author: CARTER, Justice.

text:
    Brian and Toni HAMMOND, George and Nadine Hess, Don and Donna Gerbeling, Individually and on Behalf of All Other Persons Similarly Situated, Appellants, v. FLORIDA ASSET FINANCING CORPORATION, Appellee, and Northeast National Bank, Northwest National Bank of Arlington, First Family Financial Services, and Calvary Investments, L.L.C. f/k/a Zirmack Investments, L.P., Defendants.
    No. 03-2040.
    Supreme Court of Iowa.
    April 8, 2005.

      Douglas H. Napier of Napier, Wolf & Napier, Fort Madison, for appellants.
    Scott L. Long and Sean P. Moore of Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, P.L.C., Des Moines, and Michael E. Schoeman of Schoeman, Updike & Kaufman, LLP, New York, NY, for appellee.
   CARTER, Justice.

Plaintiffs, Brian Hammond, Toni Hammond, George Hess, Nadine Hess, Don Gerbeling, and Donna Gerbeling, who brought a proposed class action against defendant, Florida Asset Financing Corporation (FAF), and other financial institutions, appeal by permission from a ruling of the district court that it lacked personal jurisdiction over FAF. After reviewing the record and considering the arguments presented, we uphold the district court’s ruling on personal jurisdiction. We modify the court’s judgment, however, because it improperly dismissed the action with prejudice rather than ordering dismissal without prejudice.

The Hammonds are residents of Iowa. The Hesses are residents of Arkansas. The Gerbelings are residents of Nebraska. FAF is a Florida corporation with its principal place of business in that state. The claims advanced by plaintiffs grow out of the purchase of campground memberships from a company known as Thousand Adventures, Inc. (TAI). Those memberships purported to entitle the members to the use of campground facilities throughout the United States. Four of these campgrounds were located in Iowa.

The plaintiffs’ memberships were purchased pursuant to an installment financing agreement that called for ten percent of the cost to be paid at the time of purchasing the memberships. The balance was to be paid in monthly installments over periods ranging from twelve to sixty months. Plaintiffs allege that the retail installment contracts for TAI memberships were assigned to third parties, including the several defendants in this action.

With respect to FAF, the record indicates that its only interest in the TAI installment agreements was in the nature of a security interest in which some of the installment agreements served as collateral for loans FAF made to TAI. These loans, which at one time involved as much as $1,500,000, were fully repaid by TAI sometime in 1995.

The TAI installment contracts that served as collateral for FAF’s loan were delivered to Travelers Data Services of Carlsbad, California, and Comerca Bank-Texas of Dallas, Texas, who served as escrow agents. The monthly payments due on these agreements were directed to the escrow agents and were deposited in a special account. The escrow agents then issued checks on that account to FAF to be applied on the unpaid balance of its loans to TAI.

The membership agreements at issue in the present action purport to be for the lifetime of the members and, depending on the amount paid, may be extended to younger generations of the buyers’ families. Plaintiffs allege that TAI breached the membership agreements in several respects, including failing to provide the number of campgrounds promised, failing to properly service and maintain the campgrounds that were provided, failing to hon- or cancellation and refund provisions of the agreement, and failing to cooperate in the transfer of memberships. Plaintiffs ask for money damages including a disgorging of the funds collected from them for the memberships. They assert that the defendants named in the action, including FAF, are liable for such disgorgement pursuant to the provisions of the Federal Trade Commission Act and trade regulation rules promulgated pursuant thereto. In particular, plaintiffs rely on section 433.2 of subchapter D Trade Regulation Rules, 16 C.F.R. § 433.2 (1975) (preservation of consumers’ claims and defenses), which makes it an unfair practice to fail to provide the following provision in a consumer sales agreement:

ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

Notices that substantially comply with that provision were included in TAI’s installment contracts. Plaintiffs have asked that the action they have commenced against the named defendants, including FAF, be maintained as a class action on behalf of all persons who have purchased campground membership from TAI and whose memberships were financed in whole or in part by executing a consumer retail installment contract.

FAF filed a motion to dismiss the claims brought against it by plaintiffs on the ground that the Iowa court lacked jurisdiction over its person. It supported that motion with an affidavit of the company president, asserting that the corporation had no presence in Iowa sufficient to render it subject to suit here. The affidavit further asserted that no aspect of the transactions between FAF and TAI concerning the installment contracts on which plaintiffs’ claims are founded took place in Iowa. The district court found that the necessary minimum contacts for personal jurisdiction over FAF were lacking and sustained the motion to dismiss. Other facts that relate to the issues will be considered in our discussion of the legal claims that have been presented on the appeal.

I. Scope of Review.

In reviewing rulings on prean-swer motions asserting jurisdictional infirmities, the trial court’s findings of fact have the effect of a jury verdict and are subject to challenge only if not supported by substantial evidence in the record. Meyers v. Kallestead, 476 N.W.2d 65, 66 (Iowa 1991); Percival v. Bankers Trust Co., 450 N.W.2d 860, 861 (Iowa 1990). We are not bound, however, by the trial court’s application of legal principles in deciding the motion. Meyers, 476 N.W.2d at 66.

II. Whether the District Court Correctly Found an Absence of Sufficient Contact to Confer Personal Jurisdiction Over FAF.

Plaintiffs urge that the district court improperly determined FAF’s amenability to suit in Iowa by concentrating on plaintiffs’ contacts with FAF rather than FAF’s contacts with the forum state. FAF asserts that the district court considered the proper factors in its ruling. It points out that there are two distinguishable bases for personal jurisdiction: general amenability to suit because of a continuing presence in the state and specific amenability to suit because the claim being made is based on some act or omission of the defendant that produced consequences in the forum state. FAF argues that no basis exists for an Iowa court to assert either general or specific jurisdiction over its person.

Iowa Rule of Civil Procedure 1.306 provides in pertinent part:

Every corporation, individual, personal representative, partnership or association that shall have the necessary minimum contact with the state of Iowa shall be subject to the jurisdiction of the courts of this state.

This rule expands Iowa’s jurisdictional reach to the widest due process parameters allowed by the United States Constitution. Hodges v. Hodges, 572 N.W.2d 549, 552 (Iowa 1997).

In analyzing the due process principles relevant to this case, five factors should be considered:

(1) the quantity of the contacts;
(2) the nature and quality of the contacts;
(3) the source and connection of the cause of action with those contacts;
(4) the interest of the forum state; and
(5) the convenience of the parties.

Id. (quoting Larsen v. Scholl, 296 N.W.2d 785, 788 (Iowa 1980)). The third factor is of significant importance because it concerns the distinction drawn between “general” and “specific” jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404, 411 (1984) (explaining that the distinction between “general” and “specific” jurisdiction is based on the nature of the contacts with the forum state). This understanding was further explained in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), wherein the United States Supreme Court stated:

[WJhere a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, this “fair warning” requirement is satisfied if the defendant has “purposefully directed” his activities at residents of the forum, and the litigation results from alleged injuries that “arise out of or relate to” those activities.

Burger King Corp., 471 U.S. at 472, 105 S.Ct. at 2182, 85 L.Ed.2d at 540-41 (citations omitted); see also State ex rel. Miller v. Baxter Chrysler Plymouth, Inc., 456 N.W.2d 371, 377 (Iowa 1990) (following the principles espoused in Burger King Corp.); Roquette Am., Inc. v. Gerber, 651 N.W.2d 896, 900 (Iowa Ct.App.2002) (“Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant’s actions within the forum state, while general jurisdiction refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose.” (quoting Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 819 (8th Cir.1994))).

The district court’s ruling that no general personal jurisdiction exists over FAF is not challenged on appeal. With respect to that court’s rejection of specific personal jurisdiction over FAF based on acts in Iowa on which plaintiffs’ claims are based, the district court found that there were no such acts by FAF. The evidence supports that finding. Although the installment contracts of the named plaintiffs may have been assigned to some of the defendants in the action, they were not assigned to FAF. That factual determination by the district court is clearly supported by substantial evidence in the record.

With respect to the Hammonds’ contracts, all dealings between FAF and TAI had been concluded before the Ham-monds’ memberships were purchased. FAF took no assignments of or security interest in the Hammonds’ installment contracts. With respect to the other named plaintiffs, the affidavit filed by FAF asserts that it did not take assignments or security interests in their installment contracts. Neither the Hesses nor the Ger-belings offered any evidence to refute that. In sum, the district court was correct in concluding that, although the plaintiffs may have claims against the other defendants, they have no claims against FAF. There may be no specific jurisdiction over a nonresident defendant absent a claim arising from that defendant’s activities in this state.

We recognize that, in the process of deciding the jurisdictional issue as to FAF, the district court also decided the merits of plaintiffs’ claims against that defendant. That result appears to violate a principle that this court has previously adopted concerning contravening the merits of a plaintiffs claim in the adjudication of a challenge to the court’s jurisdiction. We have stated this principle as follows:

[There is a] difference, in special appearance proceedings, between allegations of a petition which go to the merits of a claim and other allegations of the petition. The latter may be contradicted in special appearance proceedings by affidavits, testimony, and other evidence; the former, however, are taken as true for special appearance purposes, and are not subject to contradiction at that stage.

Martin v. Ju-Li Corp., 332 N.W.2d 871, 873 (Iowa 1983).

In the Martin case, we cited prior decisions of this court adhering to this view. We also referred to the ruling of a federal court that stated:

Certainly the trial court may gather evidence on the question of jurisdiction by affidavits or otherwise in an effort to determine the facts as they exist, and based upon the evidence so obtained, decide the jurisdictional dispute before trial. One deviation from this procedure is in the case where the issue of jurisdiction is dependent upon a decision on the merits. In that circumstance, the trial court should determine jurisdiction by proceeding to a decision on the merits. The purpose of postponing a determination upon a jurisdictional question when it is tied to the actual merits of the case is to prevent a summary decision on the merits without the ordinary incidents of a trial including the right to jury.

Schramm v. Oakes, 352 F.2d 143, 149 (10th Cir.1965) (emphasis added) (citations omitted). Later federal court appellate decisions in the same circuit have relaxed the prohibition against contravention of allegations involving the merits of a claim in deciding jurisdictional disputes. These cases permit a party who challenges jurisdiction to show by affidavit or through other credible evidence that there is no genuine issue of material fact with respect to those facts that are being asserted to defeat jurisdiction, even if those facts also involve the merits of the claim. See Pytlik v. Prof'l Res., Ltd., 887 F.2d 1371, 1376 (10th Cir.1989); Ten Mile Indus. Park v. W. Plains Serv. Corp., 810 F.2d 1518, 1524 (10th Cir.1987). Another federal circuit has followed this course in Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1285-86 (9th Cir.1977).

The origin of the rule applied in Martin antedated the adoption of the summary judgment procedure now authorized by Iowa Rules of Civil Procedure 1.981 and 1.982. Because at that time there was no basis for a summary adjudication of the merits of a controversy, it seemed unacceptable to permit a summary adjudication of the merits to occur in the process of deciding jurisdictional challenges on affidavits. Given the current acceptance of summary judgments and partial summary judgments on a wide variety of issues, it seems unnecessarily inconsistent not to permit allegations involving the merits of a claim to be controverted in attacking jurisdiction and to allow the jurisdictional challenges to succeed if there is no genuine issue of material fact as to the absence of jurisdiction. We continue to believe, however, that if genuine issues of material fact do exist concerning controverted allegations going to the merits of a claim, those issues should not be resolved by trial court findings of fact made in regard to a jurisdictional challenge, even if jurisdiction is dependent on those facts. Such issues should be reserved for determination by the trier of fact at trial.

In our review of the record in the present case, we are confident that there was no genuine issue of material fact with respect to the district court’s conclusion that FAF took no assignments of or security interest in installment contracts entered into by any of the named plaintiffs in the litigation. We conclude that our prior reluctance to adjudicate issues going to the merits of a claim in the process of determining jurisdiction should not preclude a rejection of allegations going to the merits if there is no issue of material fact as to the basis for rejecting those allegations. That is the situation in the present case.

III. The Juridical Link Argument.

Plaintiffs argue that all of the named plaintiffs and all of the unnamed class members purchased their memberships through TAI. Plaintiffs point out that TAI assigned the promissory notes to the various defendants that collected payments from all the class members on the assigned promissory notes. Therefore, plaintiffs contend that TAI provides a common juridical link to the defendants who were allegedly assigned installment contracts entered into by the class members. Consequently, plaintiffs urge, FAF is linked to Iowa through TAI.

In response, FAF asserts that the juridical-link doctrine is irrelevant in this matter because the doctrine has nothing to do with the issue of personal jurisdiction. FAF further maintains that the cases cited by plaintiffs do not address personal jurisdiction, and therefore, the juridical-link doctrine should not be considered in this matter.

Initially, it should be noted that Iowa case law has not addressed the juridical-link doctrine. The juridical-link doctrine was first introduced in dicta by the ninth circuit in La Mar v. H & B Novelty & Loan Co., 489 F.2d 461, 465-66 (9th Cir.1973). The doctrine was used to determine whether named plaintiffs in a class action were typical of the class and could fairly and adequately protect the class interests as required by Federal Rule of Civil Procedure 23. In re Eaton Vance Corp. Sec. Litig., 220 F.R.D. 162, 170 (D.Mass.2004). “The crux of the doctrine held that ‘a plaintiff who has no cause of action against the defendant can not [represent] those who do have such causes of action.’ ” Id. The ninth circuit suggested two exceptions to this rule:

[0]ne for situations where the named plaintiffs injuries “are the result of a conspiracy or concerted schemes between the defendants,” and another for situations where it would be “expeditious” to combine the defendants into one action because they are “juridically related.”

Id. Historically, this doctrine has been used in connection with class-certification analysis pursuant to Federal Rule of Civil Procedure 23 and for determining standing under Article III of the United States Constitution. Id. It does not pertain to establishing personal jurisdiction over nonresident defendants because, as noted in our discussion in a prior division, personal jurisdiction must be determined as to each defendant individually based on that defendant’s contacts with the forum state.

IV, Whether the Claims of All Potential Class Members May Be Considered For Establishing Personal Jurisdiction.

Plaintiffs argue that, even if the court lacks personal jurisdiction over FAF with respect to the claims of the named plaintiffs, the allegations of the petition are sufficient to assert jurisdiction-over FAF on the claims of some of the members of the class. We are convinced that this argument should be rejected. We recognized in Hammer v. Branstad, 463 N.W.2d 86, 91 (Iowa 1990), that, when the named plaintiffs in a class action were shown to lack standing to maintain the litigation, opportunity should be given for other members of the class to step forward and take their place. At the time that determination was made in Hammer, however, there was a certified class of plaintiffs whose rights were at issue. At the present stage of the litigation we are now considering, there has been no determination that a class exists or that the action may proceed as a class action. The only persons who may assert that it should proceed as a class action are the named plaintiffs. If the court lacks jurisdiction over FAF as to plaintiffs’ individual claims for relief, it also lacks jurisdiction over FAF for purposes of considering plaintiffs’ request to certify the litigation as a class action. See Williams v. FirstPlus Home Loan Trust, 209 F.R.D. 404, 411 (W.D.Tenn.2002) (it is named class representatives whose claims must provide basis for personal jurisdiction over nonresident defendants); Barry v. Mortgage Servicing Acquisition Corp., 909 F.Supp. 65, 73 (D.R.I.1995) (same). All claims against FAF were properly dismissed for lack of personal jurisdiction.

Y. The District Court’s Dismissal Order.

Finally, we consider plaintiffs’ claim that the district court’s judgment was incorrectly cast in the form of a dismissal with prejudice. We agree that this was wrong. Iowa Rule of Civil Procedure 1.946 provides:

All dismissals not governed by rule 1.943 or not for want of jurisdiction or improper venue, shall operate as adjudications on the merits unless they specify otherwise.

We have held that the converse of this pronouncement is also true, i.e., that dismissals for lack of jurisdiction are not adjudications on the merits. Jorge Constr. Co. v. Weigel Excavating & Grading Co., 343 N.W.2d 439, 444 (Iowa 1984).

A dismissal with prejudice is a means of declaring that there has been an adjudication on the merits. Although the merits of plaintiffs’ claims against FAF received a good deal of attention in the district court’s ruling, and findings were made that would seem to dispose of those claims on the merits, the procedural posture in which the ruling was made only involved a challenge to jurisdiction. The district court’s ruling should have reflected that fact and have provided for a dismissal without prejudice.

We modify the district court’s judgment so as to provide that the dismissal of plaintiffs’ claims against FAF is not an adjudication of the merits of their claims. In all other respects, that judgment is affirmed.

AFFIRMED AS MODIFIED.

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

      . The other named defendants are Northeast National Bank, Northwest National Bank of Arlington, First Family Financial Services, and Calvary Investments, LLC. Because the ruling appealed from only affected one of the defendants, it was interlocutory. We granted permission to appeal in advance of final judgment.

      . The memberships were priced differently based on the number of generations of the member's family that were to enjoy lifetime benefit of the membership. The memberships purchased by the Hammonds and the Gerbel-ings cost $6990, while the membership purchased by the Hesses cost $3990. In addition to the cost of membership, monthly dues were charged to members.


source: Caselaw Access Project

author: STREIT, Justice.

license: Public Domain

text:
    Erin SMIDT, Appellant, v. Thomas C. PORTER, Thomas C. Porter & Associates, and Porter & Associates, P.C., Appellees.
    No. 03-1124.
    Supreme Court of Iowa.
    April 8, 2005.

      Gordon R. Fischer of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellant.
    Mark D. Aljets and Mary E. Funk of Nyemaster, Goode, Voigts, West, Hansell & O’Brien, Des Moines, for appellee.
   STREIT, Justice.

A public relations firm fired a pregnant employee after she asked about maternity leave. The employee sued. She claimed unlawful discrimination, breach of contract, fraud, and violations of the overtime-pay provisions of the federal Fair Labor Standards Act. She later attempted to amend her petition to add a wrongful discharge claim. The district court dismissed the entire suit on the firm’s motion for summary judgment and denied the employee’s request to amend her petition. We reverse dismissal of the employee’s unlawful discrimination and breach of contract claims, but affirm the rest of the district court’s ruling. We remand for a trial on the surviving claims.

I. Facts and Prior Proceedings

Thomas Porter is president and CEO of Porter & Associates, P.C. (“P & A”), a public relations and advertising firm in West Des Moines. In June 2000, P&A hired Erin Smidt. Although it is unclear in what capacity Smidt was employed at P&A, this first stint at the firm was brief. In September 2000, Smidt received a lucrative offer to work for another company and resigned.

The next spring P&A rehired Smidt as Vice President of Business Development. The parties signed a written employment contract. The term of the contract was for one year and would end on May 1, 2002. P&A agreed to pay Smidt $60,000 plus a commission for new business Smidt brought to the firm. The contract contemplated that Smidt would spend approximately 95% of her time developing new clients and managing existing accounts; the remaining 5% would be on “administrative” matters. Paragraph 9(d) of the agreement stated that either party could terminate the contract without cause with thirty days’ notice. If the firm invoked this provision Smidt was entitled to three months salary “exclusive of commissions.”

P&A hired Diana Deibler to fill its President position at the same time it hired Smidt. Deibler had been working with Smidt at the company that had lured Smidt away from P&A. Deibler also signed a one-year employment agreement that contained an identical paragraph 9(d) for termination without cause. Porter testified he only hired Smidt because Deibler said she would not accept the job unless Smidt was also hired. Deibler denied this. Porter claims he viewed Smidt and Deibler as “a package deal.”

In the ensuing months, Porter sent Smidt a number of emails in which he praised her work. Smidt never received any disciplinary notice from Porter, and to her all appeared well at P & A.

In October 2001, Smidt told P & A’s human resources director she wanted to discuss the firm’s maternity leave policy. Smidt was pregnant. The human resources director referred Smidt to her employee manual. The P&A employee manual stated the firm was “committed to pay a portion of family leave up to six weeks.” Pregnancy and newborn care were considered good reasons for leave. The manual stated, however, that Porter had to first personally approve all leave.

On January 24, 2002, Smidt asked Porter for a meeting about taking maternity leave. Porter initially agreed to meet Smidt and her attorney, Cynthia Hurley, but later cancelled. Porter was uncomfortable meeting with Hurley because her law firm was a client of P & A. The meeting was rescheduled for March 1, 2002. Porter and Smidt met once in the interim to discuss commission calculations, not maternity leave.

The day before the scheduled meeting concerning Smidt’s maternity leave, P&A fired Smidt over breakfast. Smidt was seven-months pregnant. Porter handed Smidt a letter, in which P&A stated it had terminated Smidt’s employment pursuant to “Paragraph 9(b)” of her contract. Paragraph 9(b) related to “total disability”; Porter claims he made a mistake and actually fired her pursuant to “Paragraph 9(d),” i.e., the termination-without-cause provision of the contract. When Smidt pressed Porter for the reason for her firing, he told her she lacked “agency experience.” Porter later testified he fired Smidt because (1) he wanted to fire a poorly performing Deibler and viewed Dei-bler and Smidt as “a package deal”; (2) Smidt lacked agency experience and he was not pleased with Smidt’s performance either; and (3) Smidt was disruptive and negatively affecting employee morale at P&A. In his defense, Porter also pointed out that P&A has provided maternity leave to ten pregnant employees over the years, including to one woman who began her leave only a few days before Smidt was fired.

Smidt sued P & A and Porter personally for pregnancy discrimination in violation of state and federal civil rights statutes, breach of written and oral contract, fraud, and Fair Labor Standards Act overtime-pay violations. Smidt later sought to amend her petition to include a count for common law wrongful discharge. The district court dismissed all of Smidt’s claims on the defendants’ motion for summary judgment.

Additional facts will be set forth below.

II. Principles of Review

Summary judgment principles are well settled. Summary judgment is proper only when the record shows no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 1.981(3). The court must view the record in the light most favorable to the nonmoving party. Lloyd v. Drake Univ., 686 N.W.2d 225, 228 (Iowa 2004). In deciding whether there is a genuine issue of material fact, the court should also afford the nonmoving party every legitimate inference the record will bear. Id.

III. The Merits

A. Statutory Pregnancy Discrimination Claims

In the district court, Smidt claimed she was fired because she was pregnant, in violation of Title VII and the Iowa Civil Rights Act (ICRA). See 42 U.S.C. § 2000e et seq. (2000); Iowa Code § 216.6 (2001). The district court ruled as a matter of law that Smidt was not fired because she was pregnant. The court relied upon Porter’s explanations for the firing, the undisputed evidence that Deibler was hired and fired at the same time as Smidt, and the fact that P & A has granted maternity leave to other employees.

Smidt has offered no direct evidence of discriminatory intent, and she invokes the burden-shifting framework identified in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), to prove discriminatory motive. See Pruett v. Krause Gentle Corp., 226 F.Supp.2d 983, 987 (S.D.Iowa 2002) (applying McDonnell Douglas framework to resolve Title VII and ICRA pregnancy-discrimination claims under similar circumstances); accord Casey’s Gen. Stores, Inc. v. Blackford, 661 N.W.2d 515, 519-20 (Iowa 2003); Reiss v. ICI Seeds, Inc., 548 N.W.2d 170, 174 (Iowa Ct.App.1996). Under the McDonnell Douglas framework, the plaintiff must first establish a prima facie case of discrimination. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 142, 120 S.Ct. 2097, 2106, 147 L.Ed.2d 105, 116 (2000); accord Fuller v. Iowa Dep’t of Human Servs., 576 N.W.2d 324, 328 (Iowa 1998). Smidt must show (1) she was pregnant; (2) she was qualified for her position; and (3) her termination occurred under circumstances giving rise to an inference of discrimination. See Pruett, 226 F.Supp.2d at 987 (setting forth elements of prima facie case of discrimination based upon pregnancy); accord Farmland Foods, Inc. v. Dubuque Human Rights Comm’n, 672 N.W.2d 733, 741 n. 1 (Iowa 2003) (stating in general terms elements of a prima facie case of employment discrimination). This is a minimal requirement that is not as onerous as the ultimate burden to prove discrimination. Young v. Warner-Jenkinson Co., 152 F.3d 1018, 1022 (8th Cir.1998).

Once the plaintiff establishes a prima facie case, the burden shifts to the defendant to offer a legitimate nondiscriminatory reason for the termination. See Texas Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207, 215 (1981); accord Casey’s Gen. Stores, 661 N.W.2d at 519-20. This is a burden of production, not- persuasion, and no credibility assessment is involved. Reeves, 530 U.S. at 142, 120 S.Ct. at 2106, 147 L.Ed.2d at 117. If the employer offers a legitimate nondiscriminatory reason, the plaintiff must show the employer’s reason was pretextual and that unlawful discrimination was the real reason for the termination. See id. at 142-43, 120 S.Ct. at 2106, 147 L.Ed.2d at 117; Bergstrom-Ek v. Best Oil Co., 153 F.3d 851, 857-58 (8th Cir.1998); accord Casey’s Gen. Stores, 661 N.W.2d at 520.

Although the defendants belatedly challenged Smidt’s ability to satisfy her prima facie case at oral argument, they bypassed this argument in their appeal brief. Nor does Smidt dispute that the defendants have offered legitimate nondiscriminatory reasons for her firing. For these reasons, like the district court we focus our analysis upon the fighting issue in this appeal: whether Smidt can show the defendants intentionally discriminated against her on account of her pregnancy. See Reeves, 530 U.S. at 142-43, 120 S.Ct. at 2106, 147 L.Ed.2d at 117 (remarking that upon reaching the final step in the McDonnell Douglas analysis the framework of presumptions and burdens disappears and the sole issue is “discrimination vel non ”).

At this early stage in the proceedings, it is important to remember that we must view the facts in a light most favorable to Smidt and afford her all legitimate inferences the record will bear. See Lloyd, 686 N.W.2d at 228. Having waded into the murky waters of this case, we think the facts are sufficiently in dispute to warrant resolution by the trier of fact. • The question, after all, is simply whether Smidt has introduced sufficient admissible evidence from which a rational trier of fact could find Porter’s alleged reasons for her termination were false, and intentional discrimination was the real reason. See Bergstrom-Ek, 153 F.3d at 857-58.

Whether judgment as a matter of law is appropriate in a case such as this one will depend upon a number of factors, including the strength of the plaintiffs prima facie case and the probative value of the proof the employer’s explanation is false. See Reeves, 530 U.S. at 148-49, 120 S.Ct. at 2109, 147 L.Ed.2d at 120-21. In this case, a trier of fact could find the timing of Porter’s termination was particularly suspicious. Cf. Eliserio v. United Steelworkers of Am. Local 310, 398 F.3d 1071, 1079 (8th Cir.2005) (“A plaintiff can establish a causal connection between his complaints and an adverse action through circumstantial evidence, such as the timing of the two events.”); Bainbridge v. Loffredo Gardens, Inc., 378 F.3d 756, 761 (8th Cir.2004) (same). Porter fired Smidt the day before the two were scheduled to meet to discuss maternity leave — a meeting Porter had put off. Second, a trier of fact could choose not to believe Porter’s after-the-fact justifications. Although there is circumstantial evidence in the record to support Porter’s testimony that Smidt and Deibler were hired as part of “a package deal,” a trier of fact could find the simultaneous firing of Smidt and Deibler was a manufactured coincidence. Porter’s belated attempts to justify Smidt’s firing on grounds of her alleged poor performance or disruptive behavior are particularly troublesome. The record is replete with evidence from which a trier of fact could find Smidt was meeting or exceeding Porter’s expectations pri- or to her termination. For example, the record contains a number of email messages Porter sent to Smidt in which he repeatedly praised her performance. Porter also gave Smidt three purple cards with “smiley faces”; Porter only gave “smiley faces” to employees for particularly outstanding work. The defendants have offered no extrinsic evidence in existence before Smidt’s termination that shows she was performing poorly. Likewise, there is no extrinsic evidence that any disciplinary action was taken against Smidt for disruptive behavior. The only evidence of Smidt’s poor performance and behavior problems came after the termination and in the midst of litigation, and a trier of fact might find this suspect or may disbelieve the subjective evidence of Porter’s thoughts about her work.

If a trier of fact were to choose not to believe Porter’s representations, the plaintiffs case may be successful. Although no cause for discharge is needed,

[pjroof that the defendant’s explanation is unworthy of credence ... may be quite persuasive. In appropriate circumstances, the trier of fact can reasonably infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose. Such an inference is consistent with the general principle of evidence law that the factfinder is entitled to consider a party’s dishonesty about a material fact as “affirmative evidence of guilt.” Moreover, once the employer’s justification has been eliminated, discrimination may well be the most likely alternative explanation, especially since the employer is in the best position to put forth the actual reason for its decision. Thus, a plaintiffs prima facie case, combined with sufficient evidence to find that the employer’s asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated.

Reeves, 530 U.S. at 147-48, 120 S.Ct. at 2108-09, 147 L.Ed.2d at 119-20; see also Young, 152 F.3d at 1023; Pruett, 226 F.Supp.2d at 989. In other words, once a trier of fact rejects all legitimate reasons as possible reasons for the termination, it may find it more likely than not that the employer based his decision upon an impermissible reason. Cf. Furnco Constr. Corp. v. Waters, 438 U.S. 567, 577, 98 S.Ct. 2943, 2950, 57 L.Ed.2d 957, 967 (1978). Summary judgment was not proper.

B. Wrongful Discharge

Smidt asked the district court for permission to amend her petition to include a count for a common law claim of wrongful discharge. In its summary judgment ruling, the district court addressed this request and denied it. The district court concluded the ICRA preempted the claim. We agree.

In her attempt to escape preemption, Smidt characterizes the basis for her wrongful discharge claim not as her pregnancy per se, but rather her repeated inquiries about and requests for maternity leave. Smidt argues there is a clear public policy in this state against employers firing employees who inquire about or request maternity leave and that this policy is not subsumed under the pregnancy discrimination provisions of the ICRA.

The ICRA is preemptive. To the extent the ICRA provides a remedy for a particular discriminatory practice, its procedure is exclusive and the claimant asserting that practice must pursue the remedy it affords. See, e.g., Channon v. United Parcel Serv., Inc., 629 N.W.2d 835, 858 (Iowa 2001) (holding ICRA preempted emotional distress claim based upon discriminatory acts); Borschel v. City of Perry, 512 N.W.2d 565, 567-68 (Iowa 1994) (holding ICRA preempted wrongful discharge claim premised on discriminatory acts); Vaughn v. Ag Processing, Inc., 459 N.W.2d 627, 639 (Iowa 1990) (holding ICRA preempted claim of wrongful discharge predicated upon religious discrimination); Hamilton v. First Baptist Elderly Hous. Found., 436 N.W.2d 336, 341 (Iowa 1989) (concluding ICRA preempted common law actions also premised upon discrimination). The ICRA preempts a claim when, “in light of the pleadings, discrimination is made an element of’ the claim. Channon, 629 N.W.2d at 857; accord Greenland v. Fairtron Corp., 500 N.W.2d 36, 38 (Iowa 1993). Preemption occurs unless the claims are “separate and independent, and therefore incidental, causes of action.” Channon, 629 N.W.2d at 857.

Channon is similar to the case at bar and mandates preemption in this case. In Channon, as here, the plaintiff pled a tort in addition to her ICRA claim. We stated:

[T]he key is Channon’s characterization of her [tort] claim as stated in her pleadings .... Channon’s pleadings clearly establish that the operative facts which she alleges give rise to her claims under the ICRA are the same as those upon which she relies as giving rise to her [tort] claim. In short, her [tort] claim is based on her allegations of discrimination. The ICRA therefore preempts her claim....

Id. at 858. In her proposed amended petition, Smidt stated P & A and Porter violated the ICRA “[i]n terminating Smidt due to her pregnancy, and in retaliation for her voiced concerns about maternity leave.” (Emphasis added.) Smidt’s pleadings clearly establish that the operative facts which she alleges give rise to her claims under the ICRA are the same as those forming the basis for her proposed wrongful discharge claim. The ICRA therefore preempts Smidt’s proposed wrongful discharge claim. Id. It makes no difference that Smidt now attempts to bifurcate the factual underpinnings of each claim on appeal. The district court correctly declined to grant Smidt permission to amend her petition.

C. Fair Labor Standards Act Overtime-Pay Claim

In the district court, Smidt claimed she was a “nonexempt” employee under the Fair Labor Standards Act (FLSA), and therefore P & A owed her overtime pay for every hour she had worked each week over forty during her tenure there. The district court ruled as a matter of law that Smidt was an “exempt” employee, and therefore P & A did not violate the FLSA. We agree.

The FLSA states that, as a general rule, an employee must be paid at least time- and-a-half for all overtime hours worked. 29 U.S.C. § 207(a)(1). The FLSA carves out an exception for employees who work “in a bona fide executive, administrative, or professional capacity.” Id. § 213(a)(1). The FLSA does not define these three terms; Congress delegated this responsibility to the Secretary of Labor. Raper v. State, 688 N.W.2d 29, 36 (Iowa 2004). The Secretary of Labor has promulgated extensive regulations, including several tests, to determine whether a particular employee is exempt from the FLSA overtime-pay requirement. See id.

In this appeal we are only concerned with whether Smidt is an “administrative” employee. P & A bears the burden to prove Smidt’s exempt status. Id. (citing McAllister v. Transamerica Occidental Life Ins. Co., 325 F.3d 997, 999 (8th Cir.2003)).

1. Job Description Not Dispositive

As a threshold matter, Smidt argues that because her employment contract labeled only 5% of her work as “administrative,” she was clearly not an “administrative” employee under the FLSA. This argument puts form over substance. The federal regulations clearly indicate the employee’s job title is not dispositive. 29 C.F.R. § 541.201(b) (2002) (noting job titles may be “had cheaply” and have “no determinative value”); see, e.g., Demos v. City of Indianapolis, 126 F.Supp.2d 548, 559 (S.D.Ind. 2000); Cooke v. Gen. Dynamics Corp., 993 F.Supp. 56, 61 (D.Conn.1997); Freeman v. Nat’l Broad. Co., 846 F.Supp. 1109, 1115 (S.D.N.Y.1993), rev’d on other grounds, 80 F.3d 78 (2d Cir.1996). “Reliance on the employer’s characterization of [the employee’s] activities through an employer-created job description is similarly suspect.” Demos, 126 F.Supp.2d at 559. The Act obliges us to look to the nature of Smidt’s employment, not the employer’s characterization of it. 29 C.F.R. § 541.201(b); see, e.g., Demos, 126 F.Supp.2d at 559. “We must think things not words, or at least we must constantly translate our words into the facts for which they stand, if we are to keep to the real and the true.” Oliver Wendell Holmes, Jr., Law in Science and Science in Law, 12 Harv. L.Rev. 443, 460 (1899). We are required to evaluate Smidt’s employment on the basis of the tests the federal regulations prescribe, not whatever description the employer might use. The parties in this case discuss two tests: the so-called “duties” test and the “salary-basis” test. We consider each in turn.

2. Duties Test

To prove Smidt was an administrative employee, P & A must satisfy the duties test. Because Smidt earned in excess of $250 a week, we apply the “short test.” 29 C.F.R. § 541.214(a); see also id. § 541.2. The “short test” defines an “administrative” employee as one whose

primary duty consists of either the performance of office or nonmanual work directly related to management policies or general business operations of the employer or the employer’s customers ... where the performance of such primary duty includes work requiring the exercise of discretion and independent judgment.

Id. § 541.214(a). Smidt claims her job as P & A’s Vice President of Business Development was not “administrative” in this sense, but rather one of “production.”

Smidt was clearly an administrative employee as defined in the federal regulations. Those regulations indicate that the administrative exception includes employees “who perform work of substantial importance to the management or operation of the business of [the] employer or [the] employer’s customers.” Id. § 541.205(a). Administrative duties include “advising the management, planning, negotiation, representing the company, purchasing, promoting sales, and business research and control.” Id. § 541.205(b). It specifically includes “account executives of advertising agencies.” Id. § 541.205(c)(5).

As Vice President of Business Development for P & A, Smidt made sales calls, did sales follow-ups, made presentations, networked, was visible in the community, and researched prospective clients. All her efforts were directed to the ultimate end of keeping and generating clients for P & A, an advertising and public relations firm. Smidt’s “primary duty” plainly consisted of “the performance of office or nonmanual work directly related to management policies or general business operations of the employer or the employer’s customers.” Id. § 541.214(a). She was an account executive for an advertising agency-

It is also important to note that Smidt retained considerable disbretion and exercised independent judgment in the performance of her job. The regulations define the phrase “the exercise of discretion and independent judgment” as “the authority or power to make an independent choice, free from immediate direction or supervision and with respect to matters of significance.” Id. § 541.207(a); accord Roper, 688 N.W.2d at 41 (citing Robinsom-Smith v. Gov’t Employees Ins. Co., 323 F.Supp.2d 12, 20 (D.D.C.2004)). “The exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered.” 29 C.F.R. § 541.207(a); accord Roper, 688 N.W.2d at 41 (citations and internal quotations omitted). Smidt testified she exercised her own discretion and judgment in carrying out her duties and was free to schedule her days as she saw fit. She was not paid to do manual or secretarial work. As an account executive for the firm, her work was of “substantial importance to the management or operation of the business of [the] employer or [the] employer’s customers.” 29 C.F.R. § 541.205(a). The defendants meet the duties test as a matter of law.

3. Salary-Basis Test

An employee is exempt under the salary-basis test if she receives a predetermined amount of compensation each pay period that is not subject to reduction on account of the quality or quantity of her work. Id. § 541.118(a); see, e.g., Fife v. Harmon, 171 F.3d 1173, 1175 (8th Cir. 1999). In Roper, we framed the issue this way:-

If an employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of his compensation, which amount is not subject to reduction because of variations in the quality or quantity of the %vork performed, the employee is considered to be paid on a salary basis. For an employee to qualify for exempt status, the employee must receive his full salary for any week in which he performs any work without regard to the number of days or hours worked.

Raper, 688 N.W.2d at 46 (citations and internal quotations omitted; emphasis added).

It is uncontroverted that while at P & A, Smidt received a salary of $60,000 per year. To nonetheless prove P & A cannot meet the salary-basis test, Smidt points to emails she received during the course of her employment from P & A’s director of human resources. In one of the emails, the director stated that if Smidt did not work eight hours in a day, she would have to make up that time in the same week or take vacation to cover the shortfall because “you are being paid for forty hours a week.”

Even if we were to assume the practice outlined in the email were implemented (P&A claims the email is a misstatement of its policy), it would not render Smidt exempt. The overwhelming majority of courts have held that a deduction from an employee’s accrued vacation or personal time for absences does not destroy the employee’s status as a salaried employee because it does not constitute a reduction in “salary” or “compensation.” See, e.g., Barner v. City of Novato, 17 F.3d 1256, 1261-62 (9th Cir.1994) (concluding use of the words “amount” and “compensation” in regulations refers to “cash” or “salary,” not personal or vacation time); York v. City of Wichita Falls, 944 F.2d 236, 242 (5th Cir.1991); Cruz v. McAllister Bros., Inc., 52 F.Supp.2d 269, 289-90 (D.P.R. 1999) (collecting cases); Aiken v. County of Hampton, 977 F.Supp. 390, 396-97 (D.S.C.1997), aff'd, 172 F.3d 43 (4th Cir. 1998) (table case); accord Haywood v. N. Am. Van Lines, Inc., 121 F.3d 1066, 1070 (7th Cir.1997) (“Nothing in the regulations suggests that an employee loses his exempt status simply because his employer disciplines him in a non-monetary fashion for failing to work during his scheduled time.”). The defendants meet the salary-basis test as a matter of law.

D. Breach of Written Contract

Smidt claims P&A breached the terms of its written contract when it fired her. Smidt acknowledges that under the contract P&A had the right to fire her without cause, but claims P & A did not live up to the obligations it incurred when it did.

The relevant portion of the termination without cause provision of the contract provides:

(d) This Agreement may be terminated by [P & A] or [Smidt], with or without cause, for any reason or no reason, by providing at least thirty (30) days written notice of such intent to the other. If [P & A] terminates this Agreement pursuant to this [section] “without cause,” [Smidt] shall receive severance pay in an amount equal to three (3) months of [Smidt’s] annual salary exclusive of commissions, payable in equal monthly installments over three (3) months from the date of the termination.

It is not disputed that P&A paid Smidt three months severance. Instead, Smidt claims P&A breached paragraph 9(d) because it (1) underpaid her commissions she earned and should have received before she left and (2) did not pay her commissions she “earned” but was not due to receive until after she was fired. With respect to the latter claim, Smidt claims the phrase “exclusive of commissions” is ambiguous, and could be construed to mean she would receive severance pay and these commissions “previously earned.”

We think Smidt has presented sufficient evidence on the first part of her claim to survive summary judgment. Paragraph 2(b) of the parties’ contract stated that P&A would pay Smidt a 15% commission on certain operating income Smidt generated. Smidt testified she was underpaid commissions during her tenure at P & A, was not paid commissions in a timely fashion, and her operating income was not calculated correctly. Smidt described one occasion where, after a lengthy meeting with several executives, she was awarded a check for more than $750 in overdue commissions. Deibler, who was President of P&A at the time and present at the meeting, testified she believed P & A. underpaid Smidt’s commissions. P&A does not specifically address these allegations, except to argue generally that “the undisputed facts prove [Smidt] has received everything to which she was entitled under the written agreement.” The facts are plainly in dispute, however, and, therefore summary judgment on this portion of Smidt’s breach of written contract claim was not proper.

We affirm the district court as to the remainder of Smidt’s claim. The plain language of the parties’ contract states that severance was based on salary “exclusive of commissions.” This phrase is not ambiguous; anticipated future commissions were clearly excluded from the severance package. It is a fundamental and well-settled rule that when a contract is not ambiguous, we must simply interpret it as written. State Pub. Defender v. Iowa Dist. Ct., 594 N.W.2d 34, 37 (Iowa 1999); Rogers v. Maryland Cas. Co., 252 Iowa 1096, 1098-99, 109 N.W.2d 435, 437 (1961).

E. Breach of Oral Contract

Smidt claims Porter orally promised her (1) future promotions, (2) renewal of her contract, and (3) support staff to serve her accounts. At her deposition, Smidt indicated these promises were made to her at the time she signed her written contract. A month later, Smidt signed an affidavit in which she indicated these promises were made “several times during the entire course of my employment.” Smidt asserts she turned away other opportunities in reliance upon Porter’s promises. Deibler signed an affidavit confirming Smidt’s story.

The district court dismissed Smidt’s oral contract claim because it held as a matter of law that the terms of the alleged oral agreement were integrated into the parties’ written contract. The district court pointed out that the parties’ contract contained an integration clause and Smidt was represented by counsel during arms-length negotiations with P&A; the court also noted that Smidt’s counsel proposed specific new language into the written contract at the negotiations that P&A eventually accepted.

To the extent Smidt alleges the promises were made prior to or contemporaneously with the signing of the written contract, we agree with the district court that dismissal of her breach of oral contract claim was proper. There are no facts in dispute which could lead a reasonable person to find that the contract was not fully integrated, and therefore the parol evidence rule bars introduction of extrinsic evidence of such promises to modify, or supplement the terms of the written agreement. See, e.g., Whalen v. Connelly, 545 N.W.2d 284, 290-91 (Iowa 1996); Restatement (Second) of Contracts § 213 (1981).

That said, the parol evidence rule does not bar introduction of evidence of subsequent negotiations to show modification of a written contract. Whalen, 545 N.W.2d at 291; Baie v. Nordstrom, 238 Iowa 866, 869, 29 N.W.2d 211, 213 (1947). The district court recognized the affidavits of Smidt and Deibler were evidence of a subsequent agreement, but did not consider them in its analysis. Citing a recent decision of the Eighth Circuit Court of Appeals, the district court ruled that the affidavits directly contradicted Smidt’s pri- or deposition testimony and therefore were insufficient to withstand summary judgment. See Herring v. Canada Life Assur ance Co., 207 F.3d 1026, 1030-31 (8th Cir. 2000) (opining that a party opposing summary judgment may not create a “sham” issue of fact by filing an affidavit that directly contradicts prior deposition testimony) (citing Camfield Tires, Inc. v. Michelin Tire Corp., 719 F.2d 1361, 1365-66 (8th Cir.1983)). Whatever the merits of such a rule (the defendants do not point to any Iowa cases on point), we do not think it should apply in a case such as this one, wherein one of the proffered affidavits comes from someone other than the person who was deposed. The question is simply one of credibility: should one believe Smidt’s deposition testimony or the affidavits of Smidt and Deibler a month later? “[T]he credibility of witnesses is peculiarly the responsibility of the fact finder to assess.” Estate of Hagedom ex rel. Hagedorn v. Peterson, 690 N.W.2d 84, 88 (Iowa 2004); accord Top of Iowa Coop. v. Sime Farms, Inc., 608 N.W.2d 454, 468 (Iowa 2000); Herring, 207 F.3d at 1031 (“Normally, in circumstances such as this, it would be for the jury to resolve the discrepancy in the deposition testimony and the affidavit.”). We will not invade its province in this case.

In the alternative, Porter contends the statute of frauds should bar introduction of evidence of any such subsequent oral agreement because the promises of future promotions, renewal of a contract, and hiring of support staff could not have been performed within one year. See Iowa Code § 622.32(4) (codifying relevant provision of the statute of frauds). See generally St. Ansgar Mills, Inc. v. Streit, 613 N.W.2d 289, 292-94 (Iowa 2000) (explaining history and purpose of statute of frauds). This is simply not so. The question engendered by the statute of frauds is solely one of capability of performance: Porter clearly could have promoted Smidt, renewed her contract, or given her support staff within one year. Blair Town Lot & Land Co. v. Walker, 39 Iowa 406, 412 (1874) (noting that even where difficult or improbable, the contract is not within the statute of frauds if capable of performance within a year). The statute of frauds does not apply. Summary judgment was not proper.

F. Fraudulent Misrepresentation

In a final salvo, Smidt argues the alleged breach of the oral and written contracts constituted fraudulent misrepresentation. The elements of fraudulent misrepresentation are (1) representation; (2) falsity; (3) materiality; (4) scienter; (5) intent; (6) justifiable reliance; and (7) resulting injury. Lloyd, 686 N.W.2d at 233; Hyler v. Garner, 548 N.W.2d 864, 872 (Iowa 1996). Smidt must prove her claim by a preponderance of clear, satisfactory, and convincing evidence. Lloyd, 686 N.W.2d at 233. The district court ruled as a matter of law that Smidt could not prove intent or reasonable reliance.

We agree there is insufficient evidence in the record to show intent to deceive and reasonable reliance. Even if we were to assume Porter promised Smidt “long-term” employment with the various benefits and accoutrements she alleges, it is undisputed that Smidt had sought these same things from Porter prior to the signing of her written contract. Yet from these extensive arms-length negotiations Smidt only received a written contract for one year that was terminable at will and did not contain promotions or the hiring of support staff. There is no evidence of existing fraudulent intent here. The thrust of Smidt’s claim is that Porter broke his promises only later when he learned she was pregnant.

When a promise is made in good faith, with the expectation of carrying it out, the fact that it subsequently is broken gives rise to no cause of action, either for deceit, or for equitable relief. Otherwise any breach of contract would' call for such a remedy. The mere breach of a promise is never enough in itself to establish the fraudulent intent.

Magnusson Agency v. Pub. Entity Nat’l Co.-Midwest, 560 N.W.2d 20, 29 (Iowa 1997). Whatever the merits of Smidt’s breach of contract claims, there is clearly no fraud here. Summary judgment on this issue was proper.

IV. Conclusion

The district court erred when it dismissed Smidt’s statutory pregnancy discrimination claims and breach of oral and written contract claims. Dismissal of Smidt’s FLSA overtime-pay claim and fraud claim was proper, and the court properly denied Smidt’s motion to amend her petition to include a count of wrongful discharge. We remand for a trial on Smidt’s surviving claims.

Costs on appeal are assessed against the defendants.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED FOR FURTHER PROCEEDINGS.

All justices concur except TERNUS and CADY, JJ., who take no part.

      . Neither party challenges the viability of the McDonnell Douglas framework after Desert Palace, Inc. v. Costa, 539 U.S. 90, 123 S.Ct. 2148, 156 L.Ed.2d 84 (2003), so we continue to apply it in this case.

      . The defendants have not disputed Smidt’s ability to meet her burden on the first two elements of her prima facie case. In the district court and at oral argument, however, the defendants argued Smidt could not meet the third element of her prima facie case. In spite of this fact, the defendants submitted proposed findings of fact and conclusions of law to the district court that bypassed this argument altogether. The district court ruling mirrors the defendants' proposed findings of fact and conclusions of law.

      . We also point out that employers are, in any event, free to reduce an employee's salary for full-day absences. 29 C.F.R. 541.118(a)(2).

      . In her brief, Smidt admits it “completely misses the point” that P & A's letter of termination mistakenly references paragraph 9(b) of the contract. We do not consider this scrivener’s error in our decision.

      .Elsewhere the contract indicated that "[cjomissions will be paid on all projects for 12 months following the date the first cost estimate is signed by the client.” Smidt claims she "earned” her commissions at the moment she garnered the business for P&A. We do not understand Smidt to be claiming that she should receive commissions for business she might have brought in during the three months after she was fired.

      . We point out that the defendants do not argue on appeal that the terms of the claimed oral contract were insufficiently definite. We do not consider this issue, notwithstanding the fact the plaintiff briefs it. Nor do the parties address, for the purposes of the statute of frauds, the term of the renewed contract or whether that contract would also be terminable at will and thus capable of performance within one year.


author: CADY, Justice.

text:
    STATE of Iowa, Appellee, v. Curtis James WILLIAMS, Appellant.
    No. 04-0126.
    Supreme Court of Iowa.
    April 15, 2005.

      Linda Del Gallo, State Appellate Defender, and Stephan J. Japuntich, Assistant Appellate Defender, for appellant.
    Thomas J. Miller, Attorney General, Cris Douglass, Assistant Attorney General, Thomas J. Ferguson, County Attorney, and Linda Myers, Assistant County Attorney, for appellee.
   CADY, Justice.

Curtis Williams appeals from the judgment on his conviction for domestic abuse assault, third offense. He claims the evidence was insufficient to convict him, and his trial counsel was ineffective. For the reasons that follow, we affirm the judgment of the district court.

I. Background Facts and Proceedings

The factual background of this case is based on events that occurred on September 29, 2003. On that morning, Williams and his wife, Raegen, were getting then-children ready for school. Williams’ cell phone received two calls from an unidentified “private number.” Each time the phone rang, Raegen answered it, and the caller promptly ended the call without any communication. When a third call came from the “private number,” Raegen had Williams answer the phone by saying “hello.” She then brought the phone to her own ear, at which point a woman said, “Stop playing, Curtis. Where you at?” Raegen yelled at the woman, who terminated the call.

In the minutes that followed, Raegen called 9-1-1. She told the 9-1-1 operator, “Me and my husband had a fight. He was choking me.” The 9-1-1 operator asked to speak to Williams. The operator then asked Williams what happened, and he said, “We had an argument this morning. We had a minor altercation this morning, and there was some pushing going on. That’s about it.” At the same time, Rae-gen can be heard in the background exclaiming, “He’s lying.” The operator asked Williams if he put his hands on Reagan’s throat, and Williams denied that he did so. Raegen can then be heard to say, “He’s lying. He did.”

Officers Frisch and Wheaton were dispatched to the Williams residence in response to the call. When they arrived, Raegen was crying and agitated. She had an inch-long vertical red mark on the front of her neck. She told the officers Williams had choked her with both hands. She later gave a handwritten statement to the police, in which she stated:

[H]e start choking me, and choking me. I couldn’t breathe, I didn’t think he was going to stop. It hurt & I was getting light headed. I was trying to call for my nine yr. old Skyy. I was trying to put my finger nails in his eyes but he kept turning his head and then looking back down at me, so mean like he hated me like he didn’t wanna stop. He then let up & I gasped and ran down the stairs. He just kept wanting his phone.

On October 13, Williams was charged with domestic abuse assault, third offense, in violation of Iowa Code section 708.2A(4) (2003). The district court issued a protective order, which Raegen tried to cancel on two occasions.

The trial commenced on December 9. Prior to jury selection, an attorney representing Raegen informed the court and counsel that Raegen was willing to testify at trial, but that he expected her testimony would be contrary to the prior statements she made to the police officers incriminating Williams. The State then informed the court that it would not call Raegen as a witness. The record further suggested that defense counsel knew prior to trial that Raegen planned to recant her prior statements to police.

At trial, the State presented its evidence through the tape of the 9-1-1 call and the police officers who were dispatched to the house. The officers testified to the statements made by Raegen and to their observations of her emotional state and the red mark on her neck. The 9-1-1 tape was played for the jury, and Raegen’s handwritten statement to police was admitted into evidence. Counsel for Williams objected to the admission of the 9-1-1 tape, handwritten statement, and the testimony of the first police officer to testify. The objections were based on the rule against hearsay. The trial court overruled the objections.

At the close of the State’s case, counsel for Williams moved for a judgment of acquittal:

Well, Your Honor, I think that the— the officers only know what happened secondhand by statements that Raegen said. They admitted that they don’t — it is possible that she could have been telling them things that weren’t true. The physical evidence is very suspect. They don’t have any — any way of really knowing that that’s what caused it. They assume it was caused by that because that’s what she told them. I don’t think that — I think that there is clearly reasonable doubt here and Mr. Williams is entitled to acquittal.

The trial court overruled the motion.

Williams called Raegen as a witness to testify in his defense. She testified that she called police on September 29 out of anger and jealously, and fabricated the story that Williams had choked her. She said Williams never choked her or put his hands on her neck. She said the only physical contact that took place was that she pushed him. She further testified the red mark on her neck must have come from her “picking at [her] face.”

At the close of his evidence, Williams renewed his motion for judgment of acquittal, and he again renewed his motion at the end of the rebuttal evidence offered by the State. Williams never made any reference to a specific element of the crime, in making his motions. -The court denied both motions. The jury returned a verdict of guilty, and the district court sentenced Williams to a term of confinement not to exceed five years.

Williams appeals. He claims the district court erred in denying his motion for judgment of acquittal because there was insufficient evidence to convict him. He also claims his trial counsel was ineffective by failing to make a Confrontation Clause objection to the admission of Raegen’s incul-patory hearsay statements through ' the tape of her 9-1-1 call and the testimony of Officers Frisch and Wheaton.

II. Standards of Review

State v. Quinn, 691 N.W.2d 403, 407 (Iowa 2005) (citations omitted). We review ineffective-assistance-of-counsel claims de novo. State v. Begey, 672 N.W.2d 747, 749 (Iowa 2003) (citing Kane v. State, 436 N.W.2d 624, 626 (Iowa 1989)).

III. Sufficiency of the Evidence

The State contends Williams failed to preserve error on his sufficiency-of-the-evidence claim “because he did not make a specific motion for judgment of acquittal.” In State v. Crone, we held that when the motion for judgment of acquittal did not make reference to the specific elements of the crime on which the evidence was claimed to be insufficient, it did not preserve the sufficiency of the evidence issue for review. 545 N.W.2d 267, 270 (Iowa 1996) (citing State v. Geier, 484 N.W.2d 167, 170-71 (Iowa 1992)); accord State v. Greene, 592 N.W.2d 24, 29 (Iowa 1999) (holding error not preserved on sufficiency of the evidence issue when “counsel made a general motion for judgment of acquittal, [but] failed to identify in the district court the specific elements of the charge that were insufficiently supported by the evidence” (citing Crone, 545 N.W.2d at 270); 75A Am.Jur.2d Trial § 1046, at 588 (1991) (“A motion for judgment of acquittal must fully set forth the grounds upon which it is based. Unless there is a total failure of proof, a motion to direct an acquittal must specify the particulars in which the evidence is insufficient.”). The State is correct that Williams’ motion did not reference any specific element of the crime charged. However, we recognize an exception to the general error-preservation rule when the record indicates that the grounds for a motion were obvious and understood by the trial court and counsel. See In re Detention of Hodges, 689 N.W.2d 467, 470 (Iowa 2004) (“An appellate court will consider grounds not precisely raised in a motion for directed verdict where the record indicates the trial court, counsel, and both parties had no doubt what the grounds for the motion were and these grounds were obvious and discussed thoroughly in the court below.”).

The elements of domestic abuse assault that the State was required to prove in this case were: (1) Williams committed “any act which is intended to cause pain or injury to, or which is intended to result in physical contact which will be insulting or offensive to another” or “any act which is intended to place another in fear of immediate physical contact which will be painful, injurious, insulting, or offensive,” Iowa Code § 708.2A(1); id. § 708.1(l)-(2); and (2) Williams had “the apparent ability to execute the act,” id. The parties stipulated that if an assault was established, it qualified as domestic abuse because Williams and Raegen were married, living together, and had children together. See id. § 236.2(2) (defining domestic abuse). Thus, the fighting issue throughout the trial was whether Williams choked Raegen or she falsely accused him of choking her. Under these circumstances, the record clearly reveals the trial court and counsel understood that the grounds for the motion for judgment of acquittal targeted the insufficiency of the evidence to support the first element of assault due to the limited physical evidence and the hearsay nature of the testimony. We conclude error was properly preserved.

Evidence is sufficient to withstand a motion for judgment of acquittal when, viewing the evidence in the light most favorable to the State and drawing all reasonable inferences in the State’s favor, “there is substantial evidence in the record to support a finding of the challenged element.” State v. Reynolds, 670 N.W.2d 405, 409 (Iowa 2003). Substantial evidence means evidence that “ ‘could convince a rational fact finder that the defendant is guilty beyond a reasonable doubt.’ ” Id. at 410 (quoting State v. Bayles, 551 N.W.2d 600, 608 (Iowa 1996)). Moreover,

[t]he function of the court, on a motion to direct a verdict of acquittal, is limited to determining whether there is sufficient evidence from which reasonable persons could have found the defendant guilty as charged. It is not the province of the court, in determining the motion, to resolve conflicts in the evidence, to pass upon the credibility of witnesses, to determine the plausibility of explanations, or to weigh the evidence; such matters are for the jury.... Any inconsistencies in the testimony of a defense witness are for the jury’s consideration, and do not justify a court’s usurpation of the factfinding function of the jury.

75A Am.Jur.2d Trial § 1026, at 573-74 (emphasis added); see also State v. Laffey, 600 N.W.2d 57, 59 (Iowa 1999) (“[I]t is for the jury to judge the credibility of the witnesses and weigh the evidence.” (Citation omitted.)).

Viewing the record in the light most favorable to the State, we conclude there was substantial evidence to support the conviction. Admissible hearsay can be used to support a conviction just as other admissible evidence. See Iowa R. Evid. 5.803(2) (“A statement relating to a startling event or condition made while the declarant was under the stress of excitement caused by the event or condition.”). Additionally, the jury was free to sort out the inconsistency between Raegen’s trial testimony and her prior statements to police. The red mark on Raegen’s face constituted corroborative evidence.

IV. Ineffective Assistance

“[T]o succeed on an ineffective-assistance-of-counsel claim, a defendant must prove each of the following two elements by a preponderance of the evidence: (1) trial counsel failed to perform an essential duty, and (2) this failure resulted in prejudice.” State v. Dalton, 674 N.W.2d 111, 119 (Iowa 2004) (citing State v. Stallings, 658 N.W.2d 106, 108-09 (Iowa 2003)). “To prove a breach of an essential duty, the [defendant] faces a strong presumption that the performance of counsel falls within a wide range of reasonable professional assistance.” Fullenwider v. State, 674 N.W.2d 73, 75 (Iowa 2004) (citing State v. Hepperle, 530 N.W.2d 735, 739 (Iowa 1995)). The prejudice prong of the test “is shown if the [defendant] establishes a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different.” Id. at 75-76 (citing Strickland v. Washington, 466 U.S. 668, 694, 104 S.Ct. 2052, 2068, 80 L.Ed.2d 674, 698 (1984)). If Williams fails to prove either prong of the Strickland test, his ineffective-assistance claim fails. Dalton, 674 N.W.2d at 119 (citing State v. Cook, 565 N.W.2d 611, 614 (Iowa 1997)).

Williams claims his trial counsel breached an essential duty by failing to object to Raegen’s hearsay statements presented during the State’s case on the grounds that they violated the Confrontation Clause of the Sixth Amendment to the United States Constitution. Williams relies on Crawford v. Washington, 541 U.S. 36, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004), for authority that the introduction of Raegen’s hearsay statements by the State violated his Confrontation Clause rights. In Crawford, the Supreme Court overruled Ohio v. Roberts, 448 U.S. 56, 100 S.Ct. 2531, 65 L.Ed.2d 597 (1980), and held that when “testimonial” hearsay is at issue, “the Sixth Amendment demands what the common law required: unavailability and a prior opportunity for cross-examination.” Crawford, 541 U.S. at 68, 124 S.Ct. at 1374, 158 L.Ed.2d at 203. Thus, out-of-court testimonial evidence is inadmissible unless the declarant is unavailable, and the accused had a prior opportunity for cross-examination. Id.

Although it is not clear that the Con-, frontation Clause rights of Williams were violated in this case under the standard announced in Crawford, we conclude the decision cannot apply retroactively to support a claim for ineffective assistance of counsel. It was decided on March 8, 2004, four months after Williams’ trial. Prior to Crawford, Raegen’s hearsay statements were admissible under well-settled law. Under Ohio v. Roberts, hearsay statements did not violate the Confrontation Clause if: (1) the declarant was unavailable to testify at trial, and (2) the statement “b[ore] adequate indicia of reliability,” which it did if it fell within a firmly rooted exception to the hearsay rule. 448 U.S. at 66, 100 S.Ct. at 2539, 65 L.Ed.2d at 608. In United States v. Inadi, 475 U.S. 387, 106 S.Ct. 1121, 89 L.Ed.2d 390 (1986), the Supreme Court limited its holding in Roberts and held that “unavailability analysis is a necessary part of the Confrontation Clause inquiry only • when the ' challenged out-of-court statements were made in the course of a prior judicial proceeding.” Inadi, 475 U.S. at 394, 106 S.Ct. at 1125, 89 L.Ed.2d at 398. In White v. Illinois, the Court relied on Inadi to hold that unavailability of the declarant is not required by the Confrontation Clause when the declarant’s statement qualifies as an excited utterance. White, 502 U.S. 346, 355-56, 112 S.Ct. 736, 742-43, 116 L.Ed.2d 848, 859-60 (1992); accord State v. Campbell, 539 N.W.2d 491, 494-95 (Iowa Ct.App. 1995). Thus, because Raegen’s statements qualified as excited utterances, a firmly rooted exception to the hearsay rule, their admission did not violate the Confrontation Clause.

In addressing ineffective-assistance-of-counsel claims, we have said that counsel is not under a duty of clairvoyance. Morgan v. State, 469 N.W.2d 419, 427 (Iowa 1991); see State v. Liddell, 672 N.W.2d 805, 814 (Iowa 2003) (“ ‘Counsel need not be a crystal gazer; it is not necessary to know what the law will become in the future to provide effective assistance of counsel.)’ ” (quoting Snethen v. State, 308 N.W.2d 11, 16 (Iowa 1981)). Accordingly, Williams’ trial counsel did not breach an essential duty by failing to object on Confrontation Clause grounds. Thus, the prejudice prong of the Strickland test need not be addressed, and Williams’ ineffective-assistance-of-counsel claim fails. Dalton, 674 N.W.2d at 119 (citing Cook, 565 N.W.2d at 614)).

Having decided the ineffective-assistance-of-counsel claim on the grounds that counsel was not required to anticipate a change in the law, we decline to further address the application of the Crawford holding to the myriad questions presented by a recanting or nontestifying spouse in a domestic abuse ease. We readily recognize that these issues are of great interest to judges and the bar, and answers are needed. However, we are constrained by our principles of self-restraint, including the longstanding rule that we will not decide constitutional questions when a case can be resolved on other grounds. See, e.g., Dubuque & D.R. Co. v. Diehl, 64 Iowa 635, 640, 21 N.W. 117, 120 (1884) (“We will not decide a constitutional question, unless it be necessarily involved in the case, which cannot be disposed of without the decision of such question. If the record shows other questions which are decisive of the case, they alone will be considered. Courts are slow in approaching, and hesitate to decide, constitutional questions.”); accord State v. Button, 622 N.W.2d 480, 485 (Iowa 2001); State v. Quintero, 480 N.W.2d 50, 51 (Iowa 1992). Such judicial restraint is an essential component of our system of federalism and separation of powers. See generally 16 Am.Jur.2d Constitutional Law §§ 115-128 (1998); Lisa A. Kloppenberg, Avoiding Constitutional Questions, 35 B.C. L.Rev. 1003 (1994). Moreover, we recognize the law to be an evolving process that often makes the resolution of legal questions a composite of several cases, from which appellate courts can gain a better view of the puzzle before arranging all the pieces. The wisdom of this process has been revealed time and again, and we continue to subscribe to it today.

V. Conclusion

We conclude there is substantial evidence from which a jury could have convicted Williams. Additionally, Williams’ trial counsel did not breach an essential duty by failing to object to the admission of the hearsay statements on confrontation grounds. We affirm the judgment of the district court.

AFFIRMED.

      . See State v. Turecek, 456 N.W.2d 219, 225 (Iowa 1990) (“The right given to the State to impeach its own witnesses under Iowa Rule of Evidence 607 and our decision in State v. Trost, 244 N.W.2d 556, 559-60 (Iowa 1976), is to be used as a shield and not as a sword. The State is not entitled under rule 607 to place a witness on the stand who is expected to give unfavorable testimony and then, in the guise of impeachment, offer evidence which is otherwise inadmissible.”).

      . The State claims the statements in this case were not testimonial hearsay. Crawford only applies to "testimonial” hearsay statements. Crawford, 541 U.S. at 68, 124 S.Ct. at 1374, 158 L.Ed.2d at 203. The Supreme Court did not define "testimonial,” but stated it applies "at a minimum to prior testimony at a preliminary hearing, before a grand jury, or at a formal trial; and to police interrogations.” Id. The State also argues that the Confronta- . tion Clause was satisfied when Williams called Raegen as a witness. Finally, it argues that if Crawford does apply to the facts of this case, an exception should be recognized in domestic violence cases. We need not and do not address any of these issues in this case.


author: WIGGINS, Justice.

text:
    Dennis FISCHER, Julie Fischer, James Horn, Judy Horn, Todd Niggeling, Liz Niggeling, Kraig Sankey, Christine Sankey, Shaun Smith, Kari Smith, Mark Stevenson, Lorin Walker and Linda Walker, Appellants, v. CITY OF SIOUX CITY, Appellee.
    No. 03-1431.
    Supreme Court of Iowa.
    April 15, 2005.

      Michael P. Schmiedt and Marci L. Isem-inger of Crary, Huff, Inkster, Sheehan, Ringgenberg, Hartnett & Storm, P.C., Sioux City, for appellants.
    James L. Abshier, City Attorney, Sioux City, for appellee.
   WIGGINS, Justice.

The plaintiffs are seven families who reside in the area around the intersection of Sergeant Road and Waldon Avenue in Sioux City, Iowa. On July 2, 1999, an unusually heavy rainstorm resulted in excess surface water running into the intersection. The rainwater from the storm backed up into the families’ basements causing damage to their property. The families sued Sioux City alleging the city was negligent in connection with its storm-drainage system. The district court ruled the city was immune from liability under Iowa Code section 670.4(8) (2001). Because we agree with the city that substantial evidence supports the district court’s conclusion that the city was immune from liability under section 670.4(8), we affirm the judgment of the district court.

I. Background Facts and Proceedings.

In 1973, the city constructed the storm-drainage system when much of the drainage basin was undeveloped. As designed, the system utilized a sixty-inch pipe and allowed excess water to run off the intersection on an overland flow route. The families allege subsequent to the installation of the system the city allowed two events to take place contributing to the flooding in 1999.

The first event occurred in 1978 when the city council approved the construction of Southern Hills Mall, located five blocks from the intersection. The families claim the mall and other commercial development spawned by the mall significantly increased the amount of runoff into the drainage area because the city allowed the storm-drainage system in and around the mall area to connect to the 1973 storm-drainage system. The second event occurred when the residential development around the intersection blocked the overland flow route and created a low point in the intersection where water gathered and created a pool of water during a storm event, known as a sag condition. The families claim the city should have precluded the use of certain lots for development so excess water would continue to run off the intersection on the overland flow route. They also claim the city should not have allowed the residential development in the area because the development created the sag condition.

On August 11, 1999, each family filed separate petitions seeking compensation from the city for damages to their personal and real property. The petitions alleged ordinary and gross negligence against the city for its failure to properly design, construct, inspect, and maintain the storm-drainage system serving the drainage area where the families’ properties were located; its failure to rebuild or replace the storm-sewer line prior to July 2, 1999; and its failure to require the drainage area in question to be properly graded and swaled so the surface water would run off without causing damage to the families’ properties.

The district court consolidated the cases. The cases proceeded to trial in 2001. The district court entered judgment in favor of the families. The city appealed. On appeal, we reversed the district court decision and remanded the case for further proceedings holding the district court abused its discretion by granting the families’ motion for partial summary judgment based on issue preclusion. Fischer v. City of Sioux City, 654 N.W.2d 544, 550 (Iowa 2002).

Relevant to this appeal, on retrial the district court determined the storm-drainage system as constructed was in accordance with a generally recognized engineering standard in existence in 1973 when the city constructed the system. The district court also determined even after the commercial development, which took place in the 1970s, the city’s use of detention ponds to neutralize the effects of the added runoff created by the commercial properties was adequate to handle the additional runoff. Based on these findings, the district court concluded the city was immune from liability under Iowa Code section 670.4(8), which grants immunity to a city if the city constructed or reconstructed a public improvement or other public facility in accordance with a generally recognized engineering standard, criteria, or design theory in existence at the time of the construction or reconstruction. The families appeal.

II. Issue.

The court must determine whether substantial evidence supports the district court’s findings that the city was immune from liability for the families’ claims under Iowa Code section 670.4(8).

III. Scope of Review.

Our review is for correction of errors at law. Iowa R.App. P. 6.4. The district court’s findings of fact are binding on us if supported by substantial evidence. Iowa R.App. P. 6.14(6)(a); Molo Oil Co. v. City of Dubuque, 692 N.W.2d 686, 690 (Iowa 2005). When a party argues the district court’s ruling is not supported by substantial evidence,

we view the evidence in the light most favorable to the judgment. When a reasonable mind would accept the evidence as adequate to reach a conclusion, the evidence is substantial. Evidence is not insubstantial merely because we may draw different conclusions from it; the ultimate question is whether it supports the finding actually made, not whether the evidence would support a different finding. However, neither the district court’s conclusions of law nor its application of its legal conclusions is binding on appeal.

Raper v. State, 688 N.W.2d 29, 36 (Iowa 2004) (citations omitted).

IV. Analysis.

The Iowa Code provides a municipality shall be immune from liability for

[a]ny claim based upon or arising out of a claim of negligent design or specification, negligent adoption of design or specification, or negligent construction or reconstruction of a public improvement as defined in section 384.37, subsection 19, or other public facility that was constructed or reconstructed in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction. A claim under this chapter shall not be allowed for failure to upgrade, improve, or alter any aspect of an existing public improvement or other public facility to new, changed, or altered design standards. This subsection shall not apply to claims based upon gross negligence.

Iowa Code § 670.4(8). Section 670.4(8) not only provides the city with a state-of-the-art defense with respect to the design and construction of public improvements but also states the finder of fact measures the extent of the city’s duty for nonconstitu-tional torts by the “generally recognized engineering or safety standard, criteria, or design theory” in existence at the time of the construction or reconstruction. Connolly v. Dallas County, 465 N.W.2d 875, 877 (Iowa 1991). It is the plaintiffs burden to establish the city did not construct or reconstruct the improvement “in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction.” Id. at n. 3.

The families contend substantial evidence does not support the district court’s findings that the city constructed the storm-drainage system in accordance with a generally recognized engineering standard in existence at the time the city constructed the system. The families argue that in order for the storm-drainage system to comply with the standards in existence in 1973, the city should have used a sixty-six-inch pipe instead of a sixty-inch pipe in the construction of the system. The families also argue the 1973 standards required an overland flow route protected by a permanent easement, which not only would protect the overland flow route, but also would have prevented a sag condition from developing. The families’ expert supported these assertions.

The city’s experts testified that when the city installed the storm-drainage system in 1973, a sixty-inch pipe complied with an existing generally recognized engineering standard. The generally recognized engineering standard used by the city at that time was for the storm-drainage system to be able to handle a ten-year storm without flooding. As to an overland flow route, one of the city’s experts conceded in the 1970s an overflow route in a storm-drainage system was a good idea, but the incorporation of an overland flow route in a storm-drainage system did not become a generally recognized engineering standard until the 1980s. The district court agreed with the city’s experts and found the sixty-inch pipe was capable of handling a ten-year storm, and there was no generally recognized engineering standard requiring the city to have an overland flow route or to maintain such a route on a permanent basis. The city was not required to update its system to require a permanent easement to protect the overland flow rate when the incorporation of an overland flow rate became a generally recognized engineering standard in the 1980s. See Iowa Code § 670.4(8) (providing “[a] claim under this chapter shall not be allowed for failure to upgrade, improve, or alter any aspect of an existing public improvement or other public facility to new, changed, or altered design standards”). Based on these findings, the district court concluded the city was immune from liability for the families’ claims under section 670.4(8).

The district court had the opportunity to view the witnesses and assess their credibility. After doing so, the district court accepted the city’s evidence over the families’ evidence. The district court was free to resolve the conflict in the testimony in favor of the city. Thus, substantial evidence supports the district court’s findings that when the city installed the storm-drainage system in 1973, a sixty-inch pipe complied with an existing generally recognized engineering standard, and there was no generally recognized engineering standard requiring the city to have an overland flow route or maintain such a route on a permanent basis.

The families also argue the city was required to redesign the system because the city allowed the commercial development to discharge its runoff into the original storm-drainage system, when the city authorized the construction of the commercial development in and around the mall in the late 1970s. The families premise this argument on the fact at the time the city constructed the original storm-drainage system, most of the area served by the system was undeveloped. Soon after the city constructed the system, the city authorized the construction of the mall in 1978. The mall attracted other commercial developments in the area. Commercial development creates a tremendous amount of runoff from the roofs and concrete parking areas, in contrast to residential areas that have green spaces to absorb the runoff. When the city authorized the construction of the mall, the city allowed the mall and any future commercial development in the area to connect their storm-drainage system to the original system constructed in 1973. Prior to 1984, the city did not require the commercial developments to build detention ponds. The families contend the change in the types of the development the city allowed in the area serving the original storm-drainage system required the city to run an additional pipe parallel to the original pipe diverting the water outside of the original drainage basin, or develop adequate detention ponds to handle the excess water flow from the commercial developments in order for the original storm-drainage system to continue to meet the ten-year storm standard used when the system was constructed in 1973.

Our review of the record reveals by 1984 the city recognized commercial development in and around the mall was creating additional runoff that potentially could lead to flooding at the down-stream end of the system. In 1984, the executive committee of the city’s planning and zoning commission studied the problem and determined there were two options available to the city to deal with the situation. The first involved the installation of a parallel pipe to divert the runoff outside of the original drainage basin. The second option was to require all future non-single family residential developments in the area to have on-site detention ponds. The design of the detention ponds would allow the ponds to release water into the system at a rate equal to a rate as if the site was undeveloped.

The committee estimated the cost to the city to install a parallel pipe was approximately $40,000. The committee recommended and the city decided to use on-site detention ponds with controlled release rates to remedy the situation. After the adoption of the detention pond option, all future non-single family residential developments were required to use detention ponds with controlled release rates.

The families’ expert testified the original storm-drainage system could not handle a ten-year storm due to runoff created by the additional commercial development in the area, even with the addition of the detention-pond system. The city’s expert testified the detention ponds not only allowed the original storm-drainage system to continue to handle a ten-year storm as originally designed, but with the addition of the ponds the system was actually capable of handling a twenty-five-year storm. This testimony supported the position that the city did provide adequate detention ponds to handle the excess water flow from the commercial developments in order for the original storm-drainage system to continue to meet the ten-year storm standard used when the system was constructed. The district court chose to accept the opinions of the city’s expert over the families’ expert because the city’s expert used a more accurate and sophisticated model in reaching his conclusions.

We agree with the city that substantial evidence supports the district court’s finding the detention ponds maintained the storm-drainage system in accordance with a generally recognized engineering standard requiring the system to be able to handle a ten-year storm without flooding. Based on this finding, the district court was correct when it determined the city was immune from liability for the families’ claims under Iowa Code section 670.4(8).

V. Disposition.

Because substantial evidence supports the district court’s conclusion that the city was immune from liability for the families’ claims under Iowa Code section 670.4(8), we affirm the judgment of the district court.

AFFIRMED.

      . In 1996, a flood occurred at the same intersection and another resident obtained a judgment against the city based on a district court finding that the city had negligently designed the storm sewer by using too small a pipe. Fischer v. City of Sioux City, 654 N.W.2d 544, 546 (Iowa 2002). The families in the present case asserted a claim of issue preclusion on the issue of negligent design based on the judgment obtained by the other plaintiff. The district court granted the families’ motion for partial summary judgment precluding the city from relitigating the question of its negligence in designing the storm system.

      . As to the issues not relevant to this appeal, the district court found "no sufficient evidence to sustain” the families' allegations that the city failed to properly inspect and maintain the storm-drainage system. The district court also determined that at a point in time when the city might have realized improvements to the storm-drainage system may have been necessary, the city was immune from liability for any failure to make any improvements under the discretionary function immunity provided for by section 670.4(3). The families do not raise these issues on appeal.