Appeal Bd., 616 N.W.2d 661, 664 (Iowa 2000). Pursuant to section 17A.19(10), we act in an appellate capacity to correct errors of law on the part of the agency. Id.

In terms of judicial review, the essence of the employee’s claim here is that there is not substantial evidence to support the agency’s finding of misconduct. See Iowa Code § 17A.19(10) (allowing court to reverse agency decision if the agency’s action rests on a finding of fact “that is not supported by substantial evidence”). This claim is based on the argument that the employer cannot use the positive drug test to show misconduct because the employer did not comply with section 730.5. The employee asserts the agency erroneously interpreted this statute in concluding that the statutory deviations were not significant, enough to preclude rebanee on the test results. See id. (allowing court to reverse if agency’s action is “[b]ased upon an erroneous interpretation of a provision of law whose interpretation has not clearly been vested by a provision of law in the discretion of the agency”). We note in this regard that we give no deference to the Board’s interpretation of section 730.5 in view of the fact that workplace drug testing is not within this agency’s area of authority. Iowa Code § 17A.19(11)(6); Arthur E. Bonfield, Amendments to Iowa Administrative Procedure Act, Report on Selected Provisions to Iowa State Bar Association and Iowa State Government 70 (1998).

V. Discussion.

A. Substantial compliance. We have previously held that substantial compliance is compliance with respect to those requirements that are necessary “to assure the reasonable objectives” of the statute are met. Superior/Ideal, Inc. v. Bd. of Review, 419 N.W.2d 405, 407 (Iowa 1988). Therefore, the starting point for our analysis is an identification of the purpose served by the notice provisions, which are contained in subsection (7) of the statute.

Based on even a cursory review of the testing procedures set forth in subsection (7), one can readily conclude that the legislature sought to ensure the accuracy of any drug test serving as the basis for adverse employment action. See, e.g., Iowa Code § 730.5(7)(a) (collection of sample must be “in a manner reasonably calculated to preclude contamination or substitution of the specimen”); id. § 730.5(7)(e) (testing must be done at a certified laboratory); id. § 730.5(7)(p) (before positive results of drug test are reported to employer, medical review officer must review results, verify adequate chain of custody, and consider any information provided by employee). The multiple testing required before a test is considered a “confirmed positive drug test” for purposes of disciplinary action is an example of the legislature’s attempt to assure the correctness of testing results. Id. § 730.5(7)(/)(l) (requiring confirmation of an initial positive screening test); id. § 730.5(7)(i)(l) (allowing employee the option of having a second confirmatory test done).

Although accurate testing inures to the benefit of both the employer and the employee, the provisions with respect to a second confirmatory test appear to be for the benefit and protection of the employee in particular in view of the fact that it is the employee who determines whether the second confirmatory test will be done. The notice requirements at issue in the case before us relate to the employee’s opportunity to require a second confirmatory test. Thus, in viewing whether the employer’s conduct in this case substantially complied with the statute, we must determine whether the employer’s actions reasonably accomplished the legislature’s objective to protect the employee from adverse employment action based on an erroneous test result.

As noted at the outset of our opinion, section 730.5(7)(i)(l) requires that the employer give an employee written notice of a positive test result. Such notice must be by certified mail, return receipt requested. The notice must inform the employee of his right to have a second confirmatory test done at a laboratory of his choice and it must tell the employee what the cost of that test will be. Any fee charged by the employer must be consistent with the cost to the employer of the initial confirmatory test. An employee has seven days to request a second test.

It is important to consider how these requirements serve to protect the employee. A written document, particularly one sent by certified mail, conveys a message that the contents of the document are important. Thus, an employee receiving notice in this fashion would be more likely to consider his decision with respect to a second test to be an important one. Likewise, he would more deliberately reflect on his options and the ramifications of his decision. The seven-day period given to the employee allows adequate time for the employee to make a thoughtful choice. The requirements that the employee be informed of the cost of a second test and that he can choose the laboratory to perform the test ensures the employee’s decision will be a well-informed one, based on all relevant considerations. The statute’s limitation on the amount an employee may be charged for a second test guarantees that an employee will be treated fairly and not be unreasonably discouraged from seeking a second confirmatory test.

A review of the employer’s actions here reveals that very few, if any, of these goals were met. The employee in this case was informed by telephone of his right to have a second confirmatory test done at his expense. He was not told that he could choose the laboratory to conduct the test, nor was he told that he had seven days to think about it. Finally, he was given a significantly inflated price for the test, a price that was not consistent with the cost of the initial confirmatory test to the employer. Under these circumstances, Harrison would be more inclined to make a hurried decision without thinking through the alternatives available to him. His choice would certainly not be a knowledgeable one, given the fact that he had incomplete and inaccurate information upon which to base his decision.

Under the factual scenario of this case, the protections provided the employee by the statute are virtually nonexistent. Clearly there was not substantial compliance. We hold, therefore, that the Board was wrong to discount the importance of the employer’s violations of section 730.5.

B. Consequences of noncompliance. In Eaton, we stated “[i]t would be contrary to the spirit of chapter 730 to allow an employer to benefit from an unauthorized drug test by relying on it as a basis to disqualify an employee from unemployment compensation benefits.” 602 N.W.2d at 558. As a result, we held that the Employment Appeal Board erred in that case by relying on such a test to support a finding of misconduct. Id. Victor Plastics argues the same result is not warranted here because, unlike the test in Eaton, the test in this case was authorized by law and the employer merely failed to strictly follow the “technical notice requirements” of the statute. We disagree.

Although the legislature now allows random workplace drug testing, it does so under severely circumscribed conditions designed to ensure accurate testing and to protect employees from unfair and unwarranted discipline. The importance of these protections, including the procedural safeguards contained in section 730.5(7), is highlighted by the statutory provision making an employer “who violates this section ... liable to an aggrieved employee ... for affirmative relief including reinstatement ... or any other equitable relief as the court deems appropriate.” Iowa Code § 730.5(15). Although an employer is entitled to have a drug free workplace, it would be contrary to the spirit of Iowa’s drug testing law if we were to allow employers to ignore the protections afforded by this statute, yet gain the advantage of using a test that did not comport with the law to support a denial of unemployment compensation.

Our decision in Reigelsberger v. Employment Appeal Board, 500 N.W.2d 64 (Iowa 1993), a case upon which the employer relies, is distinguishable. In that case, we upheld a denial of unemployment compensation based on a finding of misconduct that rested on the employee’s refusal to undergo treatment for his alcoholism. 500 N.W.2d at 64-65. We noted that had the employer obtained a positive blood test under the drug testing law in effect at that time, it could have conditioned continued employment on the employee’s successful completion of alcohol treatment. Id. at 66. We held that the absence of such a test here, however, did not prevent the employer from requiring the employee to seek treatment. Id. Our decision was grounded on the “special circumstances” present in that case, notably that there was “no question that Reigelsberger had a continuing problem with alcoholism, a fact Reigelsberger acknowledged and of which [his employer] had actual knowledge.” Id. Therefore, a blood test to establish that fact was not critical to support the employer’s demand that the employee seek treatment.

In contrast, in the present case, there was no acknowledgement by Harrison that he had used marijuana; to the contrary, he denied any use from the beginning. Therefore, the special circumstances underlying our decision in Reigelsberger do not exist here. In addition, the role of the drug test at issue in Reigelsberger was quite different than the role played by the drug test here. Harrison’s positive drug test was the basis for discipline and disqualification; it was the sole proof of misconduct. In Reigelsberger, the omitted drug test related to a collateral issue; it would merely have verified an alcohol problem that all parties conceded existed. The actual misconduct was the employee’s failure to seek alcohol treatment after being directed to do so, not his use of alcohol on the job. Therefore, our decision in Reigelsberger is inapposite.

In summary, we hold the Board erred in relying on the results of Harrison’s drug test in deciding that he was not entitled to unemployment benefits. In the absence of this proof, the agency’s finding of misconduct is not supported by substantial evidence. Therefore, the district court properly reversed the agency ruling. We remand this case to the agency for an award of unemployment benefits.

AFFIRMED AND REMANDED.