author: SNELL, Justice. CARTER, Justice

text:
    STATE of Iowa, Appellee, v. Danette Marie KUBIT, Appellant.
    No. 99-1213.
    Supreme Court of Iowa.
    May 31, 2001.

      Ryan B. Moorman, West Des Moines, for appellant.
    Thomas J. Miller, Attorney General, Denise A. Timmins, Assistant Attorney General, Denver D. Dillard, County Attorney, and Laurie J. Craig, Assistant County Attorney, for appellee.
   SNELL, Justice.

This case calls upon us to determine the scope of authority to enter a suspect’s dwelling afforded by an arrest warrant. The district court held that the arrest warrant alone provides police with the right of entry into a suspect’s motel room to effectuate the arrest. Thus, evidence in plain view may be seized. Because we determine that the arrest warrant’s authority is not so broad, we reverse the district court’s ruling and remand for a new trial.

I. Factual Background and Procedure

The defendant, Danette Marie Kubit, was occupying a motel room at the Shady Acres Motel when police received an anonymous phone call regarding a great deal of human foot traffic near her room. Police determined that the occupant’s name was Danette Kubit, and that she had two active Scott County warrants for her arrest on felony drug charges. This occurred in mid-January. No attempt to arrest Kubit was made at this time.

The police believed that the constant, short-term foot traffic around Kubit’s room was a telltale sign of narcotics dealing. This made police suspicious of Ku-bit’s activities and curious to view the inside of the room. Several days later, two plain-clothes officers arrived at the motel room to execute the arrest warrants. One remained in an unmarked car while the other knocked on the door to the room, which opened to the outside. A woman inside the room peered out, but would not open the door. Uniformed police officers were then called to give assistance.

At this point, the remaining facts are in dispute. When uniformed officers again knocked, a woman opened the door and partially stepped out in an apparent attempt to leave. Upon seeing the uniformed officers, she attempted to close the door. One version suggests the woman was inside and trying to keep the officers out. The other version indicates the woman was outside and trying to close the door behind her. Officer Chris Usher prevented her from closing the door by placing his foot in the jam. The plain-clothes officer then approached and identified himself as Officer Stephen Spicher. He told the woman they had two warrants for the arrest of Danette Kubit. At this time, the officers pushed their way into the room for the supposed purpose of confirming the identity of the woman at the door as Dan-ette Kubit. Several different versions of this encounter were described by those present.

While inside, police viewed a baggie in the wastebasket in plain view, consistent with a baggie used for drugs. After a closer look, Officer Spicher observed what he believed to be marijuana residue inside the baggie. Kubit was placed under arrest for possession of the marijuana in the wastebasket and the evidence was seized. On this charge, Kubit filed a motion to suppress the baggie evidence taken from her motel room on the ground that police had no right to enter her room under the guise of executing the arrest warrants.

Kubit’s suppression motion was denied. The district court held: “By virtue of the fact [police] are armed with arrest warrants, they do have authority to enter.” Kubit agreed to a stipulated trial on the minutes of testimony. She was convicted of one count of possession of a controlled substance and sentenced to twenty days incarceration in the county jail, fined $300, and her license revoked for 180 days. See Iowa Code § 124.401(5) (1999). She appeals this conviction. The issue before us today is whether police violate a defendant’s Fourth Amendment right to be free from unreasonable searches and seizures when they force their way into a suspect’s motel room to execute an arrest warrant after coming in contact with the suspect at the door to her room.

II. Scope and Standard of Review

Kubit challenges the district court’s ruling on her suppression motion. This motion involved Fourth Amendment issues. U.S. Const, amend. IV; Iowa Const, art. I, § 8. Because the basis for this motion rested on constitutional principles, we review such a ruling de novo. State v. Prior, 617 N.W.2d 260, 262-63 (Iowa 2000); State v. Canas, 597 N.W.2d 488, 492 (Iowa 1999) (“We review this constitutional question de novo in light of the totality of the circumstances.”). Under this independent evaluation, we are bound only by the district court’s factual determinations based upon substantial evidence. Canas, 597 N.W.2d at 492. As such, we may search the entire record to aid our review. State v. Breuer, 577 N.W.2d 41, 44 (Iowa 1998).

In the present case, the district court made no factual findings. It held that regardless of the discrepancies in testimony given by the officers and the suspect, the arrest warrant alone justified the officers’ entry. Because our review is de novo, we need not give deference to this holding. As such, we are not bound by the district court’s decision and are free to accept or reject any facts presented to us in the record.

III. Issue on Appeal

An arrest warrant does not give police the same authority of access to a suspect’s home that a search warrant authorizes. We take any government intrusion into a citizen’s dwelling very seriously. See State v. Brant, 260 Iowa 758, 763, 150 N.W.2d 621, 625 (1967) (“[T]he right of officers to thrust themselves into a home is of grave concern.... ”). Therefore, uninvited entry into a suspect’s home without a search warrant must be constitutionally justified. “A search conducted without a valid warrant is per se unreasonable unless a valid exception to the warrant requirement exists.” State v. Cadotte, 542 N.W.2d 834, 836 (Iowa 1996) (citing State v. Cultor, 315 N.W.2d 808, 811 (Iowa 1982)). Those exceptions include: (1) a search with consent, (2) a search based on probable cause and exigent circumstances, (3) a search of items in plain view, or (4) a search incident to a lawful arrest. Id.; accord State v. Cline, 617 N.W.2d 277, 282 (Iowa 2000). It is the State’s burden to prove by a preponderance of the evidence that a warrantless search is justified by one of the above exceptions. Cadotte, 542 N.W.2d at 836.

The presence of a valid arrest warrant is not a recognized exception. Rather, the exception under which the State justifies seizure of the baggie in this case is plain view of the evidence. The question then is do the officers have a right to enter Kubit’s motel room to execute arrest warrants. For the plain view exception to apply, police must be rightfully in the place that allows them to make the observation. State v. Vincik, 436 N.W.2d 350, 353-54 (Iowa 1989); State v. Smith, 178 N.W.2d 329, 332 (Iowa 1970). The fact that this was a motel room instead of a home is of no consequence. We note that “[a] hotel room can clearly be the object of Fourth Amendment protection as much as a home or an office.” Hoffa v. United States, 385 U.S. 293, 301, 87 S.Ct. 408, 413, 17 L.Ed.2d 374, 381 (1966); Stoner v. California, 376 U.S. 483, 490, 84 S.Ct. 889, 893, 11 L.Ed.2d 856, 861 (1964).

Kubit makes two arguments against the validity of the officers’ presence in her motel room. The first one can be disposed of easily. Kubit maintains that because the officers’ execution of the warrants against her was pretextual for entry into her room, their actions cannot be justified under the rules for executing arrest warrants. Our court has, on countless occasions, refused to apply a subjective test when determining if the protections of the Constitution were afforded. See, e.g., State v. Hofmann, 537 N.W.2d 767, 769-70 (Iowa 1995); State v. Garcia, 461 N.W.2d 460, 463-64 (Iowa 1990). Instead, we look for an objective basis to justify the official conduct. “So long as the officer is legally permitted and objectively authorized to do so, an arrest is constitutional.” Hofmann, 537 N.W.2d at 770.

Support of our objective test also comes from the Supreme Court. “Whether a Fourth Amendment violation has occurred turns on an objective assessment of the officer’s actions in light of the facts and circumstances confronting him at the time and not on the officer’s actual state of mind.... ” Maryland v. Macon, 472 U.S. 463, 470, 105 S.Ct. 2778, 2783, 86 L.Ed.2d 370, 378 (1985) (citation omitted); accord United States v. Clayton, 210 F.3d 841, 843-44 (8th Cir.2000). Here, as long as a valid reason for the officers’ presence exists, the officers’ real motives are of no usefulness.

Kubit’s better argument is that an arrest warrant that can be executed from the outside of a dwelling does not authorize entry into the dwelling. Support for this contention can be found in Canas, 597 N.W.2d at 493. Our court invalidated the search of a motel room following the arrest of its occupant while outside the room. Id. at 493, 497. Canas involved a tip that a suspect, for whom there was an outstanding arrest warrant, might be staying at a local motel. Three law enforcement officers went to the motel to execute the warrant. When they arrived, they observed Canas standing outside his room. Upon seeing police, he immediately ran inside and slammed the door. The officers then knocked at the motel room, and when Canas opened the door, police pulled him outside to arrest him. Following Canas’s arrest, police entered his motel room to conduct a search where they found drug paraphernalia. This search was the subject of a motion to suppress.

The State tried to justify their presence in and search of the motel room under the search incident to a lawful arrest exception. We rejected this argument because Canas was never able to re-enter the room after his arrest. Id. at 492-93. We concluded:

The warrantless search of defendant’s motel room was not a valid search incident to an arrest.... The defendant’s motion to suppress should have been granted, and the admission of the evidence seized from his motel room was not a harmless error. We reverse the defendant’s conviction....

Id. at 497. Under Canas, if Kubit had been arrested outside, police would not have been constitutionally permitted to enter her room and seize items in plain view. It follows then that an arrest that can occur on the outside of a dwelling should be executed on the outside. While this is a persuasive case if the arrest had occurred outside, our disputed facts present a slightly different scenario.

Here, it is disputed that Kubit actually stepped outside her room. There is evidence from two officers, corroborated by the suspect, that it looked like Kubit was trying to leave her room and close the door behind her. Conversely, Officer Usher testified that Kubit merely peeked around the door and thereupon tried to escape back into her room by closing the door.

This dispute in the testimony comes from the four versions of the event provided by police and Kubit. Officer Spicher was one of two plain-clothes officers on the scene. He was sitting in an unmarked car eight feet outside the door when Kubit opened it. He testified that he was unsure whether Kubit “was either trying to get her door shut and get out of there or whatever.” He characterized Kubit’s actions as an attempt to exit the motel room. In his deposition, Officer Spicher said it appeared she was trying to leave and close the door behind her. He remembered her wearing a book bag. After she came to the door, he got out of the car and told her they needed to come in her room to talk. At this point, he and Officer Usher pushed their way inside.

Officer Usher was the uniformed officer at the door when Kubit opened it. He testified that rather than step out, Kubit only opened the door eight to twelve inches. She then tried to close the door when she saw the uniformed officer, who, until that time had tried to remain off to the side. Officer Usher testified that he put his foot in the door to prevent her from closing it. It was then that Office Spicher identified himself and told Kubit his purpose. At this point, Officer Usher maintains they were allowed in the room, but admits the officers had to physically push the door open to enter. He also admits that his recollection of the event is somewhat rough.

Next, Officer Anderson testified. She was the first plain-clothes officer to knock on the door. When asked to identify herself by Kubit, Officer Anderson told Kubit that she was “Mindy.” No entry was secured, so uniformed officers were called in. That is when Officer Usher arrived. Officer Anderson sat in the unmarked car while Usher knocked. From her vantage point, Officer Anderson testified that it appeared Kubit was trying to leave her room. Anderson saw Kubit trying to push her way out and step into the alleyway. She was unable to get out because Officer Usher and then Officer Spicher blocked her and stepped inside. She never saw Kubit voluntarily attempt to re-enter the room or close the door on the officer. She remembered seeing Kubit attempting to exit with a book bag on her shoulder.

The last person to testify was Kubit. She first noted that when “Mindy” knocked and asked if she was Danette, Kubit answered that she was. She had just gotten out of the shower and was not dressed. When the later knocks occurred, she was still undressed. She told them to wait, and she was coming out. She looked out and saw no one, but by the loud persistent knocking, she assumed it was the police. She opened the door when she was ready to exit to find a uniformed officer standing there. As she tried to close the door behind her, the officer prevented this. Then two officers stepped in, pushing her back with them. It was not until they were back inside the room that police stated their purpose.

Clearly, Officer Usher’s version is at odds with the two other officers’ versions. Kubit’s version is corroborated by these two officers. When there is inconsistency between the various versions, we look at the totality of the testimony to determine which version is supported by substantial evidence. Three of the four statements indicated that Kubit was trying to step out of her room to leave when police pushed their way in. The one officer to testify to the contrary admitted that he did not remember the chain of events well. The weight of the testimony makes it clear that Kubit did not remain inside her room by choice. As such, we are persuaded that the substantial evidence indicates Kubit was attempting to exit her room and was partially out when the officers pushed their way inside. Moreover, constitutional rights should not swing on the frayed rope of an officer’s fading memories of how he invaded a home.

There is ample law that police may forcibly enter a dwelling to execute a warrant after their attempts to peaceably make the arrest are thwarted. Iowa Code § 804.15 (detailing police must first knock, announce, and wait for noncompliance before entering to execute an arrest warrant); see also Hofmann, 537 N.W.2d at 768-70 (upholding entry into home where police’s knock goes unanswered). However, the substantial evidence here indicates that Kubit was attempting to allow police to peaceably arrest her by exiting her room. When Kubit came to the door, the right of police to enter and execute may have dissipated.

An Iowa statute gives police the right of entry only where they first announce who they are and what their purpose is, but the suspect will not answer. Iowa Code § 804.15. Section 804.15 states:

If a law enforcement officer has reasonable cause to believe that a person whom the officer is authorized to arrest is present on any private premises, the officer may upon identifying the officer as such, demand that the officer be admitted to such premises for the purpose of making the arrest. If such demand is not promptly complied with, the officer may thereupon enter such premises to make the arrest, using such force as is reasonably necessary.

Id. (emphasis added). A purpose of this “knock and announce rule” is to protect the privacy of the citizen and is governed under the reasonableness requirement of the Fourth Amendment. See State v. Farber, 314 N.W.2d 365, 369-70 (Iowa 1982); State v. Brown, 253 N.W.2d 601, 602 (Iowa 1977); see also 2 Wayne R. LaFave et al., Criminal Procedure § 3.6(b), at 184-86 (2d ed.1999) [hereinafter LaFave].

By Kubit coming to the door, the option to enter under this statute, assuming announcement is first made, is over. Moreover, when the officers waited until Kubit actually answered the door and stepped out — there was no longer any right or necessity to forcibly enter to find a suspect. As such, because Kubit complied with the knock, it was not reasonable for police to force her back inside. The State’s argument, that police were justified to enter under this statute because Kubit tried to escape back inside, is not supported by the greater weight of the testimony.

Al of the law cited by the State that gives the police limited authority to enter the dwelling to execute an arrest warrant is qualified to apply to situations where the suspect will not come out but police know he is within, no one answers the door, or police demands are not immediately complied with. See, e.g., Payton v. New York, 445 U.S. 573, 603, 100 S.Ct. 1371, 1388, 63 L.Ed.2d 639, 661 (1980); Clayton, 210 F.3d at 843-44; United States v. Shurn, 852 F.2d 366, 367 (8th Cir.1988). The Supreme Court has held: “[A]n arrest warrant founded on probable cause implicitly carries with it the limited authority to enter a dwelling in which the suspect lives when there is reason to believe the suspect is within.” Payton, 445 U.S. at 603, 100 S.Ct. at 1388, 63 L.Ed.2d at 661. However, the language in Payton is distinguishable from the present case because it does not address a scenario where the suspect is already outside or trying to come outside. See United States v. Albrektsen, 151 F.3d 951, 954 (9th Cir.1998) (holding that “cases where there was both a warrant and some reason to believe the defendant might five at and be present within the premises do not help the government in [a] case [where the defendant is at the threshold]”). Moreover, Payton does not require the knock and announce procedures for executing arrest warrants mandated by our law.

We are also persuaded by the logic of our decision in State v. Tolsdorf, 574 N.W.2d 290, 292 (Iowa 1998). In Tolsdorf, after being arrested away from his car, the defendant requested to go back and secure his car. Id. at 291. Police agreed and then proceeded to search his car incident to the arrest. We upheld this search because it was the defendant’s idea to return to the car. Id. at 292. See generally 2 LaFave § 3.6(d), at 188-90. However, we warned against situations where the police suggest the defendant return to his car as a pretext to search it.

Courts must be alert, however, to the possibility that the police caused the defendant to move toward or into the vehicle so that they could rely upon that movement to justify what would otherwise be an unreasonable search of the car.

Tolsdorf, 574 N.W.2d at 292. Tolsdorf does not look to police motives, but to police actions. Kubit argues that police’s efforts to get her back in her room to effectuate her arrest cannot be justified under Tolsdorf. We agree. The version of the encounter that is supported by the most evidence offends the above warning. Police forced Kubit into the room so that they could get inside to see what was in plain view. Because Kubit’s arrest could have been accomplished on the outside, and it was not Kubit’s idea to return inside, the actions of police cannot justify their presence and seizure of items in plain view.

Further, we are not persuaded by the argument that police needed to enter the room to properly identify Kubit. First, it is clear from the record that those involved were reasonably certain the woman inside was Kubit. Second, testimony indicated that Kubit was carrying her purse, the object most likely to contain her identification. And third, Officer Spicher testified that the general practice is to take the suspect to the squad car and then try to ascertain identity. Here, Officer Spicher testified that they could not do this because the closest police car was a camaro, with limited back seat room. The marked cars were more than fifty yards away, and Spicher testified it was just easier to go inside. Police ease, without exigency, cannot validate an otherwise unconstitutional entry.

Moreover, if police can enter a home under these circumstances, then section 804.15 is eroded to the extent that it authorizes entry only after the demand is not met. It is clear Kubit was meeting the demand by responding to the knock. Under the statute, entry is an option available only after the suspect does not respond to the knock and announce rule. If an arrest warrant allows police to enter the home regardless of the actions of the suspect, the purpose of section 804.15 is eviscerated and the protection of the Fourth Amendment’s search warrant requirement is destroyed.

Our opinion today also finds support in other jurisdictions. In United States v. Albrektsen, the Ninth Circuit invalidated the invasion into the defendant’s motel room to execute arrest warrants because the arrest could have occurred on the threshold. Albrektsen, 151 F.3d at 953-54. In this case, police went to the suspect’s motel room to place him under arrest. Albrektsen came to the door and rather than arrest him there, the officer pushed him back inside to be able to look around for evidence of narcotics. Id. at 952. The Ninth Circuit recognized:

“Nowhere is the protective force of the [F]ourth [A]mendment more powerful than it is when the sanctity of the home is involved. The sanctity of a person’s home, perhaps our last real retreat in this technological age, lies at the very core of the rights which animate the amendment. Therefore, we have been adamant in our demand that absent exigent circumstances a warrant will be required before a person’s home is invaded by the authorities.”
But, says the government, there were warrants in this case, arrest warrants. Of course there were, but they formed a necessary rather than a sufficient basis for the entry. They did not, by themselves, allow the invasion of Albrektsen’s motel room. There can be little doubt that police can enter a dwelling for the purpose of executing an arrest warrant. That, however, does not mean that officers armed with a warrant can enter a private home at any time or for any reason. Quite the contrary. Because our free society embraces the protections of the Fourth Amendment with appetency, rather than velleity, the courts have demanded more than the mere existence of a warrant.

Id. at 953 (footnotes and citations omitted) (quoting Los Angeles Police Protective League v. Gates, 907 F.2d 879, 884 (9th Cir.1990)). With that basis, the court held:

[The officer] knew that Albrektsen was not somewhere back in the room; he was standing right before [the officer] at the threshold.... [H]e could have arrested Albrektsen right then, and had no need to push into the room for that purpose.... [T]he arrest of Al-brektsen with a warrant could have been effected at the doorway of his motel room. It should have been; there was no need to do otherwise. In fine, it was not “necessary to arrest him” in the depths of the room, and that “invasion of [Albrektsen’s] privacy interest” in order to effect the arrest was, therefore, not authorized.

Id. at 954 (fifth alteration in original) (footnote omitted) (quoting Steagald v. United States, 451 U.S. 204, 214 n.7, 101 S.Ct. 1642, 1648 n. 7, 68 L.Ed.2d 38, 46-47 n. 7 (1981)). Finally, we agree with the Ninth Circuit that this type of case

demonstrates why our patrol of the boundary between the sanctity of the home and officers of the law must be sempiternal. The laudable desire to detect and stamp out crime continually threatens to undermine the equally laudable protections of the Fourth Amendment. That must not happen.
... [T]he mere existence of an arrest warrant does not authorize entry into a defendant’s home, where there is no necessity to enter because the defendant can be arrested at the threshold of that home. An officer’s curiosity about the contents of the home must go unsatisfied.

Id. at 955.

In conclusion, when a suspect attempts to comply with the demands of police and exits her room, police may not force her back inside to make the arrest. The arrest warrant does provide authority to enter when the provisions of section 804.15 are met. However, compliance by the suspect destroys this authority unless exigent circumstances exist or some other exception applies. As such,

where, as in this case, there is no impediment to making an arrest in a doorway, ... the officers may not intrude into the house over the objection of the arrestee, simply to complete effectuation of the arrest and put the officers into a position where they can more fully observe the interior of the premises — absent any other reasonable justification for the entry. ...

State v. Peterson, 108 Idaho 463, 700 P.2d 85, 87 (Ct.App. 1985).

Because the greater weight of the testimony does not support any exigency theory, the police entry into Kubit’s motel room was not constitutionally justified.

[E]ntry into [the suspect’s] house, without a warrant to search the premises and when he easily could have been arrested on his doorstep, [is] an impermissible invasion of [his] right of privacy and to be free from an unreasonable search and seizure under the [F]ourth [A]mendment to the United States Constitution.

Id. Under these circumstances, the plain view exception does not apply. Kubit’s motion to suppress the evidence illegally seized from her motel room should have been sustained. The failure to do so was not harmless error. Accordingly, we reverse the district court’s decision and remand for a new trial.

REVERSED AND REMANDED.

All justices concur except CARTER and CADY, JJ., who dissent.

CARTER, Justice

(dissenting).

I dissent.

As the Supreme Court recognized in Payton v. New York, 445 U.S. 573, 100 S.Ct. 1371, 63 L.Ed.2d 639 (1980):

It is true that the area that may legally be searched is broader when executing a search warrant than when executing an arrest warrant in the home.... This difference may be more theoretical than real, however, because the police may need to check the entire premises for safety reasons....

Payton, 445 U.S. at 589, 100 S.Ct. at 1381, 63 L.Ed.2d at 652 (citations omitted). It appears without dispute in the combined testimony of the witnesses on this issue that defendant opened the door when the police announced their presence and was never allowed to exit the room or close the door on the officers. That was because the officers were in the process of arresting defendant pursuant to a valid arrest warrant. In so doing, it was up to the officers to determine on which side of the threshold the arrest would be completed. The officers elected to complete the arrest on the motel-room side of the threshold and, in so doing, were in a place where they had a right to be. Apparently, the marijuana seized was in plain view. But, if it was not, the search that occurred did not go beyond that which is allowed in a search incident to a valid arrest.

I would affirm the judgment of the district court.

CADY, J., joins this dissent.


source: Caselaw Access Project

author: SNELL, Justice.

license: Public Domain

text:
    Jerry KURTH, Individually and d/b/a Fisherman’s Wharf Restaurant, Appellee, v. IOWA DEPARTMENT OF TRANSPORTATION, Appellant.
    No. 99-0666.
    Supreme Court of Iowa.
    May 31, 2001.

      Thomas J. Miller, Attorney General, David A. Ferree, Special Assistant Attorney General, and Mark Hunacek, Assistant Attorney General, for appellant.
    Richard J. Barry of Montgomery, Barry & Bovee, Spencer, for appellee.
   SNELL, Justice.

This fee condemnation case asks us to determine what type of evidence can be presented to the jury and what is proper language to instruct the jury. The Iowa Department of Transportation (DOT) maintains that the jury was impermissibly allowed to hear testimony of the value of the business on the land being condemned. We agree. The jury’s verdict is reversed and the case remanded for a new trial.

I. Factual Background and Procedure

Jerry Kurth owned and operated the Fisherman’s Wharf Restaurant (Wharf) on West Lake Okoboji. Kurth purchased this property in 1994 for approximately $85,000. Kurth made several improvements to the restaurant. On August 5, 1997, Kurth received a condemnation notice for this property from the DOT to accommodate nearby bridge expansion. He was awarded $180,000 by the Dickinson County Compensation Commission.

The restaurant was in a prime location to receive business from highway and boat traffic. The restaurant property was zoned commercial and provided dock access and outside eating to accommodate its patrons. Kurth characterized this location as the busiest spot on West Lake Okoboji and the best location for a restaurant. According to trial testimony, there is no other commercially zoned property on West Lake Okoboji that could be used for a restaurant that fronts on the lake similar to the Wharf.

With the proceeds from the condemnation, Kurth bought nearby property on which had once been located a Kentucky Fried Chicken restaurant, no longer in business. Kurth’s new property sits on East Lake Okoboji directly on the other side of the bridge from the Wharf. The restaurant is also on the lakefront with a dock and includes several amenities the Wharf did not, such as on-site parking, a newer building, and twice as much land. Kurth testified that he planned to someday open a restaurant on this location.

Kurth was unsatisfied with his condemnation award because he felt it did not take into account the Wharfs business value and location. Accordingly, Kurth sought judicial review of his award from the district court. Prior to trial, the DOT made a motion in limine to exclude evidence describing the business value of the Wharf or providing its past and future profits. The DOT wanted a determination based solely on the value of the land and the structure on it. This was denied, and the case went to jury trial.

Kurth presented the testimony of local real estate experts. Greg Winkel, a certified general real estate appraiser, testified to the worth of the land and the building. This figure was presented as $285,000. Larry Harden, a certified valuation analyst, utilized the “capitalization of earnings method” to place a fair market value on the business and the business property. To produce this number, the expert looked at past earnings to determine what the likely normalized future income would have been given this type of business and its history, location, risk, fixtures, etc. Harden arrived at the amount of $239,952, which he added to the $285,000 valuation for the land and building provided by the earlier expert. He then placed the total value of the Wharf property at $524,952.

Conversely, the DOT’s expert real estate appraiser, James Hayes, concluded that the fee was worth only $182,500 by looking at comparable sales. At the conclusion of testimony, over the objection of the DOT, the judge instructed the jury to consider the value of the Wharf property using all competent facts the buyer would factor into his price, including, if relevant, the net income of the business on the property.

The jury returned a verdict for Kurth in the sum of $875,000. The DOT appeals this decision for three reasons: (1) The court impermissibly allowed the jury to hear evidence of the value of the business; (2) The court erroneously instructed the jury as to what it may consider when valuing the condemned land; and (3) The court improperly overruled the DOT’S objection to a letter containing hearsay statements.

II. Scope and Standard of Review

The standard of review is in dispute. Ordinarily, the district court’s evi-dentiary and trial objection rulings are reviewed for an abuse of discretion. State v. Tracy, 482 N.W.2d 675, 680-81 (Iowa 1992). The DOT argues that when those decisions are based upon an erroneous interpretation of law, our review should be on legal error. See State v. Kjos, 524 N.W.2d 195, 196 (Iowa 1994). This is an accurate statement, however, the district court’s ruling to allow testimony of the value of the business is not based on any statute or codified rule. Accordingly, we review this determination for an abuse of discretion.

“An abuse of discretion occurs when the trial court ‘exercises its discretion on grounds clearly untenable or to an extent clearly unreasonable.’” State v. Greene, 592 N.W.2d 24, 27 (Iowa 1999) (quoting State v. Smith, 522 N.W.2d 591, 593 (Iowa 1994)). “[W]e grant the district court wide latitude regarding admissibility” and will reverse only where the losing party was prejudiced by an unreasonable decision. State v. Sallis, 574 N.W.2d 15, 16 (Iowa 1998); accord State v. Caldwell, 529 N.W.2d 282, 285 (Iowa 1995).

When review of the district court’s instruction to the jury is involved, our review is for correction of errors at law. City of Dubuque v. Fancher, 590 N.W.2d 493, 495 (Iowa 1999). “Error in giving ... a particular instruction does not warrant reversal unless the error is prejudicial to the party.” Herbst v. State, 616 N.W.2d 582, 585 (Iowa 2000). Prejudice is presumed when the jury has been misled by a material misstatement of the law. Graber v. City of Ankeny, 616 N.W.2d 633, 642 (Iowa 2000); Iowa Comprehensive Petroleum Underground Storage Tank Fund Bd. v. Shell Oil Co., 606 N.W.2d 376, 379 (Iowa 2000).

Generally, hearsay rulings are also reviewed for errors at law. State v. Ross, 573 N.W.2d 906, 910 (Iowa 1998) (“In the case of hearsay rulings, our review is for correction of errors at law because admission of hearsay evidence is prejudicial to the nonoffering party unless the contrary is shown.”). However, when the basis for admission of hearsay evidence is the expert opinion rule, which provides no hard and fast rule regarding admissibility, we will employ an abuse of discretion standard. Hutchison v. Am. Family Mut. Ins. Co., 514 N.W.2d 882, 889 (Iowa 1994); Brunner v. Brown, 480 N.W.2d 33, 37 (Iowa 1992); see also In re Estate of Kelly, 558 N.W.2d 719, 722 (Iowa Ct.App.1996) (reviewing trial court’s decision to admit hearsay evidence pursuant to expert opinion rule for an abuse of discretion).

III. Issues on Appeal

The admissibility of testimony and the jury instructions given both stem from the same issue — whether profits can be considered in determining the fair value of land in an eminent domain proceeding. The remaining issue will have us pass judgment on the admissibility of out-of-court statements in support of an expert’s testimony.

A. Business Value Testimony in Eminent Domain Proceedings

What this issue involves is “just compensation.” The Iowa Constitution requires the state to provide just compensation to the owner of land affected by a taking. “Private property shall not be taken for public use without just compensation first being made, or secured to be made to the owner thereof, as soon as the damages shall be assessed by a jury....” Iowa Const, art. I, § 18. However, what constitutes just compensation has historically been an elusive question. 26 Am.Jur.2d Eminent Domain § 294, at 705 (1996).

The general rule states:

A court may consider all factors indicative of the value of the property, and which would have been present in the minds of a willing buyer and a willing seller, unless the considerations advanced are too speculative or remote, and thus not a necessary, natural, or proximate result of the taking.

Id. § 297, at 707-08 (footnotes omitted). This rule has been restated in our cases. “A jury may, of course, consider ... the advantages the land possesses which a seller would press to the attention of a buyer.” Heins v. Iowa State Highway Comm’n, 185 N.W.2d 804, 807 (Iowa 1971). “When the entire property is taken, our general rule is that the measure of damage is the reasonable market value at the time of condemnation^] ... [or] what a willing buyer would pay in cash to a willing seller.... ” Aladdin, Inc. v. Black Hawk County, 562 N.W.2d 608, 611-12 (Iowa 1997) (citation omitted).

However, our cases also place a limitation on what type of evidence a jury may hear when making its just compensation determination.

Where condemnation of a fee interest is sought, generally evidence of business profits is inadmissible as an [independent] element of damage or as relevant in determining the value of the land because it is too uncertain and depends upon too many contingencies.
... The fundamental reason for the exclusion of evidence of profits lies in the rule of substantive law that the con-demnor takes only the real property, not the business located thereon.
The courts have generally stated that business profits are the result of so many factors and that their repercussion on the market is so remote, that the evidence is more likely to mislead than to aid in the determination of market value.

Twin-State Eng’g & Chem. Co. v. Iowa State Highway Comm’n, 197 N.W.2d 575, 578 (Iowa 1972) (citations omitted). “The profits of a business are too uncertain, and depend upon too many contingencies to safely be accepted as any evidence of the [useable] value of the property upon which the business is carried on.” Wilson v. Iowa State Highway Comm’n, 249 Iowa 994, 1006, 90 N.W.2d 161, 169 (1958) (citation omitted); accord Comstock v. Iowa State Highway Comm’n, 254 Iowa 1301, 1308, 121 N.W.2d 205, 209 (1963) (determining that “[a]nticipated profit has too many variables including managerial skill to be” the measure of damages).

Several Iowa cases have recognized that business value may be a relevant factor when the property condemned is a leasehold. See Twin-State Eng’g, 197 N.W.2d at 582.

[W]e conclude such evidence as to the nature and prosperity of plaintiffs business was a proper item to be considered along with all facts, circumstances and elements disclosed by the evidence as tending to establish the reasonable value of the lease at the time it was taken. The evidence tended to be descriptive of the injury resulting to the leasehold by condemnation.

Id. (emphasis added).

When the state condemns the fee, however, our court has clearly recognized: “This court has, following the traditional rule, not allowed evidence concerning profits when only the fee is being condemned.” City of Des Moines v. McCune, 487 N.W.2d 88, 84 (Iowa 1992). In McCune, we upheld the district court’s rejection of evidence as to the “going-concern value” of a business on land condemned by the city. Id. In another case, we held that the district court’s failure to sustain an objection made to testimony of profits and revenue of a business on the condemned property was an abuse of discretion. Wilson, 249 Iowa at 1006-07, 90 N.W.2d at 169. “[T]he profits of a business conducted upon land taken for the public use is not admissible in proceedings for the determination of compensation which the owner of the land shall receive.” Id. at 1006, 90 N.W.2d at 169 (emphasis added) (citation omitted). The only exceptions we have recognized to this rule are leaseholds and land used for agricultural purposes. McCune, 487 N.W.2d at 84; Wilson, 249 Iowa at 1006-07, 90 N.W.2d at 169.

When the entire fee is condemned, the usual guide to the fair market value of the property is comparable sales figures. See Crozier v. Iowa-Ill. Gas & Elec. Co., 165 N.W.2d 888, 835 (Iowa 1969). This approach was utilized by the DOT’S expert to arrive at his valuation of $182,500. Another approach that is employed is the cost approach, which looks at how much it would cost to build an identical building on identical land, depreciated by age. This approach was partially used by Kurth’s expert, Winkel, who valued the land and building at $285,000. Kurth’s second expert, Harden, then added that figure to a figure he arrived at using the capitalization of earnings approach. Kurth claims this method did not unduly consider business profits or the value of the business. We find that it did.

Harden explained that he was hired by Kurth to perform a business valuation. He informed the jury that he was valuing the business and the business property, which included tangibles like furniture and equipment and also intangibles like goocl will, the business name, and location. Specifically in this case, Harden was trying to determine how much the Wharf, operating as a restaurant, was worth. His method was meant to provide a figure to inform a buyer what he could expect to make if he was operating a similar business on the property. He arrived at this figure by looking at the “income stream” of the Wharf from 1994 through 1997. He admitted that he added estimated profits for the year of 1997 to his equation, which were not accounted for because the Wharf had to close earlier in the season than normal. He referred to the profits realized in the four years adjusted by the risk of business and other business assets as the normalized net income. Once this figure was determined, he stated the next step was “to anticipate what my future income from this property would be.” Harden used the normalized past income to predict the normalized future income. This number was then capitalized by a flat rate resulting in a figure of $239,952. Harden characterized this as the commercial value of the property. On cross-examination, he admitted that his figure was partially based on past profits of the Wharf. When asked, “And that value under your method of analysis is based on the profits of the Wharf.... Right?” Harden replied, “That’s the way the capitalization of earnings method is used. You use expected future earnings.”

Certainly, evidence that the land is being used as a restaurant is highly relevant to the value of the land. See Olson v. United States, 292 U.S. 246, 256, 54 S.Ct. 704, 709, 78 L.Ed. 1236, 1245 (1934). However, specific dollar figures as to how much profit the Wharf had made, as well as specific dollar figures guessing what it could make in the future are far too speculative and may not be provided to a jury in a fee condemnation proceeding. See McCune, 487 N.W.2d at 84. Accordingly, this information was inadmissible. Although we recognize that the capitalization of earnings method is a reliable formula for determining the value of a business, it is not a valid method for assessing just compensation in fee condemnation cases.

When inadmissible evidence is heard by the jury, the district court has abused its discretion. Whether this is grounds for a reversal depends upon our view of prejudice in these circumstances. In the context of eminent domain proceedings, we have said: “[WJhere error appears in the admission of testimony prejudice will be presumed unless the contrary affirmatively appears.” Steensland v. Iowa-Ill. Gas & Elec. Co., 242 Iowa 534, 540, 47 N.W.2d 162, 165 (1951). There is no prejudice when, “notwithstanding the illegal evidence, the competent evidence is such that the prevailing party is entitled to the verdict as a matter of law as being the only proper verdict that could be rendered.” Id. at 541, 47 N.W.2d at 165-66.

Because no figure for the real estate alone, untainted by business profits, exceeds $285,000, the jury clearly was persuaded by Harden’s business value figure and compensated for it in its $375,000 verdict. See Stom v. City of Council Bluffs, 189 N.W.2d 522, 530 (Iowa 1971); see also 27 Am.Jur.2d Eminent Domain § 676, at 216 (1996) (“[T]he condemnation verdict or award cannot be higher than the highest estimate of the expert witnesses nor lower than the lowest.”). As such, we cannot say that had this evidence been absent from trial, the jury would have arrived at the same verdict.

B. Jury Instructions for Arriving at the Condemned Land’s Value

When giving instructions to the jury, “the court must correctly state the law and confine it to [the facts]. A misstatement of the law in an instruction to a jury is reversible error.” Heldenbrand v. Executive Council, 218 N.W.2d 628, 637 (Iowa 1974). “[T]he jury should not be informed of any matter which is not proper for it to consider in arriving at its verdict.” 27 Am.Jur-.2d Eminent Domain § 628, at 175. The DOT takes issue with three jury instructions.

1. Jury Instruction No.' 1

The relevant language of this instruction with the disputed portion emphasized reads:

It is undisputed that on August 5, 1997 the Iowa Department of Transportation condemned and on October 7, 1997 took possession of the complete property owned by Jerry Kurth d/b/a Fisherman’s Wharf Restaurant.

Because the jury should not have heard evidence that equated the value of the business as property, the DOT argues that “complete property” is too broad. Literally, the complete property was taken, ie., the land and the building which was a restaurant. The State condemned the entire fee. Nonetheless, we recognize that such a phrase may fail to distinguish that the government is not also taking the business. To minimize confusion in the future as to what the government is taking, the term “complete property” should not be used.

2. Jury Instruction No. 13, paragraphs 10 and 11.

The relevant language of this instruction with the disputed portion emphasized reads:

Factors you may consider in determining the fair and reasonable market value of the property are:
10. All competent facts which an owner would properly and naturally press upon the attention of a buyer with whom he is negotiating a sale of the property.
11. All competent facts which would naturally influence a person of ordinary prudence desiring to purchase the property.

This instruction is almost verbatim from Van Horn v. Iowa Public Service Co., 182 N.W.2d 365, 371 (Iowa 1970) and earlier from Korf v. Fleming, 239 Iowa 501, 517-18, 32 N.W.2d 85, 94-95 (1948). As such, it is an accurate statement of the law. The dispute with Instruction 13 comes from the fact that the jury heard inadmissible evidence that it may have been able to incorporate in this instruction. Inadmissible evidence and a later instruction may have had an impermissible effect on this instruction.

3.Jury Instruction No. 17

The relevant language of this instruction with the disputed portion emphasized reads:

There is evidence in this case as to certain net income derived from Plaintiff’s operation of the Fisherman’s Wharf Restaurant in the past. You are instructed that you are not to use such evidence as the measure of Plaintiffs damages, but you may consider such evidence only to the extent that you find that it does provide support, if any, for the estimates given herein as the fair market value of the property on August 5,1997.

This is an accurate statement of the law in leasehold condemnation proceedings in Iowa. See Twin-State Eng’g, 197 N.W.2d at 578-82. However, what was condemned here was a fee, not a leasehold. First, the jury should never have been provided figures of net income. And second, allowing the jury to consider these figures for any purpose is a misstatement of the law in fee condemnation proceedings. See McCune, 487 N.W.2d at 84,

“In determining whether the jury was misdirected upon the measure of damages, all instructions will be read and considered together.... ” 27 Am.Jur.2d Eminent Domain § 636, at 179. Instruction 17 clearly tainted the other instructions given and allowed the jury to consider inadmissible evidence. Reading all these instructions together, because of the instruction allowing the jury to consider net income, the court’s instructions were improper and the error justifies a new trial.

C. Admission of a Letter Compiled by Out of Court Experts

Finally, a letter relied upon by two experts for Kurth was admitted into evidence. The DOT objects to its admission as hearsay. This letter was signed by five local real estate experts, only one of whom testified at the trial. Gary Carlson, the realtor who testified, compiled the letter, signed it, and obtained the signatures approving its content from four other local realtors. The letter was first referenced when Kurth’s value expert, Greg Winkel, relied on statements made in this letter to form his value estimate of the real estate. The DOT made no objection to this testimony. The letter was not offered into evidence at this time.

Following Winkel’s testimony, realtor Carlson also based his testimony on figures found in the letter with no objection. The letter was later offered into evidence. It was then that the DOT objected to it as hearsay. Kurth argues that this letter is admissible under Iowa Rule of Evidence 705. Rule 705 reads:

The expert may testify in terms of opinion or inference and give his reasons therefor without prior disclosure of the underlying facts or data, unless the court requires otherwise. The expert may in any event be required to disclose the underlying facts or data on cross-examination.

Iowa R. Evid. 705. This Rule specifically recognizes that an expert often relies on out-of-court statements or hearsay to form his opinion. Iowa Rule of Evidence 703 also acknowledges this point.

The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to him at or before the trial or hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence.

Although Rules 703 and 705 are silent as to whether this hearsay evidence is admissible, we are persuaded by the federal committee notes relating to similar federal rules. We have recognized: “According to the federal advisory committee, it was the intent of federal rule 705 to permit the introduction of ‘underlying facts or data’ necessary to the expert’s opinion.” Brunner, 480 N.W.2d at 35 (emphasis added).

“[C]ourts and rule makers have yielded to the pressures of expediency so as to recognize a relaxation of the exclusion of otherwise inadmissible hearsay, to the extent that it may be considered as a part of the witness’s legitimate cumulation of knowledge if the hearsay information is of that sort as is customarily relied upon by experts in the practice of their profession. The sanction of the general experience and reliability of the expert to sort out the acceptable information upon which he relies, from the unacceptable, is considered an adequate safeguard.”

Id. at 35-36 (alteration in original) (citation omitted). Accordingly, admission of this letter may be characterized as “an indirect exception to the hearsay rule.” Id. at 35 (citation omitted). As long as the expert can establish that this is the type of evidence reasonably relied upon by experts in his field, it should be admissible. As noted above, Winkel did testify that it is typical for him to consult local realtors’ data.

Further, there is another basis for admission of this letter. Because figures found in the letter came in without objection, admission of the letter was chiefly cumulative. See City of Dubuque, 590 N.W.2d at 496; see also State v. McKettrick, 480 N.W.2d 52, 60 (Iowa 1992) (holding “prejudice will not be found where substantially the same evidence is in the record without objection”). Given the legal support for admission of hearsay evidence in expert situations, introduction of this evidence was not an abuse of discretion.

In summary, the district court did not abuse its discretion by allowing the hearsay letter into evidence. However, the district court allowed the jury to hear inadmissible evidence. This was an abuse of discretion, and the DOT was prejudiced by this abuse. Finally, the jury was not properly instructed on the law and was allowed to factor inadmissible evidence into its verdict. For these reasons, the jury’s decision must be reversed.

REVERSED AND REMANDED.

      . We recognize that this figure does not include the plaintiff's value for all his restaurant equipment. Most of the equipment's value was subsumed in Harden's approach, which we have already determined improperly factored in past and future profits. The value assessed to the equipment under this approach is not separable, making it impossible for us to speculate how much Winkel's figure might be elevated if he had valued the remaining equipment. However, given, the DOT’s uncontested valuation of the equipment at $33,000, we are confident that this adjustment to the $285,000 figure would never exceed $375,000, nor convince us that Kurth would have been entitled to this amount as a matter of law.

      . The DOT’s expert also briefly testified as to the Wharf’s income for 1905 with a specific dollar amount to arrive at a valuation of $181,000 using the income valuation approach. This figure was then rejected by the same expert in favor of the comparable sales approach which provided a higher value for Kurth’s land. This reference to the 1995 income by the DOT does not waive the argument the DOT is now malting on appeal. Because this figure was discarded by the DOT’s expert, the prejudice suffered by the plaintiff's expansive use of past profit figures was not mitigated.


author: LAVORATO, Chief Justice. TERNUS, Justice

text:
    Gregory R. SCHAFFER d/b/a Gregory R. Schaffer Construction, Appellee, v. FRANK MOYER CONSTRUCTION, INC., Appellant.
    No. 99-0669.
    Supreme Court of Iowa.
    May 31, 2001.

      David L. Wetsch of Wetsch & Associates and Jeanne K. Johnson, Des Moines, for appellant.
    Catherine C. Dietz-Kilen of Harrison & Dietz-Kilen, Des Moines, for appellee.
   LAVORATO, Chief Justice.

In this action for foreclosure of a mechanic’s lien, the district court entered judgment for Gregory R. Schaffer, a subcontractor, against Frank Moyer Construction, Inc., a contractor. Frank Moyer Construction, Inc. appeals, challenging the district court’s (1) finding that the hen was valid and enforceable, (2) dismissal of its counterclaim, and (3) award of trial and appellate attorney fees and costs. We affirm and remand with directions.

I. Facts.

We review actions to enforce mechanic’s liens de novo. Baumhoefener Nursery, Inc. v. A & D P’ship, II, 618 N.W.2d 363, 366 (Iowa 2000). While we give weight to the district court’s findings of fact, we are not bound by them. Iowa R.App. P. 14(f)(7); Baumkoefener, 618 N.W.2d at 366. On our de novo review, we make the following findings of fact.

Frank Moyer Jr. is president of Frank Moyer Construction, Inc. (For convenience we will refer to the individual and company collectively as Moyer.) On January 12, 1995, Moyer entered into a real estate contract with Michelle LaMasters and Steven Hartung. The contract called for Moyer to sell Hartung and LaMasters land located at 13462 Lakeshore Drive, Clive, Iowa, and to build and sell them a custom house on that land. LaMasters and Har-tung agreed to pay Moyer $418,350 for the house and lot.

Construction started in February 1995. LaMasters and Hartung wanted Gregory Schaffer to do the trim carpentry work on the home. Moyer hired Schaffer to provide such work.

The agreement between Moyer and Schaffer was not reduced to writing. At the time, Schaffer had other job commitments. For this reason, Schaffer told Moyer that he could not guarantee a completion date. He also told Moyer that he would not have a full crew working on the house and that he alone would be working on the job unless he was able to have more workers there. Moyer agreed to these terms.

Schaffer began the trim work in June. In August, Moyer fired Schaffer apparently because Moyer was dissatisfied with the progress of the trim work. Moyer hired Larry Sutherland to complete the trim work.

On September 11, Schaffer submitted a bill to Moyer for work completed before Moyer fired him. The bill was for $7577. On October 3, Schaffer filed a verified statement of account to perfect his mechanic’s lien for the work he had done. See Iowa Code §§ 572.2, .8 (1995).

On October 24, Moyer served Schaffer with a notice of demand to bring suit. See Iowa Code § 572.28 (“Upon the written demand of the owner, the owner’s agent, or contractor, served on the lienholder requiring the lienholder to commence action to enforce the lien, such action shall be commenced within thirty days thereafter, or the lien and all benefits derived therefrom shall be forfeited.”).

II. Proceedings.

On November 8, Schaffer filed the present suit against Moyer seeking a judgment for $7577 and foreclosure of Ms mechanic’s lien against the property.

On November 17, Moyer deeded the property to LaMasters and Hartung.

On December 1, Moyer moved to dismiss the suit on the ground that Schaffer’s mechanic’s lien was unenforceable because Schaffer had failed to provide LaMasters and Hartung notice of his mechanic’s lien pursuant to Iowa Code section 572.14(2). The district court granted the motion, but on appeal we reversed and remanded for further proceedings. See Schaffer v. Frank Moyer Constr., Inc., 563 N.W.2d 605 (Iowa 1997) (Schaffer I).

Following remand, Moyer filed an answer and affirmative defenses. For its affirmative defenses, Moyer asserted that (1) the property was at all times the owner-occupied dwelling of LaMasters and Hartung; (2) Schaffer had failed to serve them notice of Ms mechanic’s lien; (3) LaMasters and Hartung had paid Moyer in full thereby rendering the lien unenforceable against the company pursuant to Iowa Code section 572.14(2); (4) Schaffer had failed to join LaMasters, Hartung, and other interested parties as indispensable parties; and (5) Schaffer had failed to perform the carpentry work in a good and workmanlike manner.

Later, the district court sustained Schaf-fer’s motion to jom LaMasters, Hartung, and Liberty Savings Bank, which held a mortgage against the property. Schaffer dismissed these defendants when Moyer posted a bond in twice the amount of Schaffer’s claim. Pursuant to Iowa Code section 572.15, the bond had the effect of discharging Schaffer’s mechamc’s lien on the property.

The court also sustained Moyer’s motion to amend its answer to assert a counterclaim. In its counterclaim, Moyer asserted that Schaffer and Moyer orally agreed that Schaffer would provide finish carpentry work in a timely and workmanlike manner. Moyer further asserted that Schaffer breached the agreement and as a result of this breach, Moyer incurred $11,000.60 for (1) repairs; (2) interest expenses associated with the delay; and (3) labor and material charges associated with the work done by Sutherland. Moyer asked for a judgment in its favor against Schaffer for the $11,000.60.

Moyer moved for summary judgment on its counterclaim, which the district court overruled at the time it entered its ruling on the merits of the case. In that ruling, the district court concluded that Schaffer’s lien was valid and enforceable even though he had not provided notice to LaMasters and Hartung under Iowa Code section 572.14(2). The court ruled in the alternative that even if the lien was not enforceable, Schaffer was still entitled to enforce his contract with Moyer. On this alternative theory, the court found that (1) Schaf-fer had “substantially performed his obligations” under his oral agreement with Moyer for carpentry trim work; (2) Moyer had refused to pay him; and (3) Schaffer was entitled to reasonable compensation for the work he had completed. The court entered judgment against Moyer Construction in favor of Schaffer for $7577 plus interest. The court denied Moyer’s counterclaim.

Following tMs ruling, the district court rejected Moyer’s Iowa Rule of Civil Procedure 179(b) motion in which Moyer asserted, among other things, that it, had established its counterclaim for expenses it incurred in remedymg Schaffer’s defective workmanship.

In another post-trial ruling, the district court — over Moyer’s objections — awarded Schaffer $20,875.27 in attorney fees and costs, plus interest.

III. Issues.

On appeal, Moyer raises four issues. First, it contends that the district court erred in concluding that Schaffer had a valid and enforceable mechanic’s lien. In support of its contention, Moyer argues that Schaffer had failed to properly serve notice on LaMasters and Hartung.

Second, Moyer contends the district court erred in concluding Schaffer could recover against it on a breach-of-contract claim. In support of this contention, Moyer argues that alternative theories of recovery may not be joined in an action to enforce a mechanic’s lien.

Third, Moyer contends that the district court erred in failing to award it damages on its counterclaim for amounts it expended to redo Schaffer’s work.

Last, Moyer contends the district court abused its discretion in awarding Schaffer attorney fees and costs.

IV. Validity of the Mechanic’s Lien.

In its motion for summary judgment, reasserted in its motion for directed verdict, Moyer contended that it was entitled to judgment as a matter of law. In support of its contention, Moyer argued the facts were uncontroverted that LaMasters and Hartung had an equitable ownership in the property before Schaffer filed his mechanic’s lien. Moyer argued further that because of this ownership interest, the building was an “owner-occupied” dwelling and this fact required Schaffer to serve LaMasters and Hartung with notice of his mechanic’s lien pursuant to Iowa Code section 572.14(2). Schaffer’s failure to serve such notice, Moyer asserted, rendered his lien invalid and unenforceable. For these reasons, Moyer contends on appeal that the district court erred in failing to grant the summary judgment motion and motion for directed verdict.

A. Applicable law. Iowa Code section 572.2 describes who is entitled to a mechanic’s lien:

Every person who shall furnish any material or labor for, or perform any labor upon, any building or land for improvement, alteration, or repair thereof ... by virtue of any contract with the owner, the owner’s agent, trustee, contractor or subcontractor ... shall have a lien upon such building or improvement, and land belonging to the owner ... to secure payment for material or labor furnished or labor performed.

Iowa Code § 572.2 (emphasis added).

An “owner” includes “every person for whose use or benefit any budding, erection, or other improvement is made.... ” Iowa Code § 572.1(3).

A “subcontractor” includes

every person furnishing material or performing labor upon any building, erection, or other improvement, except those having contracts therefore directly with the owner, the owner’s agent, or trustee.

Iowa Code § 572.1(5).

According to the plain language of section 572.2, before a lien can arise, the contract referred to in section 572.2 must be with “the owner, the owner’s agent, trustee, contractor, or subcontractor.” This court has therefore refused to enforce a mechanic’s lien when the contractor has performed for someone other than a person who has a present and beneficial interest in the property. See Clemens Graf Droste Zu Vischering v. Kading, 368 N.W.2d 702, 710 (Iowa 1985) (holding that contracts between contractors and vendor, entered into after vendor conveyed his interest in the building to vendee, to improve the building to make it ready for use as a restaurant could not provide basis for mechanic’s lien); see also Schaffer I, 563 N.W.2d at 608 (“Under the statutory scheme found in chapter 572, owners are the persons against whose interest the lien is asserted. It would thus be a useless exercise to authorize a lien against a statutorily defined 'owner’ who holds no legal interest that can be foreclosed upon in a property-law sense.”).

“Owner” for purposes of section 572.2 includes both the buyer and seller under an executory contract. Louie’s Floor Covering, Inc. v. DePhillips Interests, Ltd., 378 N.W.2d 923, 926 (Iowa 1985); Clemens, 368 N.W.2d at 708.

A person perfects a mechanic’s lien by filing a “verified statement of account” as described in Iowa Code section 572.8. The statement must be filed with the clerk of the district court of the county where the property to be charged with the lien is located. Iowa Code § 572.8. The principal contractor or subcontractor must file the statement “within ninety days from the date on which the last of the material was furnished or the last of the labor was performed.” Iowa Code § 572.9.

Failure to file within the ninety-day period does not necessarily defeat the lien. Id. The contractor or subcontractor can perfect the lien after the ninety-day period by following the notice procedure in Iowa Code section 572.10. Liens perfected under this latter provision, however, are enforced “only to the extent of the balance due from the owner to the contractor at the time of the service” of the notice set out in section 572.10. Iowa Code § 572.11.

An owner need not pay the original contractor until the expiration of ninety days from the completion of the building or improvement unless such contractor furnishes the home owner with lien waivers or a bond holding the owner harmless from mechanic’s liens filed by subcontractors. Iowa Code § 572.13.

According to Iowa Code section 572.14(1),

payment to the original contractor by the owner of any part or all of the contract price of the building or improvement before the lapse of the ninety days allowed by law for the filing of a mechanic’s hen by a subcontractor, does not relieve the owner from liability to the subcontractor for the full value of any material furnished or labor performed upon the building, land, or improvement if the subcontractor files a hen within the time provided by law for its filing.

Iowa Code § 572.14(1).

There is an exception to the liability described in section 572.14(1) in the case of an owner-occupied dwelling. As to an owner-occupied dwelling, “a mechanic’s hen perfected under [chapter 572] is enforceable only to the extent of the balance due from the owner to the principal contractor at the time” the subcontractor delivers notice to the owner or the owner’s spouse in the form set out in Iowa Code section 572.14(3). Iowa Code § 572.14(1).

The notice must essentially inform the owner that (1) the subcontractor is providing labor' or materials or both to the owner’s property; (2) chapter 572 may permit the enforcement of a hen against the property to secure payment for labor and materials supplied; (3) the owner is not required to pay more to the person claiming the hen than the amount of money due from the owner to the contractor; and (4) the owner should not make further payments to the contractor without a hen waiver from the contractor as to the hen claimed by the subcontractor. Iowa Code § 572.14(3).

Iowa Code section 572.1 defines an “owner-occupied dwelling” to mean

the homestead of an owner ... and actually occupied by the owner or the spouse of the owner or both.... “Owner-occupied dwelling” includes a newly constructed dwelling to be occupied by the owner as a homestead, or a dwelling that is under construction and being built as a homestead.

Iowa Code § 572.1(4) (emphasis added).

B. Analysis. Here the following facts are not disputed. Schaffer is a subcontractor. At the time Schaffer perfected his lien, Moyer, as the vendor, was the record title holder and LaMasters and Hartung, as vendees, were equitable owners. For purposes of chapter 572, and as among Moyer and LaMasters and Har-tung, all three were therefore owners at the time Schaffer perfected his lien because each had a beneficial interest in the property. Schaffer had an oral agreement with Moyer, one of the owners, to perform services and provide materials for the property. Schaffer had no such agreement with LaMasters and Hartung, the other owners.

The property was ostensibly an owner-occupied dwelling because it was being built by or for owners — LaMasters and Hartung — who would occupy the dwelling as a homestead. Consequently, they could ostensibly claim protection under section 572.14(2) if Schaffer did not provide them with the owner-occupied dwelling notice required in section 572.14(2). Moyer, however, could not claim protection under section 572.14(2) because it would not occupy the dwelling in the future as a homestead. Therefore, Schaffer was not required to serve Moyer with notice under Iowa Code section 572.14(2) in order to enforce his lien. And as far as Moyer is concerned, Schaffer had perfected his mechanic’s lien.

Although Schaffer did not provide notice to LaMasters and Hartung under section 572.14(2), we think, for reasons that follow, that failure did not render the mechanic’s lien invalid and unenforceable.

At the time Schaffer filed his mechanic’s hen, Moyer was the record title holder. LaMasters’ and Hartung’s purchase contract with Moyer was not recorded. Schaffer therefore did not have constructive notice of this purchase contract See Clemens, 368 N.W.2d at 709 (holding that contractors have constructive notice of all information contained in recorded documents and have a duty of inquiry concerning circumstances disclosed in those records).

Moyer contends, however, that Schaffer had actual knowledge that LaMasters and Hartung owned the property. In support of this contention, Moyer relies on the fact that (1) Schaffer knew the home was being custom-built for LaMasters and Hartung; (2) Schaffer knew LaMasters had asked that he perform the finish carpentry in the house; (3) Schaffer knew LaMasters visited the site two or three times a day during construction; and (4) Schaffer’s attorney talked to LaMasters two weeks before the closing on November 17.

We find that Schaffer’s knowledge as to the first three facts falls short of establishing that Schaffer had actual knowledge of LaMasters’ and Hartung’s ownership of the home. As to the last fact, LaMasters testified that when she talked to Schaffer’s attorney she did not tell him that the home was hers. Based on this testimony, we find the attorney’s conversation with La-Masters likewise falls short of establishing Schaffer’s knowledge of LaMasters’ and Hartung’s ownership of the property.

In similar circumstances, one court has held that service of notice and claim of mechanic’s lien on a record owner suffices even if it turns out that the record owner is not the true owner. See Lewis v. Midway Lumber, Inc., 114 Ariz. 426, 432, 561 P.2d 750, 756 (Ct.App.1977). The court noted that

[a] lien claimant can only be charged with such knowledge of the ownership of the property as is apparent from the public records. He cannot be required to go behind the public record to ascertain whether a conveyance, complete on its face, is burdened with some secret agreement to reconvey to the real owner.

Id.; see also 56 C.J.S. Mechanics’ Liens § 53, at 77 (1992) (“[I]n the absence of knowledge or notice, the hen claimant is entitled to rely on the record title.”).

Schaffer had a right to rely on the recorded deed when he filed his mechanic’s hen. The deed showed that Moyer was the owner of the property. Therefore, as far as the recording law was concerned, Moyer was the owner of the property and LaMasters and Hartung had no beneficial interest in the property. In short, as far as the record was concerned, LaMasters and Hartung were not “owners” within the meaning of chapter 572 and, more specifically, were not “owners” within the meaning of “owner-occupied dwelling” as defined in section 572.1(4). Accordingly, there was no reason for Schaffer to believe he had to give LaMasters and Hartung notice under Iowa Code section 572.14(2) in order to perfect his hen for his work and materials. His failure to do so did not render his mechanic’s hen invalid and unenforceable.

We have recognized that “[mjechanic’s hens stem from principles of equity which require paying for work done or materials delivered” and that “[t]he doctrines of restitution and prevention of unjust enrichment drive the mechanic’s hen entitlement.” Carson v. Roediger, 513 N.W.2d 713, 715 (Iowa 1994). Additionally, we have recognized that we are to “liberally construe[ ] the mechanic’s hen statute to promote these objectives and assist parties in obtaining justice.” Id. We are convinced these principles have particular application here and support the conclusion we have reached.

We reject Moyer’s contention that the dismissal of LaMasters and Hartung from the lawsuit requires reversal in this case. Because the bond was in place at the time of the dismissal, LaMasters and Hartung were no longer indispensable parties. This is because the bond discharged the hen, leaving the property free of any encumbrance. See Iowa Code § 572.15 (providing that an owner, principal contractor, or intermediate subcontractor may discharge a mechanic’s hen by filing a bond in twice the amount of the sum for which the claim for the hen is filed).

Because we conclude Schaffer’s mechanic’s hen was valid and enforceable, the district court was correct in overruling Moyer’s motions for summary judgment and directed verdict. The conclusion we reach makes it unnecessary to address whether the district court erred in ruling in the alternative on Schaffer’s breach of contract claim. That issue is now moot.

Y. Counterclaim.

Moyer alleged in its counterclaim that (1) it and Schaffer entered into an oral agreement in which Schaffer agreed to provide finish carpentry services in a timely and workmanlike manner; (2) the work was not finished in a timely manner; (3) the work that was done was not completed in a workmanlike manner; and (4) as a result of this breach of contract, Moyer suffered damages. Moyer requested damages for (1) charges for labor to redo Schaffer’s work in the amount of $3710; (2) $720 to repair damage Schaffer did to drywall; (3) $340 for replacement of damaged cabinets; (4) $4489 in interest related to delay in completing the home caused by Schaffer; (5) $2,282.74 for materials used to redo Schaffer’s work; and (6) $4500 for repair and replacement of oak endcaps awarded against Moyer to LaMasters and Hartung in a related lawsuit.

The burden is on Moyer to prove its counterclaim by a preponderance of the evidence. See Iowa R.App. P. 14(f)(5).

The district court addressed twenty-five items that Moyer claimed were redone by Sutherland, the replacement carpenter. The court found Moyer had failed to establish that it had incurred any expenses as a result of the need to redo work previously done by Schaffer. The court also found that

[t]he few items where Sutherland changed any of the work done by Schaf-fer were no fault of Schaffer unless he was at fault for adding extra touches to the trim on the front and back door, which were not to the taste of LaMas-ters. These items would have caused no additional expenses to [Moyer had it] permitted Schaffer to finish the job rather than firing him.

The district court had the advantage of listening to and viewing the witnesses. In matters of witness credibility, we are particularly inclined to give weight to the district court’s findings. See Iowa R.App. P. 14(f)(7); Weinhold v. Wolff, 555 N.W.2d 454, 458 (Iowa 1996). Referring to LaMasters’ testimony, the court stated:

LaMasters was completely satisfied with the quality of all the work done by Schaffer and his family members. She requested two changes because she did not like the style of woodwork details installed by Schaffer. She wanted a “teardrop” removed from the side of a wooden panel above the back door and dentil molding removed from the vertical panels along the sides of the front door. Had she had the opportunity to request of Schaffer that he make these changes, she would have done so. Schaffer would have made the changes with no extra charge. These are the only two changes to Schaffer’s work requested by LaMasters. Neither of these requested changes resulted in Schaffer’s work being redone, rather minor pieces of woodwork were removed.

In our de novo review, we agree with these findings of the district court and adopt them as our own.

As for the drywall claim, the district court found:

It is standard practice when building a new home to repair drywall after the finish carpenters have completed their work. The drywall repair was not undertaken until after Sutherland completed the finish carpentry. The defendant presented no documentation of the bill for drywall repair; nor did he present any evidence as to which drywall repairs, if any, were made necessary by the actions of Schaffer. The defendant has failed to prove that Schaffer caused the defendant to incur any expenses for drywall repair out of the ordinary and expected expense for such repair to a new home.

As to the claim for the damaged cabinets, the district court found:

The third item of damage claimed by the defendant in its counter-claim is for four cabinet doors, which it claimed were scratched by Schaffer. The cabinets in the home came from only two sources: Kitchen Classics and Phillips Woodwork. The cabinets from Phillips had not arrived at the time Schaffer was fired. Therefore, the defendant can only be referring to cabinets supplied by Kitchen Classics. Val Siddle, from Kitchen Classics, testified that no cabinet doors from the home were replaced. LaMas-ters testified that none of the cabinets was scratched by Schaffer, but some of the kitchen cabinets were scratched by-Sutherland. Those scratches were repaired by Kitchen Classics and the bill paid by LaMasters. The defendant produced no bill to support its claim. The Court finds that the defendant has failed to prove that it incurred any expenses as a result of repairing or replacing cabinet doors which it alleges were scratched by Schaffer.

As to the interest claim, the district court found:

The fourth item of damage claimed by the defendant is interest for one and one-half months. The defendant claimed that Schaffer delayed the completion of the home by one and one-half months and therefore should be responsible for the interest incurred on the construction loan during that time....
The defendant’s claim that Schaffer caused any delay in the completion of the home is not supported by the evidence .... [S]ome of the cabinetry had not even arrived before Schaffer was fired. Schaffer could not have installed these cabinets any sooner. Further, many construction tasks which were not dependent on the completion of the-finish carpentry were not begun or completed until after Schaffer was fired, including exterior painting, building a deck, installing the sprinkler system, and completing the concrete for the driveway. Even if Schaffer had completed the finish carpentry months earlier, the home would not have been ready for closing any sooner.
The Court, therefore, finds that the defendant has failed to establish that Schaffer caused a delay in the completion of the home.

As to the claim for materials used to redo Schaffer’s work, the district court found:

The final item of the defendant’s counterclaim is one for materials used for items it alleges were not properly done by Schaffer. The defendant presented a packet of invoices for materials purchased after Schaffer was fired, but failed to distinguish between charges for those materials which it claims were used to redo work done by Schaffer and those projects which were not. A review of the invoices shows many materials which were clearly used by Sutherland for projects which never involved Schaf-fer, such as the fireplace mantle.
Having failed to prove that any of the work done by Schaffer had to be redone by Sutherland, as discussed above, the defendant has also failed to establish that any additional materials were necessary to re-do Schaffer’s work.

As to the claim for $4500 for replacement of oak endcaps, the district court found:

In litigation separate from that before this Court presently, LaMasters and Hartung were awarded judgment against Moyer Construction.... Included in that judgment is an award for repair and replacement of trim. During trial LaMasters and Hartung had presented a list of construction related damages. The court did not itemize which items of trim were included in the award. A review of the list presented by LaMasters and Hartung shows that the only item of trim on their list which could reasonably be associated with the work done by Schaffer was the oak end-caps.
Four or five of the oak endcaps near the bottom of the stairs had split. Sutherland, testifying on behalf of the defendant, opined that the splits in the wood were defects in the materials and that there was nothing Schaffer could have done to prevent the splits. All witnesses who testified on the matter agreed that the humidity was very high at the time the home was built. All agreed that humidity causes wood to swell, and that when the wood dries out it can split.
Moyer’s refusal to repair or replace the damaged oak endcaps was in no way caused by Schaffer. Moyer should not be permitted to shift any part of the judgment awarded against it to Schaffer.

In our de novo review of the record, we agree with all of the district court’s findings relating to the claims for (1) damaged drywall; (2) replacement of damaged cabinets; (3) the claim for interest because of delay in construction; (4) materials used on redo items; and (5) replacement of oak endcaps. We adopt these findings as our own.

We address one last item: Moyer’s claim that Schaffer’s charge of $800 for nails is “unrealistic” and “should be reduced to the more realistic figure of $200.” The district court did not address this claim. Moyer did not request the district court to address this claim in its Iowa Rule of Civil Procedure 179(b) motion. Its failure to do so waives the claim. See Lawrence v. Grinde, 534 N.W.2d 414, 418 (Iowa 1995) (holding that party must raise issue, claim, defense, or legal theory in a rule 179(b) motion to preserve issue for appeal where district court fails to resolve issue properly submitted to it).

In sum, we agree with the district court that Moyer failed to prove its counterclaim by a preponderance of the evidence. The district court was therefore correct in dismissing it.

VI. Attorney Fees and Costs.

Moyer last contends that the district court abused its discretion in awarding attorney fees pursuant to Iowa Code section 572.32 and erred in awarding attorney fees and costs associated with the first appeal.

A. Attorney Fees. In support of its contention regarding attorney fees, Moyer argues that (1) Schaffer was not a successful plaintiff and therefore not entitled to attorney fees; (2) the award included fees associated with the first appeal; and (3) the award was excessive and included fees for duplicative legal assistant’s time.

Iowa Code section 572.32 (1997) governs the award of attorney fees and costs because this was the relevant statute in force at the time of the termination of the district court proceedings. See Fed. Land Bank of Omaha v. Woods, 480 N.W.2d 61, 70 (Iowa 1992); Bankers Trust Co. v. Woltz, 326 N.W.2d 274, 278 (Iowa 1982). This statute provides:

In a court action to enforce a mechanic’s lien, if the plaintiff furnished labor or materials directly to the defendant, the plaintiff, if successful, shall be awarded reasonable attorney fees.

Iowa Code § 572.32.

The award of attorney fees under this provision is mandatory. See Iowa Code § 572.32 (providing that attorney fees shall be awarded); Baumhoefener, 618 N.W.2d at 368 (holding that under 1997 version of section 572.32 the award of attorney fees is mandatory). Because the award is mandatory, the district court has no discretion in determining whether to award attorney fees. However, the amount awarded is “vested in the district court’s broad, but not unlimited discretion.” Baumhoefener, 618 N.W.2d at 368. Only when the district court bases its decision of the amount of the award on clearly unreasonable or untenable grounds will this court reverse. Id.

1. Was Schaffer a successful plaintiff? Section 572.32 is clear that only a successful plaintiff in a mechanic’s lien action is entitled to attorney fees. Because we have concluded that Schaffer is entitled to enforce his mechanic’s lien, he is a successful plaintiff and therefore entitled to attorney fees.

2. Was the district court empowered to award appellate attorney fees? Moyer contends that the district court improperly awarded Schaffer fees related to the appeal in Schaffer I. In support of its contention, Moyer argues that nothing in Iowa Code section 572.32 empowers the district court to award appellate attorney fees.

His argument raises two questions. First, are appellate attorney fees permitted under section 572.32? Second, if so, is the district court permitted to make such an award?

In Baumhoefener, we permitted an award of appellate attorney fees under Iowa Code section 572.32. See 618 N.W.2d at 368-69. We did so because the mechanic’s lienholder prevailed on appeal. Although the question of whether section 572.32 allows appellate attorney fees was not raised in Baumhoefener, we think the holding was correct. Section 572.32 in no way limits attorney fees to those incurred in the district court. We therefore think the statute contemplates the award of appellate attorney fees. See Bankers Trust, 326 N.W.2d at 278 (using the same rationale to allow appellate attorney fees pursuant to a statute that allowed “attorney’s fee” and where parties’ agreement which provided for attorneys fees did not limit such fees to only those incurred at trial).

The more difficult question is whether the district court, as opposed to the appellate court, is permitted to make such an award. Section 572.32 makes no mention either way. As we recognized in Lehigh Clay Products, Ltd. v. Iowa Department of Transportation, under our current practice, the issue of appellate attorney fees is “frequently determined in the first instance in the district court because of the necessity for making a record.... ” 545 N.W.2d 526, 530 n. 2 (Iowa 1996) (remanding for determination of appellate attorney fees in prior appeal and present appeal under Iowa Code section 6B.33 (1993)); see also Federal Land Bank, 480 N.W.2d at 70 (remanding for hearing on trial and appellate attorney fees under Iowa Code section 625.22 (1990)); Bankers Trust, 326 N.W.2d at 278 (remanding for hearing on trial and appellate attorney fees under Iowa Code section 625.22 (1981)).

Given that section 572.32 permits appellate attorney fees and given our current practice of allowing the district court to award such fees, we conclude the district court did have the authority to award appellate attorney fees in addition to trial attorney fees.

3. Did the district court abuse its discretion in fixing the amount of attorney fees?

The district court awarded Schaffer a total of $20,298 in trial and appellate attorney fees. The district court included in its award an allowance for a legal assistant’s time at trial. This allowance totaled $785 for 11.3 hours of work. Schaffer contends the district court did not abuse its discretion in awarding these fees.

Legal assistant fees are included in the concept of “reasonable attorney fees.” See Landals v. George A. Rolfes Co., 454 N.W.2d 891, 898 (Iowa 1990) (holding that district court properly allowed recovery of fees for paralegal assistance as part of “attorney fees”). An applicant for attorney fees has the burden to prove that the services were reasonably necessary and that the charges were reasonable in amount. Id. at 897. The appropriate factors for the district court to consider in awarding attorney fees

include the time necessarily spent, the nature and extent of the service, the amount involved, the difficulty of handling and importance of the issues, the responsibility assumed and results obtained, the standing and experience of the attorney in the profession, and the customary charges for similar service.

Id. Additionally, “[t]he district court must look at the whole picture and, using independent judgment with the benefit of hindsight, decide on a total fee appropriate for handling the complete case.” Id.

Moyer has not directed this court to any evidence demonstrating that the legal assistant’s time was duplicative or otherwise unnecessary at trial. In fact, Moyer never raised this objection in Moyer’s resistance to the application for attorney fees. Nor did Moyer do so during the hearing on the application. Moyer therefore did not preserve this issue for appellate review. In any event, we find the legal assistant’s time was not duplicative and was indeed necessary.

We also conclude the district court did not abuse its discretion in awarding $20,298 in total attorney fees in this case. These fees relate to the appeal in Schaffer I in which Schaffer prevailed. They also relate to the mechanic’s lien action itself, as well as to Schaffer’s defense of Moyer’s unsuccessful counterclaim and its post-trial motions.

The district court is an expert on the issue of reasonable attorney fees. Landals, 454 N.W.2d at 897. As such an expert, the district court had the benefit of observing the trial and the post-trial proceedings. The court was therefore “in an ideal position to judge the necessity of time and effort spent by counsel and the rationality of the relationship between the services rendered” and the causes of action and other matters involved in this case. Lynch v. City of Des Moines, 464 N.W.2d 236, 240 (Iowa 1990).

We have carefully reviewed Schaffer’s attorney-fee affidavit. Given the fact that there were two appeals and a trial, we find the hours (177) spent by the attorneys and legal assistant were reasonably necessary and the charges were reasonable in amount. Additionally, the mechanic’s lien action was successful.

Other than making conclusionary statements, Moyer has not shown how the time spent was not reasonably necessary or related to the case. Nor has Moyer even challenged the hourly rates for the lawyers and legal assistant.

B. Costs. Moyer argues the district court erred in awarding costs associated with Schaffer I because those costs had already been taxed to Moyer by this court. Moyer further argues that the district court, over Moyer’s objection, abused its discretion in awarding the cost of Schaffer’s attorney’s lunch expenses during trial.

Iowa Code section 625.18 provides:

In cases of appeals from a trial court, the supreme court clerk, if judgment is rendered in the supreme court or court of appeals or both, shall make a complete bill of costs in that court which shall be filed in the office of the clerk of the trial court and taxed with the costs in the action therein.

(Emphasis added.)

Contrary to Moyer’s contention, the emphasized language contemplates that the district court is ultimately responsible for taxing appellate costs together with the costs of the action. The record is not clear as to whether on remand in Schaffer I the district court entered a separate judgment for costs associated with the first appeal. In any event, Moyer is only responsible for paying appellate costs once. We remand with directions to the clerk to ensure that Moyer is taxed only once for those costs.

The record shows that the district court reduced the amount of costs taxed to reflect a deduction for the lunch expense which Moyer contends was included in those costs. We therefore conclude Moyer’s contention that the district court improperly taxed lunch costs lacks merit.

VII. Disposition.

In sum, we reach the following conclusions. The district court correctly found that Schaffer had a valid, enforceable mechanic’s lien. Additionally, the district court properly rejected Moyer’s counterclaim. Finally, the district court properly awarded Schaffer trial and appellate attorney fees and costs and did not abuse its •discretion on the amounts of those awards. Accordingly, we affirm and remand with directions.

AFFIRMED AND REMANDED WITH DIRECTIONS.

All justices concur except TERNUS, J., who concurs specially.

TERNUS, Justice

(concurring specially).

I concur specially because I do not agree with the majority’s decision to limit the obligation to give notice of a mechanic’s lien to only those owners of record or of which the person claiming a lien has actual knowledge. It seems to me that under the record in this case, Schaffer had knowledge of sufficient facts to put him on inquiry notice of LaMasters and Hartung’s ownership interest in the property. Nonetheless, I would still affirm because I do not believe that any failure by Schaffer to give LaMasters and Hartung notice affected Schaffer’s rights as against Moyer.