author: LAYORATO, Chief Justice.

text:
    Charles HARRIOTT and James Harriott, Appellants, v. Carlton O. TRONVOLD, Individually and as Trustee of the Carlton O. Tronvold Trust, dated 9/29/92, Appellees.
    No. 01-1547.
    Supreme Court of Iowa.
    Nov. 13, 2003.

      Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellants.
    Thomas D. Wolle of Moyer & Bergman, P.L.C., Cedar Rapids, for appellees.
   LAYORATO, Chief Justice.

In this declaratory judgment action involving three shareholders of a closed corporation, two of the shareholders sued the third. The petition alleged breach of an oral contract to contribute to the corporation to cover cash shortfalls, breach of an oral contract to sell the assets of the corporation, and interference with contractual relations with the corporation.

The district court granted the defendants’ motion for directed verdict on the first claim because the court determined there was insufficient evidence of the alleged contract. As to the second claim, the court concluded the evidence did not support the existence of a contract because there was no meeting of the minds. Finally, the court concluded the claim for interference with contractual relations was subject to an arbitration clause in a shareholders’ agreement.

The plaintiffs appealed, we transferred the case to the court of appeals, and that court affirmed. We granted the plaintiffs’ application for further review.

On our review, we affirm the decision of the court of appeals and the judgment of the district court regarding the claims for breach of contract to sell the assets of the corporation and interference with contractual relations. We vacate the court of appeals decision and reverse the judgment of the district court on the claim for breach of contract to contribute to the corporation to cover cash shortfalls. We remand the case for further proceedings consistent with this opinion.

I. Scope of Review.

We recently summarized the rules governing our review of rulings granting motions for directed verdict:

Our review of rulings granting motions for directed verdict is for correction of errors at law. In our review, “we view the evidence in the same light as the district court to determine whether the evidence generated a jury question.” We therefore view the evidence in the light most favorable to the party opposing the motion.... If reasonable minds could differ on an issue of fact, the issue is for the jury.
In ruling on such motions, the district court must decide whether the nonmov-ing party has presented substantial evidence on each element of the claim. “Evidence is substantial if a jury could reasonably infer a fact from the evidence.” A directed verdict is appropriate if the evidence is not substantial.

Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 391 (Iowa 2001) (citations omitted).

II. Facts.

Viewing the evidence in the light most favorable to the plaintiffs, we think there was substantial evidence from which the jury could have found the following facts. On June 15, 1994, Carlton 0. Tronvold, trustee of the Carlton 0. Tronvold trust, filed articles of incorporation for Hitters, Inc. Tronvold transferred land near Cedar Rapids to the corporation in return for 1000 shares of stock. A sports complex was to be built on the land.

On July 15 Tronvold gifted 200 shares to Charles Harriott and 200 shares to James Harriott. Charles and James are brothers who had previously convinced Tronvold of the need for the sports complex. Following the transfer of the shares, Tronvold owned sixty percent of the issued stock and the two brothers each owned twenty percent. The three shareholders were named directors of the corporation, James was elected president, Tronvold was elected vice-president, and Charles was elected secretary/treasurer. Charles was hired to manage the facility.

At the same time of these events, the three shareholders executed a buy-sell agreement. In addition to the buy-sell provisions, the agreement included an arbitration clause that was to apply in “any dispute [that might] arise between one or more of the parties hereto, with respect to his or their rights, obligations, duties, or requirements under and by virtue of this agreement except as to the valuation of stock....”

On July 18 the corporation borrowed $384,000 from Farmers State Bank for construction of the sports complex, which was to include softball diamonds, volleyball courts, and a concession building. In January 1995 the bank loan was increased to $484,000 to cover increased costs of the project.

In May 1995 the park opened for business. The corporation lost money the first year and for the following three years. In 1995, 1996, and 1997, the three shareholders contributed cash to the corporation in proportion to their ownership interests. Tronvold told the • Harriotts that each shareholder would be responsible for contributing to the cash shortfall in proportion to his stock ownership and a failure to do so would work a forfeiture of the defaulting shareholder’s interest in the corporation. The Harriotts agreed and contributed each time their share of the shortfall. Tronvold contributed the first three years but refused to do so for at least one year thereafter. The cash contributions were booked as equity, but no new shares were issued.

By the end of 1998, Tronvold’s patience was wearing thin. At a shareholders’ meeting, Tronvold insisted that the corporation hire a new manager and failing this, he would not contribute any more money. At about the same time, Tronvold met with the corporation’s loan officer, James Mol-lenhauer. Tronvold told Mollenhauer that he was not willing to put any more money into the project unless the two brothers agreed to replace Charles with a new manager. Tronvold advised the loan officer that there was not enough cash to make the December payment in full and that his plan was to force the issue by letting the loan go into default. At the same time, Tronvold assured Mollenhauer that he would never let the bank take any losses on the loan.

At a January 1999 shareholders’ meeting, Tronvold voted to remove Charles from the board and elected Vince Arioso in his place. At the meeting, Tronvold put forward a proposal to sell the park to the City of Cedar Rapids or Kirkwood Community College. At the directors’ meeting following the shareholders’ meeting, Tron-vold again expressed an unwillingness to contribute cash to the corporation. Although Charles was removed as a director, he remained as manager of the facility.

In February 1999 after the loan went into default, the Harriotts made an $8998.88 payment to cure the default. Although the park was losing money, the Harriotts decided to continue on, reasoning that they would minimize the loss they would otherwise experience if the park sat idle for the summer.

Things came to a head in the spring of 1999. At a special meeting of the board of directors on April 7, Arioso made a proposal to let the mortgage go in default, allow Tronvold to repurchase the property for the mortgage balance, and have the corporation file bankruptcy.

Later in the same meeting at which the parties’ attorneys were present, Charles asked Tronvold if he were offered $500,000 would he sell? Tronvold replied that the City of Cedar Rapids and Kirkwood Community College declined to buy the park because neither had the money. Tronvold then said, “I think the park is worth more than $500,000, but to end this b ... s ..., yes, I would sell.”

At this point, Tronvold’s attorney called a time-out. The parties met separately with their respective attorneys after which Tronvold’s attorney approached the Har-riotts and their attorney and announced that Tronvold would not sell the ballpark. At trial, James testified that it was his understanding that the $500,000 for the ballpark included the debts and assets. James believed that no financing would be needed because he and Charles would just continue to make the mortgage payments and have Tronvold removed from the loan. Following this meeting, the Harriotts continued to make the mortgage payments.

The Harriotts continued to operate the park in 2000. In October of that year, the parties met to discuss the treatment of cash contributions. Although Tronvold conceded that prior contributions had been treated as capital, he and Arioso voted to treat all contributions, including past contributions, as debt. The two then voted to terminate Charles’ employment.

In early 2001 the parties again defaulted on the loan, at which point the Harriotts and Tronvold made payments to cure the default. The Harriotts continued to operate the ballpark over Tronvold’s objections.

III. Proceedings.

In November 1999 the Harriotts filed a declaratory judgment action naming Carlton O. Tronvold individually and as trustee of the Carlton O. Tronvold Trust (collectively Tronvold) and Hitters, Inc. as defendants. In an amended petition, the Har-riotts alleged a count for declaratory relief, seeking a declaration of rights determining their rights as between themselves and Tronvold, and seeking specifically one of the following: (a) Tronvold should lose his equity position because he had failed to contribute to the cash shortfalls of the corporation; (b) The contribution by the Harriotts should be considered contributions resulting in the issuance of equity; or (c) The contribution of funds and services should be considered loans with appropriate judgments entered in favor of the Harriotts.

The petition also alleged a count for breach of contract for Tronvold’s failure to sell to the Harriotts the assets of the corporation for the sum of $500,000. Finally, the petition alleged a count for interference with contractual relations because of Tronvold’s interference with the Har-riotts’ contractual relations with the corporation.

The trial commenced in September 2001. Before trial, the parties stipulated that the corporation would agree to be bound by the court’s determination about the classification of the corporate contributions, that is, whether the contributions would be classified as equity or debt. The parties proceeded to try the case to the jury, but the case never reached the jury because the district court granted Tronvold’s motion for directed verdict on all of the Har-riotts’ claims.

Following the Harriotts’ appeal, we transferred the case to the court of appeals, which affirmed. That court found that the evidence of the alleged oral contract to contribute to the corporation to make up for cash shortfalls was barred by Iowa Code section 622.32(2) (1999). That provision requires a writing in circumstances where one person promises to answer for the debt of another.

As to the breach of contract claim for the sale of the corporate assets, the court of appeals concluded that there was no meeting of the minds regarding an offer and acceptance.

Finally, as to the interference with contractual relations, the court of appeals determined that claim was waived. It was waived, the court held, because the Har-riotts argued on appeal that Tronvold manifested bad faith rather than challenging the district court’s finding that the arbitration clause in the shareholders’ agreement barred the claim.

We granted the Harriotts’ application for further review. We conclude the court of appeals correctly determined the claims for breach of the alleged contract for the sale of the corporate assets and interference with contractual relations. We therefore give those claims no further consideration.

IV. Issues.

In his motion for directed verdict, Tron-vold argued, as he does here, that for two reasons the Statute of Frauds barred evidence of the alleged oral contract to contribute to the corporation to cover cash shortfalls. First, the alleged contract was in actuality a contract to pay the debts of another. Second, the alleged contract was not capable of being performed within one year.

Tronvold objected during trial on the basis that the Statute of Frauds barred evidence of the alleged contract. The district court overruled the objection and allowed such evidence. Nevertheless, the court determined there was insufficient evidence to submit the claim to the jury and granted Tronvold’s motion for directed verdict.

The court of appeals on the other hand determined that evidence of the alleged contract was barred by the Statute of Frauds.

We first consider the Statute of Frauds issue and then the sufficiency of the evidence issue.

V. Statute of Frauds.

A. The law generally. Iowa’s Statute of Frauds states in relevant part:

Except when otherwise specially provided, no evidence of the following enumerated contracts is competent, unless it be in writing and signed by the party charged or by the party’s authorized agent:
2. Those wherein one person promises to answer for the debt, default, or miscarriage of another, including promises by executors to pay the debt of the decedent from their own estate.
4. Those that are not to be performed within one year from the making thereof.

Iowa Code § 622.32.

This statute does not render the oral promises mentioned invalid. Rather, the statute merely renders incompetent oral proof of such promises. For this reason, the statute is a rule of evidence and not of substantive law. The statute provides a defense, and the party asserting it must therefore raise it by answer or by objection to evidence at trial. Sun Valley Iowa Lake Ass’n v. Anderson, 551 N.W.2d 621, 630 (Iowa 1996).

B. Oral promise to answer for the debt of another. As mentioned, Iowa Code section 622.32(2) bars evidence of an oral contract under which “one person promises to answer for the debt, default, or miscarriage of another.” Iowa Code § 622.32(2). As one treatise has noted, “the Statute of Frauds has been confined to promises made to the creditor.” 9 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 22:3, at 233 (4th ed.1999).

The Restatement of Contracts similarly provides that

[a] contract is not within the Statute of Frauds as a contract to answer for the duty of another unless the promisee is an obligee of the other’s duty, the promi-sor is a surety for the other, and the promisee knows or has reason to know of the suretyship relation.

Restatement (Second) of Contracts § 112, at 292 (1981).

The Restatement explains the purposes underlying the Statute of Frauds:

In general the primary purpose of the Statute of Frauds is assumed to be evi-dentiary. In the case of suretyship contracts, however, the Statute also serves the cautionary function of guarding the promisor against ill-considered action. The suretyship provision is not limited to important or complex contracts, but is limited to suretyship and to promises made to an obligee of the principal obligation. Such promises serve a useful purpose, and the requirement of consideration is commonly met by the same promise or performance which is consideration for the principal obligation. But the motivation of the surety is often essentially gratuitous, his obligation depends on a contingency which may seem remote at the time of contracting, and natural formalities which often attend an extension of credit are likely not to provide reliable evidence of the existence and terms of the surety’s undertaking. Hence the requirement of a writing. Reliance of the kinds usual in suretyship situations — extension of credit or forbearance to pursue the principal obli-gor — does not render the requirement inapplicable.

Id. cmt. a.

According to the Restatement of Contracts,

The word “duty” is used here as a substitute for the words “debt, default or miscarriages” used in the English statute to describe the principal obligation. Those words and corresponding words in the American statutes include all kinds of duties recognized by law, whether or not contractual and whether already incurred or to be incurred in the future. The person owing the duty is called the principal debtor or obligor. The duty may be conditional, voidable or unenforceable; but if there is no duty at all, the Statute does not apply.

Id. cmt. b (emphasis added).

As the Harriotts contend, this is not a suit by a creditor on a promise to the creditor. Rather, this is a suit by shareholders of a corporation against another shareholder based on an alleged promise to contribute to the corporation to cover cash shortfalls. What is missing here is a promise by the Harriotts and Tronvold to a specific creditor of the corporation to pay a debt the corporation owes to the creditor. The alleged promise here is therefore not within the scope of section 622.32(2).

That brings us to Tronvold’s alternative Statute of Frauds ground.

C. Promises not to be performed within one year. As also mentioned, section 622.32(4) bars evidence of oral contracts “that are not to be performed within one year from the making thereof.” Iowa Code § 622.32(4). As we said in Garland v. Branstad,

In deciding whether a particular oral contract is governed by [section 622.32(4) ], the question is not whether performance must actually be completed within a year but whether it would be possible to perform the contract within that time frame. Put another way, “[e]ontracts of uncertain duration are simply excluded; the provision covers only those contracts whose performance cannot possibly be completed within a year.”

648 N.W.2d 65, 71 (Iowa 2002) (quoting Restatement (Second) of Contracts § 130 cmt. a, at 328 (1981)). We therefore agree with the Harriotts that section 622.32(4) is narrowly applied to contracts that are not capable under any circumstances of being performed in one year. So the fact that an oral contract is performed over a period of time in excess of one year does not bar evidence of such a contract.

Here the alleged contract to contribute to the corporation to cover cash shortfalls was clearly one of uncertain duration. As the Harriotts point out, any contract that requires or contemplates future payments would not be performable within one year if those payments are in fact made. But the “impossibility” requirement necessarily recognizes such performance might occur in less than a year. For example, the parties could have sold the ballpark or done a number of things to prevent performance within one year.

We therefore conclude that neither provision of the Statute of Frauds barred evidence of the alleged contract to contribute to the corporation to cover cash shortfalls. The court of appeals erred in concluding otherwise.

VI. Sufficiency of the Evidence.

Because of the conclusion we reach as to the Statute of Frauds issue, we conclude the district court correctly allowed evidence of the alleged oral contract. However,' the district court erred in concluding there was insufficient evidence to submit this issue to the jury. More specifically, there was sufficient evidence to submit to the jury the question whether Tronvold breached a contract with the Harriotts that if a shareholder failed to contribute to the cash shortfalls, in proportion to his ownership interest, his interest in the corporation would be forfeited.

Testimony from both brothers supports our conclusion that there was sufficient evidence to submit this issue to the jury. Charles testified as follows:

Q. And what did Mr. Tronvold tell you was the situation in terms of having to put additional money in?
A. In the original time and throughout the whole course of this, at the beginning, Carl — he secured the bank loan for us. It went — He was not going to carry us anymore, that this park needed capital or needed cash. It was all coming down to where I had put my twenty percent up, Jim had to put his twenty percent up, and Carl had to put his sixty percent up. He was — As he stated, “I’m not going to have a problem putting my money up.” He told us plenty of times, “You guys are going to be the ones having a problem. You have to make sure you can do this. That was the agreement.”
Q. What did he tell you would happen if you didn’t put up your share?
A. If you don’t put your money up, you are going to get out.
Q. Did you and your brother agree to that?
A. Yes.
Q. Now, in connection with that, did Mr. Tronvold ever tell you that he had been involved in other businesses that had similar arrangements?
A. Yes, he did.
Q. Tell us what he told you about the other business ventures.
A. It seemed around the time when we started putting the money in, the first call for having to put money into the corporation, he brought up a situation in Minnesota. I mean, he was involved in a land deal up there, and it was a three-partner situation again, and they all — If there was money to be put in, they all had to put it in, or they would lose their capital or lose their stock, however you want to put it. And finally two of the partners ran out of money, and he took over a hundred percent control of the land. It seemed like he used it as a scare tactic to us, so we always put our money into the deal.
Q. Did you always put your money into the deal?
A. Yes, we did.

James testified substantially the same as Charles. The record reflects that the two brothers always contributed to cover the cash shortfalls pursuant to the alleged contract. Tronvold, on the other hand, refused to contribute to cover the cash shortfalls for at least one year.

VII. Disposition.

In sum, we conclude the court of appeals correctly decided the claims for breach of contract to sell the assets of the corporation and interference with contractual relations. We therefore affirm the court of appeals decision and the judgment of the district court on these claims.

We further conclude the Statute of Frauds did not bar evidence of the alleged oral contract to contribute to the corporation to cover cash shortfalls. We therefore vacate the court of appeals decision to the contrary. Although the district court correctly allowed evidence of the alleged oral contract, it nevertheless erred in concluding there was insufficient evidence to submit this issue to the jury. We therefore reverse the district court’s ruling on this claim and remand the case for further proceedings consistent with this opinion.

DECISION OF COURT OF APPEALS AFFIRMED IN PART, VACATED IN PART; DISTRICT COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND CASE REMANDED.

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


source: Caselaw Access Project

author: LAVORATO, Chief Justice.

license: Public Domain

text:
    Thomas E. LUTTENEGGER, Susan M. Luttenegger, and Jerome J. Carpenter, on Behalf of Themselves and All Persons Similarly Situated, Appellees, v. CONSECO FINANCIAL SERVICING CORPORATION, f/k/a Green Tree Financial Servicing Corporation, and Green Tree Mortgage Services, Appellants.
    No. 02-0206.
    Supreme Court of Iowa.
    Nov. 13, 2003.

      Richard K. Updegraff, John D. Hunter, and Miranda L. Hughes of Brown, Winick, Graves, Gross, Baskerville and Sehoeneb-aum, P.L.C., Des Moines, for appellants.
    Mitchell Taylor of Cray, Goddard, Miller & Taylor, L.L.P., Burlington, Wood R. Foster, Jr., Jordan M. Lewis, and Ryan M. Pacyga of Siegel, Brill, Greupner, Duffy & Foster, P.A., Minneapolis, Minnesota and Richard J. Bell of Bell Law Office, Mt. Pleasant, for appellees.
   LAVORATO, Chief Justice.

The defendants appeal from a district court ruling certifying the plaintiffs’ suit as a class action. After initially denying the defendants’ applications for interlocutory appeal concerning the district court’s denial of the defendants’ two motions for partial summary judgment, we granted the applications while the appeal was pending. The defendants contend the district court erred in not granting their motions for partial summary judgment. They also contend the district court abused its discretion in certifying the suit as a class action. We reverse the rulings on the two partial summary judgment motions, we reverse in part and affirm in part the class certification ruling, and we remand the case for further proceedings consistent with this opinion.

I.Background Facts and Proceedings.

On July 10, 2000, Thomas E. Lutteneg-ger and Susan M. Luttenegger filed a class action suit against Conseco Financial Servicing Corporation (f/k/a Green Tree Financial Servicing Corporation) and Green Tree Mortgage Services (hereinafter referred to collectively as “Conseco”). The suit sought monetary and injunctive relief based on Conseco’s alleged violations of Iowa Code section 535.8 (1999). Following an order granting the plaintiffs’ motion to amend, the plaintiffs filed an amended class action petition, adding several plaintiffs and alleging violations of Iowa Code sections 535.8 and 537.2501. In addition to the statutory damages claims, the plaintiffs alleged breach of contract and unjust enrichment claims.

On April 9, 2001, the district court entered a consent order, severing the plaintiffs’ case into two separate cases: one involving plaintiffs whose claims were required to go to arbitration and one involving the case now before this court. The remaining plaintiffs — ’the Lutteneggers, Jerome J. Carpenter, Marvin G. Hulett and Sheila M. Hulett — were granted leave to file a second amended class action petition.

The second amended class action petition asserted the class consisted of two subclasses: a consumer loan subclass and a home acquisition loan subclass. The petition alleged that on November 25, 1997, the Lutteneggers as representatives of the consumer loan subclass entered into a consumer loan transaction with Conseco, secured by residential real estate owned by the Lutteneggers. The petition further alleged that Conseco charged the Lutten-eggers the following settlement amounts not permitted by Iowa Code section 537.2501:

1. a loan origination fee of $766,
2. a loan processing fee of $200, and
3. a courier fee of $6.

In addition, the second amended class action petition alleged that Carpenter and the Huletts separately entered into home acquisition loans with Conseco in which they were required to pay charges not permitted by Iowa Code section 535.8. The alleged unlawful charges Carpenter was required to pay included:

1. a loan discount fee of $3,417,
2. a processing fee of $200, which when combined with the one percent loan origination fee of $1,139, exceeded the maximum origination/processing fee allowed under Iowa Code section 535.8(2),
3. a closing fee of $300, and
4. a fee for title insurance to “Glen Allen” for $560.

The alleged unlawful charges the Huletts were required to pay included:

1. a processing fee of $200, which when combined with the two percent loan origination fee of $1236 exceeded the maximum origination/processing fee allowed under the terms of Iowa Code section 535.8(2),
2. a four percent loan discount fee in the amount of $2,472,
3. a closing fee in the amount of $100,
4. a fee for an abstract or title search in the amount of $250, and
5. a fee for title insurance in the amount of $195.

The second amended petition alleged that Conseco, in closing consumer loans with the Lutteneggers and consumer loan subclass members, collected loan charges limited or prohibited by Iowa Code section 537.2501. And that by the terms of Iowa Code section 537.5201, the Lutteneggers and consumer loan subclass members were entitled to recover the unlawful charges collected.

In addition, the second amended petition alleged that Conseco, in closing Iowa residential real estate loans with Carpenter, the Huletts, and home acquisition loan subclass members, collected loan charges limited or prohibited by Iowa Code section 535.8(2), (3). And that pursuant to this statute, the two plaintiffs and subclass members were entitled to recover the unlawful charges.

The second amended petition also alleged a breach of contract theory as to both subclasses based on the alleged unlawful charges.

On June 1 Conseco filed a motion for partial summary judgment, asserting that the disputed charges as to the Lutteneg-gers’ consumer loan were allowable under Iowa Code chapter 537. Specifically, Con-seco contended even though the loan origination fee, processing fee, and courier fee were not specifically listed in section 537.2501, the fees were permitted under section 537.2401 as part of the finance charge, as that term is defined in section 537.1301(19). The plaintiffs resisted the motion. The district court denied Conse-co’s partial summary judgment motion. Following the district court’s denial of Conseco’s Iowa Rule of Civil Procedure 1.904(2) (formerly rule 179(b)) motion, this court denied Conseco’s application for interlocutory appeal.

On September 14 the plaintiffs filed a motion for class certification, seeking certification of the two subclasses. The plaintiffs alleged the proposed subclasses met the requirements of numerosity, commonality, and fair and efficient adjudication. See Iowa R. Civ. P. 1.262(2)(a), (b). The plaintiffs also asserted the representative parties would protect the interests of the class. See Iowa R. Civ. P. 1.262(2)(c). Conseco resisted the motion.

On December 3 Conseco filed a motion for partial summary judgment as to Carpenter and the Huletts. In the motion, Conseco asserted that (1) the Huletts’ loan was not governed by Iowa Code section 535.8, (2) Carpenter was not charged excessive loan origination or processing fees, and (3) Carpenter was not charged an improper closing fee. Conseco’s motion did not challenge Carpenter’s claim that the loan discount fee and title insurance fee were unlawful. The plaintiffs conceded the dismissal of the Huletts’ claim in its entirety and conceded the motion as to Carpenter’s claim that Conseco charged an impermissible origination and processing fee, but resisted the motion as to the closing fee.

The district court heard arguments on the motion for partial summary judgment and the motion for class certification at the same time. On January 18, 2002, the court filed separate rulings on both motions. The court denied Conseco’s motion for partial summary judgment concerning the closing fee that Conseco charged Carpenter. The court ruled that the HUD-1 form required at closing and containing the closing fee was not a written agreement between the parties. For that reason the court concluded the HUD-1 form could not serve as evidence that the parties had agreed to the payment of a closing fee, as required by Iowa Code section 535.8(2)(a) (lender may collect a closing fee that is agreed to in writing by the lender and the borrower). The court also ruled that because Conseco’s motion did not address Carpenter’s claims involving the loan discount fee of $3,417 and title insurance fee of $560, its ruling neither addressed nor affected those two claims.

The district court granted the plaintiffs’ motion for class certification. The court concluded: (1) the numerosity requirement was met, (2) the common question of whether Conseco violated section 535.8 or 537.2501 in making charges to Iowa borrowers predominated over individual questions, (3) certification promoted fair and efficient adjudication of the controversy, and (4) the plaintiffs have or can acquire the financial resources necessary to assure the interests of the class will not be harmed, and the plaintiffs’ attorneys would adequately represent the class.

In its ruling, the court defined the “consumer loan subclass” as:

All persons who entered into a “consumer loan” with defendants as the term is defined by Iowa Code section 537.1301(14) where:
a. The real property by which the loan was secured was in Iowa;
b. The majority of the funds borrowed was not used to acquire a home to be occupied by the borrower;
c. The defendants collected loan charges not enumerated in Iowa Code section 537.2501;
d. The loan’s last installment has not yet been paid, or was paid after November 1,1999; and
e. The promissory note related to the loan does not include an arbitration clause.

The court defined the “home acquisition loan subclass” as:

All persons who entered into a “home acquisition loan” transaction (as the term is defined by Iowa Code section 535.8(1)) in which:
a. The real property by which the loan is secured was in Iowa;
b. The defendants collected closing fees not enumerated in Iowa Code section 535.8(2)(a) and (6);
c. The charges (or interest on the charges) were collected by Conseco after July 1,1990; and
d. The promissory note related to the loan does not include an arbitration clause.

The court approved the Lutteneggers to represent the consumer loan subclass and Carpenter to represent the home acquisition loan subclass. The court indicated that the plaintiffs would be allowed to pursue the following: (1) monetary damages, refunding all charges Conseco improperly collected, together with restitution of all interest improperly collected on such charges; (2) an injunction requiring Con-seco to cease and desist from collecting unauthorized charges and to recalculate future monthly payments on all loans so as to remove interest payments attributable to improper closing charges; and (3) attorney fees and costs.

Conseco filed an application for interlocutory appeal of the district court’s second partial summary judgment ruling. Conse-co also appealed the class certification ruling. Later, the plaintiffs filed a motion to strike portions of Conseco’s brief concerning the class certification issue. The plaintiffs contended that Conseco included in its proof brief improper and immaterial matters as to the two district court partial summary judgment rulings. This court denied Conseco’s application for interlocutory appeal and denied the plaintiffs’ motion to strike.

Following oral arguments, we reconsidered our rulings denying the applications for interlocutory appeal, granted the applications, allowed the parties time to brief the summary judgment issues, and heard oral arguments on those issues.

II. The Issues.

Conseco raises two issues. It contends the district court erred in denying its two motions for partial summary judgment. Conseco also contends the district court abused its discretion concerning its class certification ruling. We first consider whether the district court erred concerning its partial summary judgment rulings. We then consider whether the district court abused its discretion in certifying the suit as a class action.

III. The Two Partial Summary Judgment Rulings.

A. Scope of review. Summary judgment is appropriate only if the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Iowa R. Civ. P. 1.981. There is no fact issue if the only dispute concerns the legal consequences flowing from the undisputed facts. Hegg v. Hawkeye Tri-County REC, 512 N.W.2d 558, 559 (Iowa 1994). Our review is therefore limited to whether a genuine issue of material fact exists and whether the district court correctly applied the law. Id.

The plaintiffs challenge a variety of fees that Conseco charged at the closing of consumer and home acquisition loans. These fees, the plaintiffs contend, violate Iowa Code section 537.2501, which is a part of Iowa’s version of the Uniform Consumer Credit Code [hereinafter U3C] and Iowa Code section 535.8(2), (3), which governs charges regarding home acquisition loans.

Conseco contends the district court misinterpreted Iowa’s Uniform Commercial Code [hereinafter IU3C] when it concluded that the IU3C forbids lenders from charging fees not expressly listed in the IU3C. In support of its contention, Conseco argues that the district court should have treated those fees as components of the “finance charge” subject to a general 21% rate ceiling.

Conseco also contends the district court erred when it concluded that the HUD-1 form did not qualify as a written agreement between the borrower, Carpenter, and the lender, Conseco, concerning the borrower’s payment of a closing fee pursuant to Iowa Code section 535.8(2)(a).

B. The alleged IU3C violations. Some background would be helpful in understanding this issue. The National Conference on Uniform Laws adopted the U3C in 1968 and followed up with a new version in 1974. Iowa enacted the 1974 version “in substantially that of the Committee’s Working Redraft No. 4 or 5.” Unif. Consumer Credit Code (1974) 7 U.L.A. Prefatory Note at 89 (2002) [hereinafter U3C(74) ]; see also 1974 Iowa Acts ch. 1250 (codified at Iowa Code ch. 537).

The Prefatory Note to the U3C(74) sets out the philosophy underlying the U3C:

A basic issue in any regulation in this area is the price of credit. In simplest terms, consumers want credit at the lowest possible prices, and creditors want to supply credit but can and will do so only if they may reasonably expect repayment of principal plus an adequate return on credit extended. In a free economy the prices of goods, services and land traditionally have been controlled by free operation of the marketplace. To some extent this principle has also extended to the price of credit but for a variety of historical reasons ... societies have attempted to control the price of credit by executive or legislative fíat. Invariably these attempts have either dried up “legal” or legitimate credit or significantly reduced the amount of credit which would have been available in a free economy. Invariably, too, consumers have been losers by this process.

U3C(74) at 90.

The U3C was intended to “abolish the crazy-quilt, patch-work welter of prior laws on consumer credit and replace them by a single new comprehensive law providing a modern, theoretically and pragmatically consistent structure of legal regulation designed to provide an adequate volume of credit at reasonable cost under conditions fair to both consumers and creditors.” Id. at 88. Under this system, all creditors dealing with consumers would be covered by the same statute. Id.

The basic policies underlying the U3C for consumer credit as to both sales and loans are (1) “to conform in spirit and substance to the Federal Truth in Lending Act,” (2) “to set maximum rates high enough to permit most of the present legitimate and respectable markets to operate,” and (3) “to encourage competition to set actual rates lower than the maxima.” Robert Braucher, Consumer Credit Reform: Rates, Profits and Competition, 43 Temple L.Q. 313, 318 (1970).

The U3C does not use the term “interest.” Rather it uses the term “finance charge.” One writer explains the rationale for the U3C’s approach:

Usury limitations generally apply to the “interest” charged by a lender. Judicial decisions have often facilitated evasion of the usury laws by giving a narrow definition to “interest.” Interest normally means the amount paid by the borrower as a rental charge for the borrowed money and as compensation to the lender for the risk of non-payment. There are, however, other administrative costs which are incurred in establishing and servicing the loan which technically are not interest but for which the lender must nevertheless be compensated. If usury limitations apply only to interest, lenders sometimes can evade these laws by making many charges which, though technically not interest, have the effect of increasing the return to the lender. The Code avoids the use of the term “interest.” All charges which the debtor incurs for the privilege of obtaining the loan are included in the loan finance charge if they are paid directly or indirectly to the lender.

Robert L. Jordan & William D. Warren, The Uniform Consumer Credit Code, Co-lum. L.Rev. 387, 395-96 (1968) (emphasis added) [hereinafter Jordan & Warren].

The U3C sets a ceiling of 21% on the finance charge. U3C(74) § 2.401, at 155-57. The U3C defines “finance charge” as “the sum of all charges payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or as a condition of the extension of . credit, including any of the [four] following types of charge.... ” U3C(74) § 1.301(20), at 125-26.

According to Jordan and Warren,
[t]he definitions of loan finance and credit service charges are meant to be all-inclusive. There are, however, important exceptions to these definitions. Certain default and delinquency charges are excepted [from the definition of finance charge] on the theory that debtors who do not pay their debts cause additional expenses to the creditor for which compensation must be provided....
In addition ... several other costs, which arise at the time the credit is extended, are also excluded from the definition of the loan finance ... charge. The Code recognizes the following additional charges: (1) official fees, (2) a general category of charges for benefits conferred on the debtor in connection with the loan or credit sale, but which are of value to him apart from the credit, and (3) insurance charges.

Jordan & Warren at 396-97 (emphasis added); see also U3C(74) §§ 1.301(20) cmt., at 133 (“finance charge” includes all fees “whatever the parties call them, if imposed by the creditor on the consumer, unless the charge is excluded by paragraph (b) as a default or delinquency charge, an additional or deferral charge, or a credit card discount”), 2.501, at 158-59 (additional charges), 2.502, at 160-61 (delinquency charges), 2.503 at 162-64 (deferral charges).

1. The IU3C. The IU3C follows the U3C in all of these respects. Iowa Code section 537.2401(1) allows a lender to “receive a finance charge ... not exceeding twenty-one percent per year on the unpaid balance of the amount financed.” Iowa Code § 537.2401(1).

Iowa Code section 537.1301(19)(a) defines “finance charge”:

Except as otherwise provided in subsection “b ”,■ “finance charge” means the sum of all charges payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or as a condition of the extension of credit, including any of the following types of charges which are applicable: [similar to the four types of charges as are found in the U3C].

Iowa Code § 537.1301(19)(a).

Iowa Code section 537.1301(19)(& )(1) sets out those charges that are not included in the term “finance charge.” These non-included charges are similar to those found in the U3C.

Iowa Code section 537.1301(19)(6 )(2) sets out the “additional charges as defined in section 537.2501 or deferral charges as defined in section 537.2503” that are not included in the term “finance charge.” These • additional charges and deferral charges are also similar to those found in the U3C.

2. Analysis. For two reasons, we agree with Conseco that the IU3C does not prohibit particular fees. Rather the IU3C caps finance charges and provides an exception to that cap by listing fees that may be charged in addition to the finance charge without regard to the cap. As to certain other fees, the IU3C does not prohibit them but treats them as part of the finance charge, subject to the cap.

Our first reason for concluding that the IU3C does not prohibit particular fees relates to statutory interpretation. The district court found an ambiguity in the word “including” in the definition of “finance charge” found in section 537.1301(19)(u). According to the district court, “including” could mean either that the following list was exclusive, that is, “finance charge” includes only the fees described in the following list. Or the word could mean that the following list was nonexclusive, that is, “finance charge” includes but is not limited to the examples provided in the list.

Unlike the district court, we find no such ambiguity but conclude the language in section 537.1301(19)(a) is clear. We agree with Conseco that only the nonexclusive meaning of the word “including” fits the statutory framework of the IU3C. Iowa Code § 537.1301(19)(a). See T & K Roofing Co. v. Iowa Deft ofEdue., 593 N.W.2d 159, 162-63 (Iowa 1999) (in construing statute, words must be read in context, and not in isolation).

As mentioned, section 537.1301(19)(a) defines “finance charge” as “the sum of all charges payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or as a condition of the extension of credit, including any of the [four] following types of charges which are applicable.... ” Iowa Code § 537.1301(19)(a) (emphasis added). To construe the word “including” to introduce an exclusive list would conflict with the word “all.” See T & K Roofing, 593 N.W.2d at 162-63. By the plain language of section 537.1301(19)(a), the list following “including” does not encompass all charges.

Additionally, the legislature knows how to prohibit loan fees. For example, Iowa Code section 535.8(2)(6), pertaining to loan charges for the purchase of a single-family or a two-family dwelling, has the following prohibition: “Collection of any cost other than as expressly permitted by this lettered paragraph is prohibited.” Iowa Code § 535.8(1),(2)(&). We find it significant that the legislature did not use similar language in the IU3C.

Our second reason for concluding that the IU3C does not prohibit particular fees is that such a prohibition conflicts with the underlying policies of the U3C, which we have earlier mentioned. We can assume in passing the IU3C the legislature was well aware of those policies. Implicit in those policies is the notion that it is irrelevant how a lender itemizes the finance charge or what the lender may call the fees included in the charge. The U3C’s language would assure that the fees, however a creditor might describe them, would all be treated as part of the “finance charge” and be disclosed as such. Borrowers would then know the true cost of the credit and would be in a position to shop for more reasonable credit rates from competing lenders.

In reaching its decision that the IU3C prohibits lenders from charging fees not listed in the IU3C, the district court relied in part on a two-page chart from the Iowa Division of Banking’s 2000 Iowa Banking Review. The chart shows various fees as “NOT ALLOWED” in consumer loans. The document suggests that the agency has construed the statutes at issue to disallow a consumer loan creditor’s use of at least two of the three disputed charges in this case — the origination fee and the processing fee.

We think for three reasons we should give the chart no deference. First, the chart itself contains a disclaimer. The chart states it is “not the law, but is meant to guide one to the appropriate section in the law.” Second, there is no record concerning the analysis the agency used in reaching its conclusion. Last, even were we to give the chart deference, we do not find it persuasive.

Here Conseco charged the Lutten-eggers a loan origination fee of $766, a loan processing fee of $200, and a courier fee of $6. The Lutteneggers contend and the district court ruled that the IU3C prohibits a lender from charging any fee that is not expressly listed in Iowa Code section 537.1301(19)(a) as included in the “finance charge” or in Iowa Code section 537.2501 as a charge permitted in addition to the finance charge. See Iowa Code § 537.1301(19)(6)(2) (“ ‘finance charge’ does not include ... (2) additional charges as defined in section 537.2501, or deferral charges as defined in section 537.2503”). Because the disputed charges were not listed in either provision, the court ruled that they were prohibited.

As our analysis shows, we reach a contrary conclusion. To prove a violation of the IU3C, Lutteneggers must compute the finance charge, including both the interest rate and the three disputed fees. They can show a violation only if the finance charge so computed exceeds the 21% cap in section 537.2401(1). The Lutteneggers’ note provided for interest at 16.59%. The three disputed fees were included in the finance charge and in the 17.726% annual percentage rate disclosed in the Truth-in-Lending Act disclosure statement that Conseco gave the Lutteneggers. The 17.726% rate does not exceed the cap of 21%. We therefore conclude as a matter of law that the Lutteneggers have proven no violation of the IU3C. All of the disputed charges were permissible. The district court therefore erred in concluding otherwise and in not granting Conseco’s motion for partial summary judgment.

C. The alleged Iowa Code Section 535.8(2)(a ) violation. Iowa Code section 535.8 limits the fees a lender may charge on a loan of money that is to be used for the purchase of real property that is a single-family or a two-family dwelling occupied or to be occupied by the borrower. Subsection 2(a) of that statute pertinently provides that “a lender may collect from a borrower, a seller of property, another lender, or any other person, or from any combination of these persons, in contemplation of or in connection with a loan, a commitment fee, closing fee, or both, that is agreed to in writing by the lender and the persons from whom the charges are to be collected.” Iowa Code § 535.8(2)(a) (emphasis added).

In its motion for partial summary judgment, Conseco contended that this provision permitted Conseco to charge Carpenter a closing fee of $300. In support of that contention, Conseco argued as it does here that the HUD-1 form which Carpenter signed constituted the required written agreement. In further support of its contention, Conseco argued that line 1101 of the HUD-1 form states in writing that the “Settlement or Closing Fee to GAC” in the amount of $300 is being paid as part of the loan transaction.

The district court concluded that the HUD-1 form could not satisfy the requirements of Iowa Code section 535.8(2)(<x). The court gave two reasons for its conclusion: the statement was not signed by the lender and was drafted by a governmental entity for the specific purpose of disclosure to the borrower, not for use as evidence of any agreements between borrowers and lenders.

For reasons that follow, we disagree with the district court’s conclusion. Iowa Code section 535.8(2)(a) does not define the phrase “agreed to in writing.” Although the HUD-1 form does not contain the usual language of agreement, we have recognized such specific language is unnecessary:

The law has outgrown its primitive state of formalism when the precise word was the sovereign talisman, and every slip was fatal. It takes a broader view today. A promise may be lacking and yet the whole writing may be “instinct with an obligation,” imperfectly expressed.

Fashion Fabrics of Iowa, Inc. v. Retail Investors Corp., 266 N.W.2d 22, 27 (Iowa 1978) (citation omitted).

Moreover, it was not necessary for the lender to sign the HUD-1 form to render that document a written agreement within the meaning of section 535.8(2)(a). Although the statute provides that the lender and borrower must agree in writing, the statute does not expressly state the lender must sign the document.

We agree with Conseco that the phrase “agreed to in writing” merely prohibits any oral agreement regarding these charges. What is important is that (1) the HUD-1 form was in writing, (2) it was proof of the parties’ intention as to the agreed upon charges according to the loan transaction, and (3) it was signed by the party agreeing to pay the charges.

There was other uncontroverted evidence to support the agreement. Carpenter signed a promissory note which indicated the loan amount of $113,900 he agreed to pay; the HUD-1 form likewise indicated the loan amount of $113,900. Of this amount, $107,427.96 was to be used to refinance the pifior debt and the remaining $6,472.04 was to be used to pay the specific fees and charges which included the $300 closing fee. Before the disbursements could be made, Carpenter had to acknowledge and accept the disbursements, which he did by signing the HUD-1 form. See Hilltop Community Sports Ctr., Inc. v. Hoffman, 755 A.2d 1058, 1062 (Me.2000) (“The general rule is that in the absence of anything to indicate a contrary intention, instruments executed at the same time, by the same contracting parties, for the same purposes, and in the course of the same transaction will be considered and construed together, since they are, in the eyes of the law, one contract or instrument.”).

We hold as a matter of law that the HUD-1 form here constituted a written agreement within the meaning of section 535.8(2)(a). The $300 closing fee was therefore a permissible charge. The district court erred in concluding otherwise and in not granting Conseco’s motion for partial summary judgment on this issue.

IV. The Class Action Ruling.

A. Scope of Review. Because the district court enjoys broad discretion in the certification of class action suits, our review is limited to a determination of whether the district court has abused that discretion. Vos v. Farm, Bureau Life Ins. Co., 667 N.W.2d 36, 44 (Iowa 2003). Such an abuse of discretion occurs only when the district court’s grounds for the certification ruling were clearly unreasonable. Id.

B. Applicable Law. Iowa Rules of Civil Procedure 1.261 to 1.263 pertain to class actions. Because these rules closely resemble Federal Rule of Civil Procedure 23, we may rely on federal authorities construing similar provisions of federal rule 23. Id.

Our rules allow one or more members of a class to sue as representative parties on behalf of all in a class provided two conditions are met: (1) the class is so numerous that joinder of all parties is impracticable and (2) there is a question of law or fact common to the class. Iowa R. Civ. P. 1.261.

To certify a class action, the district court must find all of the following:

a. The requirements of rule 1.261 have been satisfied.
b. A class action should be permitted for the fair and efficient adjudication of the controversy.
c. The representative parties fairly and adequately will protect the interests of the class.

Iowa R. Civ. P. 1.262(2). The plaintiff has the burden of proving that a purported class of plaintiffs meets all three criteria. Vos, 667 N.W.2d at 45. The district court here made findings on all three criteria.

If appropriate, the district court may, as it did here, divide a class into subclasses and treat each subclass as a class. Iowa R. Civ. P. 1.262(3)(c).

Rule 1.263(1) sets forth a number of factors that the district court is to consider and weigh in determining whether the prerequisite of rule 1.262(2)(&) (the class action should be permitted for the fair and efficient adjudication of the controversy) has been met. The factors in rule 1.263(1) “center on two broad considerations: ‘achieving judicial economy by encouraging class litigation while preserving, as much as possible, the rights of litigants — both those presently in court and those who are only potential litigants.’ ” Vos, 667 N.W.2d at 45 (citation omitted). The district court need not assign weight to any of the factors listed, a fact further evidencing the intent to grant the district court considerable discretion. Id. Moreover the district court need not make written findings as to each factor. Id. Rather, the district court need only weigh and consider the factors and come to a reasoned conclusion as to whether a class action should be permitted for a fair adjudication of the controversy. Id.

One of the factors in rule 1.263(l)(e) is that “common questions of law or fact predominate over any questions affecting only individual members.” Iowa R. Civ. P. 1.263(l)(e). It is this factor that is primarily at issue here.

Underlying the court’s inquiry into the predominance issue “is the recognition [that] the class action device is appropriate only where class members have common complaints that can be presented by designated representatives in the unified proceeding.” Vignaroli v. Blue Cross of Iowa, 360 N.W.2d 741, 744 (Iowa 1985). This does not mean, however, that “the individual claims be carbon copies of each other.” Id. at 745. Rather, as one authority has noted, the test for predominance

is a pragmatic one, which is in keeping with the basic objectives of the [class action rule]. When common questions represent a significant aspect of the case and they can be resolved for all members of the class in a single adjudication, there is a clear justification for handling the dispute on a representative rather than an individual basis. [C]ourts have held that a [class action] can be brought ... even though there is not a complete identity of facts relating to all class members, as long as a “common nucleus of operative facts” is present. ...
The common questions need not be dispositive of the entire action. In other words, “predominate” should not be automatically equated with “determinative” or “significant.” Therefore, when one or more of the central issues in the action are common to the class and can be said to predominate, the [class] action will be considered proper .... Typically, this situation arises in antitrust or securities fraud cases.... [I]n these actions the courts generally hold that if defendant’s activities present a “common course of conduct” so that the issue of statutory liability is common to the class, the fact that damages ... may vary for each party does not require that the class action be terminated....

7A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1778, at 528-33 (1986) (footnotes omitted) (emphasis added) [hereinafter Wright]; accord Vignaroli, 360 NW.2d at 745.

Our class action rules do not permit an inquiry into the merits of class action claims for relief. Vos, '667 N.W.2d at 48. Relevant here is rule 1.262(1), which provides that “as soon as practicable after the commencement of a class action the court shall hold a hearing and determine whether or not the action is to be maintained as a class action.” The court may make a certification order conditional and may alter or amend it before a decision on the merits. See Iowa R. Civ. P. 1.265(1).

As one court explained concerning the federal class action rule:

In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met.
The determination whether there is a proper class does not depend on the existence of a cause of action. A suit may be a proper class action, conforming to Rule 23, and still be dismissed for failure to state a cause of action.
Rule 23 delineates the scope of inquiry to be exercised by a district judge in passing on a class action motion. Nothing in that Rule indicates the necessity or the propriety of an inquiry into the merits. Indeed, there is absolutely no support in the history of Rule 23 or legal precedent for turning a motion under Rule 23 into a Rule 12 motion to dismiss or a Rule 56 motion for summary judgment by allowing the district judge to evaluate the possible merit of the plaintiffs claims at this stage of the proceedings. Failure to state a cause of action is entirely distinct from failure to state a class action.

Miller v. Mackey Int’l, Inc., 452 F.2d 424, 427-28 (5th Cir.1971) (citations omitted).

In short, the question of certification is a procedural one “that does not ask whether an action is legally or factually meritorious.” Linder v. Thrifty Oil Co., 23 Cal.4th 429, 97 Cal.Rptr.2d 179, 2 P.3d 27, 34 (2000). However, the important interests of fairness and efficiency could sometimes be better served

when class causes of actions are screened for legal sufficiency before the matter of certification is decided. But nothing prevents a court from weeding out legally meritless suits prior to certification via a defendant’s demurrer or pretrial motion. In fact, it is settled that courts are authorized to do so.
When the substantive theories and claims of a proposed class suit are alleged to be without legal or factual merit, the interests of fairness and efficiency are furthered when the contention is resolved in the context of a formal pleading (demurrer), or motion (judgment on the pleadings, summary judgment, or summary adjudication) that affords proper notice and employs clear standards. Were we to condone merit-based challenges as part and parcel of the certification process, similar procedural protections would be necessary to ensure that an otherwise certifiable class is not unfairly denied the opportunity to proceed on legitimate claims. Substantial discovery also may be required if plaintiffs are expected to make meaningful presentations on the merits. All of that is likely to render the certification process more protracted and cumbersome, even if, as [the defendant] suggests, trial courts were prohibited from resolving factual disputes. Such complications hardly seem necessary when procedures already exist for early merit challenges.

Id at 179, 2 P.3d at 34-35 (citations omitted) (footnotes omitted).

At least one case has reached this court on a motion for summary judgment before a class certification. See, e.g., Gardin v. Long Beach Mortgage Co., 661 N.W.2d 193 (Iowa 2003) (borrowers brought class action against lender for alleged violation of statute concerning limits on loan fees; held district court did not err in sustaining lender’s motion for summary judgment on liability issue). In Gardin, we heard this appeal even though there presumably had not been a class-action determination. Id

1. The import of our decision on the two partial summary judgment rulings. In deciding the merits of the partial summary judgment rulings, we have screened the class causes of action for legal sufficiency in the interests of fairness and efficiency. Our conclusion that all of the fees that the Lutteneggers disputed were permissible statutory charges means the Lutteneggers have no viable cause of action to pursue for the alleged statutory violations. Because the Lutteneggers’ breach of contract theory was based on the alleged unlawful charges, that action is likewise no longer viable. In this connection, we reject the Lutteneg-gers’ fallback position that their breach of contract action is still viable because the alleged unlawful charges are interest thereby rendering the interest rate on the note incorrect. As our statute clearly states, these charges are not interest. See Iowa Code § 537.1301(19)(a) (defining “finance charge” to be the sum of interest and all other charges paid by the borrower “as an incident of or as a condition of the extension of credit,” other than certain expressly excepted fees). There remains therefore no basis for class certification concerning the consumer loan subclass.

Our conclusion that the closing fee that Conseco charged Carpenter was permissible does not mean there is no viable cause of action that Carpenter may pursue. That is because Conseco did not move for summary judgment as to two fees that Carpenter contended were not permitted under section 535.8. Carpenter contended that the loan discount fee in the amount of $3,417 was improperly charged and is not permitted by the terms of Iowa Code section 535.8(2)(a). He also contended that the title insurance fee of $560 to “Glen Allen” is not permitted under the terms of Iowa Code section 535.8(2)(6 )(10) (“A lender may collect... [t]he cost of a title guaranty issued by the Iowa finance authority pursuant to chapter 16.... Collection of any cost other than as expressly permitted by this lettered paragraph is prohibited.”). Because these two issues remain undecided, we are required to consider the merits of the class certification ruling concerning the home acquisition loan subclass.

2. Merits of the class certification ruling concerning the home acquisition loan subclass. As mentioned, the district court addressed the following issues concerning class certification: (1) numerosity, (2) commonality, (3) fair and efficient adjudication, and (4) fair and adequate protection of the interests of the class by representative parties.

On appeal, Conseco raises only issues concerning the district court’s finding that the class action should be permitted for the fair and efficient adjudication of the controversy. See Iowa R. Civ. P. 1.262(2)(6). In particular, Conseco raises arguments concerning one of the “relevant factors” the court should consider in deciding whether a class action should be permitted for fair and efficient adjudication: “Whether common questions of law or fact predominate over any questions affecting only individual members.” Iowa R. Civ. P. 1.263(l)(e). On this issue, Conseco raises a number of arguments it did not raise in the district court. We address only arguments raised and addressed in the district court.

In its ruling on “commonality and efficiency,” the district court determined, and we agree, that the significant common question was whether Conseco violated Iowa Code sections 535.8 or 537.2501 in making charges to its Iowa borrowers in consumer loan or home acquisition loan transactions. Here we are only concerned with alleged violations of section 535.8. This claim involves an alleged statutory violation. This is clearly a legal question, which is a classic issue that is considered common to a class. See Wright § 1778, at 528-33; Martin v. Amana Refrigeration, Inc., 435 N.W.2d 364, 368 (Iowa 1989) (holding that breach of implied warranty constituted common question); Vignaroli, 360 N.W.2d at 744-45 (holding that plaintiffs’ reliance on written provisions of their employment manual constituted the “gist of their claim”). Like the district court we reject Conseco’s argument that determination of whether a loan was governed by section 535.8 would require extensive discovery, depositions, and individual court rulings. The court suggested a claim process as one possible way to determine the nature of the loans, a suggestion we approve.

Conseco asserts the district court punished it for a failure to keep certain records and imposed record keeping requirements after the fact where the legislature has not done so. We disagree. The district court was not imposing a record keeping requirement. Rather, the court drew the logical conclusion that Conseco at some point in the loan process had to determine the type of loan being made in order to determine if it had to comply with section 535.8. We should not deny the home acquisition loan subclass plaintiffs class certification based on Conseco’s alleged failure to keep adequate records. It is not clear from the discovery conducted thus far whether Conseco’s record-keeping assertions are true. Moreover, given the clear definition of “home acquisition loan” found in Iowa Code chapter 535, it appears a determination of whether a particular class member’s loan is a home acquisition loan would not require as much investigation as Conseco suggests.

The district court also rejected, as we do, Conseco’s argument that the court would have to make a case-by-case determination of whether a fee charged was improper in light of each borrower’s circumstances. Carpenter correctly points out that this issue goes to proof of damages, rather than to common liability issues. We have recognized that “[t]he fact that a potential class action involves individual damage claims does not preclude certification when liability issues are common to the class.” City of Dubuque v. Iowa Trust, 519 N.W.2d 786, 792 (Iowa 1994). At the certification stage, “[t]he appropriate inquiry is not the strength of each class member’s personal claim, but rather, whether they, as a class, have common complaints.” Martin, 435 N.W.2d at 367.

We must keep in mind that the district court retains the discretion to de-certify the class if further discovery reveals individual questions predominate over those applicable to the class. See Vos, 667 N.W.2d at 46. At this point, however, Carpenter has met his burden of proving that common issues of fact or law predominate over any questions affecting only individual members. The district court did not abuse its discretion by granting the motion for class certification concerning the home acquisition loan subclass.

V. Attorney Fees.

Carpenter requests an order for appellate attorney fees in an amount to be determined by the district court upon completion of the case. We note that Iowa Code section 535.8(2)(d) permits an award of attorney fees to borrowers where a lender has collected prohibited fees. In the event such a violation is established in this case, the district court shall award appellate attorney fees. Cf. Schaffer v. Frank Moyer Constr., Inc., 628 N.W.2d 11, 23 (Iowa 2001) (statute permitting award of attorney fees to successful plaintiff in an action to enforce a mechanic’s lien “in no way limits attorney fees to those incurred in the district court”; therefore, award of appellate attorney fees permitted under the statute).

VI. Disposition.

In sum, we reach the following conclusions. As a matter of law, the Lutteneg-gers have proven no violation of the IU3C. All of the disputed charges were permissible. The district court erred in concluding otherwise and in not granting Conseco’s motion for partial summary judgment on this issue. Accordingly, concerning this issue, we reverse the district court ruling and remand for an order granting Conse-co’s motion for partial summary judgment.

The conclusion we reach means the Lut-teneggers have no viable cause of action to pursue either the alleged statutory violations or their breach of contract theory. There remains therefore no basis for class certification concerning the consumer loan subclass. Accordingly, we reverse the district court certification order concerning the consumer loan subclass and remand for an order decertifying the class action as to this subclass.

As a matter of law the HUD-1 form constituted a written agreement between Conseco and Carpenter within the meaning of section 535.8(2)(a). The $300 closing fee was therefore a permissible charge. The district court erred in concluding otherwise and in not granting Conseco’s motion for partial summary judgment on this issue. Accordingly, concerning this issue, we reverse the district court ruling and remand for an order granting Conseco’s motion for partial summary judgment.

The conclusion we reach on this issue does not mean there is no viable cause of action that Carpenter may pursue. That is because Conseco did not move for summary judgment as to two fees Carpenter alleged were not permitted under section 535.8 — the loan discount fee and the title insurance fee.

Because Carpenter has a viable cause of action concerning these two fees, we had to address the question of class certification concerning the home acquisition loan subclass. On this issue, we conclude, as the district court did, that common issues of fact or law predominate over any questions affecting only individual members. Accordingly, the district court did not abuse its discretion by granting the motion for class certification concerning the home acquisition loan subclass and we affirm the ruling on that issue.

Finally, the district court shall order appellate attorney fees in the event Carpenter establishes that Conseco has collected a prohibited fee.

Although we have not addressed all of the arguments of the parties, we have carefully considered them. Those we have not addressed either lack merit or were not properly preserved for our review.

We remand the case for further proceedings consistent with this opinion.

AFFIRMED IN PART, REVERSED IN PART, AND CASE REMANDED WITH DIRECTIONS.

All Justices concur except STREIT and WIGGINS, JJ., who take no part.


author: CADY, Justice.

text:
    In re The DETENTION OF William CUBBAGE. State of Iowa, Appellee, v. William Cubbage, Appellant.
    No. 02-0850.
    Supreme Court of Iowa.
    Nov. 13, 2003.

      Mark Smith, First Assistant Public Defender, and Melissa A. Anderson, Assistant Public Defender, for appellant.
    Thomas J. Miller, Attorney General, Andrew B. Prosser and Linda J. Hines, Assistant Attorneys General, and Patrick C. Jackson, County Attorney, for appellee.
   CADY, Justice.

In this appeal, we consider whether an individual has a statutory or constitutional right to be competent during the course of proceedings instituted to determine whether he is a sexually violent predator. For the reasons that follow, we conclude he does not, and affirm the district court order finding that the respondent is a sexually violent predator and confining him for treatment.

I. Background Facts and Proceedings.

William Cubbage has been convicted of four sexually violent offenses in the past: assault with intent to commit sexual abuse (in 2000), indecent contact with a child (1997 and 1991), and lascivious acts with a child (1987). Iowa Code § 229A.2(8) (2001) (defining “sexually violent offense” for purposes of Iowa’s Sexually Violent Predator Act (SVPA)). A forensic psychologist who examined Cub-bage diagnosed him as possessing two psychological conditions: pedophilia and personality disorder NOS/mixed personality disorder (with antisocial and narcissistic features). The psychologist believed to a reasonable degree of scientific certainty that both of these conditions were “mental abnormalities” as that term is defined in the SVPA and these mental abnormalities made it seriously difficult for Cubbage to control his sexually dangerous behavior. Id. § 229A.2(4) (defining “mental abnormality”); see also In re Detention of Barnes, 658 N.W.2d 98, 101 (Iowa 2003) (requiring “a showing [that an alleged sexually violent predator has] a serious difficulty in controlling behavior”). He reached these conclusions after conducting several assessments of Cub-bage. These assessments revealed that Cubbage was a “high risk” to commit future acts of sexual violence if not held in a secure facility, possessed several factors that indicated recidivism was possible, and had never participated in sex offender treatment. See Iowa Code § 229A.2(9) (defining “sexually violent predator”). Moreover, many factors indicated that any future offenses Cubbage was likely to commit if not confined would be predatory. See id.

On August 14, 2001, the State filed a petition alleging Cubbage was a sexually violent predator subject to confinement for treatment based on his prior conduct and current mental status. See id. § 229A.4. The district court later found probable cause existed to confine Cubbage pending a more extensive trial on whether he was a sexually violent predator. See id. § 229A.5. Prior to the trial, Cubbage filed an application seeking a psychiatric evaluation of his competency to stand trial. In his application, Cubbage asserted that he had both a statutory and constitutional right to be competent during the trial inquiry into whether he was a sexually violent predator. Along with the application, Cubbage reported that another doctor had determined he suffered from senile dementia, was functioning in the mentally retarded range due to his senility, was unable to recall the date, day, month, or time when asked, and functioned below normal in understanding basic legal rights and processes. The doctor had also concluded that Cubbage was unable to assertively aid in his own defense.

The State resisted Cubbage’s application for psychiatric evaluation contending that he had no statutory or constitutional right to be competent during the trial to determine whether he was a sexually violent predator. The district court denied the application. The parties proceeded to trial on the stipulated facts laid-out above. These facts led the district court to conclude the State had proven beyond a reasonable doubt that Cubbage was a sexually violent predator and should be confined for treatment. See id. § 229A.7(3). Cub-bage appeals from this determination, challenging the district court’s underlying denial of his application for a pre-trial psychiatric evaluation.

II. Standard of Review.

Cubbage’s claims hinge on our interpretation of provisions of the SVPA and the state and federal constitutions. Our review of the district court’s construction and interpretation of the statute is for correction of errors at law. In re Detention of Swanson, 668 N.W.2d 570, 575 (Iowa 2003). We review Cubbage’s constitutional claim de novo. In re Detention of Garren, 620 N.W.2d 275, 278 (Iowa 2000).

III. Statutory Right of Competency.

Cubbage renews on appeal his arguments that he has both a statutory and constitutional right to be competent through the course of the trial inquiry into whether he is a sexually violent predator. He believes that his statutory right of competency arises from Iowa Code section 812.3, which provides,

If at any stage of a criminal proceeding it reasonably appears that the defendant is suffering from a mental disorder which prevents the defendant from appreciating the charge, understanding the proceedings, or assisting effectively in the defense, further proceedings must be suspended and a hearing had upon that question.

(Emphasis added.) See also Iowa Code § 812.4 (providing that, upon a finding of incapacity, “no further proceedings shall be taken under the complaint or indictment until the accused’s capacity is restored”). However, both our prior interpretations of the SVPA and the statutory language Cubbage invokes as evidence of his statutory right of competency undermine his argument that he holds such a right.

In In re Detention of Garren, we determined “that the Sexually Violent Predator Act is civil in nature, not criminal.” 620 N.W.2d at 283. As emphasized above, Iowa Code section 812.3 provides for a competency hearing in a criminal proceeding but makes no provision for a hearing in a civil proceeding. Cubbage offers no other source — including no specific provision of the SVPA — for his alleged statutory right to competency during proceedings under the act. For these reasons, we conclude that Cubbage does not have a statutory right to be competent during the course of proceedings brought pursuant to the SVPA.

IV. Constitutional Right of Competency.

Cubbage also argues that he has a constitutional right to be competent during the course of his SVPA proceedings. He believes this right is grounded in the substantive due process guarantees of both the state and federal constitutions. See U.S. Const, amend. V, XIV; Iowa Const, art. 1, § 9. He supports his position by analogy to cases considering competency that have arisen in the criminal law and extradition contexts and a decision of the Wisconsin Court of Appeals. See State v. Rieflin, 558 N.W.2d 149, 152 (Iowa 1996); In re Hinnant, 424 Mass. 900, 678 N.E.2d 1314, 1318 (1997); In re Commitment of Smith, 229 Wis.2d 720, 600 N.W.2d 258, 261 (App.1999). He also contends that the failure to ensure his competency at this stage of the SVPA proceedings will later undermine the sexually violent predator treatment program in which he would be enrolled to the point of creating another due process violation. See Iowa Code §§ 229A.7(3), 229A.9.

A familiar jurisprudential process guides our consideration of substantive due process claims:

The first step in analyzing a substantive due process challenge is to identify the nature of the individual right involved. If the asserted right is fundamental, we apply strict scrutiny analysis. We must then determine whether the government action infringing the fundamental right is narrowly tailored to serve a compelling government interest. Alternatively, if we find the asserted right is not fundamental, the statute must merely survive the rational basis test. To withstand rational basis review, there must be a reasonable fit between the government interest and the means utilized to advance that interest.

State v. Hemandez-Lopez, 639 N.W.2d 226, 238 (Iowa 2002) (citations omitted). In undertaking this analysis, we have “traditionally considered the federal and state due process provisions to be equal in scope, import, and purpose” and construed these provisions similarly. Garren, 620 N.W.2d at 284; see also Hernandez-Lopez, 639 N.W.2d at 237. We do the same here.

Cubbage identifies two individual rights that he argues are fundamental and threatened by operation of the SVPA: the right to be free from bodily restraint and the right, as a mentally ill person, to treatment in an appropriate setting. See Foucha v. Louisiana, 504 U.S. 71, 80, 112 S.Ct. 1780, 1785-86, 118 L.Ed.2d 437, 448 (1992); Allen v. Illinois, 478 U.S. 364, 369, 106 S.Ct. 2988, 2992, 92 L.Ed.2d 296, 304 (1986). Yet, under closer scrutiny, it is clear that these two claimed fundamental rights merely underlie Cubbage’s broader claim that he has a right to be competent during the trial to determine his sexually violent predator status. This overarching alleged right of competency is directly related to the assessment of whether Cub-bage is a sexually violent predator — the process that is at the core of this appeal— and must be focused upon in considering Cubbage’s claim that he holds a fundamental right related to his competency.

As noted previously, Cúbbage supports his due process arguments by citation to cases in the criminal and extradition case contexts and a case of the Wisconsin Court of Appeals. See Rieflin, 558 N.W.2d at 152; Hinnant, 678 N.E.2d at 1318; Smith, 600 N.W.2d at 261. However, the specialized, civil nature of the proceedings under the SVPA undermines the application of the extradition and criminal case precedents he seeks to apply. See Garren, 620 N.W.2d at 283-84; see also In re Detention of Ewoldt, 634 N.W.2d 622, 624 (Iowa 2001); In re Detention of Williams, 628 N.W.2d 447, 451 (Iowa 2001). Moreover, the Wisconsin Court of Appeals case cited by Cubbage involved the interpretation of a statute with vastly different language than the SVPA. See Smith, 600 N.W.2d at 261 (citing Wis. Stat. § 980.05(lm) (1997)). This language expressly extended all criminal context constitutional protections to alleged sexually violent predators under the Wisconsin statute. See id. (citing Wis. Stat. § 980.05(lm)). The SVPA is nowhere near as explicit — a point Cubbage concedes — and the Wisconsin court’s interpretation of that state’s statute provides little true support for Cubbage’s argument.

Instead, we turn to both our prior case precedents and those of the United States Supreme Court to guide our resolution of this issue. Neither the Supreme Court nor this court has created a clear test for determining whether an alleged right that is not specifically and constitutionally enumerated is “fundamental.” See Lawrence v. Texas, 539 U.S. -, -, 123 S.Ct. 2472, 2480, 156 L.Ed.2d 508, 521 (2003) (“ ‘[Hjistory and tradition are the starting point but not in all cases the ending point of the substantive due process inquiry.’ ” (Citation omitted.)); see also 2 Ronald D. Rotunda & John E. Nowak, Treatise on Constitutional Law § 15.7, at 633-36 (1999) (listing six substantive categories of fundamental rights “in addition to the fundamental guarantees of the Bill of Rights” identified by the Supreme Court while noting the “subjective nature” of the Court’s decisions concerning these rights). Nevertheless, we have traditionally followed the Court’s guidance in determining which rights are deemed fundamental. See Gilleland v. Armstrong Rubber Co., 524 N.W.2d 404, 407 (Iowa 1994); Bennett v. City of Redfield, 446 N.W.2d 467, 473 (Iowa 1989); Stracke v. City of Council Bluffs, 341 N.W.2d 731, 733 (Iowa 1983).

An examination of both the Court’s and our precedents reveals that “[t]he criminal trial of an incompetent defendant violates due process.” Rieflin, 558 N.W.2d at 152 (emphasis added) (citing Cooper v. Oklahoma, 517 U.S. 348, 354, 116 S.Ct. 1373, 1376, 134 L.Ed.2d 498, 506 (1996)). However, the SVPA involves the potential civil commitment of a respondent alleged to be a sexually violent predator. As prior cases have established and this case affirms, the same concerns and concomitant protections that arise in a criminal case do not necessarily arise in the SVPA area. See Kansas v. Hendricks, 521 U.S. 346, 361-71, 117 S.Ct. 2072, 2082-86, 138 L.Ed.2d 501, 515-21 (1997); Gar-ren, 620 N.W.2d at 283-84. We believe this principle is key to the determination of whether Cubbage holds a fundamental right to be competent during the SVPA proceedings. Although such a right may be recognized in the criminal case context, the same cannot .be said in the civil commitment context. This is confirmed by the fact that the Supreme Court has not recognized a fundamental right to competency in the civil commitment context. See State ex rel. Nixon v. Kinder, — S.W.3d-, -, No. WD 62363, 2003 WL 21788869, at *4 (Mo.Ct.App. Aug. 5, 2003) (considering and rejecting a due process challenge to Missouri’s sexually violent predator act); see also Gilleland, 524 N.W.2d at 407; Bennett, 446 N.W.2d at 473; Stracke, 341 N.W.2d at 733. Thus, we conclude that Cubbage does not have a fundamental right to be competent during his SVPA proceedings.

In the absence of a fundamental right, “substantive due process demands, at the most, that there be a reasonable fit between the governmental purpose and the means chosen to advance that purpose.” Garren, 620 N.W.2d at 285; see also Hemandez-Lopez, 639 N.W.2d at 238. In Garren, we determined that the SVPA survives rational basis review under a substantive due process violation claim because “there is a reasonable fit ... between the State’s purpose of protecting society from persons who have been determined to be likely to reoffend if not placed in a secure facility and their placement in such a facility.” Garren, 620 N.W.2d at 285. Therefore, the SVPA passes muster under rational basis review. Cubbage has suffered no deprivation of any constitutional due process rights related to competency by operation of the SVPA proceedings in the absence of a pre-trial evaluation of his competency to stand trial.

V. Conclusion.

We affirm the decision of the district court denying Cubbage’s request for a pretrial evaluation of his competency to stand trial and affirm the district court’s order finding that he is a sexually violent predator and confining him for treatment.

AFFIRMED.

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

      . The only provision in the statute that arguably — and, the State asserts, implicitly— evinces legislative intent in relation to competency is Iowa Code section 229A.7(1) (2001). Section 229A.7(1) provides for a pre-trial hearing on an alleged predator's prior conduct in those cases in which the alleged predator previously had been charged with a sexually violent offense and was found incompetent to stand trial or not guilty by reason of insanity. Id. The statute further provides that, "[a]t the hearing on this issue, ... all constitutional rights available to defendants at criminal trials, other than the right not to be tried while incompetent, shall apply." Id. (emphasis added). The statute then, concludes that, if "the court finds, beyond a reasonable doubt, that the person did commit” the prior sexually violent offense the court “may proceed to consider whether the person should be committed pursuant to” the Sexually Violent Predator Act (SVPA). Id.

      Ultimately, this statutory scheme seems to indicate that the legislature has anticipated that cases will arise in which an alleged predator was incompetent at the time he stood trial for his offenses and remains so at the point the State pursues a determination that he is a sexually violent predator. Moreover, in the course of this type of case, the legislature has specifically stated that the alleged predator has no right to be competent. See id. Thus, not only does no provision of the SVPA convey a statutory right to be competent during proceedings instituted pursuant to the act, this provision further evinces legislative refusal to convey such a statutory right. See id.

        . We believe this conclusion is further supported by the inherent nature of the SVPA process. The SVPA process was designed for "a small but extremely dangerous group of sexually violent predators” that require treatment by the long-term application of. nontraditional mental illness treatment modalities with the goal of ensuring public safety and providing " 'treatment of the committed individual rather than punishment.' " Iowa Code § 229A.1; In re Detention of Swanson, 668 N.W.2d 570, 576 (Iowa 2003). In many cases, a predicate requirement of competency would undermine the very proceedings instituted to protect the public and aid the respondent by focusing attention on the respondent’s competence rather than his mental illness. This result would be contrary to the legislature's intent in establishing the SVPA.

      .Cubbage also cites article one, section ten of the Iowa Constitution as a source of his constitutional due process rights. See Iowa Const, art. 1, § 10. He contends that the right to be competent during his SVPA trial is "inherent" in the rights enumerated in this section. See id. We have traditionally interpreted this section of our constitution as conveying certain rights to criminal defendants. See State v. Weaver, 608 N.W.2d 797, 802-03 (Iowa 2000); McCandless v. District Court of Polk County, 245 Iowa 599, 607, 61 N.W.2d 674, 679 (1953); State v. Mosher, 128 Iowa 82, 89-90, 103 N.W. 105, 107-08 (1905); State v. Shepard, 10 Iowa 126, 131 (1859). The fact that Cubbage raises this issue in a case involving a civil commitment and provides limited justification for its application in this context makes this case the improper arena for fully reconsidering whether article one, section ten is applicable in contexts beyond criminal law.

      . Cubbage apparently raises this argument in an effort to syllogize the role of competency in a sexually violent predator's treatment to its role in the preliminary determination of whether an individual is a sexually violent predator in need of treatment. This appeal, however, is focused only on the role of competency in the process (codified in the SVPA) for determining if treatment is warranted. For this reason, we offer no further comment in this case on what role competency might play in the actual treatment of a sexually violent predator.

      . The Wisconsin statute provided:
      At the trial to determine whether the person who is the subject of a petition under s. 980.02 is a sexually violent person, all rules of evidence in criminal actions apply. All constitutional rights available to a defendant in a criminal proceeding are available to the person.
      Wis. Stat. § 980.05(lm) (1997) (emphasis added).


author: CARTER, Justice.

text:
    Mark A. DEVAULT, Ivan A. Devault, and Rita J. Devault, Appellees, v. CITY OF COUNCIL BLUFFS, Iowa, Appellant.
    No. 02-0456.
    Supreme Court of Iowa.
    Nov. 13, 2003.

      Karen A. Dales, Council Bluffs, for appellant.
    Curtis J. Heithoff, Council Bluffs, and Michael J. Winter, Council Bluffs, for ap-pellees.
   CARTER, Justice.

The City of Council Bluffs appeals from a decree enjoining the enforcement of a municipal ordinance classifying the partially completed residential structure of defendants, Mark Devault, Ivan Devault, and Rita Devault, as a nuisance subject to abatement. The district court concluded that the ordinance in question was void for vagueness under the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Based on that conclusion, the court enjoined the city’s effort to abate the nuisance. The city lodges both procedural and substantive challenges to that decree. After reviewing the record and considering the arguments presented, we reverse the district court’s decree.

Defendants commenced the construction of a residential structure on South Nineteenth Street in Council Bluffs in the summer of 1995. From that time until at least July 2001, the structure was in a partially completed state. The initial building permit of eighteen-months duration and two subsequent building permits each of an additional eighteen-months duration were allowed to expire without completion of the project. On the expiration of the third building permit, a municipal infraction was issued, citing defendants with the violation of section 1.97.030 of the Council Bluffs Municipal Code defining nuisance to include the following act:

To maintain any partially or otherwise incomplete structures, abandoned or unmaintained property, including but not limited to fences, parking garages, commercial and residential buildings.

A companion ordinance provided that the city could act to abate a nuisance as so defined.

At a hearing held on July 20, 2000, defendants personally appeared, admitted the allegation, and sought additional time to secure necessary financing to complete the structure. A magistrate granted defendants until September 22, 2000, to be in complete compliance with local building ordinances. When this order was not complied with, a second municipal infraction was filed before a district associate judge. On January 25, 2001, the date set for trial, defendants appeared, admitted the allegations, and requested until June 1, 2001, to comply with the requirements of the local building code. This request was granted.

On June 1, 2001, an attorney retained by the defendants appeared and sought additional time to comply. The court determined that no adequate explanation had been provided and ordered that defendant must complete compliance with the building code by July 1, 2001, or suffer abatement of the nuisance at their expense. This date was later extended to September 1, 2001. The latter two orders expressly granted the city permission to abate the nuisance if the structure was not completed within the prescribed time. When it was not, the city began taking bids for demolition.

In December 2001 defendants’ attorney sought relief from the district associate judge who had granted the prior orders authorizing abatement of the nuisance. That request was summarily rejected. Defendants then filed an action in equity seeking injunctive relief against abatement of the nuisance. They obtained a temporary injunction from a district court judge preventing the city from exercising the authority granted to it by the district associate judge. Following a final hearing on that application, a permanent injunction against abatement of the nuisance was ordered on the basis that the ordinance was void for vagueness.

I. The Procedural Challenge.

At the outset, we take note of the city’s challenge to the highly irregular procedure that was followed in the present case. An order of a district associate judge, facially valid, granting the city authority to abate the nuisance had been issued. More than four months after that order, an effort was made through an independent action in equity to enjoin the abatement procedure that had been authorized by the district associate judge. This challenge, on its face, was presented as a collateral attack on the district associate judge’s order and was not an appeal therefrom. If it had been an appeal, it was untimely. The city challenged this procedural irregularity by a motion to dismiss the request for an injunction. That motion should have been granted. We hold that the order of the district associate judge authorizing abatement of the nuisance was not subject to collateral attack by the subsequently initiated injunction proceeding.

II. The Merits of the Vagueness Challenge.

Because the district court’s decision may cast a cloud over the local ordinance defining a nuisance to include an “incomplete structure, we also review the merits of that determination. We have recognized that a civil statute is unconstitutionally vague under the Due Process Clause when its language does not convey a sufficiently definite warning of the proscribed conduct. Knepper v. Monticello State Bank, 450 N.W.2d 833, 838 (Iowa 1990); Pottawattamie County v. Iowa Dep’t of Envtl. Quality, 272 N.W.2d 448, 452 (Iowa 1978). We articulated the legal test for vagueness in Knight v. Iowa District Court, 269 N.W.2d 430 (Iowa 1978), in which we concluded:

If the statute’s meaning is fairly ascertainable by reliance on generally accepted and common meaning of words used, or by reference to the dictionary, related or similar statutes, the common law or previous judicial constructions, due process is satisfied.

Knight, 269 N.W.2d at 432 (citations omitted). A presumption of constitutionality exists that must be overcome by negating every reasonable basis on which the statute can be sustained. Knepper, 450 N.W.2d at 838. Literal exactitude or precision is not required. Id. A statute is not unconstitutionally vague merely because a key word has not been specifically defined. Blinder, Robinson & Co. v. Goettsch, 403 N.W.2d 772, 773 (Iowa 1987).

In determining that the ordinance under consideration was void for vagueness, the district court focused on the ordinance provisions proscribing the maintaining of an incomplete structure. The court stated:

If one builds a structure, one must necessarily maintain the structure during the construction period. Although the right to build a structure may not rise to the constitutional level of free speech, it is a right that may not be unreasonably burdened by statute or ordinance. The City argues that an incomplete structure is not considered to be a nuisance' unless it is maintained m an incomplete state. Plaintiffs, the City contends, have maintained their incomplete house for years, often making little progress for a year at a time. While such contention may be true, the ordinance offers no guidance as to the extent of progress necessary to avoid application of the sanctions.

As we have previously noted, a statute’s meaning is not considered to be vague if it is fairly ascertainable from previous judicial constructions. We believe the same thing is true with regard to administrative interpretations. We are satisfied that in situations of this kind the requirements for avoiding the violation will necessarily be brought to the attention of the building owner by those persons administering the local building code. In the present case, that administrative interpretation was buttressed by a judicial interpretation as the proceedings went along.

Given the history of events in the present case over a period of more than five years, including many appearances before the court in which the defendants requested additional time to comply with the local building codes, we are convinced that the deficiencies required to be corrected were adequately called to the defendant’s attention. Persons who engage in some conduct that is clearly prescribed by an ordinance as interpreted in a judicial proceeding cannot complain of vagueness as applied to other conduct. Knepper, 450 N.W.2d at 839. We have considered all issues presented and conclude that the judgment of the district court must be reversed.

REVERSED.

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

      . Section 8.54.040(3) of the Municipal Code of Council Bluffs provides that, in addition to imposing monetary fines against those maintaining a nuisance, "a court of competent jurisdiction may: ... (3) Order such person, firm, partnership, corporation, or other legal entity to repair, rehabilitate, demolish or remove the building, structure, or appendage.” Subsection 5 of this ordinance authorizes abatement by the city as a result of a property owner’s failure to act.