author: STREIT, Justice.

text:
    A. DOE, as Mother and Next Friend of B. DOE, a Minor; A. Roe, as Mother and Next Friend of B. Roe, a Minor; and A. Jones, as Mother and Next Friend of B. Jones, Appellants, v. CEDAR RAPIDS COMMUNITY SCHOOL DISTRICT, Appellee.
    No. 01-0648.
    Supreme Court of Iowa.
    Sept. 5, 2002.
    Rehearing Denied Oct. 30, 2002.

      Anne Úpdegraff of Tom Riley Law Firm, P.C., Cedar Rapids, for appellants.
    Matthew G. Novak and Thad J. Collins of Pickens, Barnes & Abernathy, Cedar Rapids, for appellee.
   STREIT, Justice.

Three female students sued the Cedar Rapids Community School District alleging improper sexual conduct by a teacher with the students. The suit was based on Gary Lindsey’s alleged improper conduct with the three girls at Van Burén Middle School in 1995 where Lindsey was their music teacher. The action was premised on theories of respondeat superior and negligent hiring, retention, and supervision of Lindsey. The district court granted summary judgment finding the School was protected from liability under the discretionary function immunity. Because we find the discretionary function immunity does not apply to the acts of a school district in hiring, retaining, and supervising an individual employee, we reverse and remand.

I. Background and Facts

Gary Lindsey has a long history of allegations of misconduct related to his employment as a teacher for two school districts. We begin in 1964 while Lindsey was employed by the Oelwein Community School District. One of the fifth grade girls said Lindsey improperly touched her. Lindsey explained his conduct saying, “I guess it was a lust for the flesh.” Admitting the allegations against him, Lindsey resigned from his position during the middle of the school year.

In 1972, while Lindsey was employed by the Cedar Rapids Community School District, several students made accusations of improper conduct against him. Lindsey was involved in an altercation with one of his students. He slammed the boy up against a locker and grabbed his throat. Another student lodged a complaint in 1986 concerning disciplinary measures taken by Lindsey against the student. There are no documents available regarding this particular allegation. In 1988, Lindsey admitted telling a male student he “would not live to [the] age [of] seventeen as driving too fast, drugs, or sex would get him before that.” The School required Lindsey to apologize.

After these incidents of misconduct, the School adopted policies and regulations to apply to Lindsey’s conduct. It implemented a policy entitled “Student Welfare” that states, in part, “The District will make every effort to protect, improve, and maintain the physical, emotional, and social well-being of students.” The School also adopted a policy regarding the evaluation of its teachers. This policy provided, “The purpose of this process should be to identify and strengthen positive areas of employee performance, as well as to identify and correct deficiencies in employee performance.”

In 1990 the School again reprimanded Lindsey after a fifth grade female student claimed Lindsey made inappropriate comments to her about her clothes. The student told her mother she was “going to wear her tight pants today, because Mr. Lindsey said he really liked them on me.” Lindsey exchanged notes with the student in which he discussed parts of her body and called her “Sweet Pea.” He engaged in physical contact including back rubs with her and had lunch sessions with her in his classroom. Lindsey did not dispute any of the girl’s allegations. The School responded to this situation by issuing Lindsey a letter of reprimand. The School warned Lindsey that if another situation of this sort occurred, serious disciplinary action would be taken, including possible termination.

The final allegations of misconduct are the ones before us on appeal. Minor Roe was nine years old in 1995 and in the third grade at Van Burén Elementary School in Cedar Rapids. Roe said Lindsey placed her hands on his penis, hugged her, and kissed her. At Lindsey’s request, Roe would stay in Lindsey’s classroom alone with him during recess. Lindsey also blew kisses at Roe and told her she was a pretty girl and that he liked her very much.

Similar allegations were reported by Minor Doe who was eight years old and in the third grade at Van Burén. Doe said Lindsey placed her hands on his penis on more than one occasion. Lindsey testified that he “could not recall one way or the other” whether he had made Doe touch his penis. He also hugged and kissed her. Lindsey claimed he could not remember whether or not he kissed Doe. Like Roe, Lindsey asked Doe to stay alone with him in his classroom during lunch. Lindsey gave Doe a flower in a vase, though Lindsey denied this allegation.

Finally, a third student made charges similar to the above allegations. Minor Jones was eight years old and in the third grade at Van Burén. On more than one occasion, Lindsey placed her hands on his penis and hugged her. Lindsey admitted he hugged each of the three girls.

On August 7, 1998, their mothers on behalf of their minor daughters filed suit against the Cedar Rapids Community School District and Gary Lindsey. Alleging Lindsey’s improper contact with the three girls, the minors premised their suit on theories of respondeat superior and negligent hiring, retention, and supervision. The School filed a motion for summary judgment challenging the respondeat superior claim asserting Lindsey’s alleged misconduct was beyond the scope of his employment as a matter of law. The School also argued that judgment as a matter of law on the negligence claims was appropriate because there was no evidence the School knew or should have known of Lindsey’s unfitness to teach. Alternatively, the School contends it is immune under the discretionary function exception of Iowa Code section 670.4(8) (1995).

The district court concluded Lindsey’s alleged misconduct was beyond the scope of his employment and granted summary judgment on the vicarious liability claims. In the claim based on negligent hiring, retention, and supervision, the court found the minors generated a factual issue on whether the School had adequate notice of past misconduct to render Lindsey’s acts foreseeable. Notwithstanding, the court concluded the School was immune under the discretionary function exception. Specifically, the court found the School did take some action regarding prior accusations against Lindsey. It then ruled hiring and supervision of employees involves the type of policy considerations the discretionary function exception was designed to shield from challenge.

The minors appeal challenging the district court’s grant of summary judgment based on discretionary function immunity. They contend the immunity should not apply when a school hires, retains, or fails to supervise a teacher when it knows or should know the specific teacher has a proclivity to assault children. Specifically, the minors allege because Lindsey was previously fired from another school during the middle of a school year for misconduct, the School should have discovered this information in the hiring process. To support their claim of negligent retention and supervision, the minors show a pattern of misconduct citing a 1990 reprimand for inappropriate comments and contact with a student and 1992 allegations of improper contact. The minors further claim the School policies and the terms of the 1990 reprimand established a mandated procedure to prevent further abuse of students, and therefore there was no judgment involved in the School’s failure to take corrective action. In such case, the minors argue the discretionary function immunity does not apply.

II. Scope of Review

Our review of a denial of a motion for summary judgment is for correction of errors at law. Channon v. United Parcel Serv., Inc., 629 N.W.2d 835, 857 (Iowa 2001) (citation omitted). Summary judgment is proper if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.” Iowa R. Civ. P. 1.981(3) (2002).

III. The Merits

On appeal, the minors only challenge the district court ruling granting summary judgment to the School on the issue of negligent hiring, retention, and supervision. They do not appeal the court’s ruling on the respondeat superior claim. Therefore, we will concentrate our efforts on the issue of the discretionary function immunity, as this was the basis of the district court’s ruling.

A. Discretionary Function Immunity

Our first step is to determine whether the district court correctly found the discretionary function immunity applies here. The district court found considerations involved in the hiring and retention of school district employees include the type of balancing of competing interests the discretionary function immunity is designed to protect. Simply because the government entity exercised some discretion in a particular action does not assure it immunity. Today, liability is the rule and immunity the exception. Young v. City of Des Moines, 262 N.W.2d 612, 620 (Iowa 1978), overruled on other grounds by Parks v. City of Marshalltown, 440 N.W.2d 377, 379 (1989). Governmental entities are entitled to immunity only to the extent permitted by statute. Iowa Code section 670.4(3) provides immunity from

[a]ny claim based upon ... the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of the municipality or an officer or employee of the municipality, whether or not the discretion is abused.

The issue then is whether the School’s conduct in hiring, retaining, and supervising a particular teacher is immune from suit. In Iowa, we have adopted the test articulated by the United States Supreme Court for testing whether the discretionary function immunity applies. Goodman v. City of LeClaire, 587 N.W.2d 232, 237-38 (Iowa 1998) (citing Berkovitz v. United States, 486 U.S. 531, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988)). It is a two-prong test. The first inquiry is whether the challenged conduct was a matter of choice for the acting employee. Then, if we find an element of judgment is involved in the challenged conduct, we must determine whether the judgment is of the kind the discretionary function exception was designed to shield. This prong of the test protects governmental actions and decisions based on considerations of public policy grounded on social, economic, and political reasons. City of Cedar Falls v. Cedar Falls Cmty. Sch. Dist., 617 N.W.2d 11, 19 (Iowa 2000). If the answer to either of these questions is negative, then the discretionary function exemption does not apply. Id. (citing Goodman, 587 N.W.2d at 237-38). The district court found the School is immune because the judgment the School exercised in hiring and supervising Lindsey is of the type the immunity was designed to protect.

1. Was an element of judgment or discretion involved?

We must first determine whether the School’s actions were a matter of choice or judgment. Goodman, 587 N.W.2d at 237 (quoting Berkovitz, 486 U.S. at 536, 108 S.Ct. at 1958-59, 100 L.Ed.2d at 540-41). If the School’s conduct cannot be “appropriately the product of judgment or choice, then there is no discretion in the conduct for the discretionary function exception to protect.” Id. Nearly all challenged conduct can be characterized as the exercise of some judgment or discretion as “|j]udgment is exercised in almost every human endeavor.” Kansas State Bank & Trust Co. v. Specialized Transp. Servs. Inc., 249 Kan. 348, 819 P.2d 587, 600 (1991) (quoting Downs v. United States, 522 F.2d 990, 995 (6th Cir.1975)).

The School appears to argue it is only liable for decisions made contrary to policies that would not allow choice. This bright line analysis suggested by the School is precisely what we moved away from when we abandoned the planning/operational test. Goodman, 587 N.W.2d at 236-38. As such, we will again apply the Berkovitz test which provides an analytical framework for even the most uncertain cases. We now turn to this analysis.

The first prong of the Berkovitz test is easily satisfied in this case. When the School hired Lindsey it exercised its professional judgment. It was faced with the decision to either hire Lindsey or not hire Lindsey. When it retained Lindsey after a series of allegations of misconduct, the School further made this decision based on choice. Finally, when the School supervised Lindsey as a result of the misconduct, it exercised judgment. Therefore, the first prong of the discretionary function immunity is satisfied.

The School seems to argue that once we find it exercised discretion' in hiring, retaining, and supervising Lindsey its actions are immune from suit. Not all discretionary acts involving skill or judgment are immune simply because the legislature has empowered the state or its agents to act. See Ex parte Cranman, 792 So.2d 392, 404 (Ala.2000). The School clearly misapprehends the test we articulated in Goodman. Though the School exercised some discretion in this matter, that does not automatically guarantee immunity. Rather, once we decide an element of discretion was involved, we then must determine whether that discretion was of the nature the legislature intended to insulate from liability. We now turn to the second part of the test and consider whether the nature of the challenged act is entitled to immunity.

2. Is the challenged conduct of the nature the legislature intended to shield from liability?

In moving away from the more strict planning/operational dichotomy in Goodman, we did not expand the scope of the governmental function immunity to include all decisions based on policy. Rather, we must consider whether the challenged action was “grounded in social, economic, and political policy.” City of Cedar Falls, 617 N.W.2d at 19 (quoting Berkovitz, 486 U.S. at 536-37, 108 S.Ct. at 1959, 100 L.Ed.2d at 541); see, e.g., Bustamente v. Jefferson Parish Inspection & Code Enforcement, 683 So.2d 822 (La.Ct.App.1996) (dismissing building code violations is immune); Martin County v. Indiantown Enters., Inc., 658 So.2d 1144 (Fla.Dis.Ct.App.1995) (county officials’ oral representations regarding an informal extension of a demolition order is immune). The shield applies if the School’s challenged conduct involved considerations of public policy. Id. The more the School’s judgment involved policy-making the more it is to be recognized as immune from judicial process. See Kansas State Bank & Trust Co., 819 P.2d at 600. If the challenged conduct involved a “high degree of discretion and judgment ... in weighing alternatives and making choices with respect to public policy and planning,” the School should be immune from liability. Hacking v. Town of Belmont, 143 N.H. 546, 736 A.2d 1229, 1232 (1999). Based upon the facts before us, we conclude the School’s judgment concerning this teacher did not involve the permissible exercise of policy judgment.

The School cites a number of cases purporting to support its contention that a school district’s decision to hire, retain, and supervise a teacher is immune from judicial process. However, none of these cited cases articulates any policy reasons behind the schools’ actions that our legislature intended to insulate from liability. In Gordon v. Ottumwa Community School District, the federal district court for the southern district of Iowa predicted that this court would conclude employment decisions relating to hiring, supervision, and retention of employees are protected by the discretionary function immunity. Gordon v. Ottumwa Cmty. Sch. Dist., 115 F.Supp.2d 1077 (S.D.Iowa 2000). However, noticeably absent from this case is any discussion of specific policy considerations involved in such decisions. Rather, the court simply found “hiring, retention, training and supervision of public employees involves discretionary, policy-related decisions for which a public entity is immune from liability.” Gordon, 115 F.Supp.2d at 1087. Both the court in Gordon and the School have cited a number of other cases that merely assert policy considerations were involved without articulating the substance of such policies. See, e.g., Davis v. DeKalb County Sch. Dist., 996 F.Supp. 1478, 1484 (N.D.Ga.1998); Does 1, 2, 3 & 4 v. Covington County Sch. Bd., 969 F.Supp. 1264, 1285-87 (M.D.Ala.1997); Willoughby v. Lehrbass, 150 Mich.App. 319, 388 N.W.2d 688, 700 (1986); Doe v. Park Ctr. High Sch., 592 N.W.2d 131, 135-36 (Minn.Ct.App.1999) (applying operational/planning dichotomy, the court discussed policies relating to investigation of allegations of misconduct).

The School has not shown any social, political, or economic factors existed at the heart of its decisions concerning this teacher. The choice to hire, retain, and supervise a particular teacher does not involve policy decisions entitled to protection from judicial review. See, e.g., Willis v. Dade County Sch. Bd., 411 So.2d 245 (Fla.Dist.Ct.App.1982) (applying the planning/operational dichotomy rejected by us in Goodman, court concluded filling a position of employment in the school district is not a discretionary function for which a school district is immune from suit in tort for negligent retention and hiring); Doe v. Estes, 926 F.Supp. 979, 989 (D.Nev.1996) (applying the planning/operational dichotomy, court found discretionary immunity doctrine did not bar claims against school for negligent retention and supervision of teacher). The administrative act of hiring, retaining, and supervising an individual teacher does not involve the careful balancing of competing interests, risks, and advantages. It is merely a choice made by a school district to offer or not offer a position of employment within the district to a particular individual.

It is possible, with minimal effort, to articulate some notion of policy considerations involved in any decision. Although a school administration may very well make policy decisions concerning teachers and their conduct, a decision concerning an individual teacher with these policies as a backdrop does not catapult those decisions into the zone of immunity of the discretionary function. Decisions about individual teachers that may have policy implications do not elevate such decisions to the level of economic, political, or social policy-making. Only decisions grounded in economic, political, or social policy considerations are exempt from liability. City of Cedar Falls, 617 N.W.2d at 19. The choices inherent in hiring, retaining, and supervising a particular teacher are not policy choices our legislature intended to immunize. They do not affect the “big picture” but rather have impact on a very small scale. These decisions must be made by every school district when a teaching position is vacant and must be filled. Such decisions are no different than a government employee’s decision to turn left or right at a stop sign. Actions of this nature are not immune from liability because they are not real policy decisions implicating governmental functions.

Under the present facts, the School received an application, reviewed it, presumably interviewed Lindsey and decided whether or not to hire him. Once on staff, the School’s decision to renew his contract did not involve policy considerations. Finally, the School’s choice to either supervise Lindsey or not supervise him was not based on social, economic, or political policy. All of these decisions were merely “ad hoc decisionfs] based on the situation confronting [the School].” See Alake v. City of Boston, 40 Mass.App.Ct. 610, 666 N.E.2d 1022, 1025 (1996) (chaperones supervising school children not immune from suit). The School’s actions were nothing more than the application of professional judgment to a given set of facts. Its conduct was not “entwined in a layer of policy-making that exceeded the mere application of rules to facts.” Oslin v. State, 543 N.W.2d 408, 416 (Minn.Ct.App.1996). These ultimate decisions do not affect social, political, or economic policy any more than the decision itself is based on these considerations. See Kansas State Bank & Trust Co., 819 P.2d at 600 (discretionary function must involve some sort of policy formulation when following the “nature and quality” test articulated in Downs, 522 F.2d at 990).

The burden is on the School to prove its actions are entitled to the shield of discretionary function immunity. 18 Municipal Corporations § 58.04.20, 162 (3d ed.1993). The School did not offer and the district court did not articulate any policies at the heart of the School’s decision to hire, retain, or supervise Lindsey. It has not even attempted to satisfy this burden with the exception of mere assertions that policy considerations were involved. The required demonstration is completely absent in this case. At the time the School made decisions regarding Lindsey’s hiring, retention, and supervision, considerations were not immediately involved that directly related to the exercise of governmental policy judgments. See Ex Parte Cranman, 792 So.2d at 404. Rather, the School’s actions were nothing more than a product of ordinary, day-today operations. The decisions the School made in hiring, retaining, and supervising Lindsey -did not implicate policy formulation at any level. Given these facts, the School has not satisfied the second prong of the discretionary function immunity test. As such, the School does not enjoy immunity from the Does’ suit for negligent hiring, retention, and supervision.

As a matter of public policy, surely, our legislature, in enacting Iowa Code section 670.4(3), did not intend to allow a school district to hire, retain, or leave unsupervised a teacher with known propensities for child abuse with total impunity. The School had an affirmative duty to take all reasonable steps to protect its students. See Rodriguez v. Inglewood Unified Sch. Dist., 186 Cal.App.3d 707, 715, 230 Cal.Rptr. 823 (1986). In protecting its children, a school must exercise the same care toward them “as a parent of ordinary prudence would observe in comparable circumstances.” City of Cedar Falls, 617 N.W.2d at 18.

Teaching and learning cannot take place without the physical and mental well-being of the students. The school premises, in short, must be safe and welcoming. ... The public school setting is one in which governmental officials are directly in charge of children and their environs.... Further, the responsibility of school officials for each of their charges, the children, is heightened as compared to the responsibility of the police for the public in general.

Virginia G. v. ABC Unified Schl Dist., 15 Cal.App.4th 1848, 1854, 19 Cal.Rptr.2d 671 (1993). Based upon this special relationship between a school and its students, claims against a school district based on its own negligence may be pursued. Id. at 1855, 19 Cal.Rptr.2d 671 (claims against a school district for negligent hiring and supervision are permitted). The negligence claim before us is no different from the judgments

of private individuals which are reviewed every day through the mechanism of an action in tort. Personal injury from ... the negligence of those into whose care [children] are entrusted is not a risk that school children should, as [a] matter of public policy, be required to run in return for the benefit of a public education.

Alake, 666 N.E.2d at 1025 (citation omitted). Applying traditional tort principles, the courts are perfectly capable of adjudicating the reasonableness of hiring, retaining, and supervising a particular teacher. Because the discretionary function immunity does not apply, summary judgment should not have been granted.

IV. Conclusion

We conclude the discretionary function immunity does not apply to a school district for the acts of hiring, retaining, and supervising an individual employee. Summary judgment on this issue should not have been granted. We reverse and remand for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

All justices concur except CARTER, J., takes no part.


source: Caselaw Access Project

author: CARTER, Justice.

license: Public Domain

text:
    Genevieve Lynn ORUD, Elmer Lee Willers, Dawn Marie Willers, and Connie Alexander, Appellants, v. Nancy A. GROTH, Bruce E. Groth, Terry A. Willers, Sharon K. Willers, and IH Mississippi Valley Credit Union, Appellees.
    No. 00-1306.
    Supreme Court of Iowa.
    Oct. 9, 2002.

      Jack E. Dusthimer, Davenport, for appellants.
    Stephen P. Wing of Dwyer & Wing, P.C., Davenport, for appellees.
   CARTER, Justice.

Four of the six children of Candace Dil-ley, deceased, appeal from an adverse judgment in their action to impose a constructive or resulting trust on real estate (or the proceeds thereof) that was conveyed by Candace to her daughter Nancy Groth during Candace’s lifetime. The defendants are Nancy Groth and Candace’s son, Terry Willers, their respective spouses, and a mortgagee of the property. In response to defendants’ motion for a judgment on the pleadings pursuant to Iowa Rule of Civil Procedure 222 (now rule 1.954), the district court concluded that plaintiffs’ petition revealed that there had been a clear and unambiguous conveyance of the property to Nancy Groth without reservations or restrictions and that she was free to deal with the property as she chose.

After reviewing the record and considering the arguments presented, we disagree that plaintiffs’ claims could be determined adversely to them as a matter of law based on the pleadings. That was also the conclusion of the court of appeals. Because we disagree with certain other provisions in the court of appeals opinion, we vacate the opinion of that court but, like the court of appeals, reverse the judgment of the district court.

Plaintiffs allege in their petition that Candace Dilley owned the real estate subject to this dispute and lived on the property with Nancy Groth and Nancy’s husband. It is alleged that, at Nancy’s request, Candace executed a quitclaim deed to herself and Nancy as joint tenants in order that Nancy and her husband could claim a tax deduction for the real estate taxes, which they were paying on Candace’s property. This deed was dated May 25, 1990, and was recorded on May 30, 1990. The petition further alleges that, “on or about the same time,” Candace authored a letter signed before a notary public and dated May 29, 1990, which provides:

May 29, 1990
TO: Elmer L. Willers
Terry Willers
Dawn Willers
Connie Alexander
Genevieve Hoffmann
Nancy A. Groth
Dear Children:
This letter is written as I undertake to transfer ownership of my home at 1505 Canal Shore Drive S.W. LeClaire, Iowa into Nancy’s name. I have prepared and am filing a Quit Claim Deed from me, as surviving joint tenant of my husband, Robert Ardel Dilley, to Nancy and me as joint tenants. This Deed will place the property in joint tenancy with Nancy and me.
The purpose of this transfer of the property to Nancy’s name is so that she can claim a tax deduction for the real estate taxes and mortgage interest payments. She makes them now anyway and I live with her there and her husband.
I consider the true ownership of the property to be mine and, should Nancy at anytime sell the property, it is my direction and wish that she divide the property proceeds equally with those of you who are surviving.
Wishing the best of luck to all of you I remain your mother.
Love,
/s/Candace M. Dilley
CANDACE M. DILLEY
[notarial seal and signature]

Copies of the quitclaim deed and the letter dated May 29, 1990, were attached to and made a part of plaintiffs’ petition.

Plaintiffs allege that, as a result of the intention expressed in this letter, Nancy Groth took the subject property impressed with the trust for the benefit of Candace’s six children. The trust, as alleged, would extend to the proceeds from a sale of the property. In addition, it is alleged that Nancy sold the property to Terry Willers for less than a fair consideration and has refused to pay any portion of the proceeds of that sale to plaintiffs. In connection with that transaction, Terry Willers and his wife, Sharon, entered into a purchase-money mortgage with the defendant IH Mississippi Valley Credit Union.

Based on the allegations made, defendants filed a motion for judgment on the pleadings, pursuant to Iowa Rule of Civil Procedure 222 (now rule 1.954). The district court granted that motion. It stated in its ruling:

Where a deed has been signed, acknowledged and recorded, it is presumed to have been properly delivered, and [one seeking] to attack the deed, assumes the burden to overcome the presumption of delivery, which requires clear and satisfactory proof. It is presumed that delivery was on the date of the deed. This petition has no allegation that the deed was not delivered.
Also, a deed, if delivered, passes title immediately, though the grantor subsequently without consent or acquiescence of the grantee, obtains possession or destroys the deed. A properly delivered deed passes title, even if it is without consideration. An element of an effective delivery is an intent on the part of the grantor to make the passing of the instrument a present transfer of title.
Just as the petition fails to allege a lack of delivery, the defendants argue that the petition also fails to challenge the intent of the grantor to immediately transfer title pursuant to the quit claim deed. The presumption of delivery and intent which accompany the execution of the deed and its recording have not been challenged by the pleadings in this petition.

Plaintiffs filed a motion seeking leave to amend their petition in order to allege a delayed delivery of the deed, but that motion was denied by the district court. The court dismissed plaintiffs’ petition on the merits.

The motion for judgment on the pleadings has been part of our rules of civil procedure since their adoption in 1943. The comment of the advisory committee that drafted the rule states, in part, “[t]he motion hereunder is limited to points arising on the pleadings, and uncontroverted therein. It is not aided by evidence.... ” In commenting on the rule, we have stated that judgment on pleadings is appropriate only when pleadings, taken alone, entitle a party to judgment, and if matters outside the pleadings are to be considered, this requires a motion for summary judgment. Hurd v. Odgaard, 297 N.W.2d 355, 356 (Iowa 1980); see also Roush v. Mahaska State Bank, 605 N.W.2d 6, 8-9 (Iowa 2000).

When, as here, a defendant makes a motion for judgment on the pleadings prior to answer challenging the sufficiency of the allegations to sustain a claim for relief, the court should view the motion in the same manner as a motion to dismiss under former rule of civil procedure 104(b) (now rule 1.421(1)(/')). We have consistently held that, in order to sustain such motions, it must be shown that no state of facts is conceivable under which plaintiffs might establish a right to relief. E.g., Below v. Skarr, 569 N.W.2d 510, 511 (Iowa 1997); Holsapple v. McGrath, 521 N.W.2d 711, 712-13 (Iowa 1994). If we apply this test to defendants’ motion in the present case, we are satisfied that it must be denied.

In ruling favorably to defendants on their motion, the district court drew an adverse conclusion from a failure of the petition to allege the time of delivery of the deed. The court correctly observed that, if the deed were executed and delivered to Nancy prior to Candace communicating to her that the interest she was receiving was impressed with a trust for the benefit of all of Candace’s children, then it would have been beyond Candace’s power to impose such conditions on Nancy. On the other hand, if delivery of the deed did not occur until after Nancy had been made aware of conditions under which she was receiving title to the property, the plaintiffs have stated a valid claim for impressing a trust on the property, the proceeds, or both. It was not necessary for plaintiffs to allege the time of delivery of the deed from Candace to Nancy. That may be a matter of proof at trial.

To effectuate transfer of title under a deed, there must be delivery, actual or symbolical, accompanied with the intention of the grantor to transfer title without any reservation of control. Lathrop v. Knoop, 202 Iowa 621, 623, 210 N.W. 764, 765-66 (1926); Tutt v. Smith, 201 Iowa 107, 110-11, 204 N.W. 294, 295-96 (1925). The intent of the grantor is controlling in the matter of delivery and is to be determined by the grantor’s acts or words or both. Klosterboer v. Engelkes, 255 Iowa 1076, 1080, 125 N.W.2d 115, 117 (1963). For valid delivery the grantor must intend the deed to be presently effective as a transfer without any reservation of control. Id. A duly executed and recorded deed ordinarily raises a rebuttable presumption of delivery with the present intent of passing immediate title and the right of possession. Avery v. Lillie, 260 Iowa 10, 15, 148 N.W.2d 474, 477 (1967). However, the recording of a deed does not necessarily constitute delivery if the facts and circumstances indicate that the grantor’s intention was otherwise. Deere v. Nelson, 73 Iowa 186, 188-89, 34 N.W. 809, 810 (1887).

The methods for creating a trust include the following:

A trust may be created by
(b) a transfer inter vivos by the owner of property to another person as trustee for the transferor or for a third person; or
(e) a promise by one person to another person whose rights thereunder are to be held in trust for a third person.

Restatement (Second) of Trusts § 17 (1959). In describing what type of memorandum is required to establish a trust, the Restatement provides:

A memorandum properly signed is sufficient to satisfy the requirements of the Statute of Frauds if, but only if, it sets forth with reasonable definiteness the trust property, the beneficiaries and the purposes of the trust.

Restatement (Second) of Trusts § 46. Comment b to section 47 of the Restatement provides “[a] letter signed by the trustee whether written to the beneficiary or to another person, and whether mailed or not, is sufficient as a memorandum.” We believe that the allegations of the petition were sufficient to state a claim for impressing an express trust on the property, the proceeds, or both. In addition, there is a potential for recovery against Nancy under a contractual theory based on the alleged consideration flowing to her in the form of a tax deduction in exchange for her acceptance of the property under conditions of trust.

If for any reason a valid express trust is not established, the petition states a claim for impressing a resulting trust on the property. In the Restatement (Second) of Trusts section 404, Introductory Note, at 324, it is stated:

If a person creates an express trust, the inference is that he did not intend that the trustee should have a beneficial interest in the property; and if he had foreseen that the trust would fail ..., he would probably have desired that the trustee should reconvey the property to him.

Earlier in that note it is stated:

A resulting trust is imposed for the purpose of carrying out what it appears from the circumstances under which a disposition of property is made would probably have been the intention of the person making the disposition....

Restatement (Second) of Trusts § 404, Introductory Note, at 324. Under a resulting trust theory the beneficial interest would not revert to the intended beneficiaries but rather to those persons succeeding to Candace’s interest under her will or the laws of descent and distribution.

Plaintiffs do state a claim under which the beneficial interest might revert to them based on a theory of constructive trust. In order to be successful under that theory, they would have to establish the following conditions:

(1) Where the owner of an interest in land transfers it inter vivos to another in trust for a third person, but no memorandum properly evidencing the intention to create a trust is signed ... and the transferee refuses to perform the trust, the transferee holds the interest upon a constructive trust for the third person, if, but only if,
(a) the transferee by fraud, duress or undue influence prevented the transfer- or from creating an enforceable interest in the third person, or
(b) the transferee at the time of the transfer was in a confidential relation to the transferor, or
(c) the transfer was made by the transferor in anticipation of death.
(2) Except under the circumstances stated in Subsection (1, a, b, c), where the owner of an interest in land transfers it inter vivos to another in trust for a third person, and the transferor’s intention to create a trust but not the identity of the beneficiary is properly manifested, and the transferee refuses to perform the trust, the transferee holds the interest upon a resulting trust for the transferor [or the transferor’s successors in interest].

Restatement (Second) of - Trusts § 45. This theory would be available if, under the evidence presented, the memorandum-was insufficient to show an express trust.

Plaintiffs also injected a claim for partition and for rent, which the court of appeals found to be actionable on the pleadings. We do not believe the nature of the alleged limitation on Nancy’s interest in the property would give rise to a claim for rent against her or Terry because no possessory interest on plaintiffs’ part has been alleged.

With respect to the partition claim, we can conceive of no basis for a partition of the property at this time. If the district court on remand would subsequently adopt a remedy impressing a trust on the real estate now owned by Terry Willers, a form of partition could conceivably be resorted to in order to provide each beneficiary with that person’s proper share. However, partition, as an independent proceeding, is premature at the present time. We agree with the court of appeals conclusion that Iowa Administrative Code rule 701 — 86.5(8)(c) does not furnish a basis for granting relief in the present controversy.

We have considered all issues presented and conclude that the judgment of the district court must be reversed. The case is remanded to that court for further proceedings consistent with this opinion.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT REVERSED AND REMANDED.

      . The district court may have been misled by statements contained in Wilson v. Carter, 132 Iowa 442, 444, 109 N.W. 886, 887 (1906), suggesting that the grantor's intention as to delivery must be determined by the language of the instrument itself. That statement is inconsistent with several other cases in which we have declared that delivery of a deed is a question of intent to be determined from both the deed itself and the facts and circumstances attending its execution. See In re Bell’s Estate, 150 Iowa 725, 729-30, 130 N.W. 798, 799-800 (1911); Sheldon v. Crane, 146 Iowa 461, 475, 125 N.W. 238, 244 (1910); Brown v. North, 141 Iowa 215, 219, 119 N.W. 629, 630 (1909). The view taken in those cases is preferable because ordinarily a deed does not contain language establishing the time at which it is to become effective. We believe that the conclusions expressed in the Wilson case resulted from the fact that the deed in that case did contain language with respect to the time it was to become effective.

      . A constructive trust is not an actual trust but is simply a legal construct expressing a right to restitution based on unjust enrichment. Restatement (Second) of Trusts § 404, Introductory Note, at 326.


text:
    Patricia A. WINCKEL, Appellee, v. VON MAUR, INC., Appellant.
    No. 00-1272.
    Supreme Court of Iowa.
    Oct. 9, 2002.

      Richard A. Davidson of Lane & Waterman, Davenport, for appellant.
    Robert F. Wilson, Cedar Rapids, for appellee.
   CARTER, Justice.

Defendant, Von Maur, Inc., a department store in Cedar Rapids, appeals from an adverse judgment for actual and punitive damages in favor of plaintiff, Patricia Winckel. Plaintiffs claims grow out of a shoplifting charge that was later dismissed. She alleged claims based on false imprisonment, defamation, and malicious prosecution. The jury returned separate awards of actual and punitive damages against defendant under each of these theories. The court of appeals affirmed the awards for false imprisonment and defamation but reversed the award for malicious prosecution.

After reviewing the record and considering the arguments presented, we vacate the decision of the court of appeals and affirm the district court’s judgment on the false-imprisonment and malicious-prosecution claims but reverse the judgment on the defamation claim. We remand the case to the district court for a new trial on the latter claim.

The evidence viewed most favorably to the plaintiff reveals that, on July 1, 1998, she was shopping at defendant’s store in Lindale Mall in Cedar Rapids. It was her intention to purchase birthday gifts for members of her family. She first went to the men’s wear department where she noticed a jewelry box about eight inches wide and four inches deep. It had a strip on the top suitable for engraving. Plaintiff was interested in purchasing the item, but only if the store could engrave it prior to the birthday of the intended recipient of the gift.

Plaintiff found no one in the men’s wear department from whom to inquire about engraving and, with the jewelry box in her hand, wandered through other departments in the store looking for help. While passing through cosmetics, she picked up a container of perfume for purposes of sampling it and possibly purchasing it as a gift for her daughter-in-law. Still clutching the perfume, she wandered into the adjacent sporting clothes area of the store with the thought that, if she could find a suitable gift in that department, she would not buy the perfume.

While holding the jewelry box and perfume in her hand, she inquired on a lingerie special order that she had placed with the store several weeks before. By this time, she had laid the perfume down on a counter and was carrying only the jewelry box. She and a clerk looked through an order book to check on the status of her lingerie order. While conversing with the clerk about the order, she accidentally struck the jewelry box against the counter and, in an effort to protect it, asked if she could have a shopping bag to put it in. A shopping bag was presented to her in the presence of two Von Maur clerks in the lingerie area, and in their presence, plaintiff placed the jewelry box in the bag.

After satisfying herself with respect to the lingerie order, plaintiff continued through the store carrying the jewelry box in the shopping bag. She picked out two pairs of socks, which she carried in her hands. She retraced her steps to the place where she had left the perfume bottle on a counter. She took the perfume in her hand and proceeded to select a small bracelet and a pair of earrings for her gift-shopping needs and added these items to what she' was carrying in her hands. When she walked near the shoe department, she noticed a pair of tennis shoes that she wished to try on and sat down on a couch in the area. She placed her purse on the floor beside her. She also placed the shopping bag containing the jewelry box on the floor, and then placed all of the items in her hands in the bag. At this point, she was approached by a store security officer who led her to the manager’s office.

Plaintiff testified that in the manager’s office, the store security officer, in the presence of two other store employees, retrieved all of the items from the shopping bag and arranged for other store personnel to call the police. Plaintiff further testified that, in the presence of the other store employees, the store security officer opened plaintiffs purse, emptied the contents on a table, and implied that certain items may have been stolen from other stores. When plaintiff denied this, the security officer called her a liar. The security officer also confiscated plaintiffs Von Maur credit card and served her with a criminal trespass notice, barring her from future entry of any Von Maur store. When the police arrived, they interviewed the store security officer and had her execute a criminal complaint for filing with a magistrate under Iowa Rule of Criminal Procedure 2.2(1). The complaint charged plaintiff with fourth-degree theft in violation of Iowa Code section 714.2(4) (1997), a serious misdemeanor. They then arrested plaintiff, handcuffed her and took her to the Linn County jail, where she was detained until she could post bond for her release.

Evidence presented by defendant indicated that a clerk became suspicious of plaintiff when she carried the perfume away from the cosmetic counter because she had taken a customer sampling container, which was not for sale and which, according to store employees, was clearly marked as such. This suspicion produced a call to a store security officer who said she followed plaintiff around the store for nearly an hour before concluding that plaintiff was concealing merchandise in the shopping bag with the intention of not paying for it. The store security officer denied that she had at any time looked into plaintiffs purse.

The jury returned special verdicts awarding plaintiff $10,000 for actual damages and $25,000 as punitive damages for false imprisonment; $50,000 for actual damages and $100,000 as punitive damages for defamation; and $5000 for actual damages and $20,000 as punitive damages for malicious prosecution. It found that the conduct giving rise to the punitive damages was directed specifically at plaintiff. The court of appeals sustained the awards for false imprisonment and defamation and reversed the award for malicious prosecution. We will separately consider the parties’ claims under these three theories of recovery. Other facts that bear on the issues will be discussed in our consideration of the legal issues presented.

I. The False-imprisonment Claim.

The district court instructed the jury on false imprisonment as follows:

INSTRUCTION NO. 20
You are instructed that the privilege afforded a store manager to temporarily detain a person for the purposes of investigating a suspected theft exists only where such store manager acted with probable cause based on reasonable grounds to suspect that the person detained was committing a theft.

The jury was also instructed:

INSTRUCTION NO. 19
A person’s belief is reasonable if it is based on reasonable trustworthy information about the facts and circumstances which would allow a reasonably careful person to believe a crime had been committed.
Whether an arrest is based on a reasonable belief is determined by the circumstances existing and known to the defendant when the arrest was made, and not later investigation of the facts or the outcome of later criminal charges.

The court of appeals decided that plaintiffs evidence presented a jury issue on her false-imprisonment claim. In so ruling it identified but did not discuss certain statutory provisions that defendant claims renders it immune from a claim of false imprisonment. Those statutes provide as follows:

The detention or search under this section by a peace officer, person employed in a facility containing library materials, merchant, or merchant’s employee does not render the person hable, in a criminal or civil action, for false arrest or false imprisonment provided the person conducting the search or detention had reasonable grounds to believe the person detained or searched had concealed or was attempting to conceal property as set forth in section 714.5.

Iowa Code § 808.12(3).

The fact that a person has concealed ... unpurchased property of a store or other mercantile establishment, either on the premises or outside the premises, is material evidence of intent to deprive the owner, and the finding of ... unpur-chased property concealed upon the person or among the belongings of the person, is material evidence of intent to deprive and, if the person conceals or causes to be concealed ... unpurchased property, upon the person or among the belongings of another, the finding of the concealed ... property is also material evidence of intent to deprive on the part of the person concealing the ... goods.

Iowa Code § 714.5.

Defendant urges that it was entitled to immunity under section 808.12(3) because the placing of merchandise in a shopping bag constituted concealment. In response, plaintiff argues that, in order to invoke the immunity provided by section 808.12(3), it must appear that merchandise has been secreted in a manner that a reasonable person would consider to reveal an intent to steal. She urges that merely placing merchandise in a shopping bag furnished by the store while proceeding to shop for other items does not indicate an intent to purloin the merchandise.

While plaintiffs argument has some appeal, we need not accept it in order to uphold her recovery on the false-imprisonment count. We have previously set forth the district court’s instructions to the jury on this theory of recovery. The court did not instruct with respect to the consequences of section 808.12(3). When exceptions were taken to the court’s jury instructions, defendant’s only response to the instructions that were given was “[w]e take exception to Instruction No. 20. That’s not a part of any standard instructions. I don’t think it was necessary to instruct the jury, nor appropriate.” We are convinced that this exception was inadequate to preserve any issue concerning the application of section 808.12(3). Based on the instructions that the court gave, we agree with the court of appeals that the issue was for the jury.

II. The Defamation Claim.

Defendant requested an instruction on qualified privilege with respect to plaintiffs claim that she had been defamed. The district court declined to give an instruction on qualified privilege, and defendant duly excepted to that refusal. A qualified privilege exists with respect to statements that are otherwise defamatory if the following elements exist: (1) the statement was made in good faith; (2) the defendant had an interest to uphold; (3) the scope of the statement was limited to the identified interest; and (4) the statement was published on a proper occasion, in a proper manner, and to proper parties only. Theisen v. Covenant Med. Ctr., Inc., 636 N.W.2d 74, 83-84 (Iowa 2001). A qualified privilege is not available for statements that are made with actual malice. Vinson v. Linn-Mar Cmty. Sch. Dist., 360 N.W.2d 108, 116 (Iowa 1984).

In the present case, the jury could have based its defamation award on conversations of store personnel among themselves with respect to the perceived shoplifting and conversations between store personnel and the police with respect to same. We believe the evidence was sufficient to permit the jury to find that the elements of a qualified privilege were present with regard to those conversations. The jury could also consider the effect of the dramatic pantomime created by plaintiff being marched through the store as a defamatory act. See Theisen, 636 N.W.2d at 85. We conclude that the evidence was sufficient to permit the jury to find the elements of a qualified privilege as to those acts as well.

The jury was also allowed to consider evidence that the store security officer made accusations in the presence of other store employees indicating that some of the merchandise in plaintiffs purse had been stolen from other stores. We are less than certain that these statements, if they were made, involved an identified interest of the Von Maur store. Nevertheless, because we cannot tell which statements were the basis of the jury’s defamation award, we are convinced that an instruction on qualified privilege should have been given.

The court of appeals, although expressing some doubt about whether the instruction on qualified privilege should have been refused, found that the verdict for punitive damages represented a finding by the jury that the statements were made with actual malice and thus not privileged. In reaching this conclusion, the court of appeals stated “actual malice includes statements made with knowledge that they are false or with a reckless disregard for their truth or falsity.”

The definition of actual malice that the court of appeals employed in reaching its conclusion was the definition laid down in New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 726, 11 L.Ed.2d 686, 706 (1964), for purposes of defeating a qualified privilege for media coverage under the First Amendment. For purposes of establishing the type of actual malice that will preclude a qualified privilege in defamation cases under Iowa law, this court has defined actual malice as statements made with “ill-will, hatred or desire to do another harm.” Vinson, 360 N.W.2d at 115; Vojak v. Jensen, 161 N.W.2d 100, 107 (Iowa 1968). Conduct meeting the New York Times standard has been characterized as legal malice in our cases and contrasted with actual malice. Kimmel v. Iowa Realty Co., 339 N.W.2d 374, 384 (Iowa 1983); Feeney v. Scott County, 290 N.W.2d 885, 892 (Iowa 1980); see also Caveman Adventures UN, Ltd. v. Press-Citizen Co., 633 N.W.2d 757, 761 (Iowa 2001) (discussing distinction between the two definitions of actual malice).

In the present ease, the jury was not asked to render a finding as to whether the alleged defamatory statements were made with actual malice, and no instruction was given concerning the elements of actual malice under the Iowa law standard of ill will, hatred, or desire to do another harm. Because the finding of malice necessary to support the jury’s award of punitive damages was made pursuant to instructions that incorporated the Neiv York Times standard of actual malice, we may not infer that the jury concluded the statements were made with ill will, hatred, or desire to do another harm.

The court of appeals also expressed the view that the failure to instruct on qualified privilege under the definition of actual malice employed by Vinson and Vojak in defamation cases not involving First Amendment media considerations was not reversible error because a definition of actual malice based on ill will, hatred, or desire to do another harm was included in the court’s instructions on the malicious-prosecution claim. The three theories of liability that plaintiff advanced were separately submitted to the jury with separate verdict forms for the determination of the actual and punitive damages to be awarded under each theory of recovery. We cannot assume that in rendering its decision on the defamation claim the jury would employ a definition of actual malice that on its face pertained to the malicious-prosecution claim. The failure to instruct on qualified privilege was thus not harmless error. The failure to give an instruction on qualified privilege requires the reversal of the award for actual and punitive damages on the defamation claim. That claim is remanded to the district court for a new trial on all issues.

III. The Malicious-Prosecution Claim.

The court of appeals reversed that portion of the district court’s judgment awarding actual and punitive damages for malicious prosecution. In doing so, it relied on the premise that an accusation does not amount to the procuring of a criminal prosecution “if it is left to the uncontrolled choice of [a] third person to bring the proceedings or not as he may see fit.” (Quoting Lukecart v. Swift & Co., 256 Iowa 1268, 1281, 130 N.W.2d 716, 724 (1964)). The court of appeals based its conclusion that the criminal prosecution was the independent judgment of the police officers and county attorney based on the fact that the officers questioned plaintiff at the store, and the assistant county attorney testified that the decision to file a trial information was his own. Notwithstanding these circumstances, we are convinced that the jury could have found that defendant instigated the criminal charges that were brought against the plaintiff.

It is an essential element of a malicious-prosecution claim that the defendant procured or instigated the criminal prosecution. Lukecart, 256 Iowa at 1268, 130 N.W.2d at 723; Restatement (Second) of Torts § 653 cmt. d (1976). As revealed by the quotation from Lukecart relied on by the court of appeals, we have recognized that merely furnishing information to the police is not the instigation of a criminal prosecution. Our cases also recognize, however, that ordinarily the filing of a criminal complaint is the instigation of criminal charges, and indeed, a private person may be an instigator even though that person has not filed a formal complaint. Id.; Bair v. Shoultz, 233 Iowa 980, 983, 7 N.W.2d 904, 905 (1943).

In the present case, the formal complaint filed with the magistrate as the basis for holding plaintiff in custody was executed by the store security officer. Although that complaint was not filed with the magistrate until after plaintiff was arrested and taken to jail, it was implicit from the procedure followed by the officers that they required a complaint from a store official in order to make the arrest. These preliminary acts of complaint and arrest were the genesis of the criminal prosecution against plaintiff.

Defendant further urges that the district court erred in instructing the jury as to the standard for probable cause to initiate criminal prosecution. The trial court instructed the jury that:

INSTRUCTION NO. 13
The dismissal of the charge by the county attorney constitutes a favorable ending to the prosecution.
The favorable ending of the prosecution is evidence from which you may conclude the criminal prosecution was without probable cause unless overcome by other evidence.

The first paragraph of this instruction was a proper observation because failure of-the prosecution is an essential element of a malicious-prosecution recovery. The second paragraph of the instruction appears to have been improper based on our decision in Carter v. MacMillan Oil Co., 355 N.W.2d 52, 57 (Iowa 1984), in which we indicated that, because of the obvious differences between proof beyond a reasonable doubt (required to sustain a criminal conviction) and probable cause (required to initiate a criminal charge) failure to meet the greater standard is not a basis to infer a failure to meet the lesser standard. Unfortunately, defendant may not avail itself of this misstatement of the law because it did not object to Instruction No. 13 at trial.

Defendant also contends that there was insufficient evidence of malice to support the malicious-prosecution claim. As previously noted the district court, in regard to the malicious-prosecution claim, employed the actual-malice test based on ill will rather than the New York Times test. We, make no determination as to whether this instruction was proper as it has not been challenged here. The justices are evenly divided as to whether sufficient evidence of malice was presented under that test to support a verdict- for plaintiff on the malicious-prosecution claim. Consequently, the judgment for plaintiff on that claim is affirmed by operation of law. See Iowa Code § 602.4107 (when supreme court is equally divided the judgment on appeal is affirmed).

IV. Punitive Damages.

Finally, we consider defendant’s contention that the evidence did not warrant a verdict for punitive damages on plaintiffs claims. As was the case with respect to the malicious-prosecution claim the justices are equally divided as to whether the evidence was sufficient to sustain an award for punitive damages on the false-imprisonment and malicious-prosecution claims. Consequently, because we are vacating the decision of the court of appeals, the judgment of the district court is affirmed by operation of law. See Iowa Code § 602.4107.

We have considered all issues presented and conclude that the decision of the court of appeals should be vacated. The district court judgment for actual and punitive damages on the claims of false imprisonment and malicious prosecution should be affirmed. The judgment on the claim for defamation is reversed and the case remanded to the district court for a new trial on all issues concerning that claim. Costs of appeal are assessed thirty-five percent to plaintiff and sixty-five percent to defendant.

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

NEUMAN, J., takes no part.

      . We are satisfied that the role of the New York Times standard of actual malice, in those media-interest cases in which it applies, is to invoke a qualified privilege if that standard is not met. This does not mean, even in media-interest cases, that if the New York Times standard of actual malice is met, a qualified privilege may not be invoked. In an Iowa court, that question, in the final analysis, must be decided under the Iowa standard of actual malice.

      . In the present case, section 602.4107 requires affirmance of the judgment of the dis-. trict court rather than the judgment of the court of appeals. The court of appeals theory for reversing the verdict has been rejected and its decision vacated. That court did not even consider the issue involving the sufficiency of the evidence of malice under the court’s instructions.

      . With respect to the issues of the sufficiency of the evidence to show malice with respect to the malicious-prosecution claim or to sustain a claim for punitive damages. Chief Justice Lavorato and Justices Carter and Streit would affirm the judgment of the district court; Justices Larson, Ternus, and Cady would reverse the district court on those issues.


author: LARSON, Justice.

text:
    Alice Henningsen and Leroy Henningsen, Plaintiffs, v. EASTERN IOWA PROPANE, LTD., Appellant, v. HONEYWELL, INC., Appellee.
    No. 01-0649.
    Supreme Court of Iowa.
    Oct. 9, 2002.

      Frank A. Dvorak of Foley <& Mansfield, P.L.L.P., Minneapolis, Minnesota, and Richard S. Fry and Diane Kutzko of Shut-tleworth & Ingersoll, P.L.C., Cedar Rapids, for appellant.
    Jeannine L. Lee, George W. Flynn, and Jennifer F. Rosemark of Flynn & Gaskins, L.L.P., Minneapolis, Minnesota, and Frank A. Comito of Gaudineer & Comito, L.L.P., West Des Moines, for appellee.
   LARSON, Justice.

Alice and Leroy Henningsen sued their propane supplier, Eastern Iowa Propane, Ltd. (EIP), for damages to their home when their propane furnace exploded. EIP in turn sued Honeywell, Inc., the manufacturer of a gas valve in the furnace, for contribution or indemnity. Honeywell moved for summary judgment, based on Iowa Code section 614.1(11) (1999) (statute of repose for improvements to real property). The district court granted Honeywell’s motion, and EIP appealed. We affirm.

I. Facts and Prior Proceedings.

On December 29, 1999, an explosion occurred at the Henningsens’ residence when a serviceman from EIP attempted to relight the pilot light on their furnace. The explosion damaged the Henningsen residence. Henningsens sued EIP, alleging, among other things, that EIP failed to check for leaks in the system before relighting the furnace. EIP in turn claimed Honeywell had furnished a defective gas valve for the furnace. It is undisputed that the Henningsens’ Green Colonial propane furnace was equipped with a Honeywell gas control valve. The valve controlled the flow of gas to the pilot light and the burners of the furnace. Honeywell manufactured the valve in 1968. Honeywell recalled this model of valve in 1980 and notified gas suppliers that these models should be replaced. For some reason, the valve involved in this case was never replaced.

On November 20, 2000, Honeywell filed a summary judgment motion to dismiss all claims against it, based on Iowa Code section 614.1(11), a fifteen-year statute of repose under which the time is to be computed “after the date on which occurred the act or omission of the defendant alleged in the action to have been the cause of the injury or death.” Iowa Code § 614.1(11). This section includes injury to property as an “injury.” Id. In resistance to Honeywell’s motion for summary judgment, EIP argued that Iowa Code section 614.1(2A), a general statute of repose covering products liability, should apply instead. Section 614.1(2A) excepts from the fifteen-year period of repose all actions for contribution or indemnity — which is what EIP is seeking here.

Under Iowa Code section 614.1,

[ajctions may be brought within the times herein limited, respectively, after their causes accrue, and not afterwards, except when otherwise specially declared:
2A. With respect to products,
a. Those founded on the death of a person or injuries to the person or property brought against the manufacturer ... of a product ... based on the theories of strict liability in tort, negligence, or breach of an implied warranty shall not be commenced more than fifteen years after the product was first purchased, leased, bailed, or installed for use or consumption unless expressly warranted for a longer period of time by the manufacturer.... This subsection shall not affect the time during which a person found liable may seek and obtain contribution or indemnity from another person whose actual fault caused a product to be defective.

(Emphasis added.) A later provision in Iowa Code section 614.1(2A) provides additional exceptions to the period of repose based on (1) a “discovery” rule for latent injuries and (2) those products covered by section 614.1(11). We will discuss these exceptions later.

Most important to EIP is the provision in section 614.1(2A) that actions for contribution or indemnity “from another person whose actual fault caused a product to be defective” may be allowed even beyond the fifteen-year period of repose. EIP contends that Honeywell is a party “whose actual fault” caused the defect, and the statute of repose under section 614.1(2A) does not outlaw EIP’s claims for contribution or indemnity against Honeywell.

As an alternative argument, EIP contends that, if section 614.1(11), rather than section 614.1(2A) applies, the period of repose begins when the product was installed, not when it left Honeywell. Summary judgment therefore was not appropriate because a question of fact existed about when the Honeywell gas valve was installed in the Henningsens’ furnace. We dispose of this argument summarily. Iowa Code section 614.1(11) provides:

Improvements to real property. In addition to limitations contained elsewhere in this section, an action arising out of the unsafe or defective condition of an improvement to real property based on tort and implied warranty and for contribution and indemnity, and founded on injury to property, real or personal, or injury to the person or wrongful death, shall not be brought more than fifteen years after the date on which occurred the act or omission of the defendant alleged in the action to have been the cause of the injury or death. However, this subsection does not bar an action against a person solely in the person’s capacity as an owner, occupant, or operator of an improvement to real property.

(Emphasis added.)

Applying section 614.1(11) to this case, we conclude the “act or omission of the defendant alleged ... to have been the cause of the injury or death,” is Honeywell’s manufacture of the valve — not the installation, which, according to the record, was not even done by Honeywell. Honeywell manufactured the valve in 1968, and that is when the fifteen-year period of repose began.

The critical issue is whether Iowa Code section 614.1(2A), which expressly excludes actions for contribution or indemnity, or section 614.1(11), which expressly includes such actions, is the proper statute to be applied. For the reasons that follow, we conclude section 614.1(11) is the appropriate statute.

Our analysis must begin with Krull v. Thermogas Co., 522 N.W.2d 607 (Iowa 1994), a case decided under Iowa Code section 614.1(11). In Krull a propane supplier sued Honeywell, the manufacturer of the valve alleged to have caused the fire. (In fact, the valve in that case was the same one as is involved in the present case.) In Krull we rejected the argument that “products” such as gas valves in furnaces could not be improvements to real estate and therefore were not intended to be covered by Iowa Code section 614.1(11). We concluded that, when products are attached, they become improvements to real estate just as any other building components because the statute did not provide an exception for such attachments. Krull, 522 N.W.2d at 612. We adopted this test for determining if an attached product is an improvement under the statute: (1) does it enhance the value of the real estate, (2) does it involve the expenditure of labor or money, and (3) was the product intended to make the property more useful or valuable? We concluded that the valve met all of these tests. Id. In Tallman v. W.R. Grace & Co., 558 N.W.2d 208 (Iowa 1997), we referred to the “attachment” rule as a bright-line rule, and we reaffirmed it as adopted in Krull. Tollman, 558 N.W.2d at 211.

In this case, it is undisputed that the gas valve was installed in the furnace and thus was an “improvement” under section 614.1(11). EIP argues, however, that Tollman and Krull are no longer controlling because, after those cases were decided, the legislature enacted section 614.1(2A). In fact, EIP claims the intent of the General Assembly must have been to legislatively overrule Krull and Toll-man. However, nothing in the newer statute of repose, § 614.1(2A), suggests it applies at all to products attached to real estate; it is rather a statute of repose applicable to products generally. Section 614.1(2A), moreover, does not purport to supplant section 614.1(11) in cases involving products attached to real estate.

In fact, we believe subsection 2A provides the whole subsection is inapplicable to cases covered by section 614.1(11). Section 614.1(2A)(b)(l) states:

The fifteen-year limitation in paragraph “a” shall not apply to the time period in which to discover a disease that is latent and caused by exposure to a harmful material, in which event the cause of action shall be deemed to have accrued when the disease and such disease’s cause have been made known to the person or at the point the person should have been aware of the disease and such disease’s cause. This subsection shall not apply to cases governed by section 6U.1, subsection 11.

(Emphasis added.) Section 614.1(2A)(b)(l) states “this subsection” does not apply to cases under section 614.1(11). Does this mean that only the latent-injury portion of section 614.1(2A)(b)(l) shall not apply to section 614.1(11) cases? Or, does it mean that all of section 614.1(2A) is inapplicable in cases covered by section 614.1(H)? We believe it means the latter. The two concepts under section 614.1(2A)(b)(l) (the discovery rule in latent-injury cases) and the “nonapplieation” of section 614.1(11) have no logical connection. We believe “this subsection” in the just-quoted language refers to the entire statute of repose under section 614.1(2A) and not just the latent-injury provisions under section 614.1(2A)(b)(l). We say that because it makes no sense to tie a latent-injury discovery rule to a statute of repose for attachments to real estate. We also reach that conclusion because of the legislature’s method of constructing statutes. On page ix of the Code of Iowa, in an unnumbered paragraph, this provision is found:

Chapters of the Code are cited as whole numerals; as chapter 180 or chapter 180G.
Sections are cited as decimal numerals; as section 180.5 or section 180G.54. Occasionally, sections are divided into subsections as 1., 2., 3., etc.; subsections into paragraphs a, b, c, etc.; paragraphs into subparagraphs as (1), (2), (3), etc.; and subparagraphs into sub-paragraph subdivisions as (a), (b), (c), etc. Example: section 180G.54, subsection 1, paragraph “a ”, subparagraph (3), subparagraph subdivision (a). This may be abbreviated as [section] 180G.64[1] “a” [(3)(a) ] or [1 a (3)(a)].

Under this system of organization, Iowa Code section 614.1(2A) is a “subsection.” The provision in question, section 614.1(2A)(b)(l), is not a subsection; it is a subparagraph. If the legislature had wanted to limit the exception for section 614.1(11) cases to latent-injury cases, it would have referred to “this subpara-graph”' — not “this subsection.” Because section 614.1(2A)(b)(l) says “[t]his subsection shall not apply to cases governed by section 614 subsection 1.11,” (emphasis added), we believe the legislature intended to make all of section 614.1(2A) inapplicable to cases involving products covered by section 614.1(11). Because this case involves a product attached to real estate, it is controlled by section 614.1(11), not section 614.1(2A). The third-party plaintiffs claims of contribution or indemnity are therefore subject to the fifteen-year statute of repose.

II. The Constitutional Argument.

EIP argues that, if section 614.1(11) covers this case, EIP should prevail in any event because this section is an unconstitutional denial of equal protection under the Iowa Constitution. We rejected an identical argument in Krull, 522 N.W.2d at 613-14. However, EIP argues that Krull is distinguishable because it did not involve the “interplay between Iowa Code §§ 614.1(2A) and (11).” For the reasons previously discussed, Iowa Code section 614.1(2A) does not apply to products attached to real estate, so there can be no “interplay” between that section and section 614.1(11). We affirm the holding of Krull that section 614.1(11) does not deny claimants their constitutional right to equal protection.

We find no grounds for reversal and therefore affirm the judgment of the district court.

AFFIRMED.

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


author: PER CURIAM.

text:
    STATE of Iowa, Appellee, v. Theodore Raynard BARNES, Appellant.
    No. 01-1108.
    Supreme Court of Iowa.
    Oct. 9, 2002.

      Linda Del Gallo, State Appellate Defender, and Theresa R. Wilson, Assistant State Appellate Defender, for appellant.
    Thomas J. Miller, Attorney General, and Darrel L. Mullins, Assistant Attorney General, Allan W. Vander Hart, County Attorney, and Andrea Dryer, Assistant County Attorney, for appellee.
   PER CURIAM.

Defendant, Theodore Raynard Barnes, entered a written plea of guilty to the offense of driving while his license was barred, an aggravated misdemeanor, in violation of Iowa Code section 321.561 (1999). He was sentenced to an indeterminate term of imprisonment, not to exceed two years, and to pay a mandatory fine of $500. It is his contention on appeal that his guilty plea was not knowingly made because he was not advised of the mandatory $500 fíne and thus was not made aware of “the maximum possible punishment provided by the statute defining the offense to which the plea is offered,” as required by Iowa Rule of Criminal Procedure 2.8(2)(⅜)(2). The court of appeals agreed with that contention and ordered that defendant be allowed to withdraw his plea.

The State urged in the court of appeals and reasserts in this court that defendant waived the right to challenge his guilty plea because he failed to file a motion in arrest of judgment as required by Iowa Rule of Criminal Procedure 2.24(3)(a) (formerly Iowa Rule of Criminal Procedure 23(3)(a)). We agree with that contention and vacate the decision of the court of appeals. The judgment of the district court is affirmed.

As defendant correctly notes, the written guilty plea that he executed reflects his knowledge of the maximum punishment for the offense in the following language: “I understand the maximum punishment to which I can be sentenced is two years in prison.” No mention is made of the mandatory $500 fíne, which the offense also carries. It was also provided in defendant’s written guilty plea that

I further understand that if I wish to challenge this guilty plea, I must file a Motion in Arrest of Judgment not later than forty-five days after entry of my plea and also at least five days before the date set for sentencing and that failure to so file such challenges shall preclude the rights to assert them on appeal. I also understand I have a right to a 15 day delay before being sentenced. I waive these rights and request that judgment and sentence be pronounced upon receipt of this plea.

Iowa Rule of Criminal Procedure 2.8(2)(d) provides:

The court shall inform the defendant that any challenges to a plea of guilty based on alleged defects in the plea proceedings must be raised in a motion in arrest of judgment and that failure to so raise such challenges shall preclude the right to assert them on appeal.

The court of appeals, relying on this court’s opinion in State v. Hook, 623 N.W.2d 865, 868 (Iowa 2001), stated that, although rule 2.8(2)(6) provides that the court may waive the personal colloquy required by subpart (6) of 2.8(2), no such provision is made for a waiver of the admonition concerning arrest of judgment required by subpart (d) of that rule. It held that the failure of the court to advise defendant concerning the consequences of failure to file an arrest-of-judgment motion allowed him to assert a defect in the plea proceeding on appeal.

In Hook, as in the present case, the district court had used a written plea procedure as a substitute for an in-court colloquy. It does not appear in the Hook decision that the written plea agreement involved in that case had expressly waived the defendant’s right to file a motion in arrest of judgment and, by implication, also waived the right to challenge the plea of guilty on appeal. As we have noted, the written plea in the present case does expressly waive a right to file a motion in arrest of judgment and acknowledges that the consequence of such waiver is a waiver of a challenge to the plea by appeal.

We understand why the court of appeals drew the conclusions that it did from the language this court employed in Hook. The language in Hook does suggest that the court must personally inform the defendant concerning the consequences of failing to file a motion in arrest of judgment and that this may not be accomplished by the contents of a written plea agreement. However, further reflection on our part suggests that this interpretation of rule 2.8(2)(ci) would unduly restrict the written plea process that subpara-graph (5) of rule 2.8(2)(&) is designed to foster in prosecutions for serious or aggravated misdemeanors. We now conclude that the reason paragraph (6) of rule 2.8(2) contains an express authorization for waiver of a personal colloquy and paragraph (d) of that rule does not is because, unlike paragraph (6), paragraph id) contains no requirement that “the court must address the defendant personally.” The absence of that requirement in paragraph (d) convinces us that defendants charged with serious or aggravated misdemeanors may enter into a valid written waiver of the right to file a motion in arrest of judgment and thus trigger the bar that rule 2.24(3)(a) imposes to challenging a guilty plea on appeal. That is what occurred in the present case.

We have considered all issues presented and conclude that the decision of the court of appeals should be vacated. We affirm the judgment of the district court, but preserve for possible consideration in a postconviction-relief proceeding defendant’s claim of ineffective assistance of counsel.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.


author: Paul H. Anderson Associate Justice

text:
    In re Petition for DISCIPLINARY ACTION AGAINST Dylan J. McFARLAND, an Attorney at Law of the State of Minnesota.
    No. C5-02-553.
    Supreme Court of Minnesota.
    Oct. 15, 2002.
   ORDER

The Director of the Office of Lawyers Professional Responsibility has filed a petition for disciplinary action alleging that respondent Dylan J. McFarland has committed professional misconduct warranting public discipline, namely, that respondent misappropriated fees that properly belonged to his law firm in violation of Rule 8.4(e), Minnesota Rules of Professional Conduct (MRPC).

Respondent admits his conduct violated the MRPC, waives his rights pursuant to Rule 14, Rules on Lawyers Professional Responsibility (RLPR), and has entered into a stipulation with the Director in which they jointly recommend (1) that the appropriate discipline is an indefinite suspension from the practice of law under Rule 15(a)(2), RLPR, for a minimum period of 30 days; (2) that the reinstatement hearing provided for in Rule 18(a) through (d), RLPR, be waived; (3) that respondent be required to successfully complete the professional responsibility portion of the state bar examination within one year of the date of the court’s order; (4) that respondent be required to comply with Rule 26, RLPR; (5) that respondent pay $900 in costs under Rule 24(a), RLPR; (6) that prior to applying for reinstatement respondent pay over to his former law firm the amount he received from the client to which respondent has no claim, $25,408.44, plus interest, separate and apart from any settlement in the law firm’s action against respondent; and (7) that respondent may be reinstated at any time after 30 days upon the filing of an affidavit with the Clerk of Appellate Courts and the Director’s Office establishing that respondent is current with Continuing Legal Education, has complied with Rules 24 and 26, RLPR, and has satisfactorily completed all other conditions imposed by the court.

This court has independently reviewed the file and approves the jointly recommended disposition.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that respondent Dylan J. McFarland is indefinitely suspended from the practice of law for a minimum period of 30 days, subject to the agreed-upon conditions set forth above. Respondent shall pay $900 in costs under Rule 24(a), RLPR.

BY THE COURT:

Paul H. Anderson Associate Justice


author: Kathleen A. Blatz Chief Justice

text:
    In re Mary DOUVILLE, Employee, MN Dept. of Labor & Industry, Workers’ Compensation Division, Respondent, v. JoAnn Stores, Inc., and Kemper Insurance Company, Relators.
    No. C9-02-1186.
    Supreme Court of Minnesota.
    Oct. 31, 2002.
   ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed June 20, 2002, be, and the same is, affirmed without opinion. See Minn. R. CivApp. P. 136.01, subd. 1(b).

BY THE COURT:

Kathleen A. Blatz Chief Justice